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Strategic Review
In October 2022, Sierra Metalsâ€™ Board of Directors formed a special committee and initiated a strategic review process to explore, review, and consider options to optimize the operations of the company along with financing, restructuring, and strategic alternatives. CIBC Capital Markets is the leading financial advisor, and the process is ongoing. The special committee continues to evaluate various alternatives and expects to report to shareholders upon completion of the review. In addition to deeming the Cusi silver mine as non-core, management highlighted the undeveloped potential at both Bolivar and Yauricocha mines during the recent earnings call. We agree although both mines will likely need significant investment, including preparing Yauricocha for deeper underground mining.&nbsp;While management believes Sierra can sustainably operate profitably with two mines, we think the company will likely be sold based on the undeveloped potential of the Yauricocha and Bolivar mines or will seek greater scale and economies through merger. For that to happen, getting the company on a more solid footing is essential to maximizing value. Because Yauricocha and Bolivar are base metals-oriented and Cusi is predominantly a silver mine, they appeal to differing sets of potential acquirers and so we think management has taken a necessary step toward tidying up the asset portfolio.&nbsp; &nbsp;
Management Priorities for 2023
 
 Managementâ€™s focus has been to stabilize operations following challenges experienced in 2022 and to return to higher production levels on an economically sustainable basis. The company has already taken actions to streamline operations to reduce costs, and refinance debt obligations to preserve working capital. Initiatives that are ongoing include increasing asset utilization, focused underground mine development, and improvements to ventilation and pumping systems.
Growth initiatives include identifying additional resources at Yauricocha and Bolivar and revising life-of-mine plans for each site which are expected to be completed in the second quarter of 2023. The company is working with regulatory bodies to expedite additional permitting at Yauricocha to access deeper and higher grade ore bodies and resume higher production levels. Once the permits are received, it would take 6 to 9 months to prepare the site before mining could begin. If it were highly confident in receiving the permits, Sierra could conceivably bear some risk and prepare the ground in parallel to the permitting process to expedite production. Given that the board is undertaking a strategic review and based on the company's current finances, we do not expect that to happen.
Production Guidance â€” 2023
During the fourth quarter, Sierra achieved meaningful improvement at the Bolivar mine due to infrastructure upgrades and advances in the mineâ€™s development work. Management expects improving performance throughout 2023. As of the end of March, the Bolivar mine is operating at 3,070 tonnes per day and is expected to gradually ramp up to 5,000 tonnes per day by year end. The Yauricocha mine is expected to operate at 2,375 tonnes per day throughout 2023. The focus at Yauricocha will be obtaining permits to access deeper, high-grade ore bodies. The table below summarizes 2023 production guidance for the Yauricocha and Bolivar mines, along with our estimates. In 2023, Sierra Metals expects to produce between 74.3 and 83.3 million pounds of copper equivalents.&nbsp;
2023 Production Guidance
<img src="https://www.noblelinx.com/x/research/images/reports/Table-March303023.jpg" style="width: 487px;height: 140px;float: none" /> 

Source: Sierra Metals Inc. and Noble Capital Markets Inc.
Full Year 2022 Operational and Financial Results
 
Consolidated annual ore throughput declined 21% to 2.3 million tonnes compared to 2021. Consolidated annual copper equivalent production fell 29% due to lower throughput and lower grades. At the Bolivar mine, annual throughput was 30% lower compared to 2021 due to delays in installation of infrastructure during the first half of the year and unexpected flooding during the third quarter. Throughput from the Yauricocha mine declined 16% compared to the prior year due in part to a mudslide incident at the end of the third quarter followed by a road blockade by local communities. &nbsp;&nbsp;
Compared with 2021, revenue declined 29.4% to $192.1 million due to an increase in realized metals prices due to lower metals sales. Cost of sales declined 2.2% to $186.6 million due to lower depletion, depreciation, and amortization expense.&nbsp;
From a cash flow perspective, the company generated cash from operating activities amounting to $7.3 million, spent $38.3 million on investing activities and financing activities generated cash of $1.1 million largely due to proceeds from loans and other credit facilities in the amount of $31.5 million.
Capital Structure and Liquidity&nbsp;
As of December 31, 2022, the company reported cash of $5.1 million and debt of $87.8 million. In March, the company improved short-term liquidity by refinancing $6.25 million of debt repayments due March 2023 with negotiations continuing to refinance a total of $18.75 million of term loan amortization payments due in 2023. Total sustaining capital for 2023, excluding Cusi, is expected to be $32.0 million, mainly comprised of mine development and drainage work at Yauricocha, and mine development, infill drilling, and equipment replacement at the Bolivar mine. Growth capital is expected to be $15.0 million.

Strategic Review
In October 2022, Sierra Metalsâ€™ Board of Directors formed a special committee and initiated a strategic review process to explore, review, and consider options to optimize the operations of the company along with financing, restructuring, and strategic alternatives. CIBC Capital Markets is the leading financial advisor, and the process is ongoing. The special committee continues to evaluate various alternatives and expects to report to shareholders upon completion of the review. In addition to deeming the Cusi silver mine as non-core, management highlighted the undeveloped potential at both Bolivar and Yauricocha mines during the recent earnings call. We agree although both mines will likely need significant investment, including preparing Yauricocha for deeper underground mining.&nbsp;While management believes Sierra can sustainably operate profitably with two mines, we think the company will likely be sold based on the undeveloped potential of the Yauricocha and Bolivar mines or will seek greater scale and economies through merger. For that to happen, getting the company on a more solid footing is essential to maximizing value. Because Yauricocha and Bolivar are base metals-oriented and Cusi is predominantly a silver mine, they appeal to differing sets of potential acquirers and so we think management has taken a necessary step toward tidying up the asset portfolio.&nbsp; &nbsp;
Management Priorities for 2023 
 
 Managementâ€™s focus has been to stabilize operations following challenges experienced in 2022 and to return to higher production levels on an economically sustainable basis. The company has already taken actions to streamline operations to reduce costs, and refinance debt obligations to preserve working capital. Initiatives that are ongoing include increasing asset utilization, focused underground mine development, and improvements to ventilation and pumping systems.
Growth initiatives include identifying additional resources at Yauricocha and Bolivar and revising life-of-mine plans for each site which are expected to be completed in the second quarter of 2023. The company is working with regulatory bodies to expedite additional permitting at Yauricocha to access deeper and higher grade ore bodies and resume higher production levels. Once the permits are received, it would take 6 to 9 months to prepare the site before mining could begin. If it were highly confident in receiving the permits, Sierra could conceivably bear some risk and prepare the ground in parallel to the permitting process to expedite production. Given that the board is undertaking a strategic review and based on the company&#8217;s current finances, we do not expect that to happen.
Production Guidance â€” 2023
During the fourth quarter, Sierra achieved meaningful improvement at the Bolivar mine due to infrastructure upgrades and advances in the mineâ€™s development work. Management expects improving performance throughout 2023. As of the end of March, the Bolivar mine is operating at 3,070 tonnes per day and is expected to gradually ramp up to 5,000 tonnes per day by year end. The Yauricocha mine is expected to operate at 2,375 tonnes per day throughout 2023. The focus at Yauricocha will be obtaining permits to access deeper, high-grade ore bodies. The table below summarizes 2023 production guidance for the Yauricocha and Bolivar mines, along with our estimates. In 2023, Sierra Metals expects to produce between 74.3 and 83.3 million pounds of copper equivalents.&nbsp;
2023 Production Guidance
<img decoding="async" src="https://www.noblelinx.com/x/research/images/reports/Table-March303023.jpg" style="width: 487px;height: 140px;float: none" /> 

Source: Sierra Metals Inc. and Noble Capital Markets Inc.
Full Year 2022 Operational and Financial Results 
 
Consolidated annual ore throughput declined 21% to 2.3 million tonnes compared to 2021. Consolidated annual copper equivalent production fell 29% due to lower throughput and lower grades. At the Bolivar mine, annual throughput was 30% lower compared to 2021 due to delays in installation of infrastructure during the first half of the year and unexpected flooding during the third quarter. Throughput from the Yauricocha mine declined 16% compared to the prior year due in part to a mudslide incident at the end of the third quarter followed by a road blockade by local communities. &nbsp;&nbsp;
Compared with 2021, revenue declined 29.4% to $192.1 million due to an increase in realized metals prices due to lower metals sales. Cost of sales declined 2.2% to $186.6 million due to lower depletion, depreciation, and amortization expense.&nbsp;
From a cash flow perspective, the company generated cash from operating activities amounting to $7.3 million, spent $38.3 million on investing activities and financing activities generated cash of $1.1 million largely due to proceeds from loans and other credit facilities in the amount of $31.5 million.
Capital Structure and Liquidity&nbsp;
As of December 31, 2022, the company reported cash of $5.1 million and debt of $87.8 million. In March, the company improved short-term liquidity by refinancing $6.25 million of debt repayments due March 2023 with negotiations continuing to refinance a total of $18.75 million of term loan amortization payments due in 2023. Total sustaining capital for 2023, excluding Cusi, is expected to be $32.0 million, mainly comprised of mine development and drainage work at Yauricocha, and mine development, infill drilling, and equipment replacement at the Bolivar mine. Growth capital is expected to be $15.0 million.

