Comstock Inc

Previous wording

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

Current wording

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Previous wording

Comstock enables systemic decarbonizationby innovating and commercializing technologies and materials that integrate into existing global supply chains to extract and convert under-utilized natural resources into renewable energy products that reduce reliance on fossil fuels and contribute to net zero mobility.

Current wording

Comstock innovates and commercializes technologies that enable systemic decarbonization, primarily by enabling the extraction and conversion of under-utilized natural resources into renewable energy products that integrate into existing global supply chains to extract and convert under-utilized natural resources into renewable energy and related products that reduce reliance on fossil fuels and contribute to net zero mobility.

Previous wording

Our goal is to Accelerate the Commercialization of Hard Technologies for the Energy Transition. We are pushing the boundaries in technology development and sustainability by leveraging our teams’ unique skills, our diverse technology portfolio, and our frontier research networks toward achieving breakthrough innovations that deliver meaningful positive impact across industries, economies, and communities. The primary 2024 focus is the continued development and commercialization of our businesses.

Current wording

Our goal is toAccelerate the Commercialization of Hard Technologies for the Energy Transitionprimarily in renewable fuels, electrification metals, and artificial intelligence enabled mineral and materials development. Our strategic plan is based on innovating, enabling and commercializing material science solutions that use our technologies to reduce reliance on long cycle fossil fuels, to shift to short cycle fuels, and to lead and support the adoption and growth of a profitable, balanced short cycle ecosystem that continuously offsets, recycles, and/or neutralizes carbon emissions. We are pushing the boundaries in technology development and sustainability by leveraging our teams’ unique skills, our diverse technology portfolio, and our frontier research networks toward achieving breakthrough innovations that deliver meaningful positive impact across industries, economies, and communities.

Previous wording

Our approach integrates frontier scientific discovery with our systemic management practices into One System aligned and capable to meet the demand for commercial-ready energy transition solutions. Our operations primarily involve the innovation, development, and commercialization of our intellectual properties and related assets, with integrated teams focused on each core function in dedicated lines of business organized to address high impact decarbonization targets. We innovate and develop technologies to achieve significant growth on industry-wide scales by creating financial and other incentives for rapid integration into and across entire industries. Our commercialization plans are designed to facilitate that result, such as by selling process solutions, engineering services and technology licenses that enable clients to use their capital, infrastructure, and other resources to maximize the rate and scale of adoption, thereby simultaneously maximizing the rate we build shareholder wealth.

Current wording

Our approach integrates frontier scientific discovery with our systemic management practices intoOne System aligned and capable to meet the demand for commercial-ready energy transition solutions. Our operations primarily involve the innovation, development, and commercialization of our intellectual properties and related assets, with integrated teams focused on each core function in dedicated lines of business organized to address high impact decarbonization targets. We innovate and develop technologies to achieve significant growth on industry-wide scales by creating financial and other incentives for rapid integration into and across entire industries. Our commercialization plans are designed to facilitate that result, such as by selling process solutions, engineering services and technology licenses that enable clients to use their capital, infrastructure, and other resources to maximize the rate and scale of adoption, thereby simultaneously maximizing the rate we build shareholder wealth.

Previous wording

We are currently commercializing pioneering intellectual properties for refining lignocellulosic (woody) biomass into renewable replacements for fossil crude at remarkably high yields, recycling increasingly scarce electrification metals from end-of-life photovoltaics and other electronic devices, and advanced physics based artificial intelligence for precision mining and materials discovery. We make, own and manage investments in related assets to support our businesses, including multiple, existing minority equity positions in strategic technology developers, a renewable fuels demonstration facility in Wisconsin, a metals recycling demonstration facility in Nevada, and direct investments in northern Nevada real estate comprised of strategic water rights and about twelve square miles of mining claims and surface parcels with measured and indicated mineral resources containing 605,000 ounces of gold and 5,880,000 ounces of silver, and inferred mineral resources containing an additional 297,000 ounces of gold and 2,572,000 ounces of silver. We also announced the execution of agreements with RenFuel to acquire a development stage biorefinery project to refine byproducts of paper production into biointermediates for refining into renewable fuels, and to make an up to $3,000,000 strategic investment over the next three years in RenFuel for the continued development and commercialization of advanced applications of RenFuel’s and Comstock’s complimentary renewable fuels technologies.

