Q1 2025 Comstock Inc Earnings Call
Okay.
This meeting is being recorded.
[music].
Mhm.
Good afternoon.
Speaker Change: Thank you for joining us today for Comstock Inc's first quarter 2025 earnings call and business update.
William McCarthy: I'm William Mccarthy.
William McCarthy: Today is Thursday may eight 2025, where streaming live today in this session is being recorded a replay will be posted shortly after we adjourn in the Investor Relations section of our website.
William McCarthy: The address is Comstock Dot Inc. Slash investors.
William McCarthy: Earlier today, we filed our Form 10-Q for the quarter ended March 31, 2025 and.
And we issued a press release summarizing our first quarter results.
William McCarthy: Both documents are available on our website again, Comstock Dot Inc. Slash investors.
William McCarthy: As a reminder, Comstock is listed on the NYSE American our ticker is load that's L. O D E.
Speaker Change: Joining me today is crowded the gas brisk Comstock as executive Chairman and Chief Executive Officer.
Speaker Change: During their prepared remarks, we will cover three areas, including financial and operating performance.
Speaker Change: Integration milestones across our renewable fuels and critical materials platforms.
Speaker Change: And our strategic outlook for the balance of 2025.
Speaker Change: After our prepared remarks, we will take questions.
Speaker Change: We appreciate that you submitted over 50 questions in advance of the call.
Speaker Change: If you do have additional questions during the call. Please use the zoom Q&A window, and we will address as many as possible in the time we have.
Speaker Change: Today's discussion will include forward looking statements actual results may differ materially due to risks and uncertainties detailed in our SEC filings.
Speaker Change: Full risk disclosures can be found in those documents are available on the SEC filings page of our Investor Relations website at Comstock Dot Inc. Slash investors.
Speaker Change: With that it's now my pleasure to introduce our executive Chairman and Chief Executive Officer, Corrado to gas for US Corrado. The floor is yours. Thank you Billy and welcome everyone to the Q1 2025 business update.
Corrado: The quarter was packed with a lot of activity. So let's start with the first area of financial and operating performance as Billy said.
Speaker Change: We're all of our actions have really been directed to positioning these companies for growth.
Corrado: So that's where I'm going to focus the discussion the.
Speaker Change: The growth profile for both Comstock fuels and Comstock metals is rapidly developing and we've now attracted keen and align capital into our existing shareholder base.
Speaker Change: And we feel quite fortunate when we look at the top five top 10, even our top 50 shareholders I've spoken to most of you directly over the past few months and I just wanted to thank you for listening and frankly participating.
Corrado: In your own way as we all work diligently towards our goal.
Speaker Change: We're also engaged with some of the most sophisticated industry partners for technology like en route feedstock like hexes operations like marathon customers like RWD offtake.
Corrado: Again like marathon and many others.
Corrado: And with some now near final and your diligence on direct investments through the fuel series, a while we simultaneously explore deeper integrations and strategic transactions with the same companies.
Corrado: None of this would have been possible without the increase in our authorized shares that we affected back in February and I. Appreciate everyone's effort in getting that completed during the first quarter. The company's authorized share capacity is now properly reposition for safely capitalizing on all of these opportunities.
Corrado: Yes.
Corrado: We subsequently completed two successful settlement of our prior outstanding commitments that resulted primarily from the acquisitions of our core IP for fuels, including our Wausau, Wisconsin assets and even some of the recycling technologies that we have been instrumental in advancing.
Corrado: For both fuels and the metals businesses.
Corrado: We eliminated significant upcoming cash payments with those transactions and in both instances.
Corrado: While we even negotiated a nearly $1 million reduction in the overall commitment and recorded that financial gain in our first quarter results.
Corrado: We did do this by issuing just under $1 8 million shares of common stock that is when liquidated by the counter counterparties by more than the remaining commitments than that excess will be returned to us in remaining shares or even possibly cash.
Corrado: One of those transactions also resulted in a spike in our R&D expense during the first quarter overall R&D increased by $2 4 million in Q1 compared to the prior year and the take out of one of those obligations was the reason that we had to record a one time $1 $5 million noncash.
Corrado: Cash expense charged to R&D during the quarter.
Corrado: But our R&D spending was otherwise still up by about another 900000 compared to prior year and Theres, even in better there is an even better story here.
Corrado: About half of that increase comes from the aggressive ongoing collaboration with the national renewable energy lab, or Enbrel, where we're pursuing higher yields lower operating and capital costs and the possibility of shattering the blend wall for synthesize aviation fuel or SaaS and additionally.
Corrado: To a much lesser extent, we increased R&D spending due to the acquisition of the Madison facility during Q1.
Corrado: These transactions have not only all of these transactions as we roll that all up together have not only created a world class integrated Wisconsin based product development platform, but it's also catapulted our leadership and intellectual property for these lignocellulose take technologies we're in.
Corrado: We now have consolidated and integrated system of interdependent IP that seems nearly impossible to replicate I've heard some of you say its impenetrable.
Corrado: But I would maybe better suggests a replica ball in either characterization or active IP portfolio. It's just remarkable to say the least.
Corrado: One last point on R&D and innovation. So we're extremely pleased to announce that we recently hired Dr. Elvis Abacate into our newly created position of director of aviation for Comstock fuels, who will lead all of our SaaS initiatives.
