Non-Core Asset Sales Provide Funds for Reinvestment in Growth Businesses

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Optimizing the Value of Comstock’s Mining Asset Portfolio

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Real Estate

Comstock Inc.

Investing in Low Carbon Fuels 
On September 7, Comstock acquired Plain Sight Innovations Corporation PSI) in exchange for 8.5 million restricted Comstock shares, along with the intellectual property assets of PSI&#8217;s affiliate, FLUX Photon Corporation, in exchange for a performance-based cash payment equivalent to 20% of the company&#8217;s future consolidated net cash flow from operations up to $18 million. The shares are subject to transfer restrictions, of which 28% will be released from lock-up 180 days after closing, and the remaining 72% will be released in 8 equal installments of 9% every 6 months.
 PSI operates a commercial pilot cellulosic fuel facility in Wisconsin and owns patented, patent-pending, and proprietary process technologies to convert woody biomass into cellulosic ethanol, along with co-product precursors for renewable diesel, bio-mass derived crystalline graphite, bioplastics, and carbon neutral alternatives to fossil fuels. The company&#8217;s technologies are focused on converting forestry waste and other sources of woody biomass into natural liquid fuels at a lower cost than refining conventional renewable fuels.
With respect to Flux Photon Corporation, the acquisition is structured such that the purchase price is $18 million, payable in cash to Flux with 20% of the future monthly consolidated sales, less total variable costs, operating expenses, maintenance, tax payments, and debt service payments of the company until the purchase price of $18 million has been fully paid. Comstock is acquiring intellectual property and associated photovoltaic and photocatalysis laboratory equipment.
In our view, Comstock is positioning itself as a leader in the future of sustainable and eco-friendly technologies that will meet the evolving needs of the 21st century economy. Currently, the disadvantages associated with relying on an all-electric vehicle as a primary means of transportation are significant. The transition to eventual widespread adoption of all-electric vehicles will likely include a variety of other means, including conventional, hybrid, hybrid plug-in, liquefied natural gas, hydrogen, and fuel blends that lower carbon emissions. In our view, the investment in PSI supplements Comstock&#8217;s recent investments in battery recycling and cathode production and represents a relatively quick path to revenue growth. 
Management and Board Appointments
Comstock will appoint Mr. Kevin Kreisler, a designee of one of the former shareholders of PSI, Triple Point Asset Management (TPAM), to the company&#8217;s board of directors and as Comstock&#8217;s president and chief financial officer.&nbsp;Mr. Kreisler has a background in renewable fuels, hazardous waste, agriproducts, and intellectual property development. He is the owner, sole manager, executive officer, and director of TPAM, which received 5 million Comstock common shares in connection with the company&#8217;s acquisition of PSI.&nbsp;&nbsp;
Comstock will also appoint Mr. David Winsness, a designee of another one of the former shareholders of PSI, Global Catalytic Disruptor Fund LLC (GCDF), to serve as Comstock&#8217;s chief technology officer. Mr. Winsness has a background in the invention and development of intellectual property for the extraction and recovery of repurposed materials from waste and byproducts.&nbsp;Mr. Winsness is the owner, sole manager, and executive officer of GCDF, which received 2 million Comstock common shares in connection with the company&#8217;s acquisition of PSI.
On September 3, Mr. William McCarthy and Mr. Rahul Bobbili were appointed as Comstock&#8217;s Chief Operating Officer and Chief Engineering Officer, respectively. Mr. McCarthy recently served as the executive officer of MANA Corporation and Mr. Bobbili recently served as chief executive officer of Renewable Process Solutions, both recently acquired wholly owned subsidiaries of Comstock. Recall that Mr. McCarthy and Mr. Bobbili each received 1.5 million and 1.0 million common shares of Comstock in connection with the acquisition of their respective companies.&nbsp;
Capital Structure and Liquidity 
As of June 30, Comstock reported cash and cash equivalents in the amount of $4.8 million, restricted cash of $500 thousand, and investments in the amount of $1.4 million. Notes receivable and advances amounted to $14.0 million, of which $12.5 million is current. As of June 30 and August 9, 2021, Comstock reported shares outstanding of 46,455,515 and 54,155,515, respectively.

Comstock Inc. (LODE)

Investing in a Low Carbon Future

Fundamental Analysis:

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Non-Core Asset Sales Provide Funds for Reinvestment in Growth Businesses (LODE)

Looking Ahead to a Catalyst-Rich Second Half 2023 (LODE)

Optimizing the Value of Comstock’s Mining Asset Portfolio (LODE)

Big Ideas Lead to Big Opportunities (LODE)

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