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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024

or

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: 001-40272

OPAL FUELS INC.
(Exact name of registrant as specified in its charter)
Delaware
98-1578357
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
One North Lexington Avenue, Suite 1450

White Plains, New York
10601
(Address of principal executive offices)
(Zip Code)
(914) 705-4000
(Registrant's telephone number, including area code)

Not Applicable
(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 classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per shareOPAL
The Nasdaq Stock Market LLC

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.    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).     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
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company
                



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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes        No  


As of May 9, 2024, a total of 28,386,505 shares of Class A common stock, par value $0.0001 per share, and 71,500,000 shares of Class B common stock, par value of $0.0001 per share and 72,899,037 shares of Class D common stock, par value $0.0001 per share were issued and outstanding.
    




CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “future,” “goal,” “intends,” “may,” “objective,” “outlook,” “plans,” “projected,” “propose,” “seeks,” “target,” “will,” “would” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include:
our ability to grow and manage growth profitably, and maintain relationships with customers and suppliers;
our success in retaining or recruiting, our principal officers, key employees or directors;
intense competition and competitive pressures from other companies in the industry in which we operate;
increased costs of, or delays in obtaining, key components or labor for the construction and completion of landfill gas ("LFG") and livestock waste projects that generate electricity and renewable natural gas (“RNG”), compressed natural gas (“CNG”) and hydrogen dispensing stations;
factors relating to our business, operations and financial performance, including market conditions and global and economic factors beyond our control;
the reduction or elimination of government economic incentives to the renewable energy market;
factors associated with companies that are engaged in the production and integration of RNG, including (i) anticipated trends, growth rates and challenges in those businesses and in the markets in which they operate, (ii) contractual arrangements with, and the cooperation of, owners and operators of the landfill and livestock biogas conversion project facilities, on which we operate our LFG and livestock waste projects that generate electricity and (iii) RNG prices for Environmental Attributes (as defined below), low carbon fuel standard ("LCFS") credits and other incentives;
the ability to identify, acquire, develop and operate renewable projects and fueling stations ("Fueling Stations");
our ability to issue equity or equity-linked securities or obtain or amend debt financing;
the demand for renewable energy not being sustained;
impacts of climate change, changing weather patterns and conditions and natural disasters; and
the effect of legal, tax and regulatory changes.
The forward-looking statements contained in this Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in this Form 10-Q and in our Annual Report on Form 10-K, which was filed with the SEC on March 15, 2024 (our "Annual Report"). Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.



TABLE OF CONTENTS

PAGE
ITEM 3.




Part I - Financial Information

Item 1. Financial Statements
OPAL FUELS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share and per share data)

March 31,
2024
December 31,
2023
(Unaudited)
Assets
Current assets:
Cash and cash equivalents (includes $1,160 and $166 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
$28,207 $38,348 
Accounts receivable, net (includes $334 and $33 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
22,805 27,623 
Accounts receivable, related party14,912 18,696 
Restricted cash - current (includes $1,012 and $4,395 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
1,012 4,395 
Short term investments 5,975 9,875 
Fuel tax credits receivable4,212 5,345 
Contract assets8,997 6,790 
Parts inventory (includes $29 and $29 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
11,135 10,191 
Environmental credits held for sale1,534 172 
Prepaid expense and other current assets (includes $113 and $107 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
6,373 6,005 
Derivative financial assets, current portion537 633 
Total current assets105,699 128,073 
Capital spares3,638 3,468 
Property, plant, and equipment, net (includes $26,254 and $26,626 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
359,369 339,493 
Operating lease right-of-use assets12,137 12,301 
Investment in other entities206,014 207,099 
Note receivable - variable fee component2,369 2,302 
Other long-term assets1,651 1,162 
Intangible assets, net1,537 1,604 
Restricted cash - non-current (includes $1,957 and $1,850 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
3,477 4,499 
Goodwill54,608 54,608 
Total assets$750,499 $754,609 
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable (includes $11 and $744 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
10,815 13,901 
Accounts payable, related party (includes $802 and $1,046 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
8,166 7,024 
Fuel tax credits payable4,551 4,558 
Accrued payroll10,422 9,023 
Accrued capital expenses 10,743 15,128 
Accrued expenses and other current liabilities (includes $861 and $647 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
16,792 14,245 
Contract liabilities7,785 6,314 
OPAL Term Loan, current portion1,866  
1




Sunoma Loan, current portion (includes $1,652 and $1,608 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
1,652 1,608 
Operating lease liabilities - current portion656 638 
Other current liabilities (includes $94 and $92 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
94 92 
Asset retirement obligation, current portion1,812 1,812 
Total current liabilities75,354 74,343 
Asset retirement obligation, non-current portion5,068 4,916 
OPAL Term Loan, net of debt issuance costs175,161 176,532 
Sunoma Loan, net of debt issuance costs (includes $19,609 and $20,010 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
19,609 20,010 
Operating lease liabilities - non-current portion11,646 11,824 
Earn out liabilities1,497 1,900 
Other long-term liabilities (includes $1,297 and $211 at March 31, 2024 and December 31, 2023, respectively, related to consolidated VIEs)
8,637 7,599 
Total liabilities296,972 297,124 
Commitments and contingencies
Redeemable preferred non-controlling interests130,000 132,617 
Redeemable non-controlling interests705,190 802,720 
Stockholders' deficit
Class A common stock, $0.0001 par value, 340,000,000 shares authorized as of March 31, 2024; 30,022,288 and 29,701,146 shares, issued and outstanding at March 31, 2024 and December 31, 2023, respectively
3 3 
Class B common stock, $0.0001 par value, 160,000,000 shares authorized as of March 31, 2024; 71,500,000 and 0 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
7  
Class C common stock, $0.0001 par value, 160,000,000 shares authorized as of March 31, 2024; and 0 issued and outstanding as of March 31, 2024 and December 31, 2023
  
