NOTE 10         EQUITY

Issuance of Registered Shares of Common Stock

On March 25, 2024, the Company entered into an equity purchase agreement (“2024 ClearThink Agreement”) with ClearThink Capital Partners LLC (“ClearThink”) to offer and sell restricted and registered shares of common stock of the Company at an aggregate offering price of up to $5.0 million from time to time, at our option, on terms we deem favorable. On March 26, 2024, the Company filed a prospectus supplement to the registration statement on Form S-3, dated March 28, 2022, that registered for resale these shares issued pursuant to the 2024 ClearThink Agreement. As of June 30, 2024, the Company issued 14,083,627 registered shares of common stock to ClearThink for an aggregate sales price of $3,250,000 at an average price per share of $0.23. As of June 30, 2024, the 2024 ClearThink Agreement had remaining capacity of $1,750,000. 

On January 16, 2024, the Company issued an additional 180,210 registered shares of its common stock equal in value to 1.75% of the principal amount of the Kips Bay Note, or $92,105, also at $0.511 per share (see Note 8, Debt Obligations).

On February 13, 2023, the Company entered into an equity purchase agreement (“2023 Leviston Sales Agreement”) with Leviston Resources LLC (“Leviston”) to offer and sell registered shares of common stock at an aggregate offering price of up to $5.0 million from time to time, at our option, on terms we deem favorable. As of December 31, 2023, the Company issued 10,892,604 registered shares of common stock to Leviston pursuant to the Company’s Form S-3 filed with the U.S. Securities and Exchange Commission, for an aggregate sales price of $5.0 million at an average price per share of $0.46, and additional 552,486 common shares at a fair value of $200,000 in commitment fees. As of June 30, 2024, the 2023 Leviston Sales Agreement had no remaining capacity and no sales under this agreement were made in 2024.

On June 21, 2022, the Company entered into an equity purchase agreement (the “2022 Tysadco Sales Agreement”) with Tysadco Partners, LLC (“Tysadco”) to offer and sell registered shares of common stock in an aggregate offering price of up to $10.0 million from time to time, at our option, on terms we deem favorable. Any shares offered and sold to Tysadco were registered for resale pursuant to a registration statement on Form S-1 filed with U.S. Securities and Exchange Commission pursuant to the Securities Act of 1933 (the “Securities Act”). The Company paid commissions equal to 5% of the offering proceeds to the placement agent in connection with such sales. As of December 31, 2023, the Company issued 7,897,838 shares of common stock to Tysadco, for an aggregate sales price of $3,000,000 at an average price per share of $0.38. For the six-months ended June 30, 2024, the Company issued 3,318,014 shares of common stock to Tysadco, for an aggregate sales price of $1,213,710 at an average price per share of $0.37. Sales of common stock, if any, under the 2022 Tysadco Sales Agreement were made at a 10% discount to the volume weighted average sales price of the common stock on the date that Tysadco receives a capital call from the Company. As of  June 30, 2024, the 2022 Tysadco Sales Agreement had no remaining capacity.

Issuance of Unregistered Shares of Common Stock 

In 2024, the Company issued 615,021 shares of unregistered restricted common shares with a fair value of $240,066 to Alvin Fund in lieu of cash payment from interest under the Alvin Fund 2022 and 2023 Notes. In 2023, the Company issued 270,757 shares of unregistered restricted common shares with a fair value of $107,507 to Alvin Fund LLC in lieu of cash payments for interest under the Alvin Fund 2022 Note.

On May 22, 2024, the Company issued 1,250,000 shares of restricted common stock of the Company to our chief executive officer for $500,000 (see Note 14, Related Party Transactions).

On April 19, 2024, the Company issued 1,000,000 shares of restricted unregistered common stock to a single investor for $250,000.

On April 19, 2024, the Company issued 561,010 restricted common stock of the Company for a fair value of $162,693 to a professional services firm for consideration related to the Company's marketing services agreement.

On April 11, 2024, pursuant to the amendment in connection with the Haywood lease, the Company issued 1,500,000 shares of common stock of the Company to Decommissioning Services with a fair value of $509,850 (see Note 7, Leases).

On April 10, 2024, pursuant to the AST License Agreement Amendments, the Company issued 4,975,000 shares of common stock of the Company to AST with a fair value of $1,587,025 (see Note 7, Leases).

On March 27, 2024, the Company issued 250,000 shares of unregistered restricted common stock with a fair value of $85,000 to ClearThink as payment for commitment fees under the 2024 ClearThink Agreement.

On January 11, 2024, the Company issued 308,931 restricted shares of its common stock equal to 3% of the principal amount of the Kips Bay Note, or $157,895 at $0.511 per share (see Note 8, Debt Obligations).

On February 14, 2023, the Company issued 410,959 shares of unregistered restricted common stock with a fair value of $150,000 to Leviston as payment for due diligence fees under the 2023 Leviston Sales Agreement.

Noncontrolling Interest

On December 30, 2021, the Company entered into an agreement with LINICO to purchase additional shares of LINICO resulting in the Company owning an approximately 90% controlling interest in LINICO. The remaining 10% ownership was held by AQMS (see Note 14, Related Party Transactions) and was accounted for as a noncontrolling interest in our consolidated financial statements. On December 19, 2023, the Company, LINICO and AQMS entered into a stock redemption agreement in which AQMS sold its LINICO shares to LINICO for $600,000. The increase in ownership percentage and decrease in non-controlling interest resulted in an increase to the Company's additional paid in capital of $3,758,807 during the year ended December 31, 2023. As of June 30, 2024 and December 31, 2023, the Company owns 100% of LINICO.

On March 1, 2023, Comstock Metals Corporation (“Comstock Metals”), a wholly owned subsidiary of the Company, entered into an Employment Agreement with Dr. Fortunato Villamagna, to serve as President of Comstock Metals. As part of this agreement. Dr. Villamagna shall receive 20% of the equity in Comstock Metals, vesting evenly, over a five-year period commencing on March 1, 2023 through March 1, 2028, with estimated fair value of the equity award totaling $863,000 held by Dr. Villamagna. On March 1, 2024, the first tranche vested reducing in the Company’s ownership in Comstock Metals to 96% with a noncontrolling interest of 4%. As of June 30, 2024 and December 31, 2023, the Company owns 96% and 100% of Comstock Metals, respectively.

For the year ended December 31, 2023, the Company recognized share-based compensation of $143,833 associated with the agreement with Dr. Villamagna. During the three and six-months ended June 30, 2024, the Company recognized share-based compensation of $43,150 and $86,300, respectively. At June 30, 2024, unamortized stock-based compensation for the equity award was $632,867 and will be amortized over the remaining vesting term of 3.75 years.

Treasury Stock

At December 31, 2023, treasury stock included 2,605,322 shares of our common stock with carrying value of $3,360,867. On January 5, 2024, the Company retired and cancelled the treasury stock.

Warrants

Outstanding warrants at June 30, 2024 and  December 31, 2023 are as follows:

During the six-months ended June 30, 2024 and 2023, no warrants to purchase common stock were issued, exercised, or expired. During the three-months ended June 30, 2024, the warrants were modified in connection with amendments to related debt agreements (see Note 8, Debt Obligations).