UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~September~~June 30, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-35327

GENIE ENERGY LTD.

(Exact Name of Registrant as Specified in its Charter)

Delaware		45-2069276
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

520 Broad Street, Newark, New Jersey		07102
(Address of principal executive offices)		(Zip Code)

(973) 438-3500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b)-2 of the Exchange Act:

Title of each Class	Trading Symbol	Name of exchange of which registered
Class B common stock, par value $0.01 per share	GNE	New York Stock Exchange
Series 2012-A Preferred stock, par value $0.01 per share	GNE-PRA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of ~~November 8, 2021~~August 5, 2022, the registrant had the following shares outstanding:

Class A common stock, $0.01 par value:	1,574,326 shares
Class B common stock, $0.01 par value:	~~24,636,113~~24,313,113 shares (excluding ~~1,982,331~~2,689,645 treasury shares)

GENIE ENERGY LTD.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

GENIE ENERGY LTD.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
	(Unaudited)			(Note 1)			(Unaudited)			(Note 1)
Assets
Current assets:
Cash and cash equivalents	$	33,983		$	36,913		$	61,093		$	95,492
Restricted cash—short-term		6,528			6,271			5,658			6,657
Marketable equity securities		8,048			5,089			490			1,336
Trade accounts receivable, net of allowance for doubtful accounts of $16,465 and $8,793 at September 30, 2021 and December 31, 2020, respectively		58,593			60,778
Inventories		23,648			16,930
Trade accounts receivable, net of allowance for doubtful accounts of $4,480 and $6,365 at June 30, 2022 and December 31, 2021, respectively								43,881			52,357
Inventory								16,043			17,720
Prepaid expenses		5,767			4,633			6,843			4,994
Other current assets		15,924			3,206			48,392			21,789
Current assets of discontinued operations								18,680			0—
Total current assets		152,491			133,820			201,080			200,345
Property and equipment, net		281			259			347			297
Goodwill		25,627			25,929			11,617			11,755
Other intangibles, net		3,768			11,645			3,408			3,648
Deferred income tax assets, net		2,005			4,882			4,581			4,259
Other assets		9,448			10,804			18,202			9,161
Total assets	$	193,620		$	187,339		$	239,235		$	229,465
Liabilities and equity
Current liabilities:
Loan payable	$	0—		$	1,453
Trade accounts payable		39,760			43,005			26,188			33,554
Accrued expenses		51,339			42,762			33,771			39,523
Contract liability		8,317			5,609
Income taxes payable		6,435			1,893			10,903			9,792
Due to IDT Corporation, net		109			257			148			532
Other current liabilities		2,132			2,494			4,311			2,125
Current liabilities of discontinued operations								0—			30,766
Total current liabilities		108,092			97,473			75,321			116,292
Other liabilities		2,965			3,787			10,660			2,384
Total liabilities		111,057			101,260			85,981			118,676
Commitments and contingencies		0—			0—			0—			0—
Equity:
Genie Energy Ltd. stockholders’ equity:
Preferred stock, $0.01 par value; authorized shares—10,000:
Series 2012-A, designated shares—8,750; at liquidation preference, consisting of 2,322 shares issued and outstanding at September 30, 2021 and December 31, 2020		19,743			19,743
Class A common stock, $0.01 par value; authorized shares—3,500; 1,574 shares issued and outstanding at September 30, 2021 and December 31, 2020		16			16
Class B common stock, $0.01 par value; authorized shares—200,000; 26,582 and 25,966 shares issued and 24,600 and 24,646 shares outstanding at September 30, 2021 and December 31, 2020, respectively		266			260
Series 2012-A, designated shares—8,750; at liquidation preference, consisting of 2,087 and 2,322 shares issued and outstanding at June 30, 2022 and December 31, 2021								17,743			19,743
Class A common stock, $0.01 par value; authorized shares—35,000; 1,574 shares issued and outstanding at June 30, 2022 and December 31, 2021								16			16
Class B common stock, $0.01 par value; authorized shares—200,000; 26,712 and 26,620 shares issued and 24,055 and 24,615 shares outstanding at June 30, 2022 and December 31, 2021, respectively								267			266
Additional paid-in capital		141,787			140,746			144,818			143,249
Treasury stock, at cost, consisting of 1,982 and 1,320 shares of Class B common stock at September 30, 2021 and December 31, 2020, respectively		(13,922	)		(9,839	)
Treasury stock, at cost, consisting of 2,657 and 2,005 shares of Class B common stock at June 30, 2022 and December 31, 2021								(18,519	)		(14,034	)
Accumulated other comprehensive income		2,994			3,827			1,123			3,160
Accumulated deficit		(56,673	)		(56,658	)
Retained earnings (accumulated deficit)								18,361			(29,115	)
Total Genie Energy Ltd. stockholders’ equity		94,211			98,095			163,809			123,285
Noncontrolling interests		(11,648	)		(12,016	)		(10,555	)		(12,496	)
Total equity		82,563			86,079			153,254			110,789
Total liabilities and equity	$	193,620		$	187,339		$	239,235		$	229,465

See accompanying notes to consolidated financial statements.

Preferred

Class A

Class B

Additional

Accumulated Other

Stock

Common Stock

Common Stock

Paid-In

Treasury

Comprehensive

Accumulated

Noncontrolling

Total

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Stock

Income

Deficit

Interests

Equity

BALANCE AT MARCH 31, 2021
2,322
$ 19,743

1,574
$ 16

25,952
$ 261
$ 141,496
$ (9,839 ) $ 3,255
$ (59,014 ) $ (12,494 ) $ 83,424
Dividends on preferred stock ($ 0.1594 per share)
—

0—

—

0—

—

0—

0—

0—

0—

(370 )
0—

(370 )
Stock-based compensation
0—

0—

0—

0—

0—

0—

560

0—

0—

0—

0—

560
Repurchase of Class B common stock from stock purchase program
0—

0—

0—

0—

0—

0—

0—

(2,435 )
0—
0—

0—
(2,435 )
Sale of subsidiary
—

0—

—

0—

—

0—

0—

0—

(182 )
0—

113

(69 )
Other comprehensive (loss) income
—

0—

—

0—

—

0—

0—

0—

105
0—

0—

105
Net income (loss) for three months ended June 30, 2021
—

0—

—

0—

—

0—

0—

0—

0—

5,367
(82 )
5,285
BALANCE AT JUNE 30, 2021
2,322

19,743

1,574

16

25,952

261

142,056

(12,274 )
3,178

(54,017 )
(12,463 )
86,500

	Preferred					Class A			Class B				Additional						Accumulated Other
	Stock					Common Stock			Common Stock				Paid-In			Treasury			Comprehensive			Accumulated			Noncontrolling			Total
	Shares			Amount		Shares		Amount	Shares		Amount		Capital			Stock			Income			Deficit			Interests			Equity
BALANCE AT MARCH 31, 2022	2,322		$	19,743		1,574	$	16	26,642	$	266	$	144,089		$	(14,105	)	$	3,499		$	(13,530	)	$	(13,686	)	$	126,292
Dividends on preferred stock ($ 0.1594 per share)	—			0—		—		0—	—		0—		0—			0—			0—			(624	)		0—			(624	)
Dividends on common stock ($0.075 per share)	—			0—		—		0—	—		0—		0—			0—			0—			(1,964	)		0—			(1,964	)
Stock-based compensation	0—			0—		0—		0—	0—		0—		730			0—			0—			0—			0—			730
Restricted Class B common stock purchased from employees	—			0—		—		0—	—		0—		0—			(4,414	)		0—			0—			0—			(4,414	)
Exercise of Class B common stock warrants	0—			0—		0—		0—	73		1		(1	)		0—			0—			0—			0—			0—
Redemption of Preferred Stock	(235	)		(2,000	)	0—		0—	0—		0—		0—			0—			0—			0—			0—			(2,000	)
Other comprehensive income (loss)	—			0—		—		0—	—		0—		0—			0—			(2,376	)		0—			237			(2,139	)
Net income (loss) for three months ended June 30, 2022	—			0—		—		0—	—		0—		0—			0—			0—			34,479			2,894			37,373
BALANCE AT JUNE 30, 2022	2,087		$	17,743		1,574	$	16	26,715	$	267	$	144,818		$	(18,519	)	$	1,123		$	18,361		$	(10,555	)	$	153,254

~~Table of Contents~~

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF EQUITY
(in ~~thousands) — (Continued)~~thousands, except dividend per share

~~Genie Energy Ltd. Stockholders~~

Preferred

Class A

Class B

Additional

Accumulated Other

Stock

Common Stock

Common Stock

Paid-In

Treasury

Comprehensive

Accumulated

Noncontrolling

Total

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Stock

Income

Deficit

Interests

Equity

BALANCE AT JUNE 30, 2021

2,322
$ 19,743

1,574
$ 16

25,952
$ 261
$ 142,056
$ (12,274 ) $ 3,178
$ (54,017 ) $ (12,463 ) $ 86,500
Dividends on preferred stock ($ 0.1594 per share)
—

0—

—

0—

—

0—

0—

0—

0—

(370 )
0—

(370 )
Stock-based compensation
—

0—

—

0—

248

3

528

0—

0—

0—

0—

531
Repurchase of Class B common stock from stock purchase program
—

0—

—

0—

—

0—

0—

(1,412 )
0—
0—

0—
(1,412 )
Restricted Class B common stock repurchased from employees
—

—

—

—

—

—

—

(236 )
—

—

—

(236
)
Acquisition of noncontrolling interest of subsidiary

—

0—

—

0—

228

2

(797 )
0—

0—

0—

795

0—
Other comprehensive (loss) income
—

0—

—

0—

—

0—

0—

0—

(184 )
0—

51

(133 )
Net loss for three months ended September 30, 2021
—

0—

—

0—

—

0—

0—

0—

0—

(2,286 )
(31)
(2,317 )
BALANCE AT SEPTEMBER 30, 2021
2,322

19,743

1,574

16

26,428

266

141,787

(13,922 )
2,994

(56,673 )
(11,648 )
82,563

Preferred

Class A

Class B

Additional

Accumulated Other





Stock

Common Stock

Common Stock

Paid-In

Treasury

Comprehensive

Accumulated

Noncontrolling


Total


Shares

Amount

Shares

Amount

Shares

Amount

Capital

Stock

Income

Deficit

Interests


Equity

BALANCE AT JANUARY 1, 2020
2,322
$ 19,743

1,574
$ 16

25,785
$ 258
$ 139,615
$ (7,675 ) $ 2,519
$ (59,671 ) $ (13,875 ) $ 80,930
Dividends on preferred stock ($0.01594 per share)
—

