Comstock Inc. Fair Value Disclosure
NOTE 15 FAIR VALUE MEASUREMENTS
The following table presents our assets and liabilities measured at fair value on a recurring basis at December 31, 2025:
| Fair Value Measurements at | ||||||||||||||||
| December 31, 2025 | ||||||||||||||||
| Total | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
| Assets: | ||||||||||||||||
| Georges Trust derivative | $ | 1,201,114 | $ | — | $ | 1,201,114 | $ | — | ||||||||
| Alvin Fund derivative | 759,682 | — | 759,682 | — | ||||||||||||
| Total assets measured at fair value | $ | 1,960,796 | $ | — | $ | 1,960,796 | $ | — | ||||||||
| Liabilities: | ||||||||||||||||
| Marathon SAFE Note | $ | 12,000,000 | $ | — | $ | — | $ | 12,000,000 | ||||||||
|
| $ | 12,000,000 | $ | — | $ | — | $ | 12,000,000 | ||||||||
The following table presents our assets measured at fair value on a recurring basis at December 31, 2024:
| Fair Value Measurements at | ||||||||||||||||
| December 31, 2024 | ||||||||||||||||
| Total | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
| Assets: | ||||||||||||||||
| Haywood derivative | $ | 1,529,850 | $ | — | $ | 1,529,850 | $ | — | ||||||||
| Total assets measured at fair value | $ | 1,529,850 | $ | — | $ | 1,529,850 | $ | — | ||||||||
VALUATION METHODOLOGIES
The following is a description of the valuation methodologies used for the Company's financial instruments measured at fair value on a recurring basis as well as the general classification of such instruments pursuant to the valuation hierarchy.
Derivatives
The Company has several derivatives associated with its common stock including make-whole commitments and debt conversion options. Many of these derivatives were fully settled or extinguished in 2025. The following tables presents changes in our derivative assets and liabilities that include level 3 inputs for the years ended December 31, 2025 and 2024, measured at fair value:
| For the Year Ended December 31, 2025 | ||||||||||||||||||||||||||||
| As of December 31, 2024 | (Additions) Deductions | Conversions |
| Payments for Decrease in Contractual Stock Consideration | Other | As of December 31, 2025 | ||||||||||||||||||||||
| 2025 Kips Bay convertible debt derivative | $ | — | $ | (1,920,000 | ) | $ | 1,196,318 | $ | 723,682 | $ | — | $ | — | $ | — | |||||||||||||
| Make-whole Commitments | ||||||||||||||||||||||||||||
| Flux Photon derivative | — | 186,813 | — | (186,813 | ) | — | — | — | ||||||||||||||||||||
| Georges Trust derivative | — | 101,114 | — | 885,000 | 215,000 | — | 1,201,114 | |||||||||||||||||||||
| Alvin Fund derivative | — | (66,318 | ) | — | 826,000 | — | — | 759,682 | ||||||||||||||||||||
| LINICO acquisition-related payable derivative | — | (400,170 | ) | — | 400,170 | — | — | — | ||||||||||||||||||||
| AST derivative | — | (916,204 | ) | — | 916,204 | — | — | — | ||||||||||||||||||||
| Haywood Property derivative | 1,529,850 | 360,426 | — | (2,120,276 | ) | 230,000 | — | — | ||||||||||||||||||||
| Total assets (liabilities) measured at fair value | $ | 1,529,850 | $ | (2,654,339 | ) | $ | 1,196,318 | $ | 1,443,967 | $ | 445,000 | $ | — | $ | 1,960,796 | |||||||||||||
| For the Year Ended December 31, 2024 | ||||||||||||||||||||||||||||
| As of December 31, 2023 | (Additions) Deductions | Conversions |
| Payments for Decrease in Contractual Stock Consideration | Other | As of December 31, 2024 | ||||||||||||||||||||||
| 2023 Kips Bay convertible debenture derivative | $ | (1,360,000 | ) | $ | (836,000 | ) | $ | 735,125 | $ | 1,460,875 | $ | — | $ | — | $ | — | ||||||||||||
| 2024 Kips Bay convertible debt derivative | — | (1,558,000 | ) | 1,806,113 | (248,113 | ) | — | — | — | |||||||||||||||||||
| Leviston July 2024 convertible debt derivative | — | (1,210,000 | ) | 1,080,000 | 130,000 | — | — | — | ||||||||||||||||||||
| Leviston December 2024 convertible debt derivative | — | (690,000 | ) | 775,028 | (85,028 | ) | — | — | — | |||||||||||||||||||
| Make-whole Commitments | ||||||||||||||||||||||||||||
| GenMat derivative | (781,966 | ) | — | — | (687,429 | ) | 2,164,364 | (694,969 | ) | — | ||||||||||||||||||
| Haywood Property derivative | (875,000 | ) | 100,000 | — | 1,575,000 | 729,850 | — | 1,529,850 | ||||||||||||||||||||
| LINICO related derivative | (2,383,162 | ) | — | — | (860,691 | ) | — | 3,243,853 | — | |||||||||||||||||||
| Total assets (liabilities) measured at fair value | $ | (5,400,128 | ) | $ | (4,194,000 | ) | $ | 4,396,266 | $ | 1,284,614 | $ | 2,894,214 | $ | 2,548,884 | $ | 1,529,850 | ||||||||||||
At December 31, 2025, the fair value of the derivative assets (George's Trust and Alvin) were based on a trading price of the Company’s shares of $3.76. At December 31, 2024, Haywood Property derivative asset was based on a trading price of the Company’s shares of $8.00.