Current wording

We are currently commercializing pioneering intellectual properties for refining lignocellulosic (woody) biomass into renewable replacements for fossil crude at remarkably high yields, recycling increasingly scarce electrification metals from end-of-life photovoltaics and other electronic devices, and advanced physics based artificial intelligence for precision mining and materials discovery. We make, own and manage investments in related assets to support our businesses, including multiple, existing minority equity positions in strategic technology developers, a renewable fuels demonstration facility in Wisconsin, a metals recycling demonstration facility in Nevada, and direct investments in northern Nevada real estate comprised of strategic water rights and about twelve square miles of mining claims and surface parcels with measured and indicated mineral resources containing 605,000 ounces of gold and 5,880,000 ounces of silver, and inferred mineral resources containing an additional 297,000 ounces of gold and 2,572,000 ounces of silver. We also announced the execution of agreements with RenFuel to acquire a development stage biorefinery project to refine byproducts of paper production into biointermediates for refining into renewable fuels, and to make an up to $3,000,000 strategic investment over the next three years for the continued development and commercialization of advanced applications of RenFuel’s and Comstock’s complimentary technologies.

Previous wording

Our Fuels Segment develops and commercializes technologies that extract and convert wasted and unused lignocellulosic biomass into intermediates for refining into advanced renewable fuels. Most renewable fuels draw from the same pool of conventional FOG feedstocks, but the total existing FOG supply can only meet a small fraction of the global mobility demand. Our technologies unblock that constraint by converting abundant, lignocellulosic biomass into biointermediates for refining into renewable fuels.

Current wording

Our Fuels Segment develops and commercializes technologies that extract and convert wasted and unused lignocellulosic biomass into intermediates for refining into advanced renewable fuels. Most renewable fuels draw from the same pool of conventional fats, oils and greases (‘FOG”) feedstocks, but the total existing FOG supply can only meet a small fraction of the global mobility demand. Our technologies unblock that constraint by converting abundant, lignocellulosic biomass into biointermediates for refining into high-yielding renewable fuels.

Previous wording

While innovation and development are ongoing and we expect additional advancements, our existing commercially available technologies have proven the potential to produce more than 100 gallons per dry tonne of woody biomass as measured on a GGE basis, with CI scores of 15 or less for Cellulosic Ethanol and our proprietary HBO. HBO is used directly by biofuel refineries to blend with, diversify, and extend conventional hydroprocessed FOG feedstocks to enhance production of renewable fuels.

Current wording

While innovation and development are ongoing and we expect additional advancements, our existing commercially available technologies have proven the potential to produce more than 100 gallons per dry tonne of woody biomass as measured on a Gasoline Gallon Equivalent Basis (“GGE”) basis, with Carbon Intensity (“CI”) scores of 15 or less for Cellulosic Ethanol and our proprietary hydro-deoxygenated Bioleum oil (“HBO”). HBO is used by biofuel refineries to blend with, diversify, and extend conventional hydroprocessed FOG feedstocks to enhance production of renewable fuels.

Previous wording

We are currently evaluating several joint development solutions and systems based on our technologies, as well as feedstock and offtake agreements, licenses, engineering services, and direct investments.

Current wording

We are evaluating our first demonstration scale commercial facility and several, related joint development solutions and systems based on our technologies, as well as feedstock and offtake agreements, licenses, engineering services, and direct investments into Comstock Fuels Corporation, primarily from technologically sophisticated and well capitalized partners.

Previous wording

Execution of additional commercial agreements, including but not limited to, joint development agreements, offtake agreements, feedstock agreements, licensing agreements and direct investments supporting the deployment and enablement of our solutions, primarily with operationally experienced, technologically sophisticated, and well capitalized customers represents an ongoing objective and the primary focus for 2024. The joint development agreements represent up to five phases of development and represent material upfront engineering and professional service fees, ultimately enabling licenses and royalties could create more than 20 years of recurring revenues from the production and sale of lignocellulosic biointermediaries and related co-products.

Current wording

Execution of additional commercial agreements, including but not limited to, joint development agreements, offtake agreements, feedstock agreements, licensing agreements and direct investments supporting the deployment and enablement of our solutions in the form of our first demonstration scale commercial facility, primarily with operationally experienced and technologically sophisticated customers, represents an ongoing objective and the primary focus for 2024. The joint development agreements represent up to five phases of development and represent material upfront engineering and professional service fees, ultimately enabling licenses and royalties that could create more than 20 years of recurring revenues from the production of lignocellulosic biointermediaries and fuels.