0—

—

0—

—

0—

0—

0—

0—

(370 )
0—

(370 )
Dividends on common stock ($ 0.075 per share)
—

0—

—

0—

—

0—

0—

0—

0—

(1,975 )
0—

(1,975 )
Stock-based compensation
0—

0—

0—

0—

20

0—

483

0—

0—

0—

0—

483
Repurchase of Class B common stock from stock repurchase program

—

0—

—

0—

0—

0—

0—

(88
)
0—

0—

0—

(88
Noncontrolling interest from acquisition of Lumo
—

0—

—

0—

—

0—

(29 )
0—

0—

0—

29

0—
Deconsolidation of subsidiaries
—

0—

—

0—

—

0—

0—

0—

(6 )
0—

(92 )
(98 )
Other comprehensive income (loss)
—

0—

—

0—

—

0—

0—

0—

(283 )
0—

189
(94 )
Net income for three months ended March 31, 2020
—

0—

—

0—

—

0—

0—

0—

0—

5,832

589

6,421
BALANCE AT MARCH 31, 2020
2,322

19,743

1,574

16

25,805

258

140,069

(7,763 )
2,230

(56,184 )
(13,160 )
85,209

~~Table of Contents~~

~~GENIE ENERGY LTD.~~

CONSOLIDATED STATEMENTS OF EQUITY
(in thousands)) — (Continued)

Genie Energy Ltd. Stockholders

Preferred

Class A

Class B

Additional

Accumulated Other





Stock

Common Stock

Common Stock

Paid-In

Treasury

Comprehensive

Accumulated

Noncontrolling


Total


Shares

Amount

Shares

Amount

Shares

Amount

Capital

Stock

Income

Deficit

Interests


Equity

BALANCE AT MARCH 31, 2020
2,322
$ 19,743

1,574
$ 16

25,805
$ 258
$ 140,069
$ (7,763 ) $ 2,230
$ (56,184 ) $ (13,160 ) $ 85,209
Dividends on preferred stock ($0.01594 per share)
—

0—

—

0—

—

0—

0—

0—

0—

(370 )
0—

(370 )
Dividends on common stock ($ 0.085 per share)
—

0—

—

0—

—

0—

0—

0—

0—

(2,240 )
0—

(2,240 )
Stock-based compensation
0—

0—

0—

0—

0—

0—

401

0—

0—

0—

0—

401
Repurchase of Class B common stock from stock repurchase program

0—

0—

0—

0—

0—

0—

0—

(1,458 )
0—

0—

0—

(1,458 )
Purchase of subsidiary
—

0—

—

0—

—

0—

0—
0—

0—

0—

45

45
Other comprehensive income (loss)
—

0—

—

0—

—

0—

0—

0—

323

0—

(188 )
135
Net income for three months ended March 31, 2020
—

0—

—

0—

—

0—

0—

0—

0—

1,963

(1,083 )
880
BALANCE AT JUNE 30, 2020
2,322

19,743

1,574

16

25,805

258

140,470

(9,221 )
2,553

(56,831 )
(14,386 )
82,602

Preferred

Class A

Class B

Additional

Accumulated Other





Stock

Common Stock

Common Stock

Paid-In

Treasury

Comprehensive

Accumulated

Noncontrolling


Total


Shares

Amount

Shares

Amount

Shares

Amount

Capital

Stock

Income

Deficit

Interests


Equity

BALANCE AT JUNE 30, 2020
2,322
$ 19,743

1,574
$ 16

25,805
$ 258
$ 140,470
$ (9,221 ) $ 2,553
$ (56,831 ) $ (14,386 ) $ 82,602
Dividends on preferred stock ($0.01594 per share)
—

0—

—

0—

—

0—

0—

0—

0—

(370 )
0—

(370 )
Dividends on common stock ($ 0.085 per share)
—

0—

—

0—

—

0—

0—

0—

0—

(2,218 )
0—

(2,218 )
Repurchase of Class B common stock from stock repurchase program
0—

0—

0—

0—

0—

0—

0—

(88 )
0—

0—

0—

(88 )
Restricted Class B common stock units purchased from employees
—

0—

—

0—

—

0—

0—

(263 )
0—

0—

0—

(263 )
Stock-based compensation
0—

0—

0—

0—

0—

0—

447

0—

0—

0—

0—

447
Exercise of stock options

0—

0—

0—

0—

3

0—

18
0—

0—

0—

0—

18
Other comprehensive income (loss)
—

0—

—

0—

—

0—

0—

0—

247

0—

(74 )
173
Net income (loss) for three months ended September 30, 2020
—

0—

—

0—

—

0—

0—

0—

0—

6,728

(531 )
6,197
BALANCE AT SEPTEMBER 30, 2020

2,322

19,743

1,574

16

25,808

258

140,935

(9,572 )
2,800

(52,691
(14,991 )
86,498

	Preferred			Class A			Class B				Additional					Accumulated Other
	Stock			Common Stock			Common Stock				Paid-In		Treasury			Comprehensive			Accumulated			Noncontrolling			Total
	Shares		Amount	Shares		Amount	Shares		Amount		Capital		Stock			Income			Deficit			Interests			Equity
BALANCE AT JANUARY 1, 2021	2,322	$	19,743	1,574	$	16	25,811	$	260	$	140,746	$	(9,839	)	$	3,827		$	(56,658	)	$	(12,016	)	$	86,079
Dividends on preferred stock ($0.1594 per share)	—		0—	—		0—	—		0—		0—		0—			0—			(370	)		0—			(370	)
Stock-based compensation	0—		0—	0—		0—	121		1		588		0—			0—			0—			0—			589
Issuance of Class B common stock to Howard Jonas	0—		0—	0—		0—	20		0—		162		0—			0—			0—			0—			162
Other comprehensive (loss) income	—		0—	—		0—	—		0—		0—		0—			(572	)		0—			230			(342	)
Net loss for three months ended March 31, 2021	—		0—	—		0—	—		0—		0—		0—			0—			(1,986	)		(708	)		(2,694	)
BALANCE AT MARCH 31, 2021	2,322	$	19,743	1,574	$	16	25,952	$	261	$	141,496	$	(9,839	)	$	3,255		$	(59,014	)	$	(12,494	)	$	83,424

	Preferred			Class A			Class B				Additional					Accumulated Other
	Stock			Common Stock			Common Stock				Paid-In		Treasury			Comprehensive			Accumulated			Noncontrolling			Total
	Shares		Amount	Shares		Amount	Shares		Amount		Capital		Stock			Income			Deficit			Interests			Equity
BALANCE AT MARCH 31, 2021	2,322	$	19,743	1,574	$	16	25,952	$	261	$	141,496	$	(9,839	)	$	3,255		$	(59,014	)	$	(12,494	)	$	83,424
Dividends on preferred stock ($0.1594 per share)	—		0—	—		0—	—		0—		0—		0—			0—			(370	)		0—			(370	)
Stock-based compensation	0—		0—	0—		0—	—		0—		560		0—			0—			0—			0—			560
Repurchase of Class B common stock from stock purchase program	—		0—	—		0—	—		0—		0—		(2,435	)		0—			0—			0—			(2,435	)
Sale of subsidiary	—		0—	—		0—	—		0—		0—		0—			(182	)		0—			113			(69	)
Other comprehensive (loss) income	—		0—	—		0—	—		0—		0—		0—			105			0—			0—			105
Net loss for three months ended June 30, 2021	—		0—	—		0—	—		0—		0—		0—			0—			5,367			(82	)		5,285
BALANCE AT JUNE 30, 2021	2,322	$	19,743	1,574	$	16	25,952	$	261	$	142,056	$	(12,274	)	$	3,178		$	(54,017	)	$	(12,463	)	$	86,500

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Nine Months Ended
September 30,

2021

2020

(in thousands)

Operating activities

Net income

$
275

$
13,498
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

3,326

2,219

Impairment of assets

6,650

993
Deferred income taxes

2,877

4,838

Provision for doubtful accounts receivable

8,018

2,209

Unrealized gain on marketable equity securities and investment

(1,710 )

0—
Stock-based compensation

1,680

1,331

Equity in the net (income) loss in equity method investees

(215
)

1,698

Gain on sale of subsidiary

(4,226 )

0—
Loss on sale of assets held for sale

0—

456
Gain on deconsolidation of subsidiaries

0—

(98 )
Changes in assets and liabilities:

Trade accounts receivable

(7,570
)

2,827
Inventory

(6,718
)

3,218
Prepaid expenses

(1,524
)

2,166
Other current assets and other assets

(13,381
)

(633
)
Trade accounts payable, accrued expenses and other current liabilities

5,414

2,018
Contract liability

2,796

(12,393 )
Due to IDT Corporation

(148
)

(266
)
Income taxes payable

4,542

(43
)
Net cash provided by operating activities

86

24,038
Investing activities

Capital expenditures

(158
)

(125
)
Proceeds from disposal of assets held for sale

0—

48
Proceeds from the sale of a subsidiary, net of cash disposed

4,550

0—
Purchase of marketable equity securities

(1,000 )

0—
Investments in equity method investee

0—

(1,502 )
Purchase of short-term equity investments

(750 )

0—
Payment for acquisition of intangible

0—

(298 )
Repayment of notes receivable

14

14

Net cash provided by (used in) investing activities

2,656

(1,863
)
Financing activities

Dividends paid

(1,111
)

(7,543
)
Proceeds from revolving line of credit

0—

1,000
Repayment of revolving line of credit

0—

(3,514 )
Proceeds from loan

0—

1,395
Purchases of Class B common stock

(3,847 )

(1,634 )
Repayment of notes payable

0—

(25
)
Proceeds from exercise of stock options

0—

18
Purchase of Class B common stock from employees upon vesting of restricted shares

(236 )

(263 )
Repayment of loan payable

0—

(930 )
Net cash used in financing activities

(5,194
)

(11,496
)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(221
)

(3
)
Net (decrease) increase in cash, cash equivalents, and restricted cash

(2,673 )