Corrado: Dr. <unk> was recently a leader at southwest Airlines for their commercial SaaS initiatives and remarkably is also a leading <unk>.
Corrado: <unk> cellulosic materials scientists even cooler.
Speaker Change: First name is legitimately Alvarez, our fuels team will have a more comprehensive relief on this expanding team and the roles very very soon as it's all being synchronized with the prerequisites that we're working on with the series a efforts. However, just to say that between our own remarkable scientists can.
Speaker Change: Engineers led by David <unk>, who is our now newly appointed Chief Technology Officer for fuels, Kevin Chrysler, who leads fuels and Rob <unk>, our chief engineer.
Speaker Change: Plus the recent integration of an incredibly experienced biofuels product development team consisting of the great engineers and chemists from the former.
Speaker Change: Marathon Slash <unk> Slash Madison operation, There's just there's too many to name today.
Speaker Change: Although let me let me just try it.
Speaker Change: Andrew Dana Colin Cowie David.
Rory Tucker: Rory Tucker.
Rory Tucker: Mark or Patrick another David David to David, Yes, I got it, but but but when you add doctors to AMIC.
Rory Tucker: And his team at Wren fuel plus Doctor back.
Rory Tucker: And his team an ROE and now Doctor at Goodbody, Elvis joining us in just a few weeks.
Rory Tucker: I mean, you really witnessing the assembly of an unprecedented biofuels technical team.
Rory Tucker: I think we're humble in most respects, but honestly with this team which is growing rapidly we may already be peerless in this in this industry.
Rory Tucker: Despite growing our team administrative costs were down by nearly 10% compared to the prior quarter of last year or about $300000.
Rory Tucker: We also made nearly $1 million and equity based investments between Texas and ran fuels over the past quarter.
Speaker Change: <unk> three or four maybe five months the manner and strength that we're building these nodes into our system shouldn't be underestimated, we're integrating and enabling an unprecedented renewable bio fuel system from wave two far too few.
Rory Tucker: <unk>.
Rory Tucker: As you all know we've also raised $10 6 million early in the first quarter from the 2025 Kips Bay convertible note before we affected the split.
Rory Tucker: Since then we've issued nearly five 5 million shares.
Rory Tucker: And significantly reduce the outstanding balance of that note down to $4 $35 million.
Rory Tucker: At current prices, we'd need another $1 7 million to fully extinguish that no.
Rory Tucker: Certainly don't expect and certainly hope that we're not converting that node at the current prices.
Rory Tucker: Our share price is gaining traction and we are close to closing the first tranches of the series a valuing fuels significantly higher significantly higher higher even than the marathon cap and effectively funding fuels today fuels represents substantial majority of the company's liquidity Susan <unk>.
Rory Tucker: Your funding and deletion relief for LTE for us for load.
Rory Tucker: And we're seeing more and more long term equity investors, new long term equity investors willing to invest in holes and support the company by building a stronger base of capital to go from and that pool of new investors just keeps getting bigger.
Rory Tucker: These investors like many of our top investors see an extraordinary opportunity for clean sustainable energy and frankly generational wealth.
Rory Tucker: We will likely see the last of those convertible notes exit during the second quarter for US. It's good returns and we're happy to be getting through that.
Rory Tucker: The prerequisite for the closing of the series a included increasing our authorized shares eliminating legacy commitments.
Rory Tucker: Final amazing this separation plan for fuels that is how and when will we spin fuels out it.
Rory Tucker: It included aligning the management team updating the business plans, including four Madison, including for Axis, which required intense integration planning.
Rory Tucker: And throughout the entire past quarter and then we'll close it has been and is a tremendous amount of work and it's also accelerated much of the work and execution. So I guess in concluding on all of that.
Rory Tucker: Almost there yes outstanding shares today are $28 $6 million were actually expecting that number to be around $33 million when fuel spins off wherein we will lock in that number of shares for the fuel separation and our ownership in fuels.
Rory Tucker: The last part of the financial update is on revenue and operation.
Rory Tucker: And this was just fantastic contact metals revenue soared in the first quarter, where we received over 4 million pounds of recycled material and Invoiced 134 million in the quarter as compared to just a little over 350000 last quarter.
Rory Tucker: This is nearly a fourfold increase in comes with the news that we entered into a master services agreement with <unk> clean energy with whom we are now partnering and partnered for the recycling and disposal and decommissioning of our W. E. Solar installations are W is the third largest renewable energy.
Rory Tucker: Company and a tremendous.
Rory Tucker: It's the third largest renewable energy company with a tremendous Nevada, and California footprint.
Rory Tucker: <unk> was really looking to establish a platform for partnering.
Rory Tucker: Comprehensively in these end of life solutions and the T. Commissioning that we completed established frankly, an industry standard a case study if you will that we and our W. E are keen to replicate more and to into the market for all future solar.
Rory Tucker: Installations.
Rory Tucker: We originally guided the metals 2025 revenue billings to be about $2 5 million.
Rory Tucker: Which in itself would have been about five times the increase from all of last year when.
Rory Tucker: But it seems likely now that we'll hit that number by Q3, so we need to increase our guidance, we're going to increase it down over 3 million yet.
