UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒  QUARTERLY REPORT UNDER SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2024

☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______ TO ______.

COMMISSION FILE NO.: 001-35200

COMSTOCK INC.

(Exact name of registrant as specified in its charter)

Nevada		65-0955118
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer  Identification No.)
117 American Flat Road, Virginia City, NV		89440
(Address of principal executive offices)		(Zip Code)
	(775) 847-5272
	(Registrant’s telephone number)
	Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.000666 per share	LODE	NYSE American

Securities registered pursuant to Section 12(g) of the Acts: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	Yes	☒	No	☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the prior 12 months (or for such shorter period that the registrant was required to submit and post such files).	Yes	☒	No	☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☒	Smaller reporting company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	Yes	☐	No	☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).	Yes	☐	No	☒
The number of shares outstanding of Common Stock, $0.000666 par value per share, on August 6, 2024 was 175,283,728.

This page intentionally left blank.

2

COMSTOCK INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED June 30, 2024 and 2023

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
CONDENSED CONSOLIDATED BALANCE SHEETS	5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	7
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY	8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	30
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	39
Item 4. Controls and Procedures.	39
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.	40
Item 1A. Risk Factors.	40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	40
Item 3. Defaults Upon Senior Securities.	40
Item 4. Mine Safety Disclosures.	40
Item 5. Other Information.	40
Item 6. Exhibits.	40
Signatures	42

3

Cautionary Notice Regarding Forward-Looking Statements

Certain statements contained in this quarterly report on Form 10-Q are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, are forward-looking statements. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” “plan,” “should,” “intend,” “may,” “will,” “would,” “potential” and similar expressions identify forward-looking statements but are not the exclusive means of doing so. Forward-looking statements include statements about matters such as: future market conditions; future explorations or acquisitions; future changes in our research, development and exploration activities; future financial, natural, and social gains; future prices and sales of, and demand for, our products and services; land entitlements and uses; permits; production capacity and operations; operating and overhead costs; future capital expenditures and their impact on us; operational and management changes (including changes in the Board of Directors); changes in business strategies, planning and tactics; future employment and contributions of personnel, including consultants; future land and asset sales; investments, acquisitions, joint ventures, strategic alliances, business combinations, operational, tax, financial and restructuring initiatives, including the nature, timing and accounting for restructuring charges, derivative assets and liabilities and the impact thereof; contingencies; litigation, administrative or arbitration proceedings; environmental compliance and changes in the regulatory environment; offerings, limitations on sales or offering of equity or debt securities, including asset sales and associated costs; business opportunities, growth rates, future working capital needs, revenues, variable costs, throughput rates, operating expenses, debt levels, cash flows, margins, taxes and earnings.