10,676
Cash, cash equivalents, and restricted cash at beginning of period

43,184

38,554

Cash, cash equivalents, and restricted cash at end of period

$
40,511

$
49,230

	Six Months Ended June 30,
	2022			2021
	(in thousands)
Operating activities
Net income	$	54,109		$	2,591
Net loss from discontinued operations, net of tax		0—			(4,305	)
Net income from continuing operations		54,109			6,896
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		532			696
Deferred income taxes		7,019			2,972
Provision for doubtful accounts receivable		1,301			1,092
Unrealized loss (gain) marketable equity securities and investment		799			(7,022	)
Stock-based compensation		1,570			1,148
Equity in the net loss (income) in equity method investees		249			(164	)
Gain on sale of subsidiaries		0—			(4,226	)
Change in assets and liabilities:
Trade accounts receivable		7,175			(621	)
Inventory		1,677			1,277
Prepaid expenses		(1,849	)		(1,211	)
Other current assets and other assets		(34,212	)		(3,387	)
Trade accounts payable, accrued expenses and other current liabilities		(11,546	)		(170	)
Due to IDT Corporation		(384	)		47
Income taxes payable		1,111			625
Net cash provided by (used in) operating activities of continuing operations		27,551			(2,048	)
Net cash used in discontinued operations		0—			(3,824	)
Net cash provided by (used in) operating activities		27,551			(5,872	)
Investing activities
Capital expenditures		(60	)		(80	)
Proceeds from the sale of subsidiary, net of cash disposed		0—			4,550
Investment in notes receivables with related party		(1,388	)		0—
Purchase of marketable equity securities and other investment		(800	)		(1,000	)
Repayment of notes receivable		19			13
Net cash (used in) provided by investing activities of continuing operations		(2,229	)		3,483
Net cash used in investing activities of discontinued operations		(49,446	)		0—
Net cash (used in) provided by investing activities		(51,675	)		3,483
Financing activities
Dividends paid		(4,669	)		(740	)
Repurchases of Class B common stock from employees		(71	)		0—
Repurchase of Class B common stock		(4,414	)		(2,435	)
Redemption of preferred stock		(2,000	)		0—
Net cash used in by financing activities		(11,154	)		(3,175	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(120	)		(54	)
Net decrease in cash, cash equivalents, and restricted cash		(35,398	)		(5,618	)
Cash, cash equivalents, and restricted cash (including discontinued operations) at beginning of period		102,149			43,184
Cash, cash equivalents and restricted cash (including discontinued operations) at end of the period		66,751			37,566
Less: Cash of discontinued operations at end of period		0—			1,906
Cash, cash equivalents, and restricted cash (excluding discontinued operations) at end of period	$	66,751		$	35,660

See accompanying notes to consolidated financial statements.

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1—Basis of Presentation and Business Changes and Development

The accompanying unaudited consolidated financial statements of Genie Energy Ltd. and its subsidiaries (the “Company” or “Genie”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 108 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2021.~~2022. The balance sheet at December 31, ~~2020~~2021 has been derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, as filed with the U.S. Securities and Exchange Commission (the “SEC”).

The Company owns 99.5% of ~~its subsidiary,~~ Genie Energy International Corporation (“GEIC”), which owns 100% of Genie Retail Energy (“GRE”), 100% of Genie Retail Energy International LLC ("GRE International" or "GREI") and 95.5% of Genie Renewables. ~~In March 2021, the Company modified its management reporting to rename the Genie Energy Services ("GES") segment to the Genie Renewables segment.~~

GRE owns and operates retail energy providers (“REPs”), including IDT Energy, Inc. (“IDT Energy”), Residents Energy, Inc. (“Residents Energy”), Town Square Energy, LLC and Town Square Energy East, LLC (collectively, "TSE"), Southern Federal Power LLC ("Southern Federal") and Mirabito Natural Gas, LLC (“Mirabito”). GRE's REP businesses resell electricity and natural gas to residential and small business customers primarily in the Eastern and Midwestern United States and ~~Texas.~~ Texas.

GRE International holds the Company's ~~100% interest in Shoreditch Energy Limited, a REP that serves retail customers in the United Kingdom under the name Orbit Energy, the Company's 91.7%~~91.6% controlling interest in Lumo Energia Oyj ("Lumo Finland"), a REP serving residential customers in Finland, and its ~~98.8%~~97.7% interest in Lumo Energi AB ("Lumo Sweden")~~, which was formed in 2019 to serve retail energy customers in Sweden.~~ . GRE International also held the Company's ~~98.8~~%98.8% interest in venture in Japan, which the Company sold on May 11, 2021. GRE International also holds 100% interest in Orbit Energy, a REP operating in the United Kingdom ("U.K."), which was discontinued in November 2021 as discussed below.

Genie Renewables ~~holds~~consists of Genie Solar Energy ("Genie Solar"), a rooftop solar system sales and general contracting company, ~~and~~ a ~~93.5~~%93.5% interest in CityCom Solar, a marketer of community solar energy ~~solution, oversees~~solutions, Diversegy LLC ("Diversegy"), ~~a retail~~an energy ~~advisory~~broker for commercial customers, and ~~brokerage company that serves commercial and industrial customers throughout the United States and manages~~ GRE's ~~60.0%~~60.0% interest in Prism Solar Technology, Inc. ("Prism"), a solar solutions company that is engaged in U.S.-based manufacturing of solar panels, solar installation design and solar energy project ~~management,~~ management.

Discontinued Operations in United Kingdom

In the third quarter of 2021, the natural gas and energy market in the United Kingdom deteriorated which prompted the Company to start the process of orderly withdrawal from the United Kingdom market. In October 2021, as part of the orderly exit process from the United Kingdom market, Orbit and Shell U.K. Limited ("Shell") agreed to terminate the exclusive supply contract between them. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities with Shell.

Following the termination of the contract with Shell, Orbit filed a petition with the High Court of Justice Business and Property of England and Wales (the “Court”) to declare Orbit insolvent based on the Insolvency Act of 1986. On November 29, 2021, the Court declared Orbit insolvent, revoked Orbit's license to supply electricity and natural gas in the United Kingdom, ordered the current customers to be transferred to “supplier of last resort” and transferred the administration of Orbit to Administrators effective December 1, 2021. All of the customers of Orbit were transferred to a third-party supplier effective December 1, 2021 as ordered by the Court. All assets and liabilities of Orbit, including cash and receivables remain with Orbit, in which Genie retains 100% interest, however, the management and control of Orbit was transferred to the Administrators.

The Company determined that the discontinued operations in the United Kingdom represented a strategic shift that will have a major effect on the Company's operations and financial statements. Since the appointment of the Administrators, the Company has accounted for these businesses as discontinued operations and accordingly, has presented the results of operations and related cash flows as discontinued operations. The results of operations and related cash flows are presented as discontinued operations for all periods presented. Any remaining assets and liabilities of the discontinued operations have been presented separately, and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of June 30, 2022 and December 31, 2021. Since the Company lost control of the management of Orbit in favor of the Administrators, the accounts of Orbit were deconsolidated effective December 1, 2021 and the Company estimated the remaining liability related to its ownership of Orbit.

Energy Price Volatility in Texas and Japan ~~and Texas~~

In January 2021, weather volatility and the lack of adequate gas reserves significantly increased the price of energy at Japan Electric Power Exchange ("JEPX") for an extended period of time. The spike in demand associated with this situation, exposed Genie Japan to unexpected cost increases. Genie Japan incurred approximately $2.5 million in additional costs related to the price increases, which were included in the cost of revenue in the ~~three~~six months ended ~~March 31,~~June 30, 2021.

In February of 2021, the State of Texas experienced unprecedented cold weather and snow, ~~which~~with was named Winter Storm Uri. With the grid overtaxed due to demand and weather-related reduced supply and rolling blackouts being enforced, by order of the Electricity Reliability Council of Texas ("ERCOT"), real-time commodity prices during the crisis escalated significantly. Although GRE's commitment for their customers in Texas was hedged for foreseen winter weather conditions, the market conditions exposed the Company to significant unexpected cost increases. ~~In the three and nine months ended September 30, 2021,~~ GRE recognized approximately ~~$1.0 million and~~ $13.0 million ~~respectively,~~ in additional costs ~~related to the situation, which were included in the cost~~ of revenue infor the ~~consolidated statements of operation.~~ six months ended June 30, 2021.

In June 2021, the state legislature of the State of Texas passed House Bill 4492 (“HB 4492”) which includes certain provisions for financing certain costs associated with electric markets caused by Winter Storm Uri. Pursuant to HB 4492, two categories of charges associated with Winter Storm Uri are to be securitized and the proceeds of the securitization will be provided to the load serving entities who originally incurred the charges. Under HB 4492, the Company is entitled to recover a portion of the costs incurred from the effect of Winter Storm Uri with a calculated range of $1.5 million to $2.6 million. In the second quarter of 2021, the Company recorded a reduction in cost of revenues of $1.5 million.

In September 2021, the Public Utility Commission of Texas ("PUC") approved the Debt Obligation Order to grant ERCOT's application for a debt financing mechanism to pay for certain costs associated with Winter Storm Uri. Under the Debt Obligation Order, the amount that the Company is entitled to recover increased to approximately $3.4 million. ~~For~~In the ~~three months ended September 30,~~third quarter of 2021, the Company recorded an additional reduction in the cost of revenues of $1.9 million for an aggregate amount of $3.4 million for the ~~nine months~~year ended ~~September 30,~~December 31, 2021.

~~Natural Gas Price Volatility in United Kingdom~~

In ~~September 2021,~~June 2022, the Company initiated the process of spinning off the operations of GRE International into a separate publicly-traded company. After initiation of the spin-off process, the natural gas and energy market in the United Kingdom deteriorated which prompted the Company to suspend the spin-off and start the process of orderly withdrawal from the United Kingdom market. For the three and nine months ended September 30, 2021, the Company recognized $6.7received $3.5 million ~~impairment of assets in the consolidated statements of operations~~refund related to the ~~planned exit from United Kingdom.~~
cost of Winter Storm Uri.

Seasonality and Weather

The weather and the seasons, among other things, affect GRE’s revenues. Weather conditions have a significant impact on the demand for natural gas used for heating and electricity used for heating and cooling. Typically, colder winters increase demand for natural gas and electricity, and hotter summers increase demand for electricity. Milder winters or summers have the opposite effect. Unseasonable temperatures in other periods may also impact demand levels. Natural gas revenues typically increase in the first quarter due to increased heating demands and electricity revenues typically increase in the third quarter due to increased air conditioning use. Approximately ~~47.7%~~44.5% and ~~46.9%~~47.7% of GRE’s natural gas revenues for the relevant years were generated in the first quarters of ~~2020~~2021 and ~~2019,~~2020, respectively, when demand for heating was highest. Although the demand for electricity is not as seasonal as natural gas (due, in part, to usage of electricity for both heating and cooling), approximately 30.3% and 31.8% of GRE’s electricity revenues for the relevant years were generated in the third quarters of 2021 and 2020, ~~and 2019.~~respectively. GRE’s REPs’ revenues and operating income are subject to material seasonal variations, and the interim financial results are not necessarily indicative of the estimated financial results for the full year.