Rory Tucker: And the outlook feels even better than that however, we're still extremely early stage of market, making.
Rory Tucker: We are clearly winning with major customers because this market has three primary needs.
Rory Tucker: First it needs to eliminate the environmental liability second it needs to do so efficiently and third is that the recycling service provider must be able to scale.
Rory Tucker: They need scalable solutions, because they have millions and millions and millions of end of life panels coming home to roost by comparison, we did just a little over 80000 panels in Q1.
Rory Tucker: A drop in the proverbial bucket.
Rory Tucker: Our permit submission initially enables us with what we plan to build.
Rory Tucker: To do $3 3 million panels per year or about 100000 tons.
Rory Tucker: But there's a lot of permanent headroom to grow from there even in our first facility.
Rory Tucker: Critically.
Speaker Change: The third thing that recyclers must do to meet the needs of the market.
Speaker Change: Is ensure that the environment mental liability is fully terminated and by far the most efficient expedient way to accomplish this is with zero landfill solution.
Speaker Change: As many of you have now just read we are the only company in North America. Those are two certified responsible recycler.
Speaker Change: By the solar energy industry Association, because after a full audit we have demonstrated that our panel processing.
Speaker Change: With our proprietary thermal mass.
Speaker Change: Produces 100% commodity ready products, where in all parts of the panel, including the glass. The aluminum defined anything is fully recycled 100% zero landfill, 100% materials sold 100% materials reuse and we do it efficiently.
Speaker Change: Have an extremely low cost operation the biggest competitive issue and cost is transportation associated with the relative distance to transport the panels to the recycler.
Speaker Change: Even though we only have one facility today, we're currently winning.
Speaker Change: Business from coast to coast for sure we're winning in Nevada for sure, we're winning in California, but we're even winning in Florida.
Speaker Change: Winning in New Jersey, and in Pennsylvania, and we're also aggressively hiring and building marketing staff today as we speak.
Speaker Change: But our unit costs in our economics are excellent the pricing for recycling is add expectation and decommissioning revenues are growing much faster than we expected. The P&L won't show. These margins today from just the demo scale facility because our operating expenses are being advanced aggressively to establish this platform.
Speaker Change: And we're focused on permitting and we're focused on building and we're focused on logistics and storage and market making.
Speaker Change: The facility is too small to absorb all of that investment. However at this pace the year would still bring in net positive cash.
Speaker Change: We also installed additional scrubbing and air quality control systems. During the first quarter that resulted in less processing, but much more receiving and storing. So we ended up the quarter was about 750000 in actual revenue in the P&L in Q1, but another 750000 in deferred revenue.
Speaker Change: The cash guys don't distinguish between P&L in deferred it's all cash it's all billed and all represents money coming into the company in the second quarter.
Speaker Change: At the full industry scale, we expect robust cash margins consistent with any and all previous guidance. If anything we're happier. We are also fully engaged with.
Speaker Change: With the largest customers in the market I am talking well beyond our W. E. We have at least four more master service agreements in progress so as great as the RW success was and it's just the tip of the iceberg and it is great.
Speaker Change: Just starting and it's just happening here with metals.
Speaker Change: Let me cover the rest of the milestones for metals and fuels. The second category that Bill referred to and then we'll wrap it up with the outlook and go right into Q&A.
Speaker Change: In terms of the milestones I've already covered the biggest Q1 achievements for metals, which was the securing of the <unk> business. The Archie certification and the above expectation sales for the quarter, but let me also add that the facility is now operated for over one year. The RT designation really provides our customers.
Speaker Change: With a mature certified third party assurance that we are the only true certified zero landfill solution. This notion of the silver mine that never stops producing is starting to come into plain sight for more and more of our stakeholders.
Speaker Change: For Comstock fuels. It was also an incredibly productive quarter.
Speaker Change: As you can imagine we closed on the strategic series, a investment with marathon likely valuing it at $700 million for the fuels business alone. This includes the acquisition of Madison and we completed all planning for the integration of our two Wisconsin sites Wausau and Madison.
Speaker Change: And we can now fully go from Woody feedstock, which Madison could not do two weekly barrels of fuel, which masa could not do and together produce up to two barrels of fuel per week. Those plans are completed they're fully integrated the teams are on it and we're working towards that which will also will.
Speaker Change: Allow us to advance our systems to TRL sad that we had targeted Oklahoma.
Speaker Change: For TRL seven we can achieve tier all seven in Wisconsin, while we work on pathway approvals, while we work on ASTM product specification approvals all in advance of Oklahoma and gives US a world class platform for all product and process development activities.
Speaker Change: We also earned and received the first million dollars out of three total and incentive awards from Oklahoma quick action closing fund by committing to Oklahoma, which we fully done the second tranche will be billed as soon as we select and commit to our first site, which we're now down to three remarkable locations and starting to negotiate that.
Speaker Change: Terms will pick the best one.
Speaker Change: As far as I'm concerned, they're all three fantastic, it's going to be a winner. We're also executing our nearly exclusive license agreement with Texas and we finalized our plans for our first fuel farm with axis in Oklahoma people are still digesting the implication.
Speaker Change: Zeno graph on our model.
Speaker Change: As they start to understand that it can produce over 100 barrels of oil per acre per year, when compared to corn that sits at only 10 barrels.
