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Item 7. Management’s Discussion and Analysis

2025-03-06 compared with 2024-02-27 · 221 added, 256 removed, 110 unchanged (81% of the section changed)

ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated financial condition and results of operations.

This discussion should be read in conjunction with the Consolidated Financial Statements included herewith and the footnotes thereto and the risk factors contained herein.

Comstock enables systemic decarbonization by 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.

Our goal is to Accelerate the Commercialization of Decarbonizing Hard Technologies.

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 networks toward achieving breakthrough innovations that deliver meaningful positive impact across industries, economies, and communities.

The primary focus for 2024 is the continued development and commercialization of our businesses.

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 for each technology 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.

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 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 .

REVERSE STOCK SPLIT

On February 24, 2025, the Company effected a one-for-ten (1:10) reverse stock split of its issued and outstanding shares of common stock.

In connection with the reverse split, all shares of common stock, stock options, per-share and warrant amounts for all periods presented have been adjusted retrospectively to reflect this reverse stock split.

This recast ensures comparability across all periods presented and does not impact previously reported net income (loss), total assets, or total liabilities.

The reverse stock split did not impact the total stockholders’ equity, the number of authorized shares of common stock, or the par value per share.

Comstock innovates and commercializes technologies that extract and convert under-utilized natural resources into clean energy products, including remarkable new technologies that produce renewable fuels from waste and other forms of woody biomass and electrification metals from end-of-life electronics.

We are also developing and using artificial intelligence technologies for advanced materials development, and preparing our defined mineral resources for mining and monetization.

Our goal is to build extraordinary shareholder value by using systemic management practices, disciplined frontier scientific discovery, and applied engineering to innovate, develop, and commercialize technologies that facilitate the increased production, storage, distribution, and use of clean energy across entire industries.

Our operations primarily involve innovating, developing, deploying, and monetizing clean energy technologies with integrated teams in dedicated lines of business, including renewable fuels, metals, and mining.

Our plans to generate revenue and throughput involve using and licensing our technologies, including by creating financial and other incentives to enable and motivate our customers, licensees, and other stakeholders to use their capital, infrastructure, and other resources to accelerate and maximize adoption.

We also make, own and manage investments in related assets to support our businesses, including multiple existing minority equity positions and partnerships in strategic technology developers, two renewable fuels demonstration facilities in Wisconsin, and a metals recycling demonstration facility in Nevada.

We additionally own and manage direct investments in northern Nevada real estate comprised of industrial and commercial properties, strategic water rights and approximately twelve square miles of mining claims and related surface parcels that we own, lease and/or have a royalty interest in that also contain measured, indicated and inferred mineral resources of gold and silver.

Lines of Business

Fuels Segment

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.

While innovation and development is 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.

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.

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.

Our Fuels Segment is administered by our subsidiary, Comstock Fuels Corporation (“Comstock Fuels”).

Comstock Fuels delivers advanced lignocellulosic biomass refining solutions that set industry benchmarks for production of cellulosic ethanol, gasoline, renewable diesel, sustainable aviation fuel (“SAF”), and other renewable Bioleum™ fuels, with extremely low carbon intensity scores of 15 and market-leading yields of up to 140 gallons per dry metric ton of feedstock (on a gasoline gallon equivalent basis, or “GGE”), depending on feedstock, site conditions, and other process parameters.

Comstock Fuels additionally holds the exclusive rights to intellectual properties developed by Hexas Biomass Inc.

(“Hexas”) for production of purpose grown energy crops in liquid fuels applications with proven yields exceeding 25 to 30 dry metric tons per acre per year.

The combination of Comstock Fuels’ high yield Bioleum refining platform and Hexas’ high yield energy crops allows for the production of enough feedstock to produce upwards of 100 barrels of fuel per acre per year (at 42 gallons per barrel), effectively transforming marginal agricultural lands with regenerative practices into perpetual “drop-in sedimentary oilfields” with the potential to dramatically boost regional energy security and rural economies.

Comstock Fuels plans to contribute to domestic energy dominance by directly building, owning, and operating a network of Bioleum Refineries in the U.S.

to produce about 200 million barrels of renewable fuel per year by 2035, starting with its planned first 400,000 barrel per year commercial demonstration facility in Oklahoma.

Comstock Fuels also licenses its advanced feedstock and refining solutions to third parties for additional production in the U.S.

and global markets, including several recently announced and other pending projects.

Our Fuels Segment does not currently generate revenue but is anticipated to do so from recently announced agreements for licensing and related engineering services in Australia, New Zealand, Malaysia, Vietnam and Pakistan.

Comstock Fuels operates two pilot facilities, including a feedstock conversion and biointermediate production pilot in Wausau, Wisconsin (“Wausau Facility”), and a biointermediate conversion and renewable fuel production pilot in Madison, Wisconsin (“Madison Facility”).

Comstock Fuels is also focused on additional innovations to improve on its existing commercial process by increasing its market-leading yields and carbon intensities while driving costs down in pursuit of fossil parity.

To that end, Comstock Fuels’ innovations group has partnered with National Renewable Energy Laboratory (“NREL”), the Massachusetts Institute of Technology (“MIT”), RenFuel K2B AB (“RenFuel”), Emerging Fuels Technologies Inc.

(“EFT”), and others with sponsored research, licensing, and other agreements.

We intend to transition Comstock Fuels to directly supporting its continued development with the proceeds of a planned Series A subsidiary preferred equity offering in 2025 (“Series A Financing”) as well as subsidiary project equity and debt financings that includes a recent allocation of $152 million from the State of Oklahoma in project activity bonds for the construction of its planned first 400,000 barrel per year facility in Oklahoma.

Effective February 28, 2025, Comstock Fuels entered into a series of definitive agreements with subsidiaries of Marathon Petroleum Corporation (“Marathon”), involving the purchase of $14,000,000 in Comstock Fuels equity as part of Comstock Fuels’ planned Series A Financing, subject to a $700,000,000 valuation cap (“Investment”).

The purchase price includes $1,000,000 in cash and $13,000,000 in payment-in-kind assets comprised of equipment, related intellectual properties, and other materials located at Marathon’s former renewable fuel demonstration facility in Madison, Wisconsin (“Payment-In-Kind Assets”) (see Note 21 of the Notes to our Consolidated Financial Statements).

Metals Segment

Our Metals Segment recently secured sufficient supplier commitments and all of the necessary permits to begin commissioning our first photovoltaic recycling facility, and is expected to receive 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 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.

Our Metals Segment has operated a demonstration-scale solar panel recycling facility since early 2024, generating $401,238 in revenue for the year ended December 31, 2024, through service fees for decommissioning, tipping fees for receiving and processing end-of-life solar panels, and offtake sales of high-value recycled materials, including aluminum, copper, glass, and concentrated precious metals.

This facility has proven our capability to deliver environmentally superior recycling solutions that support U.S.

industry while reducing landfill waste.

Comstock Metals has initiated permitting and development of its first industry-scale production facility, located on the same campus as the demonstration facility to scale the operation.

This strategically located facility will enable the seamless transition of proven processes from demonstration to full-scale production.

Once operational, the industry-scale facility is expected to significantly enhance our ability to meet the growing demand for domestically recovered metals, supporting the needs of American manufacturers, and infrastructure projects.

Our mission is to create a robust domestic supply chain for critical materials by innovating and scaling sustainable recycling technologies.

The Company plans to build three facilities in the United States.

Comstock Metals is advancing a vision of American energy and resource independence while delivering economic and environmental value.

Our Metals Segment's 2025 objectives include (1) closing on direct equity and/or debt financing into Comstock Metals sufficient to fund the construction and commissioning of the Company’s first industry-scale facility, (2) submitting all prerequisite permits, (3) finalizing the industry-scale engineering, (4) ordering all of the industry-scale equipment for our first industry-scale facility, and (5) securing larger and longer terms supply contracts and accelerating site selection for our second and third facilities.

Mining Segment

Our Mining Segment generated over $1 million in revenue during 2023 and 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”).

Our Mining Segment generated income from leases, licenses, and related fees during 2024, and is administered by our wholly owned subsidiaries, Comstock Mining LLC, Comstock Processing LLC and various other local subsidiaries that collectively own, control, or retain royalty interest in 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”).

