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Long-Term Debt
12 Months Ended
Dec. 31, 2020
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
 
Long-term debt at December 31, 2020 and 2019 consisted of the following:
 
20202019
Senior Secured Debenture (GF Comstock 2) - 11% interest, paid in 2020
$— $4,929,277 
Georges Trust Unsecured Promissory Notes - 12% interest, due September 2021
1,389,014 
Concorde Trust Unsecured Promissory Notes - 12% interest, due September 2021
683,263 — 
Bean Trust Unsecured Promissory Note - 12% interest, due September 2021
290,386 — 
GHF Inc Unsecured Promissory Note - 12% interest, due September 2021
916,712 — 
Note Payable (Caterpillar Financial Services) - 5.7% interest.
404,373 645,891 
Total debt3,683,748 5,575,168 
Less: long-term debt discounts and deferred issuance costs(126,043)(163,094)
Total debt, net of discounts and deferred issuance costs3,557,705 5,412,074 
Less: current portion of long-term debt(3,557,705)(328,068)
Long-term debt, net of discounts and deferred issuance costs$— $5,084,006 

Debt Obligations

Concorde Trust, Bean Trust, Georges Trust, GHF, Inc. & Scott H. Jolcover Unsecured Promissory Notes

On August 6, 2020, the Company entered into three unsecured promissory notes (together with the additional promissory notes with the Concorde Trust and GHF Inc. described below, the "Promissory Notes") in order to refinance existing indebtedness on more favorable terms. The Promissory Notes, with the Concorde Trust, Bean Trust, and Mr. Scott H. Jolcover (a former employee of the Company), had an original aggregate principal amount of $4,475,000, were issued at an original issue discount ("OID") of $225,000, bear interest at a rate of 12% per annum payable monthly, and mature on September 20, 2021.

On October 1, 2020, the Company revised and divided the Concorde Trust promissory note of $3.68 million into two separate Promissory Notes totaling the same amount, that is, a new promissory note to Georges Trust for $3.04 million and a revised promissory note to Concorde Trust for $0.64 million, representing entities under common control with one another but not with the Company.

On October 1, 2020, the Company paid the former employee's promissory note in full, with a principal payment of $150,000 plus OID of $1,216. As of December 31, 2020, the former employee had no outstanding Promissory Notes, and had received $2,876 in payments of interest and $151,216 in payments of principal during the year ended December 31, 2020.

On October 5, 2020, the Company paid $1.7 million in principal for the Georges, Concorde, and Bean Promissory Notes, plus earned OID of $15,143. On October 9, 2020, the Company paid an additional $0.5 million in principal for the remaining Promissory Notes, plus earned OID of $4,716. These early payments reduced the principal balance on the notes to approximately $1.9 million.

On December 4, 2020, the Company entered into two additional Promissory Notes with the Concorde Trust and GHF Inc., which had an original aggregate principal amount of $1,309,589, were issued at an original issue discount of $59,589, bear interest at a rate of 12% per annum payable monthly, and mature on September 20, 2021.

Interest expense on the Promissory Notes was $223,543 for the year ended December 31, 2020, which includes OID amortization of $66,868. Accrued interest of $31,700 was included in accounts payable on the consolidated balance sheets as of December 31, 2020.
The Promissory Notes are unsecured, but contain covenants that prohibit the Company from incurring debt that matures prior to the maturity date of the Promissory Notes or that is senior in right of payment, and require the Company to prepay the Promissory Notes with at least 80% of the net cash proceeds received by the Company with respect to the sale of the Company's Silver Springs Properties. The Company is permitted to defer payment for an additional two years of up to 34% of the original principal balances (or approximately $1.9 million) due on the maturity date of the Promissory Notes (i.e., until September 20, 2023), in exchange for two-year warrants to purchase the Company’s common stock based on a 10% discount to its 20-day volume weighted average price on the original maturity date of the Promissory Notes. Based on a separate valuation analysis, the Company has concluded that the cash proceeds received approximate the fair value of the Promissory Notes. In assessing the values of the term extension and contingent warrants derivatives, the valuation model considers the probability of the derivatives being value-accretive and, on an average basis, the related costs exceed the benefits. As a result, the Company has concluded that the cash proceeds received approximate the fair value of the Promissory Notes. Accordingly, the value ascribed to the derivatives by the Company is $0 on issuance date and at December 31, 2020.

GF Comstock 2 LP

On January 13, 2017, the Company issued the Debenture to GF Comstock 2 LP due January 13, 2021, in an aggregate principal amount of $10.7 million. Interest was payable semi-annually. The Debenture was collateralized by (1) substantially all of the assets of the Company, and (2) a pledge of 100% of the equity of its subsidiaries. Hard Rock Nevada Inc., controlled by the former employee, and another related party who is a significant shareholder of the Company, participated in this financing. In addition, J. Clark Gillam, a former director of the Company is a manager and member of the general partner of GF Capital 2 LP. Mr. Gillam resigned from the Company's Board of Directors on September 20, 2020.

The Debenture was issued at a discount of approximately $0.6 million and with additional issuance costs of approximately $0.5 million. The Debenture also required an additional make whole obligation totaling approximately $0.7 million. The Company recorded the Debenture at face value on the consolidated balance sheets, net of the discount, issuance costs and make whole obligation, which approximated its estimated fair value. The discount, issuance costs and make whole obligation were amortized to interest expense during the term of the Debenture.

On August 11, 2020, the Company retired the Debenture by paying the remaining principal balance of approximately $4.0 million, plus the remaining make whole obligation of $0.2 million. Upon retirement, all securing collateral was released. The Company recognized a loss on early retirement of debt of $51,000. Interest expense on the Debenture was $0.4 million and $1.3 million for the years ended December 31, 2020 and 2019, respectively. Tonogold reimbursed $0.3 million and $0.4 million of the Debenture interest for the years ended December 31, 2020 and 2019, respectively, which was netted against interest expense in the consolidated statements of operations.

Caterpillar Equipment Facility

On June 27, 2016, the Company completed an agreement with Caterpillar Financial Services Corporation ("CAT") relating to certain finance and lease agreements (the “CAT Agreement”). The Company entered into the CAT Agreement that required the Company to complete the sale of certain financed and leased equipment and modified the payment schedule under the related finance and lease arrangements. Under the terms of the CAT Agreement, the Company paid down its obligations with the net proceeds from the financed and leased equipment sold during the second and third quarters of 2016, with the remaining balance to be paid off from a monthly payment schedule of primarily $29,570 monthly payments until the amounts have been paid in full. The note bears an interest rate of 5.7% per annum. The obligations were recorded at face value on the consolidated balance sheets, which approximated fair value.

On June 29, 2020, Comstock and CAT modified the CAT Agreement allowing for four months of deferred payments, with no extension of terms, beginning with the May 1, 2020, payment and extending through August 1, 2020. Interest payable for the four deferred payments was added to principal, after which payment amounts were increased to $37,817 per month, beginning on September 1, 2020.

Loan Commitment Agreement

In 2017 (and amended in February 2019), the Company entered into a loan commitment agreement with Legend Merchant Group that provides up to $10.0 million in borrowing capacity and expires in 2021 with an 11% interest rate. Principal amounts borrowed under this agreement are not due until 2021. No amounts have been borrowed under this agreement and the Company has $9.5 million (after consideration of fees due at the time of borrowing) of available borrowing capacity.

There are no maturities due after November 1, 2021.