Previous wording

Our Metals Segment recently secured sufficient supplier commitments and all of the necessary permits and began commissioning our first photovoltaic recycling facility, and will commence receiving revenue in the form of tipping fees and to a lesser extent recycled metal sales for the processing of end-of-life photovoltaic materials during the second quarter of 2024.

Current wording

Our Metals Segment recently secured its first industry-scale facility lease, the related county permit for storage, and sufficient supplier commitments and all of the necessary permits for operating its previously commissioned demonstration scale commercial photovoltaic recycling facility and commenced receiving revenue in the form of tipping fees during the second quarter of 2024, and to a lesser extent, will begin receiving recycled metal sales from processed end-of-life photovoltaic materials in later 2024.

Previous wording

During 2023 and early 2024, we expanded our leadership team in metals recycling, selected our first production site, secured all permitting for our first demonstration scale commercial facility, and secured long term supply agreements from our first customers. In early 2024, we commenced production commissioning activities and continued expanding our existing revenue generating supply commitments while commencing the design and site selection for our first “industry-scale” production facility and the permitting thereto in our metals recycling business are the key objectives for 2024.

Current wording

During the first half of 2024, we expanded our metals recycling team, commissioned our first production site, secured all permitting for our first demonstration scale commercial facility, and secured long term supply agreements from our first customers and commenced production commissioning activities while we continued expanding existing revenue generating supply commitments. We have also completed the site selection and secured for our first “industry-scale” production facility and commenced the design and the permitting thereto, having already received our first county-level permit for industry-scale storage and processing. Submitting all prerequisite permits, finalizing the industry-scale engineering and ordering all of the industry-scale equipment are the key 2024 Metals objectives.

Previous wording

Our Mining Segment is expected to generate income in the form of leases, licenses, and related fees throughout 2024. Our Mining Segment is administered by our wholly owned subsidiary, Comstock Mining LLC, and various other subsidiaries that collectively own or control twelve square miles of properties of patented mining claims, unpatented mining claims and surface parcels in northern Nevada, including six and a half miles of continuous mineralized strike length (the “Comstock Mineral Estate”).

Current wording

Our Mining Segment is generating income in the form of leases, licenses, and related fees during 2024, and is administered by our wholly owned subsidiaries, Comstock Mining LLC, Comstock Processing and various other local subsidiaries that collectively own or control twelve square miles of properties of patented mining claims, unpatented mining claims and surface parcels in northern Nevada, including six and a half miles of continuous mineralized strike length (the “Comstock Mineral Estate”).

Previous wording

We also recently announced the execution of agreements with RenFuel to acquire a development stage biorefinery project to refine byproducts of paper production into biointermediates for refining into renewable fuels, and to make an up to $3,000,000 strategic investment over the next three years in RenFuel for the continued development and commercialization of advanced applications of RenFuel’s and Comstock’s complimentary renewable fuels technologies.

Current wording

We also recently announced the execution of agreements with RenFuel to acquire a development stage biorefinery project to refine byproducts of paper production into biointermediates for refining into renewable fuels and fund up to $3,000,000 over the next three years in RenFuel for the continued development and commercialization of advanced applications of RenFuel’s and Comstock’s complimentary renewable fuels technologies.

Previous wording

During 2023, GenMat began elevating material simulation capabilities to commercial readiness by synthesizing and directly testing new AI simulated materials in high value applications and potentially engage early adopter enterprise clients for this use. GenMat also initiated new mineral exploration capabilities with the successful launch of GENMAT-1, GenMat’s own Hyperspectral Remote Sensing Imaging (“HRSI”) system for optimizing future mineral exploration using their proprietary physics-based artificial intelligence (AI) and newly developing hyperspectral sensing technology. GenMat and Comstock Mining are collaborating other a pioneering development and testing of GenMat’s technologies by combining Comstock’s existing geologic data with newly collected information across a broader electromagnetic spectrum form the new GENMAT-1 HRSI system and importantly, applying probabilistic algorithms powered with GenMat’s physics-based AI.

