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Item 1. Business

2023-03-16 compared with 2022-03-28 · 127 added, 130 removed, 311 unchanged (45% of the section changed)

ITEM 1 BUSINESS

Unless context otherwise indicates, the terms we , us , our , Comstock , or the Company mean Comstock Mining, Inc.

and its subsidiaries on a consolidated basis.

Comstock innovates technologies that contribute to global decarbonization and circularity by efficiently converting massive supplies of under-utilized natural resources into renewable fuels and electrification products that contribute to balancing global uses and emissions of carbon.

We intend to use our technologies to achieve exponential growth and extraordinary financial, natural and social returns by:

building, owning, and operating a fleet of advanced carbon neutral extraction and refining facilities;

selling an array of complimentary process solutions and related services, and

licensing selected technologies to qualified strategic partners.

Our objective is to generate over $16 billion in revenue on an annualized basis by 2030, by responsibly producing and selling renewable energy products that enable us, our clients, and their downstream stakeholders to reduce greenhouse gas emissions by at least 100 million metric tons per year.

Meeting that objective would offset the equivalent of more than 234 million barrels per year of fossil fuel, or about 6% of the U.S.

transportation burn.

Our technologies unlock vast quantities of historically wasted and unused feedstock supplies with enough short cycle carbon to offset many billions of metric tons of long cycle fossil fuel emissions worldwide.

Most of that potential is provided by our Cellulosic Fuels technologies, which efficiently convert wasted, unused, widely-available, and rapidly-replenishable woody biomass into intermediates and precursors for the production of carbon neutral oil, ethanol, gasoline, renewable diesel, jet fuel,

marine fuel, and other renewable replacements for long cycle fossil derivatives.

Our full portfolio of patented, patent-pending and proprietary technologies includes many additional processes that complement and add to that potential.

We expect to use our technologies to meet our 2030 objectives with less than just 8% of the biomass residues produced annually in the U.S., however, we have structured our business to achieve and enable exponentially greater gains.

We believe that the Earth’s natural carbon cycle provides the simplest, fastest, most scalable, and most practical path for enabling systemic decarbonization and achieving a net zero carbon world.

Our strategic plan is consequently based on commercializing our technologies and renewable energy products to simultaneously:

reduce reliance on long cycle fossil fuels;

shift supply chains that terminate in combustion to short cycle renewable fuels;

lead and support the adoption and growth of a highly profitable, balanced worldwide short cycle ecosystem, that continuously offsets, recycles, and contributes to neutralizing global carbon emissions by rapidly growing and replenishing vast quantities of feedstock for renewable circular fuels.

In that fashion, we plan to empower our clients, the industries in which they operate, and the populations they serve to Burn Less fossil fuels, to Burn Smarter with renewable fuels, to Burn Cleaner by recycling emissions into additional renewable fuels, and to thereby make disruptive contributions to global decarbonization and helping to achieve a net zero carbon world.

Comstock innovates technologies that efficiently use wasted and under-utilized natural resources to produce renewable energy and other products that contribute to balancing global uses and emissions of carbon and enhance mineral and material discoveries.

We plan on achieving significant financial, natural and social returns by using our and other's technologies to develop production-ready projects that we will license to qualified clients, and to sell an array of complimentary process solutions and related services.

Our Cellulosic Fuels technologies include proprietary processes that have the potential to convert vast quantities of historically wasted and unused but widely available and rapidly replenishable woody biomass supplies into advanced renewable fuels capable of sustainably offsetting billions of metric tons of fossil fuel emissions worldwide.

Our Electrification Metals technologies include a two-stage lithium-ion battery (“LIB”) recycling process designed to crush, separate, and condition LIBs for the production of high purity black mass minerals available for extracting battery grade metals.

We own and operate pilot facilities for our Cellulosic Fuels and Electrification Metals technologies that we use in our ongoing technology development and commercialization efforts.

We also hold a worldwide license to advanced new Mining technologies that will use machine learning and artificial intelligence algorithms, hyperspectral orbital imaging, and ultimately, quantum-enabled sensors to provide high precision prospecting information in mineral discovery and mining applications.

We have also consolidated and now own or control the most significant portions of the historic Comstock gold and silver mining district, consisting of 9,472 acres of patented mining claims, unpatented mining claims and surface parcels (due to overlapping interest, the combined area is approximately 7,586 acres) located in Storey and Lyon Counties, Nevada, which we will use as the proving grounds for these mineral discoveries and mining technologies.

We recently completed a third-party S-K 1300 technical report focused on a small subset of our mineral estate that we refer to as the Dayton-Spring Valley exploration target.

That report estimated that the Dayton-Spring Valley area contains measured and indicated mineral resources containing 293,000 ounces of gold and 2,120,000 ounces of silver resources.

The Dayton-Spring Valley exploration target also contains an additional inferred mineral resource containing 90,000 ounces of inferred gold resources and 480,000 ounces of inferred silver resources.

Properties in the Lucerne resource area and the Occidental and Gold Hill exploration targets were previously optioned or leased to Tonogold Resources, Inc.

("Tonogold"), who completed and published a third-party, S-K 1300 technical report for the Lucerne, Occidental and Gold Hill targets in March 2022.

That report estimated that the Lucerne area contains an indicated mineral resource containing 312,000 ounces of gold and 3,760,000 ounces of silver.

Lucerne also contains an additional inferred mineral resource containing 207,000 ounces of gold and 2,092,000 ounces of silver.

