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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 5/10/23 Montauk Renewables, Inc. 10-Q 3/31/23 89:11M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 2.93M
2: EX-31 Ex-31.1 HTML 30K
3: EX-31 Ex-31.2 HTML 29K
4: EX-32 Ex-32.1 HTML 26K
5: EX-32 Ex-32.2 HTML 26K
11: R1 Cover Page HTML 80K
12: R2 Condensed Consolidated Balance Sheets HTML 135K
13: R3 Condensed Consolidated Balance Sheets HTML 35K
(Parenthetical)
14: R4 Condensed Consolidated Statements of Operations HTML 104K
15: R5 Condensed Consolidated Statements of Stockholders' HTML 57K
Equity
16: R6 Condensed Consolidated Statements of Cash Flows HTML 105K
(Unaudited)
17: R7 Description of Business HTML 35K
18: R8 Summary of Significant Accounting Policies HTML 37K
19: R9 Asset Impairment HTML 28K
20: R10 Revenues from Contracts with Customers HTML 149K
21: R11 Accounts and Other Receivables HTML 44K
22: R12 Property, Plant and Equipment, Net HTML 60K
23: R13 Goodwill And Intangible Assets, Net HTML 67K
24: R14 Asset Retirement Obligations HTML 43K
25: R15 Derivative Instruments HTML 51K
26: R16 Fair Value of Financial Instruments HTML 98K
27: R17 Accrued Liabilities HTML 48K
28: R18 Debt HTML 69K
29: R19 Income Taxes HTML 47K
30: R20 Share-Based Compensation HTML 224K
31: R21 Defined Contribution Plan HTML 30K
32: R22 Related Party Transactions HTML 36K
33: R23 Segment Information HTML 376K
34: R24 Leases HTML 101K
35: R25 Loss per Share HTML 57K
36: R26 Subsequent Events HTML 28K
37: R27 Summary of Significant Accounting Policies HTML 47K
(Policies)
38: R28 Revenues from Contracts with Customers (Tables) HTML 145K
39: R29 Accounts and Other Receivables (Tables) HTML 42K
40: R30 Property, Plant and Equipment, Net (Tables) HTML 56K
41: R31 Goodwill And Intangible Assets, Net (Tables) HTML 65K
42: R32 Asset Retirement Obligations (Tables) HTML 42K
43: R33 Derivative Instruments (Tables) HTML 51K
44: R34 Fair Value of Financial Instruments (Tables) HTML 95K
45: R35 Accrued Liabilities (Tables) HTML 48K
46: R36 Debt (Tables) HTML 52K
47: R37 Income Taxes (Tables) HTML 39K
48: R38 Share-Based Compensation (Tables) HTML 217K
49: R39 Segment Information (Tables) HTML 373K
50: R40 Leases (Tables) HTML 102K
51: R41 Loss per Share (Tables) HTML 54K
52: R42 Description of Business - Additional Information HTML 27K
(Detail)
53: R43 Summary of Significant Accounting Policies - HTML 26K
Additional Information (Detail)
54: R44 Asset Impairment - Additional Information (Detail) HTML 24K
55: R45 Revenues from Contracts with Customers - Summary HTML 57K
of Company's Revenue by Major Source (Detail)
56: R46 Accounts and Other Receivables - Schedule of HTML 31K
Accounts and Other Receivables (Detail)
57: R47 Accounts and Other Receivables - Additional HTML 25K
Information (Detail)
58: R48 Property, Plant and Equipment, Net - Summary of HTML 43K
Property Plant and Equipment (Detail)
59: R49 Property, Plant and Equipment, Net - Additional HTML 31K
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60: R50 Goodwill And Intangible Assets, Net - Schedule of HTML 44K
Intangible Assets (Detail)
61: R51 Goodwill And Intangible Assets, Net - Schedule of HTML 30K
Intangible Assets (Parenthetical) (Detail)
62: R52 Goodwill And Intangible Assets, Net - Additional HTML 33K
Information (Detail)
63: R53 Asset Retirement Obligations - Summary of Activity HTML 32K
Associated with Asset Retirement Obligations
(Detail)
64: R54 Derivative Instruments - Summary of Realized and HTML 36K
Unrealized Gains and Losses of Derivative
Instrument (Detail)
65: R55 Fair Value of Financial Instruments - Summary of HTML 46K
Assets and Liabilities Measured at Fair Value on a
Recurring Basis (Detail)
66: R56 Accrued Liabilities - Summary of Accrued HTML 37K
Liabilities (Detail)
67: R57 Debt - Summary of Company Debt (Detail) HTML 41K
68: R58 Debt - Additional Information (Detail) HTML 73K
69: R59 Income Taxes - Schedule of Effective Income Tax HTML 30K
Rate Reconciliation (Detail)
70: R60 Income Taxes - Additional Information (Detail) HTML 28K
71: R61 Share-Based Compensation - Summary of Fair Value HTML 35K
of MRI EICP Options and Valuation Assumptions
(Detail)
72: R62 Share-Based Compensation - Summary of Outstanding HTML 65K
Activity of Options,Restricted Stock and
Restricted Stock Units under MRI EICP (Detail)
73: R63 Share-Based Compensation - Additional Information HTML 46K
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74: R64 Defined Contribution Plan - Additional Information HTML 36K
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75: R65 Related Party Transactions - Additional HTML 44K
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76: R66 Segment Information - Summary of Reconciliation of HTML 104K
the Company's Reportable Segments' Net Income from
Continuing Operations (Detail)
77: R67 Segment Information - Summary of Revenue by Major HTML 49K
Customers (Detail)
78: R68 Leases - Summary of Supplemental Information HTML 31K
Related To Operating Leases (Detail)
79: R69 Leases - Summary of Future Minimum Operating Lease HTML 41K
Payments (Detail)
80: R70 Leases - Summary of Supplemental Information HTML 30K
Related To Finance Leases (Detail)
81: R71 Leases - Summary of Future Minimum Finance Lease HTML 32K
Payments (Detail)
82: R72 Loss per Share - Schedule of Basic and Diluted HTML 57K
Loss per Share (Detail)
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84: R74 Subsequent Events - Additional Information HTML 29K
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| 10-Q |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM i 10-Q
(Mark One)
i ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended i March 31, i 2023 /
or
i ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: i 001-39919
i MONTAUK RENEWABLES, INC.
(Exact name of registrant as specified in its charter)
i Delaware |
i 85-3189583 |
(State or Other Jurisdiction of Incorporation or Organization) |
(IRS Employer Identification No.) |
|
|
i 5313 Campbells Run Road, i Suite 200 i Pittsburgh, Pennsylvania |
i 15205 |
(Address of Principal Executive Offices) |
(Zip Code) |
( i 412) i 747-8700
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
|
i Common Stock, par value $0.01 per share |
i MNTK |
The i Nasdaq Capital Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. i Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). i Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer |
☐ |
i Accelerated filer |
☒ |
|
|
|
|
Non-accelerated filer |
☐ |
Smaller reporting company |
i ☐ |
|
|
|
|
|
|
Emerging growth company |
i ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. i ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No i ☒
The number of outstanding shares of the registrant’s common stock on May 5, 2023 was i 143,661,719 shares.
TABLE OF CONTENTS
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6 |
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ITEM 1. |
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6 |
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ITEM 2. |
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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23 |
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ITEM 3. |
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38 |
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ITEM 4. |
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38 |
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39 |
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ITEM 1. |
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39 |
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ITEM 1A. |
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39 |
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ITEM 2. |
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39 |
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ITEM 3. |
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39 |
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ITEM 4. |
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39 |
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ITEM 5. |
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39 |
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ITEM 6. |
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40 |
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41 |
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Glossary of Key Terms
This Quarterly Report on Form 10-Q uses several terms of art that are specific to our industry and business. For the convenience of the reader, a glossary of such terms is provided here. Unless we otherwise indicate, or unless the context requires otherwise, any references in this Quarterly Report on Form 10-Q to:
3
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of U.S. federal securities laws that involve substantial risks and uncertainties. All statements other than statements of historical or current fact included in this report are forward-looking statements. Forward-looking statements refer to our current expectations and projections relating to our financial condition, results of operations, plans, objectives, strategies, future performance, and business. Forward-looking statements may include words such as “anticipate,” “assume,” “believe,” “can have,” “contemplate,” “continue,” “strive,” “aim,” “could,” “design,” “due,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “likely,” “may,” “might,” “objective,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “target,” “will,” “would,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operational performance or other events. For example, all statements we make relating to future results of operations, financial condition, expectations and plans of the Company, including expected benefits of the Pico feedstock amendment and the Montauk Ag project in North Carolina, the anticipated completion of the Raeger capital improvement project, Second Apex RNG Facility project, the Blue Granite RNG project, any Bowerman expansion project, the resolution of gas collection issues at the McCarty facility, our estimated and projected costs, expenditures, and growth rates, our plans and objectives for future operations, growth, or initiatives, or strategies are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expect and, therefore, you should not unduly rely on such statements. The risks and uncertainties that could cause those actual results to differ materially from those expressed or implied by these forward-looking statements include but are not limited to:
4
We make many of our forward-looking statements based on our operating budgets and forecasts, which are based upon detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results.
All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in our other Securities and Exchange Commission (“SEC”) filings and public communications. You should evaluate all forward-looking statements made by us in the context of these risks and uncertainties. See the “Risk Factors” section in our latest Annual Report on Form 10-K.
We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to you. Furthermore, the forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.
5
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
|
Page |
Montauk Renewables, Inc. |
|
Unaudited condensed consolidated financial statements |
|
7 |
|
8 |
|
9 |
|
10 |
|
11 |
6
MONTAUK RENEWABLES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share data):
|
|
as of March 31, |
|
|
as of December 31, |
|
||
ASSETS |
|
2023 |
|
|
2022 |
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
i 78,043 |
|
|
$ |
i 105,177 |
|
Accounts and other receivables |
|
|
i 6,305 |
|
|
|
i 7,222 |
|
Related party receivable |
|
|
i 9,008 |
|
|
|
i 9,000 |
|
Current portion of derivative instruments |
|
|
i 835 |
|
|
|
i 879 |
|
Prepaid expenses and other current assets |
|
|
i 2,440 |
|
|
|
i 2,590 |
|
|
|
|
|
|
|
|
||
Total current assets |
|
$ |
i 96,631 |
|
|
$ |
i 124,868 |
|
|
|
|
|
|
|
|
||
Non-current restricted cash |
|
$ |
i 407 |
|
|
$ |
i 407 |
|
Property, plant and equipment, net |
|
|
i 183,800 |
|
|
|
i 175,946 |
|
Goodwill and intangible assets, net |
|
|
i 15,512 |
|
|
|
i 15,755 |
|
Deferred tax assets |
|
|
i 16,985 |
|
|
|
i 3,952 |
|
Non-current portion of derivative instruments |
|
|
i 584 |
|
|
|
i 936 |
|
Operating lease right-of-use assets |
|
|
i 4,635 |
|
|
|
i 4,742 |
|
Finance lease right-of-use assets |
|
|
i 80 |
|
|
|
i 96 |
|
Other assets |
|
|
i 5,703 |
|
|
|
i 5,614 |
|
|
|
|
|
|
|
|
||
Total assets |
|
$ |
i 324,337 |
|
|
$ |
i 332,316 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
i 3,232 |
|
|
$ |
i 4,559 |
|
Accrued liabilities |
|
|
i 11,354 |
|
|
|
i 15,090 |
|
Income tax payable |
|
|
i 905 |
|
|
|
i 402 |
|
Current portion of operating lease liability |
|
|
i 411 |
|
|
|
i 410 |
|
Current portion of finance lease liability |
|
|
i 74 |
|
|
|
i 71 |
|
Current portion of long-term debt |
|
|
i 7,876 |
|
|
|
i 7,870 |
|
|
|
|
|
|
|
|
||
Total current liabilities |
|
$ |
i 23,852 |
|
|
$ |
i 28,402 |
|
|
|
|
|
|
|
|
||
Long-term debt, less current portion |
|
$ |
i 61,533 |
|
|
$ |
i 63,505 |
|
Non-current portion of operating lease liability |
|
|
i 4,312 |
|
|
|
i 4,341 |
|
Non-current portion of finance lease liability |
|
|
i 6 |
|
|
|
i 25 |
|
Asset retirement obligations |
|
|
i 5,593 |
|
|
|
i 5,493 |
|
Other liabilities |
|
|
i 3,968 |
|
|
|
i 3,459 |
|
|
|
|
|
|
|
|
||
Total liabilities |
|
$ |
i 99,264 |
|
|
$ |
i 105,225 |
|
|
|
|
|
|
|
|
||
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Common stock, $ i i 0.01 / par value, authorized i i 690,000,000 / shares; i i 143,682,811 / shares issued at March 31, 2023 and December 31, 2022, respectively; i i 141,633,417 / shares outstanding at March 31, 2023 and December 31, 2022, respectively |
|
|
i 1,416 |
|
|
|
i 1,416 |
|
Treasury stock, at cost, i i 971,306 / shares March 31, 2023 and December 31, 2022, respectively |
|
|
( i 11,051 |
) |
|
|
( i 11,051 |
) |
Additional paid-in capital |
|
|
i 207,830 |
|
|
|
i 206,060 |
|
Retained earnings |
|
|
i 26,878 |
|
|
|
i 30,666 |
|
|
|
|
|
|
|
|
||
Total stockholders' equity |
|
|
i 225,073 |
|
|
|
i 227,091 |
|
|
|
|
|
|
|
|
||
Total liabilities and stockholders' equity |
|
$ |
i 324,337 |
|
|
$ |
i 332,316 |
|
The accompanying notes to the unaudited condensed consolidated financial statements are an integral part of these statements.
