Comstock Inc (LODE)

[jobynimble]

8-K filing: https://www.sec.gov/ix?doc=/Archives/edgar/data/1120970/000112097023000036/lode-20230512.htm

Item 8.01 Other Event.

On March 7, 2023, Comstock Inc. (the “Company”) reported on Form 8-K that LINICO Corporation (“LINICO”), a corporation that is 88.21% owned by the Company, entered into agreements with to sell certain assets for $27.0 million, including the LINICO Battery Recycling Facility (the “Facility”) to American Battery Technology Company, a Nevada corporation (“ABTC”). Pursuant to the terms of the LINICO purchase and sales agreements, $1.5 million of the purchase price will be held in escrow for up to 18 months and be available for the settlement of and buyer indemnification claims.

On March 1, 2023, LINICO received $6 million in proceeds associated with the sale of certain equipment associated with these agreements.

On March 31, 2023, the Company, LINICO and the parties amended the Facility purchase agreement, and on April 6, 2023, the parties amended and restated the Facility purchase agreement (the “First Amended and Restated Agreement”). Pursuant to the First Amended and Restated Agreement, the Company agreed to take certain action previously contemplated by LINICO, including purchasing the Facility. The Facility was being leased pursuant to an agreement that permitted the Company to purchase the Facility for a purchase price of $15.25 million ($3.25 million of which, was previously paid in the form of deposits) if LINICO elects not to or is unable to purchase the Facility. The Company subsequently received $5 million in cash upon signing the First Amended and Restated Agreement.

The First Amended and Restated Agreement previously contemplated that the Company will receive an additional (a) $10 million in cash on or before April 21, 2023 (the “Second Deposit”) and (b) 10 million shares of restricted shares of ABTC stock on or before May 1, 2023 (with a guarantee that the Company will receive additional cash and/or shares if and to the extent that the proceeds from such shares are less than $6.6 million).

On April 21, 2023, the parties amended and restated the First Amended and Restated Agreement (the “Second Amended and Restated Agreement”), pursuant to which the parties agreed, among other things, to amend the payment terms of the Second Deposit. Pursuant to the Second Amended and Restated Agreement, the Company will receive (a) $7 million in cash on or before April 21, 2023, and (b) $3 million in cash no later than May 12, 2023 (the “May Payment”). The Company subsequently received $7 million in cash upon signing the Second Amended and Restated Agreement.

On May 12, 2023, the parties amended the Second Amended and Restated Agreement (the “First Amendment to the Second Amended and Restated Agreement”), pursuant to which the parties agreed, among other things, (a) to amend the payment terms of the May Payment, whereby ABTC paid $1 million in cash and 1 million additional shares of restricted shares of ABTC upon signing of the First Amendment to the Second Amended and Restated Agreement, and will pay the remaining $2 million in cash on or before May 26, 2023. ABTC will also pay an additional $250,000 in cash to the Company on or before May 26, 2023, to extend the closing period of the agreement, as previously contemplated in the Second Amended and Restated Agreement.

The 11 million shares of ABTC stock now issued to the Company will be registered for resale pursuant to a registration statement on Form S-3 filed with the U.S. Securities and Exchange Commission by ABTC on or around May 15, 2023.

The Company expects to receive net proceeds of approximately $15 million, $7 million, net, of which has already been received, from the sale of the Facility and related equipment, on or before September 30, 2023.