Speaker Change: And soybeans that sits at two barrels per acre per year, we have effectively integrated the highest yielding perennial grown carbon with the highest yielding carbon processor.
Speaker Change: Please let that sink in.
Speaker Change: It's literally the carbon negative oil well that never stops producing.
Speaker Change: Despite the time that we spent closing marathon it was a lot.
Speaker Change: And the time spent integrating Madison, even more and the time planning and integrating hexes almost as much this quarter.
Speaker Change: Most of our time has been spent in advancing the series a and we're on track for closing this quarter. So.
Speaker Change: So let me let me wrap it up on now with the Street <unk> outlook for the rest of 2025 first with metals again, it's been operating its demo facility now for over a year and last year, we submitted permits for the first industry scale expansion.
Speaker Change: Facility is that the facility is sized to expand to 100000 tons per year, and we would anticipate initially operating at 50000 tons of annual capacity and then efficiently doubling that to 100000 when the rate of end of life panels is secured likely that second step will occur in 2026.
Speaker Change: That means we will spend $6 million to scale up that first 50000 tonnes of annual capacity, we only need an additional $3 million again likely in 2026, bringing that 50000 tons to 100000 tons. We expect the permits to be for the expansion to be approved by the fourth quarter of.
Speaker Change: This year.
Speaker Change: But as all of that's happening where continue onward, we continue working on securing these additional master service agreements that is long term agreements strategic agreements preferred partner agreements with the most meaningful national and regional customers, bringing in panels and bringing in <unk>.
Speaker Change: Cash flow.
Speaker Change: As we previously said billable revenues were expected to be six to eight times greater as compared to last year are well over $3 million with proportional future increases as we scale up the facility's capacity.
Speaker Change: Our expanded facility running at 100000 tons, a year would do $65 million to $75 million in revenues and a whole lot of cash flow for a relatively very very low capital investment, let me turn to the outlook for fuels. The big objective here is standing of fuels.
Speaker Change: As a separate well capitalized renewable fuels business to a directly financed spin out and ultimately a public offering which means the biggest objective is closing in the series a and we're targeting at least $50 million in total and possibly more.
Speaker Change: Our focus in funding will advance our objectives ultimately fuels is looking to deliver 200 million barrels a year or over 8 billion gallons by 2035 that is an incredibly ambitious goal and it is precedented, it's been done before it's been done in.
Speaker Change: The corn ethanol industry, it's been done by others, and it's frankly, even smaller than what those other people had done but it's big.
Speaker Change: We will also complete our site selection for the first Biopharma refinery project in Oklahoma that will include feedstock that will include offtake that will occur this year and the site selection itself will include will come much quicker. We'll also begin securing additional and sufficient project level funding for that first facility that's above and beyond.
Speaker Change: And after the series a is finished we will also execute additional revenue generating license and other commercial agreements that are already in the works and while we expand our integrated Madison pilot production capabilities to up to two barrels.
Speaker Change: Per week.
Speaker Change: Intermediates and fuels will be doing that at the same time because each of these projects are Doug.
Speaker Change: <unk> with dedicated teams working in a coordinated and scheduled manner, we've got a lot going on and it's all happening.
Speaker Change: We are also from a core perspective still working very hard on monetizing the rest of the portfolio and we've got a lot of questions that came in from a mining perspective, we could not be happier with whats happening finally in the in the mining sector, but our corporate objectives.
Speaker Change: This year absolutely include monetizing that legacy real estate and the non strategic investments for over $50 million. This has been painfully slow, but we are moving forward. We are fully engaged nothing is being held back and it's actually got much more active as of.
Speaker Change: Hey.
Speaker Change: The rapidly rising industrial silver demand, primarily driven by solar and the ongoing geopolitical concerns have also created an incredible run up unprecedented run up in gold and possibly greater setup for silver prices over the next several years and we're seeing significant increases.
Speaker Change: And strategic and financial interest in our mining assets for many for many things either investing requiring partnering it's been a flurry. It seems like it's been a flurry, it's kind of remarkable didn't even start until gold hit like 30000 3100.
Speaker Change: But it's becoming more macro now we're seeing it across the board the market for Juniors has literally been dead for a decade I can tell you that.
Speaker Change: From experience I've been here for the entire 10 years since 2015, when it just dropped off and died as 2025 and it now seems to be awakening, our historic World Class, Nevada based mining assets remain fully permitted remain well very well positioned for any type of expansion to monitor.
Speaker Change: Physician, but theyre not taking precedent over metals and fuels. So we are getting inquiries we.
Speaker Change: We will see what they translate into.
Speaker Change: We know what our resource in the ground as we know that it can get bigger.
Speaker Change: But we don't have a gun to our head for those assets. So just to summarize.
Speaker Change: We're actively attracting some of the most advanced capable well capitalized innovative enterprises into our system into our network into our solutions. The series eight for fuels will be the next most tangible evidence that both unlocks tremendous value and positions the spin out of Comstock fuels that creates two very high <unk>.
Speaker Change: Both companies.
Speaker Change: Nevada based metals and mining company and an Oklahoma based fuels company as.
Speaker Change: It's what we outlined in our shareholder letter.
Speaker Change: In January and it's what we're doing so Billy good there if you'd like we can turn to the questions.