7
MONTAUK RENEWABLES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except for share and per share data):
|
|
Three months ended March 31, |
|
|||||
|
|
|
|
2022 |
|
|||
Total operating revenues |
|
$ |
i 19,154 |
|
|
$ |
i 32,169 |
|
|
|
|
|
|
|
|
||
Operating expenses: |
|
|
|
|
|
|
||
Operating and maintenance expenses |
|
|
i 14,182 |
|
|
|
i 13,201 |
|
General and administrative expenses |
|
|
i 9,475 |
|
|
|
i 8,495 |
|
Royalties, transportation, gathering and production fuel |
|
|
i 3,933 |
|
|
|
i 7,206 |
|
Depreciation, depletion and amortization |
|
|
i 5,196 |
|
|
|
i 5,153 |
|
Gain on insurance proceeds |
|
|
i — |
|
|
|
( i 313 |
) |
Impairment loss |
|
|
i 451 |
|
|
|
i 51 |
|
Transaction costs |
|
|
i 83 |
|
|
|
i 27 |
|
|
|
|
|
|
|
|
||
Total operating expenses |
|
$ |
i 33,320 |
|
|
$ |
i 33,820 |
|
|
|
|
|
|
|
|
||
Operating loss |
|
$ |
( i 14,166 |
) |
|
$ |
( i 1,651 |
) |
|
|
|
|
|
|
|
||
Other expenses (income): |
|
|
|
|
|
|
||
Interest expense |
|
$ |
i 1,675 |
|
|
$ |
i 32 |
|
Other expense (income) |
|
|
i 7 |
|
|
|
( i 310 |
) |
|
|
|
|
|
|
|
||
Total other expense (income) |
|
$ |
i 1,682 |
|
|
$ |
( i 278 |
) |
|
|
|
|
|
|
|
||
Loss before income taxes |
|
$ |
( i 15,848 |
) |
|
$ |
( i 1,373 |
) |
|
|
|
|
|
|
|
||
Income tax benefit |
|
|
( i 12,060 |
) |
|
|
( i 258 |
) |
|
|
|
|
|
|
|
||
Net loss |
|
$ |
( i 3,788 |
) |
|
$ |
( i 1,115 |
) |
|
|
|
|
|
|
|
||
Loss per share: |
|
|
|
|
|
|
||
Basic |
|
$ |
( i 0.03 |
) |
|
$ |
( i 0.01 |
) |
Diluted |
|
$ |
( i 0.03 |
) |
|
$ |
( i 0.01 |
) |
|
|
|
|
|
|
|
||
Weighted-average common shares outstanding: |
|
|
|
|
|
|
||
Basic |
|
|
i 141,633,417 |
|
|
|
i 141,045,477 |
|
Diluted |
|
|
i 141,633,417 |
|
|
|
i 141,045,477 |
|
The accompanying notes to the unaudited condensed consolidated financial statements are an integral part of these statements.
8
MONTAUK RENEWABLES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(in thousands, except share data):
|
|
Common Stock |
|
|
Treasury Stock |
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Additional Paid-in Capital |
|
|
Retained (Deficit) Earnings |
|
|
Total Equity |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at December 31, 2021 |
|
|
i 141,015,213 |
|
|
$ |
i 1,410 |
|
|
|
i 950,214 |
|
|
$ |
( i 10,813 |
) |
|
$ |
i 196,224 |
|
|
$ |
( i 4,528 |
) |
|
$ |
i 182,293 |
|
Issuance of common stock |
|
|
i 42,559 |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Treasury stock |
|
— |
|
|
|
— |
|
|
|
i 9,130 |
|
|
|
( i 91 |
) |
|
|
— |
|
|
|
— |
|
|
|
( i 91 |
) |
|
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 1,115 |
) |
|
|
( i 1,115 |
) |
|
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 2,334 |
|
|
|
|
|
|
i 2,334 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at March 31, 2022 |
|
|
i 141,057,772 |
|
|
$ |
i 1,410 |
|
|
|
i 959,344 |
|
|
$ |
( i 10,904 |
) |
|
$ |
i 198,558 |
|
|
$ |
( i 5,643 |
) |
|
$ |
i 183,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at December 31, 2022 |
|
|
i 141,633,417 |
|
|
$ |
i 1,416 |
|
|
|
i 971,306 |
|
|
$ |
( i 11,051 |
) |
|
$ |
i 206,060 |
|
|
$ |
i 30,666 |
|
|
$ |
i 227,091 |
|
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 3,788 |
) |
|
|
( i 3,788 |
) |
|
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 1,770 |
|
|
|
— |
|
|
|
i 1,770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at March 31, 2023 |
|
|
i 141,633,417 |
|
|
$ |
i 1,416 |
|
|
|
i 971,306 |
|
|
$ |
( i 11,051 |
) |
|
$ |
i 207,830 |
|
|
$ |
i 26,878 |
|
|
$ |
i 225,073 |
|
The accompanying notes to the unaudited condensed consolidated financial statements are an integral part of these statements.
9
MONTAUK RENEWABLES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands):
|
|
Three Months Ended |
|
|||||
|
|
|
||||||
|
|
|
|
2022 |
|
|||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( i 3,788 |
) |
|
$ |
( i 1,115 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation, depletion and amortization |
|
|
i 5,196 |
|
|
|
i 5,153 |
|
Benefit for deferred income taxes |
|
|
( i 13,033 |
) |
|
|
( i 236 |
) |
Stock-based compensation |
|
|
i 1,770 |
|
|
|
i 2,334 |
|
Derivative mark-to-market adjustments and settlements |
|
|
i 396 |
|
|
|
i 2,415 |
|
Gain on property insurance proceeds |
|
|
i — |
|
|
|
( i 313 |
) |
Accretion of asset retirement obligations |
|
|
i 100 |
|
|
|
i 98 |
|
Net loss (gain) on sale of assets |
|
|
i 37 |
|
|
|
( i 293 |
) |
Increase in earn-out liability |
|
|
i 214 |
|
|
|
i — |
|
Amortization of debt issuance costs |
|
|
i 93 |
|
|
|
i 108 |
|
Impairment loss |
|
|
i 451 |
|
|
|
i 51 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts and other receivables and other current assets |
|
|
i 1,033 |
|
|
|
i 2,949 |
|
Accounts payable and other accrued expenses |
|
|
( i 4,307 |
) |
|
|
( i 1,554 |
) |
Net cash (used in) provided by operating activities |
|
$ |
( i 11,838 |
) |
|
$ |
i 9,597 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
||
Capital expenditures |
|
$ |
( i 13,278 |
) |
|
$ |
( i 2,378 |
) |
Proceeds from insurance recovery |
|
|
i — |
|
|
|
i 313 |
|
Proceeds from sale of assets |
|
|
i — |
|
|
|
i 1,088 |
|
Net cash used in investing activities |
|
$ |
( i 13,278 |
) |
|
$ |
( i 977 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Repayments of long-term debt |
|
$ |
( i 2,000 |
) |
|
$ |
( i 2,000 |
) |
Treasury stock purchase |
|
|
i — |
|
|
|
( i 91 |
) |
Finance lease payments |
|
|
( i 18 |
) |
|
|
i — |
|
Net cash used in financing activities |
|
$ |
( i 2,018 |
) |
|
$ |
( i 2,091 |
) |
Net (decrease) increase in cash and cash equivalents and restricted cash |
|
$ |
( i 27,134 |
) |
|
$ |
i 6,529 |
|
Cash and cash equivalents and restricted cash at beginning of period |
|
$ |
i 105,606 |
|
|
$ |
i 53,612 |
|
Cash and cash equivalents and restricted cash at end of period |
|
$ |
i 78,472 |
|
|
$ |
i 60,141 |
|
Reconciliation of cash, cash equivalents, and restricted cash at end of period: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
i 78,043 |
|
|
$ |
i 59,794 |
|
Restricted cash and cash equivalents - current |
|
|
i 22 |
|
|
|
i 19 |
|
Restricted cash and cash equivalents - non-current |
|
|
i 407 |
|
|
|
i 328 |
|
|
|
$ |
i 78,472 |
|
|
$ |
i 60,141 |
|
The accompanying notes to the unaudited condensed consolidated financial statements are an integral part of these statements.
10
MONTAUK RENEWABLES, INC.
NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per-share amounts)
NOTE 1 – DESCRIPTION OF BUSINESS
Operations and organization
Montauk Renewables’ Business
Montauk Renewables, Inc. (the “Company” or “Montauk Renewables”) is a renewable energy company specializing in the management, recovery and conversion of biogas into Renewable Natural Gas (“RNG”). The Company captures methane, preventing it from being released into the atmosphere, and converts it into either RNG or electrical power for the electrical grid (“Renewable Electricity”). The Company, headquartered in Pittsburgh, Pennsylvania, has more than i 30 years of experience in the development, operation and management of landfill methane-fueled renewable energy projects. The Company has current operations at i 15 operating projects located in California, Idaho, Ohio, Oklahoma, Pennsylvania, North Carolina, South Carolina and Texas. The Company sells RNG and Renewable Electricity, taking advantage of Environmental Attribute premiums available under federal and state policies that incentivize their use.
Two of the Company’s key revenue drivers are sales of captured gas and sales of Renewable Identification Numbers (“RINs”) to fuel blenders. The Renewable Fuel Standard (“RFS”) is an Environmental Protection Agency (“EPA”) administered federal law that requires transportation fuel to contain a minimum volume of renewable fuel. RNG derived from landfill methane, agricultural digesters and wastewater treatment facilities used as a vehicle fuel qualifies as a D3 (cellulosic biofuel with a i 60% greenhouse gas reduction requirement) RIN. The RINs are compliance units for fuel blenders that were created by the RFS program in order to reduce greenhouse gases and imported petroleum into the United States.
An additional program utilized by the Company is the Low Carbon Fuel Standard (“LCFS”). This is state specific and is designed to stimulate the use of low-carbon fuels. To the extent that RNG from the Company’s facilities is used as a transportation fuel in states that have adopted an LCFS program, it is eligible to receive an Environmental Attribute additional to the RIN value under the federal RFS.
Another key revenue driver is the sale of captured electricity and the associated environmental premiums related to renewable sales. The Company’s electric facilities are designed to conform to and monetize various state renewable portfolio standards requiring a percentage of the electricity produced in that state to come from a renewable resource. Such premiums are in the form of Renewable Energy Credits (“RECs”). The Company’s largest electric facility, located in California, receives revenue for the monetization of RECs as a part of a purchase power agreement.
Collectively, the Company benefits from federal and state government incentives in the United States, provided in the form of RINs, RECs, LCFS credits, tax credits and other incentives to end users, distributors, system integrators and manufacturers of renewable energy projects, that promote the use of renewable energy, as Environmental Attributes.
/NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions of the SEC on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 16, 2023 (the “2022 Annual Report”). The results of operations for the three months March 31, 2023 in this report are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The balance sheet at December 31, 2022, has been derived from the audited financial statements as of that date. For further information, refer to the Company’s audited financial statements and notes thereto included for the year ended December 31, 2022 in the 2022 Annual Report.
11
Segment Reporting
The Company reports segment information in i three segments: RNG, Renewable Electricity Generation and Corporate. This is consistent with the internal reporting provided to the chief operating decision maker who evaluates operating results and performance. The aforementioned business services and offerings described in Note 1 are grouped and defined by management as two distinct operating segments: RNG and Renewable Electricity Generation. Below is a description of the Company’s operating segments and other activities.
The RNG segment represents the sale of gas sold at fixed-price contracts, counterparty share RNG volumes and applicable Environmental Attributes. This business unit represents the majority of the revenues generated by the Company.
The Renewable Electricity Generation segment represents the sale of captured electricity and applicable Environmental Attributes. Corporate relates to additional discrete financial information for the corporate function. It is primarily used as a shared service center for maintaining functions such as executive, accounting, treasury, legal, human resources, tax, environmental, engineering and other operations functions not otherwise allocated to a segment. As such, the corporate entity is not determined to be an operating segment but is discretely disclosed for purposes of reconciliation to the Company’s consolidated financial statements.
/Use of Estimates
The preparation of financial statements, in conformity with accounting principles generally accepted in the United States (“GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recently Adopted Accounting Standards
In June 2016, the FASB issued Accounting Standards Update 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This ASU and subsequent amendments are codified as Accounting Standards Codification Topic 326, Financial Instruments—Credit Losses (“ASC 326”). Application of ASC 326 was effective for SEC Issuers (excluding smaller reporting companies) for fiscal years beginning after December 15, 2019. Adoption for smaller reporting companies, emerging growth companies and nonpublic entities was deferred due to the COVID-19 pandemic and was required for fiscal years beginning after December 15, 2022. The ASU did not have a material impact on the Company’s consolidated financial statements or related financial statement disclosures.
Recently Issued Accounting Standards
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions to the current guidance on contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The FASB included a sunset provision within Topic 848 based on expectations of when the LIBOR would cease being published. The sunset provision has been amended from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The Company’s current debt agreement bears interest at the Bloomberg Short-Term Bank Yield Index Rate plus an applicable margin. LIBOR is no longer utilized as a reference rate.
12
NOTE 3 – ASSET IMPAIRMENT
The Company recorded an impairment loss of $ i 451 and $ i 51 for the three months ended March 31, 2023 and 2022, respectively. The first quarter 2023 impairment was for a feedstock processing machine component at an RNG site that was not in operational use. The first quarter 2022 impairment related to computer software and hardware no longer being utilized.
