Long-Term Debt

9 Months Ended

Sep. 30, 2020

Long-term debt consisted of the following:


Note Description	September 30, 2020		December 31, 2019
Senior Secured Debenture (GF Comstock 2) - 11% interest, due Dec 2020	$	—	$	4,929,277
Concorde Trust Unsecured Promissory Note - 12% interest, due 2021	3,679,680		—
Bean Trust Unsecured Promissory Note - 12% interest, due 2021	636,256		—
Scott H. Jolcover Unsecured Promissory Note - 12% interest, due 2021	159,064		—
Caterpillar Financial Services Unsecured Note Payable - 5.75% interest, due 2021	511,047		645,891
Total debt	4,986,047		5,575,168
Less: debt discounts and issuance costs	(220,793)		(163,094)
Total debt, net of discounts and issuance costs	4,765,254		5,412,074
Less: current maturities	(4,690,155)		(328,068)
Long-term debt, net of discounts and issuance costs	$	75,099	$	5,084,006

Debt Obligations

Concorde Trust, Bean Trust, & Scott H. Jolcover Unsecured Promissory Notes

On August 6, 2020, the Company entered into three unsecured promissory notes (the "Promissory Notes") in order to refinance existing indebtedness on more favorable terms. The Promissory Notes, with the Concorde Trust, Bean Trust, and Mr. Scott H. Jolcover (a member of the Company's management), have an aggregate principal amount of $4,475,000, were issued at an original issue discount of $255,000, bear interest at a rate of 12% per annum payable monthly, and mature on September 20, 2021. The Promissory Notes are unsecured, but contain covenants that prohibit the Company from incurring debt that matures prior to the maturity date of the Promissory Notes or that is senior in right of payment, and require the Company to prepay the Promissory Notes with at least 80% of the net cash proceeds received by the Company with respect to the sale of the Company's properties in Silver Springs, Nevada. The Company is permitted to defer payment of up to 34% of the principal payment (or approximately $1.5 million) due on the maturity date of the Promissory Notes for an additional two years (i.e., until September 20, 2023), in exchange for two year warrants to purchase the Company’s common stock based on a 10% discount to the 20-day volume weighted average price of the Company’s common stock on the maturity date of the Promissory Notes. Based on a separate valuation analysis, the Company determined fair value of the Promissory Notes approximated their face value, as embedded derivatives that required bifurcation had de minimis estimated fair values on the date of issue and at September 30, 2020. As of September 30, 2020, Scott Jolcover, a member of the Company’s management, held $159,064 face value of the Promissory Notes, and had received $2,876 in payments of interest for the three months ended September 30, 2020.

GF Comstock 2 LP

On January 13, 2017, the Company issued an 11% Senior Secured Debenture (the "Debenture") to GF Comstock 2 LP due January 13, 2021, in an aggregate principal amount of $10.7 million. Interest was payable semi-annually. The Debenture was collateralized by (1) substantially all of the assets of the Company, and (2) a pledge of 100% of the equity of its subsidiaries. Hard Rock Nevada Inc., controlled by Scott Jolcover, a member of the Company's management, and another related party who is a significant shareholder of the Company, participated in this financing. In addition, J. Clark Gillam, a former director of the Company is a manager and member of the general partner of GF Capital 2 LP. Mr. Gillam resigned from the Company's board of directors on September 20, 2020.

The Debenture was issued at a discount of approximately $0.6 million and with additional issuance costs of approximately $0.5 million. The Debenture also required an additional "Make Whole" obligation totaling approximately $0.7 million. The Company recorded the Debenture at face value, net of the discount, issuance costs and Make Whole obligation, which approximated its estimated fair value. The discount, issuance costs and Make Whole obligation were amortized to interest expense during the term of the Debenture.

On August 11, 2020, the Company retired the Debenture by paying the remaining principal balance of approximately $4.0 million, plus the remaining Make Whole obligation of $0.2 million. Upon retirement, all securing collateral was released. The Company recognized a loss on early retirement of debt of $51,000. Interest expense on the Debenture was $82,646 and $423,318 for the three and nine months ended September 30, 2020, and $330,080 and $1,065,947 for the three and nine months ended September 30, 2019, respectively. Tonogold reimbursed $41,071 and $260,795 of the Debenture interest for the three and nine months ended September 30, 2020, respectively, and reimbursed $161,160 and $278,623 of the Debenture interest for the three and nine months ended September 30, 2019, respectively.

Caterpillar Equipment Facility

On June 27, 2016, the Company completed an agreement with Caterpillar Financial Services Corporation (“CAT”) relating to certain finance and lease agreements (the “CAT Agreement”). Under the terms of the CAT Agreement, the obligations to CAT bear interest at 5.7% and mature on November 1, 2021, with scheduled payments of $29,570 per month. The obligations were recorded at face value, which approximated fair value.

On June 29, 2020, Comstock and CAT modified the CAT Agreement allowing for four months of deferred payments, with no extension of terms, beginning with the May 1, 2020, payment and extending through August 1, 2020. Interest payable for the four deferred payments was added to principal, after which monthly payment amounts were increased to $37,817 per month, beginning on September 1, 2020.