All Tonogold agreements either expired or were terminated on December 30, 2022.

Accordingly, Tonogold no longer has any interest, rights or claims in any of the Company's properties.

OPERATING SEGMENTS

We group our business activities into two operating segments to manage performance:

Renewable Energy Products Segment

Our renewable energy products segment will own and operate extraction and refining facilities that convert wasted and unused biomass and other natural resources into valuable renewable energy products, including intermediates and precursors for advanced renewable fuels, such as carbon neutral oil, ethanol, gasoline, renewable diesel, jet fuel and marine fuel and electrification products.

We are currently evaluating several sites for the construction of facilities based on our Cellulosic Fuels technologies, the first of which will be designed to convert at least 330,000 metric tons per year of qualified feedstocks into at least about 33,000,000 gallons of renewable fuels per year and offset more than 330,000 metric tons of carbon dioxide emissions per year.

We are also currently equipping an existing production facility in the Tahoe Reno Industrial (“TRI”) Center in Storey County, Nevada, with sufficient capacity to extract and refine lithium, graphite, nickel, cobalt, manganese, copper, aluminum and other metals from up to 100,000 tons per year of lithium-ion batteries ("LIB").

Our renewable energy products segment will also license selected technologies to qualified strategic partners, and offer an array of complimentary upstream and downstream design, engineering, fabrication, procurement, and construction solutions based on our experience and core competencies in technology development, process engineering, and project deployment, with a focus on processes that support long-term feedstock and offtake clients.

We group our business activities into three operating segments to manage performance:

Renewable Energy Segment

Our renewable energy segment will develop technology for the deploying of extraction and refining facilities that convert wasted and unused biomass and other natural resources into valuable renewable energy, including intermediates and precursors for advanced renewable fuels, such as carbon neutral oil, ethanol, gasoline, renewable diesel, sustainable aviation ("jet") fuel and marine fuel and electrification products.

We are currently evaluating several alternatives, for licensing to partners, for the construction of facilities based on our Cellulosic Fuels technologies.

We are also currently developing an existing demonstration system to extract highly-pure black mass containing lithium, graphite, nickel, cobalt, manganese, copper, aluminum and other metals from up to lithium-ion batteries ("LIB").

Our renewable energy segment will initially license selected technologies to strategic partners and customers, and offer an array of complimentary upstream and downstream design, engineering, fabrication, procurement, and construction solutions based on our experience and core competencies in technology development, process engineering, and project deployment, with a focus on processes that support long-term feedstock and offtake clients.

Mining Segment

Our mining segment has consolidated the most significant portions of the historic Comstock mining district, amassed the single largest known repository of historical and current geological data on the Comstock region, secured permits, built an infrastructure and completed two phases of test production.

Comstock and its mining subsidiaries own, control, or retain interest in twelve square miles of primarily mineralized properties, or 9,472 acres (and due to overlapping interests, the combined area is approximately 7,586 acres) located in Storey and Lyon Counties, Nevada, just south of Virginia City, Nevada (referred to collectively herein as the “Comstock Lode District”).

Because of the Comstock Lode District’s historical significance, the geology is well known and has been extensively studied.

The volume of geologic data is significant, particularly in the Lucerne and Dayton resource areas.

We have completed extensive geological mapping, sampling and drilling on a limited portion of the Comstock Lode District’s property, particularly the Lucerne and Dayton resource areas, in order to characterize the mineralized material.

We have performed metallurgical testing, mine planning and economic analysis, and have produced an SEC Regulation S-K Subpart 1300 (“S-K 1300”) compliant report for the Dayton resource area.

We conducted extensive test mining operations from 2004 through 2006 and 2012 through 2016.

Most of the remaining portion of the Comstock Mineral Estate is comprised of exploration stage properties that we intend to develop with our mining technologies.

Strategic and Other Investments Segment

We own and manage a number of investments and projects that are strategic to our plans and ability to produce and maximize revenue and throughput in our renewable energy products segments, but that are not a component of that segment or otherwise have distinct operating activities for management purposes.

Our strategic and other investments and projects include our recent investments in quantum computing and carbon dioxide utilization technologies as well as our mining, mercury remediation and related investments and our property development assets and related investments.

Summary Segment Results

We earned $228,123 and $201,700 in revenue in our strategic and other investments segment for each of the years ended December 31, 2021 and 2020.

We earned $634,042 and $0 in revenue in our renewable energy products segment for each of the years ended December 31, 2021 and 2020.

We had loss from operations of $4,604,326 and $5,474,261 per year for the years ended December 31, 2021 and 2020 in our strategic and other investments segment.

We had loss from operations of $1,801,595 and $0 per year for the years ended December 31, 2021 and 2020 in our renewable energy products segment.

We had total assets of $83,952,795 and $43,123,562 in our strategic and other investments segment at December 31, 2021 and 2020.

We had total assets of $43,001,837 and no assets in our renewable energy products at December 31, 2021 and 2020.

See Note 20, Segment Reporting , to the Consolidated Financial Statements

We own and manage several investments and projects that are strategic to our plans and ability to produce and maximize throughput in our renewable energy and mining segments, but that are not a component of either such other segments or otherwise have distinct operating activities for management purposes.

Our strategic and other investments segment includes our recent investments in quantum-computing based materials engineering and other decarbonizing technologies as well as our non-mining property development assets and related investments.

RECENT DEVELOPMENTS

Comstock historically focused on natural resource exploration, development, and production, with an emphasis on mining gold and silver resources from its extensive contiguous property holdings in the historic Comstock Lode and Silver City mining districts in Nevada (collectively, our “Comstock Mineral Estate”).

