OPAL Fuels Inc.

1. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The Unaudited Condensed Consolidated Financial Statements include the accounts of Opal Fuels, Inc. and its subsidiaries and reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results of operations for the interim period. In addition, we have consolidated the financial results of jointly owned affiliated companies in which our principal stockholder or other entities have a noncontrolling interest. All intercompany transactions and balances have been eliminated in consolidation. The non-controlling interest attributable to the Company's variable interest entities ("VIE") are presented as a separate component from the Stockholders' equity (deficit) in the consolidated balance sheets and as a non-redeemable non-controlling interest in the consolidated statements of changes in redeemable non-controlling interests, redeemable preferred non-controlling interests and Stockholders' (deficit) equity.

As of March 31, 2025 and 2024, the Company held equity interests in seven VIEs — Pine Bend RNG LLC ("Pine Bend"), Noble Road RNG LLC ("Noble Road"), Paragon RNG LLC ("Paragon"), Emerald RNG LLC ("Emerald"), Sapphire RNG LLC ("Sapphire"), Land2Gas LLC ("Land2Gas", Atlantic RNG LLC ("Atlantic"), Burlington RNG LLC ("Burlington")), GREP BTB Holdings LLC ("GREP"), Sunoma Holdings, LLC (“Sunoma”), Central Valley LLC (“Central Valley”). GREP, Emerald, Sapphire, Paragon and Land2Gas were presented as equity method investments and the remaining two VIEs — Sunoma and Central Valley are consolidated by the Company.

The consolidated balance sheets summarize the major consolidated balance sheet items for consolidated VIEs as of March 31, 2025 and December 31, 2024. The information is presented on an aggregate basis based on similar risk and reward characteristics and the nature of our involvement with the VIEs, such as:

•All of the VIEs are RNG facilities and they are reported under the RNG Fuel Supply segment;

•The nature of our interest in these entities is primarily equity based and therefore carry similar risk and reward characteristics.

The year-end Condensed Consolidated Balance Sheet data as of December 31, 2024, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America ("U.S. GAAP"). The interim financial information and notes thereto should be read in conjunction with the Company's latest Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "Annual Report") as the interim disclosures generally do not repeat those in the annual financial statements and are condensed in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. The results of operations for the three months ended March 31, 2025, are not necessarily indicative of results to be expected for the entire fiscal year.

The Company is organized into three operating segments based on the characteristics and the nature of products and services. Thethree operating segments are RNG Fuel, Fuel Station Services and Renewable Power.

All amounts in these footnotes are presented in thousands of dollars except share and per share data.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The significant estimates and assumptions of the Company include the residual value of the useful lives of our property, plant and equipment, the fair value of stock-based compensation, asset retirement obligations, the estimated losses on our trade receivables, percentage completion for revenue recognition, incremental borrowing rate for calculating the right-of-use lease assets and lease liabilities, the impairment assessment of goodwill and the fair value of derivative instruments. Actual results could differ from those estimates.

The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the entire year.

The Company provides all third-party construction contracts with a warranty, typically for a period of one year after substantial completion of the construction project. These warranties are accounted for under ASC Topic 460, Guarantees ("ASC 460"), and not as a separate performance obligation. Generally, the company estimates warranty costs based on historical claims experience, and other factors. Actual warranty claims may differ from the estimates, and adjustments to the liability are made as necessary. The Company accrued $173 and $171 of warranty reserves under accrued expense and other current liabilities as of March 31, 2025, and December 31, 2024, respectively.

Accounting Pronouncements Adopted

In November 2023, the FASB issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280) ("ASU 2023-07"). The update improves the reportable segment disclosure requirements by requiring all entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), report other segment items (segment revenue less the significant expenses disclosed and profit or loss) by reportable segment, title and position of the CODM and an explanation of how the CODM uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources. Additionally, ASU 2023-07 requires that if the CODM uses more than one measure of a segment's net income or loss in assessing segment performance and deciding how to allocate resources, the entity may report one or more of those additional measures. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and should be applied retrospectively for all periods presented. The Company adopted ASU 2023-07 in the year ended December 31, 2024, and applied the standard retrospectively for all periods presented. The adoption did not have a material effect on the Company’s financial position, results of operations and cash flows. Please see Note 7. Reportable Segments, for additional information.

In August 2023, the FASB issued Accounting Standards Update No. 2023-05, Business Combinations- Joint Venture Formations (Subtopic 805-60) ("ASU 2023-05"). The update requires all joint ventures formed after January 1, 2025, upon formation, to apply a new basis of accounting and initially measure its assets and liabilities at fair value. ASU 2023-05 is effective prospectively for joint ventures with a formation date on or after January 1, 2025. The adoption did not have a material effect on the Company’s financial position, results of operations, cash flows or disclosures.

Earnout Liabilities

In connection with the business combination completed in July 2022 and pursuant to a sponsor letter agreement, ArcLight CTC Holdings II, L.P. agreed to subject 10% of its Class A common stock (received as a result of the conversion of its ArcLight Class B ordinary shares immediately prior to the closing) to vesting and forfeiture conditions relating to VWAP targets for the Company's Class A common stock sustained over a period of 60 months following the closing. As of March 31, 2025 and December 31, 2024, the number of shares subject to forfeiture was 716,650 (the "Sponsor Earnout Awards").