Class D common stock, $0.0001 par value, 160,000,000 shares authorized as of March 31, 2024; 72,899,037 and 144,399,037 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively
7 14 
Additional paid-in capital   
Accumulated deficit(370,832)(467,195)
Accumulated other comprehensive income (loss)42 (15)
Class A common stock in treasury, at cost; 1,635,783 shares at March 31, 2024 and December 31, 2023
(11,614)(11,614)
Total Stockholders' deficit attributable to the Company(382,387)(478,807)
Non-redeemable non-controlling interests 724 955 
Total Stockholders' deficit(381,663)(477,852)
Total liabilities, Redeemable preferred non-controlling interests, Redeemable non-controlling interests and Stockholders' deficit $750,499 $754,609 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


2




OPAL FUELS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share and per share data)
(Unaudited)
Three Months Ended
March 31,
 20242023
Revenues:
RNG fuel (includes revenues from related party of $15,495 and $4,715 for the three months ended March 31, 2024 and 2023, respectively)
$17,727 $6,749 
Fuel Station Services (includes revenues from related party of $7,741 and $1,493 for the three months ended March 31, 2024 and 2023, respectively)
37,142 20,828 
Renewable Power (includes revenues from related party of $1,526 and $1,527 for the three months ended March 31, 2024 and 2023, respectively)
10,083 15,380 
Total revenues64,952 42,957 
Operating expenses:
Cost of sales - RNG fuel8,338 6,038 
Cost of sales - Fuel Station Services30,335 20,292 
Cost of sales - Renewable Power9,258 8,378 
Project development and start up costs785 1,883 
Selling, general, and administrative13,161 14,074 
Depreciation, amortization, and accretion3,711 3,567 
Income from equity method investments(4,206)(705)
Total expenses61,382 53,527 
Operating income (loss)3,570 (10,570)
Other income (expense):
Interest and financing expense, net(3,961)(641)
Change in fair value of derivative instruments, net403 3,933 
Other income (expense)665 (68)
Income (loss) before provision for income taxes677 (7,346)
Provision for income taxes  
Net income (loss)677 (7,346)
Net loss attributable to redeemable non-controlling interests(1,627)(8,233)
Net income (loss) attributable to non-redeemable non-controlling interests2 (297)
Dividends on redeemable preferred non-controlling interests (1)
2,618 2,763 
Net loss attributable to Class A common stockholders$(316)$(1,579)
Weighted average shares outstanding of Class A common stock:
Basic27,368,20427,383,562
Diluted27,368,20427,383,562
Per share amounts:
Basic$(0.01)$(0.06)
Diluted $(0.01)$(0.06)
(1) Paid-in-kind preferred dividend is allocated between redeemable non-controlling interests and Class A common stockholders basis their weighted average percentage of ownership. Please see Note.13 Redeemable non-controlling interests, redeemable preferred non-controlling interests and Stockholders' deficit for additional information.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


3







OPAL FUELS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands of U.S. dollars)
(Unaudited)
Three Months Ended March 31,
20242023
Net income (loss)$677 $(7,346)
Other comprehensive income (loss):
Effective portion of the cash flow hedge attributable to equity method investments350  
Net unrealized loss on cash flow hedges (356)
Total comprehensive income (loss)1,027 (7,702)
Net income (loss) attributable to redeemable non-controlling interests565(5,915)
Other comprehensive income (loss) attributable to redeemable non-controlling interests293(299)
Comprehensive income (loss) attributable to non-redeemable non-controlling interests2(297)
Dividends on Redeemable preferred non-controlling interests426 445 
Comprehensive loss attributable to Class A common stockholders$(259)$(1,636)


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


4




OPAL FUELS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE NON-CONTROLLING INTEREST, REDEEMABLE PREFERRED NON-CONTROLLING INTEREST AND STOCKHOLDERS' (DEFICIT) EQUITY
(In thousands of U.S. dollars, except share and per share data)
(Unaudited)
Class A common stockClass B common stockClass D common stockClass A common stock in treasuryMezzanine Equity
SharesAmountSharesAmountSharesAmountAdditional paid-in capitalAccumulated deficitOther comprehensive incomeNon-redeemable non-controlling interestsShares AmountTotal Stockholders' DeficitRedeemable Preferred non-controlling interestsRedeemable non-controlling interests
December 31, 202329,701,146 $3  $ 144,399,037 $14 $ $(467,195)$(15)$955 (1,635,783)$(11,614)$(477,852)$132,617 $802,720 
Net income— — — — — — — 110 — 2 — — 112 — 565 
Other comprehensive income— — — — — — — — 57 — — — 57 — 293 
Issuance of Class A common stock under the ATM program (1)
14,005 — — — — — 97 — — — — — 97 — — 
Share conversion— — 71,500,000 7 (71,500,000)(7)— — — — — — — — — 
Issuance of Class A common stock for vesting of equity awards (2)
307,137 — — — — — (627)— — — — — (627)— — 
Stock-based compensation— — — — — — 165 — — — — — 165 — 848 
Distributions to non-redeemable non-controlling interests— — — — — — — — — (233)— — (233)— — 
Dividends on redeemable preferred non-controlling interests— — — — — — — (426)— — — — (426)2,618 (2,192)
Change in redemption value of Redeemable non-controlling interests— — — — — — 365 96,679 — — — — 97,044 — (97,044)
Payment of preferred dividend— — — — — — — — — — — — — (5,235)— 
March 31, 202430,022,288 $3 71,500,000 $7 72,899,037 $7 $ $(370,832)$42 $724 (1,635,783)$(11,614)$(381,663)$130,000 $705,190 
(1) During the first quarter of 2024, the Company issued shares of Class A common stock under the Company's ATM program. Please see Note 13. Redeemable non-controlling interests, Redeemable preferred non-controlling interests and Stockholders' (Deficit) Equity for additional information.
(2) Represents the equity awards vested net of shares of Class A common stock withheld for taxes. Please see Note 16. Stock-based Compensation for additional information.
5