Comstock historically focused on natural resource exploration, development, and production, with an emphasis on exploring, developing and mining gold and silver resources from its extensive contiguous property holdings in the historic Comstock Lode and Silver City mining districts in Nevada (collectively, our “Comstock Mineral Estate”).

Between 2012 and 2016, we mined and processed about 2.6 million tons of mineralized material from the Comstock Mineral Estate, producing 59,515 ounces of gold and 735,252 ounces of silver.

We subsequently focused on exploration and development activities in anticipation of continued production, while evaluating and exploiting opportunities for the monetization of selected assets, debt elimination, new investments, and diversification.

During 2020 and 2021, we completed a series of transactions that were designed to build on our competencies and position us to address and capitalize on the global transition to clean energy.

Those transactions primarily included (i) our sale of Comstock Mining, LLC, the owner of our Lucerne resource area in Storey County, Nevada, and related permits, (ii) our acquisitions of 100% of Comstock Innovations Corporation (F/K/A Plain Sight Innovations Corporation), 100% of Comstock Engineering Corporation (F/K/A Renewable Process Solutions, Inc.), 100% of MANA Corporation and 90% of LINICO Corporation, (iii) our acquisition of intellectual property assets from FLUX Photon Corporation, and (iv) our purchase of 48.19% of Quantum Generative Materials LLC and 25% of Mercury Clean Up LLC.

Collectively, these transactions added the management, employees, facilities, intellectual properties, and other assets we needed to restructure and transform our company and business into an emerging leader in the innovation and sustainable production of renewable energy products, including cellulosic fuels and electrification metals.

We subsequently focused on diversification and during 2021 and 2022, we completed a series of transactions that were designed to build on our competencies and position us and our technologies to enhance our exploration and mineral discovery capabilities and to address and capitalize on the global transition to clean energy.

Those transactions primarily included our acquisitions of 100% of Comstock Innovations Corporation, 100% of Comstock Engineering Corporation, 88.21% of LINICO Corporation, our acquisition of 48.19% of Quantum Generative Materials LLC, and our acquisition of the intellectual property portfolio from FLUX Photon Corporation.

Collectively, these transactions added the management, employees, facilities, intellectual properties, and other assets we needed to restructure and transform our company and business into an emerging leader in both the innovation and licensing of the technology that enables sustainable production of renewable energy, including cellulosic fuels and electrification metals technology and data enhanced mineral exploration and mining.

Additional information on these transactions is provided in Note 2 to our Consolidated Financial Statements.

COMPETITIVE STRENGTHS

Our management team has deep experience in a diverse array of industries, including renewable fuels, hazardous waste, graphite, mining, metal manufacturing, agriproducts, and intellectual property research, development, and commercialization.

Our management team has deep experience in a diverse array of industries, including renewable fuels, mining, hazardous waste, graphite, manufacturing, agriproducts, and intellectual property research, development, and commercialization.

We have core competencies in systemic management and innovating and scaling new technologies to commercial maturity, with significant expertise and know-how in the design, engineering, construction, integration, operation, and scaling of facilities based on our patented, patent-pending, and proprietary processes and other technologies.

Our expertise, know-how, technologies, and patent position collectively comprise our primary competitive strengths, and form the basis for our growth plans and the value-added renewable energy products, process solutions, related services, and client licensing options.

Our expertise, know-how, technologies, and patent position collectively comprise our primary competitive strengths, and form the basis for our growth plans and the value-added renewable energy, mineral discovery, process solutions, related services, and client licensing options.

Our team has designed, engineered, built, commissioned, and operated many industrial processing facilities in multiple industries, including 26 advanced renewable fuel production facilities for third-party clients.

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corn ethanol industry uses that technology today to offset more than 20 million barrels of fossil fuels per year, with an estimated total lifetime contribution in excess of 250 million barrels of avoided fossil fuel.

Those results are validating proof of a repeatable and scalable concept that we plan on capitalizing on with our patented, patent-pending and proprietary technologies.

Our strategic and tactical plans rely on the commercialization of technologies for renewable energy products that shift and leverage the consumption patterns of industries and populations to enable systemic decarbonization and contribute to a net zero carbon world.

Those results are validating proof of a repeatable and scalable concept on which we plan to capitalize with our patented, patent-pending and proprietary technologies.

Our strategic and tactical plans rely on the commercialization of technologies for renewable energy that shift and leverage the consumption patterns of industries and populations to enable systemic decarbonization and contribute to a net zero carbon world.

BUSINESS OVERVIEW

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In contrast, there were more than 1.45 billion passenger cars and commercial vehicles in use worldwide at the end of 2022, and more than 98% of them were powered by gasoline or diesel fuel.

Those vehicles accounted for 63% of the 7.3 billion metric tons of carbon dioxide emitted by the transportation sector in 2020, and that amount is expected to increase by more than 50% as the combustion fleet

continues to grow beyond 2030.

The growth and turnover of that fleet will continue to have a significant impact on the world’s harmful carbon emissions.

Those vehicles accounted for more than 60% of the 7.7 billion metric tons of carbon dioxide emitted by the transportation sector in 2022, and that amount is expected to increase by more than 50% as the combustion fleet continues to grow beyond 2030.

The growth and turnover of that fleet will have a significant impact on the world’s harmful carbon emissions.

