NOTE 6                  ACCRUED EXPENSES AND OTHER LIABILITIES - CURRENT

Accrued expenses and other liabilities - current at March 31, 2025 and  December 31, 2024 consisted of the following:

Payable to Research and Development Company

As of  March 31, 2025, the short-term payable to a research and development company of $831,986 and long-term payable of $330,971 consists of payments due under the Securities Purchase Agreement dated March 1, 2024, between the Company and research and development company (see Note 2). During the three-months ended  March 31, 2025 and 2024, the Company paid $0 and $120,000, respectively, to the Developer in accordance with the funding commitments under the Developer Securities Purchase Agreement. For the three-months ended  March 31, 2025 and 2024, the Company recognized interest expense of $29,852 and $11,363, respectively, which represents the amortization of the discount that was recognized on the date of the agreement since the payable associated with the funding commitment is non-interest bearing. 

Accrued Incentive Compensation

On July 1, 2022, the Board of Directors of the Company approved a performance objective based, cash incentive compensation plan for executives of the Company, with the potential to earn a performance bonus of up to 100% of base salary. 

Changes in the accrued incentive compensation balance at  March 31, 2025 are presented below:

In 2024, the Company estimated the 2024 incentive compensation accrual to be $1,031,250. On March 31, 2025, the Company estimated that the Compensation Committee of the Board of Directors would approve a final, lower 2024 incentive award of $431,250 based on the final assessment of progress made on the original three year objectives of the 2024 incentive plan that are expected to be paid in 2025. For the three-months ended  March 31, 2025, the Company accordingly reduced the estimated 2024 incentive accrual by $600,000.

Changes in the accrued incentive compensation balance at March 31, 2024 are presented below:

For the three-months ended March 31, 2024, the Company expensed $309,375 for the 2024 accrued incentive compensation in the condensed consolidated financial statements. In 2024, the Company's Compensation Committee of the Board of Directors determined that the estimated $1,332,169 for the 2023 incentive compensation would not qualify for payment based on an updated intermediate assessment of the progress made toward the objectives of the three year incentive plan. The Company accordingly reduced the estimated 2023 accrued incentive compensation by $1,332,169 in the second and third quarters of 2024.

LINICO Acquisition-Related Payable

As of December 31, 2024, the total LINICO acquisition-related payable due to the former chief executive officer of LINICO (“Former LINICO CEO”) was $3,218,853 which consisted of a short-term payable of $1,018,853 and long-term payable of $2,200,000. In January 2025, the Company made an additional cash payment of $25,000 to reduce the payable to $3,193,853. On February 28, 2025, the Company agreed to make final cash payments of $148,853 and issued 775,000 common shares of the Company with a fair value of $1,860,000 to settle all amounts payable to the Former LINICO CEO in full. The Company paid $98,853 against the LINICO acquisition-related payable with $50,000 remaining as of  March 31, 2025. The settlement was designed to fully satisfy the existing obligation of $3.2 million and resulted in a gain of $845,000 recognized as a gain on extinguishment of liability in our condensed consolidated statement of operations. The Company agreed to make up any shortfall if the proceeds from the sale of the shares of common stock are less than $2.2 million, and the Former LINICO CEO agreed to refund any excess proceeds (see Note 11). The Company further agreed to register the Company's common stock for resale by Former LINICO CEO under the Securities Act of 1933, as amended, which became effective on March 28, 2025. This contractual stock consideration has been recognized as a derivative on the condensed consolidated balance sheets (see Note 11). 

Oklahoma Grant

On December 11, 2024, the Company was granted an award of $3,000,000 (the “OKL Award”), pursuant to that Contract between the Oklahoma Department of Commerce and the Company for a contractual award from the Oklahoma Quick Action Closing Fund (the “Contract”). The OKL Award funds in three tranches of $1,000,000 each within 45 days Comstock Fuels Corporation (“Comstock Fuels”), a wholly owned subsidiary of the Company, meeting these three conditions:

The OKL Award must be used for purposes of economic development and related infrastructure development. The Award requires certain ongoing conditions to be met, including without limitation, creation of 45 jobs, with an average salary of $80,000 per person, $160 million of total investments, maintenance of headquarters by March 31, 2026, with at least ten jobs for a period of at least ten consecutive quarters no later than December 31, 2030, and operation of a commercial demonstration biorefinery no later than December 31, 2031, otherwise the granted monies received would have to be repaid. In the first quarter of 2025, the Company met the first condition of the OKL Award and received $1.0 million from the Oklahoma Department of Commerce. The Company recognized grant income of $8,333 in other income (expense) in the condensed consolidated statement of operations and recognized deferred revenue of $33,334 in accrued expenses and other liabilities and $958,333 in long-term deferred revenue on the condensed consolidated balance sheet.