On December 18, 2024, the Company entered a binding membership interest purchase agreement with Mackay pursuant to which the Company sold all of its right, title, and interest in its wholly owned subsidiary Comstock Northern Exploration LLC, and the Company's 25% interest in Pelen to Mackay, for an aggregate purchase price of $2,750,000.

The Northern Targets encompass both the Gold Hill and Occidental Lode claim groups in Storey County, Nevada.

Pelen owns certain claims adjacent to and/or relevant to these northern claim groups.

For the year ended December 31, 2024, the Company recognized a gain on sale of mineral rights of $0.8 million.

The Company was paid $1.0 million in cash with another $0.75 million previously due and expected to be paid by March 30, 2025, plus an additional $1.0 million that will be paid within 45 days of the completion of Mackay’s public listing, at the election of Mackay, in either cash or their publicly registered common stock.

The $1.0 million from the public listed shares is guaranteed by the value date of October 31, 2025.

On June 30, 2023, the Company entered a Mineral Exploration and Mining Lease Agreement (“Mackay Mining Lease”) with Mackay.

Since entering the Mackay Mining Lease, the Company has received cash of $3.2 million in initial and ongoing lease payments and will also receive an additional, final pro-rata lease payment associated with these properties of $0.5 million expected to be paid by March 30, 2025.

The Mackay Mining Lease terminated on December 18, 2024.

Our Mining Segment's 2025 objectives include (1) advancing the preliminary economic assessment for the Dayton Consolidated Project and (2) the development of preliminary Dayton mine and reclamation plans, progressing toward full economic feasibility for the southern part of the district.

Strategic Investments Segment

We own and manage several investments and projects that are strategic to our plans and ability to produce and maximize throughput in our Fuels, Metals and Mining Segments, that are held for the purpose of complimenting or enhancing our mission of enabling systemic decarbonization and creating value but that are not a component of such other segments or otherwise have distinct operating activities.

Our Strategic Investments Segment includes minority equity investments in Quantum Generative Materials LLC (physics-based artificial intelligence), Green Li-ion Pte Limited (lithium ion battery recycling and cathode production), Sierra Springs Opportunity Fund (strategic direct investment in northern Nevada real estate), and other equity or equity-linked investments.

Investment in GenMat – We invested our minority interest of GenMat as an enhancement and an integral component of our innovation strategy.

GenMat has developed and launched a new generative AI that we believe is capable of simulating critical properties of known materials with high accuracy.

GenMat also plans on using its AI to simulate new material characteristics for new and existing applications.

We believe these generative AI models can be employed today, on GenMat’s existing high-performance computing platform, well before quantum computers become mainstream.

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 kicked off a new, historic era of breakthrough mineral exploration capabilities with the successful launch of GENMAT-1, GenMat’s own Hyperspectral Remote Sensing Imaging ( “ HRSI ” ) system for the purpose of optimizing future mineral exploration for the Comstock Mining using their proprietary physics-based artificial intelligence (AI) and newly developing hyperspectral sensing technology.

Hyperspectral imaging collects and processes information from across the electromagnetic spectrum using contiguous bands.

GenMat and Comstock Mining are pioneering the development and testing

of GenMat’s technologies by combining the physics-based AI with Comstock’s existing geologic data and the new GENMAT-1 HRSI system.

Investment in Green Li-ion – Our wholly owned LINICO subsidiary invested in 37,162 preferred shares of Green Li-ion in 2021, as we were assembling our technology partners for the recycling of electrification products.

We coincidentally secured the rights for the use of their renewable precursor cathode active materials production system.

We own and manage several investments and projects that are strategic to our plans and ability to produce and maximize throughput in our Fuels, Metals, and Mining Segments, that are held for the purpose of complementing or enhancing our mission of accelerating the commercialization of hard technologies for the energy transition and creating value but that are not a component of such other segments or otherwise have distinct operating activities.

Our Strategic Investments Segment includes minority equity and equity-linked investments in Green Li-ion Pte Limited (lithium-ion battery component recycler and remanufacturing), RenFuel (advanced biofuel development and production), Hexas (propagation and production of purpose grown energy crops), and Sierra Springs Opportunity Fund (northern Nevada real estate) and other equity investments.

In November 2024, we completed a transaction for the disposition of our minority equity investment in GenMat.

Sale of Investment in GenMat

On November 6, 2024, the Company, Deep Interstellar Research LLC (“DIR”) and GenMat entered into an agreement pursuant to which (i) the Company obtained 100% ownership of GenMat Development LLC (“AICo”) in exchange for all of the equity of GenMat previously owned by the Company, (ii) GenMat granted AICo a non-exclusive end user right and license (“EULA”) to use GenMat’s now and hereafter existing intellectual properties, including, without limitation, GenMat’s commercially available artificial intelligence for materials science services and products, and all current imaging and other data, analytics, artificial intelligence and other models, and other information, in both the form of data and a promulgated report, relating to Comstock’s mining properties in Nevada, and (iii) a credit against the amounts payable under the EULA equal to 100% of the Company’s cumulative historical investments in GenMat.

The Company and GenMat also mutually agreed to terminate all prior transaction documents between the two companies.

The Company determined under this agreement, the licensed intellectual property, including software applications, obtained from 100% ownership of AICo will be integrated and used for material discovery and advancement within the Company’s existing and enhanced innovation processes and likely has very little to no alternative future uses other than for the Company's own research and development activities.

The Company recognized $12.2 million as research and development expense in the consolidated statements of operation.

Pursuant to the agreement, the Company derecognized the carrying value of our investment in GenMat of $10,007,752 and advances to GenMat of $2,236,786.

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).

At September 30, 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.

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 in 2026.

For the year ended December 31, 2024, the Company recognized an unrealized loss of $711,920 in our Strategic Investments Segment related to our investment in Green Li-ion, which is measured using the alternative measurement method.

This loss was recognized as a result of an orderly transaction observed during 2024, which provided evidence of a change in the fair value of the investment.

Investment in SSOF – During 2019, the Company invested $335,000 for 6,700,000 shares.

These shares represented approximately 11.64% of SSOF as of December 31, 2022.

From 2020 through November of 2023, the Company also 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.

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.

At December 31, 2023, the Company’s total investment in SSOF has a carrying value of $19,045,000, representing 10,580,556 common shares, or 17.11% of the total SSOF outstanding common shares on a fully diluted, if converted basis.

During 2024, SSOF issued additional equity of $750,000 at $1.80 per share to third-party investors and the Company invested an additional $530,000 in SSOF at $1.80 per share increasing our equity ownership to 17.27%.

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.

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 high tech companies like Tesla, Switch, Google, Microsoft, Tract and Redwood Materials, and over one hundred other companies are currently located, expanding or locating in this industrializing region.

Other Investment – On March 1, 2024, the Company entered into Securities Purchase Agreement (the “Developer Securities Purchase Agreement”) with an unaffiliated research and development company (“Developer”) under which the Company agreed to purchase 4,000,000 shares of common stock of the Developer, corresponding to 40% of Developer's fully-diluted issued and outstanding capital stock, for $1,500,000.

In 2024, the Company recorded our initial investment in Developer of $1,290,614.

Concurrently and in connection with the entity into the Developer Securities Purchase Agreement, the Company and Developer entered into Development Services Agreement (“DSA”) for purposes of conducting certain research and development work.

The purchase price payable by the Company pursuant to the Developer Securities Purchase Agreement is scheduled to be paid on the following schedule:

$100,000 on March 1, 2024;

$20,000 per month from March 1, 2024 to completion of the first project under the DSA;

$205,000 on completion of the first project under the DSA.

After completion of Phase 1

$30,000 per month until fully paid;

$205,000 on completion of the first six projects under the DSA.

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 recognized as a discount on initial investment of $1.5 million and will be recognized over the payment term.

The Company recognized a corresponding payable for future cash payments to account for the 40% ownership interest in the Developer.

At December 31, 2024, the future remaining payments, net implied interest, totaled $1,133,105 (see Note 7 of the Notes to Consolidated Financial Statements).

For the year ended December 31, 2024, the Company recognized $180,681 in equity loss from affiliates for our investment in the Developer.

For the year ended December 31, 2024, Comstock paid $260,000 to the Developer in accordance with the funding commitments under the Developer Securities Purchase Agreement.

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.

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 classified these assets as held for sale in the consolidated balance sheet.

