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LEASES | 6 Months Ended
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Jun. 30, 2023
Leases [Abstract] |
LEASES | LEASES The Company has the following lease balances recorded on the condensed consolidated balance sheets as follows:
Lease Assets and Liabilities | Classification | June 30, 2023 | December 31, 2022
Finance lease right-of-use asset | Assets held for sale | $ | — |  | $ | 15,709,039 |
Finance lease right-of-use asset | Finance lease - right to use asset, net | 2,968,414 |  | 2,911,458 |
Operating lease right-of-use asset | Other current assets | 39,452 |  | 42,061 |
Total right of use assets |  | $ | 3,007,866 |  | $ | 18,662,558 |
Operating lease liability - current | Accrued expenses and other liabilities | $ | 5,658 |  | $ | 5,211 |
Operating lease liability - long-term | Other liabilities | 37,237 |  | 40,193 |
Finance lease liability | Liabilities - held for sale | — |  | 12,021,566 |
Finance lease liability, current portion | Finance lease - Right of use lease liability | 855,417 |  | 409,143 |
Finance lease liability | Finance lease - Right of use lease liability, long term portion | — |  | 406,968 |
Total lease liabilities |  | $ | 898,312 |  | $ | 12,883,081 |
The Company has the following lease costs recorded in the condensed consolidated statements of operations as follows:
| Three-Months Ended |  | Six-Months Ended |  |  |  |  |  |  |
| June 30, 2023 | June 30, 2022 |  | June 30, 2023 | June 30, 2022 |  |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets | $ | 13,159 |  | $ | 132,270 |  |  | $ | 23,652 |  | $ | 257,545 |  |  |  |  |  |  |  |
Interest on lease liabilities | 16,937 |  | 206,272 |  |  | 212,649 |  | 401,883 |  |  |  |  |  |  |  |
Operating lease cost | 1,322 |  | 2,525 |  |  | 3,847 |  | 5,049 |  |  |  |  |  |  |  |
Total lease cost | $ | 31,418 |  | $ | 341,067 |  |  | $ | 240,148 |  | $ | 664,477 |  |  |  |  |  |  |  |
Other information |  |  |  |  |  |  |  |  |  |  |  |
Operating cash flows from operating leases | $ | 2,475 |  | $ | 2,400 |  |  | $ | 4,950 |  | $ | 4,800 |  |  |  |  |  |  |  |
Financing cash flows from finance leases | $ | 25,066 |  | $ | 55,238 |  |  | $ | 352,050 |  | $ | 63,627 |  |  |  |  |  |  |  |
The Company has the following weighted average remaining lease terms and discount rates for our finance and operating leases:
| June 30, 2023 | June 30, 2022
Weighted-average remaining lease term - finance leases | 1.08 | 0.35
Weighted-average remaining lease term - operating leases | 5.26 | 6.25
Weighted-average discount rate - finance leases | 8.0 | % | 6.11 | %
Weighted-average discount rate - operating leases | 11.0 | % | 11.0 | %
Finance Lease AQMS Lease LINICO, a majority-owned subsidiary of the Company, had a finance lease, as lessee, with Aqua Metals Reno Inc., a subsidiary of Aqua Metals Inc. ("AQMS"), for land, buildings and related improvements (the “Facility”). AQMS is the non-controlling interest holder for LINICO. The lease agreement provided for the Company, to purchase the Facility for a purchase price of $15.25 million ($3.25 million of which was previously paid) if LINICO elected not to or was unable to purchase the Facility. On March 30, 2023, the Company delivered AQMS a notice of its irrevocable intent to exercise the option and purchase the membership interest of the entity that owned the Facility for $12,000,000, as provided by the agreement. On April 26, 2023, the Company closed on the purchase of the membership interest of Aqua Metals Transfer LLC from AQMS and paid the remaining $12 million due, taking full ownership of the membership interest of Aqua Metals Transfer LLC and terminating the AQMS lease (see Note 8, Assets Held for Sale). AST Asset Purchase Agreement On April 16, 2021, the Company entered into three license agreements and an asset purchase agreement with AST. The license agreements provided for full use of the facility and all machinery and equipment located therein until April 30, 2022 (see Note 5, Intangible Assets and Goodwill). Under the Asset Purchase Agreement, the Company agreed to acquire substantially all of AST’s assets in exchange for $3,500,000 due on April 30, 2024 in addition to $35,000 per