2025 Kips Bay Select LP Conversion Option
On January 10, 2025, the Company recorded a derivative liability on the consolidated balance sheets in connection with the Kips Bay Note. On that date, the $1,700,000 fair value of the derivative liability was determined based on the bifurcation of the derivative liability from the convertible note. The derivative was valued using a Monte Carlo valuation model with a conversion price equal to 88% of the 7-day minimum VWAP, discount rate of 35%, risk free rate of 4.24%, and volatility of 103.0%. On March 11, 2025, the Company bifurcated the conversion feature for the second $5.0 million tranche and recorded a derivative liability with a corresponding additional to debt discount of $220,000 reflected in our consolidated balance sheet. The derivative for the second tranche was valued using a Monte Carlo valuation model with a conversion price equal to 88% of the 7-day minimum VWAP, discount rate of 35% risk free rate of 3.98%, and volatility of 126.0%.
During the year ended December 31, 2025, the Company recorded a gain of for the change in the fair value of the derivative. During the year ended December 31, 2025, $1,196,318 of the derivative liability decreased in connection with the conversion of the related debt into shares of common stock. At December 31, 2025, the Kips Bay Note was fully converted. The derivative liability was classified within Level 3 of the valuation hierarchy.
In 2025, the range of variables used to calculate the original fair value of the conversion option derivative and the fair value on the dates of conversion are as follows.
| Stock Price | Discount Rate | Volatility | Risk Free Rate |
| Conversion price equal to of the 7 day minimum VWAP | 35% | 103.0% to 134.0% | 3.93% to 4.24% |
Flux Photon Derivative Instrument
On May 21, 2025, in connection with the restructured acquisition of Bioleum and the execution and delivery of the Bioleum Transaction Documents (see Note 2), the Company and Flux Photon entered into the FPC Asset Purchase Agreement Amendment. Under the FPC Asset Purchase Agreement Amendment, the Company committed to a final settlement of $10.0 million of the existing Earn Out obligation. To satisfy this commitment, the Company issued 1,700,000 shares of common stock with an initial fair value of $4,913,000 based on a $2.89 closing price. The Company recorded a derivative liability of $5,087,000 to represent the remaining obligation. The arrangement includes a "true-up" provision whereby the Company will pay any shortfall or receive any excess proceeds if the eventual sale of these shares by Flux Photon differs from the $10.0 million settlement amount. Through December 31, 2025, Flux Photon sold all 1,700,000 shares of the Company's stock for net proceeds of $4,726,187 with a remaining amount owed to Flux Photon pursuant to the FPC Asset Purchase Agreement of $5,273,813 which was recognized as Flux Photon payable in our consolidated balance sheet. During the year ended December 31, 2025, the Company recorded a loss of $186,813 for the change in the fair value of the derivative. The derivative liability was classified within Level 2 of the valuation hierarchy.
Georges Trust Derivative Instrument
On August 13, 2025, pursuant to the GHF 2021 Note Amendment (see Note 11), the Company issued 1,500,000 shares of its common stock to Georges Trust with a fair value of $4,755,000 determined by the closing price per share of our common stock of $3.17. If and to the extent that the sale of the shares results in net proceeds greater than $4,653,886, the Georges Trust is required to pay all of such excess proceeds to the Company. If and to the extent that the sale of the shares results in net proceeds less than $4,653,886, then the Company is required to pay Georges Trust equal to such shortfall. Pursuant to the amendment, a true up provision was recognized as a derivative asset in the amount of $101,114. During the year ended December 31, 2025, the Company paid Georges Trust $215,000 which resulted in a decrease in contractual stock consideration. During the year ended December 31, 2025, the Company recorded a gain of $885,000 for the change in the fair value of the derivative. The derivative asset is classified within Level 2 of the valuation hierarchy.