RECENT DEVELOPMENTS

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These acquisitions were designed to build on our competencies and reposition us to capitalize on the global transition to clean energy and added the management, employees, facilities, intellectual properties, and other assets needed to transform our company and business into an emerging leader in the innovation and sustainable production of renewable energy.

The Company is currently commercializing all three of its lines of business, renewable fuels, renewable metals and sustainable mining and making strategic investments in other decarbonizing technologies that either compliment or enhance the financial, natural and social decarbonizing impacts.

On December 19, 2023, Comstock, LINICO (the then 88.23% owned subsidiary), and AQMS entered into a stock redemption agreement pursuant to which AQMS sold and LINICO purchased, all of the remaining equity in LINICO in exchange for $600,000, payable in twelve monthly installments of $50,000.

LINICO owns, among other assets, 35,662 Series Seed Preferred Shares in Green Li-ion and Comstock owns 100% of LINICO.

On November 11, 2023, GenMat, in which we have a minority interest, successfully launched GENMAT-1, its Hyperspectral Remote Sensing Imaging (HRSI) system to explore optimizing future mineral exploration for the Comstock Mineral Estate via their proprietary physics-based artificial intelligence and hyperspectral sensing technology.

GENMAT-1 was successfully

launched and manifested via Maverick Space Systems, an end-to-end satellite deployment and mission integration services company, aboard a SpaceX Falcon 9 Transporter rocket from Vandenberg Space Force Base in Lompoc, California.

The hyperspectral data that GENMAT-1 obtains will ultimately be integrated with current and historical geological data to test and improve GenMat’s geophysics-based machine learning models.

The Company is currently commercializing all three of its lines of business, renewable fuels, renewable metals and sustainable mining and making strategic investments in other decarbonizing technologies that either complement or enhance the Company's financial, natural and social impact.

In 2025, the Company entered into agreements with Hexas (integrated feedstock solutions), Oklahoma (incentive grants and public activity bond allocations), SACL and Gresham’s Eastern (commercial licenses covering Australia, New Zealand, Vietnam, Malaysia and Pakistan) and MPC (investment of cash and payment in kind assets of the Madison Facility into Comstock Fuels).

SUMMARY RESULTS OF OPERATIONS

Net income for the year ended December 31, 2023, increased $57,264,511 to $10,526,252 from a net loss of $46,738,259 in 2022.

The increase of $57.3 million primarily resulted from higher gains on investments of $25,027,565, and a gain on the sale of a facility of $7,304,570, decreased impairments, primarily on goodwill, and to a lesser extent intangibles and investments, totaling $16,370,356 in 2022, decreased charges associated with the change in estimated fair value of the derivative investments of $8,688,723 with a $961,085 gain recorded in 2023 as compared to losses of $7,727,638 in 2022, and lower research and development expense of $905,827, higher revenues of $1,096,299, lower other income (expense) of $422,245 primarily due to change in estimated fair value of equity securities and investments, and lower depreciation and amortization expense of $851,045;

partially offset by higher selling, general and administration expenses of $2,345,273, a prior year gain on sale of Daney Ranch of $1,055,623 that did not recur and lower interest income of $135,639.

Below we set forth a summary of comparative financial information for the years ended December 31, 2024 and 2023:

2023 2022 Change

Revenue $ 1,274,449 $ 178,150 $ 1,096,299

Cost of goods sold

Operating Expenses:

Selling, general and administrative expenses

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Depreciation and amortization

Gain on sale of Daney Ranch — (1,055,623) 1,055,623

Gain on sale of Facility (Note 9) (7,304,570) — (7,304,570)

Impairment of intangible assets

Impairment of properties, plant and equipment

Gain on sale of Facility and mineral rights (Notes 4 and 9)

Total operating expenses

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Change in fair value of derivative instruments

Gain on conversion of debt 129,705 — 129,705

Impairment of intangibles — (338,035) 338,035

Impairment of investment and note receivable, net recovery — (3,243,650) 3,243,650

Impairment of goodwill — (12,788,671) 12,788,671

Gain (loss) on conversion of debt

Loss on debt extinguishment

Other income (expense)

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Net income (loss) attributable to Comstock Inc.

$ 9,161,821 $ (45,948,744) $ 55,110,565

For the years ended December 31, 2023 and 2022, we had the following (Loss) income from operations by segment, as set forth in the summary table below.

See Note 19, Segment Reporting , to the Consolidated Financial Statements.

Fuels $ (6,836,194) $ (7,928,025)

Metals (1,855,549) (1,180,300)

Mining (1,284,753) (346,115)

For the years ended December 31, 2024 and 2023, we had the following (loss) from operations by segment, as set forth in the summary table below.

See Note 19 of the Notes to Consolidated Financial Statements.

Strategic Investments

Corporate 548,945 (8,063,332)

(Loss) income from operations

For the years ended December 31, 2024 and 2023, we had total assets set forth in the summary table below.

See Note 19, Segment Reporting , to the Consolidated Financial Statements.

Fuels $ 7,257,580 $ 8,101,196

Metals 11,797,921 10,618,187

Mining 25,003,871 25,563,028

See Note 19 of the Notes to Consolidated Financial Statements.

Strategic Investments

Corporate 5,324,671 (4,764,910)

Total Assets $ 106,466,344 $ 100,053,759

COMPONENTS OF REVENUES AND EXPENSES

Our revenues are primarily derived from the sale of engineering and related services, revenue generated from our mining lease, and revenues generated from our real estate.

Our revenues are primarily derived from the sale of engineering and related services, revenue generated from our mining lease, revenue generated from our Metals operations, and revenues generated from our real estate.

Our future costs of goods sold will primarily include allocable labor, materials and incidental expenses incurred in connection with revenue from anticipated services and solutions.

Selling, general and administrative expenses consist of payroll, insurance and professional fees for marketing, selling, legal, consulting, accounting and investor relations activities.

Selling, general and administrative expenses consist of payroll, insurance and professional fees for marketing, selling, legal, consulting, accounting, governance and investor relations activities.

Payroll, including benefits and incentive compensation, are the largest single category of expenditures in selling, general and administrative expenses and research and development.

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Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Revenues for the year ended December 31, 2023 increased $1,096,299 to $1,274,449 in 2023 from $178,150 in 2022, primarily due to higher rental fees and revenues from the Mackay Precious Metals Inc.

(“Mackay”) and ABTC leases of $906,250 and $237,473, respectively.

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.

Selling, general and administrative expense for the year ended December 31, 2023 increased $2,345,273 to $12,588,626 in 2023 from $10,243,353 in 2022, primarily as a result of higher employee costs of $1,554,287 attributed to higher salaries, executive incentive compensation, payroll administration costs, and higher marketing and investor relations expenses.

Variance also attributed to higher mining related costs of $731,157 associated with no relative reimbursements from Tonogold in 2023, higher board director fees of $703,000, higher reclamation expense of $658,367 attributed to the change in estimate for reclamation liabilities in 2022, higher other expense of $418,907 including supplies, postage and royalty expense, higher license and permits of $212,346, and higher property taxes of $211,699.

The increase is partially offset by lower bad debt expense of $1,037,427 primarily attributed to the Tonogold accounts receivable impairment in 2022, lower professional fees of $920,738, and lower stock-based compensation expense of $126,234.

Research and development expenses for the year ended December 31, 2023 decreased $905,827 to $6,117,305 in 2023 from $7,023,132 in 2022, primarily as a result of higher 2022 costs related to the development of the two pilot scale systems for both processing woody biomass into biointermediates for renewable fuels and for crushing and separating electrification products.

These systems are used to validate the processes and develop parameters for deploying and upscaling these renewable technologies.

The decrease was partially offset by higher employee costs attributed to executive incentive compensation.

Depreciation and amortization expense for the year ended December 31, 2023 decreased $851,045 to $2,477,525 in 2023 from $3,328,570 in 2022, primarily from ceasing amortization on certain assets held for sale in 2023.

In 2023, we recognized a gain on sale of the battery recycling facility of $7,304,570.

In 2022, we recognized a gain on sale of the Daney Ranch of $1,055,623.

Gain on investments of $25,034,875 in 2023, increased $25,027,565 as compared to a small gain on investments in 2022 of $7,310, resulting from a positive $14,577,627 unrealized gain associated with our Green Li-ion preferred share investment, a positive $11,725,000 unrealized gain associated with our SSOF common share investment, and a realized gain of $597,248 on the actual sale of 1,500 Green Li-ion preferred shares, partially offset by a realized loss of $1,865,000 on the sale of ABTC stock.