Accordingly, we believe that combustion will continue to be the dominant source of power for transportation and energy for decades to come, if for no other reason than the fact that the associated infrastructure is already deployed on a planetary scale.

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Our Cellulosic Fuels solutions dramatically alter that dynamic by unlocking and efficiently converting wasted, unused, and rapidly-replenishable woody biomass and other short cycle renewable resources into intermediates and precursors for the production of carbon neutral crude oil, ethanol, gasoline, renewable diesel, jet fuel, marine fuel, and other renewable replacements for long cycle fossil derivatives.

Our strategic plan is based on innovating and using our technologies and the renewable energy products that they enable to reduce reliance on long cycle fossil fuels, to shift to and maximize throughput of short cycle fuels, and to lead and support the adoption and growth of a balanced global short cycle carbon ecosystem, with embedded economic incentives to offset, recycle, and contribute to neutralizing emissions by growing and selling more feedstock and fuel.

Our objective is to generate over $16 billion in revenue on an annualized basis by 2030, by responsibly producing and selling renewable energy products that enable us, our clients, and their stakeholders to reduce greenhouse gas emissions by at least 100 million metric tons per year.

Meeting that objective would offset the equivalent of 234 million barrels per year of fossil fuel, or about 6% of the U.S.

transportation burn.

Our strategic plan is based on innovating and licensing our technologies and the renewable energy that they enable to reduce reliance on long cycle fossil fuels, to shift to and maximize throughput of short cycle fuels, and to lead and support the adoption and growth of a balanced global short cycle carbon ecosystem, with embedded economic incentives to offset, recycle, and contribute to neutralizing emissions by growing and selling more feedstock and fuel.

We also make strategic and other investments that contribute to our mission of enabling systemic decarbonization and help to realize our vision of a net zero carbon world.

Our current investments include advanced new technologies involving atmospheric water harvesting, carbon capture and utilization, and quantum computing to harness quantum-enabled generative adversarial neural networks to develop breakthrough new materials for energy storage, electronics, carbon capture and utilization, and mining.

We compete with other renewable fuels, electrification metals, clean technology engineering, licensing, and mineral exploration companies in connection with the acquisition of properties and other assets, feedstock and offtake agreements, and clients, and the attraction and retention of human capital.

Those competitors may have substantially greater financial resources than we do.

While we plan to produce and sell renewable alternatives to fossil crude to fuel producers, we also have the capability of directly refining those alternates into renewable fuels, We accordingly face competition from producers and suppliers of fossil fuels, and producers, marketers, traders, and distributors of renewable fuels.

Our cellulosic ethanol products will compete with ethanol produced by the highly fragmented U.S.

corn ethanol industry, including from plants owned by farmers, cooperatives, oil refiners and retail fuel operators that may continue to operate even

when market conditions are not favorable due to the benefits realized from their other operations.

As of December 31, 2020, the top five corn ethanol producers operated 69 plants and accounted for approximately 40% of the domestic production capacity with capacities ranging from 800 million gallons per year to 1.8 billion gallons per year.

About half of the corn ethanol plants in the U.S.

are standalone facilities that accounted for approximately 38% of domestic production capacity.

Our current investments include advanced new technologies involving quantum computing based materials engineering to create quantum-enabled generative artificial intelligence and sensing technologies to develop breakthrough new materials for energy storage, electronics, and data enhanced mineral exploration and mining.

We compete with other renewable fuel technologies, electrification metals, clean technology engineering, licensing, and mineral exploration companies in connection with the acquisition of properties and assets, feedstock and offtake agreements, and clients, and the attraction and retention of human capital.

Those competitors have substantially greater financial resources than we do.

Our cellulosic ethanol technology and customers will compete with ethanol produced by the highly fragmented U.S.

corn ethanol industry, including from plants owned by farmers, cooperatives, oil refiners and retail fuel operators that may continue to operate even when market conditions are not favorable due to the benefits realized from their other operations.

The size of the biomass-based diesel industry is small compared to the size of the petroleum-based diesel fuel industry.

In the United States and Canadian biomass-based diesel markets, we will compete with independent biomass-based diesel producers, as well as large, multi-product companies that have greater resources than we do.

Ag Processing Inc., Archer Daniels Midland Company, Cargill Incorporated, and Louis Dreyfus Commodities Group are major international agribusiness corporations and biodiesel producers with the financial, feedstock sourcing and marketing resources to be formidable competitors in the biodiesel industry.

These agribusiness competitors tend to make renewable fuel as part of their integrated agribusinesses.

We will also compete with several large and well capitalized producers of renewable diesel.

Neste Corporation has about 900 million gallons of renewable diesel production capacity in Asia and Europe, a significant portion of which is imported into the U.S.

Diamond Green Diesel, LLC, a joint venture between Valero Energy Corporation and Darling Ingredients Inc., produces about 275 million gallons per year of renewable diesel and it is in the process of expanding capacity to 675 million gallons per year by 2022.

In January 2021, Valero announced that it will build a 470 million gallons per year renewable diesel plant in Texas with Darling.

We expect significant renewable diesel capacity to initiate new production by 2030.

In the United States

and Canadian biomass-based diesel markets, our technology will compete with independent biomass-based diesel producers, as well as large, multi-product companies that have greater resources than we do.

According to the U.S.

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Significant additional import activity from other countries is likely to occur.

We also face the prospect that petroleum refiners will be increasingly competitive with us, either by converting oil refineries to produce renewable diesel or by co-processing renewable feedstock with crude oil.

