OPAL Fuels Inc.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). The Company’sunaudited condensed consolidated financial statements include the assets and liabilities of these subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

The Company consolidates all entities in which it holds a majority voting interest, as well as variable interest entities ("VIEs") for which it is determined to be the primary beneficiary. The Company's variable interests in each of the VIEs arise primarily from ownership of membership interests, construction commitments, the provision of operating and maintenance services, and the provision of environmental credit processing services to VIEs. The Company reassesses its primary beneficiary status on an ongoing basis.

Noncontrolling interests related to the Company’s VIEs are presented separately from stockholders' deficit on the condensed consolidated balance sheets and are reported as non-redeemable non-controlling interests within the condensed consolidated statements of changes in redeemable non-controlling interest, redeemable preferred non-controlling interest and stockholders' deficit.

Certain amounts in the prior‑period financial statements have been reclassified to conform to the current‑period presentation. These reclassifications had no impact on previously reported total assets, total liabilities, stockholders' deficit, net loss, or condensed consolidated statements of cash flows.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The significant estimates and assumptions of the Company include the residual value of the useful lives of property, plant and equipment, the fair value of long-lived assets, asset retirement obligations, percentage completion for revenue recognition, incremental borrowing rate for calculating the right-of-use assets and lease liabilities, and the fair value of the reporting units of goodwill.

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures(Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional, disaggregated disclosure about certain income statement expense line items. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The amendments are to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact that this guidance will have on the disclosures within our condensed consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities(Topic 832). This ASU establishes a unified accounting model for business entities when recognizing, measuring, and presenting government grants. The ASU categorizes grants as either related to an asset or related to income. A grant related to income is recognized in earnings in a systematic and rational manner over the periods in which the entity recognizes the related expenses for which the grant is intended to compensate. Presentation of the grant on the income statement can be either as a component of other income or as a deduction from the related expenses. The standard is effective for annual periods beginning after December 15, 2028 and interim periods within those annual periods. However, the ASU permits early adoption. The Company is considering early adopting the provisions of ASU 2025-10 and is still assessing the impact on its financial statements, including the presentation of its Section 45Z production tax credits.

Parts Inventory

Parts inventory, also referred to as supplies inventory, consists of shop spare parts inventory and construction site parts inventory. Parts inventory is stated at historical cost, which is determined using the average cost method, and is recorded at the lower of cost or net realizable value. An annual review of inventory is performed to identify obsolete items.

Environmental Credits Held for Sale

For the three months ended March 31, 2026 and 2025, the Company recorded $2,210 and $5,847 as part of Cost of sales - Fuel Station Services in the condensed consolidated statements of operations to adjust environmental credits held for sale to lower of cost and net realizable value.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist primarily of accrued capital expenditures, accrued payroll and related benefits, accrued environmental credit rebates, and other miscellaneous accrued operating expenses. Accrued environmental credit rebates represent the Company's liabilities for dispensing services provided by third-party vendors.

Contract Balances

Contract assets consist primarily of costs and estimated earnings in excess of billings and retainage receivables. Costs and estimated earnings in excess of billings represent unbilled amounts earned and reimbursable under construction contracts and arise when revenues have been recognized but amounts are conditional and have yet to be billed under the terms of the contract. Amounts become billable in accordance with contract terms, generally based on progress toward completion and the achievement of contractual milestones. Cost and estimated earnings in excess of billings amounted to $4,920 and $6,489 as of March 31, 2026 and December 31, 2025, respectively.

Contract liabilities consist of billings in excess of costs and estimated earnings and other deferred construction revenue. Billings in excess of costs and estimated earnings represent amounts billed to or collected from customers in advance of the satisfaction of the related performance obligations. These amounts are recognized as revenue as the Company satisfies its performance obligations over the remaining contract term.

During the three months ended March 31, 2026, the Company recognized revenue of $1,353 that was included in contract liabilities at December 31, 2025. 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.

Remaining Performance Obligations

The Company's remaining performance obligations represent the unrecognized revenue value of its contract commitments. The Company's remaining performance obligations may significantly vary each reporting period based on the timing of major new contract commitments. As of March 31, 2026, the Company had a remaining performance obligation of $36,902 of which $26,052 is expected to be recognized within the next 12 months.

Significant Customers, Vendors and Concentration of Credit Risk

At March 31, 2026, one customer accounted for 36% of accounts receivable. At December 31, 2025, four customers accounted for 63% of accounts receivable.