Current wording

During 2023, GenMat began elevating material simulation capabilities to commercial readiness by synthesizing and directly testing new AI simulated materials in high value applications and potentially engage early adopter enterprise clients for this use. GenMat also initiated new mineral exploration capabilities with the successful launch of GENMAT-1, GenMat’s own Hyperspectral Remote Sensing Imaging (“HRSI”) system for optimizing future mineral exploration using their proprietary physics-based artificial intelligence (AI) and newly developing hyperspectral sensing technology. GenMat and Comstock Mining are collaborating to develop and test GenMat’s technologies by combining Comstock’s existing geologic data with newly collected information across a broader electromagnetic spectrum from the new GENMAT-1 HRSI system and importantly, applying probabilistic algorithms powered with GenMat’s physics-based AI.

Previous wording

Investment in Green Li-ion – Our wholly owned LINICO subsidiary has owned 37,162 preferred shares of Green Li-ion since 2021. On September 12, 2023, LINICO received gross proceeds of $795,510 from the sale of 1,500 Green Li-ion preferred shares (representing approximately 4% of the 37,162 of the shares then owned by LINICO). In 2023, the Company adjusted our investment's carrying value to fair value by increasing that value by $14,577,627 for the remaining 35,662 Green Li-ion preferred shares representing 13.34% of Green Li-ion. The Company intends to sell its remaining shares during 2024.

Current wording

Investment in Green Li-ion – Our wholly owned LINICO subsidiary has owned 37,162 preferred shares of Green Li-ion since 2021. On September 12, 2023, LINICO received gross proceeds of $795,510 from the sale of 1,500 Green Li-ion preferred shares (representing approximately 4% of the 37,162 of the shares then owned by LINICO). In 2023, the Company adjusted our investment's carrying value to fair value by increasing that value by $14,577,627 for the remaining 35,662 Green Li-ion preferred shares representing 13.34% of Green Li-ion. The Company intends to sell its remaining shares during late 2024, or early 2025.

Previous wording

Investment in SSOF– During 2019, the Company invested $335,000 for 6,700,000 shares. From 2020 through November of 2023, the Company advanced $6,985,000 to SSOF and its subsidiary, for the purpose of purchasing land, payments for deposits on land and payments for an option on land and water rights purchases. On December 29, 2023, the Company and SSOF agreed to convert the full amount of the outstanding advances for an additional 3,880,556 common shares of SSOF stock (at a dollar value of $1.80 per share) that also resulted in an unrealized gain recognized of $11,725,000 on the original 6,700,000 shares. In the first quarter of 2024, the Company invested $480,000 in SSOF at $1.80 per share increasing our equity ownership to 17.46%.

Current wording

Investment in SSOF– During 2019, the Company invested $335,000 for 6,700,000 shares. From 2020 through November of 2023, the Company advanced $6,985,000 to SSOF and its subsidiary, for the purpose of purchasing land, payments for deposits on land and payments for an option on land and water rights purchases. On December 29, 2023, the Company and SSOF agreed to convert the full amount of the outstanding advances for an additional 3,880,556 common shares of SSOF stock (at a dollar value of $1.80 per share) that also resulted in an unrealized gain recognized of $11,725,000 on the original 6,700,000 shares. In the first half of 2024, the Company invested $530,000 in SSOF at $1.80 per share increasing our equity ownership to 17.50%.

Previous wording

SSOF is a qualified opportunity zone fund, that owns 100% of SSE, a qualified opportunity zone business. SSE and its subsidiaries own or controls approximately 2,500 acres of land, a manufacturing facility, significant senior, junior and effluent water rights, sewer rights and also owns and operates the Silver Springs Regional Airport LLC. The substantial majority of these properties are contiguous and strategically located within immediate proximity of Highway 50, State Route 492, the Northern Nevada Industrial Center and the Tahoe Reno Industrial Center where companies like Tesla, Switch, Google, Microsoft, and Redwood Materials, and over one hundred more companies that are currently located, expanding or locating in this industrializing region.