Several petroleum refiners in the U.S.

have affected conversions of their facilities from crude oil to renewables in the past year including but not limited to Sinclair, Phillips 66, Holly Frontier, Marathon, and Exxon.

We also face the prospect that petroleum refiners will be increasingly competitive with our technology, either by converting oil refineries to produce renewable diesel or by co-processing renewable feedstock with crude oil.

Since 2021, several petroleum refiners in the U.S.

have affected conversions of their facilities from crude oil to renewables including but not limited to Sinclair, Phillips 66, Holly Frontier, Marathon, and Exxon.

Some of the largest refiners have started co-processing renewable feedstocks or have announced plans to do so.

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Competitors could also focus their substantial resources on developing more efficient recovery solutions than our highly efficient processes planned for lithium, graphite and other material extraction.

Competition also places downward pressure on contract prices and profit margins, which presents significant challenges to maintaining growth rates and acceptable margins.

Competition also places downward pressure on contract prices and royalties, which presents significant challenges to maintaining growth rates and acceptable margins.

The Company is not dependent on a limited number of customers for its sales.

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where benefits are defined in terms of three different interdependent forms of capital – financial, natural, and social, that we generate while making a positive impact on the economy, the environment, and our local and global communities.

by at least 100 million metric tons per year.

Meeting that objective would offset the equivalent of more than 234 million barrels per year of fossil fuel, or about 6% of the U.S.

transportation burn.

REGULATORY MATTERS

Once operational, our renewable energy products segment will be sensitive to government programs and policies that affect the supply and demand for ethanol, gasoline, renewable diesel, jet fuel, marine fuel, other renewable fuels, and their intermediates, precursors, and derivatives, which in turn may impact our throughput.

Once operational, our renewable energy segment will be sensitive to government programs and policies that affect the supply and demand for ethanol, gasoline, renewable diesel, jet fuel, marine fuel, other renewable fuels, and their intermediates, precursors, and derivatives, which in turn may impact our throughput.

The demand for cellulosic and carbon neutral fuels is rapidly increasing, and supply is virtually non-existent for the want of recently developed process technologies.

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Obligated parties are required to incorporate a certain percentage of renewable fuel into their petroleum-based fuel or purchase credits in the form of renewable identification numbers from those who do.

An obligated party’s RVO is based on the volume of petroleum-based fuel they produce or import.

obligated party’s RVO is based on the volume of petroleum-based fuel they produce or import.

The largest U.S.

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The value of RINs can significantly impact to the price of renewable fuel.

In 2020, RIN prices reported by the Oil Pricing Information System, or OPIS, fluctuated significantly throughout the year and ranged from a low of $0.37 per gallon to a high of $1.03 per gallon, or 45% of the average spot price, in December 2020.

The federal biodiesel mixture excise tax credit (“BTC”), provides an additional $1.00 refundable tax credit per gallon to the first blender of biomass-based diesel with petroleum-based diesel fuel.

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As the LCFS and CI requirements get increasingly stringent, fuel providers will be unable to meet their required CI reductions with corn ethanol alone.

Comstock’s advanced cellulosic ethanol is less carbon intensive than conventional corn ethanol, thereby providing opportunities for increased sales.

Comstock’s advanced cellulosic ethanol is less carbon intensive than conventional corn ethanol, thereby providing

opportunities for increased sales.

For comparison, the market value of cellulosic ethanol in the California market is equal to the price for conventional ethanol, plus the RIN value, plus the LCFS value based on the CI score.

Under current market conditions, our cellulosic ethanol would have a market value in California ranging from $4.97 per gallon with the lower limit CI scoring, to $4.43 per gallon using the upper limit for CI scoring, as compared to $2.16 per gallon for corn ethanol.

We will obtain carbon credits when we sell qualified fuels into California.

During 2020, California LCFS carbon credits ranged from $167.50 per metric ton to $218.00 per metric ton, as reported by OPIS.

Likewise, the Oregon Clean Fuel Program requires a 10% reduction of the average carbon intensity of Oregon’s transportation fuels from 2021 levels by 2025.

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We will obtain carbon credits when we sell qualified fuels in Oregon.

During 2020, Oregon OCF carbon credits ranged from $105.00 per metric ton to $155.00 per metric ton, as reported by OPIS.

In the European Union, or EU, the Renewable Energy Directive established a 10% target by 2021 for the use of renewable energy in the transport sector in EU member states.

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This totaled 790 mmg of waived requirements for the 2021 compliance year, 1.82 billion gallons for 2017 and 1.43 billion gallons for 2018.

doing so, the EPA effectively reduced the RFS II mandated volumes for those compliance years, and as a result, RIN values declined significantly.

In doing so, the EPA effectively reduced the RFS II mandated volumes for those compliance years, and as a result, RIN values declined significantly.

Biofuels groups have filed a lawsuit in the Court of Appeals for the D.C.

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Biofuels groups have argued the EPA must therefore adjust its percentage standard calculations to make up for past retroactive waivers and adjust the standards to account for any waivers it reasonably expects to grant in the future.

Our design, engineering, licensing, installation, commissioning and maintenance services are subject to various federal, state and local environmental, health and safety laws and regulations, which require a standard of care to control potential pollution and limit actual or potential impacts to the environment and personnel involved.

While our engineering and installation work regularly exceeds health, safety and environment requirements, a violation of these laws and regulations, or of permit conditions, can result in substantial fines, natural resource damage, criminal sanctions, permit revocations and/or facility shutdowns.