During the three months ended March 31, 2026, there were no concentrations in the volume of business transacted with any individual vendor. During the three months ended March 31, 2025, there was one supplier that accounted for approximately 19.3% of the Company’s total purchases.

Refer to Note 7. Reportable Segments and Geographic Information for details on revenue concentration.

2. INVESTMENTS IN OTHER ENTITIES AND VARIABLE INTEREST ENTITIES

The Company’s VIEs consist of landfill or dairy manure RNG facilities that are either under construction or in operation. OPAL’s share of design capacity for these facilities ranges from approximately 43,750 MMBtu to 1,327,140 MMBtu per year. These entities are financed through the Opal Term Loan, the Sunoma Loan, or the Paragon Loan. The Paragon Loan was obtained directly by the joint venture and is not consolidated.

VIEs for which the Company is not the primary beneficiary are accounted for under the equity method. As of March 31, 2026, Sunoma, Central Valley and CMS were consolidated VIEs.

The condensed consolidated balance sheets summarize the major consolidated balance sheet items for consolidated VIEs as of March 31, 2026 and December 31, 2025. The information is presented on an aggregate basis based on similar risk and reward characteristics and the nature of our involvement with the VIEs. All VIEs are RNG facilities reported under the RNG Fuel Supply segment, and the Company’s interests are primarily equity-based.

The following table presents the Company's ownership interests and carrying values of Investment in Other Entities:

As of March 31, 2026 and December 31, 2025, the carrying value of the Company’s equity method investments exceeded its proportionate share of the underlying net assets of its investees by $120,464 and $122,165, respectively. This basis difference primarily relates to the gain recognized upon the deconsolidation of certain RNG project entities, which increased the Company’s investment basis. The Company determined that this basis difference is attributable to construction in progress and will be amortized over the related assets’ estimated useful life of 20 years beginning when the assets are placed in service. The amortization of this basis difference, which reduces equity in earnings, was $1,700 and $1,700 and reflected in loss from equity method investments in the condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025, respectively.

The following table summarizes the loss from equity method investments:

(1)Net loss from equity method investments represents the Company's portion of the net loss 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:

The Company’s maximum exposure to loss is limited to its equity investment in the unconsolidated entities.

3. LOANS

The following table summarizes the borrowings under the various loan facilities as of March 31, 2026 and December 31, 2025:

As of March 31, 2026, principal maturities of debt are expected as follows, excluding any undrawn debt facilities:

OPAL Term Loan

During the three months ended March 31, 2026, the Company drew $128,382 under its term loan facility pursuant to its existing credit agreement. A portion of the proceeds from the borrowing was used to repay $20,000 outstanding under the revolving loan facility. As of March 31, 2026, the Company had utilized $10,747 of availability under the revolver loan to provide for the issuance of letters of credit to support the operations of OPAL Fuels Intermediate HoldCo LLC (the “Borrower”) and certain subsidiaries of the Borrower (the “Guarantors”).

During the three months ended March 31, 2026, the Company commenced principal payments under its credit agreement. In addition, beginning in the first quarter of 2026, the Company is subject to a quarterly cash sweep pursuant to which, withintwo business days after the required delivery of quarterly financial statements, a percentage of distributable cash is required to be applied to repay outstanding borrowings, with the applicable percentage determined based on the Company’s consolidated debt to cash flow ratio. If the required financial statements are not delivered within the specified timeframe,100% of distributable cash is required to be applied to the cash sweep.

Sunoma Loan

The Company utilized $927 for the issuance of letters of credit to support the operations.

4. LEASES

Lessor contracts

Sales-Type Leases

During the three months ended March 31, 2026, the Company entered into a new sales-type lease. Upon commencement, the carrying value of the underlying assets was removed from the balance sheet and a net investment in lease was recognized, measured at the present value of future lease payments discounted at the rate implicit in the lease. At that time, $2,246 was recognized within fuel station services revenues and $1,838 was recorded in cost of sales - fuel station services.

As of March 31, 2026, a maturity analysis of lease receivables reflecting undiscounted cash flows to be received on an annual basis are as follows:

5. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Commodity Swap Contracts

The following table summarizes the effect of commodity swaps on the condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025:

The following table summarizes the derivative assets and liabilities related to commodity swaps as of March 31, 2026 and December 31, 2025:

There were no amounts offset in the condensed consolidated balance sheets as of the period-end dates. In addition, there were no collateral balances with counterparties outstanding as of the period-end dates.