Class A common stockClass D common stockClass A common stock in treasuryMezzanine Equity
SharesAmountSharesAmountAdditional paid-in capitalAccumulated deficitOther comprehensive incomeNon-redeemable non-controlling interestsShares AmountTotal Stockholders' DeficitRedeemable Preferred non-controlling interestsRedeemable non-controlling interests
December 31, 202229,477,766 $3 144,399,037 $14 $ $(800,813)$195 $26,445  $ $(774,156)$138,142 $1,013,833 
Net loss— — — — — (1,134)— (297)— — (1,431)— (5,915)
Other comprehensive loss— — — — — — (58)— — — (58)— (299)
Proceeds from non-redeemable non-controlling interest— — — — 1,722 — — 1,821 — — 3,543 — — 
Issuance of Class A common stock on warrant exchange 49,633 — — — 338 — — — — — 338 — — 
Cancellation of fractional shares on warrant exchange (26)— — — — — — — — — — — — 
Exercise of put option forward purchase contract - Meteora— — — — — — — — (1,635,783)(11,614)(11,614)— — 
Forfeiture of Class A common stock (197,258)— — — — — — — — — — — — 
Stock-based compensation— — — — 157 — — — — — 157 — 814 
Change in redemption value of Redeemable non-controlling interests— — — — (2,217)(5,503)— — — — (7,720)— 7,720 
Paid-in-kind preferred dividend— — — — — (445)— — — — (445)2,763 (2,318)
March 31, 202329,330,115 $3 144,399,037 $14 $ $(807,895)$137 $27,969 (1,635,783)$(11,614)$(791,386)$140,905 $1,013,835 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6




OPAL FUELS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(Unaudited)
Three Months Ended
March 31,
 20242023
Cash flows from operating activities:
Net income (loss)$677 $(7,346)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Income from equity method investments(4,206)(705)
Distributions from equity method investments4,415  
Provision for bad debts 492 
Amortization of operating lease right-of-use assets164 147 
Depreciation and amortization3,559 3,465 
Amortization of deferred financing costs555 450 
Loss on warrant exchange  338 
Accretion expense related to asset retirement obligation152 102 
Stock-based compensation1,013 971 
Paid-in-kind interest income(67)(78)
Change in fair value of Convertible Note Payable 563 
Unrealized loss on derivative financial instruments(307)(4,855)
Changes in operating assets and liabilities:
Accounts receivable4,818 611 
Accounts receivable, related party3,784 8,375 
Fuel tax credits receivable1,133 1,649 
Capital spares(171)(13)
Parts inventory(944)(1,968)
Environmental credits held for sale(1,362)(853)
Prepaid expense and other current assets(656)1,078 
Contract assets(2,207)1,227 
Accounts payable(3,989)622 
Accounts payable, related party1,142 (507)
Fuel tax credits payable(7)(940)
Accrued payroll1,400 1,547 
Accrued expenses 2,524 (1,199)
Operating lease liabilities - current and non-current(160)(107)
Other current and non-current liabilities987 601 
Contract liabilities1,471 504 
Net cash provided by operating activities13,718 4,171 
Cash flows from investing activities:
Purchase of property, plant, and equipment(26,752)(38,780)
Proceeds from short term investments3,900 27,986 
Cash paid for investment in other entities(1,500) 
Distributions received from equity method investment2,726 1,900 
Net cash used in investing activities(21,626)(8,894)
Cash flows from financing activities:
Proceeds from OPAL Term Loan 10,000 
Cash paid for taxes related to net share settlement of equity awards(627) 
Cash paid for purchase of shares upon exercise of put option (16,391)
Financing costs paid to other third parties(238)(100)
Repayment of Senior Secured Credit Facility (22,750)
Repayment of OPAL Term Loan (6,933)
Repayment of Sunoma Loan(380) 
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Repayment of Municipality loan (45)
Repayment of equipment loan(22) 
Payment of preferred dividends(5,235) 
Distribution to non-redeemable non-controlling interest(233) 
Proceeds from issuance of shares of Class A common stock under the ATM program, net97  
Proceeds from sale of non-redeemable non-controlling interest, related party 3,543 
Net cash used in financing activities(6,638)(32,676)
Net decrease in cash, restricted cash, and cash equivalents(14,546)(37,399)
Cash, restricted cash, and cash equivalents, beginning of period47,242 77,221 
Cash, restricted cash, and cash equivalents, end of period$32,696 $39,822 
Supplemental disclosure of cash flow information
Interest paid, net of $1,444 and $5,475 capitalized, respectively
$3,242 $1,322 
Noncash investing and financing activities:
Paid-in-kind dividend on redeemable preferred non-controlling interests$ $2,763 
Accrual for purchase of Property, plant and equipment included in Accounts payable and Accrued capital expenses$10,743 $15,424 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8



OPAL FUELS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Organization and Description of Business

