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United States securities and exchange commission logo
September 15, 2023
Ann Anthony
Chief Financial Officer
OPAL Fuels Inc.
One North Lexington Ave.
Suite 1450
White Plains, NY 10601
Re: OPAL Fuels Inc.
Form 10-K for the
Fiscal Year ended December 31, 2022
Filed March 29,
2023
File No. 001-40272
Dear Ann Anthony:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year ended December 31, 2022
Properties, page 55
1. We note you reference
the Business section for information regarding your RNG and
renewable power
projects and on page 10 you state that you own and operate 7 RNG
projects and 18
renewable power projects, and you provide a list of RNG projects in
operation and under
construction, along with the design capacity in MMbtus per year.
However, it appears you
have limited similar disclosure concerning the renewable power
projects to page 66 of
MD&A, where you provide a list of these projects along with their
nameplate capacity in
MW per hour. We suggest that you reposition information
regarding your physical
properties to a common section of the filing.
Ann Anthony
FirstName LastNameAnn Anthony
OPAL Fuels Inc.
Comapany 15,
September NameOPAL
2023 Fuels Inc.
September
Page 2 15, 2023 Page 2
FirstName LastName
We believe that additional information should be provided to comply
with Instruction 1 to
Item 102 of Regulation S-K, to include information that will
reasonably inform investors
as to the suitability, adequacy, productive capacity, and extent of
utilization.
For example, disclose the timeframes for completion of the various RNG
projects under
construction, and the status of the renewable power projects such as
the relevance and
implications of being an RNG conversion candidate and the timeframes
for conversion
completion for projects where you have indicated conversion is
possible.
Please also disclose the extent of utilization of the various
facilities for each period,
relative to the design or nameplate capacity information you have
disclosed and clarify
whether utilization has been consistent with your expectations.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Key Components of Our Results of Operations
Operational Data, page 64
2. We understand from the tables on pages 64 and 65 that you produced 2.2
million MMbtu's
during 2022 from RNG projects having a design capacity of 3.9 million
MMBtu's,
indicating these projects were performing at 56% of the design
capacity.
Please expand your disclosures to clarify the extent to which you
expect this relationship
between production and design capacity to continue or to change, and
describe any
underlying factors that are reasonably likely to alter the
relationship.
Please describe any uncertainties concerning variables that would
determine whether
production at or near the design capacity is reasonably likely to
occur.
Comparison of the Years Ended December 31, 2022, and 2021
Revenues, page 67
3. We note your disclosures of changes in revenues for RNG Fuel, Fuel
Station Services, and
Renewable Power, in which you identify various additional products,
such as methanol
pathway credits, brown gas sales, environmental credits, and
transportation fuel.
Please expand your disclosures to indicate the extent to which
material changes in net
sales are attributable to changes in prices or to changes in the
volume or the amount of
goods or services being sold to comply with Item 303(b)(2) of
Regulation S-K.
Given the number of products identified, it would be helpful to
include a tabulation with
comparative sales and volumetric details for each product.
Please include descriptions of the methanol pathway credits and brown
gas and
provide any details necessary to understand the underlying drivers.
Ann Anthony
OPAL Fuels Inc.
September 15, 2023
Page 3
Financial Statements
Note 2 - Summary of Significant Accounting Policies
Revenue Recognition, page F-15
4. We note your accounting policy disclosure explaining that sales of
environmental
attributes are generally recognized when the related certificates are
delivered to a buyer
although you may recognize the sales in conjunction with sales of RNG
or renewable
power if the contract provides that title to the environmental
attributes will transfer when
such products are produced, and the price to the buyer is fixed and
collection of the
proceeds will occur within 60 days after generation of the renewable
power.
However, in the earnings releases you have furnished on Form 8-K for
the year and
subsequent interim quarters, you present the non-GAAP measure of
Adjusted EBITDA,
which reflects an adjustment for "RNG Pending Certification and Unsold
Environmental
Credits." You indicate the reason for this adjustment is to "better
align timing of revenues
to when costs are recognized for the production of RNG...."
Tell us why you believe that adding anticipated future sales of
environmental attributes to
your non-GAAP performance measure should not be regarded as contrary
to the guidance
in Question 100.04 of our Compliance and Disclosure Interpretations
pertaining to Non-
GAAP Financial Measures, which you may view on our website at the
following address:
https://www.sec.gov/corpfin/non-gaap-financial-measures.htm
As your adjustment effectively changes the recognition and measurement
principles
required under GAAP, please clarify how your individually-tailored
adjustment does not
yield a potentially misleading non-GAAP measure, in your view.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Mark Wojciechowski, Staff Accountant, at (202) 551-3759
or John
Cannarella, Staff Accountant, at (202) 551-3337 if you have any questions.
FirstName LastNameAnn Anthony Sincerely,
Comapany NameOPAL Fuels Inc.
Division of
Corporation Finance
September 15, 2023 Page 3 Office of
Energy & Transportation
FirstName LastName