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What changed in Montauk Renewables, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Montauk Renewables, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+432 added−457 removedSource: 10-K (2026-03-11) vs 10-K (2025-03-14)

Top changes in Montauk Renewables, Inc.'s 2025 10-K

432 paragraphs added · 457 removed · 303 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

72 edited+17 added−36 removed115 unchanged
Biggest changeWe develop, own, and operate RNG projects, using proven technologies that supply renewable fuel into the transportation and electrical power sectors. We are one of the largest U.S. producers of RNG, having participated in the industry for over 30 years.
Biggest changeOverview We are a renewable energy company specializing in the recovery and processing of biogas from landfills and other non-fossil fuel sources to beneficial use as a replacement to fossil fuels. We develop, own, and operate RNG projects, using proven technologies that supply renewable fuel into the transportation and electrical power sectors.
We are currently in the process of expanding two RNG project from LFG. We are also working on other projects which will repurpose equipment from existing biogas facilities for use at new project sites. The below graphic does not include the Montauk Ag project, which is currently under development.
We are currently in the process of expanding two RNG projects from LFG. We are also working on other projects which will repurpose equipment from existing biogas facilities for use at new project sites. The below graphic does not include the Montauk Ag project, which is currently under development.
In addition to monitoring biogas supply, we are incorporating similar collection and processing used for our biogas supply to our byproduct streams to capture, clean, and liquefy biogenic carbon dioxide at our existing projects. In February 2024, we announced our first agreement for certain of our Texas facilities related to biogenic carbon dioxide collection.
In addition to monitoring biogas supply, we are incorporating similar collection and processing used for our biogas supply to our byproduct streams to capture, clean, and liquefy biogenic carbon dioxide at our existing projects. In 2024, we announced our first agreement for certain of our Texas facilities related to biogenic carbon dioxide collection.
Renewable Electricity Projects Site Location Capacity(1) Bowerman Power Irvine, CA 23.6 MW Tulsa/AEL Sand Springs, OK 3.2 MW Pico(1) Jerome, ID 2.3 MW Total 29.1 MW (1) Beginning in October 2020, we began reporting the result of operations of Pico within RNG, but Pico continues to generate electricity. * Assumes inlet methane content of 56% and process efficiency of 91%, - 9 - Table of Contents A critical component of our business is our ability to negotiate and maintain long-term fuel supply agreements at our project sites.
Renewable Electricity Projects Site Location Capacity(1) Bowerman Power Irvine, CA 23.6 MW Tulsa/AEL Sand Springs, OK 3.2 MW Pico(1) Jerome, ID 2.3 MW Total 29.1 MW (1) Beginning in October 2020, we began reporting the result of operations of Pico within RNG, but Pico continues to generate electricity. * Assumes inlet methane content of 56% and process efficiency of 91%, - 8 - Table of Contents A critical component of our business is our ability to negotiate and maintain long-term fuel supply agreements at our project sites.
Lease termination typically requires the restoration of the leased area to its original condition. We have successfully ended leases on six of our former facilities. - 8 - Table of Contents Our RNG projects currently utilize three of the four proven commercial technologies available to process raw biogas into RNG, including: pressure swing absorption (“PSA”), Membrane Filtration and solvent scrubbing.
Lease termination typically requires the restoration of the leased area to its original condition. We have successfully ended leases on six of our former facilities. - 7 - Table of Contents Our RNG projects currently utilize three of the four proven commercial technologies available to process raw biogas into RNG, including: pressure swing absorption (“PSA”), Membrane Filtration and solvent scrubbing.
Strategic Overview Our business strategy focuses on the following three areas that we believe present the greatest growth opportunities for the Company at this time. • Continued Expansion into Agricultural Feedstocks for RNG Production • Optimize Existing Assets and Project Portfolio and Opportunistically Develop New Projects • Valued-added Service Offerings Continued Expansion into Agricultural Feedstocks for RNG Production As part of our long-term strategy, we are focused on diversifying our project portfolio beyond LFG through expansion into additional methane producing assets, while opportunistically adding third-party developed technology capabilities to boost financial performance and our overall cost competitiveness.
Strategic Overview Our business strategy focuses on the following three areas that we believe present the greatest growth opportunities for the Company at this time. • Continued Expansion into Agricultural Feedstocks for RNG Production - 3 - Table of Contents • Optimize Existing Assets and Project Portfolio and Opportunistically Develop New Projects • Valued-added Service Offerings Continued Expansion into Agricultural Feedstocks for RNG Production As part of our long-term strategy, we are focused on diversifying our project portfolio beyond LFG through expansion into additional methane producing assets, while opportunistically adding third-party developed technology capabilities to boost financial performance and our overall cost competitiveness.
We are required to document the QF status of each of our facilities in applications or - 11 - Table of Contents self-certifications filed with FERC, which typically require disclosure of upstream facility ownership, fuel and size characteristics, power sales, interconnection matters, and related technical disclosures.
We are required to document the QF status of each of our facilities in applications or self-certifications filed with FERC, which typically require disclosure of upstream facility ownership, fuel and size characteristics, - 10 - Table of Contents power sales, interconnection matters, and related technical disclosures.
We cannot speculate on exactly how the IRA will be implemented; however, the Act does contain numerous incentives for the production of clean energy which may impact our products. President Trump signed Executive Order 14154 on January 20, 2025, which immediately paused the disbursement of funds under the IRA.
We cannot speculate on exactly how the IRA will be implemented; however, the Act does contain numerous incentives for the production of clean energy which may impact our products. President Trump signed Executive Order 14154 in January 2025, which immediately paused the disbursement of funds under the IRA.
As a result, CA LCFS credits represent a revenue stream incremental to the value RNG producers receive for RINs. For livestock digester RNG projects, CA LCFS credits are a substantial revenue driver. We have four projects that are currently approved and eligible to earn CA LCFS credits, one of which is a livestock digester RNG project.
As a result, CA LCFS credits represent a revenue stream incremental to the value RNG producers receive for RINs. For livestock digester RNG projects, CA LCFS credits are a substantial revenue driver. We have one project that is currently approved and eligible to earn CA LCFS credits, which is a livestock digester RNG project.
To that end, we actively identify and evaluate opportunities to acquire entities that will further our vertically-integrated services. - 7 - Table of Contents Our Current Operating Portfolio We currently own and operate 13 projects, 11 of which are RNG projects and two of which are Renewable Electricity projects.
To that end, we actively identify and evaluate opportunities to acquire entities that will further our vertically-integrated services. - 6 - Table of Contents Our Current Operating Portfolio We currently own and operate 13 projects, 11 of which are RNG projects and two of which are Renewable Electricity projects.
In 2024, we converted 100% of the monetization of our Renewable Electricity production and Environmental Attributes under fixed-price agreements. For our electricity sales, all of our customers with whom we have off-take agreements are investment-grade entities with low credit risk.
In 2025, we converted 100% of the monetization of our Renewable Electricity production and Environmental Attributes under fixed-price agreements. For our electricity sales, all of our customers with whom we have off-take agreements are investment-grade entities with low credit risk.
We expect that as we continue to scale up our business, our increased size, capabilities and access to capital will provide us with increased strategic acquisition opportunities. - 6 - Table of Contents Valued-Added Service Offerings Over our three decades of experience, we have developed the full range of RNG project related capabilities from engineering, construction, management and operations, through EHS oversight and Environmental Attributes management.
We expect that as we continue to scale up our business, our increased size, capabilities and access to capital will provide us with increased strategic acquisition opportunities. Valued-Added Service Offerings Over our three decades of experience, we have developed the full range of RNG project related capabilities from engineering, construction, management and operations, through EHS oversight and Environmental Attributes management.
Our Shade site is closed to accepting new waste, but is currently expected to continue to generate a commercial level of RNG for an additional ten years. Our operating RNG projects have an average expected remaining useful life of approximately 18 years.
Our Shade site is closed to accepting new waste, but is currently expected to continue to generate a commercial level of RNG for an additional ten years. Our operating RNG projects have an average expected remaining useful life of approximately 17 years.
For the sale of Renewable Electricity and RECs, the City of Anaheim represented approximately 9.3% of our operating revenues in 2024. These sales occurred under a PPA between us and the City of Anaheim, in which electricity and RECs are sold at fixed prices.
For the sale of Renewable Electricity and RECs, the City of Anaheim represented approximately 9.3% of our operating revenues in 2025. These sales occurred under a PPA between us and the City of Anaheim, in which electricity and RECs are sold at fixed prices.
We also share a portion of our Environmental Attributes with certain pathway providers as consideration for the counterparty using our RNG as a transportation fuel. Renewable Electricity Renewable electricity is generated using gas-fueled engines or turbine-driven electrical generators, which are designed to operate efficiently on medium-Btu gas.
We also share a portion of our Environmental Attributes with certain pathway providers as consideration for the counterparty using our RNG as a transportation fuel. - 1 - Table of Contents Renewable Electricity Renewable electricity is generated using gas-fueled engines or turbine-driven electrical generators, which are designed to operate efficiently on medium-Btu gas.
Montauk also participates in industry trade groups, such as the RNG Coalition and American Biogas Council, to advocate policies and regulatory frameworks that support continued expansion of renewable energy in the United States. - 12 - Table of Contents The operation of our business may expose us to certain liabilities and compliance costs related to environmental matters.
Montauk also participates in industry trade groups, such as the RNG Coalition and American Biogas Council, to advocate policies and regulatory frameworks that support continued expansion of renewable energy in the United States. The operation of our business may expose us to certain liabilities and compliance costs related to environmental matters.
The collection of the fuel supply is potentially easier at dairy farms than at landfills due to higher quality, more uniform feedstock, and potentially less volatility in inlet - 4 - Table of Contents gas and biogas collection in a more controlled environment. During the second quarter of 2021, we amended our Pico feedstock agreement (“Pico Feedstock Amendment”).
The collection of the fuel supply is potentially easier at dairy farms than at landfills due to higher quality, more uniform feedstock, and potentially less volatility in inlet gas and biogas collection in a more controlled environment. During the second quarter of 2021, we amended our Pico feedstock agreement (“Pico Feedstock Amendment”).
We are well-positioned to take advantage of this consolidation opportunity because of our scale, operational and managerial capabilities, and execution track record in integrating acquisitions. Over the last ten years, we have acquired 13 projects and members of our current management team have led all of those acquisitions.
We are well-positioned to take advantage of this consolidation opportunity because of our scale, operational and managerial capabilities, and execution track record in integrating acquisitions. Over the last ten years, we have acquired 13 - 5 - Table of Contents projects and members of our current management team have led all of those acquisitions.
No other single customer represented more than 10% of our total 2024 operating revenues. - 10 - Table of Contents Suppliers and Equipment Vendors The major technologies used by our projects for gas processing include solvent scrubbing PSA and membrane separation. For electricity generation, we use reciprocating engines.
No other single customer represented more than 10% of our total 2025 operating revenues. - 9 - Table of Contents Suppliers and Equipment Vendors The major technologies used by our projects for gas processing include solvent scrubbing PSA and membrane separation. For electricity generation, we use reciprocating engines.
Additionally, while a larger percentage of WRRFs have biogas processing facilities, many process biogas for electricity production creating - 5 - Table of Contents additional opportunities for acquisition and conversion to RNG facilities. As with LFG and dairy farms, biogas from both swine farms and WRRFs qualify for D3 RINs under the RFS program.
Additionally, while a larger percentage of WRRFs have biogas processing facilities, many process biogas for electricity production creating additional opportunities for acquisition and conversion to RNG facilities. As with LFG and dairy farms, biogas from both swine farms and WRRFs qualify for D3 RINs under the RFS program.
Renewable Natural Gas Site COD(1) Capacity (MMBtu/ day) (2) Source Rumpke Cincinnati, OH 1986 7,271 Landfill Atascocita Humble, TX 2002*/ 2018 5,570 Landfill McCarty Houston, TX 1986 4,415 Landfill Apex Amsterdam, OH 2018 2,673 Landfill Monroeville Monroeville, PA 2004 2,372 Landfill Valley Harrison City, PA 2004 2,372 Landfill Galveston Galveston, TX 2019 1,857 Landfill Renewable Electricity Generation Raeger Johnston, PA 2006 1,857 Landfill Site COD (1) Capacity (MW) Source Shade Cairnbrook, PA 2007 1,857 Landfill (3) Bowerman Irvine, CA 2016 23.6 Landfill Coastal Plains Alvin, TX 2020 1,775 Landfill AEL Sand Spring, OK 2013 3.2 Landfill Pico Jerome, ID 2020 903 Livestock (Dairy) Total Capacity (MW) 26.8 Total Capacity (MMBtu) 32,922 = Renewable Natural Gas Project = Renewable Electricity Project (1) “COD” refers to the commercial operation date of each site.
Renewable Natural Gas Site COD(1) Capacity (MMBtu/ day) (2) Source Rumpke Cincinnati, OH 1986 7,271 Landfill Atascocita Humble, TX 2002*/ 2018 5,570 Landfill McCarty Houston, TX 1986 4,415 Landfill Apex Amsterdam, OH 2018/2025 5,273 Landfill Monroeville Monroeville, PA 2004 2,372 Landfill Valley Harrison City, PA 2004 2,372 Landfill Galveston Galveston, TX 2019 1,857 Landfill Renewable Electricity Generation Raeger Johnston, PA 2006 1,857 Landfill Site COD (1) Capacity (MW) Source Shade Cairnbrook, PA 2007 1,857 Landfill (3) Bowerman Irvine, CA 2016 23.6 Landfill Coastal Plains Alvin, TX 2020 1,775 Landfill AEL Sand Spring, OK 2013 3.2 Landfill Pico Jerome, ID 2020 903 Livestock (Dairy) Total Capacity (MW) 26.8 Total Capacity (MMBtu) 35,522 = Renewable Natural Gas Project = Renewable Electricity Project (1) “COD” refers to the commercial operation date of each site.
During 2021, we entered into an agreement to sell a portion of our production as a renewable component of refinery fuel exports into the European Union’s Renewable Energy Directive from certain RNG production facilities that have achieved International Sustainability & Carbon Certification registration. This diversification strategy accounted for approximately 1.1% of the reduction in generation of D3 RINs in 2024.
During 2021, we entered into an agreement to sell a portion of our production as a renewable component of refinery fuel exports into the European Union’s Renewable Energy Directive from certain RNG production facilities that have achieved International Sustainability & Carbon Certification registration. This diversification strategy accounted for approximately 0.9% of the reduction in generation of D3 RINs in 2025.
In addition to revenues generated from our product sales, we also generate revenues by providing various value-added services to certain of our biogas site partners. In 2024 and 2023, our projects generated approximately 6.2% and 7.7%, respectively, of all CNG and LNG D3 RINs in the United States.
In addition to revenues generated from our product sales, we also generate revenues by providing various value-added services to certain of our biogas site partners. In 2025 and 2024, our projects generated approximately 4.6% and 6.2%, respectively, of all CNG and LNG D3 RINs in the United States.
In 2024, this has allowed us to maintain average production availability of approximately 92% at our RNG projects and 93% at our Renewable Electricity projects. We treat our existing assets as an integrated portfolio rather than a collection of individual projects.
In 2025, this has allowed us to maintain average production availability of approximately 89% at our RNG projects and 92% at our Renewable Electricity projects. We treat our existing assets as an integrated portfolio rather than a collection of individual projects.
Information About Our Executive Officers Below is a list of the names, ages, and positions of our executive officers, and a brief summary of the business experience of our executive officers (ages as of March 1, 2025). Name Age Position Sean F. McClain 50 President and Chief Executive Officer, Director Kevin A.
Information About Our Executive Officers Below is a list of the names, ages, and positions of our executive officers, and a brief summary of the business experience of our executive officers (ages as of March 1, 2026). Name Age Position Sean F. McClain 51 President and Chief Executive Officer, Director Kevin A.
RNG Projects We currently own and operate 11 RNG projects across four states: Ohio (two), Pennsylvania (four), Texas (four) and Idaho (one) which, in the aggregate, have a total design capacity of approximately 32,922 MMBtu/day.
RNG Projects We currently own and operate 11 RNG projects across four states: Ohio (two), Pennsylvania (four), Texas (four) and Idaho (one) which, in the aggregate, have a total design capacity of approximately 35,9522 MMBtu/day.
Because of the growth in the number of RNG projects developed in 2023-2024, the CA LCFS program has been saturated in credits. As a result, the lower CI score projects (e.g. livestock digester RNG projects) have the financial advantage of being accepted into the - 3 - Table of Contents LCFS program.
Because of the growth in the number of RNG projects developed in 2023-2025, the CA LCFS program has been saturated in credits. As a result, the lower CI score projects (e.g. livestock digester RNG projects) have the financial advantage of being accepted into the LCFS program.
Frank has over 30 years of regulatory and environmental compliance experience. - 15 - Table of Contents
Frank has over 30 years of regulatory and environmental compliance experience. - 14 - Table of Contents
This significantly increased the quantity of D3 RINs produced, with production increasing to approximately 33 million net RINs in 2014 and approximately 704 million net RINs in 2023.
This significantly increased the quantity of D3 RINs produced, with production increasing to approximately 33 million net RINs in 2014 and approximately 923 million net RINs in 2024.