For the three months ended March 31, 2025 the Company recorded a gain from the Sponsor Earnout Awards of $281 in its condensed consolidated statements of operations. For the three months ended March 31, 2024, the Company recorded a gain of $403, in its condensed consolidated statements of operations. As of March 31, 2025 and December 31, 2024, the Company recorded a Sponsor Earnout liability of $23 and $304, respectively, as part of Other long-term liabilities on its condensed consolidated balance sheets.

Redeemable non-controlling interests

Redeemable non-controlling interests represent the portion of OPAL Fuels that the Company controls and consolidates but does not own. The Redeemable non-controlling interest represents 144,399,037 Class B Units issued by OPAL Fuels to the prior investors. The Company allocates net income or loss attributable to Redeemable non-controlling interest based on weighted average ownership interest during the period. The net income or loss attributable to Redeemable non-controlling interests is reflected in the condensed consolidated statement of operations.

At each balance sheet date, the mezzanine equity classified Redeemable non-controlling interests is adjusted up to their maximum redemption value if necessary, with an offset in Stockholders' equity (deficit). As of March 31, 2025, the maximum redemption value was $276,719.

Accounts Receivable, net

The Company's didnot have an allowance for credit losses at March 31, 2025 and December 31, 2024.

Parts Inventory

Parts inventory, also referred to as supplies inventory, consists of shop spare parts inventory and construction site parts inventory. The substantial amount of inventory is identified, tracked and treated as finished goods.

Revenues

Disaggregation of Revenue

The following table shows the disaggregation of revenue according to product line:

(1)Includes revenues of $0 and $3,617 respectively, for the three months ended March 31, 2025 and 2024, from customers domiciled outside of United States.

(2) Includes management fee revenues earned from management of operations of equity method entities.

(3)Lease revenue relates to approximately thirty-eight fuel purchasing agreements out of which we havetwo of our RNG Fuel stations with minimum take or pay provisions and revenue from power purchase agreements attwo of our Renewable Power facilities where we determined that we transferred the right to control the use of the power plant to the purchaser.

For the three months ended March 31, 2025 and 2024,9% and 17%, respectively of revenue was recognized over time, and the remainder was for products and services transferred at a point in time.

Contract Balances

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:

During the three months ended March 31, 2025, the Company recognized revenue of $2,307 that was included in "Contract liabilities" at December 31, 2024. During the three months ended March 31, 2024, the Company recognized revenue of $2,746 that was included in "Contract liabilities" at December 31, 2023.

Environmental credits held for sale

For the three months ended March 31, 2025 and 2024, the Company recorded $5,847 and 3,156 as part of Cost of sales - Fuel Station Services in its condensed consolidated statements of operations to adjust environmental credits held for sale to lower of cost and net realizable value.

Fuel Station Services Construction Backlog

The Company's remaining performance obligations ("backlog") represent the unrecognized revenue value of its contract commitments. The Company's backlog may significantly vary each reporting period based on the timing of major new contract commitments. At March 31, 2025, the Company had a backlog of$58,812.

Significant Customers, Vendors and Concentration of Credit Risk

For the three months ended March 31, 2025, one customer accounted for 43% of the revenue. For the three months ended March 31, 2024, two customers accounted for 55% of the revenue. At March 31, 2025, three customers accounted for 56% of accounts receivable. At December 31, 2024, two customers accounted for 50% of accounts receivable.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, and trade receivables. The Company places its cash with high credit quality financial institutions located in the United States of America. The Company performs ongoing credit evaluations of its customers.

As of March 31, 2025, one vendor accounted for 50% of the accounts payable. As of December 31, 2024, one vendor accounted for 17% of the accounts payable.

Investment Tax Credits

In the first quarter of 2025, the Company sold to a third-party purchaser certain transferable Investment Tax Credits (ITCs) that had been generated by the Company from its investments in the Renewable Natural Gas segment.

The Company elected to consider expected transfers of the credits in assessing their realizability as part of the valuation allowance analysis and recognize changes in the estimated proceeds as an adjustment to its valuation allowance. The Company accounted for the ITC sale in accordance with ASC 740 by electing the flow-through method to recognize the ITC benefit when it arises.

The net proceeds from the sale of tax credits, totaling $8,037, were received in cash and recorded as a credit to income tax expense as of March 31, 2025. The cash flows related to the total income tax benefits are presented in the statement of cash flow in the ‘Net income (loss)’ line item in operating activities. Legal and insurance fees associated with the transaction, totaling $862, consisting of buyer's expenses paid by the Company which are recorded as part of Income Tax Benefit. Transaction costs are deductible for income tax purposes.

2. Investment in Other Entities

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

(1) Recorded as part of cash flows from operating activities for the three months ended March 31, 2025.

(2) Recorded as part of cash flows from investing activities for the three months ended March 31, 2025.

(3) Reflected in Income from equity method investments in the condensed consolidated statement of operations for the three months ended March 31, 2025.