month from May 1, 2022 to April 30, 2024. Beginning May 1, 2022, the Asset Purchase Agreement provides for full access and use of the AST assets until all payments are made and title transfers to the Company. Under this agreement, payment associated with the machinery and equipment acquired was $79,935 and $159,870 for the three and six-months ended June 30, 2023, respectively, which is classified as research and development expense on the condensed consolidated statement of operations. For the three and six-months ended June 30, 2022, payment associated with the machinery and equipment acquired was $53,290. Haywood Quarry Acquisition and Lease Agreement On April 7, 2022 and amended on November 7, 2022, the Company contracted to purchase Haywood quarry and industrial property (“Haywood”) from Decommissioning Services LLC (“Decommissioning Services”) for $2.1 million, payable in $50,000 of cash and 1,500,000 common shares of Comstock with a value of $2,295,000. The Haywood property represents approximately 190 industrial acres in Lyon County, Nevada, and part of one of the larger industrial parks in Lyon County. The property has power, water and direct highway access. The Company plans to employ a portion of the property for used lithium-ion battery storage, supporting LINICO's battery metal recycling. The closing and purchase of the asset is contingent on liquidation of the shares and receipt of the full purchase price by the seller. The Company agreed to make up any contractual stock consideration if the proceeds from the sale of the shares plus the deposit are less than $2.1 million, and the seller agreed to refund any excess proceeds. This contractual stock consideration has been recorded as a derivative on the consolidated balance sheets. The first amendment to the lease agreement signed by the parties on November 7, 2022, extended the closing date to April 7, 2024. During the six-months ended June 30, 2023 and the year ended December 31, 2022, the Company paid Decommissioning Services $200,000 and $150,000, respectively, which resulted in a decrease in contractual stock consideration (see Note 12, Fair Value Measurements). During the period between execution of the agreement and closing, the property is leased to us for no additional consideration, providing exclusive rights to access, use or sublease portions of the property, to obtain permits and prepare the property for its intended purpose, including improvements. If the conditions for closing are not satisfied by April 7, 2024, the agreement will terminate, and Decommissioning Services will retain a total of $400,000 in rental fees for use of the property. We agreed to pay Decommissioning Services a 2% royalty of the sales price of any gravel, aggregate, or rock products produced and sold from Haywood, excluding the removal of materials that have been pledged to a third-party for improvements made. Minimum lease payments to be paid by the Company by fiscal year for the Company's operating and finance leases are as follows:
| Operating Leases |  | Finance Leases
For the remainder of 2023 | $ | 4,901 |  |  | $ | 50,130 |
2024 | 10,250 |  |  | 860,564 |
2025 | 10,550 |  |  | — |
2026 | 10,850 |  |  | — |
2027 | 11,150 |  |  | — |
Thereafter | 9,600 |  |  | — |
Total lease payments | 57,301 |  |  | 910,694 |
Less: imputed interest at 11%, operating lease | (14,406) |  |  | — |
Less: imputed interest at 8%, finance lease | — |  |  | (55,277) |
Present value of lease liabilities | $ | 42,895 |  |  | $ | 855,417 |
Operating Lease Income Revenues from operating leases on our land and building leased to others totaled $35,325 and $43,875 for the three-months ended June 30, 2023 and 2022, respectively. Revenues from operating leases on our land and building leased to others totaled $66,075 and $98,500 for the six-months ended June 30, 2023 and 2022, respectively. Minimum lease payments for operating leases to be received from others are as follows:
For the remainder of 2023 | $ | 45,450 |
2024 | 94,725 |
2025 | 96,000 |
2026 | 96,000 |
2027 | 96,000 |
Thereafter | 192,000 |
Total Minimum Lease Income | $ | 620,175 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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