Comstock Inc. Commitments Disclosure

NOTE 13         COMMITMENTS AND CONTINGENCIES

 

COMSTOCK MINERAL ESTATE LEASE PAYMENTS 

 

On September 29, 2025, the Company assigned certain mineral rights and properties under leases to Mackay pursuant to the Mackay MIPA (see Note 6). As of December 31, 2025, the Company had no remaining commitments under the mineral estate leases assigned pursuant to the Mackay MIPA. 

 

AST LICENSE AGREEMENTS

 

The Company is party to three license agreements (collectively, the “AST License Agreements”) with American Science and Technology Corporation (“AST”), pursuant to which the Company agreed to license certain developed technologies of AST for use at three facilities in exchange for three facility-specific license fees of $500,000 each, and a royalty fee equal to 1.0% of the gross revenue of each of the first three operating facilities. As of December 31, 2025, no royalty fees have been paid under the AST License Agreements. 

 

GREAT BASIN PRECEDENT AGREEMENT

 

On November 29, 2025, the Company and Great Basin Gas Transmission Company (“Great Basin”) entered into a Precedent Agreement for Great Basin to construct and install pipelines and appurtenant facilities (“Expansion Facilities”) to our properties in Silver Springs Nevada and anticipated to be completed by November 2028. Upon approval of the certificate of public convenience by the Federal Energy Regulatory Commission (“FERC”) authorizing the construction of the Expansion Facilities and prior to commencing construction, Great Basin will tender a Transportation Service Agreement consistent with tariff for rate schedule to the Company. The Transportation Service Agreement will be for a term of twenty years beginning on November 1, 2028 with a daily reserve capacity of 50,000 Dekatherm (“Dth”). Great Basin may terminate the Precedent Agreement at any time if (1) Great Basin determines that all or any portion of the Expansion Facilities would be operationally and/or economically infeasible; (2) the Company fails to perform its duties and obligations; and (3) Great Basin has not received and accepted a final certificate order from FERC. If the Precedent Agreement is terminated, the Company must reimburse Great Basin all project development and default costs. The Company will establish a surety bond of the estimated project development costs with a cumulative total of $39.96 million by December 31, 2026 and a cumulative total of $54.0 million by December 31, 2027. 

 

INVESTMENT IN LICENSED TECHNOLOGY 

 

Developer (see Note 4) 

 

On March 1, 2024, the Company and Developer entered into the DSA to advance technologies owned by the Company's subsidiary that incorporate applications of intellectual properties owned by the Developer (“Developer IP”) (See Note 4). For the years ended December 31, 2025 and 2024, the Company recorded $146,899 and $1,157,000, respectively, as research and development expense in the consolidated statements of operations. On March 1, 2024, Developer granted the Company an exclusive license to use Developer IP to produce fuel (“Fuels License”) and treat water (“Water License” and, together with the Fuels License, the “Comstock License Agreements”) in exchange for royalty fees based on the production and sales of qualified products. The Comstock License Agreements also require the Company to pay minimum royalty fees equal to $20,000 on the earlier to occur of 240 days after receiving a patent for the Developer IP, and, commenced on February 15, 2025, and for each year thereafter, (i) $10,000 in year 1 and 2, (ii) $25,000 in year 3 and 4, and (iii) $75,000 in year 5 and thereafter. The Company also agreed to pay for certain outstanding and future patent costs, as well as a new patent filing fees for each new patent application added to the Licensed Patent Rights deriving from Developer individually ($10,000) or together with the Company ($5,000). The scope of the Water License is exclusive unless Comstock elects not to invest a minimum of $100,000 per calendar quarter after completion of Phase 1. As of December 31, 2025, in accordance with the funding commitments under the Comstock License Agreements, the Company paid $205,204 of 2024 patent fee costs reflected in research and development expense in our consolidated statements of operations. As of  December 31, 2025 and 2024, payables to the Developer included in accounts payable on the consolidated balance sheet was $1,332,099 and $935,200, respectively. During the year ended December 31, 2024, in accordance with the funding commitments under the Comstock License Agreements, the Company recognized $30,000 as license fee expense and $270,000 of patent fee expense and recognized $300,000 in accrued expense and other liabilities on the consolidated balance sheets which was paid in 2025. 