Current wording

SSOF is a qualified opportunity zone fund, that owns 100% of SSE, a qualified opportunity zone business. SSE and its subsidiaries own or controls approximately 2,500 acres of land, a manufacturing facility, significant senior, junior and effluent water rights, sewer rights and also owns and operates the Silver Springs Regional Airport LLC. The substantial majority of these properties are contiguous and strategically located within immediate proximity of Highway 50, State Route 492, the Northern Nevada Industrial Center and the Tahoe Reno Industrial Center where companies like Tesla, Switch, Google, Microsoft, and Redwood Materials, and over one hundred more companies are currently located, expanding or locating in this industrializing region.

Previous wording

Since the payments are not interest bearing, the Company calculated the implied interest of $214,039 on the future cash payments using an interest rate of 9.76% which was recorded as a discount on initial investment of $1.5 million and will be recognized over the payment term. As of March 31, 2024, the Company recorded an investment in the Developer of $1,285,961 in our condensed consolidated balance sheets.

Current wording

Since the payments are not interest bearing, the Company calculated the implied interest of $214,039 on the future cash payments using an interest rate of 9.76% which was recorded as a discount on initial investment of $1.5 million and will be recognized over the payment term. The Company recorded a corresponding payable for future cash payments to account for the 40% ownership interest in the Developer. At June 30, 2024, the future remaining payments, net implied interest, totaled $1,150,424 (see Note 6,Accrued Expenses and Other Liabilities). For the three and six-months ended June 30, 2024, the Company recorded $48,400 in equity loss from affiliates for our investment in the Developer. During the three and six-months ended June 30, 2024, Comstock paid $60,000 and $180,000, respectively, to the Developer in accordance with the funding commitments under the Developer Securities Purchase Agreement.

Previous wording

Investments in Properties – The Company directly owns three types of properties in Silver Springs, NV, including 98 acres of industrial land, 160 acres of commercial land, both centrally located in Silver Springs, just south of the Silver Springs Regional Airport and a portfolio of water rights. The Company will begin marketing these assets for sale as both industrial and commercial development as interest in Silver Springs, NV continuously increased during 2023.

Current wording

Investments in Properties – The Company directly owns three types of properties in Silver Springs, NV, including 98 acres of industrial land, 160 acres of commercial land, both centrally located in Silver Springs, just south of the Silver Springs Regional Airport and a portfolio of water rights. The Company has begun marketing these assets for sale as both industrial and commercial development as interest in Silver Springs, NV continuously increased during 2024, and accordingly has classified these assets as held for sale in the condensed consolidated balance sheet.

Previous wording

Revenues for the three months ended March 31, 2024 increased by $395,201 to $425,951 from $30,750 for the comparable 2023 period, primarily due to higher revenues from the Mackay mineral lease of $390,625.

Current wording

Revenues for the three-months ended June 30, 2024 increased by $399,499 to $434,824 from $35,325 for the comparable 2023 period, primarily due to higher revenues from the Mackay mineral lease of $390,626 and initial revenues from Comstock Metals of $7,599.

Previous wording

Revenue, costs of sales and gross profit in future periods will vary significantly depending on a number of factors, including the amount of renewable energy technology solutions that we license and sell, the market prices for those services, the extent to which we secure and collect reasonable royalties, the degree to which we can provide event-driven engineering services, and the costs associated with each component of the aforementioned revenues.

Current wording

Revenue, costs of sales and gross profit in future periods will vary significantly depending on a number of factors, including the amount of solar panels that we recycle and the amount of renewable energy technology solutions that we license and sell, lease revenues on our properties, the market prices for those services, the extent to which we secure and collect reasonable royalties, the degree to which we can provide event-driven engineering services, and the costs associated with each component of the aforementioned revenues.

Previous wording

Research and development expenses for the three months ended March 31, 2024 decreased by $376,366 to $892,013 from $1,268,379 in the comparable 2023 period. The decrease is primarily related to lower employee-related costs of $463,502 partially offset by higher rent expense of $108,018.

Current wording

Research and development expenses for the three-months ended June 30, 2024 increased by $785,163 to $2,548,467 from $1,763,304 in the comparable 2023 period. The increase is primarily related to higher rent expense of $1,306,272 attributed to the AST research and development rent of $1,208,180 paid in April 2024 (see Note 7,Leases); offset partially by lower employee costs of $604,392 for salaries and executive incentive compensation.

Previous wording

Depreciation and amortization for the three months ended March 31, 2024 of $655,977 was comparable to 2023 of $631,041.

Current wording

Depreciation and amortization for the three-months ended June 30, 2024 was $656,717 and comparable to 2023 amount of $704,881.