The following table summarizes the net income from equity method investments:

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

A summary of financial information for our portion of the assets and liabilities in equity method investees in the aggregate is as follows:

3. Borrowings

The following table summarizes the borrowings under the various debt facilities as of March 31, 2025 and December 31, 2024:

As of March 31, 2025, principal maturities of debt are expected as follows, excluding any undrawn debt facilities as of the date of the condensed consolidated balance sheets:

Amended OPAL Term Loan and Revolving Loan

On March 3, 2025, OPAL Fuels Intermediate HoldCo LLC, as the borrower (the “Borrower”), certain subsidiaries of the Borrower, as guarantors (the “Guarantors”), the lenders and issuers of letters of credit party thereto and Bank of America, N.A. as the administrative agent (the “Administrative Agent”) entered into that certain Amendment No. 1 to Credit and Guarantee Agreement (the “Credit Agreement Amendment”), with respect to that certain Credit and Guarantee Agreement (the “Credit Agreement”) dated September 1, 2023, by and among the Borrower, the Administrative Agent, the financial institutions from time to time parties thereto as lenders and as issuers of letters of credit, and the other agents and persons from time to time party thereto (as amended, restated, amended and restated, supplemented or otherwise modified and in effect from time to time).

The Credit Agreement Amendment makes certain changes to the applicability of certain financial covenants and modifies other covenants to clarify the use of loan proceeds. Additionally, the Credit Agreement Amendment permits the organizational restructuring of the Guarantors in a manner designed to facilitate the sale of federal investment tax credits and the ability to raise additional future capital.

The Credit Agreement Amendment also eases the conditions precedent to making new Projects eligible for borrowing under the Credit Agreement, extends the availability period for delay draw term loans under the Credit Agreement through March 5, 2026, and extends the commencement of repayment of such term loans until March 31, 2026. The Amendment was accounted for as a modification in the period ended March 31, 2025.

In connection with the Credit Agreement Amendment, the Borrower paid the Administrative Agent, for the account of each lender, a one-time nonrefundable fee of $1,250. These costs have been recorded as a direct reduction against the debt and amortized over the life of the associated debt as a component of interest expense using the effective interest method.

As of March 31, 2025 and December 31, 2024, the outstanding loan balance (current and non-current) excluding deferred financing costs was $286,617. During the three months ended March 31, 2025, the Company did not draw additional funds from the term loan. Additionally, the Company utilized $28,578 of availability under the revolver loan. Of this amount, $13,578 was utilized for the issuance of letters of credit to support the operations of the Borrower and the Guarantors, while $15,000 was drawn to support working capital needs.

The Company has the ability, during the delayed draw availability period and subject to the satisfaction of certain credit and project-related conditions precedent, to join other newly acquired subsidiaries with comparable renewable projects in development under the credit facility for comparable funding. As of March 31, 2025, the Company is in compliance with the financial covenants under the OPAL Term Loan. The amounts outstanding under the Credit Agreement are secured by the assets of the indirect subsidiaries of OPAL Intermediate Holdco.

Sunoma Loan

On August 27, 2020, Sunoma, an indirect wholly-owned subsidiary of the Company entered into a debt agreement (the "Sunoma Loan Agreement") with Live Oak Banking Company for an aggregate principal amount of $20,000 that was increased to $23,000 in 2022. As of March 31, 2025, Sunoma is in compliance with the financial covenants under the Sunoma Loan Agreement.

As of March 31, 2025 and December 31, 2024, the outstanding loan balance (current and non-current) excluding deferred financing costs was $20,423 and $20,846, respectively. The Company also utilized $968 for the issuance of letters of credit to support the operations of the Borrower. The amounts outstanding under the Sunoma Loan are secured by the assets of Sunoma.

The significant assets of Sunoma are parenthesized in the condensed consolidated balance sheets as March 31, 2025 and December 31, 2024.

For the three months ended March 31, 2025, the weighted average effective interest rate including amortization of debt issuance costs on OPAL Term Loan was 9.1%. For the three months ended March 31, 2025, the interest rate on the Sunoma Loan was 8.7%.

For the three months ended March 31, 2024, the weighted average effective interest rate on OPAL Term Loan including amortization of debt issuance costs was 7.3%. For the three months ended March 31, 2024, the interest rate on the Sunoma loan was 8.6%.

The following table summarizes the Company's total interest expense for the three months ended March 31, 2025 and 2024:

(1)Excludes $524 of interest capitalized and recorded as part of Property, Plant and Equipment for the three months ended March 31, 2025. Excludes $1,444 of interest capitalized and recorded as part of Property, Plant and Equipment for the three months ended March 31, 2024.

4. Leases

Lessor contracts

Fuel provider agreements

Fuel provider agreements ("FPAs") are for the sale of brown gas, service and maintenance of sites. The Company is contracted to design and build a Fueling Station on the customer's property in exchange for the Company providing CNG/RNG to the customer for a determined number of years. We have determined that the FPAs contain a lease component for the use of the Fueling Station in addition to the non-lease components related to providing CNG/RNG as well as providing all-inclusive maintenance and warranty services.

Included in Fuel Station Service revenues are $2,185 and $772 and related to the lease portion of the FPAs for the three months ended March 31, 2025 and 2024, respectively. The Company allocated the contract consideration between the lease component and non-lease components on a relative standalone selling price basis.

Power purchase agreements

Power purchase agreements ("PPAs") are for the sale of electricity generated at our Renewable Power facilities. All of our Renewable Power facilities operate under fixed pricing or indexed pricing based on market prices. Two of our Renewable Power facilities transfer the right to control the use of the power plant to the purchaser and are therefore classified as operating leases.

Included in Renewable Power revenues are $256 and $219 related to the lease element of the PPAs for the three months ended March 31, 2025 and 2024, respectively.