These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical and current trends, current conditions, possible future developments and other factors they believe to be appropriate. Forward-looking statements are not guarantees, representations or warranties and are subject to risks and uncertainties, many of which are unforeseeable and beyond our control and could cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements. Some of those risks and uncertainties include the risk factors set forth in this report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and the following: adverse effects of climate changes or natural disasters; adverse effects of global or regional pandemic disease spread or other crises; global economic and capital market uncertainties; the speculative nature of gold or mineral exploration, and aluminum, cadmium, copper, silica, silver, steel, and other metal and materials recycling, including risks of diminishing quantities or grades of qualified resources; operational or technical difficulties in connection with exploration, metal recycling, material processing or mining activities; costs, hazards and uncertainties associated with precious and other metal based activities, including environmentally friendly and economically enhancing clean mining and processing technologies, precious metal exploration, resource development, economic feasibility assessment, environmental reclamations and historical restorations and cash generating mineral production; costs, hazards and uncertainties associated with metal recycling, processing or mining activities; contests over our title to properties; potential dilution to our stockholders from our stock issuances, recapitalization and balance sheet restructuring activities; potential inability to comply with applicable government regulations or law; adoption of or changes in legislation or regulations adversely affecting our businesses; permitting constraints or delays; challenges to, or potential inability to, achieve the benefits of business opportunities, including research and development stage activities that may be presented to, or pursued by, us, including those involving developing renewable, decarbonizing and/or clean energy technologies, quantum computing and generative artificial intelligence supported advanced materials development and development services, development of cellulosic technology in bio-fuels and related material production; commercialization of cellulosic technology in bio-fuels; ability to successfully identify, finance, complete and integrate acquisitions, joint ventures, strategic alliances, collaborative research and development agreement, business combinations, asset and equity investment sales, and investments that we may be party to in the future; changes in the United States or other monetary or fiscal policies or regulations; interruptions in our production capabilities due to capital constraints; equipment failures; fluctuation of prices for gold or certain other commodities (such aluminum, cadmium, copper, silica, silver, steel, and other metal and materials, cyanide, water, diesel, gasoline and alternative fuels and electricity); changes in generally accepted accounting principles; adverse effects of war, mass shooting, terrorism and geopolitical events; potential inability to implement our business strategies; potential inability to grow revenues; potential inability to attract and retain key personnel; interruptions in delivery of critical supplies, equipment and raw materials due to credit or other limitations imposed by vendors; assertion of claims, lawsuits and proceedings against us; potential inability to satisfy debt and lease obligations; potential inability to maintain an effective system of internal controls over financial reporting; potential inability or failure to timely file periodic reports with the Securities and Exchange Commission; potential inability to list our securities on any securities exchange or market or maintain the listing of our securities; and work stoppages or other labor difficulties. Occurrence of such events or circumstances could have a material adverse effect on our business, financial condition, results of operations or cash flows, or the market price of our securities. All subsequent written and oral forward-looking statements by or attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Except as may be required by securities or other law, we undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events, or otherwise.

4

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

COMSTOCK INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30, 2024		December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$	114,304	$	3,785,577
Investments		18,912,985		18,912,985
Assets held for sale - land and mineral rights and properties		8,380,231		—
Prepaid expenses and other current assets		964,527		484,577
Total current assets		28,372,047		23,183,139
Non-current Assets:
Investments		31,856,359		31,260,928
Mineral rights and properties		11,250,121		13,302,013
Properties, plant and equipment, net		8,748,948		15,204,030
Deposits		411,268		411,268
Reclamation bond deposit		3,043,228		2,850,518
Notes receivable and advances, net		2,658,133		980,291
Intangible assets, net		14,859,284		15,866,032
Finance lease - right of use asset, net		3,113,782		2,923,766
Other assets		242,833		484,359
Total non-current assets		76,183,956		83,283,205
TOTAL ASSETS	$	104,556,003	$	106,466,344

The accompanying notes to the Condensed Consolidated Financial Statements are an integral part of these statements.

5

COMSTOCK INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(UNAUDITED)

	June 30, 2024			December 31, 2023
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	2,315,057		$	1,333,980
Accrued expenses and other liabilities		3,131,158			2,283,986
Deposits		—			410,100
Deferred revenue		1,258,418			78,495
Derivative liabilities		4,400,579			5,400,128
Finance lease - right of use lease liability		540,204			838,676
Debt, net - current portion		1,611,698			4,495,660
Total current liabilities		13,257,114			14,841,025
Long-term Liabilities:
Reclamation liability		5,820,715			5,606,681
Deferred revenue		—			1,156,250
Debt, net - long-term portion		8,390,000			5,355,062
Other liabilities		2,049,173			1,230,154
Total long-term liabilities		16,259,888			13,348,147
TOTAL LIABILITIES		29,517,002			28,189,172
COMMITMENTS AND CONTINGENCIES (Notes 9 and 14)
Stockholders' Equity
Preferred stock $0.000666 par value, 50,000,000 shares authorized, no shares outstanding		—			—
Common stock, $0.000666 par value, 245,000,000 shares authorized, 157,820,072 and 117,862,081 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		105,138			78,405
Treasury stock 0 and 2,605,322 shares, at cost, at June 30, 2024 and December 31, 2023, respectively		—			(3,360,867	)
Additional paid-in capital		372,661,466			363,889,245
Accumulated deficit		(297,864,575	)		(282,329,611	)
Total equity - Comstock Inc.		74,902,029			78,277,172
Non-controlling interest		136,972			—
Total stockholders' equity		75,039,001			78,277,172
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	104,556,003		$	106,466,344

The accompanying notes to the Condensed Consolidated Financial Statements are an integral part of these statements.