Previous wording

Interest expense for the three months ended March 31, 2024 increased by $203,483 to $818,661 from $615,178 in the comparable 2023 period, primarily due to interest and related amortization of the original issue discount ("OID") on the Kips Bay Note and 2023 Alvin Fund Note originating in the fourth quarter of 2023.

Current wording

Interest expense for the three-months ended June 30, 2024 increased by $406,279 to $782,440 from $376,161 in the comparable 2023 period, primarily due to interest and related amortization of the original issue discount (“OID”) on the Kips Bay Note and 2023 Alvin Fund Note originating in the fourth quarter of 2023.

Previous wording

Change in the fair value of our derivative instruments for the three months ended March 31, 2024 decreased by $1,454,713 to a loss of $756,118 from a gain of $698,595 in the comparable 2023 period, as a result of a decrease in the Company's share price in connection with potential make-whole obligations for minimum value commitments on the Company's common shares. The 2024 loss was attributed to $516,601 gain on derivative liability for Kips Bay Note offset by loss of $510,163 LINICO investment, $477,556 GenMat investment and $285,000 Haywood investment. The gain from the three months ended March 31, 2023 was attributed to $240,000 gain on derivative liability for Ionic Note, $210,000 LINICO investment, $158,595 for GenMat and $90,000 for Haywood investment.

Current wording

Change in the fair value of our derivative instruments for the three-months ended June 30, 2024 decreased by $1,642,113 to a loss of $77,496 from a gain of $1,564,617 in the comparable 2023 period, as a result of a decrease in the Company's share price in connection with potential make-whole obligations for minimum value commitments on the Company's common shares. The 2024 loss was attributed to losses of $359,104 for the LINICO investment, $209,872 for the GenMat investment and $48,000 for the Haywood investment, partially offset by a gain of $539,480 on the derivative liability for Kips Bay Note. The gain from the three-months ended June 30, 2023 was attributed to $1,365,000 for the LINICO investment, $1,030,871 for the GenMat investment and $585,000 for the Haywood investment, partially offset by a loss $1,416,254 on the derivative liability for Ionic Note.

Previous wording

Loss of $193,523 on conversion of debt for the three months ended March 31, 2024 are attributed to the Kips Bay Note debt conversions associated with 2,276,944 of the Company's common shares used for the conversion during the three months ended March 31, 2024. Loss of $270,456 on conversion of debt for the three months ended March 31, 2023 was attributed to the Ionic Note debt conversions associated with 4,539,413 of the Company's common shares used for the conversion during the three months ended March 31, 2023.

Current wording

Loss of $1,278,544 on the conversion of debt to equity for the three-months ended June 30, 2024 is attributed to the Kips Bay Note debt conversions associated with 12,244,556 of the Company's common shares used for the conversion of the debt during the three-months ended June 30, 2024. Gain of $32,800 on the conversion of debt to equity for the three-months ended June 30, 2023 was attributed to the Ionic Note debt conversions associated with 1,951,248 of the Company's common shares used for the conversion during the three-months ended June 30, 2023.

Previous wording

Net loss for the three months ended March 31, 2024 increased by $1,236,578 to $6,918,320 from a loss of $5,681,742 for the comparable 2023 period. The increase in net loss primarily resulted from the change in estimated fair value of the derivative investments of $1,454,713 with a loss of $756,118 recorded in 2024 as compared to a gain of $698,595 recorded in 2023, higher interest expense of $203,483, lower gain on sale of Facility of $178,193 due to prior year gain recorded for the sale of the Facility, higher selling, general and administration expenses of $140,552 and higher other income (expense) of $111,835 primarily due to losses from our equity method investments. Variance offset primarily due to higher revenues of $395,201, lower research and development cost of $376,366 and lower loss on conversion of debt $76,933.

Current wording

Net loss for the six-months ended June 30, 2024 increased by $4,384,261 to $15,570,592 from a loss of $11,186,331 for the comparable 2023 period. The increase in net loss primarily resulted from a change in estimated fair value of the derivative assets of $3,096,826 with a $833,614 loss recorded in 2024 as compared to a gain of $2,263,212 in 2023, change in loss on conversion of debt of $1,234,411, higher interest expense of $609,763, loss on debt extinguishment of $521,622, higher research development expenses of $408,797, and lower gain on sale of Facility of $178,193. The increased loss is partially offset by higher revenues of $794,700, lower selling, general and administration expenses of $565,478 and lower other expense of $249,248 primarily due to other income from SSOF deposits.