OPAL Fuels Inc. (including its subsidiaries, the "Company", “OPAL,” “we,” “us” or “our”) is a renewable energy company specializing in the capture and conversion of biogas for the (i) production of RNG for use as a vehicle fuel for heavy and medium-duty trucking fleets, (ii) generation of Renewable Power for sale to utilities, (iii) generation and sale of Environmental Attributes associated with RNG and Renewable Power, and (iv) sales of RNG as pipeline quality natural gas. The term “Environmental Attributes” refers to federal, state and local government incentives in the United States, provided in the form of RINs, RECs, LCFS credits, ISCC Carbon Credits, rebates, tax credits and other incentives to end users, distributors, system integrators and manufacturers of renewable energy projects. OPAL also designs, develops, constructs, operates and services Fueling Stations for trucking fleets across the country that use natural gas to displace diesel as their transportation fuel. The biogas conversion projects currently use landfill gas and dairy manure as the source of the biogas. In addition, we have recently begun implementing design, development, and construction services for hydrogen Fueling Stations, and we are pursuing opportunities to diversify our sources of biogas to other waste streams.
The Company is organized into four operating segments based on the characteristics and the nature of products and services. The four operating segments are RNG Fuel, Fuel Station Services, Renewable Power and Corporate.
All amounts in these footnotes are presented in thousands of dollars except share and per share data.
2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
These condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") and include the accounts of the Company and all other entities in which the Company has a controlling financial interest: OPAL Renewable Power LLC (formerly Fortistar Methane 3 LLC (“FM3”) and Fortistar Methane 4 LLC), Beacon RNG LLC (“Beacon”) Sunoma Holdings, LLC (“Sunoma”), New River LLC (“New River”), Reynolds RNG LLC (“Reynolds”), Central Valley LLC (“Central Valley”), Prince William RNG LLC (“Prince William”), Cottonwood RNG LLC, Polk County RNG LLC (“Polk County”), OPAL Contracting LLC (formerly Fortistar Contracting LLC), OPAL RNG LLC (formerly Fortistar RNG LLC), and OPAL Fuel station services LLC (“Fuel Station Services”). The Company’s unaudited condensed consolidated financial statements include the assets and liabilities of these subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The non-controlling interest attributable to the Company's variable interest entities ("VIE") are presented as a separate component from the Stockholders' deficit in the condensed consolidated balance sheets and as a non-redeemable non-controlling interests in the condensed consolidated statements of changes in redeemable non-controlling interests, redeemable preferred non-controlling interests and Stockholders' (deficit) equity.
Certain prior period amounts have been reclassified to conform with the current period presentation including reclassification of the Company’s proportional share of income in equity investments into operating income. See Note 3. Investment in Other Entities for further discussion. The Company reclassified certain project development and start up costs as a separate line within Operating expenses, which were previously included in Cost of sales - RNG Fuel and Selling, general and administrative expenses. Please see the Project development and start up costs section within Note 2. Additionally, the Company also reclassified certain Asset retirement obligations from current to non-current.
The information included in this quarterly report should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as the interim disclosures generally do not repeat those in the annual financial statements. In the opinion of management, the Company's financial statements include all normal and recurring adjustments necessary in order to make the financial statements not misleading and to provide a fair presentation of the Company's financial results for the interim periods included in this Quarterly Report.

9



Variable Interest Entities
Our policy is to consolidate all entities that we control by ownership of a majority of the outstanding voting stock. In addition, we consolidate entities that meet the definition of a VIE for which we are the primary beneficiary. The Company applies the VIE model from ASC 810 when the Company has a variable interest in a legal entity not subject to a scope exception and the entity meets any of the five characteristics of a VIE. The primary beneficiary of a VIE is considered to be the party that both possesses the power to direct the activities of the entity that most significantly impact the entity’s economic performance and has the obligation to absorb losses or the rights to receive benefits of the VIE that could be significant to the VIE. To the extent a VIE is not consolidated, the Company evaluates its interest for application of the equity method of accounting. Equity method investments are included in the condensed consolidated balance sheets as “Investments in other entities.” Investments in unconsolidated entities in which the Company has influence over the operating or financial decisions are accounted for under the equity method.
As of March 31, 2024, the Company accounted for its ownership interests in Pine Bend RNG LLC ("Pine Bend"), Noble Road RNG LLC ("Noble Road"), Emerald RNG LLC ("Emerald"), Sapphire RNG LLC ("Sapphire"), Paragon RNG LLC ("Paragon"), Land2Gas LLC (the "SJI Joint Venture" (RNG Atlantic and RNG Burlington)) and GREP BTB Holdings LLC ("GREP") under the equity method.
Use of estimates
The preparation of condensed consolidated financial statements in conformity with U.S. 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates and assumptions of the Company include the residual value of the useful lives of our property, plant and equipment, the fair value of stock-based compensation, asset retirement obligations, the estimated losses on our trade receivables, percentage completion for revenue recognition, incremental borrowing rate for calculating the right-of-use lease assets and lease liabilities, the impairment assessment of goodwill and the fair value of derivative instruments. Actual results could differ from those estimates.
The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the entire year.
Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280) ("ASU 2023-07"). The update improves the reportable segment disclosure requirements by requiring all entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker (CODM), report other segment items (segment revenue less the significant expenses disclosed and profit or loss) by reportable segment, title and position of the CODM and an explanation of how the CODM uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources. Additionally, ASU 2023-07 requires that if the CODM uses more than one measure of a segment's net income or loss in assessing segment performance and deciding how to allocate resources, the entity may report one or more of those additional measures. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and should be applied retrospectively for all periods presented. The Company expects to report significant operating expenses by segment and other additional disclosures the Company is currently evaluating, upon adoption of ASU 2023-07 in its consolidated financial statements.
Emerging Growth Company Status
We are an emerging growth company as defined in the JOBS Act. The JOBS Act provides emerging growth companies with certain exemptions from public company reporting requirements for up to five fiscal years while a company remains an emerging growth company. As part of these exemptions, we need only provide two fiscal years of audited financial statements instead of three, we have reduced disclosure obligations such as for executive compensation, and we are not required to comply with auditor attestation requirements from Section 404(b) of the Sarbanes-Oxley Act regarding our internal control over financial reporting. Additionally, the JOBS Act has allowed us the option to delay adoption of new or revised financial accounting standards until private companies are required to comply with new or revised financial accounting standards.
10



