NOTE 9         COMMITMENTS AND CONTINGENCIES

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. 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. 

Under the Precedent Agreement and a related guaranty executed on March 31, 2026 (the “Great Basin Guaranty”), the Company has guaranteed the performance of its obligations, including potential reimbursement of its proportionate share of certain project development costs, in the event of specified termination or default events outside of the Company's control. To secure its obligations under the Great Basin Guaranty, the Company is required to provide credit support in the form of a phased surety arrangement, which is collateralized through an escrow account. The surety amount increases over time and is expected to reach approximately $54.0 million by December 31, 2027. The surety remains in effect until modified by Great Basin based on the Company’s payment history and creditworthiness or until the project reaches its in‑service date. The Company recognized a guarantee liability related to the Great Basin Guaranty, which was initially measured at fair value at the time the guaranty was executed. As of June 30, 2026, the carrying amount of the guarantee liability was $475,000, which is included in other long‑term liabilities in the condensed consolidated balance sheets. The corresponding guarantee asset is included in long-term other assets (see Note 12). As of  June 30, 2026, the Company deposited $1.5 million into an escrow account.

INVESTMENTS IN LICENSED TECHNOLOGY 

Magnesis Corporation (see Note 3) 

On March 1, 2024, the Company and Magnesis entered into the DSA to advance technologies owned by the Company's subsidiary that incorporate applications of intellectual properties owned by Magnesis (“Developer IP”) (see Note 3). For the three-months ended June 30, 2026 and 2025, the Company recorded $0 and $350,700, respectively, as research and development expense in the condensed consolidated statements of operations. For the six-months ended June 30, 2026 and 2025, the Company recorded $0 and $701,400, respectively, as research and development expense in the condensed consolidated statements of operations. On March 1, 2024, Magnesis 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 years 1 and 2, (ii) $25,000 in years 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 Magnesis 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  June 30, 2026 and  December 31, 2025, payables to Magnesis included in accounts payable on the condensed consolidated balance sheet were $1,332,099.

On June 12, 2026, Magnesis Corporation (“Magnesis”) filed a complaint in the United States District Court for the District of Nevada (Case No. 3:26-cv-00446) against the Company, Comstock IP Holdings LLC, Bioleum and Bioleum IP Holdings LLC (the “Magnesis Complaint”). The Magnesis Complaint alleges that the Company failed to pay its commitments for certain licenses with Magnesis. The Magnesis Complaint asserts several causes of action: breach of contract; breach of the implied covenant of good faith and fair dealing; specific performance to compel assignment of intellectual property; declaratory relief, quiet title, and constructive trust; fraud; and promissory fraud. Magnesis has terminated the agreements for material breach. The Company believes the claims are without merit and intends to vigorously defend the matter. Management, after consultation with legal counsel, does not believe that a loss is probable since the proceeding is at an early stage and uncertainties inherent in the litigation. The Company is unable to estimate the amount or range of reasonably possible loss, if any. Any adverse outcome could, however, have a material effect on the Company's financial position, results of operations, or cash flows.

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 during 2026, and 2027 is $1.7 million and $1.5 million, respectively. In 2025, the Company funded $1,616,928 for the funding commitment. For the three-months ended June 30, 2026 and 2025, $404,232 and $404,232, respectively, has been funded under the agreement and recognized as research and development expense. For the six-months ended June 30, 2026 and 2025 $898,464 and $808,464, 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. 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 six-months ended June 30, 2026 and 2025, the Company paid $90,000 and $65,000, respectively, in annual royalty fees recognized as research and development expense in our condensed consolidated statement of operations. Annual royalty payments are as follows:

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.

Metal Development Company

On March 4, 2026, the Company entered into a research and development sponsored research agreement ("SRA") with a metal development company to evaluate and process solar panel tailings concentrated for the recovery of valuable metals. The agreement provides that the Company fund research, which includes the use of its facility and equipment in Silver Springs, Nevada, of up to $1,997,377 through December 31, 2026. For the three and six-months ended June 30, 2026, the Company has funded under the SRA $1,005,740 and recognized as research and development expense. 

AST LICENSE AGREEMENTS

The Company is party to three license agreements (collectively, the “AST License Agreements”) with 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. License fees totaling $1,500,000 for the AST licenses were completed in 2022, and no additional payments are anticipated. As of June 30, 2026, no royalty fees have been paid under the AST License Agreements.

Marathon Petroleum Corporation 

On February 28, 2025, Bioleum, a subsidiary of the Company, entered into a series of definitive agreements with Virent Inc. (“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 included $1.0 million in cash and $13.0 million in the Marathon SAFE Note (see Note 12) 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, required 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 required 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. In the first quarter of 2026, Virent notified the Company that the $1.0 million in additional cash investment would not be extended and no lien on the Marathon Payment-In Kind Assets would be executed. As of  June 30, 2026 and December 31, 2025, $20.0 million of Series A equity financing has been completed. The Investment Agreements provided 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.

OTHER

The Company agreed to pay each of the independent directors a total of $160,000 annually, 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. The Chair and Vice Chair of the Board of Directors receives annually $50,000 and $25,000, respectively. For the three-months ended June 30, 2026 and 2025, the Company recognized director fees expenses of $385,039 and $200,000, respectively. For the six-months ended June 30, 2026 and 2025 the Company recognized director fees expenses of $781,697 and $400,000, respectively. As of  June 30, 2026 and December 31, 2025, director fees compensation included in accounts payable on the condensed consolidated balance sheet was $14,603 and $290,000, respectively. From 2023 through 2025, the Company accrued $1,475,000 in director fee compensation associated with the director fees payable expected to be satisfied with shares of the Company's common stock and included in other long-term liabilities on the condensed consolidated balance sheet. In  January 2026, the Company issued shares of stock to these directors to satisfy the amount accrued as of December 31, 2025 (see Note 10). 

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.

On May 27, 2026, certain former employees and shareholders of Bioleum (collectively, the “Bioleum Plaintiffs”) filed a complaint in the District Court, Clark County, Nevada (Case No. A-26-947500-B) against the Company, Bioleum and the board of directors of Bioleum (the “Bioleum Complaint”). The Bioleum Complaint alleges that the Company fraudulently induced shareholders of Bioleum to approve charter amendments in order to seize control of Bioleum, appropriate value of the pre-revenue, renewable fuels technology development company from the Bioleum Plaintiffs and reverse the Bioleum separation completed in May 2025. The Bioleum Complaint asserts several causes of action, including: declaratory judgment (seeking to void charter amendments of Bioleum); breach of fiduciary duty against the Bioleum directors (both direct and derivative); aiding and abetting breach of fiduciary duty against the Company; fraudulent inducement; breach of contract claims; breach of the implied covenant of good faith and fair dealing; and unjust enrichment. The Company believes the claims are without merit and intends to vigorously defend the matter. Management, after consultation with legal counsel, does not believe that a loss is probable since the proceeding is at an early stage and uncertainties inherent in the litigation. The Company is unable to estimate the amount or range of reasonably possible loss, if any. Any adverse outcome could, however, have a material effect on the Company's financial position, results of operations, or cash flows.