Interest expense for the year ended December 31, 2023 of $1,646,724 was comparable to 2022 of $1,651,435.

Interest income for the year ended December 31, 2023 decreased by $135,639 to $251,969 in 2023, from $387,608 in 2022, primarily as a result of the extinguishment of the Tonogold note receivable and the extinguishment of the MCU Philippines Inc.

(“MCU-P”) note receivable that was exchanged for the Mercury Clean Up LLC (“MCU”) assets, that are no longer accruing interest income for the year ended December 31, 2023.

The change in fair value of our derivative instruments changed by $8,688,723, to a gain of $961,085 in 2023 from a loss of $7,727,638, as a result of an increase in the Company's share price in connection with potential make whole obligations for minimum value commitments on the Company's common shares.

The 2023 derivative gain was attributed to $945,000 for the LINICO investment, $710,672 for the GenMat investment and $405,000 for the Haywood Property purchase, offset by a loss of $1,099,587 on the derivative liability for the Ionic Note.

The 2022 derivative loss of $7,727,638 was attributed to $3,535,000 for LINICO, $2,912,638 for GenMat and $1,875,000 for the Haywood Property, partially offset by a gain of $595,000 for LP Biosciences.

Gain of $129,705 on conversion of debt for the year ended December 31, 2023 are attributed to the Ionic Note debt conversions associated with 9,636,924 of the Company's common shares used for conversion for the year ended December 31, 2023.

Impairment of intangible assets for the year ended December 31, 2023 decreased by $338,035, due primarily to the impairment of the Flux Photon Corporation (“FPC”) intangible assets as a result of continuing losses and inability to recover the investment.

For the year ended December 31, 2023, no impairment losses or recoveries were recorded.

Impairment of investments and notes receivable, net of recoveries, for the year ended December 31, 2023 decreased by $3,243,650.

The decrease was primarily due to the 2022 impairment losses resulting from bad investments in MCU and MCU-P and note receivable in MCU-P, which were deemed unrecoverable as of March 31, 2022, resulting from a significant decline in forecasted cash flows from the MCU-P operations.

The decrease was also attributed to $595,000 related to the LPB investment prior to settlement in exchange for 3,500,000 of the Company's shares in 2022.

For the year ended December 31, 2023, no impairment losses or recoveries were recorded.

Impairment of goodwill for the year ended December 31, 2023 decreased by $12,788,671 primarily from the 2022 goodwill impairments of $10.6 million from the acquisition of Comstock Innovations (formerly Plain Sight Innovations) and $2.2 million from the acquisition of Comstock Engineering (formerly Renewable Process Solutions), respectively.

For the year ended December 31, 2023, no goodwill impairment losses were recorded.

Other income (expenses), net, for the year ended December 31, 2023 were $1,600,221, primarily consisting of losses from our equity method investments of $1,715,689, substantially all of which was associated with GenMat.

Other income (expenses), net, for the year ended December 31, 2022 were $2,022,466, primarily consisting of losses from our equity method investments of $1.1 million, substantially all of which was associated with GenMat, a $0.6 million decrease in the value of the Tonogold note receivable and a $0.3 million expense associated with the LP Biosciences LLC (“LPB”) settlement.

No deferred income tax benefit was recorded for the years ended December 31, 2023 and 2022.

Revenues for the year ended December 31, 2024 increased by $1,741,714 to $3,016,163 from $1,274,449 for the comparable 2023 period, primarily attributed to the following.

Higher revenues from our Mining Segment of $1,580,949 with $2,595,725 in 2024 as compared to $1,014,776 in 2023 attributed to the recognition of deferred revenue associated with the 2023 Mackay Mining Lease of $1,562,499 upon the sale of the related mineral interest to Mackay in 2024.

In 2024, an additional $1,166,666 was recognized on this mineral lease prior to the sale compared to $31,250 in 2023.

Higher revenues from our Metals Segment of $401,238 attributed to the startup of our first commercial demonstration facility in Silver Springs, NV for our Comstock Metals operations earned in 2024.

No revenues were earned in 2023.

Lower revenues from our Strategic Investment Segment of $237,473 attributed to lease revenue associated with the ABTC lease of $237,473 recognized in 2023.

No revenues were earned in 2024.

Cost of goods sold for the year ended December 31, 2024 increased $451,938 primarily due to the commencement of our first commercial demonstration facility for metal recycling operations in 2024.

Revenue and costs of sales 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 real 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.

Selling, general and administrative expense for the year ended December 31, 2024 increased $114,430 to $12,703,056 from $12,588,626 for the comparable 2023 period, primarily as a result of higher consulting fees of $470,306, higher employee related costs of $413,476 and higher share-based compensation of $393,735;

partially offset by lower insurance of $393,552, lower marketing expense of $246,595, lower bad debt expense of $229,442 and lower director fees of $217,600.

Research and development expenses for the year ended December 31, 2024 increased $12,980,878 to $19,098,183 from $6,117,305 for the comparable 2023 period, primarily as a result of $12,244,538 in research and development costs incurred for the GenMat transaction (see Note 2 of the Notes to the Consolidated Financial Statements ), higher research and development rent expense of $1,555,673 attributed to the AST rent of $1,208,180 paid in April 2024 (see Note 8 of the Notes to Consolidated Financial Statements) and higher development stage costs for piloting the start up of processing, crushing and separating electrification products of $1,389,118;

offset partially by lower employee costs of $1,643,491, primarily due to lower incentive compensation and lower consulting fees of $503,460.

Depreciation and amortization expense for the year ended December 31, 2024 decreased $234,971 to $2,242,554 from $2,477,525 for the comparable 2023 period, primarily from lower amortization for intangible assets in 2024.

Impairment of intangible assets and properties, plant and equipment assets for the year ended December 31, 2024 increased $8,667,869 and $324,047, respectively, attributed to the impairment of intangible assets associated with battery recycling and battery recycling equipment in 2024, as compared to no impairments recognized for the comparable 2023 period.

In 2024, we recognized a gain on the sale of mineral rights of $804,489.

In 2023, we recognized a gain on the sale of the Facility of $7,304,570.

Gain on investments for the year ended December 31, 2024 decreased by $25,746,795 to a loss on investment of $711,920 in 2024 from a gain on investments of $25,034,875 for the comparable 2023 period.

The 2023 gain resulted from a $14,577,627 unrealized gain associated with our Green Li-ion preferred share investment in 2023, a $11,725,000 unrealized gain associated with our SSOF common share investment in 2023, and a realized gain of $597,248 on the sale of 1,500 Green Li-ion preferred shares in 2023, partially offset by a realized loss of $1,865,000 on the sale of ABTC stock in 2023.

In 2024, we recognized a $711,920 unrealized loss associated with our Green Li-ion preferred share investment.

Interest expense for the year ended December 31, 2024 increased by $1,324,627 to $2,971,351 from $1,646,724 for the comparable 2023 period, primarily due to increased borrowings in 2024 and higher interest rates associated with amended note agreements.

In addition, interest expense includes $281,578 of interest expense associated with the AST lease that began in May 2024.

Interest income for the year ended December 31, 2024 increased by $50,122 to $302,091 in 2024, from $251,969 for the comparable 2023 period, primarily due to higher interest rates and income related to our daily, interest earning cash sweep account.

Change in fair value of our derivative instruments for the year ended December 31, 2024 increased by $323,529 to a gain of $1,284,614 in 2024 from a gain of $961,085 for the comparable 2023 period, resulting from an increase in the Company's share price in connection with potential make whole obligations for minimum value commitments on the Company’s common stock and the change in fair value of conversion option derivatives.

Loss of $9,755,686 on conversion of debt for the year ended December 31, 2024 are attributed to the Kips Bay Notes and the Leviston Notes debt conversions associated the Company's common stock used for the conversion for the year ended December 31, 2024.

A gain of $129,705 is attributed to the Ionic Note debt conversions associated the Company's common stock used for conversion for the year ended December 31, 2023.

Loss on debt extinguishment of $817,498 attributed to the debt modifications for the Amended GHF 2021 Note and Amended Alvin Fund 2023 Note and from the Company using cash to redeem principal on the 2023 Kips Bay Note.