Alvin Fund Derivative Instruments
On August 12, 2025, pursuant to the Alvin Fund 2022 and the Alvin Fund 2023 Note Amendments (see Note 11), the Company issued 1,400,000 shares of its common stock to Alvin Fund with a fair value of $4,438,000 determined by the closing price per share of our common stock of $3.17. If and to the extent that the sale of the shares results in net proceeds greater than $4,504,318, the Alvin Fund is required to pay all of such excess proceeds to the Company. If and to the extent that the sale of the shares results in net proceeds less than $4,504,318, then the Company is required to pay Alvin Fund equal to such shortfall. Pursuant to the amendment, a true up provision was recognized as a derivative liability in the amount of $66,318. During the year ended December 31, 2025, the Company recorded a gain of $826,000 for the change in the fair value of the derivative. The derivative asset is classified within Level 2 of the valuation hierarchy (see Note 22).
LINICO Derivative Instrument
On December 30, 2021, the Company entered into an agreement to acquire 3,129,081 LINICO common shares from its Former LINICO CEO for $7,258,162. Through 2024, the total consideration for this agreement amounted to $4,014,309, comprising the net proceeds of $1,064,309 and cash payments made by the Company since 2021, totaling $2,950,000. In March 2025, the Company issued to the Former LINICO CEO 775,000 shares of its common stock with a fair value $1,860,000 and recorded a derivative liability of $340,000. The issuance was in conjunction with a settlement designed to fully satisfy the existing obligation of $3,243,853 and resulted in a gain of $845,000 reflected in gain on extinguishment of liability on our consolidated statement of operations. During the year ended December 31, 2025, the Company made additional cash payments of $148,853 and issue common shares of the Company valued at $2,200,000 to settle all amounts payable for the acquisition of LINICO to the Former LINICO CEO in full (see Note 9). The Company agreed to make up any shortfall if the proceeds from the sale of the shares are less than $2.2 million, and the Former LINICO CEO agreed to refund any excess proceeds. During the year ended December 31, 2025, the Company recorded a gain of $400,170 for the change in the fair value of the derivative. At December 31, 2025, the Company fulfilled our commitment requirements on the make-whole provision and the derivative and the accounting thereto. The derivative liability was classified within Level 2 of the valuation hierarchy.
AST Derivative Instrument
On March 20, 2025, the Company recognized a derivative asset on the consolidated balance sheets in connection with the Second License Agreement Amendments (see Note 10). On that date, the $480,540 fair value of the derivative asset was determined based on the excess of the fair value of 1,207,166 shares of our common stock issued to and held by AST over the $3.5 million contractual stock consideration required under the agreement. The value of the shares was based on the $2.52 closing price per share of our common stock on that date. The Company further agreed to register the Company's common stock for resale by AST under the Securities Act of 1933, as amended, which became effective on April 7, 2025. During the year ended December 31, 2025, the Company recorded a gain for the change in the fair value of the derivative. The derivative asset was classified in Level 2 of the valuation hierarchy. At December 31, 2025, the Company fulfilled our commitment requirements on the make-whole provision and the derivative and the accounting thereto.
Haywood Derivative Instrument
Pursuant to the Third Amendment (see Note 10), the Company issued an additional 200,000 shares of our common stock to Haywood with a fair value of $700,000 at the closing price of $3.50. Through 2024, the Company issued 300,000 shares of our common stock to Haywood with a fair value of $2,754,850 and also made cash payments of $420,000. During the year ended December 31, 2025, the Company paid Haywood $230,000 which resulted in a decrease in contractual stock consideration. As of December 31, 2025, Haywood sold all 500,000 shares of the Company's stock for net proceeds of $1,699,359. During the years ended December 31, 2025 and 2024, the Company recorded a loss of $2,120,276 and gain of $1,575,000, respectively, for the change in the fair value of the derivative. At December 31, 2025, the Company fulfilled our commitment requirements on the make-whole provision and the derivative and the accounting thereto. The derivative liability was classified within Level 2 of the valuation hierarchy.