/NOTE 4 – REVENUES FROM CONTRACTS WITH CUSTOMERS
The following tables display the Company’s revenue by major source, excluding realized and unrealized gains or losses under the Company’s gas hedge program, based on product type and timing of transfer of goods and services for the three months ended March 31, 2023 and 2022:
|
|
Three months ended March 31, 2023 |
|
|||||||||
|
|
Goods transferred at a point in time |
|
|
Goods transferred over time |
|
|
Total |
|
|||
Major goods/Service line: |
|
|
|
|
|
|
|
|
|
|||
Natural gas commodity |
|
$ |
i 204 |
|
|
$ |
i 7,877 |
|
|
$ |
i 8,081 |
|
Natural gas environmental attributes |
|
|
i 6,644 |
|
|
|
— |
|
|
|
i 6,644 |
|
Electric commodity |
|
|
— |
|
|
|
i 2,621 |
|
|
|
i 2,621 |
|
Electric environmental attributes |
|
|
i 1,808 |
|
|
|
— |
|
|
|
i 1,808 |
|
|
|
$ |
i 8,656 |
|
|
$ |
i 10,498 |
|
|
$ |
i 19,154 |
|
Operating segment: |
|
|
|
|
|
|
|
|
|
|||
RNG |
|
$ |
i 6,848 |
|
|
$ |
i 7,877 |
|
|
$ |
i 14,725 |
|
REG |
|
|
i 1,808 |
|
|
|
i 2,621 |
|
|
|
i 4,429 |
|
|
|
$ |
i 8,656 |
|
|
$ |
i 10,498 |
|
|
$ |
i 19,154 |
|
|
|
Three months ended March 31, 2022 |
|
|||||||||
|
|
Goods transferred at a point in time |
|
|
Goods transferred over time |
|
|
Total |
|
|||
Major goods/Service line: |
|
|
|
|
|
|
|
|
|
|||
Natural gas commodity |
|
$ |
i 405 |
|
|
$ |
i 9,488 |
|
|
$ |
i 9,893 |
|
Natural gas environmental attributes |
|
|
i 22,710 |
|
|
|
— |
|
|
|
i 22,710 |
|
Electric commodity |
|
|
— |
|
|
|
i 2,385 |
|
|
|
i 2,385 |
|
Electric environmental attributes |
|
|
i 1,649 |
|
|
|
— |
|
|
|
i 1,649 |
|
|
|
$ |
i 24,764 |
|
|
$ |
i 11,873 |
|
|
$ |
i 36,637 |
|
Operating segment: |
|
|
|
|
|
|
|
|
|
|||
RNG |
|
$ |
i 23,115 |
|
|
$ |
i 9,488 |
|
|
$ |
i 32,603 |
|
REG |
|
|
i 1,649 |
|
|
|
i 2,385 |
|
|
|
i 4,034 |
|
|
|
$ |
i 24,764 |
|
|
$ |
i 11,873 |
|
|
$ |
i 36,637 |
|
NOTE 5 – ACCOUNTS AND OTHER RECEIVABLES
The Company extends credit based upon an evaluation of the customer’s financial condition and, while collateral is not required, the Company periodically receives surety bonds that guarantee payment. Credit terms are consistent with industry standards and practices. Reserves for uncollectible accounts, if any, are recorded as part of general and administrative expenses in the condensed consolidated statements of operations. i i No / reserve expense was recorded for the three months ended March 31, 2023 and 2022.
Accounts and other receivables consist of the following as of March 31, 2023 and December 31, 2022:
|
|
|
||||
Accounts receivables |
$ |
i 6,214 |
|
$ |
i 7,148 |
|
Other receivables |
|
i 73 |
|
|
i 57 |
|
Reimbursable expenses |
|
i 18 |
|
|
i 17 |
|
Accounts and other receivables, net |
$ |
i 6,305 |
|
$ |
i 7,222 |
|
13
/
NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment consists of the following as of March 31, 2023 and December 31, 2022:
|
|
|
||||
|
|
|
|
|
||
Land |
$ |
i 595 |
|
$ |
i 595 |
|
Buildings and improvements |
|
i 29,224 |
|
|
i 29,268 |
|
Machinery and equipment |
|
i 247,216 |
|
|
i 247,631 |
|
Gas mineral rights |
|
i 35,526 |
|
|
i 34,526 |
|
Construction work in progress |
|
i 32,362 |
|
|
i 20,745 |
|
Total |
$ |
i 344,923 |
|
$ |
i 332,765 |
|
Less: Accumulated depreciation and amortization |
|
( i 161,123 |
) |
|
( i 156,819 |
) |
Property, plant & equipment, net |
$ |
i 183,800 |
|
$ |
i 175,946 |
|
Depreciation expense for property, plant and equipment was $ i 4,807 and $ i 4,810 and amortization expense for gas mineral rights was $ i i 128 / for both the three months ended March 31, 2023 and 2022, respectively.
/NOTE 7 – GOODWILL AND INTANGIBLE ASSETS, NET
Goodwill and Intangible assets consist of the following as of March 31, 2023 and December 31, 2022:
|
|
|
|
|
||||
Goodwill |
|
$ |
i 60 |
|
|
$ |
i 60 |
|
Intangible assets with indefinite lives: |
|
|
|
|
|
|
||
Land use rights |
|
|
i 329 |
|
|
|
i 329 |
|
Total intangible assets with indefinite lives: |
|
$ |
i 329 |
|
|
$ |
i 329 |
|
Intangible assets with finite lives: |
|
|
|
|
|
|
||
Interconnection, net of accumulated amortization of $ i 3,292 and $ i 3,107 |
|
$ |
i 11,501 |
|
|
$ |
i 11,686 |
|
Customer contracts, net of accumulated amortization of $ i 17,080 and $ i 17,022 |
|
|
i 3,622 |
|
|
|
i 3,680 |
|
Total intangible assets with finite lives: |
|
$ |
i 15,123 |
|
|
$ |
i 15,366 |
|
Total Goodwill and Intangible assets |
|
$ |
i 15,512 |
|
|
$ |
i 15,755 |
|
As of March 31, 2023, the weighted average remaining useful life of customer contracts and interconnection were both i i 16 years / . Amortization expense was $ i 243 and $ i 215 for the three months ended March 31, 2023 and 2022, respectively.
/NOTE 8 – ASSET RETIREMENT OBLIGATIONS
The following table summarizes the activity associated with asset retirement obligations of the Company as of March 31, 2023 and December 31, 2022:
|
Three months ended March 31, 2023 |
|
Year ended December 31, 2022 |
|
||
Asset retirement obligations—beginning of period |
$ |
i 5,493 |
|
$ |
i 5,301 |
|
Accretion expense |
|
i 100 |
|
|
i 296 |
|
Decommissioning |
i — |
|
|
( i 104 |
) |
|
Asset retirement obligations—end of period |
$ |
i 5,593 |
|
$ |
i 5,493 |
|
NOTE 9 – DERIVATIVE INSTRUMENTS
To mitigate market risk associated with fluctuations in energy commodity prices (natural gas) and interest rates, the Company utilizes various derivative contracts to secure energy commodity pricing and interest rates under a board-approved program. The Company does not apply hedge accounting to any of its derivative instruments, and all realized and unrealized gains and losses from changes in derivative values are recognized in earnings each period. i As a result of the economic hedging strategies employed, the
14
Company had the following realized and unrealized gains and losses in the condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022:
Derivative Instrument |
Location |
Three months ended March 31, 2023 |
|
Three months ended March 31, 2022 |
|
||
Commodity contracts: |
|
|
|
|
|
||
Realized natural gas |
Operating revenue |
$ |
i — |
|
$ |
( i 1,016 |
) |
Unrealized natural gas |
Operating revenue |
|
i — |
|
|
( i 3,451 |
) |
Interest rate swaps |
Interest expense |
|
( i 396 |
) |
|
i 1,036 |
|
Net loss |
|
$ |
( i 396 |
) |
$ |
( i 3,431 |
) |
NOTE 10 – FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company’s assets and liabilities that are measured at fair value on a recurring basis include the following as of March 31, 2023 and December 31, 2022, set forth by level, within the fair value hierarchy:
|
|
|||||||||||
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
||||
Interest rate swap derivative asset |
$ |
i — |
|
$ |
i 1,419 |
|
|
|
$ |
i 1,419 |
|
|
Asset retirement obligations |
|
i — |
|
|
i — |
|
|
( i 5,593 |
) |
|
( i 5,593 |
) |
Pico earn-out liability |
|
i — |
|
|
i — |
|
|
( i 4,057 |
) |
|
( i 4,057 |
) |
|
|
|
|
|
|
|
|
|
||||
|
$ |
i — |
|
$ |
i 1,419 |
|
$ |
( i 9,650 |
) |
$ |
( i 8,231 |
) |
|
|
|||||||||||
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
||||
Interest rate swap derivative asset |
$ |
i — |
|
$ |
i 1,815 |
|
$ |
i — |
|
$ |
i 1,815 |
|
Asset retirement obligations |
|
i — |
|
|
i — |
|
|
( i 5,493 |
) |
|
( i 5,493 |
) |
Pico earn-out liability |
|
i — |
|
|
i — |
|
|
( i 3,843 |
) |
|
( i 3,843 |
) |
|
|
|
|
|
|
|
|
|
||||
|
$ |
i — |
|
$ |
i 1,815 |
|
$ |
( i 9,336 |
) |
$ |
( i 7,521 |
) |
A summary of changes in the fair values of the Company’s Level 3 instruments, attributable to asset retirement obligations, for the three months ended March 31, 2023 and the year ended December 31, 2022 is included in Note 8. In addition, certain assets are measured at fair value on a non-recurring basis when an indicator of impairment is identified and the assets’ fair values are determined to be less than its carrying value. See Note 3 for additional information.
/NOTE 11 – ACCRUED LIABILITIES
The Company’s accrued liabilities consists of the following as of March 31, 2023 and December 31, 2022:
|
|
|
||||
Accrued expenses |
$ |
i 5,241 |
|
$ |
i 3,221 |
|
Payroll and related benefits |
|
i 1,640 |
|
|
i 1,561 |
|
Royalty |
|
i 2,220 |
|
|
i 7,836 |
|
Utility |
|
i 1,401 |
|
|
i 1,605 |
|
Other |
|
i 852 |
|
|
i 867 |
|
Accrued liabilities |
$ |
i 11,354 |
|
$ |
i 15,090 |
|
15
/
NOTE 12 – DEBT
The Company’s debt consists of the following as of March 31, 2023 and December 31, 2022:
|
|
|
||||
Term loans |
$ |
i 70,000 |
|
$ |
i 72,000 |
|
Less: current principal maturities |
|
( i 8,000 |
) |
|
( i 8,000 |
) |
Less: debt issuance costs (on long-term debt) |
|
( i 467 |
) |
|
( i 495 |
) |
Long-term debt |
$ |
i 61,533 |
|
$ |
i 63,505 |
|
Current portion of long-term debt |
|
i 7,876 |
|
|
i 7,870 |
|
|
$ |
i 69,409 |
|
$ |
i 71,375 |
|
Amended Credit Agreement
On December 12, 2018, Montauk Energy Holdings LLC (“MEH”) entered into the Second Amended and Restated Revolving Credit and Term Loan Agreement (as amended, “Credit Agreement”), by and among MEH, the financial institutions from time to time party thereto as lenders and Comerica Bank, as the administrative agent, sole lead arranger and sole bookrunner (“Comerica”). The Credit Agreement (i) amended and restated in its entirety MEH’s prior revolving credit and term loan facility, dated as of August 4, 2017, as amended, with Comerica and certain other financial institutions and (ii) replaced in its entirety the prior credit agreement, dated as of August 4, 2017, as amended, between Comerica and Bowerman Power LFG, LLC, a wholly-owned subsidiary of MEH.
On March 21, 2019, MEH entered into the first amendment to the Credit Agreement (the “First Amendment”), which clarified a variety of terms, definitions and calculations in the Credit Agreement. The Credit Agreement requires the Company to maintain customary affirmative and negative covenants, including certain financial covenants, which are measured at the end of each fiscal quarter. On September 12, 2019, the Company entered into the second amendment to the Credit Agreement (the "Second Amendment"). Among other matters, the Second Amendment redefined the Fixed Charge Coverage Ratio (as defined in the Credit Agreement), reduced the commitments under the revolving credit facility to $ i 80,000, redefined the Total Leverage Ratio (as defined in the Credit Agreement) and eliminated the RIN Floor (as defined in the Second Amendment) as an Event of Default. In connection with the Second Amendment, the Company paid down the outstanding term loan by $ i 38,250 and the resulting quarterly principal installments were reduced to $ i 2,500.
In connection with the completion of the Reorganization Transactions and the IPO, the Company entered into the third amendment to the Credit Agreement (the “Third Amendment”). This amendment permitted the Change of Control provisions, as defined in the underlying agreement, to permit the Reorganization Transactions and IPO to be completed.
On December 21, 2021, MEH entered into the fourth amendment to the Second Amended and Restated Revolving Credit and Term Loan Agreement ("the Fourth Amendment"). The current credit agreement, which is secured by a lien on substantially all assets of the Company and certain of its subsidiaries, provides for a $ i 80,000 term loan and a $ i 120,000 revolving credit facility. The term loan amortizes in quarterly installments of $ i 2,000 through 2024, then increases to $ i 3,000 from 2025 to 2026 with a final payment of $ i 32,000 in late 2026.
The Company accounted for the Fourth Amendment as both a debt modification and debt extinguishment in accordance with ASC 470, Debt (“ASC 470”). In connection with the Credit Agreement, the Company paid $ i 2,027 in fees. Of this amount, $ i 326 was expensed and $ i 1,701 was capitalized and will be amortized over the life of the Credit Agreement. Amortized debt issuance expense was $ i 93 and $ i 108 for the three months ended March 31, 2023 and 2022, respectively and was recorded as interest expense on the statement of operations.
As of March 31, 2023, $ i 70,000 was outstanding under the term loan. In addition, the Company had $ i 4,477 of outstanding letters of credit as of March 31, 2023. Amounts available under the revolving credit facility are reduced by any amounts outstanding under letters of credit. As of March 31, 2023, the Company’s capacity available for borrowing under the revolving credit facility was $ i 115,523. Borrowings of the term loans and revolving credit facility bear interest at the Bloomberg Short-Term Bank Yield Index Rate plus an applicable margin. Interest rates as of March 31, 2023 and December 31, 2022 were i 6.64% and i 4.12%, respectively.
As of March 31, 2023, the Company was in compliance with all applicable financial covenants under the Credit Agreement.