Previous wording

In 2023, we recognized a gain on the sale of the Facility of $178,193.

Current wording

In 2023, we recognized a gain on the sale of the Facility of $178,193, with no comparable amount in 2024.

Previous wording

Interest income for the three months ended March 31, 2024 increased by $28,634 to $74,491 from $45,857 in the comparable 2023 period, primarily due to higher interest income related to our cash sweep account.

Current wording

Interest income for the six-months ended June 30, 2024, increased by $32,698 to $139,573 from $106,875 in the comparable 2023 period, primarily due to higher interest income related to our cash sweep account.

Previous wording

Our goal is to Accelerate the Commercialization of Hard Technologies for the Energy Transition. We are pushing the boundaries of what is possible in technology and sustainability by leveraging our teams’ unique skills, our diverse technology portfolio and our frontier research and development networks toward achieving breakthrough innovations that deliver meaningful positive impact across industries, economies and communities. The primary focus for 2024 is the commercialization of our businesses and the continuous innovation, development and engineering of technologies and solutions.

Current wording

Our goal is to*Accelerate the Commercialization of Hard Technologies for the Energy Transition.*We are pushing the boundaries of what is possible in technology and sustainability by leveraging our teams’ unique skills, our diverse technology portfolio and our frontier research and development networks toward achieving breakthrough innovations that deliver meaningful positive impact across industries, economies and communities. The primary focus for 2024 is the commercialization and capitalization of our businesses and the continuous innovation, development and engineering of technologies and solutions.

Previous wording

The Company’s biorefining technologies are commercially ready and offer growth-enabling performance for the Company’s prospective customers. Comstock Fuels is actively pursuing joint development and licensing agreements representing future revenues from technical and engineering services, designed to identify, define and enable renewable fuel hub projects, including securing associated supply chain participants, performing preliminary and final engineering, facilitating commissioning, construction and operations with globally recognized current and developing renewable fuel producers.

Current wording

The Company’s biorefining technologies are commercially ready and offer growth-enabling performance for the Company’s prospective customers. Comstock Fuels is actively engaged in the panning and deployment of our first commercial demonstration facility and pursuing joint development and licensing agreements representing strategic capital and future revenue sources from technical and engineering services, including securing associated supply chain participants, performing preliminary and final engineering, facilitating commissioning, construction and operations with globally recognized current and developing renewable fuel producers.

Previous wording

Comstock Metals is also commercially ready and has deployed and is currently commissioning its first commercial demonstration facility during March and April of 2024. The facility is being commissioned on one shift and will expand to three shifts over the next two quarters. Site selection, design and permitting is currently underway for the next “Industry Scale” photovoltaic recycling facility and related storage capacity. Industry Scale facilities are anticipated to scale up to 10-15 times the capacity of the operating demonstration facility (that is, from approximately 7,000 tons per annum of capacity for the demonstration facility up to 70,000 – 100,000 tons per annum of capacity for Industry Scale). Regional site assessment and selection activities are ongoing.

Current wording

Comstock Metals is also commercially ready and has deployed and is currently commissioning its first commercial demonstration facility. The facility is being commissioned on one shift and is currently expanding to three shifts over the next two to three months. Site selection, design and permitting is currently underway for the next “Industry Scale” photovoltaic recycling facility and related storage capacity. Industry Scale facilities are anticipated to scale up to 10-15 times the capacity of the operating demonstration facility (that is, from approximately 7,000 tons per annum of capacity for the demonstration facility up to 70,000 – 100,000 tons per annum of capacity for Industry Scale).

Previous wording

Each joint development project could result in millions of dollars of technical services and engineering revenues and ultimately, license agreements for commercial production facilities that could each create 15 to 20 years of royalty revenues.

Current wording

Our first commercial demonstration facility is designed to be profitable and to confirm the scale of multiple industry-scale facilities. Each joint development project could result in millions of dollars of technical services and engineering revenues and ultimately, license agreements for additional production facilities that would generate royalty revenues.