5. Derivative Financial Instruments and Fair Value Measurements

Interest rate swaps

The Company records the fair value of the interest rate swap as an asset or liability on its balance sheet. This instrument is classified as Level 2 in the fair value hierarchy. The effective portion of the swap is recorded in accumulated other comprehensive income. The Company expects to release $184 from the Other comprehensive income (loss) in the next twelve months.

The location and amounts of interest rate swaps and their fair values in the condensed consolidated balance sheets are:

The effect of interest rate swaps on the condensed consolidated statement of operations were as follows:

Commodity swap contracts

In February 2025, the Company entered into a power purchase and sale agreement with NextEra for sale of electricity over the period from March through December 2025, with a fixed contract price. The forward contract is expected to be settled by physical delivery of electricity on a monthly basis. The Company elected the normal purchase normal sale exclusion and will not apply fair value accounting under ASC 815.

Additionally, in the three months ended March 31, 2025, the Company entered into multiple ISDA agreements with JPMorgan Chase, Merrill Lynch, and Investec Bank for pay-variable, receive-fixed, cash-settled natural gas commodity swaps. The Company applied fair value accounting under ASC 815 for these transactions.

The following table summarizes the effect of commodity swaps accounted for as derivatives under ASC 815 on the condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024:

The following table summarizes the derivative assets and liabilities related to commodity swaps as of March 31, 2025 and December 31, 2024:

Other derivative liabilities

On July 21, 2022, the Company recorded a derivative liability for the Sponsor Earnout Awards and the OPAL Earnout Awards. The OPAL Earnout Awards expired in December 2024. The change in fair value on Sponsor Earnout and OPAL Earnout Awards is recorded as change in fair value of derivative instruments, net in the condensed consolidated statement of operations for the three months ended March 31, 2025 and 2024.

The following table summarizes the effect of change in fair value of other derivative liabilities on the condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024:

Fair value measurements

The carrying amount of cash and cash equivalents, accounts receivable, net, and accounts payable and accrued expenses approximates fair value due to their short-term maturities.

The carrying value of the Company's long-term debt, which are considered Level 2 in the fair value hierarchy, of $296,390 and $297,624 as of March 31, 2025 and December 31, 2024, respectively, approximates its fair value because our interest rate is variable and reflects current market rates.

The Company accounts for asset retirement obligations by recording the fair value of a liability for an asset retirement obligation in the period in which it is incurred and when a reasonable estimate of fair value can be made. The Company estimated the fair value of its asset retirement obligations based on discount rates ranging from 5.75% to 8.5%.

The fair value of the Sponsor Earnout Awards as of March 31, 2025 was determined using a Monte Carlo valuation model with a distribution of potential outcomes on a daily basis over the 2.31 years remaining in the vesting window. Assumptions used in the valuation are as follows:

•Current stock price — The Company's closing stock price of $1.84 as of March 31, 2025;

•Expected volatility —50% based on historical and implied volatilities of selected industry peers deemed to be comparable to our business corresponding to the expected term of the awards;

•Risk-free interest rate —3.89% based on the U.S. Treasury yield curve in effect at the time of issuance for zero-coupon U.S. Treasury notes with maturities corresponding to the expected 3.0 year term of the earnout period;

•Dividend yield -zero.

Convertible note receivable

In July, 2024, the Company purchased a convertible note pursuant to which the Company has the right to convert the note into shares of common stock of the investee. As of March 31, 2025, fair value of the Convertible note equaled to $1,409 and presented within prepaid expense and other current assets.

There were no transfers of assets between Level 1, Level 2, or Level 3 of the fair value hierarchy as of March 31, 2025.

The Company's assets and liabilities that are measured at fair value on a recurring basis include the following as of March 31, 2025 and December 31, 2024, set forth by level, within the fair value hierarchy:

(1) Includes balances in money market accounts of $15,433 and $19,786, respectively as of March 31, 2025 and December 31, 2024.

6. Related Parties

Related parties are represented by Fortistar and other affiliates, subsidiaries and entities under common control with Fortistar or NextEra.

Sale of redeemable preferred non-controlling interests to related parties

On November 29, 2021, NextEra subscribed for up to 1,000,000 Series A preferred units, which are issuable (in whole or in increments) at the Company’s discretion prior to June 30, 2022. During the year ended December 31, 2022, the Company had drawn $100,000 and issued 1,000,000 Series A preferred units. Please see Note 8. Redeemable non-controlling interests, Redeemable preferred non-controlling interests and Stockholders' Equity (Deficit), for the dividends paid and additional information.

Purchase and sale agreement for environmental attributes

On November 29, 2021, the Company entered into a purchase and sale agreement with NextEra for the environmental attributes generated by the RNG Fuel business.

For the three months ended March 31, 2025, the Company earned net revenues after discount and fees of $20,101 under this contract which was recorded as part of Revenues - RNG Fuel and revenues of $14,979 under this contract which was recorded as part of Revenues - Fuel Station Services.

For the three months ended March 31, 2024, the Company earned net revenues after discount and fees of $15,495 under this contract which was recorded as part of Revenues - RNG Fuel and revenues of $7,741 under this contract which was recorded as part of Revenues - Fuel Station Services.