/
16
NOTE 13 – INCOME TAXES
The Company’s provision for income taxes in interim periods is typically computed by applying the estimated annual effective tax rate to income or loss before income taxes for the period. In addition, non-recurring or discrete items are recorded during the period(s) in which they occur.
|
|
Three Months Ended |
|
|||||
|
|
|
|
|
||||
Benefit for income taxes |
|
$ |
( i 12,060 |
) |
|
$ |
( i 258 |
) |
Effective tax rate |
|
|
i 76 |
% |
|
|
i 19 |
% |
Income tax expense for the three months ended March 31, 2023 was calculated using an estimated effective tax rate which differs from the U.S. federal statutory rate of i 21% primarily due to the adjustment for production tax credits and 162(m) compensation limit adjustment. The effective tax rate of i 76% for the three months ended March 31, 2023 was higher than the rate for the three months ended March 31, 2022 of i 19% primarily due to current period pre-tax book income being higher in 2022. The March 31, 2023 rate also includes utilization of production tax credits and certain discrete items.
Income tax expense for the three months ended March 31, 2022 was calculated using an estimated effective tax rate which differs from the U.S. federal statutory rate of i 21% primarily due to the adjustment for production tax credits.
/NOTE 14 – SHARE-BASED COMPENSATION
The board of directors of Montauk Renewables adopted the Montauk Renewables, Inc. Equity and Incentive Compensation Plan (“MRI EICP”) in January 2021. Following the closing of the IPO, the board of directors of Montauk Renewables approved the grant of non-qualified stock options, restricted stock units and restricted share awards to the employees of Montauk Renewables and its subsidiaries in January 2021. In connection with the restricted share awards, the officers of the Company made elections under Section 83(b) of the Code. Pursuant to such elections, the Company withheld i 950,214 shares of common stock from such awards at a price of $ i 11.38 per share from such awards. The Company records and reports restricted shares and restricted stock units when vested and in the case of options, when such awards are settled in the Company’s common stock. As of March 31, 2023, unrecognized MRI EICP compensation expense for awards the Company expects to vest was $ i 15,332 and will be recognized over approximately i 4 years.
In connection with a May 2021 asset acquisition, i 1,250,000 restricted share awards (“RS Awards”) were granted to i two employees that were hired by the Company in connection with such acquisition. The RS Awards were to vest over a five-year period and subject to the achievement of time and performance-based vesting criteria over such period. In May 2022, the RS Awards were amended to remove the performance-based vesting criteria and will only be subject to time-based vesting requirements over a five-year period. The awards were revalued at $ i 15,500. Stock compensation expense related to the two awards was $ i 1,227 for the three months ended March 31, 2023.
The restricted shares, restricted stock units and option awards are subject to vesting schedules that commence or conclude, in the case of the options and restricted stock unit awards, on the one-year anniversary of the grant date and are subject to the terms and conditions of the MRI EICP and related award agreements including, in the case of the restricted share awards, each officer having made an election under Section 83(b) of the Code.
Options granted under the MRI EICP allow the recipient to receive the Company’s common stock equal to the appreciation in the fair market value of the Company’s common stock between the grant date and the exercise and settlement of options into shares as of the exercise date(s). The fair value of the MRI EICP options was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions (no dividends were expected):
|
|
Grant Date |
|
|
Risk-free interest rate |
|
|
i 0.5 |
% |
Expected volatility |
|
|
i 32.0 |
% |
Expected option life (in years) |
|
|
i 5.5 |
|
Grant-date fair value |
|
$ |
i 3.44 |
|
17
The following table summarizes the restricted shares, restricted stock units and options outstanding under the MRI EICP as of March 31, 2023 and March 31, 2022, respectively:
|
|
Restricted Shares |
|
|
Restricted Stock Units |
|
|
Options |
|
|||||||||||||||
|
|
Number of |
|
|
Weighted |
|
|
Number of |
|
|
Weighted |
|
|
Number of |
|
|
Weighted |
|
||||||
End of period - December 31, 2022 |
|
|
i 2,028,301 |
|
|
$ |
i 11.80 |
|
|
|
i 280,000 |
|
|
$ |
i 10.13 |
|
|
|
i — |
|
|
$ |
i — |
|
Beginning of period - January 1, 2023 |
|
|
i 2,028,301 |
|
|
$ |
i 11.80 |
|
|
|
i 280,000 |
|
|
$ |
i 10.13 |
|
|
|
i — |
|
|
$ |
i — |
|
Granted |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
— |
|
Vested |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
Forfeited |
|
|
i — |
|
|
|
i — |
|
|
|
( i 80,000 |
) |
|
i 10.23 |
|
|
|
i — |
|
|
|
i — |
|
|
Exercised |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i — |
|
|
|
i — |
|
End of period - March 31, 2023 |
|
|
i 2,028,301 |
|
|
$ |
i 11.80 |
|
|
|
i 200,000 |
|
|
$ |
i 10.09 |
|
|
|
i — |
|
|
$ |
i — |
|
|
|
Restricted Shares |
|
|
Restricted Stock Units |
|
|
Options |
|
|||||||||||||||
|
|
Number of |
|
|
Weighted |
|
|
Number of |
|
|
Weighted |
|
|
Number of |
|
|
Weighted |
|
||||||
End of period - December 31, 2021 |
|
|
i 2,569,613 |
|
|
$ |
i 10.08 |
|
|
|
i 377,984 |
|
|
$ |
i 10.23 |
|
|
|
i 950,214 |
|
|
$ |
i 11.38 |
|
Beginning of period - January 1, 2022 |
|
|
i 2,569,613 |
|
|
$ |
i 10.08 |
|
|
|
i 377,984 |
|
|
$ |
i 10.23 |
|
|
|
i 950,214 |
|
|
$ |
i 11.38 |
|
Granted |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
Vested |
|
|
( i 23,705 |
) |
|
|
i 11.38 |
|
|
|
( i 27,984 |
) |
|
|
i 11.38 |
|
|
|
( i 950,214 |
) |
|
|
i 11.38 |
|
Forfeited |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
Exercised |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i — |
|
|
|
i — |
|
End of period - March 31, 2022 |
|
|
i 2,545,908 |
|
|
$ |
i 10.07 |
|
|
|
i 350,000 |
|
|
$ |
i 10.13 |
|
|
|
i — |
|
|
$ |
i — |
|
As of March 31, 2023 none of the i 950,214 vested options have been exercised.
/
NOTE 15 – DEFINED CONTRIBUTION PLAN
The Company maintains a 401(k) defined contribution plan for eligible employees. The Company matches i 50% of an employee’s deferrals up to i 4%. The Company also contributes i 3% of eligible employee’s compensation expense as a safe harbor contribution. The matching contributions vest ratably over i four years of service, while the safe harbor contributions vest immediately. Incurred expense related to the 401(k) plan was $ i 143 and $ i 167 for the three months ended March 31, 2023 and 2022, respectively.
/Note 16 – RELATED PARTY TRANSACTIONS
On January 26, 2021, the Company entered into a Loan Agreement and Secured Promissory Note (the “Initial Promissory Note”) with Montauk Holdings Limited (“MNK”). MNK is currently an affiliate of the Company and certain of the Company’s directors and executive officers are also directors and executive officers of MNK. Pursuant to the Initial Promissory Note, the Company advanced a cash loan of $ i 5,000 to MNK for MNK to pay its dividends tax liability arising from the Reorganization Transactions under the South African Income Tax Act, 1962 (Act No. 58 of 1962), as amended (the “South African Income Tax Act”). On February 22, 2021, the Company and MNK entered into an Amended and Restated Promissory Note (the “Amended Promissory Note”) to increase the principal amount of the loan to a total of $ i 7,140, in the aggregate, and on December 22, 2021 entered into the Second Amended and Restated Loan Agreement and Secured Promissory Note (the “Second Amended Promissory Note”) to increase the principal amount of the loan to a total of $ i 8,940, in the aggregate, and on December 22, 2022 entered into the First Amendment of the Second Amended and Restated Loan Agreement and Secured Promissory Note (the “First Amendment of Second Amended Promissory Note”) to amend the maturity date of June 30, 2023, each in accordance with the Company’s obligations set forth in the Transaction Implementation Agreement entered into by and among the Company, MNK and the other party thereto, dated November 6, 2020, and amended on January 14, 2021. The terms of the Amended Promissory Note provide the Company a security interest of i 800,000 shares of the Company and require MNK to use the proceeds of any such sale of the shares to repay the note. The Amended Promissory Note also has default provisions where MNK will deliver any unsold shares of the Company back to the Company to satisfy repayment of the note.
Under applicable guidance for variable interest entities in ASC 810, Consolidation, the Company determined that MNK is a variable interest entity. The Company concluded that it is not the primary beneficiary of the variable interest entity, as the Company
18
does not have a controlling financial interest and does not have the power to direct the activities that most significantly impact the economic performance of MNK. Accordingly, the Company concluded that presentation of the Amended Promissory Note as a related party receivable remains appropriate.
MNK was delisted from the JSE on January 26, 2021. The MNK Board of Directors and Shareholders held its annual general meeting in March 2023 and voted to take MNK private.
Related Party Reimbursements
Periodically the Company will reimburse MNK and HCI Managerial Services Proprietary Limited, the administrator for the Company’s secondarily listed Johannesburg Stock Exchange trading symbol, for expenses incurred on behalf of the Company. Amounts reimbursed were $ i 59 and $ i 3 for the three months ended March 31, 2023 and 2022, respectively. $ i 41 and $ i 26 were owed as of March 31, 2023 and December 31, 2022, respectively.
/NOTE 17 – SEGMENT INFORMATION
The Company’s reportable segments for the three months ended March 31, 2023 and 2022 are Renewable Natural Gas and Renewable Electricity Generation. Renewable Natural Gas includes the production of RNG. Renewable Electricity Generation includes generation of electricity at biogas-to-electricity plants. The corporate entity is not determined to be an operating segment but is discretely disclosed for purposes of reconciliation of the Company’s condensed consolidated financial statements. i The following tables are consistent with the manner in which the chief operating decision maker evaluates the performance of each segment and allocates the Company’s resources. In the following tables, “RNG” refers to Renewable Natural Gas and “REG” refer to Renewable Electricity Generation.
|
|
Three Months Ended March 31, 2023 |
|
|||||||||||||
|
|
RNG |
|
|
REG |
|
|
Corporate |
|
|
Total |
|
||||
Total revenue |
|
$ |
i 14,785 |
|
|
$ |
i 4,369 |
|
|
$ |
i - |
|
|
$ |
i 19,154 |
|
Net (loss) income |
|
|
( i 4,340 |
) |
|
|
( i 265 |
) |
|
|
i 817 |
|
|
|
( i 3,788 |
) |
EBITDA |
|
|
( i 493 |
) |
|
|
i 1,022 |
|
|
|
( i 9,506 |
) |
|
|
( i 8,977 |
) |
Adjusted EBITDA (1) |
|
|
( i 5 |
) |
|
|
i 1,022 |
|
|
|
( i 9,423 |
) |
|
|
( i 8,406 |
) |
Total assets |
|
|
i 156,750 |
|
|
|
i 54,846 |
|
|
|
i 112,741 |
|
|
|
i 324,337 |
|
Capital expenditures |
|
|
i 10,241 |
|
|
|
i 3,031 |
|
|
|
i 6 |
|
|
|
i 13,278 |
|
The following table is a reconciliation of the Company’s reportable segments’ net income from continuing operations to Adjusted EBITDA for the three months ended March 31, 2023:
|
|
Three Months Ended March 31, 2023 |
|
|||||||||||||
|
|
RNG |
|
|
REG |
|
|
Corporate |
|
|
Total |
|
||||
Net (loss) income |
|
$ |
( i 4,340 |
) |
|
$ |
( i 265 |
) |
|
$ |
i 817 |
|
|
$ |
( i 3,788 |
) |
Depreciation, depletion and amortization |
|
|
i 3,847 |
|
|
|
i 1,287 |
|
|
|
i 62 |
|
|
|
i 5,196 |
|
Interest expense |
|
|
— |
|
|
|
— |
|
|
|
i 1,675 |
|
|
|
i 1,675 |
|
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
( i 12,060 |
) |
|
|
( i 12,060 |
) |
EBITDA |
|
$ |
( i 493 |
) |
|
$ |
i 1,022 |
|
|
$ |
( i 9,506 |
) |
|
$ |
( i 8,977 |
) |
Impairment loss |
|
|
i 451 |
|
|
|
— |
|
|
|
— |
|
|
|
i 451 |
|
Net loss on sale of assets |
|
|
i 37 |
|
|
|
— |
|
|
|
— |
|
|
|
i 37 |
|
Transaction costs |
|
|
— |
|
|
|
— |
|
|
|
i 83 |
|
|
|
i 83 |
|
Adjusted EBITDA |
|
$ |
( i 5 |
) |
|
$ |
i 1,022 |
|
|
$ |
( i 9,423 |
) |
|
$ |
( i 8,406 |
) |
19
|
|
Three Months Ended March 31, 2022 |
|
|||||||||||||
|
|
RNG |
|
|
REG |
|
|
Corporate |
|
|
Total |
|
||||
Total revenue |
|
$ |
i 32,665 |
|
|
$ |
i 3,971 |
|
|
$ |
( i 4,467 |
) |
|
$ |
i 32,169 |
|
Net Income (loss) |
|
|
i 12,940 |
|
|
|
( i 1,178 |
) |
|
|
( i 12,877 |
) |
|
|
( i 1,115 |
) |
EBITDA |
|
|
i 16,620 |
|
|
|
i 214 |
|
|
|
( i 13,022 |
) |
|
|
i 3,812 |
|
Adjusted EBITDA (1) |
|
|
i 16,327 |
|
|
|
i 214 |
|
|
|
( i 9,493 |
) |
|
|
i 7,048 |
|
Total assets |
|
|
i 147,981 |
|
|
|
i 56,818 |
|
|
|
i 82,183 |
|
|
|
i 286,982 |
|
Capital expenditures |
|
|
i 1,012 |
|
|
|
i 1,361 |
|
|
|
i 5 |
|
|
|
i 2,378 |
|
The following table is a reconciliation of the Company’s reportable segments’ net income from continuing operations to Adjusted EBITDA for the three months ended March 31, 2022:
|
|
Three Months Ended March 31, 2022 |
|
|||||||||||||
|
|
RNG |
|
|
REG |
|
|
Corporate |
|
|
Total |
|
||||
Net Income (loss) |
|
$ |
i 12,940 |
|
|
$ |
( i 1,178 |
) |
|
$ |
( i 12,877 |
) |
|
$ |
( i 1,115 |
) |
Depreciation, depletion and amortization |
|
|
i 3,680 |
|
|
|
i 1,392 |
|
|
|
i 81 |
|
|
|
i 5,153 |
|
Interest expense |
|
|
— |
|
|
|
— |
|
|
|
i 32 |
|
|
|
i 32 |
|
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
( i 258 |
) |
|
|
( i 258 |
) |
EBITDA |
|
$ |
i 16,620 |
|
|
$ |
i 214 |
|
|
$ |
( i 13,022 |
) |
|
$ |
i 3,812 |
|
Impairment loss |
|
|
— |
|
|
|
— |
|
|
|
i 51 |
|
|
|
i 51 |
|
Net gain on sale of assets |
|
|
( i 293 |
) |
|
|
|
|
|
|
|
|
( i 293 |
) |
||
Transaction costs |
|
|
— |
|
|
|
— |
|
|
|
i 27 |
|
|
|
i 27 |
|
Non cash hedging charges |
|
|
— |
|
|
|
— |
|
|
|
i 3,451 |
|
|
|
i 3,451 |
|
Adjusted EBITDA |
|
$ |
i 16,327 |
|
|
$ |
i 214 |
|
|
$ |
( i 9,493 |
) |
|
$ |
i 7,048 |
|
For the three months ended March 31, 2023 and 2022, four and five customers, respectively, made up greater than 10% of our total revenues.