Other income (expenses), net, for the year ended December 31, 2024 were $1,066,153 of net expenses, primarily consisting of income recognized on forfeiture of deposits of $400,000 on the sale of real estate and unrealized gain on fair value change of GenMat advances of $256,181, partially offset by losses from our equity method investments of $1,764,643 substantially all of which were from GenMat.

Other income (expenses), net, for the year ended December 31, 2023 were $1,600,221 of net expenses, primarily consisting of losses from our equity method investments of $1,715,689, substantially all of which was associated with GenMat.

No current or deferred income tax benefit was recognized for the years ended December 31, 2024 and 2023.

SUMMARY RESULTS OF CASH FLOWS

Net cash used in operating activities for the year ended December 31, 2024 increased $317,453 to $13,942,674 in 2024 from $13,625,221 in 2023 primarily due to a net loss in 2024 of $53.4 million compared to net income in 2023 of $10.5 million offset by an increase in noncash adjustments to net income (loss) of $64.7 million and a decrease of $1.0 million in sources of cash from working capital items, primarily increases in accounts payable, discussed in Financial Condition and Results of Operating Information.

Net cash used in investing activities for the year ended December 31, 2024 was $6,478,721 compared to net cash provided by investing activities of $3,630,541 in 2023, resulting in a $10,109,262 change, primarily due to proceeds received in 2023 from sale of AQMS lease and related assets of $21.0 million offset by purchase of the facility of $12.0 million.

The decrease is also attributed to proceeds received in 2023 for the sale of ABTC shares of $6,000,000 with no comparable proceeds in 2024, funding of RenFuel note of $1,450,000, advances to GenMat of $1,285,637 in 2024, proceeds from sale of Green Li-ion shares in 2023 of $779,600 with no comparable proceeds in 2024 and investments in SSOF of $530,000 in 2024;

partially offset by lower make-whole payments for our contractual commitments of $5,440,636, lower advances to SSOF of $1,995,000, proceeds from sale of mineral rights of $1,000,000 and lower purchase of mineral rights and property, plant and equipment of $884,341.

Net cash provided by financing activities for the year ended December 31, 2024, increased by $6,331,604 to $17,590,089 in 2024 from $11,258,485 in 2023, primarily attributed to additional funding from debt of $12,000,000;

offset by payment of principal debt of $1,363,241.

LIQUIDITY AND CAPITAL RESOURCES

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Our cash balances at December 31, 2024 and 2023 were $954,271 and $3,785,577, respectively.

The Company had current assets of $23,183,139 and current liabilities of $14,841,025, representing working capital excess of $8,342,114 at December 31, 2023.

The current liabilities include derivative liabilities of $5.4 million for the contingent make-whole liabilities and $2.4 million of accrued expenses and other liabilities, including $1.3 million for incentive compensation and $0.8 million for accrued payroll and related expenses.

The Company had current assets of $12,558,045 and current liabilities of $8,111,367, representing a working capital excess of $4,446,678 at December 31, 2024.

The current liabilities include $4,518,497 of accrued expenses and other liabilities, including $1,018,853 for the LINICO acquisition-related payable, $1,031,250 for incentive compensation and $951,247 for accrued payroll and related expenses.

Our primary source of liquidity during 2024 was cash from financing activities.

During the year ended December 31, 2024, we generated $17,590,089 in cash from our financing activities, and we used $13,942,674 and $6,478,721, respectively, in cash in our operating and investing activities.

Our primary source of liquidity during 2023 was cash from financing and investing activities.

During the year ended December 31, 2023, we generated $11,258,485 and $3,630,541, respectively, in cash from our financing and investing activities and we used $13,625,221 in cash in our operating activities.

Our primary source of liquidity during 2022 was cash from financing activities.

During the year ended December 31, 2022, we generated $12,446,702 from our financing activities and we used $12,105,169 and $3,731,949 in cash from our operating and investing activities, respectively.

During 2023, we issued 15,356,808 common shares through equity issuance and private placement agreements, at an average price per share of $0.43 corresponding to proceeds of $6,650,380, net of cash issuance fees of $249,620.

During 2023, we also provided a net $15,000,000 from the sale of the battery recycling facility (proceeds of $27,000,000 from the sale of the Manufacturing Facility and used $12,000,000 for the purchase of the Manufacturing Facility) and used $10,020,000 for advances to SSOF and payments on commitments for investments associated with derivative instruments (that is, primarily for GenMat, LINICO and the Haywood Property) and $1,819,065 for the purchase of property, plant and equipment, primarily associated with the our new solar panel recycling facility.

During 2022, we issued 20,666,674 common shares through equity issuance and private placement agreements at an average price per share of $0.52 and proceeds of $10,488,180, net of cash issuance fees of $298,000.

During 2022, we also used $2,825,000 for payments on commitments for investments associated with derivative instruments (that is, primarily for GenMat and to a lesser extent LINICO and the Haywood Property) and $1,014,070 for the purchase of property, plant and equipment, primarily associated with for the electrification metal recycling pilot.

On December 27, 2023, the Company entered into a securities purchase agreement for an unsecured convertible promissory note (the "Kips Bay Note") with Kips Bay Select LP ("Kips Bay") with a principal amount of $5,263,157, of which $263,157 was an original issue discount.

The full principal is due on March 27, 2025.

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

On December 27, 2023, the Company received $3.0 million and received the remaining $2.0 million by January 27, 2024.

The Kips Bay 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, 2023, the Company bifurcated the conversion feature was recorded as a derivative liability with a corresponding addition to debt discount of $1,360,000 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 $1.00, discount rate of 35%, risk free rate of 4.54%, and volatility of 96.0%.

During the year ended December 31, 2023, we recognized interest expense of $16,822 which includes OID amortization of $14,806 in connection with the Kips Bay Note.

On November 12, 2023, the Company entered into (the “Alvin Fund 2023 Note”) with Alvin Fund with a principal amount of $2,100,000, including a $100,000 original issue discount.

The Company also provided additional consideration in the form of warrants that allows the lender to purchase 1,000,000 shares at $0.70 per share, which was recognized as a discount on the loan.

The full principal is due on February 12, 2025.

During 2024, we issued 3,135,579 shares of common stock through equity issuance and private placement agreements, at an average price per share of $2.26 corresponding to proceeds of $7,073,590, which is net of cash issuance fees of $140,120.

During 2024, we also used $934,724 for the purchase of property, plant and equipment, primarily associated with our new solar panel recycling facility.

During 2023, we issued 1,535,681 shares of common stock through equity issuance and private placement agreements, at an average price per share of $4.33 corresponding to proceeds of $6,650,380, which is net of cash issuance fees of $249,620.

During 2023, we also provided a net sources of cash of $15,000,000 from the sale of the battery recycling facility (proceeds of $27,000,000 from the sale of the Facility and used $12,000,000 for the purchase of the Facility), used $1,995,000 for advances to SSOF, used $8,025,000 for payments on commitments for investments associated with derivative instruments (primarily for GenMat, LINICO and the Haywood Property), and $1,819,065 for the purchase of property, plant and equipment, primarily associated with the our new solar panel recycling facility.

The Company plans on advancing its technologies, in both the Fuels and Metals lines of business, leveraging its existing innovation capacity and innovation partners including NREL, MIT, RenFuel, EFT and other laboratories and universities, over the next three years.

These investments are considered discretionary and would be funded by direct investments in either or both Fuels and Metals subsidiaries.

Comstock Fuels is currently raising direct subsidiary financing for funding all innovation, business development, and operating activities up to an until its first biorefinery is operating in the United States.

Comstock Fuels is also planning to design, finance, build, and commission its first owned 75,000 ton per year integrated commercial demonstration biorefinery for approximately $250 million in project costs.

This will be funded by additional equity and debt, including up to $152 million in industrial project activity bonds allocated by the State of Oklahoma, and project level equity raised specifically for commissioning the commercial demonstration facility.

Comstock Metals has filed permits and expects to build its first industry scale facility during 2025, with capacity up to 100,000 tons of processed material per year, for up to $12 million.

The industry scale facility will also be funded by additional equity and debt, including up to $10 million in industrial project activity bonds and other alternative qualified loan financings.