Strategic Review
In October 2022, Sierra Metalsâ€™ Board of Directors formed a special committee and initiated a strategic review process to explore, review, and consider options to optimize the operations of the company along with financing, restructuring, and strategic alternatives. CIBC Capital Markets is the leading financial advisor, and the process is ongoing. The special committee continues to evaluate various alternatives and expects to report to shareholders upon completion of the review. In addition to deeming the Cusi silver mine as non-core, management highlighted the undeveloped potential at both Bolivar and Yauricocha mines during the recent earnings call. We agree although both mines will likely need significant investment, including preparing Yauricocha for deeper underground mining.&nbsp;While management believes Sierra can sustainably operate profitably with two mines, we think the company will likely be sold based on the undeveloped potential of the Yauricocha and Bolivar mines or will seek greater scale and economies through merger. For that to happen, getting the company on a more solid footing is essential to maximizing value. Because Yauricocha and Bolivar are base metals-oriented and Cusi is predominantly a silver mine, they appeal to differing sets of potential acquirers and so we think management has taken a necessary step toward tidying up the asset portfolio.&nbsp; &nbsp;
Management Priorities for 2023
   
 Managementâ€™s focus has been to stabilize operations following challenges experienced in 2022 and to return to higher production levels on an economically sustainable basis. The company has already taken actions to streamline operations to reduce costs, and refinance debt obligations to preserve working capital. Initiatives that are ongoing include increasing asset utilization, focused underground mine development, and improvements to ventilation and pumping systems.
Growth initiatives include identifying additional resources at Yauricocha and Bolivar and revising life-of-mine plans for each site which are expected to be completed in the second quarter of 2023. The company is working with regulatory bodies to expedite additional permitting at Yauricocha to access deeper and higher grade ore bodies and resume higher production levels. Once the permits are received, it would take 6 to 9 months to prepare the site before mining could begin. If it were highly confident in receiving the permits, Sierra could conceivably bear some risk and prepare the ground in parallel to the permitting process to expedite production. Given that the board is undertaking a strategic review and based on the company&#8217;s current finances, we do not expect that to happen.
Production Guidance â€” 2023
During the fourth quarter, Sierra achieved meaningful improvement at the Bolivar mine due to infrastructure upgrades and advances in the mineâ€™s development work. Management expects improving performance throughout 2023. As of the end of March, the Bolivar mine is operating at 3,070 tonnes per day and is expected to gradually ramp up to 5,000 tonnes per day by year end. The Yauricocha mine is expected to operate at 2,375 tonnes per day throughout 2023. The focus at Yauricocha will be obtaining permits to access deeper, high-grade ore bodies. The table below summarizes 2023 production guidance for the Yauricocha and Bolivar mines, along with our estimates. In 2023, Sierra Metals expects to produce between 74.3 and 83.3 million pounds of copper equivalents.&nbsp;
2023 Production Guidance


Source: Sierra Metals Inc. and Noble Capital Markets Inc.
Full Year 2022 Operational and Financial Results
   
Consolidated annual ore throughput declined 21% to 2.3 million tonnes compared to 2021. Consolidated annual copper equivalent production fell 29% due to lower throughput and lower grades. At the Bolivar mine, annual throughput was 30% lower compared to 2021 due to delays in installation of infrastructure during the first half of the year and unexpected flooding during the third quarter. Throughput from the Yauricocha mine declined 16% compared to the prior year due in part to a mudslide incident at the end of the third quarter followed by a road blockade by local communities. &nbsp;&nbsp;
Compared with 2021, revenue declined 29.4% to $192.1 million due to an increase in realized metals prices due to lower metals sales. Cost of sales declined 2.2% to $186.6 million due to lower depletion, depreciation, and amortization expense.&nbsp;
From a cash flow perspective, the company generated cash from operating activities amounting to $7.3 million, spent $38.3 million on investing activities and financing activities generated cash of $1.1 million largely due to proceeds from loans and other credit facilities in the amount of $31.5 million.
Capital Structure and Liquidity&nbsp;
As of December 31, 2022, the company reported cash of $5.1 million and debt of $87.8 million. In March, the company improved short-term liquidity by refinancing $6.25 million of debt repayments due March 2023 with negotiations continuing to refinance a total of $18.75 million of term loan amortization payments due in 2023. Total sustaining capital for 2023, excluding Cusi, is expected to be $32.0 million, mainly comprised of mine development and drainage work at Yauricocha, and mine development, infill drilling, and equipment replacement at the Bolivar mine. Growth capital is expected to be $15.0 million.

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Operating Results for the Fourth Quarter and Full Year 2022
For the fourth quarter, revenue was $40.1 million, up 51% from $26.5 million in the fourth quarter of 2021. We had forecast $41.1 million. Retail revenue in the quarter was $36.9 million, compared to $19.7 million a year ago. Impacted by oversupply and declining prices, Wholesale revenue declined to $3.2 million in the quarter, versus $6.8 million in the fourth quarter of 2021. Schwazze continued to execute in a down wholesale market in Colorado, the Company's largest market and biggest revenue stream. The Company outpaced the Colorado market, this time by 11%, which now makes for a eighth consecutive quarter in doing so.
In Colorado, two year stacked IDs were off 6% and were off 9% for the one year. Average basket was up 1.5% to $60.86, but customer visits fell 10.5% to 416,717. In New Mexico, two year stacked IDs were up 57% and one year was up 43%. Average basket declined 11.8% to $52.54, while customer visits were up 61.7% to 219,665.
Gross margin in the quarter improved to 57.2% from 45.8% in the same period a year ago. Driven by an $8.0 million impairment charge and increased expenses mostly related to adding acquired companies, Schwazze reported a $2.5 million operating loss in the fourth quarter of 2022, compared to $3.6 million of operating profit last year. Below the line, increased interest expense, $6.8 million versus $2.5 million, a $4.7 million loss on disposition of assets, and a $9.7 million unrealized loss on derivatives, resulted in EBT of a negative $23.7 million.
Taxes of $3.6 million in the quarter and $2.5 million of preferred dividends resulted in a loss to common shareholders of $29.8 million, or a loss of $0.53 per share, in the fourth quarter of 2022, compared to net income of $5.5 million, or $0.12 per share, in the fourth quarter of 2021. Schwazze generated adjusted EBITDA of $13.3 million in the quarter, or a 33% margin, up from $7.5 million, or a 28% margin, last year.
As we have mentioned in past reports, full year results were impacted by a challenging Colorado market, offset by the addition of the New Mexico operations. Sales in the Colorado market decreased in 2022 following two years of strong growth. The Colorado market dropped 21% from $2.23 billion in gross sales during 2021 to $1.77 billion in gross sales during 2022. The New Mexico market showed strong growth in 2022 following legalization of adult-use cannabis sales starting on April 1, 2022. According to BDSA, the New Mexico market generated approximately&nbsp;$461 million in sales in 2022, up from approximately $264 million in sales during 2021, representing an increase of approximately 75%.
Consolidated revenues for the year ended December&nbsp;31,&nbsp;2022, totaled $159.4 million, compared to revenues of $108.4 million, an increase of 47%. The increase was influenced by a number of factors, including consummation of identified acquisitions, new store openings, entrance into the New Mexico market, and adult-use legalization taking effect in New Mexico in 2022. In 2022, the Company completed seven acquisitions and opened six new stores not related to acquisitions, which increased the Companyâ€™s retail presence from 18 dispensaries as of December 31, 2021 to 41 dispensaries as of December 31, 2022.
Retail revenues for 2022 were $141.3 million, an increase of $67.5 million, or 92%, compared to the year ended December&nbsp;31,&nbsp;2021. The increase in Retail revenues was primarily driven the by acquisition of seven new dispensaries in Colorado, the Companyâ€™s acquisition of ten R. Greenleaf dispensaries in February 2022, the opening of six new stores independent of acquisitions, and the legalization of adult-use recreational cannabis sales coming into effect in New Mexico in April 2022.
Revenues for the Wholesale segment were $17.8 million, a decrease of $16.6 million, or 47%, compared to 2021. Wholesale revenues decreased in 2022 as compared to 2021 due to over-supply and negative pricing pressure in the wholesale market.&nbsp;Based on published pricing data from the State of Colorado, the average price per pound of cannabis flower decreased from $1,220 per pound in 2021 to $706 per pound in 2022.
Gross profit for the year totaled $85.0 million, or a 53.4% margin, compared to gross profit of $49.4 million, or a 45.5% gross margin, in 2021. While the Companyâ€™s cost of goods and services expense increased in 2022, it increased at a lower rate than the Companyâ€™s consolidated revenue, which increased by 47% in 2022, as compared to an increase in cost of goods and services of 26% during 2022, due to increased vertical integration and improved internal cost of operations that pass through to retail margins along with operation synergies leveraging internal economies of scale in each state where the Company operates.
 