We do not anticipate a material adverse effect on our business or financial condition as a result of our efforts to comply with these requirements.

Operating expenses to meet regulatory requirements, including all environmental permits, will be an integral part of service costs.

Costs for compliance with environmental laws include safety and health protection measures, controls limiting air emissions and effluent discharges, emergency response capabilities, storm water management, recordkeeping and training.

We often assist our customers in environment, health and safety compliance issues, including new requirements concerning greenhouse gas emissions.

It may not be possible to completely segregate our environmental, health and safety responsibilities from those of our customers.

In 2019, in a supplemental rule-making to the 2020 RVO rule, the EPA changed their approach, and for the first time accounted for the gallons that they anticipate will be waived from the blending requirements due to small refinery exemptions.

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Supreme Court and in January 2021, the Supreme Court announced they would hear the case.

If the decision against the EPA is upheld by the Supreme Court, it is uncertain how the EPA will propose to remedy the situation.

If the decision against the

EPA is upheld by the Supreme Court, it is uncertain how the EPA will propose to remedy the situation.

In light of the 10th Circuit ruling, a number of refineries have applied for “gap year” SREs in an effort to establish a continuous string of relief and to ensure they are able to qualify for SREs going forward.

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Without a string of continuous SRE approvals, almost no small refinery would be eligible to apply for hardship relief in this manner, unless the Supreme Court overturns the 10th Circuit ruling, which we believe is unlikely.

Our renewable energy products segment activities are subject to various and extensive environmental and other regulations.

Our renewable energy segment activities are subject to various and extensive environmental and other regulations.

We will be required to obtain and maintain various environmental permits to operate our plants and other facilities.

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The European Union proposes to update its EU Battery Directive during 2021 to implement more aggressive recycling targets, including minimum material recovery rates of 90% for both cobalt and nickel by 2025, a minimum recovery rate of 35% for lithium by 2025, and a Recycling Efficiency Rate of least 65% by 2025.

Our renewable energy products segment holds all licenses currently required in connection with its technologies and operations.

Our renewable energy segment holds all licenses currently required in connection with its technologies and operations.

We have engaged a third-party consultant to work across all projects, supporting us with permitting and regulatory compliance, and keeping us apprised of all relevant regulations and related changes.

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The BMRR, with concurrence from Storey County, has approved our most recent reclamation plan, as revised, and our estimated total costs related thereto of approximately $7,251,950, including $6,751,950 for BMRR and $500,000 of additional reclamation surety bonding directly, with Storey County.

As part of the surety agreement, the Company agreed to pay a 2.0% annual bonding fee and signed a corporate guarantee.

As part of the surety agreement, the Company agreed to pay a 2.0%

annual bonding fee and signed a corporate guarantee.

The bonded amount is $7,251,950, and the collateral held on deposit at December 31, 2022 is $2,727,815.

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HUMAN CAPITAL RESOURCES

The attraction, retention and development of employees is critical to our success.

The foundation of our Company is our employees and our success begins with the attraction, retention and development of our employees.

We accomplish this, in part, by our systemic management practices, competitive compensation practices, training initiatives, and growth opportunities within the company.

Comstock currently has 32 full-time employees.

We also employ sales, engineering, research, geological, regulatory, environmental, operating, financial, and administrative personnel.

We currently have 33 full-time employees.

We employ sales, engineering, research, geological, regulatory, environmental, operating, financial, and administrative personnel.

There is no union representation for any of our employees.

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De Gasperis has served as Comstock’s chief executive officer since 2010 and executive chairman since 2015.

He is also a director and president of each of the Company’s wholly- and majority-owned subsidiaries, and Sierra Springs Opportunity Fund, Inc., a strategic investee of Comstock since July 2019.

He is also a director of each of the Company’s wholly- and majority-owned subsidiaries, and of Quantum Generative Materials, LLC and Sierra Springs Opportunity Fund, Inc., strategic investees of Comstock since June 2021 and July 2019, respectively.

From 2006 to 2009, Mr.

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Barzel operated a network of 15 steel-based manufacturing, processing and distribution facilities in the United States and Canada that offered a wide range of metal solutions to various industries, from construction and industrial manufacturing to transportation and mining.

De Gasperis resigned from Barzel in September 2009, after Barzel agreed to sell substantially all of its assets in a planned transaction that was consummated in a sale pursuant to Section 363 of the U.S.

Bankruptcy Code following a multiple party bidding process with suitors focused on both in-court and out-of-court transactions.

Barzel and substantially all of its U.S.

and Canadian subsidiaries were purchased for $65.0 million in cash.

From 1998 to 2006, Mr.

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From 1987 to 1998, Mr.

De Gasperis was a Certified Public Accountant with KPMG LLP, an international provider of financial advisory and assurance services.

As a Senior Assurance Manager in the Manufacturing, Retail and Distribution Practice, he served clients such as General Electric Company and Union Carbide Corporation.

KPMG announced his admittance, as a Partner, effective July 1, 1998.

De Gasperis is also a director and the chairman of the of the Board of Directors of LiNiCo Corporation and chairman of the member committee for Quantum Generative Materials LLC.

He is a director of ROK-On Building Systems, a manufacturer of low-carbon, renewable building materials and a strategic investee of Sierra Springs Opportunity Fund Inc and also a founding member and the chairman of the Board of Directors of the Comstock Foundation for History and Culture, a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code").

De Gasperis was a Certified Public Accountant with KPMG LLP, an international provider of financial advisory and assurance services where he served clients such as General Electric Company and Union Carbide Corporation.