In addition to these subsidiary-level funded initiatives, the Company plans on investing approximately $5.0 million in research and development (excluding payroll) and $10 million in payroll (including research and development) during 2025.

When combined with other corporate operating expenses, this represents approximately $20 million in 2025 spending.

The Company has increasing access to a number of alternative capital resources, including an additional $4 million from currently unutilized shelf registration statement (with a new $50 million shelf registration statement expected to be filed in early March 2025), project activity bonds, various asset and investment sales, and grants, including a recent $3 million grant from the State of Oklahoma, in 2025.

The Company is also planning a “Series A” direct equity investment from known strategic, including MPC, and financial investors into Comstock Fuels Corporation.

On January 10, 2025, the Company entered into a securities purchase agreement (“2025 Kips Bay Agreement”) for an unsecured convertible promissory note (the “2025 Kips Bay Note”) with Kips Bay with a principal amount of $10,638,298, of which $5,000,000 was funded in cash on January 13, 2025 with an original issue discount of $319,149.

On or before the date that is ten (10) business days after the Company effects a reverse split (resulting in an effective increase in the number of authorized shares available for future issuances of common stock), the Company will receive an additional funding of $5,000,000, which shall result in a principal amount for such second tranche of $5,319,149 (that is, an additional $5,000,000 in cash plus an additional $319,149 of original issue discount).

The full principal is due on April 10, 2026.

Interest is payable monthly at a rate of 6% annually.

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

The loan is secured by the Company's non-mining assets.

The warrants are exercisable for a period of two years commencing on November 12, 2023, and ending on November 12, 2025.

On February 13, 2023, the Company entered into an equity purchase agreement (the “2023 Leviston Sales Agreement”) with Leviston to offer and sell registered shares of common stock at an aggregate offering price of up to $5,000,000.

As of December 31, 2023, the Company issued Leviston 10,892,604 of registered common shares for an aggregate sales price of $5,000,000 at an average price per share of $0.46, and the Company issued Leviston an additional 552,486 common shares at a fair value of $200,000 in commitment fees.

As of December 31, 2023, the 2023 Leviston Sales Agreement has no remaining capacity.

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

In 2023, the Company delivered 9,636,924 shares of common stock with a fair value of $4,622,502 at an average conversion price per share of $0.48 upon the conversion.

The conversion terms required a measurement period of five days within which the number of shares initially converted are adjusted for changes in trading volume during the period.

Under this provision, on April 6, 2023 and October 27, 2023, Ionic returned excess shares of 327,549 and 603,569, respectively, of the Company's common stock issued upon earlier conversions with a fair value of $364,330.

The Ionic Note had a derivative liability balance of $1,519,587 that was reversed upon conversion.

The Company recorded a gain on the conversions of $129,705.

As of December 31, 2023, the Ionic Note was fully converted with no remaining obligation.

On October 25, 2022, the Company entered into (the “Alvin Fund 2022 Note”) with Alvin Fund LLC 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 which was recognized as a discount on the loan.

The full principal was due on October 25, 2023.

Interest was 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.

On September 30, 2023, the Company entered into an amendment to extend the maturity of the Alvin Fund 2022 Note to January 31, 2026, at an interest rate of 16%.

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

On June 21, 2022, the Company entered into an equity purchase agreement with Tysadco for the private placement of 3,076,923 common shares at a purchase price of $0.65 per share.

The Company paid $140,000 in cash and delivered 57,143 common shares with a fair value of $40,000 to the placement agent in connection with such sale.

Such sale was exempt from registration pursuant to Section 4(a)(2) of the Securities Act.

On June 21, 2022, the Company also entered into an agreement with Tysadco for the purchase of up to $10,000,000 worth of shares of the Company’s common stock from time to time, at the Company’s option.

Any shares offered and sold to Tysadco will be registered for resale pursuant to a registration statement on Form S-1 filed with U.S.

Securities and Exchange Commission pursuant to the Securities Act.

The Company also paid Tysadco a commission of 428,571 additional common shares with a fair value of $300,000.

For the year ended December 31, 2022, the Company issued 3,433,634 shares of common stock to Tysadco, for an aggregate sales price of $1,100,000 at an average price per share of $0.32.

For the year ended December 31, 2023, the Company issued 4,464,204 shares of common stock to Tysadco, for an aggregate sales price of $1,900,000 at an average price per share of $0.43.

Sales of common stock, if any, under the Purchase Agreement are made at a 10% discount to the volume weighted average sales price of the common stock on the date that Tysadco receives a capital call from the Company.

As of December 31, 2023, the Purchase Agreement has $7,000,000 remaining capacity, subject to certain limitations and contractual restrictions.

On April 12, 2022, the Company entered into an equity purchase agreement (the “2022 Leviston Sales Agreement”) with Leviston for the purchase of up to $10,000,000 worth of shares of the Company’s common stock from time to time, at the Company’s option, on terms deemed favorable to the Company.

Any shares offered and sold are issued pursuant to the Company’s shelf registration statement on Form S-3 and the related prospectus (File No.

333-263930) filed by the Company with the U.S.

Securities and Exchange Commission pursuant to the Securities Act.

Sales of common stock, if any, under the Purchase Agreement may be made in sales deemed to be “at-the-market” equity offerings as defined in Rule 415 promulgated under the Securities Act, at a discount of 10% to the volume weighted average sales price of the common stock on the date that Leviston receives a capital call from the Company.

For consideration to enter into the 2022 Leviston Sales Agreement, the Company agreed to deliver additional shares of common stock to Leviston, for no additional consideration, on the first settlement date with respect to a put notice delivered by the Company.

For the year ended December 31, 2022, the Company issued to Leviston 13,156,117 common shares with an aggregate sales price of $7,311,180, at an average price per share of $0.64, and an additional 206,897 common shares at a fair value of $300,000 in commitment fees.

The Company issued 136,986 unregistered common shares with a fair value of $200,000 in due diligence fees.

As of December 31, 2023, the 2022 Leviston Sales Agreement has no remaining capacity and the facility was closed.

We intend to fund our operations over the next twelve months from existing cash and cash equivalents, mining lease revenues, sales from our lignocellulosic and battery metal recycling technology and related engineering services, and planned sales of

non-strategic assets and other investments, planned licensing.

The Company can redeem the 2025 Kips Bay Note for cash 30-days following closing at 120% of the face value, plus accrued interest.

(See Note 21 of the Notes to Consolidated Financial Statements).

We intend to fund our operations over the next twelve months from issuance of equity under our existing shelf registration statement and private placements, issuance of subsidiary-level equity, planned licensing and related engineering services, sales and deferred revenue from our solar panel recycling business, planned sales of non-strategic assets and other investments, and existing cash and cash equivalents.

Based on these expected funding sources, management believes we will have sufficient funds to sustain our operations and meet our commitments under our investment agreements during the 12 months following the date of issuance of the consolidated financial statements included herein.

While we have been successful in the past in obtaining the necessary capital to support our operations, including registered equity financings from our existing shelf and other registration statements, non-registered equity placements, borrowings and various other means, there is no assurance we will be able to obtain additional equity capital or other financing, if needed.

We intend to fund our operations beyond the next twelve months from existing cash and cash equivalents, mining lease revenues, sales from our lignocellulosic and battery metal recycling technology and related engineering services, and planned sales of non-strategic assets and other investments, planned licensing, and borrowings and other various equity financing alternatives from our existing shelf and other registration statements.

Net cash used in operating activities for the year ended December 31, 2023 increased $1,520,052 to $13,625,221 in 2023 from $12,105,169 in 2022 primarily due to increases in cash used for operating expenses discussed in Financial Condition and Results of Operating.

Net cash provided by investing activities for the year ended December 31, 2023, increased by $7,362,490 to $3,630,541 as compared to cash used of $3,731,949 in 2022, primarily due to proceeds from sale of the Manufacturing Facility of $27.0 million, including $6.0 million from proceeds on sale of ABTC shares paid for that Facility, and $0.8 million for proceeds on sale of Green Li-ion investments, partially offset by $12.0 million in cash used for the purchase of the Manufacturing Facility, $5.2 million for payments on contractual commitments our investment in GenMat, LINICO and the Haywood Property, $2.0 million for SSOF advances, and $0.8 million for the purchase of equipment and water rights, as compared to net cash provided in the 2022 period primarily from $1.5 million for proceeds on sale of Daney Ranch, $0.9 million from proceeds from the sale of Tonogold shares, and $0.8 million from proceeds from the Tonogold option agreement, partially offset by $1.6 million in cash used for construction in progress.