Ciroli was the North American Counsel and HR Manager for the North American subsidiaries of FAAC Group, a company that designs solutions for pedestrian and vehicle needs, representing the entities in their American and Canadian portfolio. From 2014 to July 2016, Mr. Ciroli was a Senior Litigation Counsel with the Housing Authority of the City of Pittsburgh. Mr.
From July 2016 to July 2020, Mr. Ciroli was the North American Counsel and HR Manager for the North American subsidiaries of FAAC Group, a company that designs solutions for pedestrian and vehicle needs, representing the entities in their American and Canadian portfolio. From 2014 to July 2016, Mr.
Our principal executive offices are located at 5313 Campbells Run Road, Suite 200, Pittsburgh, PA 15205. Our telephone number is (412) 747-8700. We are required to file annual, quarterly and current reports, proxy statements and other information with the SEC.
Corporate Information Montauk Renewables, Inc. is incorporated in the State of Delaware. Our principal executive offices are located at 5313 Campbells Run Road, Suite 200, Pittsburgh, PA 15205. Our telephone number is (412) 747-8700. We are required to file annual, quarterly and current reports, proxy statements and other information with the SEC.
McClain has served as our President and Chief Executive Officer and a member of our Board of Directors since January 2021. Prior to the Reorganization Transactions, Mr. McClain served as President and Chief Executive Officer of Montauk Holdings USA and as a member of its Board of Directors. From April 2011 until September 2019, Mr.
Prior to the Reorganization Transactions, Mr. McClain served as President and Chief Executive Officer of Montauk Holdings USA and as a member of its Board of Directors. From April 2011 until September 2019, Mr. McClain served as Chief Financial Officer of Montauk Holdings USA and Montauk Energy Holdings.
RNG Projects Site Location Capacity* Rumpke Cincinnati, OH 7,271 MMBtu/day Atascocita Humble, TX 5,570 MMBtu/day McCarty Houston, TX 4,415 MMBtu/day Apex (1) Amsterdam, OH 2,673 MMBtu/day Monroeville Monroeville, PA 2,372 MMBtu/day Valley Harrison City, PA 2,372 MMBtu/day Galveston Galveston, TX 1,857 MMBtu/day Raeger Mountain Johnstown, PA 1,857 MMBtu/day Shade Cairnbrook, PA 1,857 MMBtu/day Coastal Plains Alvin, TX 1,775 MMBtu/day Pico Jerome, ID 903 MMBtu/day Total 32,922 MMBtu/day (1) The capacity for Apex will increase to approximately 5,273 when we commission the second facility in the second quarter of 2025. * Assumes inlet methane content of 56% for all sites other than Pico, which assumes inlet methane content of 62%, and process efficiency of 91%.
RNG Projects Site Location Capacity* Rumpke Cincinnati, OH 7,271 MMBtu/day Atascocita Humble, TX 5,570 MMBtu/day McCarty Houston, TX 4,415 MMBtu/day Apex (1) Amsterdam, OH 5,273 MMBtu/day Monroeville Monroeville, PA 2,372 MMBtu/day Valley Harrison City, PA 2,372 MMBtu/day Galveston Galveston, TX 1,857 MMBtu/day Raeger Mountain Johnstown, PA 1,857 MMBtu/day Shade Cairnbrook, PA 1,857 MMBtu/day Coastal Plains Alvin, TX 1,775 MMBtu/day Pico Jerome, ID 903 MMBtu/day Total 35,522 MMBtu/day (1) Includes the capacity for our second Apex Facility, which was commissioned in 2025. * Assumes inlet methane content of 56% for all sites other than Pico, which assumes inlet methane content of 62%, and process efficiency of 91%.
These liabilities or compliance costs did not have a material effect on our capital expenditures or competitive position for fiscal 2024, nor do we expect them to have a material effect in the future. We believe we are in material compliance with all environmental regulations applicable to our operations. Inflation Reduction Act .
These liabilities or compliance costs did not have a material effect on our capital expenditures or competitive position for fiscal 2024, nor do - 11 - Table of Contents we expect them to have a material effect in the future. We believe we are in material compliance with all environmental regulations applicable to our operations. Tax Regulation .
Fuel Supply Agreement Summary RNG Projects Fuel Supply Agreement Expiration Dates Current Sites as of December 31, 2024 % of 2024 Total RNG Production Within 0-5 years 2 7.8 % Between 6-15 years 3 32.3 % Greater than 15 years 6 60.0 % Renewable Electricity Projects Fuel Supply Agreement Expiration Dates Current Sites as of December 31, 2024 % of 2024 Total Renewable Electricity Production Within 0-5 years — 3.4 % Between 6-15 years — — % Greater than 15 years(1) 2 91.9 % (1) Our Pico project continues to generate both RNG and Renewable Electricity and is accounted for above in the RNG Projects summary.
Fuel Supply Agreement Summary RNG Projects Fuel Supply Agreement Expiration Dates Current Sites as of December 31, 2025 % of 2025 Total RNG Production Within 0-5 years 2 3.0 % Between 6-15 years 3 34.0 % Greater than 15 years 6 63.0 % Renewable Electricity Projects Fuel Supply Agreement Expiration Dates Current Sites as of December 31, 2025 % of 2025 Total Renewable Electricity Production Within 0-5 years — — % Between 6-15 years — — % Greater than 15 years(1) 2 93.8 % (1) Our Pico project continues to generate both RNG and Renewable Electricity and is accounted for above in the RNG Projects summary.
Approximately 69% of our 2024 RNG production has been monetized under fuel supply agreements with expiration dates more than 15 years from December 31, 2024. Approximately 92% of our 2024 Renewable Electricity production has been monetized under fuel supply agreements with expiration dates more than 15 years from December 31, 2024.
Approximately 63% of our 2025 RNG production has been monetized under fuel supply agreements with expiration dates more than 15 years from December 31, 2025. Approximately 94% of our 2025 Renewable Electricity production has been monetized under fuel supply agreements with expiration dates more than 15 years from December 31, 2025.
As of December 31, 2024, our operating RNG projects have an average expected remaining useful life of approximately 18 years and our operating Renewable Electricity projects have an average expected remaining useful life of approximately 34 years, including renewal periods.
As of December 31, 2025, our operating RNG projects have an average expected remaining useful life of approximately 17 years and our operating Renewable Electricity projects have an average expected remaining useful life of approximately 33 years, including renewal periods.
We anticipate having this system migration complete in 2025. Competition There are several other companies operating in the renewable energy and waste-to-energy space, ranging from other project developers to service or equipment providers. Our primary competition is from other companies or solutions for access to biogas from waste.
Competition There are several other companies operating in the renewable energy and waste-to-energy space, ranging from other project developers to service or equipment providers. Our primary competition is from other companies or solutions for access to biogas from waste.
The terms of these contracts range up to 19 years, excluding renewal periods, with a weighted average remaining tenure of 17 years, based on 2024 electricity production.
The terms of these contracts range up to 18 years, excluding renewal periods, with a weighted average remaining tenure of 16 years, based on 2025 electricity production.
Valero, GE Warren, Exxon and Mercuria represented approximately 17.6%, 15.7%, 13.8% and 11.8%, respectively, of our operating revenues in 2024 from the sale of Environmental Attributes. We sell RINs to numerous RIN off-take parties and our largest RIN off-taker as a percentage of revenue can vary year to year given the short-term nature of these contracts.
Valero and Exxon represented approximately 17.4% and 11.3%, respectively, of our operating revenues in 2025 from the sale of Environmental Attributes. We sell RINs to numerous RIN off-take parties and our largest RIN off-taker as a percentage of revenue can vary year to year given the short-term nature of these contracts.
We completed the design of the digestion capacity expansion project in 2022, commenced construction of the digestion expansion, and commissioned the digestion expansion project in 2024. We currently expect the dairy to begin delivering the final increase in feedstock volumes during 2025 when we will make the final payment to the dairy as required under the Pico Feedstock Amendment.
We completed the design of the digestion capacity expansion project in 2022, commenced construction of the digestion expansion, and commissioned the digestion expansion project in 2024. In 2025, we made the final payment to the dairy as required under the Pico Feedstock Amendment and the dairy began delivering the final increase in feedstock volumes.
RNG ancillary constituent removal is done using equipment provided by Iron Sponge, MV Technologies, Thiopaq, Guild Associates, and PSB Industries. Electricity generation equipment is provided by Solar Turbines, Caterpillar, and Jenbacher. We have made substantial investments in a centralized Enterprise Resource Planning (“ ERP ”) system (Microsoft Dynamics) to better integrate operations across our projects.
RNG ancillary constituent removal is done using equipment provided by Iron Sponge, MV Technologies, Thiopaq, Guild Associates, and PSB Industries. Electricity generation equipment is provided by Solar Turbines, Caterpillar, and Jenbacher. In 2025, we made a substantial investment in a centralized Enterprise Resource Planning (“ ERP ”) system Microsoft Dynamics 365.
For information regarding revenues and other information regarding our results of operations for each of our last two financial years, please refer to our financial statements included in this report and within “Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this report. - 13 - Table of Contents Corporate Information Montauk Renewables, Inc. is incorporated in the State of Delaware.
For information regarding revenues and other information regarding our results of operations for each of our last two financial years, please refer to our financial - 12 - Table of Contents statements included in this report and within “Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this report.
Van Asdalan served as a lines of business controller and manager of external reporting at L.B. Foster Company, a manufacturer, distributor and service provider for transportation and energy infrastructure, from July 2011 to March 2018. Prior to L.B. Foster, Mr. Van Asdalan held senior associate accounting positions at PricewaterhouseCoopers LLP and Sisterson & Co LLP.
Prior to joining Montauk in 2018, Mr. Van Asdalan served as a lines of business controller and manager of external reporting at L.B. Foster Company, a manufacturer, distributor and service provider for transportation and energy infrastructure, from July 2011 to March 2018. Prior to L.B. Foster, Mr.
The provisional patent covers a new low pH neutralization technology designed to mitigate unfavorable pH condensate that is produced when wastewater is removed from the biogas conversion process. In 2024, we filed a provisional patent application pertaining to a renewable natural gas processing skid that we developed.
In 2022, we filed a provisional patent application pertaining to a combustion-based oxygen removal condensate neutralization technology we developed. The provisional patent covers a new low pH neutralization technology designed to mitigate unfavorable pH condensate that is produced when wastewater is removed from the biogas conversion process.
Ciroli has over 25 years of experience representing and advising domestic and international corporations and government entities in the areas of contracts, mergers and acquisitions, litigation, employment and governmental procurement and regulatory affairs.
Ciroli was a Senior Litigation Counsel with the Housing Authority of the City of Pittsburgh. Mr. Ciroli has over 25 years of experience representing and advising domestic and international corporations and government entities in the areas of contracts, mergers and acquisitions, litigation, employment and governmental procurement and regulatory affairs.
He is a certified public accountant and chartered global management accountant with nearly 25 years of business and financial management experience and holds a Master of Business Administration from the University of Pittsburgh Katz Graduate School of Business. James A. Shaw . Mr.
Van Asdalan held senior associate accounting positions at PricewaterhouseCoopers LLP and Sisterson & Co LLP. He is a certified public accountant and chartered global management accountant with nearly 25 years of business and financial management experience and holds a Master of Business Administration from the University of Pittsburgh Katz Graduate School of Business. James A. Shaw . Mr.
Van Asdalan served as Chief Financial Officer of Montauk Holdings USA and as a member of its Board of Directors. From March 2018 until September 2019, Mr. Van Asdalan served as Controller of Montauk Energy Holdings and Montauk Holdings USA. Prior to joining Montauk in 2018, Mr.
Van Asdalan has served as our Chief Financial Officer and Treasurer since January 2021. Prior to the Reorganization Transactions, Mr. Van Asdalan served as Chief Financial Officer of Montauk Holdings USA and as a member of its Board of Directors. From March 2018 until September 2019, Mr. Van Asdalan served as Controller of Montauk Energy Holdings and Montauk Holdings USA.
CARB finalized in the first quarter of 2023 Pico's initial CI Score Pathway model. We have been recognizing revenues from RINs and LCFS credits since the fourth quarter of 2022.
CARB finalized in the first quarter of 2023 Pico's initial CI Score Pathway model. We have been recognizing revenues from RINs and LCFS credits since the fourth quarter of 2022. As a result of the 2025 Annual Fuel Pathway Report ("AFPR") review, our CI score worsened.
On December 5, 2024, the EPA proposed rules to partially waive the 2024 cellulosic biofuel volume requirement using the general waiver authority and revise the associated percentage standard under the RFS. Despite this proposed rule, the EPA has indicated it will not utilize the CWC.
On December 5, 2024, the EPA proposed rules to partially waive the 2024 cellulosic biofuel volume requirement using the general waiver authority and revise the associated percentage standard under the RFS. This rule was finalized on July 7, 2025.
To succeed in a competitive labor market, we have developed and implemented various recruitment and retention strategies. These include competitive salary structures, bonus programs and competitive benefits, as well as paid time off, sick leave, disability coverage, group term life insurance, and a retirement savings program. We also offer our employees tuition reimbursement for job-related education and training opportunities.
These include competitive salary structures, bonus programs and competitive benefits, as well as paid time off, sick leave, disability coverage, group term life insurance, and a retirement savings program. We also offer our employees tuition reimbursement for job-related education and training opportunities. We continue to provide leadership and developmental training for our executive, director and manager level employees.
Montauk Ag Renewables In 2021, through our 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 to produce high quality renewable natural gas to generate renewable electricity, to generate North Carolina swine RECs, and to produce micronutrient organic fertilizer alternatives (the "Montauk Ag Renewables Acquisition”).
Montauk Ag Renewables In 2021, Montauk Ag Renewables purchased technology and assets (the “Montauk Ag Renewables Acquisition”) to recover residual natural resources from swine waste and to refine and recycle such waste products through proprietary and other processes to produce high quality renewable natural gas, renewable electricity, North Carolina swine RECs and micronutrient organic fertilizer alternatives.
This system centralizes maintenance operations across all of our projects. Our proactive approach to maintenance, corrective maintenance, root cause analysis, failure reporting, project management, and budgeting are all completed using the ERP system. We are currently in the process of migrating our ERP to the latest version of the Microsoft Dynamics system.
It allows us to better integrate operations across our projects. This system centralizes maintenance operations across all of our projects. Our proactive approach to maintenance, corrective maintenance, root cause analysis, failure reporting, project management, and budgeting are all completed using the ERP system.
Through contractual arrangements with our site hosts and counterparties, we typically share pricing and production risks while retaining our ability to benefit from potential upside. A portion of the RNG volume we produce is sold under bundled fixed-price arrangements for the RNG and Environmental Attributes, some of which include a sharing arrangement where we benefit from prices above certain thresholds.
A portion of the RNG volume we produce is sold under bundled fixed-price arrangements for the RNG and Environmental Attributes, some of which include a sharing arrangement where we benefit from prices above certain thresholds.
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. Once collected, biogas can be processed into pipeline-quality RNG or converted into electricity.
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.
The funding pause has been challenged by several states and the District of Columbia. Employees and Human Capital Resources Employee Profile We employed 166 people on December 31, 2024, located in California, Idaho, Ohio, Oklahoma, Pennsylvania, North Carolina and Texas. Our employee population is comprised of a mix of field operations personnel and office-based professionals.
Employees and Human Capital Resources Employee Profile We employed 189 people on December 31, 2025, located in California, Idaho, Ohio, Oklahoma, Pennsylvania, North Carolina and Texas. Our employee population is comprised of a mix of field operations personnel and office-based professionals. As of December 31, 2025, none of our employees were represented by a collective bargaining unit or labor union.
The conversion facility is typically located on landfill property away from the active fill operations where additional waste is added to the landfill site.
Once collected, biogas can be processed into pipeline-quality RNG or converted into electricity. The conversion facility is typically located on landfill property away from the active fill operations where additional waste is added to the landfill site.
We established our currently operating portfolio of eleven RNG and two Renewable Electricity projects and development projects through self-development, partnerships, and acquisitions that span seven states.
We are one of the largest U.S. producers of RNG, having participated in the industry for over 30 years. We established our currently operating portfolio of eleven RNG and two Renewable Electricity projects and development projects through self-development, partnerships, and acquisitions that span seven states.
He served as our Vice President, General Counsel and Secretary from January 2021 until January 2023 and in the same role with Montauk Energy Holdings upon joining in July 2020. From July 2016 to July 2020, Mr.
Shaw has more than 25 years of experience in facilities operations and management. John Ciroli. Mr. Ciroli has served as our Chief Legal Officer since January 2023. He served as our Vice President, General Counsel and Secretary from January 2021 until January 2023 and in the same role with Montauk Energy Holdings upon joining in July 2020.
He was a Site Manager for five Montauk Energy Holdings operating sites from April 2015 to April 2016 and two Montauk Energy Holdings operating sites from June 2010 to March 2015. Prior to joining Montauk, Mr. Shaw was a facility manager for SONY Electronics at the world’s first vertically integrated television manufacturing facilities. Mr.
He previously served as North Region Manager of Montauk Energy Holdings from May 2016 until September 2019 and held positions of increasing responsibility as a site manager from 2010 until 2016. Prior to joining Montauk, Mr. Shaw was a facility manager for SONY Electronics at the world’s first vertically integrated television manufacturing facilities. Mr.
Shaw has served as our Vice President of Operations since January 2021 and has served as Vice President of Operations of Montauk Energy Holdings since September 2019. He previously served as North Region Manager of Montauk Energy Holdings from May 2016 to September 2019.