Operating expenses for the year ended December&nbsp;31,&nbsp;2022, totaled $72.2 million, compared to operating expenses of $38.9 million during 2021. The increase was largely due to increased selling, general and administrative expenses, which includes certain one-time impairment charges for the year ended December 31, 2022, and increased salary expenses. Other expense, net, for 2022, totaled $16.4 million, compared to other income, net, of $8.5 million in 2021, driven by increased interest expense and the loss on disposal of assets, partly offset by unrealized gains on derivatives.
 For the year, Schwazze generated a net loss to common stockholders of $26.3 million, or a loss of $0.49 per share, compared to net income of $7.2 million, or $0.17 per share, during the year ended December&nbsp;31,&nbsp;2021.
Adjusted EBITDA for the year was $52.0 million, or a 33% margin, compared to $32.2 million, or a 30% margin, in 2021.
Cash Flow Generation
 
Schwazze generated positive cash flow from operations for the fourth quarter and the full year, a key differentiator of Schwazze from many of its cannabis competitors, and one that we believe will be increasing important in the current operating environment. The Company's ability to show positive cash flow from operations positions Schwazze to not only be a survivor, but positions the Company to capitalize on any potential demise of current competitors.
In the fourth quarter, Schwazze generated $5.4 million of CFFO, compared to $3.6 million in the same period last year. For the full year, the Company produced $11.4 million of cash flow from operations, up from $8.4 million in 2021. The generation of positive cash flow allows the Company to meet its borrowing obligations, reinvest in its infrastructure investments, and implement its strategy of going deep in both Colorado and New Mexico, in our view.
Brand Building Continues
 
 The Schwazze House of Brands continues to grow. Schwazze is actively building a house of brands that includes both active retail banners as well as products for sale at both the retail and wholesale level, manufacturing all products and controlling the quality for such brands through its vertical integration.
The Lowell Farms brand was launched in both the Colorado and New Mexico markets, although different paths were followed. In Colorado, the product was first rolled out to non-Schwazze dispensaries, with the product entering Schwazze owned dispensaries in April. In New Mexico, the Lowell Farms product was rolled out in the R. Greenleaf dispensaries first and is now expanding distribution to non-network dispensaries. Current products include: Quicks, Classics, and Singles. Quicks and Classics are sold in 3.5g multi-units packs in blends of strains of indica, sativa, and hybrid dominances, while â€œsinglesâ€ are 1g, single strain pre-rolls. According to management, demand has been strong.
Schwazze also is introducing EDW, or Every Day Weed, a Schwazze-owned brand. A&nbsp;pre-packaged pouch of loose-ground flower offered in half-ounce increments at an affordable price point, EDW is a unique product that is not currently available in the market and management has high hopes for the brand.
As we have mentioned in past reports, the building of brands should drive Schwazze to be valued more like a consumer products company, with their much higher multiples, than as just another cannabis dispensary.
<div>
 Updated Projections
 Schwazze's&nbsp;growth plans remain on track. And, despite challenges for the entire industry, we continue to believe in the Company's long-term plan of building a regional powerhouse through developing scale with a customer-first approach, curating a distinguished house of brands, and leveraging data analytics and technology to drive decisions.
 The challenged Colorado market, however, will be a drag on results, potentially lasting through much of 2023. On the positive side, we have an extra three months of New Mexico recreational use, new locations, and acquisitions. Unlike past quarters, management did not provide any insight into expectations for 2023 on the conference call. We have taken what we believe is a conservative approach to growth in 2023.
 We are projecting first quarter revenue of $41.5 million, compared to $31.8 million in the year ago period. Gross margin should continue to improve year-over-year. We are projecting operating income of $8.3 million. Our estimated net loss for common shareholders is $2.1 million, or a loss of $0.04 per share. For the full year, we are projecting revenue of $180.5 million, adjusted EBITDA of $62.1 million, and a net loss of $1.5 million, or a loss of $0.03 per share.
</div>

Operating Results for the Fourth Quarter and Full Year 2022
For the fourth quarter, revenue was $40.1 million, up 51% from $26.5 million in the fourth quarter of 2021. We had forecast $41.1 million. Retail revenue in the quarter was $36.9 million, compared to $19.7 million a year ago. Impacted by oversupply and declining prices, Wholesale revenue declined to $3.2 million in the quarter, versus $6.8 million in the fourth quarter of 2021. Schwazze continued to execute in a down wholesale market in Colorado, the Company&#8217;s largest market and biggest revenue stream. The Company outpaced the Colorado market, this time by 11%, which now makes for a eighth consecutive quarter in doing so.
In Colorado, two year stacked IDs were off 6% and were off 9% for the one year. Average basket was up 1.5% to $60.86, but customer visits fell 10.5% to 416,717. In New Mexico, two year stacked IDs were up 57% and one year was up 43%. Average basket declined 11.8% to $52.54, while customer visits were up 61.7% to 219,665.
Gross margin in the quarter improved to 57.2% from 45.8% in the same period a year ago. Driven by an $8.0 million impairment charge and increased expenses mostly related to adding acquired companies, Schwazze reported a $2.5 million operating loss in the fourth quarter of 2022, compared to $3.6 million of operating profit last year. Below the line, increased interest expense, $6.8 million versus $2.5 million, a $4.7 million loss on disposition of assets, and a $9.7 million unrealized loss on derivatives, resulted in EBT of a negative $23.7 million.
Taxes of $3.6 million in the quarter and $2.5 million of preferred dividends resulted in a loss to common shareholders of $29.8 million, or a loss of $0.53 per share, in the fourth quarter of 2022, compared to net income of $5.5 million, or $0.12 per share, in the fourth quarter of 2021. Schwazze generated adjusted EBITDA of $13.3 million in the quarter, or a 33% margin, up from $7.5 million, or a 28% margin, last year.
As we have mentioned in past reports, full year results were impacted by a challenging Colorado market, offset by the addition of the New Mexico operations. Sales in the Colorado market decreased in 2022 following two years of strong growth. The Colorado market dropped 21% from $2.23 billion in gross sales during 2021 to $1.77 billion in gross sales during 2022. The New Mexico market showed strong growth in 2022 following legalization of adult-use cannabis sales starting on April 1, 2022. According to BDSA, the New Mexico market generated approximately&nbsp;$461 million in sales in 2022, up from approximately $264 million in sales during 2021, representing an increase of approximately 75%.
Consolidated revenues for the year ended December&nbsp;31,&nbsp;2022, totaled $159.4 million, compared to revenues of $108.4 million, an increase of 47%. The increase was influenced by a number of factors, including consummation of identified acquisitions, new store openings, entrance into the New Mexico market, and adult-use legalization taking effect in New Mexico in 2022. In 2022, the Company completed seven acquisitions and opened six new stores not related to acquisitions, which increased the Companyâ€™s retail presence from 18 dispensaries as of December 31, 2021 to 41 dispensaries as of December 31, 2022.
Retail revenues for 2022 were $141.3 million, an increase of $67.5 million, or 92%, compared to the year ended December&nbsp;31,&nbsp;2021. The increase in Retail revenues was primarily driven the by acquisition of seven new dispensaries in Colorado, the Companyâ€™s acquisition of ten R. Greenleaf dispensaries in February 2022, the opening of six new stores independent of acquisitions, and the legalization of adult-use recreational cannabis sales coming into effect in New Mexico in April 2022.
Revenues for the Wholesale segment were $17.8 million, a decrease of $16.6 million, or 47%, compared to 2021. Wholesale revenues decreased in 2022 as compared to 2021 due to over-supply and negative pricing pressure in the wholesale market.&nbsp;Based on published pricing data from the State of Colorado, the average price per pound of cannabis flower decreased from $1,220 per pound in 2021 to $706 per pound in 2022.
Gross profit for the year totaled $85.0 million, or a 53.4% margin, compared to gross profit of $49.4 million, or a 45.5% gross margin, in 2021. While the Companyâ€™s cost of goods and services expense increased in 2022, it increased at a lower rate than the Companyâ€™s consolidated revenue, which increased by 47% in 2022, as compared to an increase in cost of goods and services of 26% during 2022, due to increased vertical integration and improved internal cost of operations that pass through to retail margins along with operation synergies leveraging internal economies of scale in each state where the Company operates. 
 
Operating expenses for the year ended December&nbsp;31,&nbsp;2022, totaled $72.2 million, compared to operating expenses of $38.9 million during 2021. The increase was largely due to increased selling, general and administrative expenses, which includes certain one-time impairment charges for the year ended December 31, 2022, and increased salary expenses. Other expense, net, for 2022, totaled $16.4 million, compared to other income, net, of $8.5 million in 2021, driven by increased interest expense and the loss on disposal of assets, partly offset by unrealized gains on derivatives.
 For the year, Schwazze generated a net loss to common stockholders of $26.3 million, or a loss of $0.49 per share, compared to net income of $7.2 million, or $0.17 per share, during the year ended December&nbsp;31,&nbsp;2021.
Adjusted EBITDA for the year was $52.0 million, or a 33% margin, compared to $32.2 million, or a 30% margin, in 2021.
Cash Flow Generation 
 
Schwazze generated positive cash flow from operations for the fourth quarter and the full year, a key differentiator of Schwazze from many of its cannabis competitors, and one that we believe will be increasing important in the current operating environment. The Company&#8217;s ability to show positive cash flow from operations positions Schwazze to not only be a survivor, but positions the Company to capitalize on any potential demise of current competitors.
In the fourth quarter, Schwazze generated $5.4 million of CFFO, compared to $3.6 million in the same period last year. For the full year, the Company produced $11.4 million of cash flow from operations, up from $8.4 million in 2021. The generation of positive cash flow allows the Company to meet its borrowing obligations, reinvest in its infrastructure investments, and implement its strategy of going deep in both Colorado and New Mexico, in our view.
Brand Building Continues 
 
