Comstock Inc.: Form 10-Q for the period ended Mar 31, 2025

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our condensed consolidated financial condition and results of operations. This discussion should be read in conjunction with the Condensed Consolidated Financial Statements, footnotes and the risk factors included herewith and herein.

OVERVIEW

Comstock innovates and commercializes technologies that extract and convert under-utilized natural resources into clean energy products, including pioneering technologies that produce renewable fuels from waste and other forms of woody biomass and electrification metals from end-of-life electronics. We are also preparing our defined mineral resources for mining and/or monetization.

We plan on delivering extraordinary shareholder value by using systemic management practices, disciplined frontier scientific discovery, and applied engineering to innovate, develop, engineer, and commercialize technology solutions that facilitate the increased throughput, 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 and partners in dedicated lines of business, including renewable fuels, renewable 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 resources, often integrated directly with us and our solutions, to accelerate and maximize adoption.

We own and manage investments in related assets that support our businesses, including existing minority equity positions and partnerships in strategic technology developers, two Wisconsin renewable fuels demonstration facilities, and a Nevada metals recycling demonstration facility. We also own and manage direct investments in northern Nevada real estate comprised of industrial and commercial land, water rights and about twelve square miles of gold and silver mining claims and surface parcels that we own, lease or have a royalty interest in and that some of which contain measured and indicated, as well as inferred gold and silver mineral resources.

Lines of Business

Fuels Segment

Our Fuels Segment is administered by our subsidiary, Comstock Fuels Corporation (“Comstock Fuels”). Comstock Fuels delivers advanced lignocellulosic biomass refining solutions that are setting new industry standards for the 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”), subject to certain preexisting agreements, 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 yielding Bioleum refining platform and Hexas’ high yielding energy crops enables the production of enough feedstock to produce upwards of 100 barrels (at 42 gallons per barrel) of fuel per acre per year, with regenerative practices that can effectively transform marginal agricultural lands 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 global markets, including several recently announced 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, Vietnam, and Pakistan.

Comstock Fuels operates two complementary and interdependent 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 continues innovating its existing commercial process for the purpose of increasing its market-leading yields, further decreasing carbon intensities, and driving costs down in pursuit of fossil parity. Comstock Fuels’ innovations group has also 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. Comstock Fuels also partners with Hexas and other strategic operating partners for the same objectives.

We are transitioning Comstock Fuels to directly support its own 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 $14.0 million in Comstock Fuels equity as part of Comstock Fuels’ planned Series A Financing, subject to a $700 million valuation cap (“Investment”). The purchase price includes $1.0 million in cash and $13.0 million 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”). The Payment-In-Kind Assets were valued based on the fair value of the Simple Agreement for Future Equity (“Marathon SAFE”), which was recorded as a liability on the condensed consolidated balance sheet as of March 31, 2025. The fair value of the SAFE was determined to be $12.0 million, calculated by discounting the $13.0 million principal amount using estimated time periods and a 35% discount rate.

Metals Segment

Our Metals Segment has operated a demonstration-scale solar panel recycling facility for over 12 months, generating $401,238 in revenue during 2024, and more than tripled its billable revenues (currently recognized and deferred revenue) to $1,344,127 during the first quarter of 2025, as compared to all of 2024, through service fees for decommissioning, recycling 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 is capable of delivering environmentally superior, zero-landfilled recycling solutions that support U.S. mineral industries.

Comstock Metals has initiated permitting and development of its first industry-scale production facility, located on the same campus as the demonstration-scale facility to scale the operation, initially to 50,000 tons per year and then 100,000 tons per year. This strategically located facility will enable the expeditious transition of proven processes from demonstration to full-scale production. The industry-scale facility is expected to significantly enhance our ability to meet the continuously growing demand for domestically recovered metals, supporting the needs of American manufacturers and infrastructure projects.

