Item 1.02 Termination of a Material Definitive Agreement.
As previously disclosed, on July 23, 2021, Comstock Mining Inc. (the “Company”), purchased 500,000 Class A Units, representing 50% of the issued and outstanding voting equity of LP BIOSCIENCES LLC, a Wyoming limited liability company (“LPB”), from LP NUTRITION LLC, a Delaware limited liability company (“Nutrition”), an affiliate of LAKEVIEW ENERGY LLC, a Delaware limited liability company (“Lakeview”), with plans to retrofit LPB’s pre-existing solvent extraction facility located in Merrill, Iowa to extract oil from industrial hemp; and, entered into a Note Purchase Agreement (the “Note Purchase Agreement”) to purchase a secured note with a face value of $17,000,000 from LPB (the “LPB Note”). The Company issued 3,500,000 restricted shares of its common stock, paid $826,258 in cash, and agreed to pay an initial $1,500,000 in cash in connection with its foregoing equity purchase and financing commitments. The Company, Nutrition, and LPB simultaneously entered into a Partnership Interest Purchase Agreement (“Equity Purchase Agreement”) and a Limited Liability Company Operating Agreement for LPB (the “Operating Agreement,” and together with the documents and agreements related to the transactions and documents described above, the “Transaction Documents”).
On February 28, 2022, the Company and the other parties to the Transaction Documents mutually agreed to terminate the Transaction Documents. Upon termination of the Transaction Documents, each of the parties to the Transaction Documents were relieved of their respective rights, liabilities, expenses, and obligations under the Transaction Documents, except for payment obligations under the termination agreement and tax obligations in respect of their ownership of LPB through the date of termination. In connection with the termination of the Transaction Documents, 3,500,000 restricted shares of the Company’s common stock were transferred back to the Company for cancellation upon receipt. The Company incurred expenses of approximately $250,000 in connection with the termination of the Transaction Documents.