Shaw has served as our Chief Operating Officer since October 2025. He served as our Vice President of Operations from January 2021 until September 2025 and as the Vice President of Operations of Montauk Energy Holdings from September 2019 until December 2020.
Products Sold The revenues Montauk receives from selling renewable energy consist of two main components. The first component consists of revenues from the commodity value of the natural gas or electricity generated, which we sell through a variety of term-length - 1 - Table of Contents agreements.
The first component consists of revenues from the commodity value of the natural gas or electricity generated, which we sell through a variety of term-length agreements. The second component consists of revenues from the Environmental Attributes derived from the production of RNG and Renewable Electricity.
We continue to sell a portion of our production as a renewable component of refinery fuel exports. - 2 - Table of Contents We seek to mitigate our exposure to commodity and Environmental Attribute pricing volatility.
We continue to sell a portion of our production as a renewable component of refinery fuel exports. We seek to mitigate our exposure to commodity and Environmental Attribute pricing volatility. Through contractual arrangements with our site hosts and counterparties, we typically share pricing and production risks while retaining our ability to benefit from potential upside.
McClain served as Chief Financial Officer of Montauk Holdings USA and Montauk Energy Holdings. Prior to joining Montauk in 2011, he held various management positions with BPL Global Limited, Bayer and Dick’s Sporting Goods and was in public accounting at Arthur Andersen LLP.
Prior to joining Montauk in 2011, he held various management positions with BPL Global Limited, Bayer and Dick’s Sporting Goods and was in public accounting at Arthur Andersen LLP. He is a certified public accountant and has over 25 years of business and financial management experience. - 13 - Table of Contents Kevin A. Van Asdalan . Mr.
Van Asdalan 47 Chief Financial Officer and Treasurer James A. Shaw 53 Vice President of Operations Michael Barsch 51 Vice President of Business Development John Ciroli 54 Chief Legal Officer and Secretary Sharon Frank 68 Vice President of Environmental, Health and Safety Sean F. McClain . Mr.
Van Asdalan 48 Chief Financial Officer and Treasurer James A. Shaw 54 Chief Operating Officer John Ciroli 55 Chief Legal Officer and Secretary Sharon Frank 69 Vice President of Environmental, Health and Safety Sean F. McClain . Mr. McClain has served as our President and Chief Executive Officer and a member of our Board of Directors since January 2021.
ITEM 1. BUSI NESS. Unless the context requires otherwise, references to “Montauk,” the “Company,” “we,” “us” or “our” refer to Montauk Renewables, Inc. and its consolidated subsidiaries. Overview We are a renewable energy company specializing in the recovery and processing of biogas from landfills and other non-fossil fuel sources to beneficial use as a replacement to fossil fuels.
ITEM 1. BUSI NESS. Unless the context requires otherwise, references to “Montauk,” the “Company,” “we,” “us” or “our” refer to Montauk Renewables, Inc. and its consolidated subsidiaries. Additionally, amounts are in thousands unless indicated otherwise.
We continue to provide leadership and developmental training for our executive, director and manager level employees. Intellectual Property We rely on a combination of patent, trademark, copyright and trade secret laws, employee and third-party nondisclosure/confidentiality agreements, non-compete, and license agreements to protect our intellectual property.
Intellectual Property We rely on a combination of patent, trademark, copyright and trade secret laws, employee and third-party nondisclosure/confidentiality agreements and non-compete and license agreements to protect our intellectual property. We acquired certain technology in the Montauk Ag Renewables Acquisition for which we received a patent during 2021 with a term of 20 years.
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.
Our current operating projects produce either RNG or Renewable Electricity by processing biogas from landfill sites or agricultural waste from livestock farms. 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.
The 2023 TRIR national average was 2.4 for all industries. We continue to focus on practices and measures to lower our TRIR. Employee Development and Training The success and growth of our business is significantly correlated with our ability to recruit, train, promote and retain talented individuals at all levels of our organization.
Employee Development and Training The success and growth of our business is significantly correlated with our ability to recruit, train, promote and retain talented individuals at all levels of our organization. To succeed in a competitive labor market, we have developed and implemented various recruitment and retention strategies.
As of December 31, 2024, none of our employees were represented by a collective bargaining unit or labor union. We consider our employee relations to be good across our organization. Health and Safety Safety, including the health of our employees, is one of our core values and a priority across our operations.
We consider our employee relations to be good across our organization. Health and Safety Safety, including the health of our employees, is one of our core values and a priority across our operations. We are committed to developing a strong health and safety culture that reduces injuries and illness whenever possible.
We also routinely train our employees on health and safety practices applicable to their job function and provide them all necessary personal protective equipment to perform their job in a safe manner. Our recordable cases and total recordable incident rate (“TRIR”), excluding COVID-19 related incidents, was 2.89 and 0.00 in 2024 and 2023, respectively.
Our health and safety strategy is designed to proactively identify, mitigate and eliminate conditions that could result in serious injury or fatality. We also routinely train our employees on health and safety practices applicable to their job function and provide them all necessary personal protective equipment to perform their job in a safe manner.
We intend to contract with additional farms to secure feedstock sources, as we commission commercial production and increase our production capabilities, which we anticipate will secure additional feedstock for future production processes. Other Opportunities Other industries that present opportunities of scale for biogas conversion include swine farms and WRRFs.
We expect our production and revenue generation activities to commence in April 2026. - 4 - Table of Contents Other Opportunities Other industries that present opportunities of scale for biogas conversion include swine farms and WRRFs.
Removed
Corporate History On January 4, 2021, the Company, Montauk Holdings Limited (“MNK”) and Montauk Holdings USA, LLC (a direct wholly-owned subsidiary of MNK at the time, “Montauk USA”) entered into a series of transactions, including an equity exchange (the “Equity Exchange”) and a distribution collectively referred to as the “Reorganization Transactions,” that resulted in the Company owning all of the assets and entities (other than Montauk USA) previously owned by Montauk USA, and Montauk Renewables became a direct wholly-owned subsidiary of MNK.
Added
In January 2021, we closed the initial public offering of our common stock on the Nasdaq Capital Market with the shares traded under the symbol “MNTK.” Our common stock is also secondarily listed on the Johannesburg Stock Exchange under the trading symbol “MKR.” Products Sold The revenues Montauk receives from selling renewable energy consist of two main components.
Removed
Prior to the Reorganization Transactions, MNK’s business and operations were conducted entirely through Montauk USA and its U.S. subsidiaries, and MNK held no substantial assets other than equity of Montauk USA. The Company had no significant operations or assets prior to January 4, 2021, when it engaged in the equity exchange with Montauk USA and MNK.
Added
The EPA made CWCs available for purchase under the final rule along with the partial waiver of the 2024 cellulosic biofuel volume requirement.
Removed
After completion of the Reorganization Transactions, (i) Montauk USA ceased to own any substantial assets and (ii) all entities through which MNK’s business and operations were conducted became owned, directly or indirectly, by the Company. MNK adopted a plan contemporaneously with the completion of the Reorganization Transactions that authorized the future liquidation and dissolution of MNK.
Added
The final rule also requires the use of a new data source for the average wholesale price of gasoline to be used in the calculation of the CWC price. - 2 - Table of Contents The EPA proposed the 2026 and 2027 RVOs, and a Partial Waiver of the 2025 Cellulosic Biofuel Volume Requirement on June 17, 2025.
Removed
On January 15, 2021, MNK sold the membership interest of Montauk USA to a third party. On January 26, 2021, MNK distributed all of the outstanding shares of the Company’s common stock as a pro rata dividend to the holders of MNK’s ordinary shares (the “Distribution”), subject to any tax withholding obligations under applicable South African law.
Added
On August 22, 2025, the EPA issued decisions on 175 Small Refinery Exemptions (SREs) for the years 2023-2025. EPA subsequently proposed a Supplemental Rule (referred to as the SRE reallocation volume) on September 18, 2025, which would account for the for 2023-2025 exempted RVOs.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

89 edited+37 added−58 removed166 unchanged
Biggest changeThe Amended Credit Agreement is subject to customary events of default, and contemplates that we would be in default if, for any fiscal quarter (x) the average monthly D3 RIN price is less than $0.80 per RIN and (y) the consolidated EBITDA for such quarter is less than $6.0 million.
Biggest changeUnder the Credit Agreement, which became applicable upon entry into the new facility on March 9, 2026, we are required to maintain: • a fixed charge coverage ratio of at least 1.20 to 1.00; • a total leverage ratio of not more than 4.00 to 1.00; • minimum Liquidity (as defined in the Credit Agreement) of at least $10.0 million, and • minimum Consolidated EBITDA (as defined in the Credit Agreement) of at least $10.0 million. - 27 - Table of Contents The Credit Agreement is subject to customary events of default, and contemplates that we would be in default if, for any fiscal quarter, the average monthly D3 RIN price is less than $1.00 per RIN.
Under certain of such laws and regulations, we could be held strictly liable for the removal or remediation of previously released materials or property contamination, regardless of whether we were responsible for the release or contamination and even if our operations met previous standards in the industry at the time they were conducted.
Under certain such laws and regulations, we could be held strictly liable for the removal or remediation of previously released materials or property contamination, regardless of whether we were responsible for the release or contamination and even if our operations met previous standards in the industry at the time they were conducted.
Furthermore, extreme weather events, such as lightning strikes, ice storms, tornados, extreme wind, hurricanes and other severe storms, wildfires and other unfavorable weather conditions or natural disasters, such as floods, fires, earthquakes, and rising sea-levels, could adversely affect the input and output commodities associated with the renewable energy sector.
Furthermore, extreme weather events, such as lightning strikes, ice storms, tornados, extreme wind, hurricanes and other severe storms, wildfires and other unfavorable weather conditions or natural disasters, such as droughts, floods, fires, earthquakes, and rising sea-levels, could adversely affect the input and output commodities associated with the renewable energy sector.
In addition to preventing additional borrowings under the Amended Credit Agreement, an event of default, if not cured or waived, could result in the acceleration of the maturity of indebtedness outstanding under the facility, which would require us to immediately repay all amounts outstanding.
In addition to preventing additional borrowings under the Credit Agreement, an event of default, if not cured or waived, could result in the acceleration of the maturity of indebtedness outstanding under the facility, which would require us to immediately repay all amounts outstanding.
A material write-off or impairment change could adversely affect our ability to comply with the financial covenants under the Amended Credit Agreement, and otherwise adversely affect our business, financial condition and results of operations.
A material write-off or impairment change could adversely affect our ability to comply with the financial covenants under the Credit Agreement, and otherwise adversely affect our business, financial condition and results of operations.
Our specific focus on the renewable energy sector exposes us to risks related to the supply of, demand for and the ultimate price of energy commodities and Environmental Attributes, inflation, taxes, tariffs, duties or other assessments on necessary equipment, the cost of capital expenditures, government regulation, world and regional events and economic conditions, and the acceptance of alternative power sources.
Our specific focus on the renewable energy sector exposes us to risks related to the supply of, demand for and the ultimate price of energy commodities and Environmental Attributes, inflation, taxes, tariffs, duties, or other assessments on necessary equipment, the cost of capital expenditures, government regulation, world and regional events and economic conditions, labor market conditions and the acceptance of alternative power sources.
In addition, in order to maximize collection of LFG, we will need to take various measures, such as drilling additional gas wells in the landfill to increase LFG collection, balancing the pressure on the gas field based on the data collected by the landfill operator from the gas wells to ensure optimum landfill gas utilization and ensuring that we match availability of engines and related equipment to availability of LFG.
In addition, to maximize collection of LFG, we need to take various measures, such as drilling additional gas wells in the landfill to increase LFG collection, balancing the pressure on the gas field based on the data collected by the landfill operator from the gas wells to ensure optimum landfill gas utilization and ensuring that we match availability of engines and related equipment to availability of LFG.
Many factors will influence the widespread adoption of renewable energy and demand for renewable energy projects, including: • cost-effectiveness of renewable energy technologies as compared with conventional and competitive technologies; • performance and reliability of renewable energy products as compared with conventional and non-renewable products; • fluctuations in economic and market conditions that impact the viability of conventional and competitive alternative energy sources; • increases or decreases in the prices of oil, coal and natural gas; • continued deregulation of the electric power industry and broader energy industry; and • availability or effectiveness of government subsidies and incentives.
Many factors will influence the widespread adoption of renewable energy and demand for renewable energy projects, including: • cost-effectiveness of renewable energy technologies as compared with conventional and competitive technologies; • performance and reliability of renewable energy products as compared with conventional and non-renewable products; • fluctuations in economic and market conditions that impact the viability of conventional and competitive alternative energy sources; - 18 - Table of Contents • increases or decreases in the prices of oil, coal and natural gas; • continued deregulation of the electric power industry and broader energy industry; and • availability or effectiveness of government subsidies and incentives.
In addition, we have in the past, and may in the future, incur material asset impairment charges if any of our renewable energy projects incurs operational issues that indicate our expected future cash flows from the project are less than the project’s carrying value.
In addition, we have in the past, and may in the future, incur material asset impairment charges if any of our renewable energy projects has operational issues that indicate our expected future cash flows from the project are less than the project’s carrying value.
In a December 1, 2022 proposed rule, EPA proposed to not utilize its cellulosic waiver authority for the years 2023-2025. However, if actual production is lower than the RVO, the EPA will have discretion to utilize CWC. This rule was finalized in July 2023.
In a December 1, 2022 proposed rule, EPA proposed to not utilize its cellulosic waiver authority for the years 2023-2025. However, if actual production is lower than the RVO, the EPA will have discretion to utilize CWC. This rule was finalized on July 12, 2023.
Govender have entered into a Consortium Agreement whereby they agree to act together when voting our common stock in the election of directors, among other matters. The parties to the Consortium Agreement beneficially owned, in the aggregate, approximately 52.3% of our common stock as of February 28, 2025.
Govender have entered into a Consortium Agreement whereby they agree to act together when voting our common stock in the election of directors, among other matters. The parties to the Consortium Agreement beneficially owned, in the aggregate, approximately 52.3% of our common stock as of February 28, 2026.
To the extent that any material disruptions or security breaches result in a loss or damage to our data, or an inappropriate disclosure of confidential, proprietary or customer information, it could materially cause damage to our reputation, affect our relationships with our customers and strategic partners, lead to claims against us from governments and private plaintiffs, and ultimately have a material adverse effect on our business.
To the extent that any material disruptions or security breaches result in a loss or damage to our data, or an inappropriate disclosure of confidential, proprietary or customer information, it could materially cause damage to our reputation, - 25 - Table of Contents affect our relationships with our customers and strategic partners, lead to claims against us from governments and private plaintiffs, and ultimately have a material adverse effect on our business.
Certain of our directors reside outside of the United States and it may be difficult to enforce judgments against them in the United States. Two of our directors, all of our executive officers and all of our operating assets reside in the United States. Directors Copelyn, Govender, Ahmed and Shaik are residents of South Africa.
Certain of our directors reside outside of the United States and it may be difficult to enforce judgments against them in the United States. One of our directors, all of our executive officers and all of our operating assets reside in the United States. Directors Copelyn, Govender, Ahmed and Shaik are residents of South Africa.
In addition, we may be required to incur significant costs to protect against and remediate damage caused by these disruptions or security breaches in the future that could have a material adverse effect on our business. - 27 - Table of Contents We rely on the technology, infrastructure, and software applications of certain third parties in order to host or operate some of our business.
In addition, we may be required to incur significant costs to protect against and remediate damage caused by these disruptions or security breaches in the future that could have a material adverse effect on our business. We rely on the technology, infrastructure, and software applications of certain third parties in order to host or operate some of our business.
Furthermore, although no similar qualification process currently exists for LCFS credits, we expect such a process to be implemented and would expect to seek qualification on a state-by-state basis under such future programs. Changes to the LCFS program require annual verification of the CI score assigned to a project.
Furthermore, although no similar qualification process currently exists for LCFS credits, we expect such a process to be implemented and would expect to seek qualification on a state-by-state basis under such future programs. Changes to the LCFS program require annual verification of the CI - 24 - Table of Contents score assigned to a project.
For example, controlled companies are not required to have: • a board that is composed of a majority of “independent directors,” as defined under the Nasdaq rules; • a compensation committee that is composed entirely of independent directors; and - 31 - Table of Contents • director nominations that are made, or recommended to the full board of directors, by its independent directors, or by a nominations/governance committee that is composed entirely of independent directors.
For example, controlled companies are not required to have: • a board that is composed of a majority of “independent directors,” as defined under the Nasdaq rules; • a compensation committee that is composed entirely of independent directors; and • director nominations that are made, or recommended to the full board of directors, by its independent directors, or by a nominations/governance committee that is composed entirely of independent directors.
Annual verification could significantly affect the profitability of a project, particularly in the case of a livestock farm project. Delays in obtaining registration, RIN qualification, and any future LCFS credit qualification, or CI rescoring through CARB annual audits, of a new project could delay future revenues from the project and could adversely affect our cash flow.
Annual verification could significantly affect the profitability of a project, particularly in the case of a livestock farm project. Delays in obtaining registration, RIN qualification, and any future LCFS credit qualification, or change in CI scores through CARB annual audits, of a new project could delay future revenues from the project and could adversely affect our cash flow.