Our plan 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 and support American energy and resource independence while simultaneously 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) finalizing the industry-scale engineering, (3) submitting all prerequisite permits, (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 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 executed a 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 Limited Liability Company, 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. The Company was paid $1.0 million in cash in 2024 and is due another $1.75 million in either cash or their publicly registered common stock that is due and payable.

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 $3.75 million in initial and ongoing lease payments, including the final pro-rata lease payment associated with these properties of $0.65 million that expected to be paid on May 15, 2025. The Mackay Mining Lease terminated on December 18, 2024.

Our Mining Segment's 2025 objectives include (1) monetizing over $2.0 million from the sale of the northern mining claims, (2) 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 Dayton.

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 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 while retaining the rights for using the technologies.

Investment in Green Li-ion– Our wholly owned LINICO subsidiary owns 35,662 Green Li-ion preferred shares representing 13.34% of Green Li-ion. The Company intends to sell its remaining shares in 2026.

Investment in SSOF – For the three-months ended March 31, 2025, the Company invested an additional $300,000 in SSOF for 166,667 additional common shares at $1.80 per share. At March 31, 2025 and December 31, 2024, the Company owns 11,041,667 and 10,875,000, respectively, of SSOF shares and our ownership is at 17.46% and 17.27%, respectively. At March 31, 2025 and December 31, 2024, no adjustments were made to our investments carrying value as a result of the SSOF equity issuances since the price per share sold was consistent with the Company’s carrying value for this investment. At March 31, 2025, the Company’s maximum exposure to loss as a result of its involvement with SSOF is limited to its investment of $19,875,000.

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 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.

Investment in Hexas – On January 14, 2025, the Company executed an agreement with Hexas, under which Hexas agreed to grant the Company an exclusive worldwide license to Hexas’ intellectual properties in liquid fuels applications, subject to certain pre-existing agreements and relationships, and to provide certain development services in connection with the Company's site development and innovation activities. Under the terms of the agreement, the Company invested $500,000 in Hexas in the form of a simple agreement for future equity (“Hexas SAFE Investment”). On April 4, 2025, the Company invested the final tranche of $133,333 for total investment in the Hexas SAFE of $500,000.

Investment in Research and Development Company

On March 1, 2024, the Company entered into Securities Purchase Agreement (the “Developer Securities Purchase Agreement”) with an unaffiliated research and development company (“Developer”) and recognized an initial investment 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. At March 31, 2025, the future remaining payments, net implied interest, totaled $1,162,957. During the three-months ended March 31, 2025 and 2024, the Company paid $0 and $120,000, respectively, to the Developer in accordance with the funding commitments under the Developer Securities Purchase Agreement.

Other

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

COMPARATIVE FINANCIAL INFORMATION

Below we set forth a summary of comparative financial information for the three-months ended March 31, 2025 and 2024:

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RESULTS OF OPERATIONS

Three-Months Ended March 31, 2025 Compared to Three-Months Ended March 31, 2024

Revenues for the three-months ended March 31, 2025 increased by $359,864 to $785,815 from $425,951 for the comparable 2024 period, primarily attributed to the following:

• Higher revenues from our Metals Segment of $748,765 for our Comstock Metals operations in 2025, primarily for decommissioning services and to a lesser extent, sales of aluminum, glass and mineral-rich tailings, including silver; and
• Lower revenues from our Mining Segment of $388,901 attributed to the termination of the Mackay Mining Lease in the fourth quarter of 2024.

Cost of goods sold for the three-months ended March 31, 2025 increased $886,796 primarily due to the commencement of our first commercial demonstration facility operating at far less than full capacity due to the installation of additional air quality control system, all for metal recycling operations.

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 three-months ended March 31, 2025 decreased by $269,059 to $3,258,465 from $3,527,524 in the comparable 2024 period, primarily as a result of lower employee-related costs of $984,856, primarily due to lower incentive compensation; partially offset by higher rent expense of $350,315, higher consulting expense of $165,268, higher marketing expense of $127,315 and higher legal fees of $111,856.