In January 2025, the Environmental Protection Agency implemented a new framework in which (1) RNG producers are eligible to claim a “K-1” RIN on their volumes of RNG produced, and (2) dispensers are eligible to claim “K-2” RINs on natural gas volumes dispensed as truck fuel, provided they also have a corresponding K-1 RIN to demonstrate the renewable sourcing of gas. The creation of distinct “K-1” and “K-2” RINs creates flexibility for RNG producers to generate and sell K-1 RINs to dispensers independent of the K-2 registration process or dispensing activities. K-1 RINs are only useful for the purpose of registering a K-2 RIN, and K-2 RINs are used to record the environmental offset (similar to a traditional RIN). The introduction of K-1 and K-2 RINs gives rise to a new form of commercial transaction for Opal that is distinct from previous RIN minting arrangements.

On March 26, 2025, the Company entered into a NAESB Base Contract with NextEra (together with certain special conditions, a letter agreement, and an RNG addendum, the "NAESB Contract"). In accordance with the NAESB Contract, the Company may enter into transaction confirmations on a periodic basis for the sale of RNG generated by the RNG Fuels business and NextEra may elect to utilize the Company to market such RNG to generate RINs for NextEra. On March 26, 2025, the Company and NextEra entered into such transaction confirmations relating to 255,000 MMBtus of March 2025 production along with the associated K-1 RINs, pursuant to which the Company will receive net proceeds from NextEra for the sale of the RNG based on the agreed upon price less a specified discount, which, among other factors, takes into account the Company's RNG marketing fee. Additionally, Opal agreed to dispense CNG from its fueling facilities as transportation fuel, pair the dispensing volume with K-1 RINs transferred by NextEra back to Opal, mint K-2 RINs, and transfer these K-2 RINs to NextEra.

The Company concluded that production and dispensing services represent separate performance obligations. Control over K-1 RINs transfers at the time of gas generation or upon delivery of the RINs. Opal will recognize the consideration associated with dispensing services when it pairs these activities with NextEra’s K-1 RINs to convert them into K-2 RINs. The Company recognized $5.3 million as a part of Revenues-RNG Fuel for the three months ended March 31, 2025, as a result of this transaction.

Commodity swap contracts under ISDA and REC sales contracts

The Company recorded $1,166 and $1,526 as revenues earned under ISDA and REC sales agreements with NextEra as part of Revenues - Renewable Power for the three months ended March 31, 2025 and 2024, respectively.

Revenues contracts with equity method investment entities

The Company's wholly owned subsidiary, OPAL Fuel Station Services contracted with Pine Bend, Noble Road, Biotown, Emerald and Sapphire to dispense RNG and to generate and market resulting RINs. For the three months ended March 31, 2025 and 2024, the Company earned environmental processing fees of $1,625 and $2,339, net of intersegment elimination, respectively, under this agreement which are included in Fuel Station Services revenues in the condensed consolidated statements of operations.

Service agreements with related parties

On March 17, 2025, Fortistar, through its subsidiary Wasatch RNG LLC (“Wasatch RNG”), acquired all of the limited liability company interests outstanding in Alpro SD, LLC (“Alpro” and such acquired interest, the “Alpro Interest”). Alpro owns a 50% limited liability company interest in Wasatch Resource Recovery, LLC (the “Project” or “Wasatch” and such ownership interest, the “Wasatch Interest”) and a 50% tenancy-in-common interest in certain real estate and operating assets used by Wasatch (the “Project Interest”). The Project captures and converts biogas generated from food waste to produce pipeline quality renewable natural gas (RNG). The Project generates revenue from long-term contracted gas sales, tipping fees, and digestate (fertilizer) sales.

In connection with the acquisition, Fortistar Services 2 LLC and OPAL Fuels LLC entered into an amendment to its existing Administrative Services Agreement, pursuant to which OPAL Fuels will provide certain services to Wasatch RNG in exchange for certain agreed upon fees and expense reimbursements. These services include oversight of the plan to improve the operations and productivity of the Project. Either party may, at its sole election and on ninety (90) days advance written notice, terminate Company's provision of services to Wasatch Resource Recovery LLC ("Wasatch"), at which time the Management Fee and the Wasatch Remediation Fee shall also terminate.

Additionally, Wasatch RNG and OPAL Fuels entered into an Option Agreement, pursuant to which Wasatch RNG granted an option to OPAL Fuels to purchase the Alpro Interest. The exercise period of the option commenced upon closing of the acquisition and will terminate on the third anniversary of the closing of the acquisition, or ninety days following a change of control of OPAL Fuels. The exercise price of the option would be determined such that Wasatch RNG would earn an internal rate of return on its invested capital of 10% percent per year if the option is exercised in the first year,15% per year if exercised in the second year, and 20% per year if exercised in the third year.

Wasatch RNG is qualitatively determined to be a VIE due to their having insufficient equity investment at risk to finance their activities without additional subordinated financial support, and due to the fact that the holder of equity at risk in Wasatch RNG lacks the right to fully receive the expected residual returns. However, we are not the primary beneficiary of this VIE because we do not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. Accordingly, we do not consolidate the results of operations, financial condition and cash flows of Wasatch RNG in our consolidated financial statements.

During the three months ended March 31, 2025, Scott Contino served as Interim CFO. Pursuant to the Interim Services Agreement, the Company paid Fortistar an agreed hourly rate, such that the monthly fee did not exceed $50, on a cumulative basis.