~~Coronavirus Disease (COVID-~~19)

~~Starting in the first quarter of~~ ~~2020, the world and the United States experienced the unprecedented impacts of the coronavirus disease~~ ~~2019~~ ~~(COVID-~~19~~) pandemic.~~

For the three and nine months ended September 30, 2021, the impacts of COVID-19 are evident in several key aspects of the Company's business operations and the corresponding financial impact has been mixed. The Company's customer base is predominantly residential, so the Company has benefited from the increased demand for residential electricity as many customers are working from and spending more time in their homes. On the other hand, like other retail providers, the Company suspended its face-to-face customer acquisition programs in March 2020 as public health measures were implemented to combat COVID-19, resulting in a decrease in gross meter acquisitions. The reduction in gross meter acquisitions during the second quarter of 2021 resulted in a slight decline in domestic meters served during the third quarter of 2021. Churn for the third quarter of 2021 slightly increased compared to the same period in 2020, however, below the churn levels that the Company typically experienced before March 2020. In the fourth quarter of 2020, authorities began relaxing certain COVID-19 public health restrictions in some of GRE's domestic markets facilitating a partial reactivation of the previously curtailed customer acquisition channels.

There are many uncertainties regarding the impacts of the COVID-19 pandemic, and the Company is closely monitoring those impacts on all aspects of its business, including how it will impact the customers, employees, suppliers, vendors, and business partners.

Note 2—Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet ~~that equals~~and the ~~total of the same~~corresponding amounts reported in the consolidated statements of cash flows:

	September 30, 2021		December 31, 2020		June 30, 2022		December 31, 2021
	(in thousands)				(in thousands)
Cash and cash equivalents	$	33,983	$	36,913	$	61,093	$	95,492
Restricted cash—short-term		6,528		6,271		5,658		6,657
Total cash, cash equivalents, and restricted cash	$	40,511	$	43,184	$	66,751	$	102,149

Restricted cash—short-term includes amounts set aside in accordance with the Amended and Restated Preferred Supplier Agreement with BP Energy Company (“BP”) (see Note ~~17),~~18) and Credit Agreement with JPMorgan Chase (see Note 1819).

Included in the cash and ~~Afek Oil and Gas, Ltd.’s security deposits for its exploration license~~cash equivalents as of December 31, 2021 is cash received from ~~the Government of Israel, and its customs and other import duties for the import of exploration equipment.~~Orbit Energy (see Note 5).

Note 3—Inventories

Inventories consisted of the following:

September 30,
2021

December 31,
2020

(in thousands)
Natural gas

$
1,965

$
1,021

Renewable credits

21,395

15,574
Solar Panels:

Finished goods
288
335
Totals

$
23,648

$
16,930

	June 30, 2022		December 31, 2021
	(in thousands)
Natural gas	$	2,130	$	1,891
Renewable credits		13,737		15,610
Solar Panels:
Finished goods		176		219
Totals	$	16,043	$	17,720

Note 4—Revenue Recognition

Revenue from the single performance obligation to deliver a unit of electricity and/or natural gas is recognized as the customer simultaneously receives and consumes the benefit. Variable quantities in requirements contracts are considered to be options for additional goods and services because the customer has a current contractual right to choose the amount of additional distinct goods to purchase. GRE and Genie Japan (prior to its sale in May 2021) record unbilled revenues for the estimated amount customers will be billed for services rendered from the time meters were last read to the end of the respective accounting period. The unbilled revenue is estimated each month based on available per day usage data, the number of unbilled days in the period and historical trends. ~~Several~~

Incumbent utility companies ~~offer purchase of receivable, or POR, programs~~ in most of the service territories in which ~~GRE operates,~~GRE's REPs operate offer purchase of receivable, or POR programs, and GRE’s REPs participate in POR programs for a majority of their receivables. The Company estimates variable consideration related to its rebate programs using the expected value method and a portfolio approach. The Company’s estimates related to rebate programs are based on the terms of the rebate program, the customer’s historical electricity and natural gas consumption, the customer’s rate plan, and a churn factor. Taxes that are imposed on the Company’s sales and collected from customers are excluded from the transaction price.

Revenues from Orbit Energy are accrued based on an estimate of the quantity in units of electricity or natural gas supplied to customers by profile class. The estimate is made using historical consumption patterns, industry estimated consumption rates, and takes into consideration industry reconciliation processes.

Revenue from sales of solar panels are recognized at a point in time following the transfer of control of the solar panels to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. For sales contracts that contain multiple performance obligations, such as the shipment or delivery of solar modules, the Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices, or estimates of such prices, and recognize the related revenue as control of each individual product is transferred to the customer, in satisfaction of the corresponding performance obligations. Revenues from sale of solar panels are included in other revenues in the consolidated statements of operations.

The Company recognizes the incremental costs of obtaining a contract with a customer as an asset if it expects the benefit of those costs to be longer than one year. The Company determined that certain sales commissions to acquire customers meet the requirements to be capitalized. For GRE, the Company applies a practical expedient to expense costs as incurred for sales commissions to acquire customers as the period would have been one year or less. Incremental customer acquisition cost of certain GRE International entities are capitalized and amortized over the range of between eighteen and twenty-four months. These costs and the related amortization are recorded within sales and marketing expenses. Total capitalized customer acquisition costs to obtain customer contracts ~~were $0.2~~were $0.1 millionand $0.3 million for the three months ended June 30, 2022 and ~~$0.8 million for thethree and nine~~ ~~months ended September 30, 2021~~2021, respectively. Total capitalized customer acquisition costs to obtain customer contracts were $0.2 million and $0.6 million for ~~three and nine~~ the six months ended ~~September~~June 30, ~~2020,~~2022 and 2021, respectively. At ~~September~~June 30, ~~2021,~~2022, customer acquisition costs of ~~$0.5~~$0.5 million and ~~$0.2~~$0.1 million included in other current ~~assets~~assets and other assets, respectively, on the consolidated balance sheet. The Company recognized $0.1 million and $0.2 million of amortization of capitalized customer acquisition cost ~~in each of~~for the three months ended ~~September~~June 30, 2022 and 2021, ~~and 2020.~~ respectively.The Company recognized ~~$0.6~~$0.2 million and $0.4 million of amortization of capitalized customer acquisition cost ~~in each~~for the six months ended June 30, 2022 and 2021, respectively. The Company continuously monitors its customer relationship periods to ensure compliance with the application of the ~~nine months ended September 30, 2021 and 2020.~~standard.

Disaggregated Revenues

The following table shows the Company’s revenues disaggregated by pricing plans offered to customers:

	Electricity		Natural Gas		Other		Total		Electricity		Natural Gas		Other		Total
	(in thousands)								(in thousands)
Three Months Ended September 30, 2021
Three Months Ended June 30, 2022
Fixed rate	$	57,429	$	5,027	$	0—	$	62,456	$	20,615	$	2,311	$	0—	$	22,926
Variable rate		46,370		2,582		0—		48,952		40,217		7,787		0—		48,004
Other		0—		0—		1,756		1,756		0—		0—		4,096		4,096
Total	$	103,799	$	7,609	$	1,756	$	113,164	$	60,832	$	10,098	$	4,096	$	75,026

Three Months Ended September 30, 2020
Three Months Ended June 30, 2021
Fixed rate	$	41,707	$	631	$	0—	$	42,338	$	33,967	$	808	$	0—	$	34,775
Variable rate		50,086		2,093		0—		52,179		34,714		4,274		0—		38,988
Other		0—		0—		1,809		1,809		0—		0—		2,616		2,616
Total	$	91,793	$	2,724	$	1,809	$	96,326	$	68,681	$	5,082	$	2,616	$	76,379

Nine Months Ended September 30, 2021
Six Months Ended June 30, 2022
Fixed rate	$	161,279	$	26,063	$	0—	$	187,342	$	41,120	$	6,094	$	0—	$	47,214
Variable rate		129,504		22,395		0—		151,899		91,496		28,507		0—		120,003
Other		0—		0—		6,970		6,970		0—		0—		6,337		6,337
Total	$	290,783	$	48,458	$	6,970	$	346,211	$	132,616	$	34,601	$	6,337	$	173,554

Nine Months Ended September 30, 2020
Six Months Ended June 30, 2021
Fixed rate	$	99,278	$	3,200	$	0—	$	102,478	$	72,872	$	2,550	$	0—	$	75,422
Variable rate		128,393		20,990		0—		149,383		83,422		19,812		0—		103,234
Other		0—		0—		24,591		24,591		0—		0—		5,214		5,214
Total	$	227,671	$	24,190	$	24,591	$	276,452	$	156,294	$	22,362	$	5,214	$	183,870

The following table shows the Company’s revenues disaggregated by non-commercial and commercial channels:

Electricity

Natural Gas

Other

Total

(in thousands)
Three Months Ended September 30, 2021

Non-Commercial Channel
$ 79,476

$ 5,948

$ 0—

$ 85,424
Commercial Channel

24,323

1,661

0—

25,984
Other

0—

0—

1,756

1,756
Total
$ 103,799

$ 7,609

$ 1,756

$ 113,164

Three Months Ended September 30, 2020

Non-Commercial Channel
$ 75,214

$ 1,747

$ 0—

$ 76,961
Commercial Channel

16,579

977

0—

17,556
Other

0—

0—

1,809

1,809
Total
$ 91,793

$ 2,724

$ 1,809

$ 96,326

Nine Months Ended September 30, 2021

Non-Commercial Channel

$
234,534

$
43,410

$
0—

$
277,944

Commercial Channel

56,249

5,048

0—

61,297

Other

0—

0—

6,970

6,970

Total

$
290,783

$
48,458

$
6,970

$
346,211

Nine Months Ended September 30, 2020

Non-Commercial Channel

$
190,970

$
20,750

$
0—

$
211,720

Commercial Channel

36,701

3,440

0—

40,141

Other

0—

0—

24,591

24,591

Total

$
227,671

$
24,190

$
24,591

$
276,452

	Electricity		Natural Gas		Other		Total
	(in thousands)
Three Months Ended June 30, 2022
Non-Commercial Channel	$	51,299	$	6,669	$	0—	$	57,968
Commercial Channel		9,533		3,429		0—		12,962
Other		0—		0—		4,096		4,096
Total	$	60,832	$	10,098	$	4,096	$	75,026

Three Months Ended June 30, 2021
Non-Commercial Channel	$	51,222	$	3,805	$	0—	$	55,027
Commercial Channel		17,459		1,277		0—		18,736
Other		0—		0—		2,616		2,616
Total	$	68,681	$	5,082	$	2,616	$	76,379

Six Months Ended June 30, 2022
Non-Commercial Channel	$	113,460	$	26,305	$	0—	$	139,765
Commercial Channel		19,156		8,296		0—		27,452
Other		0—		0—		6,337		6,337
Total	$	132,616	$	34,601	$	6,337	$	173,554

Six Months Ended June 30, 2021
Non-Commercial Channel	$	124,368	$	18,976	$	0—	$	143,344
Commercial Channel		31,926		3,386		0—		35,312
Other		0—		0—		5,214		5,214
Total	$	156,294	$	22,362	$	5,214	$	183,870

~~Contract Liabilities~~

Certain revenue contracts at Genie Renewables include provisions that require advance payment from customers. These advance payments received under revenue contracts are recognized as revenue as the Company satisfies the performance obligations to the other party. A portion of the transaction price allocated to the performance obligations to be satisfied in the future periods is recognized as contract liability.