Our success depends, in part, on technological innovation to stay ahead of market competitors. Our success will depend on our ability to create and maintain a competitive position in the renewable energy industry.
Our success depends, in part, on technological innovation to stay ahead of market competitors. Our success depends on our ability to create and maintain a competitive position in the renewable energy industry.
We cannot assure you that we will be able to identify attractive opportunities outside of our current area of focus or acquire or develop such projects at a price and on terms that are attractive or that, once acquired or - 20 - Table of Contents developed, such projects will operate profitably.
We cannot assure you that we will be able to identify attractive opportunities outside of our current area of focus or acquire or develop such projects at a price and on terms that are attractive or that, once acquired or developed, such projects will operate profitably.
We may rely on any or all of these exemptions so long as we remain a controlled company. The concentration of our capital stock ownership may limit our stockholders’ ability to influence corporate matters and may involve other risks.
We may rely on any or all of these exemptions so long as we remain a controlled company. - 29 - Table of Contents The concentration of our capital stock ownership may limit our stockholders’ ability to influence corporate matters and may involve other risks.
Additional information regarding the senior credit facility and the Amended Credit Agreement can be found - 29 - Table of Contents in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Our failure to comply with these covenants could result in the declaration of an event of default and cause us to be unable to borrow under the Amended Credit Agreement.
Additional information regarding the senior credit facility and the Credit Agreement can be found in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Our failure to comply with these covenants could result in the declaration of an event of default and cause us to be unable to borrow under the Credit Agreement.
A number of these permits, approvals and consents must be obtained prior to the start of development of a project. Other permits, approvals and consents are required to be obtained at, or prior to, the time of first commercial operation or within prescribed time frames following commencement of commercial operations.
A number of these permits, approvals and consents must be obtained prior to the start of development of a project. Other permits, approvals and consents are required to be obtained at, or prior to, - 22 - Table of Contents the time of first commercial operation or within prescribed time frames following commencement of commercial operations.
Operational problems, such as degradation of our project’s equipment due to wear or weather or capacity limitations or outages on the electrical transmission network, could also affect - 26 - Table of Contents the amount of energy that our projects are able to deliver.
Operational problems, such as degradation of our project’s equipment due to wear or weather or capacity limitations or outages on the electrical transmission network, could also affect the amount of energy that our projects are able to deliver.
We have significant customer concentration, with a limited number of customers accounting for a substantial portion of our revenues. In 2024, sales to Valero, GE Warren, ExxonMobil and Mercuria represented approximately 17.6%, 15.7%, 13.8 and 11.8%, respectively of our operating revenue.
We have significant customer concentration, with a limited number of customers accounting for a substantial portion of our revenues. In 2025, RIN sales to Valero and ExxonMobil represented approximately 17.4% and 11.3%, respectively, of our operating revenue. In 2024, RIN sales to Valero, GE Warren, ExxonMobil and Mercuria represented approximately 17.6%, 15.7%, 13.8 and 11.8%, respectively, of our operating revenue.
At such time, our independent registered public accounting firm may issue a report that is adverse in the event that it is not satisfied with the level at which our controls are documented, designed or operating.
At such time, our independent registered public accounting firm may issue a report that is adverse if it is not satisfied with the level at which our controls are documented, designed or operating.
If we are unable to grow and - 25 - Table of Contents manage the capacity that we expect from our projects in our anticipated timeframes, it could adversely affect our business, financial condition and results of operations.
If we are unable to grow and manage the capacity that we expect from our projects in our anticipated timeframes, it could adversely affect our business, financial condition and results of operations.
Any such opposition may be considered by government officials responsible for granting the relevant permits, which could result in the permits being delayed or not being granted or being granted solely on the condition that we carry out certain corrective measures to the proposed project.
Any such opposition may be considered by government officials responsible for granting the relevant permits, which could result in the permits being delayed or not being granted or being granted - 23 - Table of Contents solely on the condition that we carry out certain corrective measures to the proposed project.
The ownership interests in the land subject to these easements, leases and rights-of-way may be subject to mortgages securing loans or other liens (such as tax liens) and other easement, lease rights and rights-of-way of third parties - 17 - Table of Contents (such as leases of oil or mineral rights) that were created prior to our projects’ easements, leases and rights-of-way.
The ownership interests in the land subject to these easements, leases and rights-of-way may be subject to mortgages securing loans or other liens (such as tax liens) and other easements, lease rights and rights-of-way of third parties (such as leases of oil or mineral rights) that were created prior to our projects’ easements, leases and rights-of-way.
In connection with certain acquisitions, we could acquire, or be required to - 23 - Table of Contents provide indemnification against, environmental liabilities that could expose us to material losses. In addition, claims for damages to persons or property, including natural resources, may result from the EHS impacts of our operations.
In connection with certain acquisitions, we could acquire, or be required to provide indemnification against, environmental liabilities that could expose us to material losses. In addition, claims for damage to persons or property, including natural resources, may result from the EHS impacts of our operations.
While the EPA has identified an additional 463 landfills as candidates for biogas projects, we believe that approximately 38 of these sites produce sufficient quantities of LFG to support commercial-scale projects, with 25 of the approximately 38 sites being operated by Waste Management or Republic Waste, with whom we would need to negotiate with to secure sufficient LFG rights to support an RNG project.
While the EPA has identified an additional 444 landfills as candidates for biogas projects, we believe that approximately 32 of these sites produce sufficient quantities of LFG to support commercial-scale projects, with 24 of the approximately 32 sites being operated by Waste Management or Republic Waste, with whom we would need to negotiate with to secure sufficient LFG rights to support an RNG project.
In addition, several other factors related to the development and operation of individual renewable energy projects could adversely affect our business, including: • regulatory changes, whether as a result of the new presidential administration or otherwise, that affect the demand for or supply of Environmental Attributes and the prices thereof, which could have a significant effect on the financial performance of our projects and the number of potential projects with attractive economics; • changes in energy commodity prices, such as natural gas and wholesale electricity prices, which could have a significant effect on our revenues; • changes in pipeline gas quality standards or other regulatory changes that may limit our ability to transport RNG on pipelines for delivery to third parties or increase the costs of processing RNG to allow for such deliveries; • changes in the broader waste collection industry, including changes affecting the waste collection and biogas potential of the landfill industry, which could impede the LFG resource that we currently target for our projects; • substantial construction risks, including the risk of delay, that may arise due to forces outside of our control, including those related to engineering and environmental problems, as a result of inclement weather or labor disruptions; • operating risks and the effect of disruptions on our business, weather conditions, catastrophic events such as fires, explosions, earthquakes, droughts and acts of terrorism, and other force majeure events on us, our customers, suppliers, distributors and subcontractors; • the ability to obtain financing for a project on acceptable terms or at all and the need for substantially more capital than initially budgeted to complete projects and exposure to liabilities as a result of unforeseen costs or environmental, construction, technological or other complications; • entering into markets where we have less experience, such as our projects for biogas recovery at livestock farms; - 18 - Table of Contents • exposure to liabilities as a result of unforeseen environmental, construction, technological or other complications; • failures or delays in obtaining desired or necessary land rights, including ownership, leases, easements, zoning rights and building permits; • a decrease in the availability and timeliness of delivery of raw materials and components necessary for the projects to function or an increase in the costs of raw materials and components due to, among other reasons, inflation, tariffs, duties, taxes or assessments; • obtaining and keeping in good standing permits, authorizations and consents from local city, county, state and U.S. federal governments as well as local and U.S. federal governmental organizations; • penalties, including potential termination, under short-term and long-term contracts for failing to deliver RNG in accordance with our contractual obligations; • unknown regulatory changes RNG which may increase the transportation cost for delivering under contracts in place; • the consent and authorization of local utilities or other energy development off-takers to ensure successful interconnection to energy grids to enable power sales; and • difficulties in identifying, obtaining and permitting suitable sites for new projects.
In addition, several other factors related to the development and operation of individual renewable energy projects could adversely affect our business, including: • regulatory changes and statements and policies of the current presidential administration that make it more difficult and expensive for us to borrow and raise capital, reduce investment in the infrastructure we rely on and affect the demand for and supply of our RNG, REG, and the Environmental Attributes and the prices thereof, which have a significant effect on the financial performance of our projects and the number of potential projects with attractive economics; • changes in energy commodity prices, such as natural gas and wholesale electricity prices, which could have a significant effect on our revenues; • changes in pipeline gas quality standards or other regulatory changes that may limit our ability to transport RNG on pipelines for delivery to third parties or increase the costs of processing RNG to allow for such deliveries; - 17 - Table of Contents • changes in the broader waste collection industry, including changes affecting the waste collection and biogas potential of the landfill industry, which could impede the LFG resource that we currently target for our projects; • substantial construction risks, including the risk of delay that may arise due to forces outside of our control, including those related to reduced parts supply, delays in parts supply, increased costs of parts, engineering and environmental problems, labor shortages and disruptions and adverse weather conditions; • operating risks and the effect of disruptions on our business, weather conditions, catastrophic events such as fires, explosions, earthquakes, droughts and acts of terrorism, and other force majeure events on us, our customers, suppliers, distributors and subcontractors; • the ability to obtain financing for a project on acceptable terms or at all and the need for substantially more capital than initially budgeted to complete projects and exposure to liabilities as a result of unforeseen costs or environmental, construction, technological or other complications; • entering into markets where we have less experience, such as our projects for biogas recovery at livestock farms; • exposure to liabilities as a result of unforeseen environmental, construction, technological or other complications; • failures or delays in obtaining desired or necessary land rights, including ownership, leases, easements, zoning rights and building permits; • a decrease in the availability and timeliness of delivery of raw materials and components necessary for the projects to develop and function, such as our collaboration with European Energy which relies on parts from Denmark, or an increase in the costs of raw materials and components due to, among other reasons, inflation, tariffs, duties, taxes or assessments; • obtaining and keeping in good standing permits, authorizations and consents from local city, county, state and U.S. federal governments as well as local and U.S. federal governmental organizations; • penalties, including potential termination, under short-term and long-term contracts for failing to deliver RNG, RECs, or REG in accordance with our contractual obligations; • unknown regulatory changes with respect to RECs, RINs, REG, or RNG which may increase the transportation cost for delivering under contracts in place; • the consent and authorization of local utilities or other energy development off-takers to ensure successful interconnection to energy grids to enable power sales; and • difficulties in identifying, obtaining and permitting suitable sites for new projects.
We currently operate seven renewable energy projects (six RNG projects and one Renewable Electricity project) on landfills operated by Waste Management and two RNG projects on landfills operated by Republic Services. Our projects located on Waste Management operated landfills represented 38.5%, 37.3% and 38.9% of our revenue in 2024, 2023 and 2022, respectively.
We currently operate seven renewable energy projects (six RNG projects and one Renewable Electricity project) on landfills operated by Waste Management and two RNG projects on landfills operated by Republic Services. Our projects located on Waste Management operated landfills represented 36.8%, 38.5% and 37.3% of our revenue in 2025, 2024, and 2023, respectively.
Our projects located on Republic Services operated landfills represented 24.6%, 22.2% and 25.1% of our revenue in 2024, 2023 and 2022, respectively. We are dependent upon Waste Management and Republic Services to operate and maintain their landfill facilities and provide a continuous supply of waste for conversion to RNG and Renewable Electricity.
Our projects located on Republic Services operated landfills represented 19.9%, 24.6% and 22.2% of our revenue in 2025, 2024 and 2023, respectively. We are dependent upon Waste Management and Republic Services to operate and maintain their landfill facilities and provide a continuous supply of waste for conversion to RNG and Renewable Electricity.
The senior credit facility matures in December 2026 and we may be unable to extend or replace it on acceptable terms, or at all. Furthermore, the credit agreement governing our facility (the “Amended Credit Agreement”) imposes business restrictions and contains other covenants that require us to meet specified financial ratios and financial tests.
The senior credit facility matures in March 2031 and we may be unable to extend or replace it on acceptable terms, or at all. Furthermore, the credit agreement governing our facility (the “Credit Agreement”) imposes business restrictions and contains other covenants that require us to meet specified financial ratios and financial tests.
If this were to occur, we would be subject to the volatility of gas prices and be unable to predict our revenues from such project, and the sales prices for such RNG may be lower than what we could sell the RNG for under an off-take agreement. We are subject to volatility in prices of RINs and other Environmental Attributes.
If this were to occur, we would be subject to the volatility of gas prices and be unable to predict our revenues from such project, and the sales prices for such RNG may be lower than what we could sell the RNG for under an off-take agreement.
Any failure to adopt, delay in implementing, expiration, repeal or modification of these programs and regulations, or the adoption of any programs or regulations - 24 - Table of Contents that encourage the use of other energy sources over renewable energy, could adversely affect our business, financial condition and results of operations.
Any failure to adopt, delay in implementing, expiration, repeal or modification of these programs and regulations, or the adoption of any programs or regulations that encourage the use of other energy sources (such as coal) over renewable energy, could adversely affect our business, financial condition and results of operations.
The market price for natural gas is sensitive to cyclical demand and capacity supply, changes in weather patterns, natural gas storage levels, natural gas production levels, general economic and geopolitical conditions (including the current conflicts in the Middle East and Ukraine) and the volume of natural gas imports and exports.
The market price for natural gas is sensitive to cyclical demand and capacity supply, changes in weather patterns (including extreme temperatures spells), natural gas storage levels, natural gas production levels, general economic and geopolitical conditions (including the current conflict in the Middle East) and the volume of natural gas imports and exports.
This process could result in delays to the RNG producer's receipt of the separated K2 RINs from the dispenser.
This process has proven to result in delays to the RNG producer's receipt of the separated K2 RINs from the dispenser.
There can be no guarantee that we will be able to take all necessary measures to maximize collection. In addition, the LFG available to our projects is dependent in part on the actions of other persons, such as landfill operators.
There can be no guarantee that we will be able to take all necessary measures to maximize collection. For example, we do not operate the wellfields at all sites. In addition, the LFG available to our projects is dependent in part on the actions of other persons, such as landfill operators.
Additionally, we do - 32 - Table of Contents not carry key personnel insurance for any of our management executives, and the loss of any key employee or our inability to recruit, develop and retain these individuals as needed, could adversely affect our business, financial condition and results of operations.
Additionally, we do not carry key personnel insurance for any of our management executives, and the loss of any key employee or our inability to recruit, develop and retain these individuals as needed, could adversely affect our business, financial condition and results of operations. ITEM 1B. UNRESOLVED S TAFF COMMENTS. None.
For as long as we are an emerging growth company, which may be up to five full fiscal years following January 22, 2021, the completion of the IPO, unlike other public companies, we will not be required to, among other things: (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; (iii) provide certain disclosures regarding executive compensation required of larger public companies; or (iv) hold nonbinding advisory votes on executive compensation and any golden-parachute payments not previously approved.
We will then be required to, among other things: (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; (iii) provide additional comprehensive disclosures regarding executive compensation required of larger public companies; and (iv) hold nonbinding advisory votes on executive compensation and any golden-parachute payments not previously approved.
For the years ended December 31, 2024 and 2023, excluding the effect of derivative instruments, approximately 69.1% and 68.4%, respectively, of operating revenues were derived from these locations.
For the years ended December 31, 2025 and 2024, excluding the effect of derivative instruments, approximately 67.7% and 69.1%, respectively, of operating revenues derived from these locations.
Other events that can result in a reduction in LFG output include: extreme hot or cold temperatures or excessive rainfall; liquid levels within a landfill increasing; oxidation within a landfill, which can kill the anaerobic microbes that produce landfill gas; and the buildup of sludge.
Other events that result in a reduction in LFG output include: extreme hot or cold temperatures or drought or excessive rainfall; liquid levels within a landfill increasing; oxidation within a landfill, which can kill the anaerobic microbes that produce landfill gas; and the buildup of sludge or inorganic materials (such as construction materials) that do not produce gases as they decompose.
The market price of electricity is sensitive to cyclical changes in demand and capacity supply, and in the economy and geopolitical conditions (including the current conflicts in the Middle East and Ukraine), as well as to regulatory trends and developments impacting electricity market rules and pricing, transmission development and investment to power markets within the United States and in other jurisdictions through interconnects and other external factors outside of the control of renewable energy power-producing projects.
The market price of electricity is sensitive to changes in demand and capacity supply (including both cyclical demand and increased long term demand due to, among others, data storage centers and artificial intelligence), and in the economy and geopolitical conditions, as well as to regulatory trends and developments impacting electricity market rules and pricing, transmission development and investment to power markets within the United States and in other jurisdictions through interconnects and other external factors outside of the control of renewable energy power-producing projects.
Our insurance policies do not, however, cover all losses, including, in some situations, those as a result of force majeure, which is generally defined as events that are beyond the control of the parties.
Our insurance policies do not, however, cover all losses, including, in some situations, those because of force majeure, which is generally defined as events that are beyond the control of the parties. Even if insurance policies for some of our projects cover losses as a result of certain types of force majeure events, such coverage is subject to important limitations.
Regional events, such as gas transmission interruptions, regional availability of replacement parts and service in the event of equipment failures and severe weather events in either of those geographic regions have previously adversely affected, and if the future could adversely - 16 - Table of Contents affect, our RNG production and transmission.
Regional events, such as gas transmission interruptions, regional availability of replacement parts and service in the event of equipment failures and severe weather events in either of those geographic regions have previously adversely affected, and if the future could adversely affect, our RNG production and transmission. These impacts are greater than would be if our business was more geographically diverse.