|
|
Three Months Ended March 31, 2023 |
|
|||||||||||||
|
|
RNG |
|
|
REG |
|
|
Corporate |
|
|
Total |
|
||||
Customer A |
|
|
— |
|
|
|
i 21.0 |
% |
|
|
— |
|
|
|
i 21.0 |
% |
Customer B |
|
|
i 19.8 |
% |
|
|
— |
|
|
|
— |
|
|
|
i 19.8 |
% |
Customer C |
|
|
i 17.3 |
% |
|
|
— |
|
|
|
— |
|
|
|
i 17.3 |
% |
Customer D |
|
|
i 10.5 |
% |
|
|
— |
|
|
|
— |
|
|
|
i 10.5 |
% |
|
|
Three Months Ended March 31, 2022 |
|
|||||||||||||
|
|
RNG |
|
|
REG |
|
|
Corporate |
|
|
Total |
|
||||
Customer A |
|
|
i 24.3 |
% |
|
|
— |
|
|
|
— |
|
|
|
i 24.3 |
% |
Customer B |
|
|
i 16.1 |
% |
|
|
— |
|
|
|
— |
|
|
|
i 16.1 |
% |
Customer C |
|
|
— |
|
|
|
i 11.2 |
% |
|
|
— |
|
|
|
i 11.2 |
% |
Customer D |
|
|
i 10.6 |
% |
|
|
— |
|
|
|
— |
|
|
|
i 10.6 |
% |
Customer E |
|
|
i 10.3 |
% |
|
|
— |
|
|
|
— |
|
|
|
i 10.3 |
% |
NOTE 18 – LEASES
The Company leases office space and other office equipment under operating lease arrangements (with initial terms greater than twelve months), expiring in various years through 2033. These leases have been entered into to better enable the Company to conduct business operations. Office space is leased to provide adequate workspace for all employees in Pittsburgh, Pennsylvania and Houston, Texas. Office space and office equipment agreements that exceed 12 months are accounted for as operating leases in accordance with ASC 842, Leases.
The Company also leases safety equipment for the various operational sites in the United States. The term of certain equipment exceeds twelve months and is accordingly classified as a finance lease under ASC 842. The finance leases expire in 2024 and were entered into in order to provide a safe work environment for operational employees.
20
The Company determines if an arrangement is, or contains, a lease at inception based on whether that contract conveys the right to control the use of an identified asset in exchange for consideration for a period of time. For all operating and finance lease arrangements, the Company presents at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.
The Company has elected, as a practical expedient, not to separate non-lease components from lease components, and instead account for each separate component as a single lease component for all lease arrangements, as lessee. In addition, the Company has elected, as a practical expedient, not to apply lease recognition requirements to leases with a term of one year or less. In determination of the lease term, the Company considers the likelihood of lease renewal options and lease termination provisions.
The Company uses its incremental borrowing rate, as the basis to calculate the present value of future lease payments, at lease commencement. The incremental borrowing rate represents the rate that would approximate the rate to borrow funds on a collateralized basis over a similar term and in a similar economic environment.
Supplemental information related to operating lease arrangements was as follows:
|
|
Three months ended |
|
|||||
|
|
|
||||||
|
|
|
|
2022 |
|
|||
Cash paid for amounts included in the measurement of operating lease liabilities |
|
$ |
i 86 |
|
|
$ |
i 64 |
|
Weighted average remaining lease term (in years) |
|
|
i 5.92 |
|
|
|
i 1.05 |
|
Weighted average discount rate |
|
|
i 5.00 |
% |
|
|
i 5.00 |
% |
Future minimum operating lease payments are as follows:
Year Ending |
|
|
|
|
Remainder of 2023 |
|
$ |
i 344 |
|
2024 |
|
|
i 611 |
|
2025 |
|
|
i 624 |
|
2026 |
|
|
i 573 |
|
2027 |
|
|
i 583 |
|
Thereafter |
|
|
i 3,307 |
|
Interest |
|
|
( i 1,319 |
) |
Total |
|
$ |
i 4,723 |
|
Supplemental information related to finance lease arrangements was as follows:
|
|
Three months ended |
|
|||||
|
|
|
||||||
|
|
|
|
2022 |
|
|||
Cash paid for amounts included in the measurement of financing lease liabilities |
|
$ |
i 19 |
|
|
$ |
i — |
|
Weighted average remaining lease term (in years) |
|
|
i 1.14 |
|
|
|
— |
|
Weighted average discount rate |
|
|
i 5.00 |
% |
|
|
i — |
|
/
Future minimum finance lease payments are as follows:
Year Ending |
|
|
|
|
Remainder of 2023 |
|
$ |
i 57 |
|
2024 |
|
|
i 25 |
|
Interest |
|
|
( i 2 |
) |
Total |
|
$ |
i 80 |
|
21
NOTE 19 – LOSS PER SHARE
Basic and diluted loss per share was computed using the following common share data for the three months ended March 31, 2023 and March 31, 2022, respectively:
|
|
Three months ended March 31, 2023 |
|
|
Three months ended March 31, 2022 |
|
||
Net loss |
|
$ |
( i 3,788 |
) |
|
$ |
( i 1,115 |
) |
Basic weighted-average shares outstanding |
|
|
i 141,633,417 |
|
|
|
i 141,045,477 |
|
Dilutive effect of share-based awards |
|
|
i — |
|
|
|
i — |
|
Diluted weighted-average shares outstanding |
|
|
i 141,633,417 |
|
|
|
i 141,045,477 |
|
Basic loss per share |
|
$ |
( i 0.03 |
) |
|
$ |
( i 0.01 |
) |
Diluted loss per share |
|
$ |
( i 0.03 |
) |
|
$ |
( i 0.01 |
) |
/
As a result of incurring a net loss for the three months ended March 31, 2023 and March 31, 2022, potential common shares of i 616,496 and i 600,467 were excluded from diluted loss per share because the effect would have been antidilutive.
/NOTE 20 – SUBSEQUENT EVENTS
The Company evaluated its March 31, 2023 condensed consolidated financial statements through the date the financial statements were issued. On April 19, 2023, the Company granted i 2,100,000 stock options to certain executive officers. The exercise price of the options is $ i 6.77 and they vest in one third increments beginning in 2026. The stock option awards expire one year after vesting.
/22
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. Throughout this section, dollar amounts are expressed in thousands, except for per share amounts and MMBtu and RIN pricing amounts and unless otherwise indicated.
In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Cautionary Note Regarding Forward-Looking Statements,” “Item 1A.–Risk Factors” of our 2022 Annual Report and elsewhere in this report.
Overview
Montauk Renewables is a renewable energy company specializing in the recovery and processing of biogas from landfills and other non-fossil fuel sources for beneficial use as a replacement to fossil fuels. We develop, own, and operate RNG projects, using proven technologies that supply RNG into the transportation industry and use RNG to produce Renewable Electricity. We are one of the largest U.S. producers of RNG, having participated in the industry for over 30 years. We established our operating portfolio of 12 RNG and three Renewable Electricity projects through self-development, partnerships, and acquisitions that span six states.
Biogas is produced by microbes as they break down organic matter in the absence of oxygen (during a process called anaerobic digestion). Our two current sources of commercial scale biogas are LFG or ADG. We typically secure our biogas feedstock through long-term fuel supply agreements and property lease agreements with biogas site hosts. Once we secure long-term fuel supply rights, we design, build, own, and operate facilities that convert the biogas into RNG or use the processed biogas to produce Renewable Electricity. We sell the RNG and Renewable Electricity through a variety of term length agreements. Because we are capturing waste methane and making use of a renewable source of energy, our RNG and Renewable Electricity generate valuable Environmental Attributes which we are able to monetize under federal and state renewable initiatives.
Our current operating projects produce either RNG or Renewable Electricity by processing biogas from landfill sites or agricultural waste from livestock farms. We view agricultural waste from livestock farms as a significant opportunity for us to expand our RNG business, and we continue to evaluate other agricultural feedstock opportunities. We believe that our business model and technology are highly scalable given availability of biogas from agriculturally derived sources, which will allow us to continue to grow through prudent development and complimentary acquisitions.
Recent Developments
RINs Generated but Unsold
Our profitability is highly dependent on the market price of Environmental Attributes, including the market price for RINs. As we self-market a significant portion of our RINs, a strategic decision not to commit to transfer available RINs during a period will impact our operating revenue and operating profit. The industry experienced volatile D3 RIN index prices since the EPAs release of the 2023 RVO in December 2022. The RVO released in December 2022 also included a three-year volume compliance schedule rather than annual volume obligations. The final RVO is due to be released in June 2023 which has temporarily impacted the timing of D3 RIN transfers from 2023 RNG production.
Though the average market price of D3 RINs since the 2023 RVO release was approximately $2.18, the market price declined as low as $1.88 in February 2023 from a D3 RIN index price of $2.43 on the day of the 2023 RVO release. We viewed this reduction in price as temporary and, accordingly, we determined not to transfer a significant amount of D3 RINs generated and available for transfer from 2023 RNG production during the first quarter of 2023. As a result, at March 31, 2023, we had approximately 7,325 RINs in inventory from 2023 RNG production. We sold the majority of D3 RINs generated and available for transfer from 2022 RNG production.
We have committed to transfer a significant amount of RINs generated but unsold as of March 31, 2023 and expect to transfer the majority of these RINs during the second quarter of 2023. The average D3 RIN index price during the month of May 2023 was approximately $1.97.
23
Blue Granite RNG Project
In the first quarter of 2023, we announced the planned entrance into South Carolina with the development of a new landfill gas-to-RNG facility. The planned project is expected to contribute approximately 900 MMBtu per day of production capacity upon commissioning. We expect to incur capital expenditures beginning in the second quarter of 2023 and expect the project to be complete and become commercially operational in 2025.
Pico Digestion Capacity Increase
During the first quarter of 2023, CARB finalized the engineering review of the Pico facility's provisional CI application and released it for public comment. The public comment period ended March 14, 2023 and we did not receive any significant comments. CARB certified our Tier 2 application and the certified CI value will be used starting in the fourth quarter of 2022 to report and generate LCFS credits. We plan to release the remaining gas from storage in the second quarter of 2023.
Related to our Pico feedstock amendment, which increased the amount of feedstock supplied to the facility for processing over a one to three-year period (the “Pico Feedstock Amendment”), the dairy began delivering the first and second increases in feedstock during the third quarter of 2022 and we have made three payments to the dairy as required in the Pico Feedstock Agreement. The improved efficiencies of our existing digestion process and the water management improvements have enabled us to process the increased feedstock volumes which we current expect to increase by five to ten percent once all increased feedstock deliveries have been received from the dairy. We completed the design of the digestion capacity project in the third quarter of 2022 and continue to incur capital expenditures related to the construction of the project. We currently expect the construction of the project to be functionally completed during the third quarter of 2023. We currently expect the dairy to begin delivering the final increase in feedstock volumes during 2024.
Montauk Ag Asset Acquisition
In 2021, through a wholly-owned subsidiary Montauk Ag Renewables, we completed an asset purchase related to developing technology to recover residual natural resources from waste streams of modern agriculture and to refine and recycle such waste products through proprietary and other processes in order to produce high quality renewable natural gas, bio-oil and biochar (the “Montauk Ag Renewables Acquisition”).
We continue to work with our engineer of record through the optimization of improvements to the now patented reactor technology. However, we have not completed our improvements, and we have not reached commercial operations at the Turkey, NC location. The improvements to the reactor technology are intended to be deployed at the Turkey, NC location. In the first quarter of 2023, we completed the relocation of the reactor in Magnolia, NC to the Turkey, NC location to centralize processing at one location.
While these project developments continue, we continue to engage with regulatory agencies in North Carolina related to the resulting power generation derived from swine waste to confirm its eligibility for Renewable Energy Credits under North Carolina’s Renewable Energy Portfolio Standards in anticipation of commercial production. Accordingly, our Turkey location has been approved to participate in the Piedmont Natural Gas Renewable Gas Pilot Program which is a step towards obtaining the New Renewable Energy Facility (“NREF”) designation under the North Carolina Utilities Commission. Due to our consolidation of operations at the Turkey, NC location and based on our current expectations related to commercial operations, we have paused our registration process to obtain NREF status for the Turkey, NC location.
In the first quarter of 2023, we signed a receipt interconnection agreement with Piedmont Natural Gas for the Turkey, NC location. This agreement is structured to coincide with the development timeline at the Turkey, NC location. Also during the first quarter of 2023, we signed a lease agreement with Piedmont Natural Gas to provide access to the Turkey, NC property during construction of the interconnection. We are also in varying stages of discussions with potential power purchasers.