 The Schwazze House of Brands continues to grow. Schwazze is actively building a house of brands that includes both active retail banners as well as products for sale at both the retail and wholesale level, manufacturing all products and controlling the quality for such brands through its vertical integration.
The Lowell Farms brand was launched in both the Colorado and New Mexico markets, although different paths were followed. In Colorado, the product was first rolled out to non-Schwazze dispensaries, with the product entering Schwazze owned dispensaries in April. In New Mexico, the Lowell Farms product was rolled out in the R. Greenleaf dispensaries first and is now expanding distribution to non-network dispensaries. Current products include: Quicks, Classics, and Singles. Quicks and Classics are sold in 3.5g multi-units packs in blends of strains of indica, sativa, and hybrid dominances, while â€œsinglesâ€ are 1g, single strain pre-rolls. According to management, demand has been strong.
Schwazze also is introducing EDW, or Every Day Weed, a Schwazze-owned brand. A&nbsp;pre-packaged pouch of loose-ground flower offered in half-ounce increments at an affordable price point, EDW is a unique product that is not currently available in the market and management has high hopes for the brand.
As we have mentioned in past reports, the building of brands should drive Schwazze to be valued more like a consumer products company, with their much higher multiples, than as just another cannabis dispensary.
<div>
Updated Projections
Schwazze&#8217;s&nbsp;growth plans remain on track. And, despite challenges for the entire industry, we continue to believe in the Company&#8217;s long-term plan of building a regional powerhouse through developing scale with a customer-first approach, curating a distinguished house of brands, and leveraging data analytics and technology to drive decisions.
The challenged Colorado market, however, will be a drag on results, potentially lasting through much of 2023. On the positive side, we have an extra three months of New Mexico recreational use, new locations, and acquisitions. Unlike past quarters, management did not provide any insight into expectations for 2023 on the conference call. We have taken what we believe is a conservative approach to growth in 2023.
We are projecting first quarter revenue of $41.5 million, compared to $31.8 million in the year ago period. Gross margin should continue to improve year-over-year. We are projecting operating income of $8.3 million. Our estimated net loss for common shareholders is $2.1 million, or a loss of $0.04 per share. For the full year, we are projecting revenue of $180.5 million, adjusted EBITDA of $62.1 million, and a net loss of $1.5 million, or a loss of $0.03 per share.
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Operating Results for the Fourth Quarter and Full Year 2022
For the fourth quarter, revenue was $40.1 million, up 51% from $26.5 million in the fourth quarter of 2021. We had forecast $41.1 million. Retail revenue in the quarter was $36.9 million, compared to $19.7 million a year ago. Impacted by oversupply and declining prices, Wholesale revenue declined to $3.2 million in the quarter, versus $6.8 million in the fourth quarter of 2021. Schwazze continued to execute in a down wholesale market in Colorado, the Company&#8217;s largest market and biggest revenue stream. The Company outpaced the Colorado market, this time by 11%, which now makes for a eighth consecutive quarter in doing so.
In Colorado, two year stacked IDs were off 6% and were off 9% for the one year. Average basket was up 1.5% to $60.86, but customer visits fell 10.5% to 416,717. In New Mexico, two year stacked IDs were up 57% and one year was up 43%. Average basket declined 11.8% to $52.54, while customer visits were up 61.7% to 219,665.
Gross margin in the quarter improved to 57.2% from 45.8% in the same period a year ago. Driven by an $8.0 million impairment charge and increased expenses mostly related to adding acquired companies, Schwazze reported a $2.5 million operating loss in the fourth quarter of 2022, compared to $3.6 million of operating profit last year. Below the line, increased interest expense, $6.8 million versus $2.5 million, a $4.7 million loss on disposition of assets, and a $9.7 million unrealized loss on derivatives, resulted in EBT of a negative $23.7 million.
Taxes of $3.6 million in the quarter and $2.5 million of preferred dividends resulted in a loss to common shareholders of $29.8 million, or a loss of $0.53 per share, in the fourth quarter of 2022, compared to net income of $5.5 million, or $0.12 per share, in the fourth quarter of 2021. Schwazze generated adjusted EBITDA of $13.3 million in the quarter, or a 33% margin, up from $7.5 million, or a 28% margin, last year.
As we have mentioned in past reports, full year results were impacted by a challenging Colorado market, offset by the addition of the New Mexico operations. Sales in the Colorado market decreased in 2022 following two years of strong growth. The Colorado market dropped 21% from $2.23 billion in gross sales during 2021 to $1.77 billion in gross sales during 2022. The New Mexico market showed strong growth in 2022 following legalization of adult-use cannabis sales starting on April 1, 2022. According to BDSA, the New Mexico market generated approximately&nbsp;$461 million in sales in 2022, up from approximately $264 million in sales during 2021, representing an increase of approximately 75%.
Consolidated revenues for the year ended December&nbsp;31,&nbsp;2022, totaled $159.4 million, compared to revenues of $108.4 million, an increase of 47%. The increase was influenced by a number of factors, including consummation of identified acquisitions, new store openings, entrance into the New Mexico market, and adult-use legalization taking effect in New Mexico in 2022. In 2022, the Company completed seven acquisitions and opened six new stores not related to acquisitions, which increased the Companyâ€™s retail presence from 18 dispensaries as of December 31, 2021 to 41 dispensaries as of December 31, 2022.
Retail revenues for 2022 were $141.3 million, an increase of $67.5 million, or 92%, compared to the year ended December&nbsp;31,&nbsp;2021. The increase in Retail revenues was primarily driven the by acquisition of seven new dispensaries in Colorado, the Companyâ€™s acquisition of ten R. Greenleaf dispensaries in February 2022, the opening of six new stores independent of acquisitions, and the legalization of adult-use recreational cannabis sales coming into effect in New Mexico in April 2022.
Revenues for the Wholesale segment were $17.8 million, a decrease of $16.6 million, or 47%, compared to 2021. Wholesale revenues decreased in 2022 as compared to 2021 due to over-supply and negative pricing pressure in the wholesale market.&nbsp;Based on published pricing data from the State of Colorado, the average price per pound of cannabis flower decreased from $1,220 per pound in 2021 to $706 per pound in 2022.
Gross profit for the year totaled $85.0 million, or a 53.4% margin, compared to gross profit of $49.4 million, or a 45.5% gross margin, in 2021. While the Companyâ€™s cost of goods and services expense increased in 2022, it increased at a lower rate than the Companyâ€™s consolidated revenue, which increased by 47% in 2022, as compared to an increase in cost of goods and services of 26% during 2022, due to increased vertical integration and improved internal cost of operations that pass through to retail margins along with operation synergies leveraging internal economies of scale in each state where the Company operates.
   
Operating expenses for the year ended December&nbsp;31,&nbsp;2022, totaled $72.2 million, compared to operating expenses of $38.9 million during 2021. The increase was largely due to increased selling, general and administrative expenses, which includes certain one-time impairment charges for the year ended December 31, 2022, and increased salary expenses. Other expense, net, for 2022, totaled $16.4 million, compared to other income, net, of $8.5 million in 2021, driven by increased interest expense and the loss on disposal of assets, partly offset by unrealized gains on derivatives.
 For the year, Schwazze generated a net loss to common stockholders of $26.3 million, or a loss of $0.49 per share, compared to net income of $7.2 million, or $0.17 per share, during the year ended December&nbsp;31,&nbsp;2021.
Adjusted EBITDA for the year was $52.0 million, or a 33% margin, compared to $32.2 million, or a 30% margin, in 2021.
Cash Flow Generation
   
Schwazze generated positive cash flow from operations for the fourth quarter and the full year, a key differentiator of Schwazze from many of its cannabis competitors, and one that we believe will be increasing important in the current operating environment. The Company&#8217;s ability to show positive cash flow from operations positions Schwazze to not only be a survivor, but positions the Company to capitalize on any potential demise of current competitors.
In the fourth quarter, Schwazze generated $5.4 million of CFFO, compared to $3.6 million in the same period last year. For the full year, the Company produced $11.4 million of cash flow from operations, up from $8.4 million in 2021. The generation of positive cash flow allows the Company to meet its borrowing obligations, reinvest in its infrastructure investments, and implement its strategy of going deep in both Colorado and New Mexico, in our view.
Brand Building Continues
   
 The Schwazze House of Brands continues to grow. Schwazze is actively building a house of brands that includes both active retail banners as well as products for sale at both the retail and wholesale level, manufacturing all products and controlling the quality for such brands through its vertical integration.
The Lowell Farms brand was launched in both the Colorado and New Mexico markets, although different paths were followed. In Colorado, the product was first rolled out to non-Schwazze dispensaries, with the product entering Schwazze owned dispensaries in April. In New Mexico, the Lowell Farms product was rolled out in the R. Greenleaf dispensaries first and is now expanding distribution to non-network dispensaries. Current products include: Quicks, Classics, and Singles. Quicks and Classics are sold in 3.5g multi-units packs in blends of strains of indica, sativa, and hybrid dominances, while â€œsinglesâ€ are 1g, single strain pre-rolls. According to management, demand has been strong.
Schwazze also is introducing EDW, or Every Day Weed, a Schwazze-owned brand. A&nbsp;pre-packaged pouch of loose-ground flower offered in half-ounce increments at an affordable price point, EDW is a unique product that is not currently available in the market and management has high hopes for the brand.
As we have mentioned in past reports, the building of brands should drive Schwazze to be valued more like a consumer products company, with their much higher multiples, than as just another cannabis dispensary.

Updated Projections
Schwazze&#8217;s&nbsp;growth plans remain on track. And, despite challenges for the entire industry, we continue to believe in the Company&#8217;s long-term plan of building a regional powerhouse through developing scale with a customer-first approach, curating a distinguished house of brands, and leveraging data analytics and technology to drive decisions.
The challenged Colorado market, however, will be a drag on results, potentially lasting through much of 2023. On the positive side, we have an extra three months of New Mexico recreational use, new locations, and acquisitions. Unlike past quarters, management did not provide any insight into expectations for 2023 on the conference call. We have taken what we believe is a conservative approach to growth in 2023.
We are projecting first quarter revenue of $41.5 million, compared to $31.8 million in the year ago period. Gross margin should continue to improve year-over-year. We are projecting operating income of $8.3 million. Our estimated net loss for common shareholders is $2.1 million, or a loss of $0.04 per share. For the full year, we are projecting revenue of $180.5 million, adjusted EBITDA of $62.1 million, and a net loss of $1.5 million, or a loss of $0.03 per share.