See “—Operational Risks—“The concentration in revenues from five of our projects and geographic concentration of our projects expose us to greater risks of production interruptions from severe weather or other interruptions of production or transmission” for additional information. Our business is subject to risks arising out of climate change, which could result in increased operating costs.
See “—Operational Risks—“The concentration in revenues from five of our projects and geographic concentration of our projects expose us to greater risks of production interruptions from severe weather or other interruptions of production or transmission” for additional information.
During 2024, RNG production at our Atascocita, Rumpke, McCarty and Galveston facilities accounted for approximately 20.3%, 18.9%, 16.4% and 11.0% of our RNG revenues, respectively, and 18.7%, 21.4%, 15.0% and 8.7% of the RNG we produced, respectively.
During 2025, RNG production at our Rumpke, Atascocita, McCarty and Apex facilities accounted for approximately 20.7%, 20.3%, 16.0% and 7.7% of our RNG revenues, respectively, and 20.7%, 20.3%, 16.0% and 7.7% of the RNG we produced, respectively.
A failure to successfully integrate such new projects into our existing project portfolio as a result of unforeseen operational difficulties or otherwise, could adversely affect our business, financial condition and results of operations.
A failure to successfully integrate such new projects into our existing project portfolio as a result of unforeseen operational difficulties or otherwise, could adversely affect our business, financial condition and results of operations. The profitability of our renewable fuel projects may be limited by our ability to dispense fuel to separate RINs and the volatility of the price of RINs.
As an emerging growth company, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404 until the date we are no longer an emerging growth company.
As an emerging growth company, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404 until our Form 10-K for the year ended December 31, 2026.
We plan to continue to develop new RNG projects at landfills and livestock farms but we may be unable to implement this growth strategy if we cannot identify suitable landfills and livestock farms on which to develop projects, reach agreements with landfill or livestock farm owners to develop RNG projects or arrange required financing for new projects.
We may not be able to identify suitable landfills and livestock farms on which to develop projects, reach agreements with landfill or livestock farm owners to develop RNG projects or arrange required financing for new projects.
Our ability to generate revenue from sales of RINs and LCFS credits depends on our strict compliance with these federal and state programs, which are complex and can involve a significant degree of judgment.
While federal support for renewable projects may decline, states and the private sector are expected to continue driving development. Our ability to generate revenue from sales of RECs, RINs and LCFS credits depends on our strict compliance with these federal and state programs, which are complex and can involve a significant degree of judgment.
We may be required to write-off or impair capitalized costs or intangible assets in the future or we may incur restructuring costs or other charges, each of which would harm our earnings.
If an event of default occurs, we may not be able to cure it within any applicable cure period, or at all. We may be required to write-off or impair capitalized costs or intangible assets in the future or we may incur restructuring costs or other charges, each of which would harm our earnings.
If demand for renewable energy fails to grow sufficiently, we may be unable to achieve our business objectives. In addition, demand for renewable energy projects in the markets and geographic regions that we target may not develop or may develop more slowly than we anticipate.
In addition, demand for renewable energy projects and Environmental Attributes in the markets and geographic regions that we target may not develop or may develop more slowly than we anticipate.
As a result, we will be even more dependent on the LCFS credits and RINs produced at our dairy farm project than on the RINs produced at our landfill facilities for the project’s commercial viability.
Our Pico dairy farm project produces significantly less RNG than our landfill facilities. As a result, we are even more dependent on the LCFS credits and RINs produced at our dairy farm project than on the RINs produced at our landfill facilities for the project’s commercial viability. As a result of the 2025 AFPR review, our CI score worsened.
There can be no assurance that EPA will meet its proposed timelines for these actions. RECs are created through state law requirements for utilities to purchase a portion of their energy from renewable energy sources. 74% and 76% of our operating revenues for 2024 and 2023, respectively, were generated from the sale of Environmental Attributes.
RECs are created through state law requirements for utilities to purchase a portion of their energy from renewable energy sources. Approximately, 67% and 74% of our operating revenues for 2025 and 2024, respectively, were generated from the sale of Environmental Attributes.
As a result, certain of our projects’ rights under these easements, leases or rights-of-way may be subject, and subordinate, to the rights of those third parties.
As a result, certain of our projects’ rights under these easements, leases or rights-of-way may be subject, and subordinate, to the rights of those third parties. In the future, our existing projects may need new easements or rights-of-way and there is no guaranty that we will be able to secure these.
In addition, new projects have no operating history and may employ recently developed technology and equipment. A new project may be unable to fund principal and interest payments under its debt service obligations or may operate at a loss, which may adversely affect our business, financial condition or results of operations.
A new project may be unable to fund principal and interest payments under its debt service obligations or may operate at a loss, which may adversely affect our business, financial condition or results of operations. This may also make it more difficult to obtain capital for new projects.
The trading market for our common stock will be influenced by the research and reports that securities or industry analysts publish about us.
General Risk Factors If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline. The trading market for our common stock will be influenced by the research and reports that securities or industry analysts publish about us.
Additionally, we rely on computer hardware purchased in order to operate our business. We do not have control over the operations of the facilities of the third parties that we use.
Additionally, we rely on computer hardware purchased in order to operate our business. We do not have control over the operations of the facilities of the third parties that we use. However, our recent adoption of a governance, risk and compliance platform to manage third party risk will help us establish and maintain a formalized program.
As cyber incidents become more frequent and the sophistication of threat actors increases, our associated cybersecurity costs have and are expected to continue to increase. Specifically, we expect to implement several incremental cybersecurity improvements over the next 18 to 36 months to enhance our defensive capabilities and resilience.
As cyber incidents become more frequent and the sophistication of threat actors increases, our associated cybersecurity costs have and are expected to continue to increase.
For example, on December 12, 2024, EPA proposed a partial waiver of 2024 Cellulosic Biofuel Volume Requirements due to the projected shortfall of D3 RINs available to meet the 2024 RVO. This proposal is still pending, and, with a new presidential administration, it is unknown when this proposed rule will be finalized (if at all) in 2025.
For example, on December 12, 2024, EPA proposed a partial waiver of 2024 Cellulosic Biofuel Volume Requirements due to the projected shortfall of D3 RINs available to meet the 2024 RVO. This rule was finalized on July 7, 2025.
We may not be able to ensure the responsible management of the landfill site by owners and operators, which may result in less than optimal gas generation or increase the likelihood of “hot spots” occurring. Hot spots can temporarily reduce the volume of gas which may be collected from a landfill site, resulting in a lower gas yield.
We may not be able to ensure responsible management of the landfill site by owners and operators or there could be a change in operations and maintenance providers that results in less effective operations. This could result in less-than-optimal gas generation or increase the likelihood of “hot spots” occurring.
As a result, we are only able to sell RINs on a forward basis for the year in which the RINs are generated and the following year.
In addition, refiners are permitted to carry over up to 20% of RINs generated for one calendar year to satisfy their RVOs for the following year. As a result, we are generally only able to sell RINs on a forward basis for the year in which the RINs are generated and the subsequent year.
Emerging Growth Company Risks For as long as we are an emerging growth company, we will not be required to comply with certain requirements that apply to other public companies. We are an emerging growth company, as defined in the JOBS Act.
Emerging Growth Company Risks We are in our last year of being an emerging growth company and will soon be required to comply with certain requirements that apply to other public companies.
We expect to have quarterly variations in the revenues from the projects in which we generate revenue from the sale of RINs that we are unable to sell through forward contracts. - 21 - Table of Contents Our revenues may be subject to the risk of fluctuations in commodity prices.
We expect quarterly variations in the revenues from the projects in which we generate revenue from the sale of RINs that we are unable to sell through forward contracts and may experience reduced revenues if we are unable to separate RINs through the dispensing of produced RNG through permitted channels or reduced net income if we must pay a higher price to separate such RINs due to excess supply. - 20 - Table of Contents Our revenues may be subject to the risk of fluctuations in commodity prices.
During 2024, Renewable Electricity production at our Bowerman Power LFG, LLC (“Bowerman”) facility accounted for approximately 92.2% of our Renewable Electricity Generation revenues and 82.6% of the Renewable Electricity we produced during 2024.
During 2025, Renewable Electricity production at our Bowerman facility accounted for approximately 94.9% of our Renewable Electricity Generation revenues and 85.5% of the Renewable Electricity we produced during 2025.
Our dairy farm project has, and any future digester project will have, different economic models and risk profiles than our landfill facilities, and we may not be able to achieve the operating results we expect from these projects. Our dairy farm project produces significantly less RNG than our landfill facilities.
There is no established market for swine RECs so we are unsure at what price we will be able to sell them, if we are able to sell them at all. - 19 - Table of Contents Our dairy farm project has, and any future digester project will have, different economic models and risk profiles than our landfill facilities, and we may not be able to achieve the operating results we expect from these projects.
We cannot assure you that we will be able to extend existing fuel supply agreements at their historic revenue levels or at all when they expire. - 19 - Table of Contents Our agreements contain complex price adjustments, calculations and other terms based on gas price indices and other metrics, the interpretation of which could result in disputes with counterparties that could affect our results of operations and customer relationships.
Our agreements contain complex price adjustments, calculations and other terms based on gas price indices and other metrics, the interpretation of which could result in disputes with counterparties that could affect our results of operations and customer relationships.
We may also face competition based on technological developments that reduce demand for electricity, increase power supplies through existing infrastructure or that otherwise compete with our projects. We also encounter competition in the form of potential customers electing to develop solutions or perform services internally rather than engaging an outside provider such as us.
We also encounter competition in the form of potential customers electing to develop solutions or perform services internally rather than engaging an outside provider such as us.
This could cause us to experience interruption in our production and distribution of renewable energy and generation of related Environmental Attributes, difficulty retaining current relationships and attracting new relationships, or harm our brand, reputation or growth. - 28 - Table of Contents Our projects rely on interconnections with and access to electric distribution and transmission facilities and gas transportation pipelines that are owned and operated by third parties, and as a result, are exposed to risks related to such facilities’ development and operational curtailment risks.
Our projects rely on interconnections with and access to electric distribution and transmission facilities and gas transportation pipelines that are owned and operated by third parties, and as a result, are exposed to risks related to such facilities’ development and operational curtailment risks.
Other than the patented technology acquired through the Montauk Ag Renewables Acquisition, our internally developed condensate neutralization technology and an RNG processing skid we developed, we do not have any exclusive rights to any of the technologies that we utilize, and our competitors may currently use and may be planning to use identical, similar or superior technologies.
We do not have exclusive rights to many of the technologies that we utilize, and our competitors may currently use and may be planning to use identical, similar or superior technologies.
Our insurance may not cover all environmental risks and costs or may not provide sufficient coverage if an environmental claim is made against us. New laws, changes to existing laws, new interpretations of existing laws, increased governmental enforcement of environmental laws or other developments could require us to make significant additional expenditures.
Our insurance may not cover all environmental risks and costs or may not provide sufficient coverage if an environmental claim is made against us.
In developing and operating our projects, we rely on products meeting our design specifications and components manufactured and supplied by third parties, and on services performed by subcontractors. We also rely on subcontractors to perform substantially all of the construction and installation work related to our projects, and we often need to engage subcontractors with whom we have no experience.
In developing and operating our projects, we rely on products meeting our design specifications and components manufactured and supplied by third parties, and on services performed by subcontractors.
Any of these factors could adversely affect our business, financial condition and operating results. Our renewable fuel projects may be exposed to the volatility of the price of RINs. The price of RINs is driven by various market forces, including regulatory action, gasoline prices and the availability of renewable fuel from other renewable energy sources and conventional energy sources.
Furthermore, the price of Environmental Attributes, including RINs, is driven by various market forces, including regulatory action, gasoline prices and the availability of renewable fuel from other renewable energy sources and conventional energy sources.
A lengthy interruption of production or transmission of renewable energy from one or more of these projects, as a result of a severe weather event, failure or degradation of our or a landfill operator’s equipment or interconnection transmission problems could have a disproportionate effect on our revenues and cash flow.
A lengthy interruption of production or transmission of renewable energy from one or more of these projects, due to a severe weather event, failure or degradation of our or a landfill operator’s equipment or interconnection transmission problems could have a disproportionate effect on our revenues and cash flow. - 15 - Table of Contents Our Atascocita, McCarty, Galveston and Coastal Plains projects are located within 20 miles of each other near Houston, Texas and six of our other RNG projects are in relatively close proximity to each other in Pennsylvania and Ohio.
These government economic incentives could be reduced or eliminated altogether, or the categories of renewable energy qualifying for such government economic incentives could be changed. These renewable energy program incentives are subject to regulatory oversight and could be administratively or legislatively changed in a manner that could adversely affect our operations.
These renewable energy program incentives are subject to regulatory oversight and could be administratively or legislatively changed - 21 - Table of Contents in a manner that could adversely affect our operations. Reductions in, changes to, or eliminations or expirations of governmental incentives could result in decreased demand for, and lower revenues from, our projects.
If any of our subcontractors are unable to provide services that meet or exceed our customers’ expectations or satisfy our contractual commitments, our reputation, business and operating results could be harmed.
We also rely on subcontractors to perform substantially all of the construction and installation work related to our projects, and we often need to engage subcontractors with whom we have no experience. - 26 - Table of Contents If any of our subcontractors are unable to provide services that meet or exceed our customers’ expectations or satisfy our contractual commitments, our reputation, business and operating results could be harmed.
We plan to expand our business in part through developing RNG recovery projects at landfills and livestock farms, but we may not be able to identify suitable locations or complete development of new projects.
We plan to expand our business in part through developing RNG recovery projects at landfills and livestock farms, including our Turkey, North Carolina location, but we may not be successful. We plan to continue to develop new RNG projects at landfills and livestock farms but we may be unable to implement this growth strategy.
Any of these factors could prevent us from identifying, completing or operating our projects, or otherwise adversely affect our business, financial condition and results of operations. If there is not sufficient demand for renewable energy, or if renewable energy projects do not develop or take longer to develop than we anticipate, we may be unable to achieve our investment objectives.
If there is not sufficient demand for renewable energy, or the associated Environmental Attributes, or if renewable energy projects do not develop or take longer to develop than we anticipate, we may be unable to achieve our investment objectives. If demand for renewable energy or Environmental Attributes fails to grow sufficiently, we may be unable to achieve our business objectives.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Management and Strategy Enterprise risk management is the responsibility of our executive management team consisting of our chief executive officer, chief financial officer, chief legal officer and our vice presidents of operations, business development and environmental, health and safety.
Biggest changeRisk Management and Strategy - 30 - Table of Contents Enterprise risk management is the responsibility of our executive management team consisting of our chief executive officer, chief financial officer, chief legal officer, chief operations officer and our vice president of environmental, health and safety.
Our executive management team meets on a weekly basis and discusses cybersecurity on an ad hoc basis when it is relevant. Our director of Information Technology, who reports directly to our chief executive officer, and our director of Internal Audit are primarily responsible for management of cybersecurity risk.
Our executive management team meets on a weekly basis and discusses cybersecurity on an ad hoc basis when it is relevant. Our chief information officer, who reports directly to our chief executive officer, and our director of Internal Audit are primarily responsible for management of cybersecurity risk.
We believe that this program will better enable us to identify and manage material risks from cybersecurity threats related to our third-party service providers. As of December 31, 2024, we have not identified any risks from cybersecurity threats (including any previous cybersecurity incidents) that have materially affected us, our business strategy, our results of operations or our financial condition.
We believe that this program will better enable us to identify and manage material risks from cybersecurity threats related to our third-party service providers. As of December 31, 2025, we have not identified any risks from cybersecurity threats (including any previous cybersecurity incidents) that have materially affected us, our business strategy, our results of operations or our financial condition.
In accordance with our overall enterprise risk management process, our executive management team supervises our director of Information Technology to assess, identify, report and manage material risks from cybersecurity threats and relies on our director of Internal Audit to assess, identify and report those risks.
In accordance with our overall enterprise risk management process, our executive management team supervises our chief information officer to assess, identify, report and manage material risks from cybersecurity threats and relies on our director of Internal Audit to assess, identify and report those risks.
From time to time, - 33 - Table of Contents members of our executive management team and our directors of Information Technology and Internal Audit provide updates to the Audit Committee and the Board of Directors regarding cybersecurity incidents and cybersecurity planning .
From time to time, members of our executive management team and our directors of Information Technology and Internal Audit provide updates to the Audit Committee and the Board of Directors regarding cybersecurity incidents and cybersecurity planning .
Our director of Information Technology is an active ISC 2 accredited member with 15 years of information technology experience, namely in developing solutions focused on private and hybrid cloud computing systems for small scale organizat ions.
Our chief information officer is an active ISC 2 accredited member with 16 years of information technology experience, namely in developing solutions focused on private and hybrid cloud computing systems for small scale organizat ions.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeNone of our directors, officers, affiliates, or any owner of record or beneficial owner of more than 5% of our common stock, is involved in a material proceeding adverse to us or our subsidiaries or has a material interest adverse to us or our subsidiaries. ITEM 4. MINE SAFETY DISCLOSURES.
Biggest changeNone of our directors, officers, affiliates, or any owner of record or beneficial owner of more than 5% of our common stock, is involved in a material proceeding adverse to us or our subsidiaries or has a material interest adverse to us or our subsidiaries. - 31 - Table of Contents ITEM 4. MINE SAFETY DISCLOSURES.