Warrants

During the three months ended March 31, 2026, the Company issued the Warrants with an initial estimated fair value of $2,760. Changes in fair value of $710 were recognized in other (expense) income, net, resulting in an estimated fair value of $3,470 as of March 31, 2026. The key inputs into the Black-Scholes option pricing model for the Warrants were as follows for the relevant periods:

Recurring Fair Value Measurements

There were no transfers of assets between Level 1, Level 2, or Level 3 of the fair value hierarchy as of March 31, 2026 and December 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, 2026 and December 31, 2025, set forth by level, within the fair value hierarchy:

6. RELATED PARTIES

Related parties are represented by Fortistar LLC ("Fortistar") and other affiliates, subsidiaries and entities under common control with Fortistar or NextEra Energy Marketing, LLC (“NextEra”).

The following table summarizes revenues recorded from related parties:

(1)Represents RIN and LCFS sales to NextEra. Includes revenues of $5,674 and $5,017 recognized under the Green Gas Contract, which were recorded within RNG fuel revenues for the three months ended March 31, 2026 and 2025, respectively.

(2)Represents revenue earned under ISDA and REC sales agreements with NextEra.

(3)Represents environmental processing fees earned under agreements with equity method investments, related to the generation and marketing of RINs and LCFS.

(4)Represents management fees earned under an agreement with Fortistar.

The following table summarizes the various fees recorded under the service agreements with related parties which are included in selling, general and administrative within the Company's condensed consolidated statements of operations:

The following table presents the various balances for related parties included in the Company's condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025:

7. REPORTABLE SEGMENTS AND GEOGRAPHIC INFORMATION

The Company is organized into three operating segments.

During the fourth quarter of 2025, the Company changed the presentation of information reviewed by the Chief Operating Decision Makers (“CODM”) to allocate certain Corporate general and administrative costs, including consulting, insurance, and payroll expenses, to the related reportable segments. Segment information has been retrospectively revised to reflect this change. All the assets and revenue-generating activities, aside from sales‑type lease in Canada, were domiciled in the United States for the three months ended March 31, 2026 and 2025. Transactions between reportable segments are accounted for using market‑based pricing. Intersegment revenues and expenses are eliminated in consolidation.

During the fourth quarter of 2025, the Company changed the presentation of information reviewed by the CODM to allocate certain Corporate general and administrative costs, including consulting, insurance, and payroll expenses, to the related reportable segments. Segment information has been retrospectively revised to reflect this change. For the three months ended March 31, 2025, amounts reallocated from Corporate to RNG Fuel, Fuel Station Services, and Renewable Power were $2,292, $336, and $962, respectively.

The following table reflects the financial data used to calculate each reportable segment’s income (loss) and includes reconciliations to the Company's consolidated revenue and consolidated net income for the three months ended March 31, 2026:

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown in the line Cost of sales and no intersegment profit was recognized.

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

•RNG - payroll, consulting, insurance and other expenses

•Fuel Station Services - gain on RNG dispensing and payroll

•Renewable Power - payroll, consulting, insurance and other expenses

The following table reflects certain other financial data for the reportable segments as of March 31, 2026:

For the three months ended March 31, 2026, the Company made the following cash payments for capital expenditures:

The following table reflects the financial data used to calculate each reportable segment’s income (loss) and includes reconciliations to the Company's consolidated revenue and consolidated net (loss) income 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 CODM. Intersegment expenses are included within the amounts shown in line Cost of sales and no intersegment profit was recognized.

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

•RNG - payroll, consulting, insurance and other expenses

•Fuel Station Services - payroll expenses, gain on RNG dispensing and asset impairment

•Renewable Power - payroll, consulting, insurance and other expenses, and asset impairment

The following table reflects certain other financial data for the reportable segments for as of December 31, 2025:

For the three months ended March 31, 2025, the Company made the following cash payments for capital expenditures:

The following table reflects revenues from external customers by type for the reportable segments:

(1)Revenues from RNG marketing in the Fuel Station Services segment relate to revenues earned from Environmental Attribute generation and monetization services.

