Comstock(US:LODE)2023-08-10 20:01Financial Performance - Net loss for the three months ended June 30, 2023 decreased by $8,586,008 to $5,504,589 from a loss of $14,090,597 for the comparable 2022 period [165]. - Net loss for the six months ended June 30, 2023 decreased by $9,451,289 to $11,186,331 from a loss of $20,637,620 for the comparable 2022 period [179]. - Revenue for the six months ended June 30, 2023, decreased by $41,475 to $66,075 compared to $107,550 in the same period of 2022, primarily due to lower revenues from operating leases after the sale of the Daney Ranch [182]. Expenses - Selling, general and administrative expenses increased by $990,279 to $3,498,852 from $2,508,573 in the comparable 2022 period, mainly due to higher employee costs [170]. - Selling, general and administrative expenses increased by $1,974,485 to $6,885,824, driven by higher employee costs and marketing expenses [184]. - Research and development expenses decreased by $815,846 to $1,763,304 from $2,579,150 in the comparable 2022 period, attributed to lower costs related to pilot scale systems [171]. - Research and development expenses decreased by $742,885 to $3,031,683, mainly due to lower costs related to pilot scale systems for processing biomass and lithium-ion batteries [185]. - Interest expense rose by $354,589 to $991,339, attributed to interest and amortization on promissory notes [188]. - Interest income fell by $251,477 to $106,875, due to the extinguishment of certain note receivables [189]. Derivative Instruments - Change in the fair value of derivative instruments increased by $9,754,617 to a gain of $1,564,617 from a loss of $8,190,000 in the comparable 2022 period [176]. - The change in fair value of derivative instruments resulted in a gain of $2,263,212, an increase of $7,388,212 compared to a loss of $5,125,000 in 2022 [190]. Company Strategy and Objectives - The company demonstrated commercial readiness with yields approaching 100 gallons of fuel per dry ton of feedstock on a gasoline gallon equivalent basis [160]. - The company plans to secure revenue-generating supply commitments in its expanded metals recycling business as a key objective for 2023 [161]. - GenMat plans to elevate new material simulation to commercial readiness by synthesizing and directly testing new AI simulated materials in high-value applications in 2023 [163]. - The company aims to achieve commercialization of its biorefining technologies and expects capital expenditures of approximately $2 million for its first commercial demonstration facility in 2023 [196]. - The company plans to secure cash proceeds of over $2 million from new mineral leases and execute early adopter license agreements for commercial scale projects in 2023 [208]. Investments and Assets - Comstock Mining signed a 20-year Mining Lease Agreement with Mackay Precious Metals, receiving an initial fee of $1,250,000 and quarterly payments totaling $375,000 for the first four years [207]. - Comstock has a 48.19% investment interest in Quantum Generative Materials LLC (GenMat), which focuses on generative artificial intelligence for material discovery [211]. - GenMat's AGI can simulate thousands of unique new materials in seconds, significantly reducing the time and cost compared to traditional methods [212]. - The company expects to complete the monetization of over $30 million in sales of non-strategic assets during 2023 [214]. - For the six months ended June 30, 2023, the company generated $21.0 million from ABTC and expects to sell 9,076,923 restricted shares of ABTC common stock, yielding a minimum of $6.0 million in proceeds [214]. Cash Flow and Liquidity - Current assets were $41,122,241 and current liabilities were $44,349,777, resulting in a working capital deficit of $3,227,536 as of June 30, 2023 [216]. - Net cash used in operating activities decreased by $1,036,673 to $6,678,030 for the six months ended June 30, 2023, compared to $7,714,703 in the same period of 2022 [227]. - Net cash provided by investing activities increased by $3,185,496 to $3,701,641 for the six months ended June 30, 2023, primarily due to proceeds from the sale of the AQMS lease and related assets [228]. - Net cash provided in financing activities decreased by $3,591,355 to $2,040,330 for the six months ended June 30, 2023, compared to $5,631,685 in the same period of 2022 [229]. - The company intends to fund operations over the next twelve months from existing cash, planned sales of non-strategic assets, and other investments [226]. - Risks to liquidity may arise from future operating expenditures exceeding management's expectations, which could adversely affect financial condition and cash flows [230].