Cash, Cash Equivalents, and Restricted Cash
Cash, cash equivalents, and restricted cash consisted of the following as of March 31, 2024 and December 31, 2023:
March 31,
2024
December 31,
2023
Current assets:
Cash and cash equivalents$28,207 $38,348 
Restricted cash - current (1)
1,012 4,395 
Long-term assets:
Restricted cash held as collateral (2)
3,477 4,499 
Total cash, cash equivalents, and restricted cash$32,696 $47,242 
(1) Restricted cash - current as of March 31, 2024 consists of $1,012 related to debt reserve on Sunoma Loan. Restricted cash - current as of December 31, 2023 consists of $3,361 related to debt reserve on Sunoma Loan and $1,034 relates to deposit on our interconnections payments.
(2) Restricted cash held as collateral represents the collateral requirements on our debt facilities.
Short term investments
The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity greater than three months at the time of purchase to be short term investments. The Short term investments of $5,975 and $9,875 as of March 31, 2024 and December 31, 2023, respectively, consists of cash invested in commercial paper with maturities ranging between 1 and 12 months as of the reporting date. The amounts in these accounts are liquid and available for general use.
Our short term investments are generally invested in commercial paper issued by highly credit worthy counter parties and government backed treasury bills. Investments are generally not FDIC insured and we take counter party risk on these investments.
Earnout Liabilities
In connection with the Business Combination and pursuant to a sponsor letter agreement, the Sponsor agreed to subject 10% of its Class A common stock (received as a result of the conversion of its ArcLight Class B ordinary shares immediately prior to the closing) to vesting and forfeiture conditions relating to VWAP targets for the Company's Class A common stock sustained over a period of 60 months following the closing. OPAL Fuels equity holders are eligible to receive an aggregate of 10,000,000 shares of Class B and Class D common stock upon the Company achieving each earn-out event during the earn-out period. The Earnout Awards were recognized at fair value on the closing date and classified as a liability which is remeasured at each balance sheet date and any change in fair value is recognized in the Company's condensed consolidated statement of operations as part of change in fair value of derivative instruments, net. For the three months ended March 31, 2024 and 2023, the Company recorded a gain of $403 and $4,310, respectively, in its condensed consolidated statements of operations. As of March 31, 2024 and December 31, 2023, the Company recorded earnout liabilities of $1,497 and $1,900, respectively, on its condensed consolidated balance sheets.
Redeemable non-controlling interests
Redeemable non-controlling interests represent the portion of OPAL Fuels that the Company controls and consolidates but does not own. The Redeemable non-controlling interest was created as a result of the Business Combination and represents 144,399,037 Class B Units issued by OPAL Fuels to the prior investors. The Company allocates net income or loss attributable to Redeemable non-controlling interest based on weighted average ownership interest during the period. The net income or loss attributable to Redeemable non-controlling interests is reflected in the condensed consolidated statement of operations.
11



At each balance sheet date, the mezzanine equity classified Redeemable non-controlling interests is adjusted up to their maximum redemption value if necessary, with an offset in Stockholders' equity. As of March 31, 2024, the maximum redemption value was $705,190.
Project development and start up costs
The Company has multiple RNG projects under construction for which the Company incurs certain development costs such as legal, consulting fees for joint venture structuring, royalties to the landfill owner, fines, settlements, site lease expenses and certification costs. Additionally, the Company also incurs certain expenses on new RNG projects that started operating for the first two years such as virtual pipeline costs (trucking costs incurred until a physical pipeline is connected) and ramp up costs. These costs are temporary and non-recurring over the project lifetime. Historically, the Company included these expenses in Cost of sales - RNG Fuel and Selling, general and administrative expenses with no associated revenues. For the three months ended March 31, 2024 and 2023, the Company is presenting these expenses in a separate line within operating expenses to provide additional information to the readers of the financial statements regarding the ongoing profitability of our RNG projects in operation.
The following table provides information on the types of expenses classified under this expense category:
Three Months Ended March 31,
 20242023
Site lease expenses$275 $254 
Legal and professional fees288 275 
Royalties 500 
Virtual pipeline costs 119 700 
Management services (1)
30 126 
Other73 28 
Total Project development and startup costs $785 1,883 
(1) Relates to charges billed to the individual projects by Fortistar. See Note. 10 Related parties for additional information.
Net loss per share
The Company's basic earnings per share of Class A common stock is computed based on the average number of outstanding shares of Class A common stock for the period.
The Company's diluted earnings per share includes effects of the Company's outstanding equity awards under the 2022 Plan (as defined elsewhere in these financial statements), Redeemable non-controlling interests (OPAL Fuels Class B units), redeemable preferred non-controlling interests, Sponsor Earnout Awards and OPAL Earnout Awards. The dilutive effect is not applicable for the periods presented.
Accounts Receivable, Net
The Company's allowance for credit losses was $82 and $0 at March 31, 2024 and December 31, 2023.
Asset Retirement Obligation
The Company accounts for asset retirement obligations in accordance with FASB ASC 410, Asset Retirement and Environmental Obligations, which requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and when a reasonable estimate of fair value can be made. The fair value of the estimated asset retirement obligations is recorded as a long-term liability, with a corresponding increase in the carrying amount of the related asset. The discounted asset retirement costs capitalized amount are accreted over the life of the sublease or site lease agreement. Asset retirement obligations are deemed Level 3 fair value measurements as the inputs used to measure the fair value are unobservable. The Company estimates the fair value of asset retirement obligations by calculating the estimated present value of the cost to retire the asset. This estimate requires assumptions and judgments regarding the existence of
12