(2)Fuel Station Services lease revenue relates to revenue from fuel purchasing agreements where we determined that we transferred the right to control the use of the station to the purchaser. Includes sales-type lease revenues of $2,246 and $— respectively, for the for the three months ended March 31, 2026 and 2025, from customers domiciled outside of the United States. All remaining lease revenue relates to operating leases.

(3)Includes revenues of $— and $3,617 respectively, for the for the three months ended March 31, 2026 and 2025, from customers domiciled outside of the United States.

(4)Renewable Power operating lease revenue relates to revenue from power purchase agreements where we determined that we transferred the right to control the use of the power plant to the purchaser.

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

The tables below outline the revenue from customers that comprise 10% or more of the Company's consolidated revenue, along with their respective percentages of revenue by each segment.

8. REDEEMABLE NON-CONTROLLING INTEREST, REDEEMABLE PREFERRED NON-CONTROLLING INTEREST AND STOCKHOLDERS' EQUITY

Common stock

As of March 31, 2026, the Company is authorized to issue 340,000,000 shares of Class A common stock,160,000,000 shares of Class B common stock,160,000,000 shares of Class C common stock, and 160,000,000 shares of Class D common stock.

Shares of Class B and Class D common stock do not have any economic value except voting rights as described below.

Redeemable Preferred Non-controlling Interests

Upon completion of the Business Combination, the Company effectively assumed the Series A‑1 and Series A preferred units previously issued by OPAL Fuels LLC to Hillman and NextEra, respectively. Following the transaction, these preferred units were presented as redeemable preferred non-controlling interests in the Company’s condensed consolidated financial statements.

On March 6, 2026, OPAL Fuels LLC (“Opal Fuels”), the Company’s primary operating consolidated subsidiary, entered into a subscription agreement (“Subscription Agreement”) with Preferred Fuels LLC, (“Preferred Fuels” or “Investor”), an entity under common control with the Company. Pursuant to the Subscription Agreement Preferred Fuels committed to purchase up to $180,000 (the “Offering”) of Series A preferred units of Opal Fuels in multiple closings. At the initial closing on March 6, 2026, Preferred Fuels purchased 1,200,000 preferred units for aggregate proceeds of $120,000. OPAL Fuels may, in its sole discretion, require Preferred Fuels to fund up to an additional $60,000 (or “Undrawn Commitment”) withinone year of the initial closing (“or Availability Period”), subject to the terms of the Subscription Agreement. Additionally, pursuant to the Subscription Agreement, the Investor also has a right of first offer to purchase up to an additional 700,000 Units for an aggregate purchase price of up to $70,000 in the Offering in the event that OPAL Fuels intends to sell any additional units prior to thetwo (2) year anniversary of the initial closing. Opal Fuels used the proceeds received from the issuance of the Series A preferred units on March 6, 2026 to redeem all of the previously issued and outstanding Series A preferred units.

In connection with the initial closing on March 6, 2026, OPAL Fuels Inc. issued to Preferred Fuels warrants (“Warrants”) to purchase up to 2,160,000 shares of Class A common stock (the “Warrant Shares”) at an exercise price per share of $2.67, subject to customary anti-dilution adjustments. The Warrants expire on March 6, 2034. A holder of the Warrants shall not have the right to exercise the Warrants without prior approval by the Company’s Board of Directors to the extent that after giving effect to such exercise, such person would beneficially own in excess of 19.9% of the Company’s outstanding common stock immediately after giving effect to such exercise. Up to 720,000 shares of the Warrant Shares are forfeitable if Preferred Fuels fails to fund issuance of the remaining Series A preferred units during the Availability Period provided Opal Fuels requested such funding. As of March 31, 2026, no drawdown request has been made.

Additionally, up to 840,000 shares issuable on a pro rata basis upon future purchases by Preferred Fuels of up to an additional 700,000 Series A preferred units (up to $70,000) withintwo years of the initial closing pursuant to its right of first offer. No Subsequent Warrant Shares have been issued as of March 31, 2026.

The Company recorded Series A preferred units as redeemable noncontrolling interest in its condensed consolidated financial statements at the amount of proceeds received, less the fair value of the Warrants of $2,760 and directly attributable issuance costs of $3,330. The Series A preferred units are subsequently remeasured to their redemption value as of each reporting date as if such reporting date were the redemption date. The Company concluded that the Warrants are not indexed to the Company’s equity. The Warrants are accounted for as liabilities in the Company’s condensed consolidated financial statements, within other long-term liabilities with changes in fair value recognized in other (expense) income, net.