Net cash provided by financing activities for the year ended December 31, 2023, decreased by $1,188,217 to $11,258,485 in 2023 from $12,446,702 in 2022, primarily as a result of lower net proceeds from the issuance of common stock of $3.9 million and reduced contributions of $500,000 from AQMS for additional shares in LINICO in 2022;

offset partially by lower payments for financial leases of $3.5 million due to sale of Facility in 2023.

Risks to our liquidity could result from future operating expenditures above management’s expectations, including but not limited to research and development, pre-development, exploration, selling, general and administrative, and investment related expenditures in excess of sale proceeds from our non-strategic assets and other investments, amounts to be raised from the issuance of equity under our existing shelf registration statement, declines in the market value of properties planned for sale, or declines in the share price of our common stock that would adversely affect our results of operations, financial condition and cash flows.

While we have been successful in the past in obtaining the necessary capital to support our operations, including registered equity financings from our existing shelf registration statement, non-registered equity placements, non-registered equity issued directly from certain subsidiaries, borrowings, and various other means, there is no assurance we will be able to obtain additional equity capital or other financing, if needed.

We intend to fund our operations beyond the next twelve months from planned sales of non-strategic assets, sales from our solar panel recycling operations, sales from licensing our lignocellulosic technology and related engineering services, issuance of subsidiary-level equity, and borrowings and other various equity financing alternatives from our existing shelf and other registration statements.

Risks to our liquidity could result from future operating expenditures above management’s expectations, including but not limited to pre-development, research and development, exploration, selling, general and administrative, and investment related expenditures in excess of sale proceeds from our non-strategic assets and other investments, amounts to be raised from direct equity from our subsidiaries or the issuance of equity under our existing shelf registration statement or amounts to be raised directly from the non-registered equity of our subsidiaries, declines in the market value of properties planned for sale, or declines in the share price of our common stock that would adversely affect our results of operations, financial condition and cash flows.

If we were unable to obtain any necessary additional funds, this could have an immediate material adverse effect on liquidity and raise substantial doubt about our ability to continue as a going concern.

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There can be no assurance that we would be able to take any such actions on favorable terms, in a timely manner, or at all.

Our goal is to Accelerate the Commercialization of Decarbonizing Hard Technologies.

Our goal is to Accelerate the Commercialization of Hard Technologies for Energy Markets.

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.

Technology Readiness

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.

Comstock Metals is also commercially ready and has engineered and ordered its first commercial demonstration facility and permitted and deployed approximately $2.3 million in capital expenditures for this facility, primarily in the second half of 2023, and early 2024, with commissioning and production commencing in early 2024.

Comstock’s team has decades of diverse technology development and commercialization experience.

The Company uses a disciplined approach to devising, qualifying, and elevating innovations from conception through increasing degrees of commercial readiness.

The Company has adopted a widely used Technology Readiness Level (“TRL”) measurement system for objectively assessing Comstock’s progress, risks, investment qualifications, and commercial maturity.

There are nine readiness levels on the TRL scale, starting with TRL 1.

Progression up the scale requires achievement of “SMART” milestones that are Specific, Measurable, Achievable, Relevant, and Timely.

Proof of concept occurs at TRL 3.

TRL 4 and 5 involve increasing degrees of process validation.

TRL 6 is the first true demonstration of commercial readiness.

TRL 7 and 8 involve various functional prototypes and pilots with increasing fidelity and sophistication.

A TRL 9 technology is commercially mature and fully deployed.

Depending on the technology and other applicable factors, revenue can commence at TRL 6 for early adopting and generally sophisticated commercial clients with continued development to TRL 7, 8, and 9.

Each of our lines of developing businesses have achieved sufficiency for certain aspects of their technology readiness enabling early adoption and commercialization efforts.

The following summarizes the recent change in TRL status, and the 2024 objectives:

Line of Business

Lignocellulosic Fuels

Conversion of under-utilized woody biomass into renewable fuels at high yield

Artificial Intelligence

Generative AI that simulates new materials at exponentially increased speed

Scalable extraction of metals from electrification products

Dramatically reduced exploration costs with hyperspectral imaging and AI-based analytics

Comstock’s SMART milestones and commercialization process involve meticulous planning that is informed by many factors, including the total addressable markets, their growth rates and the speed that the Company can initiate and increase revenue.

Commercialization – Lines of Business

The primary focus for 2025 is the capitalization and commercialization of our renewable fuels and metals businesses and the corporate monetization of our legacy assets and investments.

The growth opportunities for both Comstock Fuels and Comstock Metals have developed well beyond our original expectations, and we have attracted some of the most sophisticated partners for feedstocks, technologies, operations, governments, refining and offtake, with many now evaluating direct investments, and in multiple cases exploring deeper integrations with us, enabling us to extend the breadth of the system under our control.

Our capital structure, balance sheet and public valuations have introduced complexities in these discussions but also fostered more collaborative relationships leading to additional opportunities across the country and world.

To achieve these growth objectives, on February 24, 2025, the Company increased its authorized capital capacity by implementing a 1:10 reverse stock split, without a corresponding decrease in the existing 245,000,000 authorized shares, effectively increasing the Company's authorized capital resources with sufficient available authorized shares of common stock that positions the right capital sources, liquidity, and profile that we believe best attracts the right amounts and types of capital resources needed to grow and maximize the value of our Company for our shareholders.

The Company’s Corporate objectives for 2025 include:

Increasing the authorized capital capacity of the Company to position the capital structure for high-value future growth;

Monetize our legacy real estate and non-strategic investments for over $50 million;

Ensure adequate liquidity and capital resources sufficient to support the next phases of growth;

Finalize, communicate and implement plans to unlock maximum value from a spin-off of Comstock Fuels.

This ultimately results in two high-growth public companies:

a renewable metals and mining company headquartered in Nevada, and a renewable fuels company headquartered in Oklahoma and with major operations already operating in Wisconsin.

Comstock Fuels

Most current forms of renewable fuel draw from the same pool of conventional feedstocks, including corn and vegetable oils in the U.S., but the entire available supply of those feedstocks could only meet a small fraction of the rapidly growing demand for renewable fuels.

Comstock's patented and patent-pending biorefining technologies unblock that constraint by converting underutilized lignocellulosic or "woody" biomass into biointermediates for refining drop-in and other renewable fuels.

Comstock Fuel's biorefining technologies are commercially ready for deployment and offer growth-enabling performance for the Company and its prospective licensees and customers.

Comstock Fuels is actively engaged in the planning and deployment of our first commercial demonstration facility and pursuing joint development and licensing agreements representing future revenue sources from technical and engineering services, royalties, and equity participation.

The joint efforts include securing associated supply chain participants (including feedstock, site selection, and offtake), performing preliminary and final engineering, facilitating commissioning, construction, and operations with globally and locally recognized current and developing renewable fuel producers that, in certain cases, also represent a source of strategic capital for funding the projects.

Our commercialization plans also include multiple, global joint development projects, with each joint development project, like SACL and Gresham’s, with the potential for generating millions of dollars of technical services and engineering revenues and license agreements for additional production facilities that generate royalty revenues.

The plans also include integrating our high yield Bioleum refining platform with Hexas’ high yield energy crops, when appropriate, capable of growing enough feedstock to produce upwards of 100 barrels of fuel per acre per year, effectively transforming agricultural lands into perpetual “drop-in sedimentary oilfields” with the potential to dramatically boost domestic and global energy independence.

The Company's objectives for 2025 include:

• Execute multiple, revenue generating commercial agreements for industry-scale joint development projects, including prefeasibility, feasibility, engineering, commissioning, construction, operations, committed offtake, supply of feedstocks etc., with operationally experienced, technologically sophisticated and well capitalized customers ;

• Expand, integrate and commission an integrated, continuous bio-intermediate production system, including cellulosic ethanol and HBO for sufficient time to achieve and broadly demonstrate TRL 7, in late 2024 or early 2025.

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.