Continuing to Perform in a Challenging Market

Business Services

FY2022 Reported With New Clinical Trials On Track

Lowering Near-Term Estimates; Durable Cash Flow Story Remains Intact
 
We have lowered our 2023 EBITDA and earnings per share estimates to $1.09 billion and $5.50 from $1.14 billion and $5.90, respectively. While we lowered our first half revenue expectations, our full year revenue estimate was increased based on greater contributions from the coal segment and expectations for an improved commodity price environment in the second half of the year. We expect stronger financial results in the second half of 2023 to drive top line revenue growth due, in part, to a second shift being added at the Gibson mine in the second quarter. Notably, we refined and increased our operating cost estimates to reflect higher labor costs, sales-related expenses, and operational costs related to longwall moves within the mining segment.
 
Prices for crude oil and natural gas have declined throughout the year. While coal prices have softened in recent weeks, 34.7 million tons of the partnershipâ€™s 2023 planned coal sales, or 94% at the mid-point of guidance, were committed and priced as of the date of ARLPâ€™s fourth quarter conference call. Year-to-date through March 28, crude oil and natural gas futures prices averaged $76.33 per barrel and $2.84 per thousand cubic feet (Mcf) compared to $80.47 per barrel and $4.48 per Mcf at the end of 2022 and $73.38 per barrel and $2.16 per Mcf as of March 28. As a result, we lowered our expectations for the oil &amp; gas royalty segment.
 
Alliance Resource Partners 2023 Guidance
 
The table below summarizes the partnership's guidance for key line items in 2023, along with our estimates.
Alliance Resource Partners 2023 Guidance
<img src="https://www.noblelinx.com/x/research/images/reports/ARLPTable-March282023.jpg" style="width: 525px;height: 392px;float: none" />
 

Source: Alliance Resource Partners and Noble Capital Markets Inc.
Alliance expects total coal sales volume in 2023 to be in the range of 36.0 million to 38.0 million. Based on a highly committed and priced coal contract book, management anticipates 2023 coal price realizations in the range of $67 to $69 per ton, an increase of 13% to 17% compared to 2022. Assuming production of 37.0 million tons, the mid-point of 2023 guidance, management expects that at least 50% of the uncommitted and unpriced tonnage will be sold into the export market with the balance going to either the export or domestic market as pricing dictates. For the full year 2023, segment adjusted EBITDA expense is expected to increase by approximately 10% to 15% over 2022 full year levels to a range of $40.25 to $42.25 per ton sold.
 
During the partnershipâ€™s fourth quarter conference call, management indicated that while they were beginning to see the significant inflation experienced in 2022 start to level off, labor pressures and higher sales related expenses due to higher price realizations and coal sales volumes will continue to add to costs in 2023. Management expects segment adjusted EBITDA expense per ton to be higher during the first half of 2023 compared to 2022 levels before moderating in the second half of the year.
 
Capital Structure and Liquidity
 
As of December 31, 2022, Alliance Resource Partners reported cash and cash equivalents in the amount of $296.0 million and debt amounting to $422.2 million, of which $25.0 million is current. Units outstanding were 127,195,219.&nbsp;Compared to 2022, capital expenditures are expected to be higher in 2023 and 2024. Management expects 2023 capital expenditures to be in the range of $400 million to $450 million compared to $286 million in 2022. This includes maintenance capital of $350 million to $390 million.
In January 2023, the Board of Directors authorized a $93.5 million increase to the unit repurchase program. Consequently, the partnership is authorized to repurchase up to a total of $100.0 million of ARLP's limited partner common units. As of February 24, 2023, Alliance had repurchased and retired 856,629 units at an average unit price of $21.15 for an aggregate purchase price of $18.1 million. We believe the recent repurchase is to offset equity awards to management, including options, and have made no adjustment to our outstanding unit estimate at this time.

Lowering Near-Term Estimates; Durable Cash Flow Story Remains Intact 
 
We have lowered our 2023 EBITDA and earnings per share estimates to $1.09 billion and $5.50 from $1.14 billion and $5.90, respectively. While we lowered our first half revenue expectations, our full year revenue estimate was increased based on greater contributions from the coal segment and expectations for an improved commodity price environment in the second half of the year. We expect stronger financial results in the second half of 2023 to drive top line revenue growth due, in part, to a second shift being added at the Gibson mine in the second quarter. Notably, we refined and increased our operating cost estimates to reflect higher labor costs, sales-related expenses, and operational costs related to longwall moves within the mining segment. 
 
Prices for crude oil and natural gas have declined throughout the year. While coal prices have softened in recent weeks, 34.7 million tons of the partnershipâ€™s 2023 planned coal sales, or 94% at the mid-point of guidance, were committed and priced as of the date of ARLPâ€™s fourth quarter conference call. Year-to-date through March 28, crude oil and natural gas futures prices averaged $76.33 per barrel and $2.84 per thousand cubic feet (Mcf) compared to $80.47 per barrel and $4.48 per Mcf at the end of 2022 and $73.38 per barrel and $2.16 per Mcf as of March 28. As a result, we lowered our expectations for the oil &amp; gas royalty segment. 
 
Alliance Resource Partners 2023 Guidance 
 
The table below summarizes the partnership&#8217;s guidance for key line items in 2023, along with our estimates.
Alliance Resource Partners 2023 Guidance
<img decoding="async" src="https://www.noblelinx.com/x/research/images/reports/ARLPTable-March282023.jpg" style="width: 525px;height: 392px;float: none" /> 
 

Source: Alliance Resource Partners and Noble Capital Markets Inc.
Alliance expects total coal sales volume in 2023 to be in the range of 36.0 million to 38.0 million. Based on a highly committed and priced coal contract book, management anticipates 2023 coal price realizations in the range of $67 to $69 per ton, an increase of 13% to 17% compared to 2022. Assuming production of 37.0 million tons, the mid-point of 2023 guidance, management expects that at least 50% of the uncommitted and unpriced tonnage will be sold into the export market with the balance going to either the export or domestic market as pricing dictates. For the full year 2023, segment adjusted EBITDA expense is expected to increase by approximately 10% to 15% over 2022 full year levels to a range of $40.25 to $42.25 per ton sold. 
 
During the partnershipâ€™s fourth quarter conference call, management indicated that while they were beginning to see the significant inflation experienced in 2022 start to level off, labor pressures and higher sales related expenses due to higher price realizations and coal sales volumes will continue to add to costs in 2023. Management expects segment adjusted EBITDA expense per ton to be higher during the first half of 2023 compared to 2022 levels before moderating in the second half of the year. 
 
Capital Structure and Liquidity 
 
As of December 31, 2022, Alliance Resource Partners reported cash and cash equivalents in the amount of $296.0 million and debt amounting to $422.2 million, of which $25.0 million is current. Units outstanding were 127,195,219.&nbsp;Compared to 2022, capital expenditures are expected to be higher in 2023 and 2024. Management expects 2023 capital expenditures to be in the range of $400 million to $450 million compared to $286 million in 2022. This includes maintenance capital of $350 million to $390 million.
In January 2023, the Board of Directors authorized a $93.5 million increase to the unit repurchase program. Consequently, the partnership is authorized to repurchase up to a total of $100.0 million of ARLP&#8217;s limited partner common units. As of February 24, 2023, Alliance had repurchased and retired 856,629 units at an average unit price of $21.15 for an aggregate purchase price of $18.1 million. We believe the recent repurchase is to offset equity awards to management, including options, and have made no adjustment to our outstanding unit estimate at this time.

Lowering Near-Term Estimates; Durable Cash Flow Story Remains Intact
   
We have lowered our 2023 EBITDA and earnings per share estimates to $1.09 billion and $5.50 from $1.14 billion and $5.90, respectively. While we lowered our first half revenue expectations, our full year revenue estimate was increased based on greater contributions from the coal segment and expectations for an improved commodity price environment in the second half of the year. We expect stronger financial results in the second half of 2023 to drive top line revenue growth due, in part, to a second shift being added at the Gibson mine in the second quarter. Notably, we refined and increased our operating cost estimates to reflect higher labor costs, sales-related expenses, and operational costs related to longwall moves within the mining segment.
   
Prices for crude oil and natural gas have declined throughout the year. While coal prices have softened in recent weeks, 34.7 million tons of the partnershipâ€™s 2023 planned coal sales, or 94% at the mid-point of guidance, were committed and priced as of the date of ARLPâ€™s fourth quarter conference call. Year-to-date through March 28, crude oil and natural gas futures prices averaged $76.33 per barrel and $2.84 per thousand cubic feet (Mcf) compared to $80.47 per barrel and $4.48 per Mcf at the end of 2022 and $73.38 per barrel and $2.16 per Mcf as of March 28. As a result, we lowered our expectations for the oil &amp; gas royalty segment.
   
Alliance Resource Partners 2023 Guidance
   
The table below summarizes the partnership&#8217;s guidance for key line items in 2023, along with our estimates.
Alliance Resource Partners 2023 Guidance

  

Source: Alliance Resource Partners and Noble Capital Markets Inc.
Alliance expects total coal sales volume in 2023 to be in the range of 36.0 million to 38.0 million. Based on a highly committed and priced coal contract book, management anticipates 2023 coal price realizations in the range of $67 to $69 per ton, an increase of 13% to 17% compared to 2022. Assuming production of 37.0 million tons, the mid-point of 2023 guidance, management expects that at least 50% of the uncommitted and unpriced tonnage will be sold into the export market with the balance going to either the export or domestic market as pricing dictates. For the full year 2023, segment adjusted EBITDA expense is expected to increase by approximately 10% to 15% over 2022 full year levels to a range of $40.25 to $42.25 per ton sold.
   