Speaker Change: Excellent.
Speaker Change: Certainly a lot to unpack there corrado and we're getting a lot of questions coming in I mentioned at the top of the call. We received over 50 questions before the call.
Speaker Change:
Speaker Change: And let's try to tackle as many as we can there's a lot of common themes. We're seeing consistently through these questions. So I'll try to combine them together and try to hit a couple of points that that seem very important to the people listening I.
Speaker Change: I know you just covered it but just back on the mining and the resource assets.
Speaker Change: Maybe you can just lay out one more time like what the plan and the timetable really for restarting or monetizing those assets and then just one more time like how do you think the macro conditions and how are they affecting our decisions on that I think is what people really want to know.
Speaker Change: It seems like everyone's bullish on gold goes currently well over $3300 an ounce. What happened was it's remarkable to me like there was literally a quarter or two quarter delay in the macro equity markets responding to the main.
Speaker Change: Agers, Barrick and Newmont had to post like 50, 152% gross margins for people to start investing.
Speaker Change: And then you think Warren Buffett.
Speaker Change: Started investing in Barrick, a couple of years ago. So.
Speaker Change: Everyone, everyone has slowed until when it comes to the to these mining plays the junior miners and now every every analyst.
Speaker Change: Is is is just screaming that the junior miners are undervalued junior miners undervalue dirt cheap we don't feel we have one penny in our valuation.
Speaker Change: Waiting to our mining assets and we're experiencing significant inbound inquiry from many many parties and Canadians to believe it or not right. So we're getting a tremendous amount of inquiry. We're actively evaluating the options you know bill he's doing a bunch of work. These are like special projects for US we cannot allow fortune out on the <unk>.
Speaker Change: <unk> team, we cannot allow Kevin David and the fuels team to be distracted.
Speaker Change: Hey.
Speaker Change: We're evaluating them, we're assessing them.
Speaker Change: I think something's changed like something is different okay capital is starting to <unk>.
Speaker Change: Not to mining to junior mining, Okay, that's the big change okay.
Speaker Change: Also went back to the table with our with our Mackie deal.
Speaker Change: <unk> it wasn't fully closed out.
Speaker Change: And we're negotiating a higher price because you know it's warranted. So I think I think I want to temper the expectations.
Speaker Change: We were going heavily heavily.
Speaker Change: With the fuels and metals, however, we're going to have to allocate some resources to this because its too strong.
Speaker Change: Excellent.
Speaker Change: Okay.
Speaker Change: Let's turn to metals for a second and and maybe you could just break down as clear as possible like projected timeline for the expansion, we're doing the milestones permitting financing construction and take us through the first revenues for the new facility yeah. Thanks for that.
Speaker Change: There's so much happening with metals I love the question to just be able to summarize a little more succinctly. So look we're right in the middle of a permit for expanding the storage. So I mean, it's just just jump right out and say in Q2, we're going to get a permit to expand significantly the storage.
Speaker Change: We have it's adjacent almost adjacent to the existing processing facility and we need that storage as soon as practical Q2 Q3, we're working on financing. When you heard me say, we don't need a lot of money to deploy this equipment in the metals, but Q3 will look we will look to that financing.
Speaker Change: In order of the equipment the major permits for the state the major permit that enables the.
Speaker Change: The industry scale facility, we're expecting by Q4 of 2025.
Speaker Change: The ordering of the equipment in Q3 allows us to synchronize the equipment and the permits coming together at the same time that allows us to commission construct get it up and running by the end of Q1. So we could have that first industry scale production and its revenue.
Speaker Change: Second quarter remember to the extent, none of that slows us down and getting master service agreements in engaging large customers and in frankly, even taking panels in advance.
Speaker Change: It's obviously the more of the production capacity you have the better but nothing nothing is going to be waiting on it.
Speaker Change: That's great I hope that helps clarify for everyone.
Speaker Change: Let's do something similar for fuels.
Speaker Change: But let's think about milestones 'twenty five 'twenty six 'twenty seven sort of through the activation of the commercial facilities, both the demonstration facility and our wholesale deployments, including the stuff with the licensees overseas.
Speaker Change: Yes, Brian I think the real the real just here is like.
Speaker Change: What are those milestones that get us the meaningful revenue and cash flow and Comstock fuels. Yeah. Let me, let me try that so just recapping quickly into 2025 ones right Comstock fuel spins out series a for at least $50 million, Oklahoma site selected final engineering for those same Oklahoma site integrate access into a demo.
Speaker Change: Farm in Oklahoma get that fuel production coming out of Madison.
Speaker Change: And.
Speaker Change: Thats, great, but alongside all of that we're going to have many additional commercial supply agreements commercial supply chain partners be it for feedstocks are off takes including marathons offtake agreement and more we're going to have offtake with Alba is coming onboard.
Speaker Change: And with the work that David and chatted already been doing we're going to have more off cakes, not just for by OEM and the oils, but for the sustainable aviation fuel, we're going to pool, our monster amount of offtake for sustainable aviation fuel, we're going to have additional international licenses, including.
Speaker Change: Locations Lifestyle America Africa, and Asia. So we expect to see all of that occurring here. This is 2025.
Speaker Change: But then.