Not Applicable. - 34 - Table of Contents PAR T II
Not Applicable. - 32 - Table of Contents PAR T II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 34 PART II 35 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 35 ITEM 6. RESERVED 37 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 38 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 56 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 32 PART II 33 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 33 ITEM 6. RESERVED 35 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 36 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 54 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following performance graph and related information is being furnished and shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that section, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent we specifically incorporate it into reference into such filing. - 35 - Table of Contents 1/22/21 3/21 6/21 9/21 12/21 3/22 6/22 9/22 12/22 Montauk Renewables, Inc. 100.00 116.49 73.87 108.29 98.84 108.00 96.91 168.18 106.36 NASDAQ Composite 100.00 102.95 112.92 112.66 122.18 111.25 86.46 83.08 82.43 Peer Group 100.00 105.94 94.35 87.29 88.23 89.02 50.82 64.52 55.01 3/23 6/23 9/23 12/23 3/24 6/24 9/24 12/24 Montauk Renewables, Inc. 75.89 71.75 87.85 85.92 40.12 54.97 50.24 38.38 NASDAQ Composite 96.48 109.07 104.77 119.22 130.32 141.36 145.26 154.48 Peer Group 47.23 49.77 42.25 35.22 28.09 27.16 33.85 27.12 Dividend Policy The Company did not pay any dividends in the fiscal year ended December 31, 2024 and currently intends to retain future earnings, if any, to finance the operations, growth and development of its business.
Biggest changeThe following performance graph and related information is being furnished and shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that section, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent we specifically incorporate it into reference into such filing. - 33 - Table of Contents 1/22/21 3/31/21 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 Montauk Renewables, Inc. 100.00 116.49 73.87 108.29 98.84 108.00 96.91 168.18 106.36 NASDAQ Composite 100.00 102.95 112.92 112.66 122.18 111.25 86.46 83.08 82.43 Peer Group 100.00 121.76 85.76 78.41 54.99 65.34 34.06 38.35 34.48 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 Montauk Renewables, Inc. 75.89 71.75 87.85 85.92 40.12 54.97 50.24 38.38 20.15 NASDAQ Composite 96.48 109.07 104.77 119.22 130.32 141.36 145.26 154.48 138.62 Peer Group 47.23 49.77 42.25 35.22 28.09 27.16 33.85 27.12 15.36 6/30/25 9/30/25 12/31/25 Montauk Renewables, Inc. 21.41 19.38 16.10 NASDAQ Composite 163.52 182.18 187.14 Peer Group 19.72 31.97 28.27 - 34 - Table of Contents Dividend Policy The Company did not pay any dividends in the fiscal year ended December 31, 2025 and currently intends to retain future earnings, if any, to finance the operations, growth and development of its business.
Any such determination will also - 36 - Table of Contents depend upon our business prospects, results of operations, financial condition, cash requirements and availability, and other factors that our Board of Directors may deem relevant.
Any such determination will also depend upon our business prospects, results of operations, financial condition, cash requirements and availability, and other factors that our Board of Directors may deem relevant.
Our 2024 and 2023 peer group, which is comprised of companies that we believe have comparable characteristics and are in the same industry or line-of-business, consists of Ameresco, Inc., Aemetis, Inc., Anaergia, Inc., Clean Energy Fuels Corp., Gevo, Inc., and Opal Fuels, Inc. Our 2022 peer group consisted of Aemetis Inc., Clean Energy Fuels Corp., and Gevo Inc.
Our 2025 and 2024 peer group, which is comprised of companies that we believe have comparable characteristics and are in the same industry or line-of-business, consists of Ameresco, Inc., Aemetis, Inc., Anaergia, Inc., Clean Energy Fuels Corp., Gevo, Inc., and Opal Fuels, Inc.
Prior to that time, there was no established public trading market for the Company’s common stock. Holders of Montauk Common Stock As of March 7, 2025, there were 12 holders of record of 143,717,391 shares of Montauk common stock outstanding as of such date.
Prior to that time, there was no established public trading market for the Company’s common stock. Holders of Montauk Common Stock As of March 6, 2026, there were 12 holders of record of 143,717,391 shares of Montauk common stock outstanding as of such date.
Removed
Our eleven month 2021 peer group also included Archaea Energy, Inc., and Renewable Energy Group Inc. but these entities were acquired and ceased trading during 2022 and, as such, a separate line showing the total returns for this group is not possible in the below performance graph through December 31, 2022.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeConsolidated 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.
Biggest changeConsolidated 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 and in certain circumstances. - 49 - Table of Contents Under the Amended Credit Agreement, we are required to maintain the following: • a Total Net Leverage Ratio (as defined in the Amended Credit Agreement) of not more than 3.50 to 1.00 as of the end December 31, 2025; stepping down to 3.00 to 1.00 on March 31, 2026 and thereafter; and • as of the end of each fiscal quarter, a Fixed Charge Coverage Ratio (as defined in the Amended Credit Agreement) of not less than 1.2 to 1.0. • requires that MEH provide additional financial information and analysis to the lenders within fifteen business days of the end of each month As of December 31, 2025, $44,000 was outstanding under the term loan and we had $85,000 of outstanding borrowings under the revolving credit facility.
Our Renewable Electricity Generation segment commodity production is primarily monetized under fixed-priced PPAs. • Production of Environmental Attributes: We monetize Environmental Attributes derived from our production of RNG and Renewable Electricity. We carry-over a portion of the RINs generated from RNG production to the following year and monetize the carried over RINs in such following calendar year.
Our Renewable Electricity Generation segment commodity production is primarily monetized under fixed-priced PPAs. • Production of Environmental Attributes: We monetize Environmental Attributes derived from our production of RNG and Renewable Electricity. We may carry-over a portion of the RINs generated from RNG production to the following year and monetize the carried over RINs in such following calendar year.
In December 2021, Rivetprops 47 Proprietary Limited (“RP47”) entered into an agreement to loan MNK up to 10,000 South African Rand (the “RP47 Loan”). The current principal balance and accrued interest is 11,713 Rand or approximately $650 US Dollars. There was no collateral pledged for this loan.
In December 2021, Rivetprops 47 Proprietary Limited (“RP47”) entered into an agreement to loan MNK up to 10,000 South African Rand (the “RP47 Loan”). The principal balance and accrued interest was 11,713 Rand or approximately $650 US Dollars. There was no collateral pledged for this loan.
In addition to development capital, we annually reinvest to maintain these facilities. • Impairment Loss: Expenses related to reductions in the carrying value(s) of fixed and/or intangible assets based on periodic evaluations whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. • Transaction Costs: Transaction costs primarily consist of expenses incurred for due diligence and other activities related to potential acquisitions and other strategic transactions.
In addition to development capital, we annually reinvest to maintain these facilities. • Impairment Loss: Expenses related to reductions in the carrying value(s) of fixed and/or intangible assets based on periodic evaluations whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. - 43 - Table of Contents • Transaction Costs: Transaction costs primarily consist of expenses incurred for due diligence and other activities related to potential acquisitions and other strategic transactions.
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. • In the third quarter of 2024, we began to experience trends with several of our landfill hosts delaying their installation of or delaying our ability to install wellfield collection infrastructure in active waste placement areas, a practice historically common and critical to our projections of feedstock gas and, therefore, 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. • In 2024, we began to experience trends with several of our landfill hosts delaying their installation of or delaying our ability to install wellfield collection infrastructure in active waste placement areas, a practice historically common and critical to our projections of feedstock gas and, therefore, production.
For discussion and analysis of our results for the year ended December 31, 2023 compared to the year ended December 31, 2022 , refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K filed with the SEC on March 14, 2024.
For discussion and analysis of our results for the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K filed with the SEC on March 14, 2025.
Our RNG revenues from Environmental Attributes are recorded net of a portion of Environmental Attributes shared with off-take counterparties as consideration for such counterparties using the RNG as a transportation fuel. We had certain pathway provider sharing arrangements expiring throughout 2024.
Our RNG revenues from Environmental Attributes are recorded net of a portion of Environmental Attributes shared with off-take counterparties as consideration for such counterparties using the RNG as a transportation fuel. We had certain pathway provider sharing arrangements expiring throughout 2024 and 2025.
From time to time, we may be parties to legal proceedings arising in the normal course of business which could increase our legal expenses. We continue to expect increased general and administrative expenses associated with our ongoing development of Montauk Ag Renewables in 2025.
From time to time, we may be parties to legal proceedings arising in the normal course of business which could increase our legal expenses. We continue to see increased general and administrative expenses associated with our ongoing development of Montauk Ag Renewables in 2025.
A wholly-owned subsidiary continues to carry from 2023 to 2024 approximately $12,986 of federal net operating losses that are not expected to be realizable due to loss limitation rules.
A wholly-owned subsidiary continues to carry from 2024 to 2025 approximately $12,986 of federal net operating losses that are not expected to be realizable due to loss limitation rules.
The impairment losses in 2024 primarily relate to the remaining book value of assets at the Security facility, various RNG equipment that - 49 - Table of Contents was deemed obsolete for current operations, and REG assets that were impacted under initial startup testing for one of our REG construction work-in-progress sites.
The impairment losses in 2024 primarily relate to the remaining book value of assets at the Security facility, various RNG equipment that was deemed obsolete for current operations, and REG assets that were impacted under initial startup testing for one of our REG construction work-in-progress sites.
This loan became due on December 31, 2024 (“Maturity Date”) when MNK - 52 - Table of Contents and RP47 did not extend the maturity of the loan agreement. Associated with a modification on December 31, 2024 of the Transaction Implementation Agreement ("TIA") between us and MNK, we became obligated to repay the RP47 Loan on MNK’s behalf.
This loan became due on December 31, 2024 (“Maturity Date”) when MNK and RP47 did not extend the maturity of the loan agreement. Associated with a modification on December 31, 2024 of the Transaction Implementation Agreement ("TIA") between us and MNK, we became obligated to repay the RP47 Loan on MNK’s behalf.
See Note 14 to our audited consolidated financial statements for additional information. - 54 - Table of Contents 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.
See Note 14 to our audited consolidated financial statements for additional information. 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.
Realized prices for Environmental Attributes monetized in a year may not correspond directly to index prices due to the forward selling of commitments. - 46 - Table of Contents Comparison of Years Ended December 31, 2024 and 2023 The following table summarizes the key operating metrics described above, which metrics we use to measure performance.
Realized prices for Environmental Attributes monetized in a year may not correspond directly to index prices due to the forward selling of commitments. - 44 - Table of Contents Comparison of Years Ended December 31, 2025 and 2024 The following table summarizes the key operating metrics described above, which metrics we use to measure performance.
During 2023, we did not have off-balance sheet arrangements other than outstanding letters of credit of approximately $2,505. We have contractual obligations involving operating leases. See Note 19 to our audited consolidated financial statements for further information related to the lease obligations. We have other contractual obligations associated with our fuel supply agreements.
During 2024, we did not have off-balance sheet arrangements other than outstanding letters of credit of approximately $2,185. We have contractual obligations involving operating leases. See Note 19 to our audited consolidated financial statements for further information related to the lease obligations. We have other contractual obligations associated with our fuel supply agreements.
Delays in commencement of production or extended commissioning issues at a new project or a conversion project, such as those we are currently experiencing at Blue Granite as described above, would delay any realization of production from that project.
Delays in commencement of production or extended commissioning issues at a new project or a conversion project, such as those - 42 - Table of Contents we are currently experiencing at Blue Granite as described above, would delay any realization of production from that project.
Realized prices for - 45 - Table of Contents Environmental Attributes monetized in a year may not correspond directly with that year’s production as attributes may be carried over and subsequently monetized. We may elect to not commit to transfer all available RINs in a given period which could impact our revenue and operating profit.
Realized prices for Environmental Attributes monetized in a year may not correspond directly with that year’s production as attributes may be carried over and subsequently monetized. We may elect to not commit to transfer all available RINs in a given period which could impact our revenue and operating profit.
During 2024, we had $2,185 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 usage against these outstanding letters of credit.
During 2025, we had $2,571 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 usage against these outstanding letters of credit.
In December 2023, CARB released the formal proposal for new LCFS rules. The proposed rules will increase the stringency of CI reduction targets from 20% to 30% in 2030 and create a 2045 target of 90%. This reduction would have the potential impact of reducing the number of net credits in the program.
In December 2023, CARB released the formal proposal for new LCFS rules. The proposed rules will increase the stringency of CI reduction targets from 20% to 30% in 2030 and 90% by 2045. This reduction would have the potential impact of reducing the number of net credits in the program.
This section generally discusses our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
This section generally discusses our results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Corporate also 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.
Corporate relates to additional discrete financial information for the corporate function; primarily used as a shared service center for maintaining - 41 - Table of Contents functions such as executive, accounting, treasury, legal, human resources, tax, environmental, engineering, and other operations functions not otherwise allocated to a segment.
On July 12, 2023, the EPA issued final rules in the Federal Register for the RFS volume requirements for 2023-2025. Final volumes for cellulosic biofuel were set at 838, 1,090 and 1,376 million RINs for the three years 2023, 2024 and 2025, respectively.
On July 12, 2023, the EPA issued final rules in the Federal - 40 - Table of Contents Register for the RFS volume requirements for 2023-2025. Final volumes for cellulosic biofuel were set at 838, 1,090 and 1,376 RINs for the three years 2023, 2024 and 2025, respectively.
ITEM 7. MANAG EMENT’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 Annual Report on Form 10-K.
ITEM 7. MANAG EMENT’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 Annual Report on Form 10-K. Amounts are in thousands unless indicated otherwise.
The revolving and term loans under the Amended Credit Agreement bore interest at the BSBY Margin or Base Rate Margin based on our Total Leverage Ratio (in each case, as those terms are defined in the Amended Credit Agreement) as of September 30, 2024.
The revolving and term loans under the Amended Credit Agreement bore interest at the BSBY Margin or Base Rate Margin based on our Total Leverage Ratio (in each case, as those terms are defined in the Amended Credit Agreement) as of December 31, 2025.
Second Apex RNG Facility In 2022, we announced the planned construction of a second RNG processing facility at the Apex landfill. The construction of a second facility under our existing fuel supply agreement was triggered by biogas feedstock volumes exceeding production capabilities discussions with the landfill host, and the host's waste intake forecasted projections.
Second Apex RNG Facility In 2025, we successfully completed the construction and commissioning of a second RNG processing facility at the Apex landfill. The construction of a second facility under our existing fuel supply agreement was triggered by biogas feedstock volumes exceeding production capabilities, discussions with the landfill host, and the host's waste intake forecasted projections.
The term loan amortizes in quarterly installments of $2,000 through December 2024, quarterly installments of $3,000 from 2025 through maturity, with a final payment of $32,000, on December 21, 2026. Interest rates were 6.01% and 6.11% at December 31, 2024 and 2023, respectively.
The term loan amortizes in quarterly installments of $3,000 quarterly through 2026 with a final payment of $32,000, on December 21, 2026. Interest rates were 6.44% and 6.01% at December 31, 2025 and 2024, respectively.
The expiration of these agreements range between 3-19 years. The minimum royalty and capital obligation associated with these agreements range from $8 to $1,695. Internal Control Over Financial Reporting There were no changes during 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The expiration of these agreements range between 2-18 years. The minimum royalty and capital obligation associated with these agreements range from $8 to $1,746. Internal Control Over Financial Reporting There were no changes during 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Feedstock collection update We have entered into agreements with over forty separate farming locations to provide access to waste from at least 200 thousand hog spaces to support our expected processing needs under our first phase for the Turkey, NC location. We continue to install collection equipment at these separate farms to access the waste.
We have entered into long term agreements with over forty separate farming locations to provide access to waste from at least 300 hog spaces to support our expected processing needs under our first phase for the Turkey location. We continue to install collection equipment at these separate farms to access the waste.
MNK is our affiliate and certain of our directors are also directors of MNK. Pursuant to the Initial Promissory Note, we advanced a cash loan of $5,000 to MNK for MNK to pay its dividend's tax liability arising from the Reorganization Transactions under the South African Income Tax Act, 1962 (Act No. 58 of 1962), as amended.
Pursuant to the Initial Promissory Note, we advanced a cash loan of $5,000 to MNK for MNK to pay its dividend's tax liability arising from the Reorganization Transactions under the South African Income Tax Act, 1962 (Act No. 58 of 1962), as amended.
Also in the rules is a phase out of avoided methane crediting for dairy and swine manure pathways by 2040 for CNG usage and through 2045 for RNG used to produce hydrogen. The RNG deliverability/book and claim provisions for out-of-region projects will be eliminated for all projects that break ground after 2030.
The rules also phase out avoided methane crediting for dairy and swine manure pathways by 2040 for CNG usage and through 2045 for RNG used to produce hydrogen. The RNG deliverability/book and claim provisions for out-of-region projects are eliminated for all projects that break ground after 2030. These projects will be required to demonstrate physical deliverability requirements beginning in 2041.
For the year ended December 31, 2024, income and adjustments to income from operating activities provided $44,961 compared to $49,896 in 2023. Working capital and other assets and liabilities used $1,166 in 2024 compared to $8,843 in 2023. Our net cash flows used in investing activities has historically focused on project development and facility maintenance.
