NOTES RECEIVABLE AND ADVANCES, NET

6 Months Ended

Jun. 30, 2023

Notes receivable and advances, net at June 30, 2023 and December 31, 2022 include:


	June 30, 2023		December 31, 2022
Current portion
Sierra Springs advances receivable	$	5,925,000	$	4,990,000
Other notes receivable	16,267		22,275
Total notes receivable and advances, current portion	$	5,941,267	$	5,012,275

Non-current portion
Daney Ranch note receivable	$	991,156	$	993,000
Unamortized discount for implied interest	(9,077)		(33,682)
Daney Ranch note receivable, net of discount	982,079		959,318
Total notes receivable and advances, non-current portion, net	$	982,079	$	959,318

Daney Ranch Sale

In August 2022, the Company sold the Daney Ranch and issued a 10-year $993,000 note receivable maturing in August 2032 to the former lessee and purchaser (see Note 7, Leases). The note bears interest at 2% for the first year and 7% for the remaining term. The note may be prepaid, in full or in part, at any time without penalty. The note is secured by a second priority security interest in the property. The present value of the future interest and principal payments using a prevailing rate for similar loans of 7% was less than the face amount of the loan at issuance and we recognized an initial discount of $51,909. The discount is being amortized into interest income over the first year of the note and the note is measured on an amortized cost basis. During the three and six-months ended June 30, 2023, we recognized interest income of $17,310 and $34,449, respectively. For the three and six-months ended June 30, 2022, there was no interest income recognized.

Tonogold Note Receivable

In September 2020, the Company sold its 100% ownership interest in Comstock Mining LLC whose sole assets were the Lucerne properties and related permits (“Comstock Lucerne”), to Tonogold Resources, Inc. ("Tonogold") for cash and debt.

On March 26, 2022, we entered into an option agreement (the "Lucerne Option") with Tonogold where we agreed to extinguish their $6,650,000 note receivable ("the Note") in exchange for 100% of the membership interests of Comstock Mining LLC and a payment of $750,000. The agreement provided Tonogold the right to repurchase the Comstock Mining LLC membership interests, which expired at December 31, 2022, when all agreements were terminated due to the failure to pay the Company.

Prior to the Lucerne Option agreement, we accounted for the Note using the fair value option. For the three and six-months ended June 30, 2022, we recognized a loss in other income and expense on the consolidated statement of operations for the change in fair value of the Note of $0 and $605,000, respectively.

Advances to Sierra Springs Opportunity Fund, Inc.

For the six-months ended June 30, 2023 and 2022, the Company provided SSOF advances of $935,000 and $1,300,000, respectively. The $1,300,000 amount was fully repaid on January 26, 2022. SSOF used the advances payments on land options and working capital associated with the investments in qualified businesses in the opportunity zone. Total advances outstanding at June 30, 2023 and December 31, 2022 were $5,925,000 and $4,990,000, respectively. The advances are non-interest bearing.