6

COMSTOCK INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three-Months Ended						Six-Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Revenue	$	434,824		$	35,325		$	860,775		$	66,075
Operating expenses:
Selling, general and administrative expenses		2,792,822			3,498,852			6,320,346			6,885,824
Research and development		2,548,467			1,763,304			3,440,480			3,031,683
Depreciation & amortization		656,717			704,881			1,312,695			1,335,922
Gain on sale of Facility		—			—			—			(178,193	)
Total operating expenses		5,998,006			5,967,037			11,073,521			11,075,236
Loss from operations		(5,563,182	)		(5,931,712	)		(10,212,746	)		(11,009,161	)
Other Income (Expense)
Interest expense		(782,440	)		(376,161	)		(1,601,102	)		(991,339	)
Interest income		65,081			61,018			139,573			106,875
Change in fair value of derivative instruments		(77,496	)		1,564,617			(833,614	)		2,263,212
Gain (loss) on conversion of debt		(1,278,544	)		32,800			(1,472,067	)		(237,656	)
Loss on debt extinguishment		(521,622	)		—			(521,622	)		—
Other income (expense)		(494,069	)		(855,151	)		(1,069,014	)		(1,318,262	)
Total other income (expense), net		(3,089,090	)		427,123			(5,357,846	)		(177,170	)
Net loss		(8,652,272	)		(5,504,589	)		(15,570,592	)		(11,186,331	)
Net loss attributable to noncontrolling interest		(18,720	)		(36,101	)		(35,628	)		(48,906	)
Net loss attributable to Comstock Inc.	$	(8,633,552	)	$	(5,468,488	)	$	(15,534,964	)	$	(11,137,425	)
Weighted average common shares outstanding, basic and diluted		143,196,709			101,374,933			130,165,879			98,173,844
Earnings per Share - Basic and Diluted:
Net loss per share - basic and diluted	$	(0.06	)	$	(0.05	)	$	(0.12	)	$	(0.11	)

The accompanying notes to the Condensed Consolidated Financial Statements are an integral part of these statements.

7

COMSTOCK INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(UNAUDITED)