The following table summarizes the various fees recorded under the service agreements with related parties which are included in "Selling, general, and administrative" expenses:

The following table presents the various balances for related parties included in our condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024:

7. Reportable Segments and Geographic Information

The Company is organized into three operating segments based on the characteristics of its renewable power generation, dispensing portfolio, production and sale of renewable gas, and nature of other products and services.

Our reportable segments disclosure is aligned with the information and internal reporting provided to our CODM. Our Co-CEOs, Adam Comora and Jonathan Maurer, jointly fulfill the role of the CODM. The CODM evaluates performance based on segment net income (loss). For all of the segments, the CODM uses segment net income (loss) in the annual budgeting and monthly forecasting process. The CODM considers budget-to-current forecast and prior forecast-to-current forecast variances for segment net income (loss) on a monthly basis for evaluating performance of each segment and making decisions about allocating capital and other resources to each segment.

Thethree operating segments are RNG Fuel, Fuel Station Services and Renewable Power. The Company has determined that each of thethree operating segments meets the characteristics of a reportable segment under U.S. GAAP.

The Corporate entity is not determined to be an operating segment but is discretely disclosed for purposes of reconciliation of the Company’s consolidated financial statements, and though not denoted as an operating segment, significant expenses are noted within the segment.

The following table reflect the financial data used to calculate each reportable segment’s net income (loss) and includes reconciliations to Opal’s consolidated revenue and consolidated net income (loss) for the three months ended March 31, 2025:

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Intersegment expenses are included within the amounts shown.

(2) Other segment items for each reportable segment includes:

•Fuel Station Services - gain on RNG dispensing, and gain on asset disposal

•Corporate - information technology expense, legal and professional advisor fees, and other overhead expenses

Geographic Information: The Company's assets and revenue generating activities are domiciled in the United States.

The following table reflects certain other financial data for the reportable segments for the three months ended March 31, 2025:

The following table reflect the financial data used to calculate each reportable segment’s net income (loss) and includes reconciliations to Opal’s consolidated revenue and consolidated net income (loss) for the three months ended March 31, 2024:

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Intersegment expenses are included within the amounts shown.

(2) Other segment items for each reportable segment includes:

•Fuel Station Services - gain on recognition of RINs

•Corporate - gain on mark-to-market for OPAL and Sponsor Earnout Awards, loss on extinguishment of debt, insurance other overhead expenses

Geographic Information: The Company's assets and revenue generating activities are domiciled in the United States.

The following table reflects certain other financial data for the reportable segments for the year ended December 31, 2024:

The tables below outlines the revenue from our two major customers, along with their respective percentages of revenue by each segment.

8. Redeemable non-controlling interests, Redeemable preferred non-controlling interests and Stockholders' Equity (Deficit)

Common stock

As of March 31, 2025, there are (i)30,607,664 shares of Class A common stock issued and 28,971,881 outstanding, (ii)71,500,000 shares of New OPAL Class B common stock issued and outstanding (shares of Class B common stock do not have any economic value except voting rights as described below), (iii)no shares of Class C common stock issued and outstanding and (iv)72,899,037 shares of Class D common stock (shares of Class D common stock do not have any economic value except voting rights as described below).

Redeemable preferred non-controlling interests

The following table summarizes the changes in the redeemable preferred non-controlling interests which represent Series A and Series A-1 preferred units outstanding at OPAL Fuels level from December 31, 2024 to March 31, 2025:

(1)On November 29, 2021, as part of an Exchange Agreement, the Company issued 300,000 Series A-1 preferred units to Hillman in return for Hillman’s non-controlling interest in four RNG project subsidiaries.

(2)On November 29, 2021, NextEra subscribed for up to 1,000,000 Series A preferred units, which were issuable (in whole or in increments) at the Company’s discretion prior to June 30, 2022. During the year ended December 31, 2023, the Company had drawn $100,000 and issued 1,000,000 Series A preferred units.

Redeemable non-controlling interests

At each balance sheet date, the Redeemable non-controlling interests are adjusted up to their redemption value if necessary, with an offset in stockholders' deficit. As of March 31, 2025, the Company recorded $276,719 to adjust the carrying value to their redemption value based on a five-day VWAP of $1.92 per share.

9. Net Loss Per Share

The following table summarizes the calculation of basic and diluted net loss per share:

The basic income (loss) per share for the three months ended March 31, 2025 does not include 1,635,783 shares in treasury and 716,650 shares that are issued and outstanding but are contingent on achieving earnout targets.

For the periods in which EPS is presented, the following securities were excluded from the computation of diluted EPS since their impact would have been antidilutive:

10. Income taxes

For the three months ended March 31, 2025, the Company recorded $8,037 income tax benefit, as a result of the sale to a third-party purchaser of certain transferable Investment Tax Credits that had been generated by the Company from its investments in the RNG segment. For the three months ended March 31, 2024, the Company recorded $0 income tax benefit. The effective tax rate for the three months ended March 31, 2025 and 2024 was 0%. The difference between the Company’s effective tax rate and the U.S. statutory tax rate of 21% was primarily due to a full valuation allowance recorded on the Company’s net U.S. deferred tax assets. The Company evaluates the realizability of the deferred tax assets on a quarterly basis and establishes a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset may not be realized.

11. Stock-based compensation

Performance Units

The performance units are contingent upon Company achieving certain Adjusted EBITDA and production targets. The grant date fair value of these awards was estimated using the closing share price of the Company's stock on the date of the grant and the compensation cost related to these awards is recognized based on the relative satisfaction of the performance condition as of the reporting date. The applicable performance period for performance units granted in 2025 is January 1, 2027 to December 31, 2027, and all such performance units are scheduled to vest on March 31, 2028 subject to achievement of certain performance criteria.