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, 2025 to March 31, 2026:

Terms of Redeemable Preferred Units

The Series A-1 preferred units held by Hillman RNG Investments LLC (Hillman), Series A preferred units previously held by NextEra affiliated entity and the new Series A preferred units (collectively the “Preferred Units”) held by Preferred Fuels, have substantially the same terms and features (unless specified otherwise) which are listed below:

Voting: The Series A-1 preferred units do not have any voting rights. The Series A preferred units carry no voting rights except as required by Delaware law or as provided under certain protective covenants in the Subscription Agreement.

Dividends: The Series A-1 preferred units are entitled to receive dividends at a rate of 8% per annum. The Series A preferred units are entitled to preferred quarterly distributions at a rate of 12% per annum (“Preferred Coupon”), compounding quarterly. Dividends on each series begin accruing from the issuance date, are mandatory and cumulative. OPAL Fuels may elect to pay up to 2% per annum of the 12% Series A Preferred Coupon in kind through the issuance of additional Series A preferred units.

Liquidation preference: In the event of a liquidation of OPAL Fuels, each holder of Series A and Series A-1 units is entitled to receive, on a pro rata basis, the original issue price of $100 per unit plus any accrued and unpaid dividends, out of assets available for distribution after payment of debt, liabilities, and liquidation expenses.

Redemption and Conversion: OPAL Fuels may redeem each series of Preferred Units at any time at the original issue price of $100 per unit plus accrued and unpaid dividends. Under the Series A preferred units, the Company was required to respond within 90 days from the date of the holder’s redemption notice in accordance with the applicable terms.

Preferred Fuels may require redemption upon (i) a change of control, (ii) an uncured material debt default or breach of protective covenants continuing for 60 days, or (iii) at any time on or after the fifth anniversary of the initial closing (March 6, 2031). In the event OPAL Fuels fails to redeem the Series A preferred units when requested: (1) the Preferred Coupon rate increases by an additional 0.50% per quarter, subject to a maximum of 4.00% per annum above the then-applicable rate, with all accrued distributions compounding quarterly at the Preferred Coupon plus the penalty rate; and (2) any residual cash flow of OPAL Fuels and its subsidiaries after operating expenses and capital expenditures must be applied to redeem the Series A preferred units at the applicable Redemption Price until the failure is cured. The applicable Redemption Price is (i) a price equal to at least 1.15 times the original issue price (inclusive of all fees paid and accrued dividends) on or prior to the first anniversary of the initial closing, (ii)102% of the original issue price (exclusive of fees) after the first but on or prior to the second anniversary, and (iii) the original issue price plus accrued and unpaid cash dividends thereafter. Preferred Fuels also has the right, but not the obligation, to appoint a single director to the Board of Directors of OPAL Fuels Inc. if the redemption failure is not cured within 90 days.

9. NET LOSS PER SHARE

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

The basic loss per share for the three months ended March 31, 2026 and 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.

Additionally, the diluted loss per share of Class A common stock for the three months ended March 31, 2026 and 2025 does not include redeemable preferred non-controlling interests because the substantive contingency for conversion has not been met as of March 31, 2026. It also excludes redeemable non-controlling interests for the three months ended March 31, 2026 and 2025.

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

(1) All unvested PSUs are contingent on achieving performance targets

(2) Includes 720,000 warrants that are subject to forfeiture contingent on obtaining additional funding

10. INCOME TAXES

For the three months ended March 31, 2026, the Company recorded $5,709 income tax benefit, respectively, as a result of the generation of 45z credits. The Company also sold ITCs to the buyer for net proceeds of $9,563.

For the three months ended March 31, 2025, the Company recorded $8,037 income tax benefit.

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

The Company adopted 2022 Omnibus Equity Incentive Plan (the "2022 Plan") in 2022 which was approved by our stockholders on July 21, 2022. The purposes of the 2022 Plan are to (i) provide an additional incentive to selected employees, directors, and independent contractors of the Company or its Affiliates whose contributions are essential to the growth and success of the Company, (ii) strengthen the commitment of such individuals to the Company and its Affiliates, (iii) motivate those individuals to faithfully and diligently perform their responsibilities and (iv) attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company. The 2022 Plan allows for granting of stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. The Company registered 19,811,726 shares of Class A common stock that can be issued under this Plan.

