Deposits for Investments

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Deposits for Investments

Deposits for Investments

Deposits for investment in Mercury Clean Up LLC

On June 21, 2019, as amended July 3, 2019, the Company entered into a Mercury Remediation Pilot, Investment and Joint Venture Agreement (the “MCU Agreement”) with Mercury Clean Up LLC (“MCU”) (Note 22). Pursuant to the MCU Agreement, the Company committed $2.0 million of capital contributions that was payable in cash of $1.15 million and shares of the Company's common stock of $0.85 million, in exchange for 15% of the fully-diluted equity ownership of MCU and the first right to participate in 50% of the equity of any future joint ventures formed with MCU (the “Joint Ventures”).

The MCU Agreement offers the Company the opportunity to acquire an additional 10% of the fully-diluted equity ownership by investing, or arranging for the investment of an additional $3.0 million in the Joint Ventures. Until this additional investment is recovered, 75% of any profits from the Joint Ventures will be distributed to the Company, and thereafter there will be a 50/50 distribution of profits.

On July 18, 2019, the Company issued 900,000 shares of restricted common stock with a fair value of $751,050 to MCU to fund the MCU capital contribution. The shares were subsequently liquidated by MCU for gross proceeds of approximately $0.5 million. On May 15, 2020, the Company issued MCU an additional 625,000 shares of restricted common stock with a fair value of $314,687 to fund the difference between proceeds received by MCU and the required 0.85 million capital contribution.

The Company paid MCU $0.4 million in cash during the nine months ended September 30, 2020, bringing the total to $1.15 million in cash as of September 30, 2020, satisfying the required cash contribution. Since the transaction has not closed, these

amounts are recorded as prepaid expenses and other current assets in the condensed consolidated balance sheets. The Company expects to close the MCU Agreement in the fourth quarter of 2020.

Deposits for investment in MCU Philippines Inc. ("MCU-P")

The Company entered into a second amendment of the MCU Agreement, on April 10, 2020, wherein MCU and the Company have identified an opportunity to remediate mercury in the Philippines, particularly in the province of Davao d' Oro (the “Philippine Opportunity”). MCU and the Company formed a new entity called MCU Philippines Inc. ("MCU-P") to engage in the Philippine Opportunity. During the three months ended September 30, 2020, the Company made cash deposits totaling $1 million for MCU-P, committed another $1 million equity investment in MCU and a joint venture with MCU, and committed up to $1 million in secured loans. These Company investments, when completed, will meet the requirements of the additional investments in the MCU Agreement, and result in the full 25% interest in MCU and direct 50% joint venture participation in both the Philippine and Comstock Lode systems. The Company expects to close the MCU-P transaction in the first quarter of 2021. The Company’s chief executive officer is a director of MCU-P.