Speaker Change: There's a whole another segment of the market. When you talk about revenue that we have hardly talked about internally, we refer to it as integrations, but we expect to see meaningful quote unquote integrations of our solutions into other existing operation.
Speaker Change: Pulp and paper Mills.
Speaker Change: Trigger cane mills, even now with with with the ability to have your own purpose grown crops like a hexes corn ethanol mill.
Speaker Change: So you're going to see you're going to see us selling solutions that enhance pulp and paper revenue enhance sugarcane revenue.
Speaker Change: Expand yields lower the cost of feedstocks are solution is extraordinary versatile and they can integrate into other existing operations.
Speaker Change: The other thing too is the international licensees, which we expect will grow even from the five that we've already announced will start site preparation right. So we expect to see some of that occurring this year and next year, which will then start up these engineering service revenues for us as well David.
Speaker Change: Witness is prioritizing these monetization for 2025 that can then show revenue and cash inflows for fuels plus of course, the funding with the series E gives us the capacity for making all of these developments and new reality everything is capacity related we need human capacity right we need to.
Speaker Change: <unk> to get into the market for 2026, we're looking at placing the project capital, obviously that I'll start with the $152 million project activity bonds.
Speaker Change: That we were so gracefully advocated from Oklahoma, but as well as project equity, we've talked about $235 $245 million to $250 million is a sufficient level to get and commenced construction for that serial number one hopefully in 2027, we're nearing the completion of the construction of that.
Speaker Change: Which then is full scale deployment.
Speaker Change: Our first site. So that's a lot I mean, if you just walk down the lane of our first site.
Speaker Change: The revenue associated with that site.
Speaker Change: We will be complemented by licensing revenue by integrations revenue by other activities to go there, but critically will be fully funded from the series a so that.
Speaker Change: It's a laser focus to that to that asset.
Speaker Change: Great.
Speaker Change: Look I think this next question extends out of that it generally starts with a comment about the series a and how we're going to be funding fuels.
Speaker Change: Positive response to it and the question is how are we thinking about the growth of the other businesses funding everything else limiting dilution or are we thinking about similar models are we engaging bankers maybe.
Speaker Change: Maybe just walk through the general thought process, yeah, well first and foremost we'll be we'll be engaging bankers for fuels right, we will be engaging bulge bracket banks.
Speaker Change: Really really sophisticated institutions to help us with that the deployment of that project activity bond $152 million plus the project equity associated.
Speaker Change: With that first facility however.
Speaker Change: We all have the same view, it's on a much much smaller scale. When you when you take fuels out of the corporation's liquidity profile. It's the substantial majority of our spend is the substantial majority of our liquidity assistance and the majority of our new investments.
Speaker Change: So metals is a much more focusing but the answer is yes, we already have strategic interest directly into metals and there's huge value there and with the capital is lower so so we're being a little bit more cautious with that funding we all.
Speaker Change: Have remarkable access to debt financing when a facility has been operating for a year. The USDA loans become eligible. We also have the same possibility for the industrial revenue bonds, obviously, it's Nevada, Oklahoma, obviously, it's a smaller number so so we're going to be.
Speaker Change: Very very cautious here.
Speaker Change: We could do direct subsidiary financing, but we're not going to give up a lot of this company because the speed at which it gets the cash flow is much much higher and the capital required to deploy and get to is much much lower so.
Speaker Change: <unk>.
Speaker Change: I think that's it in a nutshell between between settling the previous legacy obligations beats.
Speaker Change: Between funding the.
Speaker Change: Series a.
Speaker Change: And I think I mentioned already that we probably expect to be at like 33 million shares outstanding at the spinoff then it's just going to be a full full kits.
Speaker Change: On bringing these businesses to those cash flows that you're referring to in both cases, we now have line of sight Theres still obstacles there are still meaningful distance to go but we can see the lie.
Speaker Change: You can see the light so I just wanted to repeat we don't want to use those convertible bonds structures, we want to focus on fundamental long term equity investors equity partners across the board guess, what it's already happening some of our largest investors have already approached us and said.
Speaker Change: Don't do any convert to the new capital will be there for you. We see you getting to the lie right. So I guess.
Speaker Change: That's nice I mean, it's more than nice it's Steve we appreciate it but we're also mature enough now with this progress that more people are paying attention more opportunities are evolving.
Speaker Change: And I'm going to tell you that even though people generally talk about fuels as the eight one.
Speaker Change: 100 pound gorilla I don't know if that makes.
Speaker Change: Metals, a little monkey or something that's ridiculous because both of these businesses will be in the billions of dollars of valuation and sooner not later, so it's beyond massive.
Speaker Change: Overall addressable market for fuels is staggering when you talk about the Tam for fuels.
Speaker Change: It's staggering it's beyond massive.
Speaker Change: But so is solar.
Speaker Change: The sheer magnitude of solar panels that have already been deployed.
Speaker Change: The one hundreds of millions billions of pounds already be they've already been deployed and then the growth of new deployment.
Speaker Change: I mean, I cant honestly imagine to better markets or two better.
Speaker Change: Physicians to be and then we are right now.
Speaker Change: Excellent.
Speaker Change: You talked a lot today about the team that we've built.
Speaker Change: All of these businesses and I think a lot of people want to know what are we doing from a strategic.
