Note 15 - Subsequent Events

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE 15 SUBSEQUENT EVENTS

On July 1, 2024, the Company, as lessee, signed a Real Estate and Building Lease Agreement with Sierra Clean Processing LLC to lease real property and improvements located in Silver Springs, Nevada. The SCP Building Lease is under a five-year term commencing on August 1, 2024, subject to automatically renew for an additional five-year term. Under the lease, rental expense is $70,000 per month for the first twelve rent payments, $75,000 per month for the next twelve months and $80,000 per month for the last thirty-six months of the lease term. The Company's chief executive officer is an executive and director of SCP.

From July 1, through July 17, 2024, pursuant to the 2024 ClearThink Agreement, the Company issued 6,704,146 registered shares of common stock of the Company to ClearThink for an aggregate sales price of $1,000,000 at an average price per share of $0.15. On July 18, 2024, the Company elected to terminate all future offers and sales pursuant an Equity Purchase Agreement (the “Sales Agreement”) with ClearThink Capital Partners LLC (“ClearThink”) and the Company filed a prospectus supplement to reflect the reduction in the aggregate offering dollar amount of securities to be offered and sold from $5,000,000 to $4,250,000, and accordingly, the 2024 ClearThink Agreement has no remaining capacity (see Note 10, Equity).

From July 1, through July 19, 2024, pursuant to the Kips Bay Note, the Company issued 2,967,160 shares to Kips Bay at a conversion price of $400,000 at an average conversion price of $0.135. The Company also issued an additional 786,521 shares to Kips Bay in compliance with a most favored nation (“MFN”) clause associated with past conversions.

On July 19, 2024, the Company entered into a securities purchase agreement (the “Leviston Securities Agreement”) with Leviston Resources LLC (“Leviston”), relating to the issuance of an 8.0% convertible promissory note due October 31, 2025 (the “Leviston Convertible Note”). The Convertible Note was issued with an original aggregate principal amount of $2,717,500 (the “Principal Amount”) and an 8% original issue discount and the Company received cash of $2.5 million. The Convertible Note accrues interest at a per annum interest rate of 8% and is redeemable for 30-days following closing at 125% of the Principal Amount, plus accrued interest. The Company agreed to, and on August 6, 2024, issued Leviston (i) 337,787 restricted shares of the Company’s common stock representing 2% of the Principal Amount, based on a price per share equal to the 20-day VWAP for the period beginning on the 10th trading day prior to the closing of the Convertible Note and ending on the 10th trading day after the closing of the Convertible Note (the “VWAP Period”), and (ii) 506,681 registered shares of the Company’s common stock representing 3% of the Principal Amount of the Convertible Note (the “Registered Commitment Shares”), based on a price per share equal to the 20-day VWAP for the VWAP Period, in each case, for no additional consideration.

On July 19, 2024, the Company redeemed $500,000 of principal on the Kips Bay Note at a 10% redemption premium for $550,000.

On July 24, 2024, pursuant to the Leviston Convertible Note, the Company issued 5,974,124 registered shares to convert $717,500 of the Convertible Note plus $2,382 of accrued interest at conversion price of $0.12 leaving the remaining principal balance of the Convertible Note at $2,000,000.

The Company is currently assessing an agreement with an affiliate company of Kevin Kreisler, the Company’s director and chief technology officer, pursuant to which the Company would agree to acquire substantially all of the issued and outstanding equity of a publicly traded entity in connection with the Company’s ongoing evaluation of various alternatives to monetize certain non-strategic assets. Pursuant to the agreement, Mr. Kreisler agreed to contribute his beneficial ownership interest in the entity to the Company for no additional consideration, and the Company agreed to reimburse certain transaction expenses of approximately $41,860 incurred by Mr. Kreisler. No formal agreement has been consummated between the Company and the affiliated company of Mr. Kreisler.

On August 2, 2024, the Company issued 187,237 shares of unregistered restricted common stock with a fair value of $42,115 to Alvin Fund in lieu of cash payments from interest under the Alvin 2023 Note.

On August 7, 2024, the Company signed indicative term sheets for $325 million in funding with SBC Commerce LLC (“SBCC”), subject to final due diligence and applicable regulatory approvals. The term sheets include $275 million of direct investment into the Company’s three main operating subsidiaries, including a $3 million direct equity investment into Comstock Inc. summarized as follows:

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$200 million investment in Comstock Fuels, a wholly owned subsidiary of the Company, to fund the development and deployment of a commercial-scale demonstration facility to produce advanced lignocellulosic fuels from waste woody biomass feedstocks. SBCC will receive 40% of the Comstock Fuels and the Company will retain the remaining 60%.

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$50 million investment in Comstock Mining to advance the development of the southern part of the Comstock district. SBCC will receive 40% of Comstock Mining and the Company will retain the remaining 60%.

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$22 million investment in Comstock Metals, 96% owned subsidiary of the Company, to accelerate the deployment of three 100,000-ton per year solar panel recycling facilities in Nevada. SBCC will receive 20% of Comstock Metals and the Company will retain 60% on a fully diluted basis.

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$3 million investment into Comstock Inc. for 7.5 million restricted shares of the Company’s common stock at $0.40 per share

Additionally, the Company has also agreed to the sale of directly owned Nevada real estate and water rights for additional gross proceeds of $50 million.