							Additional						Treasury			Non-
	Common Stock						Paid in			Accumulated			Stock			Controlling
	Shares			Amount			Capital			Deficit			Amount			Interest			Total
BALANCE - January 1, 2023		91,442,018		$	60,660		$	348,390,556		$	(291,491,432	)	$	(3,360,867	)	$	2,764,542		$	56,363,459
Issuance of common stock		6,090,276			4,056			2,145,944			—			—			—			2,150,000
Common stock issuance costs		—			—			(607,620	)		—			—			—			(607,620	)
Issuance of common stock for stock issuance costs		963,445			642			349,358			—			—			—			350,000
Issuance of common stock for conversion of debt and accrued interest		4,539,413			3,023			1,659,700			—			—			—			1,662,723
Employee and director share-based compensation		—			120			126,168			—			—			—			126,288
LINICO dividends earned by AQMS not distributed		—			—			—			—			—			(44,703	)		(44,703	)
Net loss		—			—			—			(5,668,937	)		—			(12,805	)		(5,681,742	)
BALANCE - March 31, 2023		103,035,152			68,501			352,064,106			(297,160,369	)		(3,360,867	)		2,707,034			54,318,405
Issuance of common stock		619,352			412			499,588			—			—			—			500,000
Issuance of common stock for conversion of debt and accrued interest, net shares returned		1,951,248			1,300			1,667,632			—			—			—			1,668,932
Issuance of common stock in lieu of payment of interest		270,757			180			107,327			—			—			—			107,507
Employee and director share-based compensation		—			—			46,328			—			—			—			46,328
LINICO dividends earned by AQMS not distributed		—			—			—			—			—			(46,092	)		(46,092	)
Net loss		—			—			—			(5,468,488	)		—			(36,101	)		(5,504,589	)
BALANCE - June 30, 2023		105,876,509		$	70,393		$	354,384,981		$	(302,628,857	)	$	(3,360,867	)	$	2,624,841		$	51,090,491
BALANCE - January 1, 2024		117,862,081		$	78,405		$	363,889,245		$	(282,329,611	)	$	(3,360,867	)	$	—		$	78,277,172
Issuance of common stock		4,102,697			2,732			1,460,978			—			—			—			1,463,710
Common stock issuance costs		—			—			(225,120	)		—			—			—			(225,120	)
Issuance of common stock for stock issuance costs		250,000			167			84,833			—			—			—			85,000
Issuance of common stock for debt issuance costs		489,141			326			249,674			—			—			—			250,000
Issuance of common stock for conversion of debt and accrued interest		2,276,944			1,516			893,257			—			—			—			894,773
Issuance of common stock in lieu of payment of interest		239,609			160			116,443			—			—			—			116,603
Retirement of treasury shares (2,605,322 shares)		(2,605,322	)		(1,735	)		(3,359,132	)		—			3,360,867			—			—
Employee and director share-based compensation		—			120			56,064			—			—			—			56,184
Non-controlling interest vesting of shares in subsidiary		—			—			(172,600	)		—			—			172,600			—
Net loss		—			—			—			(6,901,412	)		—			(16,908	)		(6,918,320	)
BALANCE - March 31, 2024		122,615,150			81,691			362,993,642			(289,231,023	)		—			155,692			74,000,002
Issuance of common stock		15,548,944			10,356			3,739,644			—			—			—			3,750,000
Issuance of common stock for conversion of debt and accrued interest		12,244,556			8,155			3,398,706			—			—			—			3,406,861
Issuance of common stock in lieu of payment of interest		375,412			250			123,213			—			—			—			123,463
Issuance of common stock for marketing-related costs		561,010			374			162,319			—			—			—			162,693
Issuance of common stock for Haywood lease amendment		1,500,000			999			508,851			—			—			—			509,850
Issuance of common stock for AST lease amendment		4,975,000			3,313			1,583,712			—			—			—			1,587,025
Employee and director share-based compensation		—			—			43,149			—			—			—			43,149
Warrant modification associated with debt amendment		—			—			108,230			—			—			—			108,230
Net loss		—			—			—			(8,633,552	)		—			(18,720	)		(8,652,272	)
BALANCE - June 30, 2024		157,820,072		$	105,138		$	372,661,466		$	(297,864,575	)	$	—		$	136,972		$	75,039,001

The accompanying notes to the Condensed Consolidated Financial Statements are an integral part of these statements.