We are at the beginning stages of developing the opportunities associated with Montauk Ag Renewables and can give no assurances that our plans related to this acquisition will meet our expectations. We continue to design and plan for the development of the facility to be used for commercial production. Based on our current development timeline expectations, we do not expect to commence significant revenue generating activities until 2024. We intend to contract with additional farms to secure feedstock sources for future production processes.
Bowerman Power RNG Expansion Project
We monitor biogas supply availability across our portfolio and seek to maximize production at existing projects by expanding operations when economically feasible. In the second quarter of 2023, we entered into late stages of negotiation of a development opportunity to develop, own, and operate an RNG facility alongside our existing REG facility in Irvine, California. We intend to
24
beneficially process the available feedstock, of which we currently estimate to be approximately 2,485 MMBtu in excess of what the REG facility can process. While we believe we are in the late stages of negotiation and expect to finalize the development opportunity, no assurances can be given that our plans related to this negotiation will meet our expectations.
Key Trends
Market Trends Affecting the Renewable Fuel Market
We believe demand for RNG produced from biogas remains strong due to increasing public policy initiatives focused on reducing greenhouse gas emissions, including methane, as well as continued public and private sector interest in the development of additional renewable energy sources to offset traditional fossil fuel energy sources.
Key drivers for the long-term growth of RNG include the following factors:
Factors Affecting Our Future Operating Results:
Conversion of Electricity Projects to RNG Projects:
We periodically evaluate opportunities to convert existing facilities from Renewable Electricity to RNG production. These opportunities tend to be most attractive for any merchant electricity facilities given the favorable economics for the sale of RNG plus RINs relative to the sale of market rate electricity plus RECs. This strategy has been an increasingly attractive avenue for growth since 2014 when RNG from landfills became eligible for D3 RINs. However, during the conversion of a project, there is a gap in production while the electricity project is offline until it commences operation as an RNG facility, which can adversely affect us. This timing effect may adversely affect our operating results as a result of our potential conversion of Renewable Electricity projects. Upon completion of a conversion, we expect that the increase in revenue upon commencement of RNG production will more than offset the loss of revenue from Renewable Electricity production. Historically, we have taken advantage of these opportunities on a gradual basis at our merchant electricity facilities, such as Atascocita and Coastal Plains.
Acquisition and Development Pipeline
The timing and extent of our development pipeline affects our operating results due to:
25
Regulatory, Environmental and Social Trends
Regulatory, environmental and social factors are key drivers that incentivize the development of RNG and Renewable Electricity projects and influence the economics of these projects. We are subject to the possibility of legislative and regulatory changes to certain incentives, such as RINs, RECs and GHG initiatives. On December 30, 2022 EPA issued proposed rules in the Federal Register for Renewable Fuel Standard (RFS) Program Standards for 2023-2025. Final volumes for cellulosic biofuel were set at 720, 1,420 and 2,130 million RINs for the three years 2023, 2024 and 2025, respectively. The proposed standards also introduced the new regulatory program governing renewable electricity with eRINs which is scheduled to start January 1, 2024. The cellulosic biofuel volumes include a portion dedicated to eRINs. In 2024, 600 million of the total 1,420 million and in 2025 1,200 million of the total 2,130 million are the volume obligations from eRINs. The proposed standards also introduced significant changes to the existing RFS program that will require the RNG industry to modify how all RINs are generated. Final RFS Program rules are to be issued by June 14, 2023 per a court-ordered deadline established by the settlement agreement with Growth Energy.
Changes to the LCFS program require annual verification of the CI score assigned to a project. Annual verification could significantly affect the profitability of a project, particularly in the case of a livestock farm project.
Factors Affecting Revenue
Our total operating revenues include renewable energy and related sales of Environmental Attributes. Renewable energy sales primarily consist of the sale of biogas, including LFG and ADG, which is either sold or converted to Renewable Electricity. Environmental Attributes are generated and monetized from the renewable energy.
We report revenues from two operating segments: Renewable Natural Gas and Renewable Electricity Generation. Corporate relates to additional discrete financial information for the corporate function; primarily used as a shared service center for maintaining functions such as executive, accounting, treasury, legal, human resources, tax, environmental, engineering, and other operations functions not otherwise allocated to a segment. As such, the corporate entity is not determined to be an operating segment but is discretely disclosed for purposes of reconciliation to the Company’s consolidated financial statements
Our operating revenues are priced based on published index prices which can be influenced by factors outside our control, such as market impacts on commodity pricing and regulatory developments. Strategic decisions to not monetize RINs available to be transferred will have an impact on our operating revenues and operating profit. As we self market a significant portion of our RINs and as the RFS is based on annual compliance, any strategic decision to not monetize available RINs in a quarter could impact the timing of operating revenues recognized during a fiscal year. With our royalty payments structured as a percentage of revenue, royalty payments fluctuate with changes in revenues. Due to these factors, we place a primary focus on managing production volumes and operating and maintenance expenses as these factors are more controllable by us.
26
RNG Production
Our RNG production levels are subject to fluctuations based on numerous factors, including:
Disruptions to Production: Disruptions to waste placement operations at our active landfill sites, severe weather events, failure or degradation of our or a landfill operator’s equipment, our inability to fill open or newly created positions, or interconnection or transmission problems could result in a reduction of our RNG production. We strive to proactively address any issues that may arise through preventative maintenance, process improvement and flexible redeployment of equipment to maximize production and useful life.
Pricing
Our Renewable Natural Gas and Renewable Electricity Generation segments’ revenues are primarily driven by the prices under our off-take agreements and PPAs and the amount of RNG and Renewable Electricity that we produce. We sell the RNG produced from our projects under a variety of termed agreements to counterparties, with contract terms varying from three years to five years. Our contracts with counterparties are typically structured to be based on varying natural gas price indices for the RNG produced. All of the Renewable Electricity produced at our biogas-to-electricity projects is sold under long-term contracts to creditworthy counterparties, typically under a fixed price arrangement with escalators.
The pricing of Environmental Attributes, which accounts for a substantial portion of our revenues, is subject to volatility based on a variety of factors, including regulatory and administrative actions and commodity pricing.
During the first quarter of 2023, our Pico dairy farm project was awarded a more attractive CI by CARB, thereby generating LCFS credits at a multiple of those generated by our landfill projects.
The sale of RINs, which is subject to market price fluctuations, accounts for a substantial portion of our revenues. We manage against the risk of these fluctuations through forward sales of RINs, although currently we only sell RINs in the calendar year they are generated. We did not forward sell a significant portion of expected 2023 RIN generation. Realized prices for Environmental Attributes monetized in a year may not correspond directly to index prices due to the forward selling of commitments
Factors Affecting Operating Expenses
Our operating expenses include royalties, transportation, gathering and production fuel expenses, project operating and maintenance expenses, general and administrative expenses, depreciation and amortization, net loss (gain) on sale of assets, impairment loss and transaction costs. Our operating expenses can be subject to inflationary cost increases that are largely out of our control.
27
Key Operating Metrics
Total operating revenues reflect both sales of renewable energy and sales of related Environmental Attributes. As a result, our revenues are primarily affected by unit production of RNG and Renewable Electricity, production of Environmental Attributes, and the prices at which we monetize such production. Set forth below is an overview of these key metrics:
28
Comparison of Three Months Ended March 31, 2023 and 2022
The following table summarizes the key operating metrics described above, which metrics we use to measure performance.
|
|
Three Months Ended |
|
|
|
|
|
Change |
|
|||||||
|
|
2023 |
|
|
2022 |
|
|
Change |
|
|
% |
|
||||
(in thousands, unless otherwise indicated) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Renewable Natural Gas Total Revenues |
|
$ |
14,785 |
|
|
$ |
32,666 |
|
|
$ |
(17,881 |
) |
|
|
(54.7 |
%) |
Renewable Electricity Generation Total Revenues |
|
$ |
4,369 |
|
|
$ |
3,971 |
|
|
$ |
398 |
|
|
|
10.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
RNG Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CY RNG production volumes (MMBtu) |
|
|
1,352 |
|
|
|
1,369 |
|
|
|
(17 |
) |
|
|
(1.2 |
%) |
Less: Current period RNG volumes under fixed/floor-price contracts |
|
|
(304 |
) |
|
|
(310 |
) |
|
|
6 |
|
|
|
(1.9 |
%) |
Plus: Prior period RNG volumes dispensed in current period |
|
|
368 |
|
|
|
372 |
|
|
|
(4 |
) |
|
|
(1.1 |
%) |
Less: Current period RNG production volumes not dispensed |
|
|
(418 |
) |
|
|
(410 |
) |
|
|
(8 |
) |
|
|
2.0 |
% |
Total RNG volumes available for RIN generation (1) |
|
|
998 |
|
|
|
1,021 |
|
|
|
(23 |
) |
|
|
(2.3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
RIN Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current RIN generation ( x 11.727) (2) |
|
|
11,700 |
|
|
|
11,967 |
|
|
|
(267 |
) |
|
|
(2.2 |
%) |
Less: Counterparty share (RINs) |
|
|
(1,224 |
) |
|
|
(1,216 |
) |
|
|
(8 |
) |
|
|
0.7 |
% |
Plus: Prior period RINs carried into current period |
|
|
739 |
|
|
|
128 |
|
|
|
611 |
|
|
|
477.3 |
% |
Less: CY RINs carried into next CY |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total RINs available for sale (3) |
|
|
11,215 |
|
|
|
10,879 |
|
|
|
336 |
|
|
|
3.1 |
% |
Less: RINs sold |
|
|
(2,949 |
) |
|
|
(6,485 |
) |
|
|
3,536 |
|
|
|
(54.5 |
%) |
RIN Inventory |
|
|
8,266 |
|
|
|
4,394 |
|
|
|
3,872 |
|
|
|
88.1 |
% |
RNG Inventory (volumes not dispensed for RINs) (4) |
|
|
418 |
|
|
|
410 |
|
|
|
8 |
|
|
|
2.0 |
% |
Average Realized RIN price |
|
$ |
2.01 |
|
|
$ |
3.46 |
|
|
$ |
(1.45 |
) |
|
|
(41.9 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Renewable Natural Gas Operating Expenses |
|
$ |
14,808 |
|
|
$ |
16,345 |
|
|
$ |
(1,537 |
) |
|
|
(9.4 |
%) |
Operating Expenses per MMBtu (actual) |
|
$ |
10.95 |
|
|
$ |
11.94 |
|
|
$ |
(0.99 |
) |
|
|
(8.3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
REG Operating Expenses |
|
$ |
3,328 |
|
|
$ |
3,737 |
|
|
$ |
(409 |
) |
|
|
(10.9 |
%) |
$/MWh (actual) |
|
$ |
72.35 |
|
|
$ |
83.04 |
|
|
$ |
(10.69 |
) |
|
|
(12.9 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Renewable Electricity Generation Volumes Produced (MWh) |
|
|
46 |
|
|
|
45 |
|
|
|
1 |
|
|
|
2.2 |
% |
Average Realized Price $/MWh (actual) |
|
$ |
94.98 |
|
|
$ |
88.27 |
|
|
$ |
6.71 |
|
|
|
7.6 |
% |
29
The following table summarizes our revenues, expenses and net income for the periods set forth below:
|
|
Three Months Ended |
|
|
|
|
|
Change |
|
|||||||
|
|
2023 |
|
|
2022 |
|
|
Change |
|
|
% |
|
||||
Total operating revenues |
|
$ |
19,154 |
|
|
$ |
32,169 |
|
|
$ |
(13,015 |
) |
|
|
(40.5 |
)% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating and maintenance expenses |
|
|
14,182 |
|
|
|
13,201 |
|
|
|
981 |
|
|
|
7.4 |
% |
General and administrative expenses |
|
|
9,475 |
|
|
|
8,495 |
|
|
|
980 |
|
|
|
11.5 |
% |
Royalties, transportation, gathering and production fuel |
|
|
3,933 |
|
|
|
7,206 |
|
|
|
(3,273 |
) |
|
|
(45.4 |
)% |
Depreciation, depletion and amortization |
|
|
5,196 |
|
|
|
5,153 |
|
|
|
43 |
|
|
|
0.8 |
% |
Gain on insurance proceeds |
|
|
- |
|
|
|
(313 |
) |
|
|
313 |
|
|
|
(100.0 |
)% |
Impairment loss |
|
|
451 |
|
|
|
51 |
|
|
|
400 |
|
|
|
784.3 |
% |
Transaction costs |
|
|
83 |
|
|
|
27 |
|
|
|
56 |
|
|
|
207.4 |
% |
Total operating expenses |
|
|
33,320 |
|
|
|
33,820 |
|
|
|
(500 |
) |
|
|
(1.5 |
)% |
Operating loss |
|
$ |
(14,166 |
) |
|
$ |
(1,651 |
) |
|
$ |
(12,515 |
) |
|
|
758.0 |
% |
Other expenses/ (income): |
|
|
1,682 |
|
|
|
(278 |
) |
|
|
1,960 |
|
|
|
(705.0 |
)% |
Income tax benefit |
|
|
(12,060 |
) |
|
|
(258 |
) |
|
|
(11,802 |
) |
|
|
4,574.4 |
% |
Net loss |
|
$ |
(3,788 |
) |
|
$ |
(1,115 |
) |
|
$ |
(2,673 |
) |
|
|
239.7 |
% |
Revenues for the Three Months Ended March 31, 2023 and 2022
Total revenues in the first quarter of 2023 were $19,154 a decrease of $13,015 (40.5%) compared to $32,169 in the first quarter of 2022. The decrease is primarily related to our strategic decision to not self market a significant amount of RINs from 2023 RNG production due to our belief that first quarter of 2023 D3 RIN index volatility was temporary. Of the 6,485 RINs sold in the first quarter of 2022, 3,800 RINs were related to 2021 RNG production. The decrease is partially offset by losses recognized in the first quarter of 2022 of $3,451 which is related to gas commodity hedge program that has since expired.