Stock Options

Stock options generally vest over three years and expireten years from the date of grant.

The fair value of the stock options granted in the three months ended March 31, 2026 was estimated at $1.76 per option using the Black-Scholes model. The valuation was based on the following assumptions: share price of $2.46, exercise price of $2.52, expiration of 10 years, annual risk-free interest rate of 4.30% and expected volatility of 59%.

Stock option activity during the three months ended March 31, 2026 consisted of the following (in thousands, except for share and per share data):

The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2026 and 2025 was $1.76 and $1.44 per share, respectively.

The aggregate intrinsic value of the outstanding stock options is $1,107 and $922 as of March 31, 2026 and December 31, 2025, respectively. The aggregate intrinsic value of the vested and exercisable stock options iszero as of March 31, 2026 and December 31, 2025.

Performance Units

The applicable performance period for the units granted in 2026 is from January 1, 2026 to December 31, 2028, with all such units scheduled to vest on March 31, 2029, subject to the achievement of certain performance criteria. The applicable performance period for the units granted in 2025 is from January 1, 2025 to December 31, 2027, with all such units scheduled to vest on March 31, 2028, subject to the achievement of certain performance criteria.

Restricted Stock Units

A summary of the unvested shares as of March 31, 2026, and changes during the three months ended March 31, 2026, is presented below.

The total fair value of shares vested during the three months ended March 31, 2026 and 2025, was $6,015 and $4,241 respectively.

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:

Stock-based compensation expense related to unvested awards yet to be recognized as of March 31, 2026 totaled $18,514 and is expected to be recognized, on a weighted average basis, over 2.30 years.

12. COMMITMENTS AND CONTINGENCIES

Letters of Credit

As of March 31, 2026 and December 31, 2025, the Company was required to maintain standby letters of credit totaling $11,675 and $15,504, respectively, to support obligations of certain Company's 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.

Lease Commitments

The table below provides the total amount of lease payments on an undiscounted basis on our lease contracts as of March 31, 2026:

Guaranty

On March 30, 2026, Land2Gas LLC, a 50%-owned equity method investee, sold $22,926 of investment tax credits to Athene Annuity and Life Company and Athene Annuity Re II Ltd. for net proceeds of $21,550, of which the Company's 50% share was $10,775. Land2Gas LLC is obligated to return the purchase price and reimburse any taxes, interest, and penalties if the credits are disallowed or recaptured.

The Company and an unaffiliated third party (together, the "Guarantors") each guarantee 50% of these obligations and have entered into a cross-indemnification agreement allocating losses attributable to each party's respective causation. The guarantees include credit support provisions whereby, upon specified credit-related events — including either Guarantor's net worth falling below defined thresholds — the applicable Guarantor may be required to provide letters of credit or cash collateral to the buyers.

The Company's maximum potential exposure represents its 50% proportionate share of the purchase price repayment and related tax indemnification obligations. The Company evaluated these arrangements under ASC 460 and ASC 450 and determined that no material liability was required to be recognized as of March 31, 2026.

Legal Matters

Direct Contractor Claims

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") 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 $14,000, 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; American Arbitration Association ("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 scheduled in May 2027.

The EPC Agreement requires that CEI, continue working during the course of the litigation and related arbitration proceedings; however, CEI effectively stopped working. On June 26, 2024, MD issued a Notice of Default and Demand to Cure to CEI. CEI failed to do so, 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.

Similarly, 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 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 4,948 (MD) and 1,984 (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.

The AAA proceeding is scheduled for evidentiary hearing from May 3 through June 7, 2027. Based upon the deposition testimony and the expert reports that were exchanged on February 23, 2026, the Company reasonably believes that it will demonstrate that the terminations were justified and for cause. Issues related to damages, i.e., the cost to complete the projects, are evolving and it is premature to offer an opinion on the strength of this component of the case.

Subcontractor Lien Claims

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 for 3,141, which the Company is obligated to defend and indemnify the dairy owners from and against. Several of liens were untimely and have been released voluntarily by the claimants, others were released through the recording of release bonds by Company.

The NWP Industries, L.P. ("NWP") and Argo Sales ("Argo") claims have been settled and will be dismissed as to MD and VS when the settlement payments have been fully funded.

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 defendants have recently filed an answer and certain cross claims. Discovery in the case is now underway.