During the partnershipâ€™s fourth quarter conference call, management indicated that while they were beginning to see the significant inflation experienced in 2022 start to level off, labor pressures and higher sales related expenses due to higher price realizations and coal sales volumes will continue to add to costs in 2023. Management expects segment adjusted EBITDA expense per ton to be higher during the first half of 2023 compared to 2022 levels before moderating in the second half of the year.
   
Capital Structure and Liquidity
   
As of December 31, 2022, Alliance Resource Partners reported cash and cash equivalents in the amount of $296.0 million and debt amounting to $422.2 million, of which $25.0 million is current. Units outstanding were 127,195,219.&nbsp;Compared to 2022, capital expenditures are expected to be higher in 2023 and 2024. Management expects 2023 capital expenditures to be in the range of $400 million to $450 million compared to $286 million in 2022. This includes maintenance capital of $350 million to $390 million.
In January 2023, the Board of Directors authorized a $93.5 million increase to the unit repurchase program. Consequently, the partnership is authorized to repurchase up to a total of $100.0 million of ARLP&#8217;s limited partner common units. As of February 24, 2023, Alliance had repurchased and retired 856,629 units at an average unit price of $21.15 for an aggregate purchase price of $18.1 million. We believe the recent repurchase is to offset equity awards to management, including options, and have made no adjustment to our outstanding unit estimate at this time.

Lowering Near-Term Estimates; Cash Flow Story Remains Favorable

Summary.&nbsp; PDS Biotech reported a 4Q22 loss of $19.1 million or $(0.61) per share and a FY2022 loss of $40.9 million or $(1.43) per share.&nbsp; The 4Q results included a Research and Development expense of $10 million in licensing fees for PDS0301, paid with $5 million in cash and $5 million in stock. Management also gave additional details for the upcoming Phase 3 trials with PDS0101 and PDS0301 for FY2023. Cash on hand on December 31, 2022 was $73.8 million, which is expected to fund operations through 3Q24.
PDS Expects To Begin The Phase 3 VERSATILE-003 In 4Q23. The Phase 2 VERSATILE-002 trial reported strong results testing PDS0101 with Keytruda (pembrolizumab, a PD-1 checkpoint inhibitor from Merck) for recurrent or metastatic head and neck cancer.&nbsp; Based on this data, PDS has received guidance for the Phase 3 trial, to be known as VERSATILE-003. The trial protocols are being finalized for an IND submission expected in 2H23.
The final trial design is expected follow the Phase 2 VERSATILE-002 study, enrolling patients with head and neck cancer with recurrent or metastatic disease. PDS0101 will be given with a checkpoint inhibitor approved for treatment of head and neck cancer, which could be either Keytruda and Opdivo (nivolumab, Bristol Myers Squibb).&nbsp; The primary endpoint is expected to be overall survival (OS), with secondary endpoints of response rate (RR) and progression free survival (PFS).&nbsp;
The company has completed the technology transfer to a contract manufacturer to produce PDS0101. Manufacturing is expected to be completed to allow IND submission in 2H23.&nbsp; This could allow the trial to begin enrollment in 4Q23. Importantly, the Chemistry Manufacturing and Controls (CMC) section of the BLA will be prepared for submission.
 
Trial Design Is Expected To Include Interim Analysis.&nbsp; PDS management has indicated that the trial design could include an interim analysis intended to determine efficacy and safety.&nbsp; The number of patients to be enrolled has not yet been determined, but we expected the interim analysis to have sufficient statistical power for accelerated approval.&nbsp;
 
Triple Therapy Trial.&nbsp; PDS Management reported that is has continued discussions with the FDA regarding the design of the â€œTriple Therapyâ€ Phase 3 trial testing the combination of PDS0101, PDS0301 (tumor-targeted IL-12), and a checkpoint inhibitor.&nbsp; The protocols are being developed and expected to be finalized during 2023.
VERSATILE-003 Will Have Highest Priority.&nbsp; PDS management is focusing on starting the Phase 3 VERSATIVE-003 trial and moving toward an approval in head and neck cancer. We estimate the Triple Therapy trial is about 3 to 6 months behind the VERSATILE-002, but we do not expect it to start until the company has secured adequate funding.&nbsp; We see this as a good strategy that ensures that PDS0101 can complete its lead indication and file a BLA.
Additional Trials in HPV16-positive Cancers.&nbsp; The company has presented strong preliminary data from an Phase 2 Investigator Initiated Trial (IIT) in testing PSD0101 with radiotherapy in cervical cancer (IMMUNOCERV). The study 9 out of 9 patients had greater than 60% tumor shrinkage at their mid-point evaluation, with 8 out of 9 showing a complete response. Another ITT is testing PDS0101 with or without Keytruda before oropharynx cancer surgery. We believe these trials could provide data to support label expansion for use in other HPV16-positive cancer, but do not expect larger trials until VERSATILE-003 is completed.
Conclusion.&nbsp; PDS continues to meet its expected timeframes to advance PDS0101 and PDS0301 toward Phase 3 trials.&nbsp; Throughout 2022, the company reported strong data from its clinical trials with PDS0101 and PDS0301 in several trials for several tumor types with HPV16-positive cancers.&nbsp; Additional studies showed the mechanism of action that support the improved responses.&nbsp; Although the company continues to make fundamental progress, the stock has been declining with the market for small biotechnology companies.&nbsp; We are reiterating our Outperform rating and $19 price target.

Summary.&nbsp; PDS Biotech reported a 4Q22 loss of $19.1 million or $(0.61) per share and a FY2022 loss of $40.9 million or $(1.43) per share.&nbsp; The 4Q results included a Research and Development expense of $10 million in licensing fees for PDS0301, paid with $5 million in cash and $5 million in stock. Management also gave additional details for the upcoming Phase 3 trials with PDS0101 and PDS0301 for FY2023. Cash on hand on December 31, 2022 was $73.8 million, which is expected to fund operations through 3Q24.
PDS Expects To Begin The Phase 3 VERSATILE-003 In 4Q23. The Phase 2 VERSATILE-002 trial reported strong results testing PDS0101 with Keytruda (pembrolizumab, a PD-1 checkpoint inhibitor from Merck) for recurrent or metastatic head and neck cancer.&nbsp; Based on this data, PDS has received guidance for the Phase 3 trial, to be known as VERSATILE-003. The trial protocols are being finalized for an IND submission expected in 2H23.
The final trial design is expected follow the Phase 2 VERSATILE-002 study, enrolling patients with head and neck cancer with recurrent or metastatic disease. PDS0101 will be given with a checkpoint inhibitor approved for treatment of head and neck cancer, which could be either Keytruda and Opdivo (nivolumab, Bristol Myers Squibb).&nbsp; The primary endpoint is expected to be overall survival (OS), with secondary endpoints of response rate (RR) and progression free survival (PFS).&nbsp;
The company has completed the technology transfer to a contract manufacturer to produce PDS0101. Manufacturing is expected to be completed to allow IND submission in 2H23.&nbsp; This could allow the trial to begin enrollment in 4Q23. Importantly, the Chemistry Manufacturing and Controls (CMC) section of the BLA will be prepared for submission. 
 
Trial Design Is Expected To Include Interim Analysis.&nbsp; PDS management has indicated that the trial design could include an interim analysis intended to determine efficacy and safety.&nbsp; The number of patients to be enrolled has not yet been determined, but we expected the interim analysis to have sufficient statistical power for accelerated approval.&nbsp; 
 
Triple Therapy Trial.&nbsp; PDS Management reported that is has continued discussions with the FDA regarding the design of the â€œTriple Therapyâ€ Phase 3 trial testing the combination of PDS0101, PDS0301 (tumor-targeted IL-12), and a checkpoint inhibitor.&nbsp; The protocols are being developed and expected to be finalized during 2023.
VERSATILE-003 Will Have Highest Priority.&nbsp; PDS management is focusing on starting the Phase 3 VERSATIVE-003 trial and moving toward an approval in head and neck cancer. We estimate the Triple Therapy trial is about 3 to 6 months behind the VERSATILE-002, but we do not expect it to start until the company has secured adequate funding.&nbsp; We see this as a good strategy that ensures that PDS0101 can complete its lead indication and file a BLA.
Additional Trials in HPV16-positive Cancers.&nbsp; The company has presented strong preliminary data from an Phase 2 Investigator Initiated Trial (IIT) in testing PSD0101 with radiotherapy in cervical cancer (IMMUNOCERV). The study 9 out of 9 patients had greater than 60% tumor shrinkage at their mid-point evaluation, with 8 out of 9 showing a complete response. Another ITT is testing PDS0101 with or without Keytruda before oropharynx cancer surgery. We believe these trials could provide data to support label expansion for use in other HPV16-positive cancer, but do not expect larger trials until VERSATILE-003 is completed.
Conclusion.&nbsp; PDS continues to meet its expected timeframes to advance PDS0101 and PDS0301 toward Phase 3 trials.&nbsp; Throughout 2022, the company reported strong data from its clinical trials with PDS0101 and PDS0301 in several trials for several tumor types with HPV16-positive cancers.&nbsp; Additional studies showed the mechanism of action that support the improved responses.&nbsp; Although the company continues to make fundamental progress, the stock has been declining with the market for small biotechnology companies.&nbsp; We are reiterating our Outperform rating and $19 price target.