Previous wording

Comstock Metals has secured all permits for operating its demonstration scale production facility in Silver Springs, NV, with commissioning of operations commencing now, and once commissioned, begin ongoing production immediately thereafter.

Current wording

Comstock Metals has secured all permits for operating its demonstration scale production facility in Silver Springs, NV, with commissioning of operations occurring now with ongoing production immediately thereafter. Comstock Metals has also secured the initial county level permits for industry-scale operations and storage and is actively engaged in expanded revenue generating supply and now, also, residual material offtake commitments.

Previous wording

The Company’s 2024 efforts will apply economic analysis to Comstock’s existing gold and silver resources progressing toward full economic feasibility for the southern part of the district and the ultimate development of full mine and reclamation plans.

Current wording

The Company’s 2024 efforts apply economic analysis to Comstock’s existing gold and silver resources progressing toward full economic feasibility for the southern part of the district and the ultimate development of full mine and reclamation plans and the development of post productive land and community development plans.

Previous wording

Investment in generative physics-based AI is a crucial component of Comstock’s technology innovation strategy. GenMat develops and commercializes proprietary generative artificial intelligence models for the discovery and manipulation of matter. This includes AI models that can be employed today, for commercial use on GenMat’s existing, high-performance computing platforms. GenMat is a company in which Comstock has a minority investment interest.

Current wording

Investment in physics-based AI is a meaningful component of Comstock’s technology innovation strategy. GenMat develops and commercializes proprietary generative artificial intelligence models for the discovery and manipulation of matter. This includes AI models that can be employed today, for commercial use on GenMat’s existing, high-performance computing platforms. Comstock has a minority investment interest in GenMat.

Previous wording

Green Li-ion continues making meaningful progress in the development and deployment of its system that remanufactures critical precursor cathode active materials (“PCAM”). In 2023, LINICO received gross proceeds of approximately $0.8 million from the sale of 1,500 Green Li-ion preferred shares (representing approximately 4% of the 37,162 Green Li-ion preferred shares owned by LINICO). The Company intends to sell the remaining 35,662 Green Li-ion preferred shares for potentially up to $19 million more in 2024 proceeds, resulting in a total of almost $20 million from its original $2.0 million investment.

Current wording

Green Li-ion continues making meaningful progress in the development and deployment of its system that remanufactures critical precursor cathode active materials (“PCAM”), having now deployed its first commercial battery remanufacturing facility from fully recycled battery materials deployed. The Company intends to sell the remaining 35,662 Green Li-ion preferred shares in late 2024 or early 2025.

Previous wording

Our financial position and liquidity is based on our net sources of capital from financing as generally compared to our net uses of capital from investing activities and ultimately, our ability to generate cash flows from our operations. Our cash balances at March 31, 2024 and December 31, 2023 were $466,976 and $3,785,577, respectively. The Company had current assets of $22,099,158 and current liabilities of $14,791,541, representing working capital excess of $7,307,617 at March 31, 2024.

Current wording

Our financial position and liquidity are based on our net sources of capital from financing as generally compared to our net uses of capital from investing activities and ultimately, our ability to generate cash flows from our operations. Our cash balances at June 30, 2024 and December 31, 2023 were $114,304 and $3,785,577, respectively. The Company had current assets of $28,372,047 and current liabilities of $13,257,114, representing working capital excess of $15,114,933 at June 30, 2024.

Previous wording

The current liabilities include derivative liabilities of $5.5 million for the contingent make-whole liabilities and $3.3 million of accrued expenses and other liabilities, including $1.6 million for incentive compensation and $0.7 million for accrued payroll and related expenses.

Current wording

The current liabilities include derivative liabilities of $4,400,579 for the contingent make-whole liabilities and $3,131,158 of accrued expenses and other liabilities, including $1,237,500 for incentive compensation and $888,788 for accrued payroll and related expenses.

Previous wording

Our primary source of liquidity during the first three months of 2024 was cash from equity financing activities. During the three months ended March 31, 2024, we generated $3,131,934 in cash from our financing activities and we used $3,830,596 and $2,619,939, respectively, in cash in our operating and investing activities.

Current wording

Our primary source of liquidity during the first six-months of 2024 was cash from financing activities. During the six-months ended June 30, 2024, we generated $6,823,459 in cash from our financing activities and we used $5,830,794 and $4,663,938, respectively, in cash in our operating and investing activities.