liabilities, the amount and timing of cash outflows required to settle the liability, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental, and political environments. In addition, the Company determines the Level 3 fair value measurements based on historical information and current market conditions.
As of March 31, 2024 and December 31, 2023, the Company estimated the value of its total asset retirement obligations to be $6,880 and $6,728, respectively.
The changes in the asset retirement obligations were as follows as of March 31, 2024:
March 31,
2024
Balance, December 31, 2023 - Current and non-current $6,728 
Payment of asset retirement obligations during the year 
Accretion expense152 
Total asset retirement obligation6,880 
Less: current portion(1,812)
Total asset retirement obligation, net of current portion$5,068 
Revenue Recognition
The Company’s revenue arrangements generally consist of a single performance obligation to transfer goods or services. Revenue from the sale of RNG, CNG and electricity is recognized by applying the “right to invoice” practical expedient within the accounting guidance for Revenue from Contracts with Customers that allows for the recognition of revenue from performance obligations in the amount of consideration to which there is a right to invoice the customer and when the amount for which there is a right to invoice corresponds directly to the value transferred to the customer. For some public CNG Fueling Stations where there is no contract with the customer, the Company recognizes revenue at the point in time that the customer takes control of the fuel.
The Company also performs maintenance services throughout the country. Maintenance consists of monitoring equipment and replacing parts as necessary to ensure optimum performance. Revenue from service agreements is recognized over time as services are provided. Capacity payments fluctuate based on peak times of the year and revenues from capacity payments are recognized monthly as earned.
The Company has agreements with two natural gas producers ("Producers") to transport Producers' natural gas using the Company's RNG gathering system. The performance obligation is the delivery of Producers' natural gas to an agreed delivery point on an interstate gas pipeline. The quantity of natural gas transported for the Producers is measured at a certain specified meter. The price is fixed at contracted rates and the Producers pay approximately 30 days after month-end. As such, transportation sales are recognized over time, using the output method to measure progress.
The Company provides credit monetization services to customers that own renewable gas generation facilities. The Company recognizes revenue from these services as the credits are minted on behalf of the customer. The Company receives non-cash consideration in the form of RINs or LCFSs for providing these services and recognizes the RINs or LCFSs received as Environmental credits held for sale within current assets based on their estimated fair value at contract inception.
On November 29, 2021, the Company entered into a purchase and sale agreement with NextEra, a related party, for the Environmental Attributes generated by the RNG Fuels business. Under this agreement, the Company is committed to sell a minimum of 90% of the Environmental Attributes generated and will receive net proceeds based on the agreed upon price less a specified discount. A specified volume of Environmental Attributes sold per quarter will incur a discount fee per Environmental Attribute in addition to the specified discount. The agreement was effective beginning January 1, 2022. For the three months ended March 31, 2024 and 2023, the Company earned net revenues after discount and fees of $15,495 and $4,715, respectively, under this contract which was recorded as part of Revenues - RNG Fuel. For the three months ended March 31, 2024 and 2023, the Company earned net revenues after discount and fees of $7,741 and $1,493, respectively, which was recorded as part of Revenues - Fuel Station Services.
13



During third and fourth quarter of 2022, two of the wholly-owned subsidiaries from our Renewable Power portfolio entered into a purchase and sale agreement with an Environmental Attribute marketing firm to sell Environmental Attributes associated with renewable biomethane ("ISCC Carbon Credits") and purchase brown gas back at contracted fixed prices per million British thermal units ("MMbtu"). One of these contracts has a term of 3-years from the date of certification of the facility with an auto-renewal option. The other contract was terminated in August 2023. During the third quarter of 2023, three additional Renewable Power facilities entered into purchase and sale agreements with 3-year terms and similar terms and conditions as the previous contracts. For the three months ended March 31, 2024 and 2023, the Company earned net revenues of $3,788 and $5,445, respectively under the contracts which were recorded as part of Revenues - Renewable Power in the condensed consolidated statement of operations.
Sales of Environmental Attributes such as RINs, renewable energy credits ("RECs"), ISCC Carbon Credits and LCFS are generally recorded as revenue when the certificates related to them are delivered to a buyer. However, the Company may recognize revenue from the sale of such Environmental Attributes at the time of the related Renewable Power sales when the contract provides that title to the Environmental Attributes transfers at the time of production, the Company's price to the buyer is fixed, and collection of the sales proceeds is certain.
Management operating fees are earned for the operation, maintenance, and repair of the gas collection system of a landfill site. Revenue is calculated on the volume of per million British thermal units of LFG collected and the megawatt hours ("MWhs") produced at that site. This revenue is recognized when LFG is collected and Renewable Power is delivered.
The Company has various fixed price contracts for the construction of Fueling Stations for customers. Revenues from these contracts, including change orders, are recognized over time, with progress measured by the percentage of costs incurred to date compared to estimated total costs for each contract. This method is used as management considers costs incurred to be the best available measure of progress on these contracts. Costs capitalized to fulfill certain contracts were not material in any of the periods presented.
The Company owns Fueling Stations for use by customers under fuel sale agreements. The Company bills these customers at an agreed upon price for each gallon sold and recognizes revenue based on the amounts invoiced in accordance with the "right to invoice" practical expedient. For some public stations where there is no contract with the customer, the Company recognizes revenue at the point-in-time that the customer takes control of the fuel.
The Company from time-to-time enters into fuel purchase agreements with customers whereby the Company is contracted to design and build a Fueling Station on the customer's property in exchange for the Company providing CNG/RNG to the customer for a determined number of years. In accordance with the standards of ASC 840, Leases, the Company has concluded these agreements meet the criteria for a lease and are classified as operating leases. Typically, these agreements do not require any minimum consumption amounts and, therefore, no minimum payments. Upon adoption of ASC 842, the Company adopted the practical expedient not to reassess the classification. For additional information on lease revenues earned, please see Note 8. Leases.
Disaggregation of Revenue
The following table shows the disaggregation of revenue according to product line:
14