Customers of Orbit Energy can elect to be on a budget plan. Under this type of plan, a monthly installment amount is calculated based on estimated annual usage. Contract liabilities are adjusted monthly based on actual and estimated usage of the customers. Annually, the budget plan is reconciled to actual annual usage.

~~The following table summarized the changes in the liabilities.~~

Nine Months Ended September 30,

2021

2020

(in thousands)
Contract liability, beginning

$
5,609

$
13,426

Recognition of revenue included in the beginning of year contract liability

(4,468
)

(13,004
)
Additions during the period, net of revenue recognized during the period

7,158

611

Cumulative translation adjustments

18

0—
Contract liability, end

$
8,317

$
1,033

Note 5—~~Acquisition~~Discontinued Operations and Divestiture

~~Acquisition of Controlling Interest of Shoreditch Energy Limited~~United Kingdom Operations

On July 17, 2017, the Company’s subsidiary, Genie Energy UK Ltd. (“GEUK”), entered into a definitive agreement with Energy Global Investments Pty Ltd (“EGC”) to launch Shoreditch Energy Limited (“Shoreditch”), a joint venture to offer electricity and natural gas service to residential and small business customers in the U.K., under the trade name Orbit Energy. ~~In second quarter of 2020, the Company contributed $1.5 million to Shoreditch, which increased GEUK's total contribution to $9.5 million as of~~ ~~October 8, 2020.~~Prior to October 8, 2020, the Company owned 77.0% of the outstanding equity of Shoreditch.

~~Prior to the Company acquiring the remaining 23.0% o~~f Shoreditch, EGC had significant participation rights in the management of Shoreditch that limited GEUK’s ability to direct the activities that most significantly impact Shoreditch’s economic performance. GEUK, therefore, accounted for its ownership interest in Shoreditch using the equity method since GEUK had the ability to exercise significant influence over its operating and financial matters, although it did not control Shoreditch.

On October 8, 2020, the Company entered into an agreement (the “Purchase Agreement”) with EGC under which GEUK purchased EGC’s remaining interest in Shoreditch, in exchange for a cash payment of £1.3 million (equivalent to $1.7 million on the date of closing) offset by £0.2 million (equivalent to $0.2 million on the date of closing) in amounts owing from EGC to the Company under a loan provided to EGC in 2018 related to EGC’s capital contributions to Shoreditch. ~~Prior to~~ ~~October 8, 2020, the estimated fair value and net book value of the Company's investment in Shoreditch was $5.5 million and~~ ~~nil, respectively.~~ Following the transaction, Shoreditch isbecame a wholly-owned subsidiary of GEUK.

In the third quarter of 2021, the natural gas and energy market in the U.K. deteriorated which prompted the Company to start the process of orderly withdrawal from the U.K. market. In October 2021, as part of the orderly exit process, Orbit and Shell U.K. Limited agreed to terminate the exclusive supply contract between them. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities with Shell.

Following the ~~transaction, EGC has no rights~~termination of the contract with Shell, Orbit filed a petition with the High Court of Justice Business and Property of England and Wales (the “Court”) to declare Orbit insolvent based on the Insolvency Act of 1986. On November 29, 2021, the Court declared Orbit insolvent, revoked Orbit's license to supply electricity and natural gas in the United Kingdom, ordered the current customers to be transferred to “supplier of last resort” and transfer the administration of Orbit to Administrators effective December 1, 2021. All of the customers of Orbit were transferred to a third-party supplier effective December 1, 2021 as ordered by the Court. All assets and liabilities of the Orbit, including cash and receivables remain with Orbit and the management and control of ~~Shoreditch~~which was transferred to Administrators. The Company expects that the administration of Orbit will be completed in 2022.

In the fourth quarter of 2021, Orbit transferred to GEIC a net amount of $49.7 million from the proceeds of the settlement of the contract with Shell which is included in cash and ~~GEUK has complete~~cash equivalents in the consolidated balance sheet as of December 31, 2021. In January 2022, the Company transferred $21.5 million to the Administrators of Orbit Energy to fund the settlement of the expected remaining liabilities of Orbit of $30.8 million, which were included in the current liabilities of discontinued operations in the consolidated balance sheet as of December 31, 2021. In February 2022, the Company deposited $28.3 million into an attorney trust account to hold, preserve, and dispense funds to the extent needed in connection with the administration process. On February 24, 2022, the Administrators filed a petition under Chapter 15 of the U.S. Bankruptcy Code with the Bankruptcy Court of the Southern District of New York seeking (i) recognition of the U.K. administration proceeding as a foreign main proceeding and the U.K. Administrators as its foreign representatives, and (ii) entrusting distribution of the funds the Company deposited into its attorney’s trust fund to the U.K. Administrators. In the second quarter of 2022, the Administrators filed an application to transfer the funds back to the Administrators’ control ~~over~~in the ~~activities~~U.K. Subject to certain representations and expectations regarding use and application of ~~Shoreditch.~~the funds to efficiently and expeditiously pay off creditors and bring a timely close to the insolvency administration, the Company decided not to oppose the application, and the $28.3 million was transferred to the account of the Administrator. The Company believes that the funds are more than sufficient to pay any remaining creditors of Orbit (with any surplus, which the Company expects to be significant, to be returned to the Company).

The Company determined that exiting operations in the United Kingdom represented a strategic shift that will have a major effect on the Company's operations and financial statements and accordingly, the results of operations and related cash flows are presented as discontinued operations for all periods presented. The assets and liabilities of the discontinued operations have been presented separately, and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of June 30, 2022 and December 31, 2021.

As a result of loss of control, the Company deconsolidated Orbit effective December 1, 2021 and estimated the remaining liability related to its ownership of Orbit.

The summary of results of operations of the discontinued operations were as follows:

	Three Months Ended June 30, 2021				Six Months Ended June 30, 2021
	(in thousands)
Total revenues	$	21,327		$	49,178
Cost of revenues		18,769			41,745
Gross profit		2,558			7,433
Selling, general and administrative expenses		5,739			11,724
Net loss before taxes		(3,181	)		(4,291	)
Provision for income taxes		14			14
Loss from discontinued operations, net of taxes	$	(3,195	)	$	(4,305	)

The carrying value of the Company's interest in Orbit was net investments of $18.7 million as of June 30, 2022 and net liabilities of $30.8 million as December 31, 2021. The carrying value was determined by estimating the net realizable values of assets and fair values of remaining liabilities which approximates its carrying values as of June 30, 2022 and December 31, 2021.

The following table presents a summary of cash flows of the discontinued operations for the six months ended June 30, 2021:

Net loss	$	(4,305	)
Non-cash items		3,199
Changes in assets and liabilities		(2,718	)
Cash flows used in operating activities of discontinued operations	$	(3,824	)

The ~~Company conducted an assessment of~~ assets and liabilities ~~related to~~of Orbit were included in the ~~acquisition of Shoreditch.~~GRE International segment. ~~The impact of the acquisition’s purchase price allocations on the Company’s consolidated balance sheet and the acquisition date fair value of the total consideration transferred were as follows:~~

(in thousands)

Cash
$
2,681
Trade accounts receivable

8,008

Other current assets

843

Intangible assets:
Trademark (10-year useful life)

1,594

Non-compete agreements (2-year useful life)

1,956

Customer relationships (2-year useful life)

3,620

Goodwill

13,426

Other assets

657
Accounts payable and other current liabilities

(20,490
)
Contract liabilities
(5,152
)
Net assets

$
7,143

~~Goodwill was allocated to the GRE~~International segment. Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company and assembled workforce. Goodwill recognized as a result of the acquisition is not deductible for income tax purposes.

The Company recognized a gain of $5.5 million upon consolidation of Orbit Energy in the consolidated statement of operations for the year ended December 31, 2020, pertaining to the estimated fair value of the Company's noncontrolling interest prior to the acquisition, which is based on the amount paid by the Company for the remaining 23.0% of Shoreditch. The net book value of the Company's investments in Shoreditch was nil immediately prior to the acquisition.

Divestiture of Genie Japan

In March 2021, the Company initiated a plan to sell certain assets and liabilities of Genie Japan. In the first quarter of 2021,, certain assets and liabilities of Genie Japan were reclassified as assets and liabilities held for sale and reported at lower of fair value less cost to sell and net book value.

On April 26, 2021, the Company entered into an Equity Purchase Agreement ("Purchase Agreement") with Hanhwa Q Cells Japan Co., Ltd. ("Hanhwa"), pursuant to which, the Company agreed to sell its interest in Genie Japan for ¥570.0 million (equivalent to approximately $~~5.3~~$5.3 million at April 26, 2021) subject to certain terms and conditions set forth in the Purchase Agreement. On May 11, 2021, upon the terms and subject to the conditions of Purchase Agreement, the Company completed the divestiture of Genie Japan for an aggregate cash consideration of ¥~~570.0~~¥570.0 million (equivalent to approximately $5.2 million at May 11, 2021). Hanhwa also assumed the outstanding balance of the loan payable of Genie Japan. The Company paid $0.6 million of commission to certain former employees of Genie Japan and recognized a pre-tax gain of $4.2 million from the divestiture.

The carrying values of assets and liabilities divested at May 11, 2021 which ~~was~~were previously classified as held for sale ~~as of March 31, 2021~~ included the following:

(in thousands)	(in thousands)
Cash		$	83		$	83
Trade accounts receivable			`1,737			1,737
Prepaid and other current assets			391			391
Intangible (license)			540			540
Other noncurrent assets			296			296
Accounts payable			(611	)
Accounts payables						(611	)
Accrued expenses and other current liabilities			(588	)		(588	)
Loans payable			(1,372	)
Loan payable						(1,372	)
Cumulative translation adjustment			(181	)		(181	)
Noncontrolling interest			114			114
Liabilities held for sale included in other current liabilities		$	409
Net assets					$	409

The assets and liabilities of Genie Japan were included in GRE International segment.