Research and development expenses for the three-months ended March 31, 2025 increased by $2,411,905 to $3,303,918 from $892,013 in the comparable 2024 period, primarily related to higher rent expense attributed to the AST research and development rent of $1,487,476 paid in March 2025 (see Note 7 to the condensed consolidated financial statements), higher research and development costs for renewable fuel associated projects, substantially all with external laboratories of $582,570, higher employee-related costs of $217,201 and higher consulting expense of $139,461.

Depreciation and amortization for the three-months ended March 31, 2025 decreased by $280,593 to $375,384 from $655,977 in the comparable 2024 period, primarily related to lower amortization of intangible assets in the three-month period ended March 31, 2024 that were impaired later in 2024.

Interest expense for the three-months ended March 31, 2025 decreased by $159,517 to $659,144 from $818,661 in the comparable 2024 period, primarily due to lower interest and lower amortization of the original issue discount (“OID”) on the 2025 Kips Bay Note in 2025 compared to the 2023 Kips Bay Notes in 2024.

Interest income for the three-months ended March 31, 2025 increased by $21,618 to $96,109 from $74,491 in the comparable 2024 period, primarily due to higher accrued interest income related to the RenFuel note receivable.

Change in the fair value of our derivative instruments for the three-months ended March 31, 2025 increased by $434,685 to a loss of $1,190,803 from a loss of $756,118 in the comparable 2024 period, resulting from an decrease 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 $1,196,880 on the conversion of debt to equity for the three-months ended March 31, 2025 is attributed to the 2025 Kips Bay Note debt conversions. Loss of $193,523 on the conversion of debt to equity for the three months ended March 31, 2024 is attributed to the 2023 Kips Bay Note debt conversions.

Gain on extinguishment of liability of $845,000 was attributed to the restructuring of the LINICO acquisition-related payable (see Note 11 to the condensed consolidated financial statements).

Other income (expense), net for the three-months ended March 31, 2025 were $50,535, primarily consisting of gain from our equity method investments of $41,438.

Other income (expense), net for the three-months ended March 31, 2024 were $574,946, primarily consisting of losses from our equity method investments of $575,904 primarily from GenMat losses of $566,204, which was sold in the fourth quarter of 2024.

OUTLOOK

Our goal is to Accelerate the Commercialization of Breakthrough Technologies, that is, primarily technologies that extract and convert under-utilized natural resources into clean energy products, including pioneering technologies that produce renewable fuels from waste and other forms of woody biomass and electrification metals from end-of-life electronics. 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 2025 is the commercialization of our businesses and the continuous innovation, development and engineering of technologies and solutions that support the efficient conversion of under-utilized natural resources into clean energy products.

Corporate

The growth opportunities for both Comstock Fuels and Comstock Metals have developed beyond our original plans, and we have attracted some of the most sophisticated partners for investment, feedstock, technology, operations, and offtake, with many now evaluating direct investments and exploring deeper integrations and strategic transactions. The Company’s authorized share capacity is properly repositioned for safely capitalizing on these opportunities, however, both Comstock Fuels and Comstock Metals have directly commenced independent financing efforts for direct funding using subsidiary equity on terms that are non-dilutive to Comstock shares. These are keenly strategic capital partners, enabling Comstock to solidify its capital base, unlock the underlying value in each of its businesses, and extend the functionality of its system, often with these same partners, for tremendous growth potential.

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 the rest of 2025 include:

• Finalize plan to monetize our legacy real estate and non-strategic investments for over $50 million in 2026;
• Ensure adequate liquidity and capital resources sufficient to support the next phases of growth; and
• Finalize, communicate and implement plans to unlock maximum value from a spin-off of Comstock Fuels.

This ultimately results in two high-growth companies: a renewable metals and mining company headquartered in Nevada, and a renewable fuels company headquartered in Oklahoma and with major operations already functioning in Wisconsin.