2023 Kips Bay Select LP Conversion Option
On December 27, 2023, the Company recognized a conversion option derivative liability on the consolidated balance sheets in connection with the 2023 Kips Bay Note (see Note 11). On that date, the $1,360,000 fair value of the conversion option derivative was determined based on bifurcation of the conversion option from the 2023 Kips Bay Note. At December 31, 2023, the derivative was valued using a Monte Carlo valuation model with a conversion price equal to 90% of the average price capped at $1.00, discount rate of 35%, risk free rate of 4.54%, and volatility of 96.0%. On January 27, 2024, the Company recognized an additional $836,000 associated with the additional borrowings under the 2023 Kips Bay Note. During 2024, $735,125 of the derivative liability was eliminated in connection with the conversion of the related debt into shares of common stock. At December 31, 2024, the underlying note was fully converted eliminating the conversion option derivative.
In 2024, the range of variables used to calculate the original fair value of the conversion option derivative and the fair value on the dates of conversion are as follows.
| Stock Price | Discount Rate | Volatility | Risk Free Rate |
| Conversion price equal to % of the average price capped at $ | 35% | 61.0% to 96.0% | 4.33% to 4.65% |
2024 Kips Bay Select LP Conversion Option
On September 19, 2024, the Company recognized a conversion option derivative liability on the consolidated balance sheets in connection with the 2024 Kips Bay Note (see Note 11). On that date, the $1,120,000 fair value of the conversion option derivative was determined based on the bifurcation of the conversion option from the 2024 Kips Bay Note. The derivative was valued using a Monte Carlo valuation model with a conversion price equal to 88% of the seven day minimum VWAP, discount rate of 35%, risk free rate of 3.75%, and volatility of 78.0%. On October 23, 2024, the Company recognized an additional $438,000 associated with the additional borrowings of $1.5 million under the 2024 Kips Bay Note. The derivative was valued using a Monte Carlo valuation model with a conversion price equal to 88% of the seven day VWAP, discount rate of 35%, risk free rate of 4.14%, and volatility of 77.0%. During 2024, $1,806,113 of the derivative liability was eliminated in connection with the conversion of the related debt into shares of common stock. At December 31, 2024, the underlying note was fully converted eliminating the conversion option derivative.
In 2024, the range of variables used to calculate the original fair value of the conversion option derivative and the fair value on the dates of conversion are as follows.
| Stock Price | Discount Rate | Volatility | Risk Free Rate |
| Conversion price equal to % of the seven day minimum VWAP | 35% | 77.0% to 80.0% | 4.09% to 4.23% |
Leviston Resources LLC Conversion Options
On July 19, 2024, the Company recognized a conversion option derivative liability on the consolidated balance sheets in connection with the July 2024 Leviston Note (see Note 11). On that date, the $1,210,000 fair value of the conversion option derivative was determined based on the bifurcation of the conversion option from the July 2024 Leviston Note. The derivative was valued using a Monte Carlo valuation model with a conversion price equal to the lower of (i) the closing day price times 150% or (ii) 80% of minimum historical 10 day VWAP, discount rate of 35%, risk free rate of 4.65%, and volatility of 79.0%. During 2024, $1,080,000 of the derivative liability was eliminated in connection with the conversion of the related debt into shares of common stock. At December 31, 2024, the underlying note was fully converted eliminating the conversion option derivative.
In 2024, the range of variables used to calculate the original fair value of the conversion option derivative and the fair value on the dates of conversion are as follows.
| Stock Price | Discount Rate | Volatility | Risk Free Rate |
| Conversion price equal to % or % of minimum historical 10 day VWAP | 35% | 70.0% to 79.0% | 4.33% to 4.65% |
On December 4, 2024, the Company recognized a conversion option derivative liability on the consolidated balance sheets in connection with the December 2024 Leviston Note (see Note 11). On that date, the $690,000 fair value of the conversion option derivative was determined based on the bifurcation of the conversion option from the December 2024 Leviston Note. For debt conversions occurring during 2024, the derivative was valued using a Monte Carlo valuation model with a conversion price equal to 88% of the seven day VWAP, discount rate of 35%, risk free rate of 4.11%, and volatility of 79.0%. During 2024, $775,028 of the derivative liability was eliminated in connection with the conversion of the related debt into shares of common stock. At December 31, 2024, the underlying note was fully converted eliminating the conversion option derivative.
In 2024, the range of variables used to calculate the original fair value of the conversion option derivative and the fair value on the dates of conversion are as follows.
| Stock Price | Discount Rate | Volatility | Risk Free Rate |
| Conversion price equal to % of the seven day minimum VWAP | 35% | 79.0% to 102.0% | 4.10% to 4.16% |
GenMat Derivative Instrument
On May 17, 2024, the Company fulfilled our initial funding requirements of $15.0 million which satisfied the make-whole provision and removed the requirement to account for the commitment as a derivative. On May 17, 2024, the fair value of the Company's shares of common stock still held by GenMat of $694,969 was transferred to Advances to GenMat (see Note 4). The derivative liability was classified in Level 2 of the valuation hierarchy.