Three Months Ended
March 31,
 20242023
Renewable Power sales$5,819 $9,604 
Third party construction10,790 7,154 
Service5,335 4,904 
Brown gas sales5,602 7,530 
Environmental credits (1)
35,677 12,677 
Parts sales397 187 
Other341  
Total revenue from contracts with customers63,961 42,056 
Lease revenue (2)
991 901 
Total revenue$64,952 $42,957 
(1) Includes revenues of $3,617 and $5,168 for the three months ended March 31, 2024 and 2023, from customers domiciled outside of United States.
(2) Lease revenue relates to approximately twenty-six fuel purchasing agreements out of which we have two of our RNG fuel stations with minimum take or pay provisions and revenue from power purchase agreements at two of our Renewable Power facilities where we determined that we transferred the right to control the use of the power plant to the purchaser.
For the three months ended March 31, 2024 and 2023, 16.6% and 16.6%, respectively of revenue was recognized over time, and the remainder was for products and services transferred at a point in time.
Other income (expense)
The following table shows the items consisting of items recorded as Other income (expense):
Three Months Ended March 31,
 20242023
Gain on transfer of non-financial asset in exchange for services received (1)
$665 $270 
Loss on warrant exchange  (338)
Other income (expense)$665 $(68)
(1) Represents the fair value of RINs transferred as consideration for services received.
Contract Balances
The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:
15



 March 31,
2024
December 31,
2023
Accounts receivable, net$22,805 $27,623 
Contract assets:
Cost and estimated earnings in excess of billings$6,818 $4,630 
Accounts receivable retainage, net2,179 2,160 
Contract assets total$8,997 $6,790 
Contract liabilities:
Billings in excess of costs and estimated earnings$7,785 $6,314 
Contract liabilities total$7,785 $6,314 
During the three months ended March 31, 2024, the Company recognized revenue of $2,746 that was included in "Contract liabilities" at December 31, 2023. During the three months ended March 31, 2023, the Company recognized revenue of $8,013 that was included in "Contract liabilities" at December 31, 2022.
Environmental credits held for sale
The Company provides dispensing and credit monetization services to OPAL owned facilities and third-party customers that own renewable gas generation facilities. The Company recognizes revenue from these services as the credits are minted on behalf of the customer. The Company receives non-cash consideration in the form of RINs or LCFSs for providing these services and recognizes the environmental credits received as part of Revenues - Fuel Station Services and Environmental credits held for sale within current assets based on their estimated fair value at contract inception. It is recorded at historical fair value at contract inception and reviewed to ensure it is recorded at lower of cost and net realizable value at each balance sheet date. Due to the historically higher LCFS pricing, the fair value at contract inception may be significantly higher than the net realizable value of the environmental credits generated at the period-end balance sheet date. For the three months ended March 31, 2024 and 2023, the Company recorded $3,156 and $1,218 as part of Cost of sales - Fuel Station Services in its condensed consolidated statements of operations to adjust environmental credits held for sale to lower of cost and net realizable value.
Fuel Station Services Construction Backlog
The Company's remaining performance obligations ("backlog") represent the unrecognized revenue value of its contract commitments. The Company's backlog may significantly vary each reporting period based on the timing of major new contract commitments. At March 31, 2024, the Company had a backlog of $43,731 of which $32,917 is anticipated to be recognized as revenue in the next 12 months.
Major Maintenance

Major maintenance is a component of maintenance expense and encompasses overhauls of internal combustion engines, gas compressors and electrical generators. Major maintenance is expensed as incurred. Major maintenance expense was $2,909 and $2,076 for the three months ended March 31, 2024 and 2023 respectively, and is included in cost of sales — Renewable Power in the consolidated statements of operations.

Vulnerability Due to Certain Concentrations

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents, restricted cash, short term investments, derivative instruments and trade accounts receivable. The Company holds cash, cash equivalents and restricted cash at several major financial institutions, much of which exceeds FDIC insured limits. Historically, the Company has not experienced any losses due to such concentration of credit risk. The Company’s temporary cash investments policy is to limit the dollar amount of investments with any one financial institution and monitor the credit ratings of those institutions. While the Company may be exposed to credit losses due to the nonperformance of the holders of its deposits, the Company does not expect the settlement of these transactions to have a material effect on its results of operations, cash flows or financial condition.

16



Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes (“ASC Topic 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s condensed consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The Company calculates the interim tax provision in accordance with the provisions of ASC Subtopic 740-270, Income Taxes; Interim Reporting. For interim periods, the Company estimates the annual effective income tax rate and applies the estimated rate to the year-to-date income or loss before income taxes.
Significant Customers, Vendors and Concentration of Credit Risk
For the three months ended March 31, 2024, two customers accounted for 55% of the revenue. For the three months ended March 31, 2023, three customers accounted for 44% of the revenue. At March 31, 2024, two customers accounted for 58% of accounts receivable. At December 31, 2023, two customers accounted for 54% of accounts receivable.
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, and trade receivables. The Company places its cash with high credit quality financial institutions located in the United States of America. The Company performs ongoing credit evaluations of its customers.
As of March 31, 2024, no vendors accounted for more than 10% of the accounts payable. As of December 31, 2023, one vendor accounted for 32% of the accounts payable.
3. Investment in Other Entities
The Company uses the equity method to account for investments in affiliates that it does not control, but in which it has the ability to exercise significant influence over operating and financial policies. The Company's investments in these nonconsolidated affiliates are reflected in the Company's condensed consolidated balance sheets under the equity method, and the Company's proportionate net income, if any, is included in the Company's condensed consolidated statements of operations as income from equity method investments.
We continue to evaluate operational developments and the impact of the anticipated expansion of the operations of our existing equity method investments. Based on our analysis, it was determined that our equity method investments have evolved into a critical, integral part of our RNG segment business operations as they provide critical additional production capacity. Therefore, we have determined that the presentation of income (loss) from equity method investments as part of the operating income is more meaningful and useful information to the readers of our financial statements. As a result, we have reclassified our portion of income (loss) from equity method investments to Operating income for all periods presented.