KPMG announced his admittance into the partnership, as a Partner, effective July 1, 1998.

De Gasperis is also a director and the executive chairman of the Board of Directors of LiNiCo Corporation and chairman of the member committee and board for Quantum Generative Materials LLC.

He is a director of ROK-On Building Systems, a manufacturer of low-carbon, renewable building materials and a strategic investee of Sierra Springs Opportunity Fund Inc.

and also a founding member and the chairman of the Board of Directors of the Comstock Foundation for History and Culture, a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code").

DeGasperis previously served as a director and as chairman of the Virginia City Tourism Commission.

He also has served as a director of GBS Gold International Inc., where he was chairman of the Audit and Governance Committee and the Compensation Committee and a member of the Nominations and Advisory Committees.

He also has served as a director of GBS Gold International Inc., where he was chairman of the Audit and

Governance Committee and the Compensation Committee and a member of the Nominations and Advisory Committees.

De Gasperis holds a BBA from the Ancell School of Business at Western Connecticut State University, with honors.

Kreisler, President and Chief Financial Officer

Kreisler joined Comstock as its president and chief financial officer in September 2021.

He is also a director and chief financial officer of each of the Company’s wholly- and majority-owned subsidiaries.

Kreisler, Chief Technology Officer

Kreisler joined Comstock in September 2021.

Kreisler is currently our chief technology officer.

He is also a director and serves as a director of Quantum Generative Materials, LLC.

Kreisler has a diverse background in agriproducts, renewable fuels, hazardous waste, and intellectual property development, with deep expertise in building and scaling commercial production processes and companies in regulated markets.

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in Economics from Tufts University.

Winsness, Chief Technology Officer

Winsness joined Comstock as its chief technology officer in September 2021.

Winsness, President, Comstock Fuels Corporation

Winsness joined Comstock in September 2021.

Winsness is currently the president of the Comstock Fuels subsidiary.

Winsness has spent his professional career targeting the extraction and recovery of materials from byproduct streams and repurposing those recovered materials into high value markets.

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Winsness subsequently served as chief executive officer of Plain Sight Innovations LLC and its predecessor, FLUX Carbon LLC, where he led the development of a technology portfolio for cellulosic fuels and other clean technologies, focusing on advanced carbon-neutral fuels and alternatives to fossil fuels.

Winsness attended Clemson University and graduated with a Bachelor of Science degree in Mechanical Engineering.

Winsness graduated from Clemson University with a Bachelor of Science degree in Mechanical Engineering.

Rahul Bobbili, Chief Engineering Officer

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Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any filed or furnished amendments to those reports pursuant to Section 13(a) of the Exchange Act are made available through our website as soon as practical after we electronically file or furnish the reports to the SEC.

Also available on our website are the Company’s Governance Guidelines and Code of Conduct, as well as the charters of the audit,

compensation and nominating committees of the Board of Directors.

Also available on our website are the Company’s Governance Guidelines and Code of Conduct, as well as the charters of the audit, compensation and nominating committees of the Board of Directors.

Information on our website is not incorporated into this report.

Stockholders may request free copies of these documents from Comstock Mining Inc., P.O.

Stockholders may request free copies of these documents from Comstock Inc., P.O.

Box 1118, Virginia City, Nevada 89440.

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Equity Issuance Agreements

For the year ended December 31, 2021, we sold 9,220,123 registered shares of common stock at an average share price of $2.97, and net proceeds of $26,335,500 after fees and expenses.

In connection with these sales, we issued 143,787 shares for in payment of commitment and due diligence fees.

We also issued 26,863,156 unregistered shares of common stock as consideration for acquisitions, investments and payment for mineral rights.

For the year ended December 31, 2022, we sold 20,666,674 registered and unregistered shares of common stock at an average share price of $0.51, and net proceeds of $10,488,180 after fees and expenses.

In connection with these sales, we issued 772,454 shares in payment of commitment and due diligence fees.

We issued 264,040 restricted shares with a fair value of $340,000 in connection with our equity sales for commitment fees.

We issued 565,557 unrestricted shares with a fair value of $500,000 in connection with our equity sales for commitment and due diligence fees.

We also issued 2,907,915 unregistered shares of common stock as consideration for acquisitions, investments and other endeavors.

Debt Financing Agreements

The Company entered into a long-term promissory note ("GHF 2021 Note") with GHF, Inc.

on December 15, 2021, with a principal amount of $5,000,000, of which $4,550,000 was funded and $450,000 was an original issue discount ("OID").

("GHF") on December 15, 2021, with a principal amount of $5,000,000, of which $4,550,000 was funded and $450,000 was an original issue discount ("OID").

The full principal is due on December 15, 2024.

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If the promissory note has not been paid in full on or prior to December 15, 2022, the Company will issue warrants to GHF allowing them to purchase 1,000,000 shares of the Company’s common stock, half of which are exercisable at a price per share of 150% of the 20-day volume weighted average closing price (“VWAP”) of the Company’s common stock on its primary trading market for the 20 consecutive trading days preceding December 15, 2021, and the remainder at a price per share of 135% of the 20-day VWAP as determined on December 15, 2022.

On December 16, 2022, in compliance with the GHF 2021 Note agreement, the Company issued warrants to GHF allowing them to purchase 1,000,000 shares of the Company’s common stock, 500,000 of which are exercisable at a price per share of $2.5217 and the remaining 500,000 at a price per share of $0.4555.