Other
Marathon SAFE Note Instrument
On February 28, 2025, Bioleum, the Company's subsidiary, entered into a series of definitive agreements with Virent, which have been assigned to Bioleum and involve the purchase of Bioleum equity as part of Bioleum's planned Series A Financing (see Notes 6 and 13). As of February 28, 2025, the Company recognized the Marathon SAFE Note liability of $12.0 million on the condensed consolidated balance sheets in connection with the agreement with Virent and elected to account the Marathon SAFE Note liability under the fair value option. The Marathon SAFE Note liability was estimated with assistance from third-party valuation specialists and valued using a probability weighted present value of the Marathon SAFE Note with the discount factor based on published venture capital rate of returns of 35% and a discounting period range of 0.25 to 0.84 years. At December 31, 2025, the fair value of the Marathon SAFE Note liability was estimated at $12.0 million and valued using a probability weighted present value of the Marathon SAFE Note with the discount factor based on published venture capital rate of returns of 35% and a discounting period range of 0.25 to 0.75 years. During the year ended December 31, 2025, the change in the fair value associated with the Marathon SAFE Note was The Marathon SAFE Note liability was classified as a Level 3 of the valuation hierarchy.
In 2025, the range of variables used to calculate the original fair value of the Marathon SAFE Note and the fair value on the dates of conversion are as follows.
| Present Value of Marathon SAFE Note | Discount Rate | Period Range |
| $ million to $ million | 35% | years to years |
Founders Shares
The Founder Group received equity in Bioleum, the Company's subsidiary, (see Notes 2, 8 and 14) and the fair value of the Founders Shares were estimated with the assistance from third-party valuation specialists and valued using a historical cost approach and an option pricing analysis of the Founders Shares with the discount factor based on published venture capital rate of returns of 50%, an option term of 5 years, a risk-free rate of 4.11%, a marketability discount of 40% and peer volatility of 108%. The Founders Shares were classified within Level 3 of the valuation hierarchy. The initial fair value determination of the Founder Shares at the date of issuance is a non-recurring fair value measurement (see Note 22).
RenFuel IP Asset Acquisition
The sellers of RenFuel received equity in Bioleum pursuant to the Asset Transfer Agreement (see Notes 5 and 14) and the fair value of the Bioleum common shares issued for the purchase price as well as the warrants of 104,167 shares of Bioleum common stock were estimated with assistance from third-party valuation specialists and valued using a historical cost approach and an option pricing analysis of the sellers of RenFuel shares with the discount factor based on published venture capital rate of returns of 55%, an option term of 4.5 years, a risk-free rate of 3.65%, a marketability discount of 39% and peer volatility of 93%. The fair value of the warrants and Bioleum common shares were classified within Level 3 of the valuation hierarchy. The initial fair value determination of the Bioleum Corporation shares at the date of issuance is a non-recurring fair value measurement.
Hexas Business Acquisition
The Hexas parties received equity in Bioleum pursuant to the Stock Purchase Agreement to acquire 100% of the issued and outstanding equity and voting shares of Hexas (see Notes 3 and 14). The former owner of Hexas received 146,637 shares of Bioleum common stock with a fair value of $140,875, a $2.5 million unsecured convertible debenture with a fair value of $78,000 and deferred compensation of the remaining $400,000 of additional cash payments with a fair value of $199,695 with the discount factor based on published venture capital rate of returns of 35% over the next four years. The fair value of the Bioleum common shares was estimated with the assistance from third-party valuation specialists for the valuation of Hexas and valued using a historical cost approach with the discount factor based on published venture capital rate of returns of 55% and an obsolescence factor range of 20% to 95% (see Note 3). The fair value of the deferred compensation and debenture were based on observable inputs and the fair value of the Bioleum shares were classified within Level 3 of the valuation hierarchy. The initial fair value determination of the Bioleum Corporation shares at the date of issuance is a non-recurring fair value measurement.
Other Financial Instruments
At December 31, 2025, the carrying amount of cash and cash equivalents, notes receivable, advances, deposits, Flux Photon payable, and reclamation bond approximates fair value because of the short-term maturity of these financial instruments.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 24, 2026 | Showing above |
| 2024 | Mar 6, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 28, 2022 | |
| 2020 | Mar 10, 2021 | |
| 2019 | Mar 30, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 20, 2018 | |
| 2016 | Mar 9, 2017 | |
| 2015 | Jan 28, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.