Renewable Natural Gas Revenues
We produced 1,352 MMBtu of RNG during the first quarter of 2023, a decrease of 17 MMBtu over the 1,369 MMBtu (1.2%) produced in the first quarter of 2022. Our Rumpke facility produced 17 more MMBtu in the first quarter of 2023 compared to the first quarter of 2022 as a result of process equipment failure in the first quarter of 2022. Our Apex facility produced 15 more MMBtu in the first quarter of 2023 compared to the first quarter of 2022 as a result of process equipment failure in the first quarter of 2022. Our Galveston facility produced 33 fewer MMBtu in the first quarter of 2023 compared to the first quarter of 2022 as a result of temporary reduction of feedstock inlet during modifications to process equipment. Also contributing to the decrease is our Pico facility which produced 16 fewer MMBtu in the first quarter of 2023 compared to the first quarter of 2022 as a result of operational process challenges in the first quarter of 2023.
Revenues from the Renewable Natural Gas segment in the first quarter of 2023 were $14,785, a decrease of $17,881 (54.7%) compared to $32,666 in the first quarter of 2022. Average commodity pricing for natural gas for the first quarter of 2023 was $3.42 per MMBtu, 30.9% lower than the first quarter of 2022. During the first quarter of 2023, we self-monetized 2,949 RINs, representing a 3,536 decrease (54.5%) compared to 6,485 in the first quarter of 2022. The decrease was primarily related to our strategic decision to not self market a significant amount of RINs from 2023 RNG production. Average pricing realized on RIN sales during the first quarter of 2023 was $2.01 as compared to $3.46 in the first quarter of 2022, a decrease of 41.9%. This compares to the average D3 RIN index price for the first quarter of 2023 of $2.03 being approximately 37.5% lower than the average D3 RIN index price in the first quarter of 2022. At March 31, 2023, we had approximately 418 MMBtu available for RIN generation and we had approximately 8,266 RINs generated and unsold. At March 31, 2022, we had approximately 410 MMBtu available for RIN generation and 4,394 RINs generated and unsold.
Renewable Electricity Generation Revenues
We produced approximately 46 MWh in Renewable Electricity in the first quarter of 2023, an increase of 1 MWh (2.2%) from 45 MWh in the first quarter of 2022. Our Bowerman facility produced 2 MWh more in the first quarter of 2023 compared to the first quarter of 2022 as a result of preventative engine maintenance performed during the first quarter of 2022. Our Tulsa facility produced approximately 1 MWh less in the first quarter of 2023 compared to the first quarter of 2022 due to engine component failures in the first quarter of 2023.
30
Revenues from Renewable Electricity facilities in the first quarter of 2023 were $4,369, an increase of $398 (10.0%) compared to $3,971 in the first quarter of 2022. The increase is primarily driven by the increase in our Bowerman facility production volumes.
In the first quarter of 2023, 99.8% of Renewable Electricity Generation segment revenues were derived from the monetization of Renewable Electricity at fixed prices associated with underlying PPAs, as compared to 100% in the first quarter of 2022. This provides the Company with certainty of price resulting from our Renewable Electricity sites.
Corporate Analysis
While we did not have any gas commodity hedge programs in the first quarter of 2023, our gas commodity hedge program during the first quarter of 2022 was priced as rates below actual index prices resulting in realized losses of $3,451.
Expenses for the Three Months Ended March 31, 2023 and 2022
General and Administrative Expenses
Total general and administrative expenses were $9,475 for the first quarter of 2023, an increase of $980 (12.6%) compared to $8,495 for the first quarter of 2022. Our general and administrative expense for the first quarter of 2023 increased approximately $1,136 compared to the first quarter of 2022 associated with the Montauk Ag Renewables. The increase was primarily driven by stock-based compensation expense as a result of the 2022 amendments to restricted share awards issued in the Montauk Ag Renewables acquisition. Partially offsetting this increase is a reversal of approximately $328 stock based compensation expense related to forfeited stock awards. Also, our professional fees increased approximately $783 (61.1%) in the first quarter of 2023 as compared to the first quarter of 2022.
Renewable Natural Gas Expenses
Operating and maintenance expenses for our RNG facilities in the first quarter of 2023 were $11,342, an increase of $1,782 (18.6%) as compared to $9,560 in the first quarter of 2022. Our McCarty facility incurred increased scheduled preventative maintenance expenses of approximately $314. Our Apex facility operating and maintenance expenses increased approximately $950 as a result of timing of preventative maintenance and increased waste disposal costs in the first quarter of 2023 as compared to first quarter of 2022.
Royalties, transportation, gathering and production fuel expenses for the Company’s RNG facilities for the first quarter of 2023 were $3,466, a decrease of $3,319 (48.9%) compared to $6,785 in the first quarter of 2022. Royalties, transportation, gathering and production fuel expenses increased as a percentage of RNG revenues to 23.4% for the first quarter of 2023 from 20.8% in the first quarter of 2022. The decrease in royalties, transportation, gathering and production fuel expenses is primarily related to the decrease in RNG revenues in the first quarter of 2023 compared to the first quarter of 2022.
Renewable Electricity Expenses
Operating and maintenance expenses for our Renewable Electricity facilities in the first quarter of 2023 were $2,861, a decrease of $455 (13.7%) compared to $3,316 in the first quarter of 2022. The decrease is primarily related to scheduled preventative maintenance at our Bowerman facility, which was approximately $832 higher in the first quarter of 2022 compared to the first quarter of 2023.
Royalties, transportation, gathering and production fuel expenses for our Renewable Electricity facilities for the first quarter of 2023 were $467, an increase of $46 (10.9%) compared to $421in the first quarter of 2022. As a percentage of Renewable Electricity Generation segment revenues, royalties, transportation, gathering and production fuel expenses decreased to 10.7% from 10.6%.
Royalty Payments
Royalties, transportation, gathering, and production fuel expenses in the first quarter of 2023 were $3,933, a decrease of $3,273 (45.4%) compared to $7,206 in the first quarter of 2022. We make royalty payments to our fuel supply site partners on the commodities we produce and the associated Environmental Attributes. These royalty payments are typically structured as a percentage of revenue subject to a cap, with fixed minimum payments when Environmental Attribute prices fall below a defined threshold. To the extent commodity and Environmental Attributes’ prices fluctuate, our royalty payments may fluctuate upon renewal or extension of a fuel supply agreement or in connection with new projects. Our fuel supply agreements are typically structured as 20-year contracts, providing long-term visibility into the margin impact of future royalty payments.
31
Depreciation
Depreciation and amortization in the first quarter of 2023 was $5,196, an increase of $43 (0.8%) compared to $5,153 in the first quarter of 2022. The increase is associated with the payments related to the Pico Feedstock Agreement.
Impairment loss
We calculated and recorded an impairment loss of $451 in the first quarter of 2023, an increase of $400 (784.3%) compared to $51 in the first quarter of 2022. The impairment in the first quarter of 2023 was related to a feedstock processing machine component at an RNG facility that was not operating at an optimal level. The first quarter of 2022 impairment was related to computer software and hardware no longer being utilized.
Other Expense (Income)
Other expense in the first quarter of 2023 was $1,682, an increase of $1,960 (705.0%) compared to other income of $278 in the first quarter of 2022. The increase is primarily related to an increase in interest expense of $1,643 from the first quarter of 2023 compared to the first quarter of 2022. In the first quarter of 2022, we recognized a gain of $311 from the sale of NOx emissions allowances credits.
Income Tax Expense
Income tax expense for the three months ended March 31,2023 was calculated using an estimated effective tax rate which differs from the U.S. federal statutory rate of 21% primarily due to the adjustments for production tax credits and 162(m) compensation limitation.
The effective tax rate of 76.10% for the three months ended March 31, 2023 was higher than the rate for the three months ended March 31, 2022 of 18.79% primarily due to current period pre-tax book income being higher in 2022. The March 31,2023 rate also includes utilization of production tax credits and certain discrete items.
Operating Loss (Profit) for the Three Months Ended March 31, 2023 and 2022
Operating loss in the first quarter of 2023 was $14,166, an increase of $12,515 (757.9%) compared to $1,651 in the first quarter of 2022. RNG operating loss for the first quarter of 2023 was $4,285, a decrease of $17,258 (133.0%) compared to operating profit of $12,973 in the first quarter of 2022. Renewable Electricity Generation operating loss for the first quarter of 2023 was $247, a decrease of $1,225 (83.2%) compared $1,471 for the first quarter of 2022.
Non-GAAP Financial Measures:
The following table presents EBITDA and Adjusted EBITDA, non-GAAP financial measures for each of the periods presented below. We present EBITDA and Adjusted EBITDA because we believe the measures assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, EBITDA and Adjusted EBITDA are financial measurements of performance that management and the board of directors use in their financial and operational decision-making and in the determination of certain compensation programs. EBITDA and Adjusted EBITDA are supplemental performance measures that are not required by or presented in accordance with GAAP. EBITDA and Adjusted EBITDA should not be considered alternatives to net (loss) income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities or a measure of our liquidity or profitability.
32
The following table provides our EBITDA and Adjusted EBITDA for the periods presented, as well as a reconciliation to net (loss) income, which is the most directly comparable GAAP measure, for the three months ended March 31, 2023 and 2022:
|
|
|
|
|
|
|
|
|
||
|
|
|
Three Months Ended |
|
|
|||||
|
|
|
|
|
2022 |
|
|
|||
|
Net Loss |
|
$ |
(3,788 |
) |
|
$ |
(1,115 |
) |
|
|
Depreciation, depletion and amortization |
|
|
5,196 |
|
|
|
5,153 |
|
|
|
Interest expense |
|
|
1,675 |
|
|
|
32 |
|
|
|
Income tax benefit |
|
|
(12,060 |
) |
|
|
(258 |
) |
|
|
Consolidated EBITDA |
|
|
(8,977 |
) |
|
|
3,812 |
|
|
|
|
|
|
|
|
|
|
|
||
|
Impairment loss (1) |
|
|
451 |
|
|
|
51 |
|
|
|
Net loss (gain) of sale of assets |
|
|
37 |
|
|
|
(293 |
) |
|
|
Transaction costs |
|
|
83 |
|
|
|
27 |
|
|
|
Non-cash hedging charges |
|
|
— |
|
|
|
3,451 |
|
|
|
Adjusted EBITDA |
|
$ |
(8,406 |
) |
|
$ |
7,048 |
|
|
|
|
|
|
|
|
|
|
|
||
Liquidity and Capital Resources
Sources of Liquidity
At March 31, 2023 and March 31, 2022, our cash and cash equivalents, net of restricted cash, was $78,043 and $59,794 respectively. We intend to fund near-term development projects using cash flows from operations and borrowings under our revolving credit facility. We believe that we will have sufficient cash flows from operations and borrowing availability under our credit facility to meet our debt service obligations and anticipated required capital expenditures (including for projects under development) for at least the next 12 months. However, we are subject to business and operational risks that could adversely affect our cash flows and liquidity.
At March 31, 2023, we had debt before debt issuance costs of $70,000, compared to debt before debt issuance costs of $72,000 at December 31, 2022.
Our debt before issuance costs (in thousands) are as follows:
|
|
|
|
|
||||
Term loan |
|
$ |
70,000 |
|
|
|
72,000 |
|
Revolving credit facility |
|
|
— |
|
|
|
— |
|
Debt before debt issuance costs |
|
$ |
70,000 |
|
|
$ |
72,000 |
|
Amended Credit Agreement
On December 21, 2021, the Company entered into the Fourth Amendment with Comerica and certain other financial institutions. The current credit agreement, which is secured by a lien on substantially all of our assets and assets of certain of our subsidiaries, provides for a five-year $80,000 term loan and a five-year $120,000 revolving credit facility.
As of March 31, 2023, $70,000 was outstanding under the term loan and we had no outstanding borrowings under the revolving credit facility. The term loan amortizes in quarterly installments of $2,000 through 2024, then increases to $3,000 through 2026, with a final payment of $32,000 in late 2026 with an interest rate of 6.64% and 4.12% at March 31, 2023 and December 31, 2022, respectively. The revolving and term loans under the Amended Credit Agreement bear interest at the Bloomberg Short-Term Bank Yield Index Rate plus an applicable margin based on our Total Leverage Ratio (in each case, as those terms are defined in the Amended Credit Agreement).
The Amended Credit Agreement contains customary covenants applicable to us and certain of our subsidiaries, including financial covenants. The Amended Credit Agreement is subject to customary events of default, and contemplates that we would be in
33
default if, for any fiscal quarter (x) the average monthly D3 RIN price (as determined in accordance with the Amended Credit Agreement) is less than $0.80 per RIN and (y) the consolidated EBITDA for such quarter is less than $6,000. Consolidated EBITDA is defined under the Amended Credit Agreement as net income plus (a) income tax expense, (b) interest expense, (c) depreciation, depletion, and amortization expense, (d) non-cash unrealized derivative expense and (e) any other extraordinary, unusual, or non-recurring adjustments to certain components of net income, as agreed upon by Comerica in certain circumstances.
Under the Amended Credit Agreement, we are required to maintain the following ratios:
As of March 31, 2023, we were in compliance with all applicable financial covenants under the Amended Credit Agreement.
The Amended Credit Agreement replaced our prior credit agreements with Comerica and a portion of the proceeds of the term loan made under the Amended Credit Agreement were used by us to, among other things, fully satisfy an aggregate of $59,197 outstanding principal under such credit agreements. For additional information regarding the Amended Credit Agreement, see Note 12— Debt to our unaudited condensed consolidated financial statements.