Comstock Fuels

Comstock Fuels’ biorefining technologies are commercially ready for deployment and offer growth-enabling performance. Comstock Fuels is actively engaged in the planning and deployment of its first commercial demonstration facility and pursuing joint development and licensing agreements representing future revenue sources from technical and engineering services, royalties, and equity participation. These efforts include securing associated supply chain participants (including feedstock, site selection, engineering, construction and procurement, and offtake), performing preliminary and final engineering, and facilitating commissioning, construction, and operations, including with globally and locally recognized current and developing renewable fuels producers that, in certain cases, also represent a source of strategic capital for funding the projects.

The Company's Fuels objectives for the rest of 2025 include:

• Stand up a separate, stand-alone, well-capitalized, renewable fuels business through a directly financed spinout entity solely focused on advancing our objective of delivering hundreds of millions of barrels by 2035 and a public offering;
• Close on subsidiary-level “Series A” equity financing in the Fuels spinout entity;
• Plan and integrate a local, Hexas-based, fuel farm based into our first commercial biorefinery;
• Complete site selection for first commercial biorefinery project in Oklahoma, including feedstock and offtake;
• Secure sufficient project-level financing for first Oklahoma-based commercial biorefinery project;
• Execute additional revenue generating licenses and other commercial agreements;
• Expand integrated pilot production capabilities to up to two barrels per week of intermediates and fuels; and
• Advance our innovation and development efforts toward even higher yields, lower costs and lower capital.

Comstock Fuels’ commercialization plans also include multiple joint development projects, with each joint development project, such as Comstock Fuels’ SACL and other licensees, with the potential for generating hundreds of millions of dollars per year in technical services, engineering, and licensing revenues. Comstock Fuels also offers integrations of its solutions into existing agriculture, forestry, pulp and paper, ethanol, and petroleum infrastructure to generate additional technical services, engineering and royalty revenues. The plans also include integrating Comstock Fuels’ high yield Bioleum refining platform with Hexas’ high yield energy crops to provide 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.

Comstock Metals

Comstock Metals has now been operating its first commercial demonstration facility for over a full year and in November of 2024, submitted permits for the first industry-photovoltaic recycling facility. The industry-scale facilities are anticipated to initially operate at 50,000 tons of annual capacity and then efficiently double that rated capacity to 100,000 tons of annual capacity. Site selection activities are ongoing for the next two industry-scale facilities and associated storage sites.

The Company's Metals objectives for the rest of 2025 include:

• Maximize three-shift production and revenue from the demonstration scale production facility;
• Secure sufficient funding for scale-up of the first Nevada site to industry-scale;
• Expand local county storage capacity adjacent to our first industry-scale facility;
• 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;
• Secure additional Master Service Agreement (MSA) with national and regional customers;
• Complete site selection and preliminary development for two additional solar panel recycling locations;
• Expand the system globally with international strategic and capital partners; and
• Advance and expand R&D efforts to recover more and higher-purity materials from recycled streams for offtake.

Closing on equity and/or debt financing that accelerates the deployment of the first three industry facilities. The capital expenditures for the first 50,000 tons of annual capacity for the first industry scale facility are expected to be $6.0 million in 2025, plus an additional up to $1.0 million for expanded storage. Increasing the capacity to 100,000 tons of annual capacity requires an additional $3.0 million, most likely in 2026. Billable revenues are expected to be six to eight times greater in 2025, as compared to 2024, or well over $3.0 million, with proportionate future increases as we scale up our industry-scale facilities.

Comstock Mining

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 Mining objectives for the rest of 2025 include:

• Receive cash proceeds of over $2.0 million from prior mineral leases and asset sales from the northern claims;
• Commercialize agreements that either monetize or enable resource expansion of the central claims;
• Complete the preliminary mine plans that enable the economic development of the southern district claims; and
• 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 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”), 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 has announced plans for selling its non-mining real estate and water rights anticipated in the latter part of 2025.