Speaker Change: What tools are we using to ensure alignment between the senior team the operational management team at the different subsidiaries and our shareholders and most importantly, maintaining that alignment as we grow here very rapidly over the next few years.
Speaker Change: That's good that's a good question so.
Speaker Change: Look our model's evolved tremendously over the past four years and when you think about it right just keeping.
Speaker Change: This team together through so many.
Speaker Change: Difficult achievements right when youre talking about moving up the TRL scale, it's not for the faint of heart.
Speaker Change: So and when you when you contrast to that look we know that we started this thing with a small.
Speaker Change: Public company.
Speaker Change: And I think that there's positives and negatives to that.
Speaker Change: I think net net we've seen much more positive and I think the reason that there is much more positive as I look at our top 20 shareholders I look at our top 40 shareholders I looked at our top 100 shareholders. These these are not necessarily typically the type of stakeholders that get to invest in this kind of opportunity. So to me it warms my.
Speaker Change: From a management perspective, I don't think I've got any equity compensation I know I haven't gotten any conversation, but the no equity compensation.
Speaker Change: And I think people have already seen when we brought.
Speaker Change: Both these teams are not only entrepreneurial their founders.
Speaker Change: <unk> is the inventor of these technologies can do we roll. These guys are the inventors of these technologies and there's a few more people in there Raul microwave will all of these folks listed on the patents decades ago. Okay.
Speaker Change: These are people who are engaged in what I would call their life's work.
Speaker Change: If you look back at our disclosures.
Speaker Change: When we when we combined <unk> technology into our recycling scheme. He has the ability to have an interest of up to 20%.
Speaker Change: The subsidiary so everything's flowing now from like a subsidiary level context, which means which means its performance base, which means.
Speaker Change: If this thing hits, the billions and billions and billions like everybody is.
Speaker Change: Going to be happy.
Speaker Change: We ended up rescinding that original agreement I got a lot of questions about it and I didn't answer any of them because it wasn't appropriate to do so.
Speaker Change: When you're talking about someone's specific compensation it wasn't final days, yet, but anyway, we rescinded the original agreement because it wasn't tax efficient.
Speaker Change: And what we're doing now is we reconstituting those types of agreements, both our metals and fuels.
Speaker Change: So that we have tax efficient performance based equity alignment, that's going to unlock billions and billions of value.
Speaker Change: This is actually one of the major prerequisite of the series a investors its like Youre literally like an adventure capital mode, where Comstock is the seed Investor series, a youre, bringing sophisticated investors you've got to check the boxes how's the attack check.
Speaker Change: How is the balance sheet check how is the management team.
Speaker Change: Check okay. So we put meaningful meaningful performance based subsidiary level equity incentives in place.
Speaker Change: We're looking to finish all of this work here.
Speaker Change: In may.
Speaker Change: I think we've previously said it but if we haven't we would like to give specificity around all of this by the annual meeting which is coming up here.
Speaker Change: At the end of May so.
Speaker Change: I don't.
Speaker Change: I wasn't expecting to talk about this but I'll tell you that I just wanted to repeat these management teams right Theyre not comment.
Speaker Change: And what's happening now is as we engage company.
Speaker Change: At marathon differently.
Speaker Change: Pound gorilla, it's a monster when you started engaging companies like <unk> fuel you started engaging companies like Texas, you certainly engaging with many many more.
Speaker Change: And you find a common.
Speaker Change: Founder Slash entrepreneurial slash people, who are purpose driven.
Speaker Change: That means like they are fully dedicated their re landfill right.
Speaker Change: You need to have.
Speaker Change: Im not strong alignment strong alignment feels feels squishy to me you have to have laser sharp.
Speaker Change: Absolutely forged steel alignment if you want to create something if you want to achieve something that's never been done before and I will tell you. If people ask me what are we most proud of.
Speaker Change: Because I've been through experiences like this heads.
Speaker Change: <unk> typically explode alignment.
Speaker Change: Emotionally philosophically strategically operationally is very very difficult to forge to that level of precision we've done it here.
Speaker Change: We've done it here and that's why I think if theres any reason that people would say.
Speaker Change: Yeah.
Speaker Change: Why is the series E going to happen.
Speaker Change: Right, it's because of that technology prerequisite guy like Elvis who's like.
Speaker Change: Is it advance the lignocellulose thick materials sciences anyone that wants that we know obviously is going to check the attack before he wants to join a company like ours, but I don't think I think that's a prerequisite I don't think that's the close of the closer in the team the way we work the way we work together and.
Speaker Change: How.
Speaker Change: Is this trend going to get to the finish line because I don't want again on a train that isn't going to make it to the finish line, there's gotta be sufficiency and we have so yes.
Speaker Change: Yes, sorry, I, probably went off center, a little bit with that question, but I. Appreciate it. So it's all good we're running short on time, but we're getting a lot of really good questions can we do a little lightning.
Speaker Change: Hit a couple of these quickly for you.
Speaker Change: You mentioned the patent portfolio I don't know if you want to say anything about a lot of people have been asking about the recent publishing of some of our patents, including one for the production of graphite given your background running the largest industrial supply chain for many years.
Speaker Change: Okay.
Speaker Change: Yeah, absolutely so firstly, yes.