Capital Expenditures
We have historically funded our growth and capital expenditures with our working capital, cash flow from operations and debt financing. We expect our non-development 2023 capital expenditures to range between $15,000 and $19,000. Our 2023 capital plans include annual preventative maintenance expenditures, annual wellfield expansion projects, other specific facility improvements, and information technology improvements. Additionally, we currently estimate that our existing 2023 development capital expenditures will range between $70,000 and $100,000. The majority of our 2023 development capital expenditures are related to our Pico digestion capacity increase, the ongoing development of Montauk Ag Renewables, our second Apex facility, and our recently announced Blue Granite RNG project. Our Amended Credit Agreement provides us with a $120,000 revolving credit facility, with a $75,000 accordion option, providing us with access to additional capital to implement our acquisition and development strategy. We are currently in various stages of discussions regarding a variety of strategic growth opportunities. Included amongst these opportunities are: approximately up to seven LFG RNG sites and waste water treatment to RNG opportunities. If we ultimately enter into definitive agreements for any of these opportunities, we expect to incur material capital expenditures related to either acquisition costs or development costs, or both. As we continue to explore strategic growth opportunities and while we have entered into nonbinding letters of intent for certain of these opportunities, we provide no assurances that our plans related to any or all of these strategic opportunities will progress to definitive agreements. We believe that our existing cash and cash equivalents, cash generated from operations, and credit availability under our Amended Credit Agreement would allow us to pursue and close on our identified strategic growth opportunities in addition to the previously discussed non-development and development capital expenditures.
Cash Flow
The following table presents information regarding our cash flows and cash equivalents for the three months ended March 31, 2023 and 2022:
|
|
Three Months Ended March 31, |
|
|||||
|
|
|
|
2022 |
|
|||
Net cash (used in) provided by: |
|
|
|
|
|
|
||
Operating activities |
|
$ |
(11,838 |
) |
|
$ |
9,597 |
|
Investing activities |
|
|
(13,278 |
) |
|
|
(977 |
) |
Financing activities |
|
|
(2,018 |
) |
|
|
(2,091 |
) |
Net (decrease) increase in cash and cash equivalents |
|
|
(27,134 |
) |
|
|
6,529 |
|
Restricted cash, end of the period |
|
|
429 |
|
|
|
347 |
|
Cash and cash equivalents, end of period |
|
|
78,472 |
|
|
|
60,141 |
|
For the first three months of 2023, we used $11,838 of cash from operating activities compared to $9,597 of cash provided by operating activities in the first three months of 2022. For the first three months of 2023, income and adjustments to income from operating activities used $8,565 compared to income and adjustments to income providing $8,202 in first three months of 2022.
34
Included within income and adjustments to income from operating activities for the first three months of 2023 was an increase of $12,797 related to the deferred tax provision adjustment. Working capital and other assets and liabilities used $3,274 in the first three months of 2023 compared to working capital and other assets and liabilities providing $1,395 in the first three months of 2022.
Our net cash flows used in investing activities has historically focused on project development and facility maintenance. Our capital expenditures for the first three months of 2023 were $13,278, of which $5,440, $2,689, and $1,954 were related to the ongoing development of the Pico facility digestion capacity increase, the Montauk Ag Renewables in North Carolina, and second Apex RNG facility, respectively.
Our net cash flows used in financing activities of $2,018 for the first three months of 2023 decreased by $73 compared to cash used in financing activities in the first three months of 2022 of $2,091.
Contractual Obligations and Commitments
Off-balance sheet arrangements comprise those arrangements that may potentially impact our liquidity, capital resources and results of operations, even though such arrangements are not recorded as liabilities under GAAP. Our off-balance sheet arrangements are limited to the outstanding letters of credit described below. Although these arrangements serve a variety of our business purposes, we are not dependent on them to maintain our liquidity and capital resources, and we are not aware of any circumstances that are reasonably likely to cause the off-balance sheet arrangements to have a material adverse effect on liquidity and capital resources.
The Company has contractual obligations involving asset retirement obligations. See Note 8 in the unaudited condensed consolidated financial statements for further information regarding the asset retirement obligations.
The Company has contractual obligations under our debt agreement, including interest payments and principal repayments. See Note 12 in the unaudited condensed consolidated financial statements for further discussion of the contractual commitments under our debt agreements, including the timing of principal repayments. During the first three months of 2023, we had approximately $4,477 of off-balance sheet arrangements of outstanding letters of credit. These letters of credit reduce the borrowing capacity of our revolving credit facility under our Amended Credit Agreement. Certain of our contracts require these letters of credit to be issued to provide additional performance assurances. There have been no draw downs on these outstanding letters of credit. During the first three months of 2022, we did not have off-balance sheet arrangements other than outstanding letters of credit of approximately $3,905.
The Company has contractual obligations involving operating leases. The Company leases office space and other office equipment under operating lease arrangements, expiring in various years through 2033. See Note 18 in the unaudited condensed consolidated financial statements for further information related to the lease obligations.
The Company has other contractual obligations associated with our fuel supply agreements. The expiration of these agreements range between 4-20 years. The minimum royalty and capital obligation associated with these agreements range from $8 to $1,385.
Critical Accounting Policies and Estimates
Our unaudited condensed consolidated financial statements are prepared in conformity with GAAP and require our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates, and such estimates may change if the underlying conditions or assumptions change.
Revenue Recognition
Our revenues are comprised of renewable energy and the related Environmental Attribute sales provided under a variety of short-term and medium-term agreements with our customers. All revenue is recognized when we satisfy our performance obligation(s) under the contract (either implicit or explicit) by transferring the promised product to the customer either when (or as) the customer obtains control of the product. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation. We allocate the contract’s transaction price to each performance obligation using the product’s observable market standalone selling price for each distinct product in the contract.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring our products. As such, revenue is recorded net of allowances and customer discounts as well as net of transportation and gathering costs incurred. To the
35
extent applicable, sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis.
The nature of the Company’s contracts may give rise to several types of variable consideration, such as periodic price increases. This variable consideration is outside of the Company’s influence as the variable consideration is dictated by the market. Therefore, the variable consideration associated with the long-term contracts is considered fully constrained.
RINs
We generate D3 RINs through our production and sale of RNG used for transportation purposes as prescribed under the RFS program. Our operating costs are associated with the production of RNG. The RINs are government incentives that are generated through our renewable operating projects and not a result of physical attributes of our RNG production. The RINs that we generate are able to be separated and sold as credits independently from the energy produced. Therefore, no cost is allocated to the RIN when it is generated. Revenue is recognized on these Environmental Attributes when there is an agreement in place to monetize the credits at an agreed upon price with a customer and transfer of control has occurred. We enter into forward commitments to transfer RINs. These forward commitments are based on D3 RIN index prices at the time of the commitment. Realized prices for RINs monetized in a year may not correspond directly to index prices due to the forward selling of commitments.
RECs
We generate RECs through our production and conversion of landfill methane into Renewable Electricity in various states, including California, Oklahoma, and Texas. These states have various laws requiring utilities to purchase a portion of their energy from renewable resources. Our operating costs are associated with the production of Renewable Electricity. The RECs are generated as an output of our renewable operating projects. The RECs that we generate are able to be separated and sold independently from the electricity produced. Therefore, no cost is allocated to the REC when it is generated. Revenue is recognized on these Environmental Attributes when there is an agreement in place to monetize the credits at an agreed upon price with a customer and transfer of control has occurred.
Income Taxes
We are subject to income taxes in the U.S. federal jurisdiction and various state and local jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply.
Our net deferred tax asset position is a result of net operating losses (“NOLs”), fixed assets, intangibles, and tax credit carryforwards. The realization of deferred tax assets is dependent upon our ability to generate sufficient future taxable income during the periods in which those temporary differences become deductible, prior to the expiration of the tax attributes. The evaluation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns and forecasting future profitability by tax jurisdiction.
We evaluate our deferred tax assets at reporting periods on a jurisdictional basis to determine whether adjustments to the valuation allowance are appropriate considering changes in facts or circumstances. As of each reporting date, management considers new evidence, both positive and negative, when determining the future realization of our deferred tax assets. We account for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. Given our current level of pre-tax earnings and forecasted future pre-tax earnings, we expect to generate income before taxes in the United States in future periods at a level that would fully utilize our U.S. federal NOL carryforwards and the majority of its state NOL carryforwards prior to their expiration.
Intangible Assets
Separately identifiable intangible assets are recorded at their fair values upon acquisition. We account for intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. Finite-lived intangible assets include interconnections, customer contracts, and trade names and trademarks. The interconnection intangible asset is the exclusive right to utilize an interconnection line between the operating project and a utility substation to transmit produced electricity. Included in that right is full maintenance provided on this line by the utility. Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful life. We evaluate our finite-lived intangible assets for impairment as events or changes in circumstances indicate the carrying value of these assets may not be fully recoverable. Events that could result in an impairment include, among others, a significant decrease in the market price or the decision to close a site.
36
If finite-lived or indefinite-lived intangible assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The fair value is determined based on the present value of expected future cash flows. We use our best estimates in making these evaluations, however, actual future pricing, operating costs and discount rates could vary from the assumptions used in our estimates and the impact of such variations could be material.
Our assessment of the recoverability of finite-lived and indefinite-lived intangible assets is determined by performing monitoring assessment of the future cash flows associated with the underlying gas rights agreements. The cash flows estimates are performed at the operating unit level and based on the average remaining length of the gas rights agreements. Based on our analysis, we concluded the cashflows generated to be well in excess of the carrying amounts. Changes in market conditions related to the various price indexes used in estimating these cash flows could adversely affect these estimates.
Finite-Lived Asset Impairment
In accordance with FASB ASC Topic 360, Property, Plant and Equipment and intangible assets with finite useful lives are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset or asset group to future undiscounted cash flows expected to be generated by the asset or asset group. Such estimates are based on certain assumptions, which are subject to uncertainty and may materially differ from actual results, including considering project specific assumptions for long-term credit prices, escalated future project operating costs and expected site operations. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value is generally determined by considering (i) internally developed discounted cash flows for the asset group, (ii) third-party valuations, and/or (iii) information available regarding the current market value for such assets. We use our best estimates in making these evaluations and consider various factors, including future pricing and operating costs. However, actual future market prices and project costs could vary from the assumptions used in our estimates and the impact of such variations could be material. We identified discrete events and recorded impairment of $451 and $51 for the three months ended March 31, 2023 and 2022, respectively. See Note 3 in the unaudited condensed consolidated financial statements for further information related to asset impairments.
Emerging Growth Company
We are an emerging growth company, as defined in the JOBS Act. The JOBS Act allows emerging growth companies to delay the adoption of new or revised accounting standards until such time as those standards apply to private companies. We intend to utilize these transition periods, which may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the transition periods afforded under the JOBS Act.
Recent Accounting Pronouncements
For a description of our recently adopted accounting pronouncements and recently issued accounting standards not yet adopted, see Note 2 of our unaudited condensed consolidated financial statements in this report.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes since our disclosure in Quantitative and Qualitative Disclosures About Market Risk included as Item 7A in our 2022 Annual Report.
ITEM 4. CONTROLS AND PROCEDURES
Management’s Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act, as of the end of the period covered by this quarterly report. Disclosure controls and procedures are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management, including our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report, concluded that as of such date, our disclosure controls and procedures were effective at a reasonable level of assurance.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we and our subsidiaries may be parties to legal proceedings arising in the normal course of our business. We and our subsidiaries are currently not a party, nor is our property subject, to any material pending legal proceedings.
ITEM 1A. RISK FACTORS
We face a number of risks that could materially and adversely affect our business, results of operations, cash flow, liquidity, or financial condition. A discussion of our risk factors can be found in Part I, “Item 1A Risk Factors” in our 2022 Annual Report any of which could have a material effect on us.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Use of Proceeds from Sale of Registered Securities
On January 21, 2021, our Registration Statement on Form S-1, as amended (File No. 333-251312) (the “Registration Statement”), was declared effective by the SEC in connection with our IPO. The underwriter for the IPO was Roth Capital Partners. A total of 3,399,515 shares of our common stock were sold pursuant to the Registration Statement, which was comprised of (1) 2,702,500 shares of new common stock issued by the Company and (2) 697,015 shares of the Company’s common stock held by MNK. The 3,399,515 shares were sold at an offering price of $8.50 per share and resulting in net proceeds to the Company of approximately $15.0 million, after deducting the underwriting discount of approximately $1.6 million and offering expenses payable by the Company of approximately $6.2 million.
The IPO closed on January 26, 2021. No payments for such expenses were made directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii) any of our affiliates.
From the closing of the IPO through March 31, 2023, approximately $15.0 million of the net proceeds from the IPO have been used by Montauk for the following: the Montauk Ag Asset Acquisition in May 2021, the purchase of the real-estate and property in October 2021 related to Montauk Ag, and subsequent development activities related to Montauk Ag Renewables. An immaterial amount has been used relating to other possible acquisitions and projects. As of March 31, 2023, all net proceeds have been used by the Company.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS
Exhibit Number |
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Description |
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31.1 |
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31.2 |
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32.1 |
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32.2 |
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101.INS |
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Inline XBRL Instance Document |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema Document |
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101.CAL |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF |
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Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB |
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Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104 |
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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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MONTAUK RENEWABLES, INC. |
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By: |
/s/ SEAN F. MCCLAIN |
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President, Chief Executive Officer and Director (Principal Executive Officer) |
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By: |
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Chief Financial Officer (Principal Financial and Accounting Officer) |
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| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 12/31/24 | ||||
| 6/30/24 | ||||
| 6/29/24 | ||||
| 1/1/24 | ||||
| 6/30/23 | ||||
| 6/29/23 | ||||
| 6/14/23 | ||||
| Filed on: | 5/10/23 | 8-K | ||
| 5/5/23 | ||||
| 4/19/23 | 4 | |||
| For Period end: | 3/31/23 | 8-K | ||
| 3/16/23 | 10-K, 8-K | |||
| 3/14/23 | ||||
| 1/1/23 | ||||
| 12/31/22 | 10-K, ARS | |||
| 12/30/22 | ||||
| 12/22/22 | 8-K | |||
| 12/15/22 | ||||
| 3/31/22 | 10-Q | |||
| 1/1/22 | 3 | |||
| 12/31/21 | 10-K | |||
| 12/22/21 | ||||
| 12/21/21 | 8-K | |||
| 2/22/21 | 8-K | |||
| 1/26/21 | 4 | |||
| 1/21/21 | 3, 3/A, 4, CERT, EFFECT, SEC LETTER | |||
| 1/14/21 | ||||
| 11/6/20 | ||||
| 12/15/19 | ||||
| 9/12/19 | ||||
| 3/21/19 | ||||
| 12/12/18 | ||||
| 8/4/17 | ||||
| List all Filings | ||||