Summary.&nbsp; PDS Biotech reported a 4Q22 loss of $19.1 million or $(0.61) per share and a FY2022 loss of $40.9 million or $(1.43) per share.&nbsp; The 4Q results included a Research and Development expense of $10 million in licensing fees for PDS0301, paid with $5 million in cash and $5 million in stock. Management also gave additional details for the upcoming Phase 3 trials with PDS0101 and PDS0301 for FY2023. Cash on hand on December 31, 2022 was $73.8 million, which is expected to fund operations through 3Q24.
PDS Expects To Begin The Phase 3 VERSATILE-003 In 4Q23. The Phase 2 VERSATILE-002 trial reported strong results testing PDS0101 with Keytruda (pembrolizumab, a PD-1 checkpoint inhibitor from Merck) for recurrent or metastatic head and neck cancer.&nbsp; Based on this data, PDS has received guidance for the Phase 3 trial, to be known as VERSATILE-003. The trial protocols are being finalized for an IND submission expected in 2H23.
The final trial design is expected follow the Phase 2 VERSATILE-002 study, enrolling patients with head and neck cancer with recurrent or metastatic disease. PDS0101 will be given with a checkpoint inhibitor approved for treatment of head and neck cancer, which could be either Keytruda and Opdivo (nivolumab, Bristol Myers Squibb).&nbsp; The primary endpoint is expected to be overall survival (OS), with secondary endpoints of response rate (RR) and progression free survival (PFS).&nbsp;
The company has completed the technology transfer to a contract manufacturer to produce PDS0101. Manufacturing is expected to be completed to allow IND submission in 2H23.&nbsp; This could allow the trial to begin enrollment in 4Q23. Importantly, the Chemistry Manufacturing and Controls (CMC) section of the BLA will be prepared for submission.
   
Trial Design Is Expected To Include Interim Analysis.&nbsp; PDS management has indicated that the trial design could include an interim analysis intended to determine efficacy and safety.&nbsp; The number of patients to be enrolled has not yet been determined, but we expected the interim analysis to have sufficient statistical power for accelerated approval.&nbsp;
   
Triple Therapy Trial.&nbsp; PDS Management reported that is has continued discussions with the FDA regarding the design of the â€œTriple Therapyâ€ Phase 3 trial testing the combination of PDS0101, PDS0301 (tumor-targeted IL-12), and a checkpoint inhibitor.&nbsp; The protocols are being developed and expected to be finalized during 2023.
VERSATILE-003 Will Have Highest Priority.&nbsp; PDS management is focusing on starting the Phase 3 VERSATIVE-003 trial and moving toward an approval in head and neck cancer. We estimate the Triple Therapy trial is about 3 to 6 months behind the VERSATILE-002, but we do not expect it to start until the company has secured adequate funding.&nbsp; We see this as a good strategy that ensures that PDS0101 can complete its lead indication and file a BLA.
Additional Trials in HPV16-positive Cancers.&nbsp; The company has presented strong preliminary data from an Phase 2 Investigator Initiated Trial (IIT) in testing PSD0101 with radiotherapy in cervical cancer (IMMUNOCERV). The study 9 out of 9 patients had greater than 60% tumor shrinkage at their mid-point evaluation, with 8 out of 9 showing a complete response. Another ITT is testing PDS0101 with or without Keytruda before oropharynx cancer surgery. We believe these trials could provide data to support label expansion for use in other HPV16-positive cancer, but do not expect larger trials until VERSATILE-003 is completed.
Conclusion.&nbsp; PDS continues to meet its expected timeframes to advance PDS0101 and PDS0301 toward Phase 3 trials.&nbsp; Throughout 2022, the company reported strong data from its clinical trials with PDS0101 and PDS0301 in several trials for several tumor types with HPV16-positive cancers.&nbsp; Additional studies showed the mechanism of action that support the improved responses.&nbsp; Although the company continues to make fundamental progress, the stock has been declining with the market for small biotechnology companies.&nbsp; We are reiterating our Outperform rating and $19 price target.

4Q22 Results Reported With Clinical Plan Updates For 2023

Healthcare

Positive Results Announced From 2nd BX1000 Interim Analysis

Investment Appraisal&nbsp;
The company reported revenue of $3.8 million and an adj. EBITDA loss of $3.5 million in the quarter, roughly in line with our estimates as illustrated in Figure #1 Q4 Results. In Q4 the company made a gesture of good will to its user base by releasing a free DLC (expansion pack) for NASCAR 21: Ignition. The free expansion pack was an effort to restore confidence in the company after initial gameplay issues. Revenue in the quarter was driven by the successful release of NASCAR Rivals on the Nintendo Switch.
The company announced its highly anticipated IndyCar game launch will be delayed until 2024. Management attributed the delay to an increased focus on quality, given that an Indy title has not been released in over a decade. The company is taking extra time to develop the game in order to make a good first impression with the Indy Car fan base. Notably, in order to avoid a repeat of product glitches and disappointment with the launch of NASCAR Ignition 21, the company hired expert consultants. Management noted that subsequent Indy titles will benefit from efficiencies, given that quality tracks and cars are already developed. 
Due to the delayed release of Indy Car and consequent deferral of revenue to 2024, we are lowering our estimates for 2023. We are lowering our full year revenue and adj. EBITDA forecast from $23.5 million to $8.9 million and from a loss of $8.0 million to a loss of $22.6 million, respectively. For Q1, we expect revenue of $2.6 million and an adj. EBITDA loss of $4.6 million. Our outlook anticipates a high level of investment in game development over the balance of the year, predicated on the company successfully obtaining additional funding through a debt and/or equity raise. Therefore, our estimattes are fluid, as the company will need to reduce its spend if it is unable to source additional funding later in the year. &nbsp;&nbsp;
Management noted that the company has $6.5 million in cash with a monthly burn rate of approximately $1.6 million. The company is not expected to generate positive cash flow in 2023, due to the delay of the release of its Indy Car title. As such, the company will need additional financing to continue operating in the second half of the year, at the current burn rate.&nbsp; 
We view the shares as an option on the companyâ€™s ability to continue operating until it becomes profitable, which we believe could occur in 2024. Due to the recent significant advance of the shares, up over 150% from recent lows in late January, we rate the shares Market Perform. We will look for opportunities for a rating revision as product luanches gain visibility and as the company's access to capital needed for product development becomes more evident.
 ---------- page break ----------
 
 
Figure #1 Q4 Results
 
<img src="https://noblelinx.com/x/research/images/reports/MSGM_20230327_25709-01.jpg" style="width: 390px;height: 627px" />
Note: Per share data calculations have been adjusted to reflect a 1-for-10 reverse stock split on Nov. 10, 2022 on a retroactive basis.

Investment Appraisal&nbsp;
The company reported revenue of $3.8 million and an adj. EBITDA loss of $3.5 million in the quarter, roughly in line with our estimates as illustrated in Figure #1 Q4 Results. In Q4 the company made a gesture of good will to its user base by releasing a free DLC (expansion pack) for NASCAR 21: Ignition. The free expansion pack was an effort to restore confidence in the company after initial gameplay issues. Revenue in the quarter was driven by the successful release of NASCAR Rivals on the Nintendo Switch.
The company announced its highly anticipated IndyCar game launch will be delayed until 2024. Management attributed the delay to an increased focus on quality, given that an Indy title has not been released in over a decade. The company is taking extra time to develop the game in order to make a good first impression with the Indy Car fan base. Notably, in order to avoid a repeat of product glitches and disappointment with the launch of NASCAR Ignition 21, the company hired expert consultants. Management noted that subsequent Indy titles will benefit from efficiencies, given that quality tracks and cars are already developed. 
Due to the delayed release of Indy Car and consequent deferral of revenue to 2024, we are lowering our estimates for 2023. We are lowering our full year revenue and adj. EBITDA forecast from $23.5 million to $8.9 million and from a loss of $8.0 million to a loss of $22.6 million, respectively. For Q1, we expect revenue of $2.6 million and an adj. EBITDA loss of $4.6 million. Our outlook anticipates a high level of investment in game development over the balance of the year, predicated on the company successfully obtaining additional funding through a debt and/or equity raise. Therefore, our estimattes are fluid, as the company will need to reduce its spend if it is unable to source additional funding later in the year. &nbsp;&nbsp;
Management noted that the company has $6.5 million in cash with a monthly burn rate of approximately $1.6 million. The company is not expected to generate positive cash flow in 2023, due to the delay of the release of its Indy Car title. As such, the company will need additional financing to continue operating in the second half of the year, at the current burn rate.&nbsp; 
We view the shares as an option on the companyâ€™s ability to continue operating until it becomes profitable, which we believe could occur in 2024. Due to the recent significant advance of the shares, up over 150% from recent lows in late January, we rate the shares Market Perform. We will look for opportunities for a rating revision as product luanches gain visibility and as the company&#8217;s access to capital needed for product development becomes more evident.
 &#8212;&#8212;&#8212;- page break &#8212;&#8212;&#8212;- 
 
 
Figure #1 Q4 Results
 
<img decoding="async" src="https://noblelinx.com/x/research/images/reports/MSGM_20230327_25709-01.jpg" style="width: 390px;height: 627px" />
Note: Per share data calculations have been adjusted to reflect a 1-for-10 reverse stock split on Nov. 10, 2022 on a retroactive basis.