Restricted stock

The Company’s RSUs are convertible into shares of the Company’s Class A common stock upon vesting on a one-to-one basis, and generally contain time-based vesting conditions. The RSUs generally vest over the service period ofone tothree years.

A summary of the unvested shares as of March 31, 2025, and changes during the three months ended March 31, 2025, is presented below.

Parent Equity Awards

There wereno new residual equity interest grants during the three months ended March 31, 2025.

The stock-based compensation expense for the above stock awards under the 2022 Plan as well as Parent Equity Awards is included in the selling, general and administrative expenses:

12. Commitments and Contingencies

Letters of Credit

As of March 31, 2025 and December 31, 2024, the Company was required to maintain seventeen andnine standby letters of credit totaling $14,610 and $15,120, respectively, to support obligations of certain Company subsidiaries. These letters of credit were issued in favor of a lender, utilities, a governmental agency, and an independent system operator under PPA electrical interconnection agreements, and in place of a debt service reserve. There have beenno draws to date on these letters of credit.

Purchase Options

The Company hastwo contracts with customers to provide CNG for periods ofseven andten years, respectively. The customers have an option to terminate the contracts and purchase the Company's CNG Fueling Station at the customers' sites for a fixed amount that declines annually.

In July 2015, the Company entered into aten year fuel sales agreement with a customer that included the construction of a CNG Fueling Station owned and managed by the Company on the customer's premises. At the end of the contract term, the customer has an option to purchase the CNG Fueling Station for a fixed amount. The cost of the CNG Fueling Station was recorded to Property, plant, and equipment and is being depreciated over the contract term.

Lease commitments

The table below provides the total amount of lease payments on an undiscounted basis on our lease contracts as of March 31, 2025:

Guaranty

On September 13, 2024, OPAL Paragon entered into a tax credit purchasing agreement with Apollo Management Holdings, L.P., ("Buyer"), pursuant to which OPAL Paragon sold $11,096 investment tax credits to the Buyer for net proceeds of $8,906. If the tax credits are disallowed or recaptured from the Buyer, OPAL Paragon will be required to return the purchase price and pay any taxes, interests or penalties incurred.

In connection with the above transaction, the Company entered into an agreement that guarantees Opal Paragon's obligations up to $16,644. This amount decreases 20% annually forfive years.

On March 28, 2025, OPAL Paragon entered into a tax credit purchasing agreement with the Buyer, pursuant to which OPAL Paragon sold $9,801 investment tax credits to the Buyer for net proceeds of $8,037. If the tax credits are disallowed or recaptured from the Buyer, OPAL Paragon will be required to return the purchase price and pay any taxes, interests or penalties incurred.

In connection with the above transaction, the Company entered into an agreement that guarantees Opal Paragon's obligations up to $13,365. This amount decreases 20% annually forfive years.

Legal Matters

The Company is involved in various claims arising in the normal course of business. Management believes that the outcome of these claims will not have a material adverse effect on the Company's financial position, results of operations or cash flows.

Set forth below is information related to the Company’s material pending legal proceedings as of the date of this report, other than ordinary routine litigation incidental to the business.

Central Valley Project

In September 2021, an indirect subsidiary of the Company, MD Digester, LLC (“MD”), entered into a fixed-price Engineering, Procurement and Construction Contract (an “EPC Contract”) with VEC Partners, Inc. d/b/a CEI Builders (“CEI”) for the design and construction of a turn-key renewable natural gas production facility using dairy cow manure as feedstock in California’s Central Valley. In December 2021, a second indirect subsidiary of the Company, VS Digester, LLC (“VS”) entered into a nearly identical EPC Contract (collectively, the "EPC Contracts") with CEI for the design and construction of a second facility, also in California’s Central Valley. CEI’s performance under both of the EPC Contracts is fully bonded by licensed sureties.

CEI has submitted a series of change order requests seeking to increase the EPC Contract Price by approximately $14 million, per project, primarily due to: (1) modifications to CEI’s design drawings which are required to meet its contracted performance guaranties, and (2) a default by one of CEI’s major equipment manufacturers. The Company disputes the vast majority of the change order requests.

In January 2024, the Company filed a civil lawsuit captioned, MD Digester, LLC. et. al. vs. VEC Partners, Inc. et. al.; with the California Superior Court, County of San Joaquin; Action No. STK- CV-UCC-2024-0000185 and commenced a related arbitration proceeding in order to obtain a formal determination on the claims; AAA Case No. 01-24-0000-0775. The Superior Court Action has been stayed, pending the conclusion of the arbitration. In the meantime, the AAA has empaneled three experienced arbitrators and has set the hearing date for the matter, currently schedule in May 2026.

The EPC Agreement requires that CEI, continue working during the course of the litigation and related arbitration proceedings; however, CEI effectively stopped working. Between May and August 2024, MD issued a series of Notices of Default and Demands to Cure to CEI. CEI failed to cure, and on July 30, 2024, MD terminated CEI for default. MD notified CEI’s performance bond surety, Atlantic Specialty Insurance Company of the termination and demanded that it perform under the bond. Atlantic has denied the claim.