The following table shows the movement of Investment in Other Entities:
17



Pine BendNoble RoadGREPSJIParagonTotal
Percentage of ownership50 %50 %20 %50 %50 %
Balance at December 31, 2023
$21,062 $22,174 $2,015 $1,567 $160,281 $207,099 
Net income from equity method investment 1,042 1,469 (71)(59)3,255 5,636 
Contribution by the Company    1,500  1,500 
Distributions from return on investment in equity method investment (1)
(996)(1,400)  (2,019)(4,415)
Distributions from return of investment in equity method investment (2)
(104)   (2,622)(2,726)
Accumulated other comprehensive income    350 350 
Amortization of basis difference (3)
(46)(147)  (1,237)(1,430)
Balance at March 31, 2024
$20,958 $22,096 $1,944 $3,008 $158,008 $206,014 
(1) Recorded as part of cash flows from operating activities for the three months ended March 31, 2024.
(2) Recorded as part of cash flows from investing activities for the three months ended March 31, 2024.
(3) Reflected in Income from equity method investments in the condensed consolidated statement of operations for the three months ended March 31, 2024.
The following table summarizes the activity from our equity method investments as well as our share of net income from equity method investments:

Three Months Ended March 31,
 
2024
2023
Revenue $25,407 $7,539 
Gross profit11,094 1,651 
Net income (loss)10,704 (213)
Net income from equity method investments (1)
$4,206 $705 

(1) Net income from equity method investments represents our portion of the net income from equity method investments including amortization of any basis differences.

4. Property, Plant, and Equipment, Net
Property, plant, and equipment, net, consisted of the following as of March 31, 2024 and December 31, 2023:
18



March 31,
2024
December 31,
2023
Plant and equipment$198,174 $205,188 
CNG/RNG fueling stations56,529 51,749 
Construction in progress (1)
193,006 175,060 
Buildings2,585 2,585 
Land1,303 1,303 
Service equipment2,499 2,481 
Leasehold improvements815 815 
Vehicles489 489 
Office furniture and equipment307 307 
Computer software277 277 
Land lease - finance lease6,283 6,469 
Vehicles - finance leases2,460 2,580 
Other591 591 
 465,318 449,894 
Less: accumulated depreciation(105,949)(110,401)
Property, plant, and equipment, net$359,369 $339,493 
(1) Includes capitalized interest of $1,444 and $5,475, respectively, for the three months ended March 31, 2024 and year ended December 31, 2023.
On October 20, 2023, our wholly owned subsidiary entered into an Asset Purchase and Sale Agreement (for the purposes of this paragraph, the “Agreement”) with Washington Gas Light Company ("WGL"). The subsidiary is currently constructing a production facility at the Prince William County landfill located in Manassas, Virginia, to process landfill gas into RNG. The Agreement obligates the subsidiary to develop, plan and permit a gas pipeline extension and associated interconnection facilities (the “Pipeline Project”) to deliver RNG from the facility to an interconnection point on WGL’s pipeline. Per the terms and conditions of the Agreement, WGL will purchase the Pipeline Project from the subsidiary after its final completion at a purchase price of $25 million. The closing is contingent upon approval of the Agreement by the Virginia State Corporation Commission, as well as the satisfaction of customary closing conditions, and the outside closing date is on or prior to October 20, 2024. As of March 31, 2024, we have recorded capital expenditure of $2.5 million which is included in the Property, Plant and Equipment on our condensed consolidated balance sheet.
As of March 31, 2024, the Construction in progress consists of capital expenditures on construction of RNG generation facilities including, but not limited to Prince William, Polk County, Cottonwood, Central Valley RNG projects and RNG dispensing facilities. The majority of these facilities, for which costs are in construction in progress as of March 31, 2024, are expected to be operational during late 2024 and mid 2025.
Depreciation expense on property, plant, and equipment for the three months ended March 31, 2024 and 2023 was $3,493 and $3,305, respectively.
5. Intangible Assets, Net
Intangible assets, net, consisted of the following at March 31, 2024 and December 31, 2023:

March 31, 2024
CostAccumulated
Amortization
Intangible
Assets,
Net
Weighted
Average
Amortization
Period
(Years)
Power purchase agreements$8,999 $(7,469)$1,530 18.1
Transmission/distribution interconnection1,600 (1,600) 15.1
Intellectual property43 (36)7 5.0
Total intangible assets$10,642 $(9,105)$1,537  
19




December 31, 2023
CostAccumulated
Amortization
Intangible
Assets,
Net
Weighted
Average
Amortization
Period
(years)
Power purchase agreements$8,999 $(7,926)$1,073 18.1
Transmission/distribution interconnection1,600 (1,076)524 15.1
Intellectual property43 (36)7 5.0
Total intangible assets$10,642 $(9,038)$1,604  
Amortization expense for the three months ended March 31, 2024 and 2023 was $67 and $160, respectively. At March 31, 2024, estimated future amortization expense for intangible assets is as follows:
Nine months ending December 31, 2024$205 
Fiscal year:
2025267 
2026231 
2027171 
2028171 
Thereafter492