8

COMSTOCK INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six-Months Ended
	June 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(15,570,592	)	$	(11,186,331	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,285,746			1,336,375
Amortization of finance leases		24,043			23,652
Amortization on discount associated with finance leases		16,445			212,649
Amortization of debt discount and other debt-related items		910,992			479,065
Accretion of reclamation liability		203,088			186,107
Interest expense paid with common stock		240,066			107,507
Research and development expense paid with common stock		1,208,180			—
Gain on write-off of SSOF deposits		(400,000	)		—
Gain on sale of Facility		—			(178,193	)
Loss on extinguishment of debt		521,622			—
Loss on conversion of debt		1,472,067			237,656
Employee and director share based compensation		99,333			172,616
Change in fair value of derivative instruments		833,614			(2,263,212	)
Change in fair value of investments		—			765,000
Share of net loss of equity-method investments		1,225,185			806,264
Other		302,167			(24,605	)
Changes in operating assets and liabilities:
Prepaid expenses		(327,355	)		(79,391	)
Deposits - asset		—			289,485
Other assets		222,123			78,976
Accounts payable		1,301,050			213,124
Accrued expenses, other liabilities and deposits		327,761			720,226
Deferred gain		—			1,425,000
Deferred revenue		23,673			—
Other liabilities		249,998			—
Net cash used in operating activities		(5,830,794	)		(6,678,030	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of mineral rights and properties, plant and equipment		(465,938	)		(816,071	)
Proceeds from sale of leased facility and related assets		—			21,000,000
Purchase of Aqua Metals Transfer LLC and Facility		—			(12,000,000	)
Payments on contractual commitments associated with derivatives		(2,284,364	)		(3,500,000	)
Advances to Sierra Springs Opportunity Fund, Inc.		—			(935,000	)
Investment in SSOF		(530,000	)		—
Funding of RenFuel note receivable		(1,030,000	)		—
Advances to GenMat		(235,636	)		—
Funding of reclamation bond		(50,000	)		—
Other		(68,000	)		(47,288	)
Net cash provided by (used in) investing activities		(4,663,938	)		3,701,641
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on financing leases		(50,131	)		(352,050	)
Proceeds from the issuance of common stock		5,213,710			2,650,000
Principal payments of debt		(200,000	)		—
Issuances of debt		2,000,000			—
Common stock issuance costs		(140,120	)		(257,620	)
Net cash provided by financing activities		6,823,459			2,040,330
Net decrease in cash and cash equivalents		(3,671,273	)		(936,059	)
Cash and cash equivalents at beginning of period		3,785,577			2,521,772
Cash and cash equivalents at end of period	$	114,304		$	1,585,713
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common shares for debt conversion and accrued interest	$	4,301,634		$	3,331,656
Issuance of common shares with debt	$	250,000		$	—
Investment acquired with payable	$	1,285,961		$	—
Issuance of common shares for due diligence and commitment fees	$	85,000		$	350,000
Issuance of common stock in lieu of payment of marketing expense	$	162,693		$	—
Issuance of common stock for Haywood lease amendment	$	509,850		$	—
Issuance of common stock for AST lease amendment	$	378,845		$	—
Fair value of common stock held by GenMat transferred to GenMat Advances (see Note 2)	$	694,970		$	—
Return of common stock in connection with conversion of debt and accrued interest	$	—		$	(121,193	)
Investment shares received on sale of Facility	$	—		$	9,365,000
Return of investment shares in lieu of escrowed funds	$	—		$	(1,500,000	)

The accompanying notes to the Condensed Consolidated Financial Statements are an integral part of these statements.     

9

COMSTOCK INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1                  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REFERENCES TO THE COMPANY

Unless otherwise indicated, the terms we, us, our, Comstock, or the Company mean Comstock Inc., and its subsidiaries on a consolidated basis.

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of Comstock Inc. and its wholly and majority owned subsidiaries. Intercompany transactions have been eliminated. The condensed consolidated financial statements do not include all disclosures required of annual consolidated financial statements and, accordingly, should be read in conjunction with our consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Operating results for the three and six-months ended June 30, 2024 may not be indicative of full year 2024 results.

In management's opinion, the accompanying condensed consolidated financial statements contain all adjustments necessary for a fair statement of our financial position as of June 30, 2024, and our results of operations and changes in equity for the three and six-months ended June 30, 2024 and 2023, and our cash flows for the six-months ended June 30, 2024 and 2023.