On July 11, 2024, VS issued a Notice of Default and Demand to Cure, advising CEI of its defaults and giving it an opportunity to cure. CEI failed to do so, and on August 27, 2024, VS terminated CEI for default. VS has notified CEI’s bond surety, also Atlantic, of the second termination and demanded that it perform under the performance bond. The surety has denied the claim.

As a result of CEI’s default and Atlantic’s denial of the claims, MD and VS have amended their claims in the AAA arbitration to include breach of contract claims against CEI and breach of performance bond claims against Atlantic (who was formally joined into the arbitration on November 20, 2024) in the AAA Arbitration with CEI.

CEI has since recorded mechanic’s liens against each of the projects for $4,900 (MD) and $2,000 (VS), and recently filed actions with the Stanislaus and San Joaquin County Superior Courts, respectively, to enforce their liens. It is expected that these claims will be stayed and consolidated with the pending arbitration proceeding.

In addition to the above-referenced action and arbitration, several of CEI’s subcontractors have recorded mechanic’s liens against the MD and VS projects, which the Company is obligated to defend and indemnify the dairy owners from and against. Several of liens were untimely and have been released.

The Company believes its claims against CEI (and the surety where bond claims are denied) have substantial merit, and intends to prosecute the claims vigorously. However, due to the incipient stage of the litigation and related arbitration, the recency of the termination, and the ongoing status of the proceedings and discussions with the bond surety, as well as the uncertainties involved in all litigation and arbitration, the Company is unable at this time to assess the likely outcome of the litigation and related arbitration, the timing of its resolution, or its ultimate impact, if any, on the Central Valley projects or the Company's business, financial condition or results of operations.

Former Development Partner/Construction Manager

In March 2024, the Company filed an action in the Orange County Superior Court (Case No. 30- 2024-01415510-CU-BC-CXC) against its former development partner and construction manager, Sierra Renewable Organics Management, LLC, as well as its principal (Ethan Werner) and affiliated engineering firm (CH Four Biogas) for Breach of Contract, Indemnity, Declaratory Relief, Intentional Misrepresentation and Negligent Misrepresentation relating to the design and development of the Projects. The case is not yet at issue, so no answer or cross claims have been filed yet, and no discovery has been conducted.

13. Subsequent Events

Class D Common Stock Conversion

On April 23, 2025, our ultimate controlling shareholder, Fortistar LLC (“Fortistar”), through its subsidiary OPAL Holdco LLC, exchanged 50 million shares of Class D common stock of the Company held by it, each of which is entitled tofive votes per share on all matters on which stockholders generally are entitled to vote, for an equal number of shares of newly issued Class B common stock of the Company, each of which is entitled toone vote on such matters. This transaction had no effect on the economic interest in the Company held by Fortistar.

On May 9, 2025, a wholly-owned indirect subsidiary of the Company, entered into a limited liability company agreement (the “LLC Agreement”) with a leading environmental solutions company (the "Counterparty"), establishing the terms and conditions of governance and operation of a joint venture (the “Joint Venture”). The purpose of the Joint Venture,70% of which is owned indirectly by the Company and 30% of which is owned by the Counterparty (together, the "Shares"), is to develop, construct, own and operate a facility (the “RNG Facility”) to produce RNG using biogas generated by a certain landfill.

The LLC Agreement governs the terms and conditions of capital contributions to be made by the Joint Venture members to fund the development, construction and operations of the RNG Facility. The LLC Agreement requires members of the Joint Venture to contribute their respective Shares of such capital requirements. The LLC Agreement contemplates that the RNG Facility will be located on a landfill owned by an affiliate of the Counterparty, with a nameplate capacity designed for approximately 5,500 scfm of landfill gas. The representations, warranties and covenants contained in the LLC Agreement were made solely for the benefit of the parties to the LLC Agreement and may be subject to limitations agreed upon by the contracting parties.

The LLC Agreement also provides for the Joint Venture to enter into an agreement with an affiliate of the Counterparty for the contractual rights to purchase landfill gas for the purpose of producing RNG at the RNG Facility (the “RNG Gas Rights Agreement”), as well as the site lease for the RNG Facility (the “RNG Site Lease”). The RNG Gas Rights Agreement and RNG Site Lease expire twenty (20) years from the date of commencement of operations of the RNG Facility. The existing gas rights agreement between an indirect subsidiary of the Company and an affiliate of the Counterparty (which relate to renewable electricity facilities) will terminate in accordance with the provisions of the RNG Gas Rights Agreement.

Further, the LLC Agreement contemplates that the Joint Venture will enter into a management services agreement (the “MSA”), an operations and maintenance agreement (the “O&M Agreement”), and an RNG marketing agreement (the "RNG Marketing Agreement") with certain wholly-owned, indirect subsidiaries of the Company. The MSA will establish terms and conditions for the day-to-day administration of the projects, including responsibility for managing the development and overseeing the construction of the RNG Facility. The O&M Agreement will establish the terms and conditions for operating and maintaining the RNG Facility once construction is completed. The RNG Marketing Agreement will provide for the acquisition, marketing and sale of the environmental attributes associated with RNG produced by the RNG Facility. The definitive terms and conditions of these agreements are not yet established and, accordingly, there is no guarantee that the Joint Venture will enter into each of these agreements.

This summary of the terms of the LLC Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the LLC Agreement, a copy of which is filed as Exhibit 10.6 hereto.