~~Table of Contents~~

Note ~~6—Fair Value~~6—Fair Value Measurements

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis:

	Level 1 (1)		Level 2 (2)		Level 3 (3)		Total		Level 1 (1)		Level 2 (2)		Level 3 (3)		Total
	(in thousands)								(in thousands)
September 30, 2021
June 30, 2022
Assets:
Marketable equity securities	$	8,048	$	0—	$	0—	$	8,048	$	490	$	0—	$	0—	$	490
Derivative contracts	$	11,398	$	2,431	$	0—	$	13,829	$	51,890	$	0—	$	0—	$	51,890
Liabilities:
Derivative contracts	$	457	$	0—	$	0—	$	457	$	4,202	$	0—	$	0—	$	4,202
December 31, 2020
December 31, 2021
Assets:
Marketable equity securities	$	5,089	$	0—	$	0—	$	5,089	$	1,336	$	0—	$	0—	$	1,336
Other current assets (Investments in warrants)	$	0—	$	0—	$	259	$	259
Derivative contracts	$	1,237	$	118	$	0—	$	1,355	$	14,405	$	44	$	0—	$	14,449
Liabilities:
Derivative contracts	$	286	$	0—	$	0—	$	286	$	1,230	$	0—	$	0—	$	1,230

(1) – quoted prices in active markets for identical assets or liabilities

(2) – observable inputs other than quoted prices in active markets for identical assets and liabilities

(3) – no observable pricing inputs in the market

The Company’s derivative contracts consist of natural gas and electricity put and call options and swaps. The underlying asset in the Company’s put and call options is a forward contract. The Company’s swaps are agreements whereby a floating (or market or spot) price is exchanged for a fixed price over a specified period.

The Company did not have any transfers of assets or liabilities between Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the ~~period~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.

Fair Value of Other Financial Instruments

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting this data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

Restricted cash—short-term, ~~and long-term,~~ trade receivables, due to IDT Corporation, other current assets and other current liabilities. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the carrying amounts of these assets and liabilities approximated fair value. The fair value estimate for restricted cash—short-term ~~and long-term~~ was classified as Level 1. The carrying value of other current assets, due to IDT Corporation, and other current liabilities approximated fair value.

Other ~~assets, revolving line of credit and notes payable.~~assets. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, other assets included notes receivable. At ~~September~~June 30, ~~2021,~~2022, the ~~outstanding balance of the sellers of Lumo Finlands' one-time put option was not significant and was included in other liabilities account in the consolidated balance sheet. The~~ carrying amount of the note receivable and loans payable approximated fair value. The fair values were estimated based on the Company’s assumptions, and were classified as Level 3 of the fair value hierarchy.

The primary non-recurring fair value estimates typically are in the context of ~~business acquisitions (Note 5) which involve a combination of Level 2 and Level 3 inputs,~~ goodwill impairment testing, which involves Level 3 inputs, and asset impairments ~~(Notes 8 and 10)~~(Note 9) which utilize Level 3 inputs.

Concentration of Credit Risks

The Company holds cash, cash equivalents, and restricted cash at several major financial institutions, which may exceed Federal Deposit Insurance Corporation insured limits. Historically, the Company has not experienced any losses due to such concentration of credit risk. The Company’s temporary cash investments policy is to limit the dollar amount of investments with any one financial institution and monitor the credit ratings of those institutions. While the Company may be exposed to credit losses due to the nonperformance of the holders of its deposits, the Company does not expect the settlement of these transactions to have a material effect on its results of operations, cash flows or financial condition.

~~The following table summarizes the percentage of consolidated revenues from customers that equal or exceed~~ ~~10.0% of the Company’s consolidated revenues in the period (no other single customer accounted for more than~~ ~~10.0% of consolidated revenues in these periods):~~

Three Months Ended September 30,

Nine Months Ended September 30,

2021
2020

2021

2020

Customer A

12
%

13
%

na
%

11
%

~~na-less than 10.0% of consolidated revenue in the period~~

The following table summarizes the percentage of consolidated trade receivable by customers that equal or exceed 10.0% of consolidated net trade receivables at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 (no other single customer accounted for 10.0% or greater of our consolidated net trade receivable as ~~of September~~June 30, ~~2021~~2022 or December 31, ~~2020)~~2021):

June 30, 2022

~~September 30,~~

December 31, 2021

~~December 31,~~

~~2020~~

Customer A

na12.5

~~Customer B~~

0na

na-less than 10.0% of consolidated revenue in the period

The following table summarizes the percentage of revenues by customers that equal or exceed 10.0% of consolidated revenues for the three and six months ended June 30, 2022 and 2021 (no other single customer accounted for 10.0% or greater of our consolidated revenues for the three and six months ended June 30, 2022 or 2021):

		Three Months Ended June 30				Six Months Ended June 30
	2022		2021			2022		2021
Customer B		0na		13.6	%		0na		0na
Customer A		0na		10.2			0na		0na

na-less than 10.0% of consolidated revenue in the period

Note 7—Derivative Instruments

The primary risk managed by the Company using derivative instruments is commodity price risk, which is accounted for in accordance with Accounting Standards Codification 815 — Derivatives and Hedging. Natural gas and electricity put and call options and swaps are entered into as hedges against unfavorable fluctuations in market prices of natural gas and electricity. The Company does not apply hedge accounting to these options or swaps, therefore the changes in fair value are recorded in earnings. By using derivative instruments to mitigate exposures to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company minimizes the credit or repayment risk in derivative instruments by entering into transactions with high-quality counterparties. At ~~September~~June 30, ~~2021,~~2022, GRE’s swaps and options were traded on the Intercontinental Exchange. GRE International's swaps and options were traded through counterparties.

The summarized volume of ~~GRE and GRE International's~~GRE’s outstanding contracts and options at ~~September~~June 30, ~~2021~~2022 was as follows (MWh – Megawatt hour and Dth – Decatherm):

Settlement Dates	Volume				Volume
	Electricity (in MWh)		Gas (in Dth)		Electricity (in MWH)		Gas (in Dth)
Fourth quarter 2021		215,479		526,400
First quarter 2022		173,802		851,800
Second quarter 2022		49,681		112,800
Third quarter 2022		61,992		63,940		108,368		258,440
Fourth quarter 2022		34,312		70,850		102,816		1,189,500
First quarter 2023		19,456		82,500		108,920		1,344,440
Second quarter 2023		19,456		50,600		53,904		154,000
Third quarter 2023		19,152		32,350		44,816		114,050
Fourth quarter 2023		19,152		32,500		51,528		585,150
First quarter 2024		0—		29,950		30,576		820,050
Second quarter 2024		0—		18,900		11,616		89,550
Third quarter 2024		0—		6,250
Third quarter of 2024						8,832		59,400
Fourth quarter of 2024						13,248		60,400
First quarter of 2025						11,472		285,550
Second quarter of 2025						0—		258,300
Third quarter of 2025						18,400		230,000
Fourth quarter of 2025						0—		230,000

The fair value of outstanding derivative instruments recorded in the accompanying consolidated balance sheets were as follows:

Asset Derivatives

Balance Sheet Location

September 30,
2021

December 31,
2020

(in thousands)

Derivatives not designated or not qualifying as hedging instruments:

Energy contracts and options¹
Other current assets
$ 12,671

$ 1,338
Energy contracts and options
Other assets

1,158

17
Total derivatives not designated or not qualifying as hedging instruments — Assets

$
13,829

$
1,355

Asset Derivatives

Balance Sheet Location

June 30,
2022

December 31,
2021

(in thousands)

Derivatives not designated or not qualifying as hedging instruments:

Energy contracts and options¹

Other current assets

43,408

13,750

Energy contracts and options

Other assets

8,482

699

Total derivatives not designated or not qualifying as hedging instruments — Assets

51,890

14,449

Liability Derivatives

Balance Sheet Location

September 30,
2021

December 31,
2020

Balance Sheet Location

June 30,

2022

December 31,

2021

(in thousands)

Derivatives not designated or not qualifying as hedging instruments:

Energy contracts and options¹

Other current liabilities

346

245

Other current liabilities

2,584

697

Energy contracts and options

Other liabilities

111

Other liabilities

1,618

533

Total derivatives not designated or not qualifying as hedging instruments — Liabilities

457

286

4,202

1,230

(1) The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months.

The effects of derivative instruments on the consolidated statements of operations was as follows:

		Amount of Gain Recognized on Derivatives
Derivatives not designated or not qualifying as	Location of Gain Recognized	Three Months Ended June 30,				Six Months Ended June 30,
hedging instruments	on Derivatives		2022		2021		2022		2021
		(in thousands)				(in thousands)
Energy contracts and options	Cost of revenues	$	61,820	$	1,908	$	99,548	$	4,795

Note 8—Other Current Assets and Other Assets

Other current assets consisted of the following:

	June 30, 2022		December 31, 2021
	(in thousands)
Fair value of derivative contracts—current	$	43,408	$	13,750
Receivables from the settlement of derivative contracts		1,617		4,655
Other current assets		3,367		3,384
Total other current assets	$	48,392	$	21,789

Amount of Gain Recognized on Derivatives

Derivatives not designated or not qualifying as

Location of Gain (Loss) Recognized

Three Months Ended September 30,
Nine Months Ended September 30,
hedging instruments

on Derivatives

2021

2020

2021

2020

(in thousands)
(in thousands)

Energy contracts and options

Cost of revenues

$ 24,305

$ 4,764 $ 29,100

$ 23,352

Other assets consisted of the following:

	June 30, 2022		December 31, 2021
	(in thousands)
Fair value of derivative contracts—noncurrent	$	8,482	$	699
Security deposits		5,119		4,867
Right-of-use assets, net of amortization		1,618		1,656
Other assets		2,983		1,939
Total other assets	$	18,202	$	9,161

Note 8—9—Goodwill and Other Intangible Assets

The table below reconciles the change in the carrying amount of goodwill for the period from January 1, ~~2021~~2022 to ~~September~~June 30, ~~2021:~~2022:

GRE
GRE International

Genie Renewables
Total

(in thousands)
Balance at January 1, 2021

$
9,998
$
15,931

$ 0—
$
25,929
Cumulative translation adjustment

0—

(302 )

0—

(302 )
Balance at September 30, 2021

$
9,998
$
15,629

$ 0—
$
25,627

	GRE		GRE International			Genie Renewables		Total
	(in thousands)
Balance at January 1, 2022	$	9,998	$	1,757		$	0—	$	11,755
Cumulative translation adjustment		0—		(138	)		0—		(138	)
Balance at June 30, 2022	$	9,998	$	1,619		$	0—	$	11,617

In the fourth quarter of 2020, the Company performed a quantitative impairment analysis for its Prism reporting unit (part of the Genie Renewables segment) as a result of lower than expected results of operations in 2020. As a result of this test, the Company concluded that the carrying value of the Prism reporting unit exceeded its fair value of including the allocated goodwill. Therefore, the Company recognized a goodwill impairment charge of $0.4 million.