LIQUIDITY AND CAPITAL RESOURCES

The Condensed Consolidated Financial Statements are prepared on the going concern basis of accounting that assumes the realization of assets and the satisfaction of liabilities in the ordinary course of business. The Company has had recurring net losses from operations and had an accumulated deficit of $297,864,575 at June 30, 2024. For the six-months ended June 30, 2024, the Company recognized a net loss of $15,570,592 and cash and cash equivalents decreased by $3,671,273 from $3,785,577 at December 31, 2023 to $114,304 at June 30, 2024. The Company intends to fund its operations over the next twelve months from planned sales of non-strategic assets and other investments, issuance of equity under our existing shelf registration statement and private placements, planned licensing and related engineering services, sales and deferred revenue from our solar panel recycling business and existing cash and cash equivalents. Based on these expected funding sources, management believes the Company will have sufficient funds to sustain our operations and meet our contractual and investment commitments during the 12 months following the date of issuance of the Condensed Consolidated Financial Statements included herein. While the Company has been successful in the past in obtaining the necessary capital to support our operations, including registered equity financings from our existing shelf registration statement, borrowings, asset sales and other means, there is no assurance the Company will be able to sell additional assets timely and/or obtain additional equity capital or other financing, if needed. Risks to our liquidity include future operating expenditures above management’s expectations, including but not limited to exploration, pre-development, research and development, selling, general and administrative, investment related expenditures, the sale of the Silver Springs Properties, and amounts to be raised from the issuance of equity under our existing shelf registration statement. Declines in the share price of our common stock would also adversely affect our results of operations, financial condition and cash flows and available liquidity. If the Company is 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, the Company 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 the Company would be able to take any such actions on favorable terms, in a timely manner, or at all.

RECLASSIFICATIONS

Certain prior period amounts have been reclassified to conform to the 2024 financial statement presentation. Reclassifications had no effect on net income (loss) or cash flows as previously reported.

RECENTLY ISSUED ACCOUNTING STANDARDS

In August 2023, the FASB issued ASU 2023-05 Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. The new guidance addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture's separate financial statements. The objectives of the amendments are to (1) provide decision useful information to investors and other allocators of capital in a joint venture's financial statements and (2) reduce diversity in practice. The guidance is applied prospectively and effective for all newly formed joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact of this guidance on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07 (Topic 280) Improvements to Reportable Segment Disclosures. The new guidance requires disclosure of significant segment expenses that are (1) regularly provided to or easily computed from information regularly provided to the chief operating decision maker and (2) included in the reported measure of segment profit or loss. The new standard also allows companies to disclose multiple measures of segment profit or loss if those measures are used to assess performance and allocate resources. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted and retrospective adoption is required unless impracticable. The Company is currently evaluating the impact of this disclosure guidance on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 (Topic 740) Improvements to Income Tax Disclosures. The new guidance requires additional disclosures of disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024. The guidance should be applied on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating the impact of this disclosure guidance on our consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

10

 

NOTE 2                  INVESTMENTS

Summary of Investments

At June 30, 2024 and  December 31, 2023 our investments include:

	June 30, 2024						December 31, 2023
Equity Method Investments:	Investment			Ownership %			Investment			Ownership %
Quantum Generative Materials LLC	$	10,433,624			48.19	%	$	11,606,763			48.19	%
Pelen Limited Liability Company		605,519			25.00	%		609,165			25.00	%
Investment in research and development company		1,242,216			40.00	%		—			—	%
Total equity method investments		12,281,359						12,215,928
Measurement Alternative Investments:
Green Li-ion Pte. Ltd.		18,912,985			13.34	%		18,912,985			13.34	%
Sierra Springs Opportunity Fund, Inc.		19,575,000			17.50	%		19,045,000			17.11	%
Total measurement alternative investments		38,487,985						37,957,985
Total Investments		50,769,344						50,173,913
Less: current investments		(18,912,985	)					(18,912,985	)
Long-term investments	$	31,856,359					$	31,260,928

Summary financial information for affiliated companies (20% to 50%-owned) accounted for by the equity method for the periods presented, compiled from the equity investee's financial statements and reported on a one quarter lag is as follows:

	June 30, 2024		December 31, 2023
Current assets	$	858,517	$	665,765
Non-current assets		4,765,848		6,260,818
Current liabilities		153,519		—
Non-current liabilities		89,050		—

	Six-Months Ended
	June 30, 2024		June 30, 2023
Revenues		140,300