For the year ended December 31, 2025, income and adjustments to income from operating activities provided $37,348 compared to $44,961 in 2024. Working capital and other assets and liabilities used $7,014 in 2025 compared to $1,166 in 2024. Our net cash flows used in investing activities has historically focused on project development and facility maintenance.
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.
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.
At December 31, 2024, we had debt before debt issuance costs of $56,000, compared to debt before debt issuance costs of $64,000 at December 31, 2023.
At December 31, 2025, we had debt before debt issuance costs of $129,000, compared to debt before debt issuance costs of $56,000 at December 31, 2024.
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 have not entered into commitments to transfer significant RINs generated from 2025 production.
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.
Our debt before issuance costs (in thousands) is as follows: December 31, 2024 December 31, 2023 Term loan $ 56,000 64,000 Revolving credit facility — — Debt before debt issuance costs $ 56,000 $ 64,000 Amended Credit Agreement On December 21, 2021, the Company entered into the Fourth Amendment to the Second Amended and Restated Revolving Credit and Term Loan Agreement (the “Amended Credit Agreement”), with Comerica Bank (“Comerica”) and certain other financial institutions.
Our debt before issuance costs (in thousands) is as follows: December 31, 2025 December 31, 2024 Term loan $ 44,000 56,000 Revolving credit facility 85,000 — Debt before debt issuance costs $ 129,000 $ 56,000 Amended Credit Agreement On December 31, 2025, we entered into the Sixth Amendment to the Second Amended and Restated Revolving Credit and Term Loan Agreement (the “Amended Credit Agreement”), with Comerica Bank (“Comerica”) and certain other financial institutions.
We had approximately 358 MMBtus available for RIN generation and approximately 108 RINs generated and unsold at December 31, 2023. We have entered into commitments and transferred all of our RINs in inventory related to our 2024 RNG production.
At December 31, 2024,we had approximately 291 MMBtus available for RIN generation and had approximately 6,822 RINs generated and unsold. We have entered into commitments and transferred all of our RINs related to our 2025 RNG production.
All revenue is recognized when we satisfy our performance obligation(s) - 53 - Table of Contents 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.
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.
On February 2, 2025, our Board of Directors approved the repayment of the RP47 Loan under the TIA and on March 5, 2025 we repaid the RP47 loan as required under the TIA. The amount repaid is included in the principal balance of the Fifth Amended Promissory Note described above. Refer to Note 22 – Subsequent Events for further information.
On February 2, 2025, our Board of Directors approved the - 51 - Table of Contents repayment of the RP47 Loan under the TIA and on March 5, 2025 we repaid the RP47 loan as required under the TIA. The amount repaid is included in the principal balance of the Fifth Amended Promissory Note described above.
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.
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 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.
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.
Royalties, transportation, gathering and production fuel expenses for our Renewable Electricity facilities for 2024 were $1,973, a decrease of $12 (0.6%) compared to $1,985 in 2023, and as a percentage of Renewable Electricity Generation segment revenues increased from 10.8% for 2023 to 11.1% for 2024.
Royalties, transportation, gathering and production fuel expenses for our Renewable Electricity facilities for 2025 were $1,959, a decrease of $14 (0.7%) compared to $1,973 in 2024, and as a percentage of Renewable Electricity Generation segment revenues increased from 11.1% for 2024 to 11.4% for 2025.
Upon receipt of the final tranche, we will make the final contractual payment to the dairy host. As a result of the increased digestion capacity, we produced approximately 73.4% more MMBtu during 2024 as compared to 2023.
Upon receipt of the final tranche, we made the final contractual payment to the dairy host. As a result of the increased digestion capacity, we produced approximately 31.8% more MMBtu during 2025 as compared to 2024.
Our fuel supply agreements are typically structured as 20-year contracts, providing long-term visibility into the margin impact of future royalty payments. Depreciation, Depletion and Amortization Depreciation, depletion and amortization in 2024 was $23,515, an increase of $2,357 (11.1%) compared to $21,158 in 2023 .
Our fuel supply agreements are typically structured as 20-year contracts, providing long-term visibility into the margin impact of future royalty payments. Depreciation, Depletion and Amortization Depreciation, depletion and amortization in 2025 was $29,972, an increase of $6,457 (27.5%) compared to $23,515 in 2024.
At full first phase capacity, we anticipate the ability to process feedstock from over 200 hog spaces per day, which equates to over two hundred tons of daily waste collection.
Feedstock Collection At full first phase capacity, we anticipate the ability to process feedstock from approximately 400 to 450 hog spaces per day, which equates to approximately 35 tons of annual waste collection.
The decrease was primarily related to proceeds of $1,000 received from the sale of gas rights ahead of the fuel supply agreement expiration of our Security facility and decreased interest expense of $476. Income Tax Expense As of December 31, 2024 and 2023, we utilized all of our non-limited NOLs.
In 2024, we recorded proceeds of $1,000 from the sale of gas rights ahead of the fuel supply agreement expiration of our Security facility. Income Tax (Benefit) Expense As of December 31, 2025 and 2024, we utilized all of our non-limited NOLs.
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.
Corporate also 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. Revenues from RINs distributed from GreenWave, not included in our operating metrics table.
Separate from our cash flows assessment, we identified discrete events and recorded impairment of We identified discrete events and recorded impairment of $1,586 and $902 for 2024 and 2023, respectively. See Note 3 to our audited consolidated financial statements for further information related to asset impairments.
Separate from our cash flows assessment, we identified discrete events and recorded impairment of $3,231 and $1,586 for 2025 and 2024, respectively. See Note 3 to our audited 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.
Cash Flow The following table presents information regarding our cash flows and cash equivalents for years ended December 31, 2024 and 2023: For the year ended December 31, 2024 2023 Net cash provided by (used in): Operating activities $ 43,795 $ 41,053 Investing activities (62,191 ) (63,087 ) Financing activities (9,842 ) (9,330 ) Net decrease in cash and cash equivalents (28,238 ) (31,364 ) Restricted cash, end of the period 383 431 Cash and cash equivalents, end of period 46,004 74,242 For the year ended December 31, 2024, we generated $43,795 of cash from operating activities, a 6.7% increase compared to $41,053 for the year ended December 31, 2023.
Cash Flow The following table presents information regarding our cash flows and cash equivalents for years ended December 31, 2025 and 2024: For the year ended December 31, 2025 2024 Net cash provided by (used in): Operating activities $ 30,334 $ 43,795 Investing activities (120,487 ) (62,191 ) Financing activities 68,339 (9,842 ) Net decrease in cash and cash equivalents (21,814 ) (28,238 ) Restricted cash, end of the period 438 383 Cash and cash equivalents, end of period 24,190 46,004 For the year ended December 31, 2025, we generated $30,334 of cash from operating activities, a 30.7% decrease compared to $43,795 for the year ended December 31, 2024.
The decrease was primarily related to the decision to not self-market a significant amount of RINs in inventory in the fourth quarter of 2024. Average pricing realized on RIN sales during 2024 was $3.28 as compared to $2.71 in 2023, an increase of 21.0%.
During 2025, we self-marketed 44,132 RINs, representing an 7,493 increase (20.5%) compared to 36,639 in 2024. The increase was primarily related to the decision to not self-market a significant amount of RINs in inventory in the fourth quarter of 2024. Average pricing realized on RIN sales during 2025 was $2.33 as compared to $3.28 in 2024, a decrease of 29.0%.
Calendar Quarter RINs Available for Sale RINs Sold RINs sold as % of RINs Available RINs Available but Unsold RINs Unsold as % of RINs Available 2023 First Quarter 11,215 2,949 26.3% 8,266 73.7% 2023 Second Quarter 20,407 17,441 85.5% 2,966 14.5% 2023 Third Quarter 14,514 13,750 94.7% 764 5.3% 2023 Fourth Quarter 10,904 10,796 99.0% 108 1.0% 2024 First Quarter 11,240 7,889 70.2% 3,351 29.8% 2024 Second Quarter 14,707 10,000 68.0% 4,707 32.0% 2024 Third Quarter 15,895 15,750 99.1% 145 0.9% 2024 Fourth Quarter 9,822 3,000 30.5% 6,822 69.5% - 38 - Table of Contents Capital Development Summary The following summarizes our ongoing development growth plans expected capacity contribution, anticipated commencement of operations, and capital expenditure estimate, respectively, excluding Montauk Ag Renewables Development project: Development Opportunity Estimated Capacity Contribution (MMBtu/day) Anticipated Commencement Date Estimated Capital Expenditure Second Apex RNG Facility 2,100 2025 second quarter $30,000-$40,000 Blue Granite RNG Facility 900 Delayed TBD Bowerman RNG Facility 3,600 2027 $85,000-$95,000 European Energy Facilities N/A 2027 $65,000-$75,000 Tulsa RNG Facility 1,500 2027 $25,000-$35,000 Pico Digestion Capacity Increase In 2024, we successfully commissioned the expansion of our digestion capacity which is necessary to process the final tranche of increased feedstock expected to be received in the second quarter of 2025.
Calendar Quarter RINs Available for Sale RINs Sold RINs sold as % of RINs Available RINs Available but Unsold RINs Unsold as % of RINs Available 2024 First Quarter 11,240 7,889 70.2% 3,351 29.8% 2024 Second Quarter 14,707 10,000 68.0% 4,707 32.0% 2024 Third Quarter 15,895 15,750 99.1% 145 0.9% 2024 Fourth Quarter 9,822 3,000 30.5% 6,822 69.5% 2025 First Quarter 13,801 9,885 71.6% 3,916 28.4% 2025 Second Quarter 11,158 11,050 99.0% 108 1.0% 2025 Third Quarter 12,421 12,411 99.9% 10 0.1% 2025 Fourth Quarter 10,786 10,786 100.0% - 0.0% Capital Development Summary The following summarizes our ongoing development growth plans, expected capacity contribution, anticipated commencement of operations, and capital expenditure estimate, excluding the Montauk Ag Renewables Development project: Development Opportunity Estimated Capacity Contribution (MMBtu/day) Anticipated Commencement Date Estimated Capital Expenditure Bowerman RNG Facility 3,600 2027 $85,000-$95,000 European Energy Facilities N/A TBD $65,000-$75,000 Tulsa RNG Facility 1,500 2027 $25,000-$35,000 Rumpke RNG Relocation Project 7,500 2028 $70,000-$90,000 Pico Digestion Capacity Increase In 2025, we began processing the final tranche of increased feedstock.
We place a primary focus on managing production volumes and operating and maintenance expenses as these factors are more controllable by us. - 43 - Table of Contents 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, or failure or degradation of our or a landfill operator’s equipment or interconnection or transmission problems could result in a reduction of our RNG production.
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, or failure or degradation of our or a landfill operator’s equipment or interconnection or transmission problems could result in a reduction of our RNG production.
Royalty Payments Royalties, transportation, gathering, and production fuel expenses in 2024 were $31,502, a decrease of 3,359 (9.6%) compared to $34,861 in 2023. We make royalty payments to our fuel supply site partners on the commodities we produce and the associated Environmental Attributes.
Royalty Payments Royalties, transportation, gathering, and production fuel expenses in 2025 were $32,945, an increase of $1,443 (4.6%) compared to $31,502 in 2024. We make royalty payments to our fuel supply site partners on the commodities we produce and the associated Environmental Attributes.
Realized prices for Environmental Attributes monetized in a year may not correspond directly to index prices due to the forward selling of commitments. - 44 - Table of Contents 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. • Operating and Maintenance Expenses: Operating and maintenance expenses primarily consist of expenses related to the collection and processing of biogas, including biogas collection system operating and maintenance expenses, biogas processing, operating and maintenance expenses, and related labor and overhead expenses.
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. • Operating and Maintenance Expenses: Operating and maintenance expenses primarily consist of expenses related to the collection and processing of biogas, including biogas collection system operating and maintenance expenses, biogas processing, operating and maintenance expenses, and related labor and overhead expenses.
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.
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.
For additional information regarding the Amended Credit Agreement, see the sections entitled “Description of Indebtedness" and Note 13 to our audited consolidated financial statements. - 51 - Table of Contents Capital Expenditures We have historically funded our growth and capital expenditures with our working capital, cash flow from operations and debt financing.
As of March 9, 2026, $155,000 was outstanding under the New Senior Credit Facility. For additional information regarding the Amended Credit Agreement and the New Senior Credit Facility, see Note 13 to our audited 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 facility commissioning in 2027 and expect the capital investment to range between $85,000 - $95,000. As part of the agreement to develop the RNG plant, we agreed to work with the landfill host on the landfill's management of its wellfield and flare facility permit requirements.
As part of the agreement to develop the RNG plant, we agreed to work with the landfill host on the landfill's management of its wellfield and flare facility permit requirements and this work remains ongoing.
For 2024, our capital expenditures were $62,323, of which $27,847, $12,643, and $8,759, were related to the ongoing development of the Montauk Ag Renewables, second Apex RNG facility, and Bowerman RNG project, respectively.
For 2024, our capital expenditures were $62,323, of which $27,847, $12,643, and $8,759, were related to the ongoing development of the Montauk Ag Renewables, second Apex RNG facility, and Bowerman RNG project, respectively. Our net cash flows in financing activities provided $68,339 for 2025 increased by $78,181 compared to cash used in financing activities of $9,842 in 2024.
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. - 55 - Table of Contents Recent Accounting Pronouncements For a description of our recently adopted accounting pronouncements and recently issued accounting standards not yet adopted, see Note 2 to our consolidated financial statements.
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.
We assess the impairment of intangible assets that have indefinite lives at least on an annual basis or whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.
We assess the impairment of intangible assets that have indefinite lives at least on an annual basis or whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. - 53 - Table of Contents 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.
Acquisition and Development Pipeline The timing and extent of our development pipeline affects our operating results due to: • Impact of Higher Selling, General and Administrative Expenses Prior to the Commencement of a Project’s Operation: We incur significant expenses in the development of new RNG projects.
Factors Affecting Our Future Operating Results: Acquisition and Development Pipeline The timing and extent of our development pipeline affects our operating results due to: • Impact of Higher Selling, General and Administrative Expenses Prior to the Commencement of a Project’s Operation: We incur significant expenses in the development of new RNG projects. • Shifts in Revenue Composition for Projects from New Fuel Sources: As we expand into livestock farm projects, our revenue composition from Environmental Attributes will change.
These landfill-driven delays impact the timing of collection system enhancement installations and the resulting timing of our production increases. We expect these trends to continue through 2025. • Despite collaboration with the landfill host at our Rumpke facility on our gas collection efforts, wellfield extraction environmental factors continue to impact gas extraction at the site.
These landfill-driven delays impact the timing of collection system enhancement installations and the resulting timing of our production increases. We expect these trends to continue throughout 2026. • Similar wellfield extraction environmental factors continue to impact gas extraction at our Apex site. We are collaborating with the landfill to mitigate these impacts and these mitigation efforts have continued in 2025.
RNG operating profit for 2024 was $56,032, a decrease of $3,254 (5.5%) compared to $59,286 in 2023. Renewable Electricity Generation operating loss for 2024 was $2,823, an increase of $2,228 (374.5%) compared to $595 in 2023. Non-GAAP Financial Measures: The following table presents EBITDA and Adjusted EBITDA, non-GAAP financial measures for each of the periods presented below.
Renewable Electricity Generation operating loss for 2025 was $4,870, an increase of $2,047 (72.5%) compared to $2,823 in 2024. Non-GAAP Financial Measures: The following table presents EBITDA and Adjusted EBITDA, non-GAAP financial measures for each of the periods presented below.
This compares to the average D3 RIN index price for 2024 of $3.12 being approximately 18.6% higher than the average D3 RIN index price in 2023 of $2.63. At December 31, 2024, we had approximately 291 MMBtus available for RIN generation and had approximately 6,822 RINs generated and unsold.
This compares to the average D3 RIN index price for 2025 of $2.34 being approximately 25.0% lower than the average D3 RIN index price in 2024 of $3.12. At December 31, 2025, we had approximately 354 MMBtu available for RIN generation, 190 RINs generated and unseparated, and no RINs generated and unsold.
Key Trends Market Trends Affecting the Renewable Fuel Market We believe rising demand for RNG is attributable to a variety of factors, including growing public support for renewable energy, U.S. governmental actions to increase energy independence, environmental concerns increasing demand for natural gas-powered vehicles, job creation, and increasing investment in the renewable energy sector. - 41 - Table of Contents Key drivers for the long-term growth of RNG include the following factors: • Regulatory or policy initiatives, including the federal RFS program and state-level low-carbon fuel programs in states such as California and Oregon, that drive demand for RNG and its derivative Environmental Attributes (as further described below). • Efficiency, mobility and capital cost flexibility in RNG operations enable it to compete successfully in multiple markets.
Key drivers for the long-term growth of RNG include the following factors: • Regulatory or policy initiatives, including the federal RFS program and state-level low-carbon fuel programs in states such as California and Oregon, that drive demand for RNG and its derivative Environmental Attributes (as further described below). • Efficiency, mobility and capital cost flexibility in RNG operations enable it to compete successfully in multiple markets.
The BSBY ceased publication on November 15, 2024, and the current debt agreement was amended to utilize the Secured Overnight Financing Rate Index ("SOFR"), plus applicable margin. The Amended Credit Agreement contains customary covenants applicable to us and certain of our subsidiaries, including financial covenants.