The table below presents information on the Company’s other intangible assets:

	Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization and Impairment		Net Balance		Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization			Net Balance
	(in thousands)								(in thousands)
September 30, 2021
June 30, 2022
Patents and trademarks		17.0 years	$	5,557	$	2,781	$	2,776		17.1 years	$	3,822	$	(1,275	)	$	2,547
Non-compete agreements		3.0 years		2,120		2,117		3
Customer relationships		9.0 years		4,958		4,357		601		9.0 years		1,100		(591	)		509
Licenses		10.0 years		479		91		388		10.0 years		479		(127	)		352
Total			$	13,114	$	9,346	$	3,768			$	5,401	$	(1,993	)	$	3,408
December 31, 2020
December 31, 2021
Trademark		14.9 years	$	5,534	$	878	$	4,656		17.1 years	$	3,805	$	(1,103	)	$	2,702
Non-compete agreement		2.0 years		2,096		75		2,021
Customer relationships		3.1 years		6,907		2,922		3,985		9.0 years		1,100		(530	)		570
Licenses		10.0 years		1,224		241		983		10.0 years		479		(103	)		376
Total			$	15,761	$	4,116	$	11,645			$	5,384	$	(1,736	)	$	3,648

In the third quarter of 2021, as a result of the deterioration of the energy and natural gas market in the United Kingdom, the Company initiated the process of exiting that market which resulted in the impairment of trademark, non-compete agreements and customer relationships of Orbit of $4.7 million, included in the statements of operations.

In the second quarter of 2020, Prism renegotiated a contract with its main customer which resulted in impairment of customer relationship of $0.8 million included in the consolidated statements of operations.

Amortization expense of intangible assets (including minimal amounts reported in cost of revenues) was $~~0.9~~ $0.2 million and $~~3.2~~0.3 million in the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022, respectively. Amortization expense of intangible assets (including minimal amounts reported in cost of revenues) was $0.3million and ~~$1.3~~$0.5 million in the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021, respectively. The Company estimates that amortization expense of intangible assets will be $0$0.2 million, $0.4 million, $0.4 million, $0.4 million, $~~0.4~~0.3 million and ~~$2.0~~$1.7 million for the remainder of ~~2021,~~2022, and for ~~2022,~~ 2023, 2024, 2025, 2026 and thereafter, respectively.

Note 9—10—Accrued Expenses and Other Liabilities

Accrued expenses consisted of the following:

	September 30, 2021		December 31, 2020		June 30, 2022		December 31, 2021
	(in thousands)				(in thousands)
Renewable energy	$	35,673	$	26,474	$	17,911	$	23,247
Liability to customers related to promotions and retention incentives		9,003		9,558		9,079		9,071
Payroll and employee benefit		3,074		3,534		3,863		3,297
Other accrued expenses		3,589		3,196		2,918		3,908
Total accrued expenses	$	51,339	$	42,762	$	33,771	$	39,523

Other liabilities consisted of the following:

	June 30, 2022		December 31, 2021
	(in thousands)
Deferred tax liabilities	$	7,342	$	0—
Fair value of derivative contracts—noncurrent		1,618		533
Other noncurrent liabilities		1,700		1,851
Total other liabilities	$	10,660	$	2,384

Note ~~10—~~11—Leases

The Company entered into operating lease agreements primarily for offices in domestic and foreign locations where it has operations with lease periods expiring between ~~2021~~2022 and 2030. The Company has no finance leases.

The Company ~~determines~~determine if a contract is a lease at inception. Right-of-Use ("ROU") assets are included under other assets in the consolidated balance sheet. The current portion of the operating lease liabilities are included in other current liabilities and the noncurrent portion is included in other liabilities in the consolidated balance sheet.

ROU assets and operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the incremental borrowing rate, because the interest rate implicit in most of our leases is not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized borrowing rate based on information available at the lease commencement date. ROU assets also include any prepaid lease payments and lease incentives. The lease terms include periods under options to extend or terminate the lease when it is reasonably certain that we will exercise that option. The Company use the base, non-cancelable, lease term when determining the lease assets and liabilities. Operating lease expense is recognized on a straight-line basis over the lease term.

	September 30, 2021		December 31, 2020		June 30, 2022		December 31, 2021
	(in thousands)				(in thousands)
ROU Assets	$	1,488	$	4,409	$	1,618	$	1,656

Current portion of operating lease liabilities		1,004		1,327		245		229
Noncurrent portion of operating lease liabilities		2,521		3,233		1,450		1,495
Total	$	3,525	$	4,560	$	1,695	$	1,724

At ~~September~~June 30, ~~2021,~~2022, the weighted average remaining lease term is ~~8.3~~6.9 years and the weighted average discount rate is ~~6.0%~~6.5%.

Supplemental cash flow information for ROU assets and operating lease liabilities are as follows:

	Nine Months Ended September 30,				Six Months Ended June 30,
	2021		2020		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:	(in thousands)				(in thousands)
Operating cash flows from operating activities	$	1,377	$	637	$	299	$	183

ROU assets obtained in the exchange for lease liabilities
Operating leases	$	0—	$	0—	$	98	$	0—

In the third quarter of 2021, as a result of the deterioration of the energy and natural gas market in the United Kingdom, the Company initiated the process of exiting the market which resulted in the impairment of ROU of $1.9 million, included in the statements of operations.

Future lease payments under operating leases as of ~~September~~June 30, ~~2021~~2022 were as follows:

(in thousands)
Remainder of 2021	$	308
2022		1,193
Remainder of 2022				$	174
2023		1,162			352
2024		225			319
2025		233			245
2026					239
Thereafter		1,072			832
Total future lease payments		4,193			2,161
Less imputed interest		(668	)		(466	)
Total operating lease liabilities	$	3,525		$	1,695

Rental expenses under operating leases were ~~$0.4~~$0.2 million and ~~$1.4~~$0.3 million in the three and six ~~nine~~ months ended ~~September~~ June 30, ~~2021, respectively.~~2022. Rental expenses under operating leases were ~~$0.2~~ $0.3million and ~~$0.6~~$0.5 million in the three and ~~nine~~ six months ended ~~September~~ June 30, ~~2020, respectively.~~2021.

~~Note 20— Subsequent Events~~

~~United Kingdom Market~~

In October 2021, as part of the orderly exit process from the United Kingdom market (see Note 1), Orbit and Shell agreed to terminate the exclusive supply contract between them. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities with Shell. These proceeds, together with the existing cash and accounts receivables as of September 30, 2021, are expected to cover the cost to supply Orbit's current customers with electricity and natural gas until an orderly transfer of those customers is completed, and to exceed Orbit’s liabilities and carrying value of goodwill at September 30, 2021 of $30.7 million and $13.9 million, respectively. Due to a wide range of outcomes related to the on-going exit from the United Kingdom market, the Company is unable to provide the expected net proceeds from the exit from the United Kingdom market at this time.

~~Fair Value of Investments in Rafael~~

~~In October 2021, Rafael reported disappointing news related to the result of its clinical trials which resulted in a significant decline in the value of its Class B common stock.~~ ~~At September 30, 2021, the carrying value of the investment in Rafael was $8.0 million (see Note 15).~~

Note 21—Subsequent Events

Lumo Finland and Lumo Sweden

In July 2022, the Company initiated a plan to dispose of certain assets and liabilities of Lumo Finland and Lumo Sweden. From July 13, 2022 to July 19, 2022, the Company entered into a series of transactions to sell most of the electricity swap instruments held by Lumo Finland and Lumo Sweden for a gross aggregate amount of €41.1 million (equivalent to approximately $41.4 million) before fees and other costs. The sale price is expected to be settled monthly based on the monthly commodity volume specified in the instruments from September 2022 to March 2025. The net book value of the instruments sold was €35.8 million (equivalent to $35.8 million) as of June 30, 2022.

In July 2022, Lumo Sweden entered into a transaction to transfer, effective August 5, 2022, its customers to a third party for nominal consideration. The Company is exploring alternatives for ongoing servicing of the customers of Lumo Finland.

The aggregate net assets of Lumo Finland and Lumo Sweden was $39.8 million as of June 30, 2022, including $35.8 million in the net book value of derivative contracts disclosed above. The aggregate revenue of Lumo Finland and Lumo Sweden was $8.1 million and $20.7 million in the three and six months ended June 30, 2022, respectively and $6.3 million and $17.5 million in the three and six months ended June 30, 2021, respectively. The assets, liabilities and results of operations of Lumo Finland and Sweden are included in the GRE International segment.

The Company anticipates that the assets and liabilities of Lumo Finland and Lumo Sweden that are expected to be sold or disposed will be reclassified as assets and liabilities held for sale. A potential disposal would represent a strategic shift that would have a major effect on the Company’s operations and financial statements and would be accounted for as a discontinued operation upon completion of disposal in 2022. Upon completion of the disposal of the assets and liabilities of Lumo Finland and Lumo Sweden, the remaining assets and liabilities of GRE International would be combined with the corporate segment.

Redemption of Preferred Stock

In July 2022, the Company elected to exercise its right to redeem 117,647 shares of its outstanding Preferred Stock on August 15, 2022 (the “Redemption Date”) at a price of $8.50 per share (an aggregate of $1.0 million), together with an amount equal to all dividends accrued and unpaid up to, but not including, the Redemption Date.

I~~tem~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the accompanying consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, as filed with the U.S. Securities and Exchange Commission (or SEC).

As used below, unless the context otherwise requires, the terms “the Company,” “Genie,” “we,” “us,” and “our” refer to Genie Energy Ltd., a Delaware corporation, and its subsidiaries, collectively.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are not limited to, those discussed below under Part II, Item IA and under Item 1A to Part I “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Overview

We are comprised of Genie Retail Energy ("GRE"), Genie Retail Energy International ("GRE International") and Genie Renewables.

GRE owns and operates retail energy providers ("REPs"), including IDT Energy, Residents Energy, Town Square Energy ("TSE"), Southern Federal and Mirabito Natural Gas. GRE's REP businesses resell electricity and natural gas primarily to residential and small business customers, with the majority of the customers in the Eastern and Midwestern United States and Texas.

GRE International holds the Company's interest in REPs that serve retail customers in Scandinavia. It holds 91.6% controlling interest in Lumo Energia Oyj ("Lumo Finland"), a REP serving residential customers in Finland and 97.7% interest in LumoEnergi AB ("Lumo Sweden"). GREI previously held 98.8% in Genie Japan that was sold in May 2021. GRE International also holds a 100% ownership of Orbit Energy, a REP operating in the U.K., which was discontinued in November 2021 as discussed below.