LIQUIDITY AND CAPITAL RESOURCES

Our financial position and liquidity are based on our net sources of capital from financing as generally compared to our net uses of capital from investing activities and ultimately, our ability to provide or use cash flows from or in our operations. Our cash balances at March 31, 2025 and December 31, 2024 were $3,906,773 and $954,271, respectively. The Company had current assets of $15,697,279 and current liabilities of $8,620,700, representing working capital excess of $7,076,579 at March 31, 2025.

The current liabilities include $3,401,551 of accrued expenses, including $831,986 for the payable to a research and development company, $825,891 for accrued payroll and related expenses and $431,250 for incentive compensation.

Our primary source of liquidity during the first three-months of 2025 was cash from financing activities. During the three-months ended March 31, 2025, we generated $9,731,350 in cash from our financing activities and we used $4,962,518 and $1,816,330, respectively, in cash in our operating and investing activities. Our primary source of liquidity during the first three-months of 2024 was cash from financing activities. During the three-months ended March 31, 2024, we generated $3,131,934 in cash from our financing activities and we used $3,830,596 and $2,619,939, respectively, in cash in our operating and investing activities.

The Company continues 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 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 over $10.0 million in payroll (including research and development) during 2025. When combined with other corporate operating expenses, this represents over $20.0 million in 2025 spending.

The Company has increasing access to a number of alternative capital resources, including a new $50 million shelf registration statement filed in March 2025, project activity bonds, various asset and investment sales, and grants, including a recent $3.0 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 other investors directly into Comstock Fuels and debt and/or equity financings directly into Comstock Metals.

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 and the remaining $5,000,000 funded on March 11, 2025 with an original issue discount of $638,298. The full principal is due on April 10, 2026. Interest is payable monthly at a rate of 6% per annum. As of May 6, 2025, the remaining principal balance on the 2025 Kips Bay Note was $4,350,000.

We intend to fund our operations over the next twelve months from revenues from our solar panel recycling business, government grants for our fuels business, issuance of subsidiary-level equity, issuance of equity under our existing shelf registration statement, planned licensing and related engineering services fees, 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 condensed 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 registration statement, government grants, 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, revenue from our solar panel recycling operations, sales from licensing our lignocellulosic technology and related engineering services, government grants, non-registered equity issued directly from certain subsidiaries, 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. In such case, we could be required to limit or discontinue certain business plans, activities or operations, reduce or delay certain capital expenditures or investments, or sell certain assets or businesses. 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.

CRITICAL ACCOUNTING ESTIMATES

There have been no significant changes to the critical accounting estimates disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K.

Market Prices

Changes in the market price of commodities, including precious metals, critical metals and oil and gas may significantly affect our future profitability and cash flow. Metal and fuel prices fluctuate widely due to factors such as: demand, global production levels, supply chain constraints, investor sentiment, central bank reserves, global conflicts and the value of the U.S. dollar and other currencies.

Interest Rate Risk

The interest rates on our existing long-term debt borrowings are fixed, and as a result, interest due on borrowings are not impacted by changes in market-based interest rates.

There have been no material changes in the market risks discussed in Item 7A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

A. Disclosure

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, with the participation of both our Principal Executive and Financial Officer and our Principal Accounting Officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 ("Exchange Act") was conducted. Our disclosure controls and procedures are designed to ensure information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Exchange Act rules, and such information is accumulated and communicated to our management, including our Principal Executive and Financial Officer, to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based on that evaluation, our chief executive officer concluded that our disclosure controls and procedures, including controls and procedures designed to ensure that information required to be disclosed by us is accumulated and communicated to our management, were effective as of March 31, 2025, in assuring them in a timely manner that material information required to be disclosed in this report has been properly recorded, processed, summarized and reported.

Changes in Internal Control Over Financial Reporting

During the quarter ended March 31, 2025, there was no change in our internal control over financial reporting that materially affected or is reasonably likely to materially affect our internal control over financial reporting.

No new risk factors have been identified in addition to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.