The BSBY ceased publication on November 15, 2024, and the current debt agreement was amended to utilize the Secured Overnight Financing Rate Index ("SOFR"), plus applicable margin. As of December 31, 2025, we were in compliance with all financial covenants related to the Amended Credit Agreement.
For the year ended December 31, Change 2024 2023 Change % (in thousands, unless otherwise indicated) Revenues Renewable Natural Gas Total Revenues $ 157,983 $ 156,455 $ 1,528 1.0 % Renewable Electricity Generation Total Revenues $ 17,753 $ 18,449 $ (696 ) (3.8 %) RNG Metrics CY RNG production volumes (MMBtu) 5,587 5,499 88 1.6 % Less: Current period RNG volumes under fixed/floor-price contracts (1,546 ) (1,287 ) (259 ) 20.1 % Plus: Prior period RNG volumes dispensed in current period 358 368 (10 ) (2.7 %) Less: Current period RNG production volumes not dispensed (291 ) (358 ) 67 (18.7 %) Total RNG volumes available for RIN generation (1) 4,108 4,222 (114 ) (2.7 %) RIN Metrics Current RIN generation ( x 11.727) (2) 48,177 49,508 (1,331 ) (2.7 %) Less: Counterparty share (RINs) (4,824 ) (5,203 ) 379 (7.3 %) Plus: Prior period RINs carried into current period 108 739 (631 ) (85.4 %) Less: CY RINs carried into next CY (6,822 ) (108 ) (6,714 ) 6216.7 % Total RINs available for sale (3) 36,639 44,936 (8,297 ) (18.5 %) Less: RINs sold (36,639 ) (44,936 ) 8,297 (18.5 %) RIN Inventory — — — 0.0 % RNG Inventory (volumes not dispensed for RINs) (4) 291 358 (67 ) (18.7 %) Average Realized RIN price $ 3.28 $ 2.71 $ 0.57 21.0 % Operating Expenses Renewable Natural Gas Operating Expenses $ 82,916 $ 80,762 $ 2,154 2.7 % Operating Expenses per MMBtu (actual) $ 14.84 $ 14.69 $ 0.15 1.1 % REG Operating Expenses $ 14,734 $ 13,730 $ 1,004 7.3 % $/MWh (actual) $ 79.22 $ 70.77 $ 8.45 11.9 % Other Metrics Renewable Electricity Generation Volumes Produced (MWh) 186 194 (8 ) (4.1 %) Average Realized Price $/MWh (actual) $ 95.45 $ 95.10 $ 0.35 0.4 % (1) RINs are generated the month following the month gas is produced and dispensed.
For the year ended December 31, Change 2025 2024 Change % (in thousands, unless otherwise indicated) Revenues Renewable Natural Gas Total Revenues $ 155,736 $ 157,983 $ (2,247 ) (1.4 %) Renewable Electricity Generation Total Revenues $ 17,231 $ 17,753 $ (522 ) (2.9 %) RNG Metrics CY RNG production volumes (MMBtu) 5,644 5,587 57 1.0 % Less: Current period RNG volumes under fixed/floor-price contracts (1,907 ) (1,546 ) (361 ) 23.4 % Plus: Prior period RNG volumes dispensed in current period 291 358 (67 ) (18.7 %) Less: Current period RNG production volumes not dispensed (354 ) (291 ) (63 ) 21.6 % Total RNG volumes available for RIN generation (1) 3,674 4,108 (434 ) (10.6 %) RIN Metrics Current RIN generation ( x 11.6935) (2) 42,970 48,177 (5,207 ) (10.8 %) Less: Counterparty share (RINs) (5,470 ) (4,824 ) (646 ) 13.4 % Plus: Prior period RINs carried into current period 6,822 108 6,714 6216.7 % Less: RINs generated but unseparated (190 ) — (190 ) 0.0 % Less: CY RINs carried into next CY — (6,822 ) 6,822 (100.0 %) Total RINs available for sale (3) 44,132 36,639 7,493 20.5 % Less: RINs sold (44,132 ) (36,639 ) (7,493 ) 20.5 % RIN Inventory — — — 0.0 % RNG Inventory (volumes not dispensed for RINs) (4) 354 291 63 21.6 % Average Realized RIN price $ 2.33 $ 3.28 $ (0.95 ) (29.0 %) Operating Expenses Renewable Natural Gas Operating Expenses $ 90,095 $ 82,916 $ 7,179 8.7 % Operating Expenses per MMBtu (actual) $ 15.96 $ 14.84 $ 1.12 7.5 % REG Operating Expenses $ 16,670 $ 14,734 $ 1,936 13.1 % $/MWh (actual) $ 94.18 $ 79.22 $ 14.96 18.9 % Other Metrics Renewable Electricity Generation Volumes Produced (MWh) 177 186 (9 ) (4.8 %) Average Realized Price $/MWh (actual) $ 97.35 $ 95.45 $ 1.90 2.0 % (1) RINs are generated in the month that the gas is dispensed to generate RINs, which occurs the month after the gas is produced.
Employee related costs, including stock-based compensation costs were $23,099 in 2024, an increase of $3,366 (17.1%) compared to $19,733 in 2023. The increase was primarily related to the accelerated vesting of certain restricted share awards as a result of the termination of an employee. Our professional fees decreased approximately $1,628 (35.3%) in 2024 compared to 2023.
Employee related costs, including stock-based compensation costs were $18,356 in 2025, a decrease of $4,743 (20.5%) compared to $23,099 in 2024. The decrease was primarily related to the accelerated vesting of certain restricted share awards as a result of the termination of an employee in 2024. Our corporate insurance fees decreased approximately $843 (15.4%) in 2025 compared to 2024.
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.
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.
The Amended Credit Agreement, which is secured by 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 December 31, 2024, $56,000 was outstanding under the term loan and we had no outstanding borrowings under the revolving credit facility.
The Amended Credit Agreement, which is secured by 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. The Amended Credit Agreement contains customary covenants applicable to us and certain of our subsidiaries, including financial covenants.
Our Security facility produced 9 MWh less in 2024 compared to 2023 as a result of us ceasing operations in connection with the first quarter of 2024 sale of the gas rights back to the landfill host. - 48 - Table of Contents Revenues from Renewable Electricity facilities in 2024 were $17,753, a decrease of $696 (3.8%) compared to $18,449 in 2023.
Renewable Electricity Generation Revenues We produced 177 MWh in Renewable Electricity in 2025, a decrease of approximately 9 MWh (4.8%) compared to 186 MWh in 2024. Our Security facility produced 6 MWh less in 2025 compared to 2024 as a result of us ceasing operations in connection with the 2024 sale of the gas rights back to the landfill host.
As of December 31, 2024 and 2023, we had approximately $12,274 and $13,042, respectively, federal tax credit carryforwards that expire 20 years from the date incurred, which will begin to expire in tax year 2026. As of December 2024, we continue to carry state NOL balances in Pennsylvania and Florida from 2023.
As of December 31, 2025 and 2024, we had approximately $17,339 and $12,274, respectively, federal tax credit carryforwards that expire 20 years from the date incurred, which will begin to expire in tax year 2026. As of December 2025, we have no remaining state NOL’s. Additionally, we have created a federal net operating loss of $407 in 2025.
The timing of gas conditioning and process equipment preventative maintenance intervals could impact the timing and amount of our operating and maintenance expenses within a given quarter. • Royalties, Transportation, Gathering and Production Fuel Expenses: Royalties represent payments made to our facility hosts, typically structured as a percentage of revenue.
The timing of gas conditioning and process equipment preventative maintenance intervals could impact the timing and amount of our operating and maintenance expenses within a given quarter.
Additionally, the landfill host modified the wellfield bifurcation approach which has reduced the quantity of feedstock received at our facility.
Additionally, the landfill host modified the wellfield bifurcation approach which has reduced the quantity of feedstock received at our facility. We are working with the landfill host but continue to have lower volumes of feedstock available to be processed at the McCarty facility.
Volumes under fixed/floor arrangements generate RINs which we do not self-market. (2) One MMBtu of RNG has the same energy content as 11.727 gallons of ethanol, and thus may generate 11.727 RINs under the RFS program. (3) Represents RINs available to be self-marketed by us during the reporting period.
Volumes under fixed/floor-price arrangements generate RINs which we do not self-market. K3 RIN separation occurs after the gas is dispensed (RINs generated but unseparated). (2) One MMBtu of RNG has the same energy content as 11.6935 gallons of ethanol, and thus may generate 11.6935 RINs under the RFS program.
The project will offer a variable inlet capacity providing production capacity of approximately 1,500 MMBtu per day and designed to beneficially process all of the available inlet gas feedstock from its landfill host. - 39 - Table of Contents We expect the capital investment to range from approximately $25,000 to $35,000 and be commissioned during the first quarter of 2027.
The project will offer a variable inlet capacity, ranging from 550 scfm to 2,250 scfm per day, providing average production capacity we target to be approximately 1,500 MMBtu per day and designed to beneficially process all of available inlet gas feedstock from its landfill host. We expect commissioning in 2027 and to continue incurring capital expenditures for long lead items.
We continue to review various alternatives related to interconnection opportunities as part of our considerations for offtake options with the understanding those alternatives may differ from initial development project assumptions, included but not limited to physical and virtual and fixed interconnections. We are also reviewing alternatives for this site around producing energy other than RNG.
We continue to have $1,000 recorded associated with the payment upon award of the gas rights agreement. We continue to review various alternatives related to interconnection opportunities as part of our considerations for offtake options with the understanding those alternatives may differ from initial development project assumptions, including physical and virtual and fixed interconnections.
Montauk Ag Asset Acquisition In 2021, through a wholly-owned subsidiary Montauk Ag Renewables, we completed an asset purchase related to developing technology and a centralized processing location to recover residual natural resources from the 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 and recapture nitrogen, phosphorus, and micronutrient organic fertilizer alternatives (the “Montauk Ag Renewables Acquisition”).
Montauk Ag Asset Acquisition In 2021, Montauk Ag Renewables purchased technology and assets (the “Montauk Ag Renewables Acquisition”) to recover residual natural resources from swine waste and to refine and recycle such waste products through proprietary and other processes to produce high quality renewable electricity, North Carolina swine RECs, and micronutrient organic fertilizer alternatives.
A majority of our Renewable Natural Gas segment Environmental Attributes are self-monetized, though a portion are generated and monetized by third parties under counterparty sharing agreements.
A majority of our Renewable Natural Gas segment Environmental Attributes are self-monetized.
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 decision not to commit to transfer available RINs during a period will impact our revenue and operating profit.
As we self-market a significant portion of our RINs, a decision not to commit to transfer available RINs during a period will impact our revenue and operating profit. We expect the timing between RINs generated and unseparated and RINs available for sale to only impact 2025 which is the year BRRR became effective.
The quality of the waste at our landfill project sites is subject to change based on the volume and type of waste accepted. Variations in the quality of the biogas could affect our RNG production levels. At three of our projects, we operate the wellfield collection system, which allows greater control over the quality and consistency of the collected biogas.
Variations in the quality of the biogas could affect our RNG production levels. At three of our projects, we operate the wellfield collection system, which allows greater control over the quality and consistency of the collected biogas. At our McCarty projects, we have operating and management agreements by which we earn revenue for managing the wellfield collection systems.
To the 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 our contracts may give rise to several types of variable consideration, such as periodic price increases.
As such, revenue is recorded net of allowances and customer discounts as well as net of transportation and gathering costs incurred. To the 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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

13 edited+2 added−0 removed4 unchanged
Biggest changeWe use interest rate swaps to set the variable interest rates under the Amended Credit Facility at a fixed interest rate to manage our interest rate risk. As of December 31, 2024, we had $56.0 million outstanding under the Amended Credit Facility. Our weighted average interest rate on variable debt balances during 2024 was approximately 6.01%.
Biggest changeTo manage exposure to variability in cash flows associated with changes in interest rates, we entered into interest rate swap agreements that effectively converted variable-rate borrowings under the Amended Credit Facility to fixed-rate obligations. As of December 31, 2025, we had $129.0 million outstanding under the Amended Credit Facility.
We did not enter into a derivative contract to hedge a portion of our RNG production for 2024 or 2023. We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to the market price of wholesale gas.
We did not enter into a derivative contract to hedge a portion of our RNG production for 2025 or 2024. We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to the market price of wholesale gas.
The estimated annual impact of a hypothetical 10% decrease in the market price of wholesale gas would have a negative effect on our operating profit of approximately $1.2 million.
The estimated annual impact of a hypothetical 10% decrease in the market price of wholesale gas would have a negative effect on our operating profit of approximately $1.4 million.
The estimated annual impact of a hypothetical 10% decrease in the average realized price per RIN would have a negative effect on our operating profit of approximately $7.0 million. RNG and Renewable Electricity Pricing Risk The price of RNG and Renewable Electricity changes in relation to the market prices of wholesale gas and wholesale electricity, respectively.
The estimated annual impact of a hypothetical 10% decrease in the average realized price per RIN would have a negative effect on our operating profit of approximately $8.5 million. RNG and Renewable Electricity Pricing Risk The price of RNG and Renewable Electricity changes in relation to the market prices of wholesale gas and wholesale electricity, respectively.
We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to RIN prices. Our analysis, which may differ from actual results, was based on a 2025 estimated D3 RIN Index price of approximately $2.42 and our actual 2024 RINs sold.
We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to RIN prices. Our analysis, which may differ from actual results, was based on a 2026 estimated D3 RIN Index price of approximately $2.40 and our actual 2025 RINs sold.
Our analysis, which may differ from actual results, was based on a 2025 estimated NYMEX average Index Price of approximately $3.851/MMBtu and our actual 2024 gas production sold pursuant to contracts that do not provide for a fixed or floor price.
Our analysis, which may differ from actual results, was based on a 2025 estimated NYMEX average Index Price of approximately $4.687/MMBtu and our actual 2025 gas production sold pursuant to contracts that do not provide for a fixed or floor price.
This concentration increases our exposure to credit risk on our receivables, since the financial insolvency of these customers could have a significant impact on our results of operations. - 57 - Table of Contents
We are also subject to credit risk due to concentration of our RNG receivables with a limited number of significant customers. This concentration increases our exposure to credit risk on our receivables, since the financial insolvency of these customers could have a significant impact on our results of operations. - 55 - Table of Contents
These consist of our commodity hedging derivatives and interest rate swaps contracts. We are exposed to credit losses in the event of non-performance by the counterparties to our financial and derivative instruments. We are also subject to credit risk due to concentration of our RNG receivables with a limited number of significant customers.
Credit Risk We have certain financial and derivative instruments that subject us to credit risk. These consist of our commodity hedging derivatives and interest rate swaps contracts. We are exposed to credit losses in the event of non-performance by the counterparties to our financial and derivative instruments.
RIN and Environmental Attribute Pricing Risk We attempt to negotiate the best prices for our Environmental Attributes and to competitively price our products to reflect the fluctuations in market prices. Reductions in the market prices of Environmental Attributes may have a material adverse effect on our revenues and profits as they directly reduce our revenues.
Reductions in the market prices of Environmental Attributes may have a material adverse effect on our revenues and profits as they directly reduce our revenues.
For information about our realized or unrealized gains or losses with respect to our derivative transactions and the fair value of such financial instruments, see Note 10 and Note 11 to our audited consolidated financial statements.
For information about our realized or unrealized gains or losses with respect to our derivative transactions and the fair value of such financial instruments, see Note 10 and Note 11 to our audited consolidated financial statements. - 54 - Table of Contents RIN and Environmental Attribute Pricing Risk We attempt to negotiate the best prices for our Environmental Attributes and to competitively price our products to reflect the fluctuations in market prices.
We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to changes in interest rates.
The weighted average interest rate on our variable debt balances during the year ended December 31, 2025 was approximately 6.44%. We performed a sensitivity analysis to estimate our exposure to market risk with respect to changes in interest rates.
Based on our analysis, which may differ from actual results, a hypothetical increase in our effective borrowing rate of 10% would not have a material effect on our annual interest expenses and consolidated financial statements. - 56 - Table of Contents Credit Risk We have certain financial and derivative instruments that subject us to credit risk.
Based on our analysis, a hypothetical 10% increase in our effective borrowing rate as of December 31, 2025 would not have had a material impact on our annual interest expense or consolidated financial statements, primarily due to the effect of our interest rate swap agreements.
Interest Rate Risk In order to maintain liquidity and fund a portion of development and working capital needs, we have the Amended Credit Facility, which bears a variable interest rate based on SOFR index rate plus a margin based on our Total Leverage Ratio (in each case, as those terms are defined in the Amended Credit Agreement).
Interest Rate Risk We previously utilized our Amended Credit Facility, which bore interest at a variable rate based on the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin determined by our Total Leverage Ratio, as defined in the Amended Credit Agreement.
Added
This analysis is based on certain assumptions and does not represent a forecast of future results. On March 9, 2026, we repaid in full all outstanding borrowings under the Amended Credit Facility in connection with entering into the Senior Credit Facility. As a result, we no longer have exposure to variable interest rate risk associated with the Amended Credit Facility.
Added
The Senior Credit Facility bears interest at a fixed rate, we do not expect material exposure to changes in market interest rates with respect to borrowings under this facility. Accordingly, our exposure to interest rate risk following the refinancing is expected to be significantly reduced compared to our prior variable-rate borrowings.

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