 

NREL

 

On October 1, 2024, the Company entered into an agreement with a managing and operating contractor of the U.S. Department of Energy’s (“DOE”) National Renewable Energy Laboratory (“NREL”). The agreement provides that the Company fund the research which includes the use of its pilot facility, equipment and laboratory in Wisconsin. The ongoing funding commitment is $1.5 million, $1.7 million, and $1.5 million, during 2025, 2026, and 2027, respectively. For the years ended December 31, 2025 and 2024, $1,616,928 and $269,488, respectively, has been funded under the agreement and recognized as research and development expense.

 

On October 1, 2024, the Company entered into an exclusive licensing agreement with the same party whereby the Company obtained exclusive license in existing or future patent rights associated with the research. The licensing agreement required the Company to pay fees of $100,000 that were recognized as research and development expense during the year ended December 31, 2024. Under this licensing agreement, the Company will pay a royalty fee equal to 3% of net sales. The agreement includes minimum annual royalty payments that are not applied against future years’ royalty payments. For the year ended December 31, 2025, the Company paid $65,000 in annual royalty fees recognized as research and development expense in our consolidated statement of operations. Annual royalty payments are as follows:

 

		Minimum Annual Royalty
2026		$	90,000
2027		$	95,000
2028		$	125,000
2029		$	135,000
2030		$	150,000
Thereafter		$	150,000

 

The Company has sublicensing rights and will pay a royalty fee equal to 15% of any such sublicensing revenue to NREL. The royalty fee and the sublicensing fee will be reduced to 2% and 10%, respectively, upon achievement of certain thresholds.

 

Marathon Petroleum Corporation 

 

On February 28, 2025, Bioleum, a subsidiary of the Company, entered into a series of definitive agreements with Virent, which have been assigned to Bioleum and involve the purchase of $14.0 million in Bioleum equity as part of Bioleum's planned Series A preferred equity financing (“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 the Marathon SAFE Note (see Notes 6 and 15) issued in exchange for payment-in-kind assets, on and subject to the terms and conditions of the applicable transaction documents (“Investment Agreements”). The Investment Agreements, as amended on  September 26, 2025, requires the $1.0 million cash portion of the Investment to be made within five business days of the execution by Bioleum of third-party investment agreements for at least $25,000,000 in Series A equity financing. The Investment Agreements additionally require Bioleum to grant MPC Investment LLC a lien on the Marathon Payment-In Kind Assets if Bioleum does not complete $25,000,000 in the Series A equity financing before  March 31, 2026. As of December 31, 2025, $20.0 million of Series A equity financing has been completed. The Investment Agreements provide for the grant by Virent to Bioleum of a non-exclusive, non-transferable, non-assignable, non-sublicensable, perpetual, royalty-free license under the Virent IP solely for research and development purposes associated with the Marathon Payment-In Kind (“Virent IP”), excluding applications involving the heterogenous catalysis of biomass-derived sugars. The Virent IP consists of the transfer of know-how in order to use the Marathon Payment-In Kind Assets and does not represent any standalone value to the Company, thus, no value was assigned to the Virent IP as of  December 31, 2025.

 

OTHER

 

Annually, the Company pays each of the independent directors a total of $160,000 in cash or shares of common stock, which includes an annual cash payment of $60,000 plus chair and committee meeting fees. The Chair of each Committee is paid an additional cash payment of $20,000 annually. For years ended December 31, 2025 and 2024, the Company recognized director fees expenses of $992,500 and $900,000, respectively. As of December 31, 2025 and 2024, director fee compensation included in accounts payable on the consolidated balance sheet was $290,000 and $177,500, respectively. As of December 31, 2025 and 2024, the Company accrued $1,475,000 and $1,000,000, respectively, in director fee compensation associated with the director fees payable expected to be satisfied with shares of the Company's common stock is included in other long-term liabilities on the consolidated balance sheet. On December 30, 2025, the Compensation Committee of the Board of Directors approved the payment of the accrued director fee compensation of $1,475,000 and on January 5, 2026, the Company issued 410,866 shares at $3.59 per share to our directors.

 

From time to time, we are involved in claims and proceedings that arise in the ordinary course of business. There are no matters pending that we expect to have a material adverse impact on our business, results of operations, financial condition or cash flows.