Complete site selection for first commercial biorefinery project in Oklahoma, including feedstock and offtake;

Plan and integrate a local, Hexas-based, fuel farm based into our first commercial biorefinery;

Secure and close on sufficient subsidiary-level equity financing, that is, a Series A for Comstock Fuels Corp;

Secure sufficient project-level financing for our first Oklahoma-based commercial biorefinery project;

Execute additional revenue generating commercial agreements for industry-scale joint development;

Commence revenues from engineering services associated with our existing global development partners;

Expand our integrated bio-intermediate pilot production capabilities, up to two barrels per day of oils and fuels;

Advance our innovation and development efforts toward even higher yields, lower costs and lower capital.

Comstock Fuels initially plans to build and own its first four U.S.

based industrial scale facilities, each of which is designed to convert 1 million tons per year of woody biomass into 140 million GGE, 3.3 million barrels of advanced biofuels, including sustainable aviation fuels and renewable diesel and then increase its production facilities to 200 million barrels by 2035.

Comstock Metals

End of life solar panels are one of the primary metals-based products that can cause a massive amount of pollution if simply allowed to be landfilled at the end of life with no recovery of any of the underlying metal values.

Comstock Metals objectives for 2024 include:

• Advancing the technology readiness for broader material recycling, prioritizing photovoltaics, to TRL 7;

• Commissioning the photovoltaic material recycling;

• Commencing production of the demonstration scale production facility;

• Expanding our existing revenue generating supply commitments;

• Finalizing the design and site selection for our first few “industry-scale” facilities and commence permitting.

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.

Comstock Metals has now been operating its first commercial demonstration facility for nearly a full year.

In 2024, the facility most recently operated on two shifts and is currently operating on three shifts.

Site selection for the first “Industry Scale” photovoltaic recycling facility and related storage capacity is complete, with leases and initial storage permits secured and final engineering designs and remaining permitting processes well underway.

Industry Scale facilities are anticipated to operate at 100,000 tons of annual capacity.

Site selection activities are ongoing for the next two Industry Scale facilities and storage sites.

The Company's objectives for 2025 include:

Maximize three-shift production and revenue from the demonstration scale production facility;

Secure sufficient project-level funding for scale-up of the first Nevada site to industry-scale;

Complete permitting for our first “industry-scale” facility in Silver Springs, NV;

Procure, deploy, and assemble plant and equipment for our first “industry-scale” facility in Silver Springs, NV;

Complete site selection and preliminary development for two additional solar panel recycling locations;

Expand the system globally with international strategic and capital partners;

Advance and expand R&D efforts to recover more and higher-purity materials from recycled streams for offtake.

Closing on direct equity and/or debt financing that accelerates the deployment of the first two industry facilities.

Comstock Metals has also expanded its business into decommissioning services both as a revenue generator and a feeder for our recycling business and established preliminary markets for the sale of residual materials including aluminum, glass and silver-rich tailings.

The capital expenditures for the first facility are expected to be $6 million in 2025 with commissioning in 2026.

Billable revenues are expected to be five or six times greater in 2025, as compared to 2024, or approximately $2.5 million.

Comstock Mining

The Company has amassed the single largest known repository of historical and current geological data within the Comstock mineral district, including extensive geophysical surveys, geological mapping, and drilling data, including the Dayton resource.

On June 30, 2023, the Company signed a Mineral Exploration and Mining Lease Agreement (the “Mining Lease”) with Mackay.

The Mining Lease provides a twenty-year term granting Mackay the rights to conduct exploration on certain of the Company’s mineral properties in Storey County, Nevada.

Mackay paid a lease initiation fee of $1,250,000 and made their first two quarterly lease payments totaling $875,000, with quarterly lease payments of $375,000 due for the next three and a half years, and then quarterly lease payments of $250,000 thereafter.

Mackay also committed to expenditures of $1,000,000 per year on a cumulative basis, and increasingly detailed technical reports after the first five, ten, and fifteen years.

Mackay will reimburse carrying costs and pay a 1.5% NSR royalty from any future mine production.

Comstock Mining has amassed the single largest known repository of historical and current geological data within the Comstock mineral district, including extensive geophysical surveys, geological mapping, and drilling data, including the Dayton resource.

The Company's objectives for 2025 include:

• Receive cash proceeds of approximately $2 million from mineral leases leveraging the northern district claims;

• Commercialize mineral development agreements that enable resource expansion of the central district claims;

• Develop with GenMat, AI-based exploration tools, using Comstock's extensive geologic data along with GENMAT-1’s hyperspectral imaging solution to condition and develop the AI and ground-truth its predictions, and

• Complete the development and mine plans that enables the economic development of the southern district claims.

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.

Receive cash proceeds of approximately $1.75 million from mineral leases and asset sales from the northern claims;

Commercialize additional mineral development agreements that both monetize and enable resource expansion of the central district claims;

Complete the preliminary mine plans that enable the economic development of the southern district claims;

Commence work for expanding and upgrading the Dayton resource into proven and probable reserves.

The Company’s 2025 efforts will apply economic analysis to Comstock’s existing gold and silver resources progressing toward preliminary 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.

Strategic Investments

Investment in GenMat

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.

GenMat's AI uses atoms and molecules to generate physical systems and harness math and science to discover new materials in an exponentially shorter time than traditional methods allow.

New material discovery typically takes many years and many millions of dollars.

GenMat's AI can simulate thousands of unique new materials in seconds.

GenMat’s objectives for 2024 include:

• Elevate new material simulation to TRL 7 by synthesizing and directly testing the AI’s ability to predict material properties to confirm the precision and accuracy of those simulations;

• Commercialize its space-based hyperspectral imaging sensor for mineral discovery applications;

• Commercialize physics-based AI solutions to enterprise clients for advanced materials simulation and synthesis.

While the Company can’t be precise about exactly when GenMat will initiate revenue, GenMat’s technologies are maturing much faster than anticipated and at least one commercial agreement is likely in 2024.

Investment in Green Li-ion

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.

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 2026.

Investments in others non-mining real estate, water rights and securities

The Company directly owns land and water rights in Silver Springs, NV, that it will begin marketing for sale and anticipates selling these assets for over $40 million in net proceeds during 2024.

The Company has announced plans for selling its non-mining real estate and water rights anticipated in the latter part of 2025.

IMPACT OF NEW ACCOUNTING STANDARDS

Information about the impact of new accounting standards is included in Note 1 of the consolidated financial statements in this Annual Report.

Information about the impact of new accounting standards is included in Note 1 of the Notes to Consolidated Financial Statements in this Annual Report.

CRITICAL ACCOUNTING ESTIMATES

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Such indicators include changes in the Company’s business plans, changes in precious metal prices and significant downward revisions of estimated mineralization quantities.

If the carrying value of an asset exceeds the future undiscounted cash flows expected from the asset, an impairment charge is recorded for the excess of carrying value of the asset over its estimated fair value.

If the carrying value of an asset exceeds the future undiscounted cash flows expected from the asset, an impairment charge is recognized for the excess of carrying value of the asset over its estimated fair value.

Determination as to whether and how much an asset is impaired involves management estimates on highly uncertain matters such as future commodity prices, the effects of inflation and technology improvements on operating expenses, and the outlook for global or regional demand conditions for gold and silver.

However, the impairment reviews and calculations are based on assumptions that are consistent

with the Company’s business plans and long-term investment decisions.

However, the impairment reviews and calculations are based on assumptions that are consistent with the Company’s business plans and long-term investment decisions.

Management does not believe there are impairments present in mineral rights and properties, plant, and equipment.

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These GAAP-based undiscounted cash flow analysis are prepared by a third-party consultant and reviewed by management for reasonableness.

If the carrying value of the assets or asset group are not recoverable, impairment is measured and recorded as the amount by which the carrying value exceeds its fair value.

If the carrying value of the assets or asset group are not recoverable, impairment is measured and recognized as the amount by which the carrying value exceeds its fair value.

Estimates of future cash flows used to test the recoverability of our intangible assets are based on management’s best estimate of the revenues generated from planned projects and related costs expected to be incurred for our Fuels, Metals and Mining business segments.

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These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates that we are using to manage the underlying businesses.

Valuation allowances are recorded as reserves against net deferred tax assets by the Company when it is determined that net deferred tax assets are not likely to be realized in the foreseeable future.

Valuation allowances are recognized as reserves against net deferred tax assets by the Company when it is determined that net deferred tax assets are not likely to be realized in the foreseeable future.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations.

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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 7. Management’s Discussion and Analysis