Investment Appraisal&nbsp;
The company reported revenue of $3.8 million and an adj. EBITDA loss of $3.5 million in the quarter, roughly in line with our estimates as illustrated in Figure #1 Q4 Results. In Q4 the company made a gesture of good will to its user base by releasing a free DLC (expansion pack) for NASCAR 21: Ignition. The free expansion pack was an effort to restore confidence in the company after initial gameplay issues. Revenue in the quarter was driven by the successful release of NASCAR Rivals on the Nintendo Switch.
The company announced its highly anticipated IndyCar game launch will be delayed until 2024. Management attributed the delay to an increased focus on quality, given that an Indy title has not been released in over a decade. The company is taking extra time to develop the game in order to make a good first impression with the Indy Car fan base. Notably, in order to avoid a repeat of product glitches and disappointment with the launch of NASCAR Ignition 21, the company hired expert consultants. Management noted that subsequent Indy titles will benefit from efficiencies, given that quality tracks and cars are already developed. 
Due to the delayed release of Indy Car and consequent deferral of revenue to 2024, we are lowering our estimates for 2023. We are lowering our full year revenue and adj. EBITDA forecast from $23.5 million to $8.9 million and from a loss of $8.0 million to a loss of $22.6 million, respectively. For Q1, we expect revenue of $2.6 million and an adj. EBITDA loss of $4.6 million. Our outlook anticipates a high level of investment in game development over the balance of the year, predicated on the company successfully obtaining additional funding through a debt and/or equity raise. Therefore, our estimattes are fluid, as the company will need to reduce its spend if it is unable to source additional funding later in the year. &nbsp;&nbsp;
Management noted that the company has $6.5 million in cash with a monthly burn rate of approximately $1.6 million. The company is not expected to generate positive cash flow in 2023, due to the delay of the release of its Indy Car title. As such, the company will need additional financing to continue operating in the second half of the year, at the current burn rate.&nbsp; 
We view the shares as an option on the companyâ€™s ability to continue operating until it becomes profitable, which we believe could occur in 2024. Due to the recent significant advance of the shares, up over 150% from recent lows in late January, we rate the shares Market Perform. We will look for opportunities for a rating revision as product luanches gain visibility and as the company&#8217;s access to capital needed for product development becomes more evident.
 &#8212;&#8212;&#8212;- page break &#8212;&#8212;&#8212;-
   

Figure #1 Q4 Results


Note: Per share data calculations have been adjusted to reflect a 1-for-10 reverse stock split on Nov. 10, 2022 on a retroactive basis.

Pushes Out IndyCar Launch

Technology

Anticipation Builds
Defense Metals recently updated its 3-D geological model of the Wicheeda Rare Earth Element (REE) deposit. The update incorporated results from drilling completed during 2021 and 2022 that is not reflected in the January 2022 preliminary economic assessment (PEA), and will be used to update the mineral resource estimate and incorporated into a preliminary feasibility study (PFS) expected to be completed during the first quarter of 2024.
 
Results from 47 holes representing 10,876 meters of drilling has now been included in the updated geological model. The drilling programs were designed to: 1) increase mineral resource confidence from inferred to indicated and measured categories, 2) define the northern endpoint of the Wicheeda carbonate complex, and 3) to provide detailed geotechnical and hydrogeological drilling data for advanced pit slope and mine design. By way of comparison, current resources outlined in the January 2022 preliminary economic assessment&nbsp;were based on a total of 27 diamond drill holes representing 4,249 meters of drilling.
 
Updated Geological Model Illustrating PEA Mineral Resource Pit Shell
 
<img src="https://www.noblelinx.com/x/research/images/reports/DFMTF-Mar232023.JPG" style="width: 650px;height: 425px;float: none" />
Source: Defense Metals Corp.
 Drilling results from the 2021 and 2022 programs yielded some of the longest and highest-grade drill intercepts to date and led to the discovery of a new zone of high-grade mineralization at depth that has the potential to positively impact an updated mineral resource estimate. Resource infill Hole WI21-58 that returned 3.09% total rare earth oxide (TREO) over 251 meters and Hole WI22-68 which returned 6.70% TREO over 18 meters. In 2021, drilling revealed high-grade REE dolomite-carbonatite within the north area of the deposit yielding 3.17% TREO over 196 meters, including 4.29% TREO over 55 meters to a depth of 201 meters extending 30 meters below the resource pit shell.
 
Recall that in January 2022, Defense Metals released a preliminary economic assessment NI 43-101 technical report which highlighted 5.0 million tonnes of indicated resources averaging 2.95% total rare earth oxides (TREO) and 29.5 million tonnes of inferred resources averaging 1.83% TREO within a conceptual pit shell. The study affirmed the economic value of advancing the project based on significant resource potential, favorable metallurgical recoveries, and attractive return potential. Resources were based on a total of 27 diamond drill holes totaling 4,249 meters of drilling.
Capital Structure and Liquidity
As of December 31, 2022, Defense Metals reported cash in the amount of C$3,914,313 and no debt. Shares outstanding were 207,702,648.

Anticipation Builds
Defense Metals recently updated its 3-D geological model of the Wicheeda Rare Earth Element (REE) deposit. The update incorporated results from drilling completed during 2021 and 2022 that is not reflected in the January 2022 preliminary economic assessment (PEA), and will be used to update the mineral resource estimate and incorporated into a preliminary feasibility study (PFS) expected to be completed during the first quarter of 2024. 
 
Results from 47 holes representing 10,876 meters of drilling has now been included in the updated geological model. The drilling programs were designed to: 1) increase mineral resource confidence from inferred to indicated and measured categories, 2) define the northern endpoint of the Wicheeda carbonate complex, and 3) to provide detailed geotechnical and hydrogeological drilling data for advanced pit slope and mine design. By way of comparison, current resources outlined in the January 2022 preliminary economic assessment&nbsp;were based on a total of 27 diamond drill holes representing 4,249 meters of drilling. 
 
Updated Geological Model Illustrating PEA Mineral Resource Pit Shell 
 
<img decoding="async" src="https://www.noblelinx.com/x/research/images/reports/DFMTF-Mar232023.JPG" style="width: 650px;height: 425px;float: none" />
Source: Defense Metals Corp.
 Drilling results from the 2021 and 2022 programs yielded some of the longest and highest-grade drill intercepts to date and led to the discovery of a new zone of high-grade mineralization at depth that has the potential to positively impact an updated mineral resource estimate. Resource infill Hole WI21-58 that returned 3.09% total rare earth oxide (TREO) over 251 meters and Hole WI22-68 which returned 6.70% TREO over 18 meters. In 2021, drilling revealed high-grade REE dolomite-carbonatite within the north area of the deposit yielding 3.17% TREO over 196 meters, including 4.29% TREO over 55 meters to a depth of 201 meters extending 30 meters below the resource pit shell. 
 
Recall that in January 2022, Defense Metals released a preliminary economic assessment NI 43-101 technical report which highlighted 5.0 million tonnes of indicated resources averaging 2.95% total rare earth oxides (TREO) and 29.5 million tonnes of inferred resources averaging 1.83% TREO within a conceptual pit shell. The study affirmed the economic value of advancing the project based on significant resource potential, favorable metallurgical recoveries, and attractive return potential. Resources were based on a total of 27 diamond drill holes totaling 4,249 meters of drilling.
Capital Structure and Liquidity
As of December 31, 2022, Defense Metals reported cash in the amount of C$3,914,313 and no debt. Shares outstanding were 207,702,648.

Anticipation Builds
Defense Metals recently updated its 3-D geological model of the Wicheeda Rare Earth Element (REE) deposit. The update incorporated results from drilling completed during 2021 and 2022 that is not reflected in the January 2022 preliminary economic assessment (PEA), and will be used to update the mineral resource estimate and incorporated into a preliminary feasibility study (PFS) expected to be completed during the first quarter of 2024.
   
Results from 47 holes representing 10,876 meters of drilling has now been included in the updated geological model. The drilling programs were designed to: 1) increase mineral resource confidence from inferred to indicated and measured categories, 2) define the northern endpoint of the Wicheeda carbonate complex, and 3) to provide detailed geotechnical and hydrogeological drilling data for advanced pit slope and mine design. By way of comparison, current resources outlined in the January 2022 preliminary economic assessment&nbsp;were based on a total of 27 diamond drill holes representing 4,249 meters of drilling.
   
Updated Geological Model Illustrating PEA Mineral Resource Pit Shell
   

Source: Defense Metals Corp.
 Drilling results from the 2021 and 2022 programs yielded some of the longest and highest-grade drill intercepts to date and led to the discovery of a new zone of high-grade mineralization at depth that has the potential to positively impact an updated mineral resource estimate. Resource infill Hole WI21-58 that returned 3.09% total rare earth oxide (TREO) over 251 meters and Hole WI22-68 which returned 6.70% TREO over 18 meters. In 2021, drilling revealed high-grade REE dolomite-carbonatite within the north area of the deposit yielding 3.17% TREO over 196 meters, including 4.29% TREO over 55 meters to a depth of 201 meters extending 30 meters below the resource pit shell.
   
Recall that in January 2022, Defense Metals released a preliminary economic assessment NI 43-101 technical report which highlighted 5.0 million tonnes of indicated resources averaging 2.95% total rare earth oxides (TREO) and 29.5 million tonnes of inferred resources averaging 1.83% TREO within a conceptual pit shell. The study affirmed the economic value of advancing the project based on significant resource potential, favorable metallurgical recoveries, and attractive return potential. Resources were based on a total of 27 diamond drill holes totaling 4,249 meters of drilling.
Capital Structure and Liquidity
As of December 31, 2022, Defense Metals reported cash in the amount of C$3,914,313 and no debt. Shares outstanding were 207,702,648.