Speaker Change: One of the first things that we did in 2021 going into 2022 was file and ensure right that all of the.
Speaker Change: All of the interdependent activities that have occurred over the last the previous four or five years.
Speaker Change: We've put into what we were almost calling like an umbrella patent right that one was just recently approved it was sort of the one that.
Speaker Change: Really gave.
Speaker Change: A lot of these inquiries from the market sort of popping up all looked upon as being approved the patents being approved.
Speaker Change: In the interim we found some others like the one that you just referred to.
Speaker Change: Think of that one is an adjacency right. There is a lot of discoveries that are happening in these carbon based rounds that when we when we when we stumble onto something or when we when we when we identify something that's new that's novel will file a patent to protect that but in that second case, it's like an adjacency.
Speaker Change: It's remarkable frankly, but it's it's not part of our current plan of commercialization and it would be addressed to our focus we can't allow that right. So it should be viewed positively right. It means that we're because sometimes when you're working on something and you're trying to solve a specific problem you.
Speaker Change: Unintentionally solve three or four or you just.
Speaker Change: You just surface three or four novel things that have never been discovered or mentioned before so you protect them. So we have both we have both.
Speaker Change: Great.
Speaker Change: Let's do a quick question on Texas, given that the Zahnow grass and other energy crops improve soil health and sequester carbon this comstock evaluating opportunities to monetize this through carbon credits or regenerative farming partnerships or other environmental incentive programs to create additional revenue streams, yes. Good.
Speaker Change: Question, So first of all let's emphasize that.
Speaker Change: The Zeno grass in the nano fibers are not just remarkable from a yield perspective right. They are perennial which means that they are planted one and then the.
Speaker Change: The roof systems sequester carbon tremendously also enriching the soils so.
Speaker Change: Only they don't only function or can function at.
Speaker Change: More than acceptable yields and marginal lands, they actually worked to improve those lands over time.
Speaker Change: Is remarkable.
Speaker Change: They require sunlight, but relatively less water so.
Speaker Change: You have something extraordinary here, which is going to allow you to create oil wells in non currently nonproductive lands and currently nonproductive areas.
Speaker Change: So so.
Speaker Change: Monetizing <unk>.
Speaker Change: Even feedstock solution.
Speaker Change: Let's say, even if you.
Speaker Change: If you if you're looking at a corn ethanol situation, where theyre paying exponentially more for their feedstock and getting materially less further.
Speaker Change: Molecularly identical ethanol.
Speaker Change: We can have in our feedstock solution agricultural solution can we can monetize that we could also monetize those carbon attributes that you. Just described so I would put the integrations part if it has anything to do with selling solution into an existing infrastructure. It is a priority.
Speaker Change: For us it's a priority for us because we can deliver it today if it has to do with secondary or tertiary potential benefits, even carbon credit monetization for an example.
Speaker Change: It's on our plan, but it's not immediately the thing thats right in front of us.
Speaker Change: I hope that helps.
Speaker Change: Okay, I think I think we're coming up on time, we covered a lot of questions. In your prepared remarks covered a lot of stuff to I'll, just say to everyone. If we didn't get to your question definitely said that to me at IR at Comstock in Dot Com and we're going to do our best to either respond directly or maybe what we like to do more of these days has posted a response on that.
Speaker Change: Ask either Comstock or Corrado account, if anyone's not following us on X. The company account is at Comstock, Inc.
Speaker Change: You should definitely follow us we're trying to put a lot more content up there in real time.
Speaker Change: Corrado before we wrap up why don't we give you the floor to give us some final thoughts.
Corrado: Please be sure to recap all the major catalysts coming up the remainder of Q2 and the rest of the 25.
Speaker Change: Okay for sure so.
Speaker Change: Let me go rapid fire on the catalysts coming up for Q2 and 25, so a fuels right. We've got site selection, we got bulge bracket bankers for the bonds. We got the first series a shoe dropping strong valuation spin out plan for few very big all the details off take agreement for fuels Marathon.
Speaker Change: All et cetera strategic off takes in addition to that and feedstock agreements licensing up and down the supply chain monetization for integrations, that's primarily focused as new revenues in the United States.
Speaker Change:
Speaker Change: And would result in revenues pre Oklahoma and then the production coming out of Madison shifts to law. That's all this year, that's all coming soon for metals counting permit for expanding the storage more strategic customer for fuels those.
Speaker Change: Msas higher revenues state permit for industry scale capital equipment for industry scale, corporate land sales potential monetization or capital for mining higher silver prices for sure.
Speaker Change: And then lastly, I guess just looking forward to updating everyone on may 22nd at our annual meeting.
Speaker Change: Yes, I would.
Speaker Change: Just throw in please.
Speaker Change: Your proxies as soon as practical.
Speaker Change: Already well above a quorum, so where we're in a smooth zone here, but we'd love to get as high turn out as possible as always.
Speaker Change: For for me I wanted to just thank everybody. This would conclude our first quarter 2025.
William McCarthy: Business update and earnings call and as Billy said.
William McCarthy: We're out of time, but if you have any additional questions. We tried to aggregate them. We tried to kill as many birds with as few as questions as possible, but just send them in and we'll be happy to get back to you.
Corrado: Thanks, Corrado thanks, everyone. Thank you.
Goodbye.