The warrants are exercisable for a period of two years commencing on December 15, 2022, and ending on December 15, 2022.

At December 31 2021, the warrants were valued at $708,789.

We recognized interest expense of $19,720 during the year ended December 31, 2021 in connection with the GHF 2021 Note.

At the time the Company issued the GHF 2021 Note, the Company estimated a 10% probability that the warrants would be issued and recognized an initial discount on the debt of $70,879.

In December 2022, the contingency was resolved upon issuing the warrants, the Company recorded an additional $637,910 and the discount on the note was adjusted to reflect the increase.

During the years ended December 31, 2022 and 2021, we recognized interest expense of $715,089, which includes OID amortization of $429,912, and $19,720, respectively, in connection with the GHF 2021 Note.

On August 22, 2022, the Company amended the GHF promissory note’s prepayment provision to reduce the amount required to be paid from the Daney Ranch sale to $710,000.

As consideration for the amendment, the Company issued GHF warrants to purchase 200,000 common shares at a price of $1.00 per share.

The warrants had a fair value of $18,975 on the date of issuance and was recorded as an additional debt discount with a corresponding increase in additional paid-in capital.

During the years

ended December 31, 2022 and 2021, we recognized interest expense of $715,089 which includes OID amortization of $429,912 and $19,720, respectively, in connection with the GHF 2021 Note..

On March 4, 2021, we retired our unsecured promissory notes (“Promissory Notes”) by paying the remaining principal balance of $3.1 million plus earned OID of $0.1 million.

For the year ended December 31, 2021, interest expense on the promissory notes was $139,213, which includes OID amortization of $71,289.

On October 25, 2022, the Company entered into a short-term promissory note with Alvin Fund LLC ("Alvin Fund Note") with a principal amount of $2,000,000.

In consideration of the lender providing the financing, the Company issued $250,000 in shares to the lender.

The full principal is due on October 25, 2023.

Interest is payable monthly at a rate of 9% per annually.

Prepayment is allowed in full or in part at any time without premium or penalty.

The loan is secured by all of the property commonly referred to as the Dayton properties.

During the year ended December 31, 2022, we recognized interest expense of $33,041 and amortization of discount of $45,890 in connection with the Alvin Fund Note.

The Company used the proceeds for a $2.0 million payment toward the purchase of a battery metal recycling facility from LINICO.

On December 16, 2022, the Company entered into a securities purchase agreement for an unsecured convertible promissory note ("Ionic Ventures 2022 Convertible Note") with Ionic Ventures, LLC with a principal amount of $3,150,000, of which $2,975,000 was funded and $175,000 was an original issue discount.

The full principal is due on March 16, 2024.

Interest is payable monthly at a rate of 8% annually.

The Company can redeem up to $2,000,000 of the Convertible Note for cash 30-days following closing at 110% of the Face Value, plus accrued interest.

The Ionic 2022 Convertible Note contains conversion terms that are based on percentages of trading price and volumes over defined measurement periods.

The terms require the conversion option to be bifurcated as a derivative.

As of December 31, 2022, the Company bifurcated the conversion feature and recorded a derivative liability of $420,000 reflected in our consolidated balance sheet.

The derivative was valued using a Monte Carlo valuation model with a conversion price equal to 90% of the average price capped at $0.50, discount rate of 35%, risk free rate of 4.40%, and volatility of 60.0%.

During the year ended December 31, 2022, we recognized interest expense of $10,356 and amortization of discount of $17,161 in connection with the Ionic 2022 Convertible Note.

The Company used the net proceeds from this offering for strategic development programs, working capital and general corporate purposes.

RISK FACTOR SUMMARY

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We intend to derive a significant portion of our revenues from sales of our renewable fuel in states with Low Carbon Fuel Standards, however, adverse changes in the associated laws or reductions in the value of the applicable credits would harm our revenues and profits.

A decline in the adoption rate of renewable energy or electrification, or a decline in the support by governments for renewable energy and electrification technologies, could materially harm our financial results and ability to grow our business.

Our success will depend on acquiring, maintaining, and increasing feedstock supply commitments, as well as securing new customers and offtake agreements.

Our margins are dependent on the spread between the market prices for our renewable energy products and the costs for our feedstocks, which may be volatile and can cause our results of operations to fluctuate substantially.

Our margins are dependent on the spread between the market prices for our renewable energy and the costs for our feedstocks, which may be volatile and can cause our results of operations to fluctuate substantially.

Our operations depend on the availability of sufficient water supplies.

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We do not have proven or probable reserves, and there is no assurance that the quantities of minerals and metals we produce will be sufficient to recover our investment and operating costs.

The cost of our exploration, development and acquisition activities is substantial, and there is no assurance that the quantities of minerals and metals we discover, acquire or recover will justify commercial operations or replace future reserves.

Resource and other material statements are estimates subject to uncertainty due to factors including market prices, and the inherent variability and recoverability of targeted natural resources in extraction and beneficiation processes.

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Our facilities and our customers' facilities will be subject to risks associated with fire, explosions, leaks, and natural disasters, which may disrupt our business and increase costs and liabilities.

The dangers inherent in storage and transportation of our renewable energy products could cause disruptions in our operations and could expose us to potentially significant losses, costs or liabilities.

The dangers inherent in storage and transportation of our renewable energy could cause disruptions in our operations and could expose us to potentially significant losses, costs or liabilities.

Increases in transportation costs or disruptions could have a material adverse effect on our business.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business