Genie Renewables holds Genie Solar Energy, a rooftop solar system sales and general contracting company, a 93.5% interest in CityCom Solar, a marketer of community solar energy solutions, Diversegy LLC ("Diversegy"), an energy broker for commercial, and a 60.0% controlling interest in Prism Solar, a solar solutions company that is engaged in U.S. manufacturing of solar panels, solar installation design and solar energy project management.

As part of our ongoing business development efforts, we seek out new opportunities, which may include complementary operations or businesses that reflect horizontal or vertical expansion from our current operations. Some of these potential opportunities are considered briefly and others are examined in further depth. In particular, we seek out acquisitions to expand the geographic scope and size of our REP businesses.

Discontinued Operations in United Kingdom

In 2021, the natural gas and energy market in the United Kingdom deteriorated which prompted us to suspend the spin-off and start the process of orderly withdrawal from the United Kingdom market. In October 2021, as part of the orderly exit process from the United Kingdom market, Orbit and Shell U.K. Limited ("Shell") agreed to terminate the exclusive supply contract between them. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities with Shell. A portion of the net cash proceeds was transferred to us (see Note 5, Discontinued Operations and Divestiture, to our financial statements included elsewhere in this Quarterly Report on Form 10-Q).

Following the termination of the contract with Shell, we filed a petition with the High Court of Justice Business and Property of England and Wales (the “Court”) to declare Orbit insolvent based on the Insolvency Act of 1986. On November 29, 2021, the Court declared Orbit insolvent based on the Insolvency Act of 1986, revoked Orbit's license to supply electricity and natural gas in the United Kingdom, ordered that Orbit's current customers be transferred to a “supplier of last resort” and transferred the administration of Orbit to Administrators effective December 1, 2021. All of the customers of Orbit were transferred to a third-party supplier effective December 1, 2021 as ordered by the Court. All assets and liabilities of Orbit, including cash and receivables remain with Orbit, the management and control of which was transferred to Administrators.

We determined that exiting the United Kingdom represented a strategic shift that would have a major effect on our operations and accordingly, presented the results of operations and related cash flows as discontinued operations for all periods presented. The assets and liabilities of the discontinued operations have been presented separately, and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of June 30, 2022 and December 31, 2021.

Lumo Finland and Lumo Sweden

In July 2022, we initiated a plan to dispose of certain assets and liabilities of Lumo Finland and Lumo Sweden. From July 13, 2022 to July 19, 2022, we entered into a series of transactions to sell most of the electricity swap instruments held by Lumo Finland and Lumo Sweden for a gross aggregate amount of €41.1 million (equivalent to approximately $41.4 million) before fees and other costs. The sale price is expected to be settled monthly based on monthly commodity volume specified in the instruments from September 2022 to March 2025. The net book value of the instrument sold was €35.8 million (equivalent to $35.8 million) as of June 30, 2022.

In July 2022, Lumo Sweden entered into a transaction to transfer effective August 5, 2022, its customers to a third party for nominal consideration.We are exploring alternatives for ongoing servicing of the customers of Lumo Finland.

The aggregate net assets of Lumo Finland and Lumo Sweden were $39.8 million as of June 30, 2022, including the $35.8 million in net book value of derivative contracts disclosed above. The aggregate revenue of Lumo Finland and Lumo Sweden was $8.1 million and $20.7 million in the three and six months ended June 30, 2022, respectively and $6.3 million and $17.5 million in the three and six months ended June 30, 2021, respectively. The assets, liabilities and results of operations of Lumo Finland and Lumo Sweden are included in GRE International segment.

We anticipate that the assets and liabilities of Lumo Finland and Lumo Sweden that are expected to be sold or disposed will be reclassified as assets and liabilities held for sale. A potential disposal would represent a strategic shift that would have a major effect on our operations and financial statements and would be accounted for as a discontinued operation upon completion of disposal in 2022. Upon completion of the disposal of the assets and liabilities of Lumo Finland and Lumo Sweden, the remaining assets and liabilities of GRE International would be combined with the corporate segment.

Coronavirus Disease (COVID 19)

Starting in the first quarter 2020, the world and the United States experienced the unprecedented impacts of the coronavirus disease 2019 (COVID-19) pandemic.

For the ~~three and nine months~~year ended ~~September 30,~~December 31, 2021, the impacts of COVID-19 are evident in several key aspects of our business operations and the corresponding financial impact has been mixed. Our consolidated income from operations for the three and six months ended June 30, 2022 increased by $43.9 million and $73.8 million compared to the same periods in 2021.

Our customer base is predominantly residential, so we benefited from the increased demand for ~~residential~~ electricity when customers are working from their homes. On the other hand, like other retail energy providers, we suspended our face-to-face customer acquisition programs in March 2020 as public health measures were implemented to combat COVID-19, resulting in a decrease in gross meter acquisitions and a ~~reduction~~decrease in ~~the~~ U.S. domestic meters served. ~~Churn for~~The reduction in gross meter acquisitions decreased our customer acquisition expense in the ~~third quarter of~~year ended December 31, 2021 ~~slightly increased~~and 2020 compared to the ~~same~~ period ~~in 2020, however, below~~before the churn levels that the Company typically experienced before March 2020. In the fourth quarter of 2020, authorities began relaxing certain COVID-19 public health restrictions in some of GRE's domestic markets facilitating a partial reactivation of the previously curtailed customer acquisition channels.pandemic.

We did not experience any significant changes in our workforce composition and were able to implement our business continuity plans with no significant impact to our ability to maintain our operations. We continue to maintain strong physical and cybersecurity measures in order to both serve our operational needs with a remote workforce and to ensure that we continue to provide services to our customers. We face challenges due to the need to operate with a remote workforce and are continuing to address those challenges so as to minimize the impact on our ability to operate.

~~In the fourth quarter of 2020, authorities began relaxing certain COVID-19~~Beginning in 2021, public health restrictions were eased in ~~some~~most of our markets which ~~allows~~has allowed us to resume face-to-face sales and marketing. ~~Looking ahead, we expect to see a modest rebound in~~We believe that the impact of public health restrictions on our meter acquisition efforts has dissipated, however, any reversal of the easing of restrictions would impact that ~~expected rebound.~~situation.

There are many uncertainties regarding the impacts of the COVID-19 pandemic, and we are closely monitoring those impacts of on all aspects of its business, including how it will impact our customers, employees, suppliers, vendors, and business partners. We are currently unable to predict the impact that COVID-19 will have on our financial position and operating results due to the complexities of the impacts and numerous uncertainties that are beyond the Company's control. We expect to continue to assess the evolving impact of COVID-19 on our business and assets and intend to make adjustments accordingly.

~~Overview~~

~~We are comprised of Genie Retail Energy~~ ~~("GRE"), Genie Retail Energy International ("GRE International") and Genie Renewables.~~ ~~In March 2021, the Company modified its management reporting to rename theGenie Energy Services ("GES")~~ ~~segment as "Genie~~ ~~Renewables."~~

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GRE International holds the Company's REPs that serve retail customers in United Kingdom under the name Orbit Energy, its 98.8% interest in venture in Japan ("Genie Japan"), its 91.7% interest in Lumo Energia Oyj ("Lumo Finland"), a REP serving residential customers in Finland and its 98.8% interest in Lumo~~Energi~~ ~~AB ("Lumo~~ ~~Sweden"), which was formed in~~ ~~2019~~ ~~to serve retail energy customers in Sweden. In May 2021, we completed the sale of Genie Japan.~~

~~Genie Renewables holds~~ ~~Genie Solar Energy, a rooftop solar system sales and general contracting company, a 93.5% interest in~~ ~~CityCom~~ ~~Solar, a marketer of community solar energy solutions, oversees~~ ~~Diversegy, a retail energy advisory and brokerage company that serves commercial and industrial customers throughout the United States and manages our 60.0% controlling interest in Prism, a~~ ~~solar solutions company that is engaged in U.S. based manufacturing of solar panels, solar installation design and solar energy project management.~~

~~Strategic Update~~

We suspended the planned spin-off of our international operations in the United Kingdom and Scandinavia following the deterioration of the United Kingdom energy market, where a planned, orderly withdrawal from the market is underway. We do not expect to incur additional material, cash charges as a result.

Genie Retail Energy

GRE operates REPs that resell electricity and/or natural gas to residential and small business customers in Connecticut, Delaware, Georgia, ~~Florida, Georgia,~~ Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Florida, Texas, Rhode Island, and Washington, D.C. GRE’s revenues represented approximately ~~70.5~~84.2% and ~~85.0%~~84.7% of our consolidated revenues in the ~~nine~~three and six months ended ~~September~~June 30, 2022, respectively and 87.7% and 85.7% of our consolidated revenues in the three and six months ended June 30, 2021, ~~and 2020,~~ respectively.

Seasonality and ~~Weather~~Weather; Climate Change

The weather and the seasons, among other things, affect GRE’s REPs' revenues. Weather conditions have a significant impact on the demand for natural gas used for heating and electricity used for heating and cooling. Typically, colder winters increase demand for natural gas and electricity, and hotter summers increase demand for electricity. Milder winters and/or summers have the opposite effects. Unseasonable temperatures in other periods may also impact demand levels. Potential changes in global climate may produce, among other possible conditions, unusual variations in temperature and weather patterns, resulting in unusual weather conditions, more intense, frequent and extreme weather events and other natural disasters. Some climatologists believe that these extreme weather events will become more common and more extreme which will have a greater impact on our operations. Natural gas revenues typically increase in the first quarter due to increased heating demands and electricity revenues typically increase in the third quarter due to increased air conditioning use. Approximately ~~47.7%~~44.5% and ~~49.6%~~47.9% of GRE’s natural gas revenues for the relevant years were generated in the first quarter of ~~2020~~2021 and ~~2019,~~2020, respectively, when demand for heating was highest. Although the demand for electricity is not as seasonal as natural gas (due, in part, to usage of electricity for both heating and cooling), approximately 30.8% and 31.8% of GRE’s electricity revenues for 2021 and 2020, ~~and 2019,~~respectively, were generated in the third quarters of those years. GRE's REP's revenues and operating income are subject to material seasonal variations, and the interim financial results are not necessarily indicative of the estimated financial results for the full year.

In addition to the direct physical impact that climate change may have on our business, financial condition and results of operations because of the effect on pricing, demand for our offerings and/or the energy supple markets, we may also be adversely impacted by other environmental factors, including: (i) technological advances designed to promote energy efficiency and limit environmental impact; (ii) increased competition from alternative energy sources; (iii) regulatory responses aimed at decreasing greenhouse gas emissions; and (iv) litigation or regulatory actions that address the environmental impact of our energy products and services.

Winter Storm in Texas

In ~~mid-February~~February of 2021, the State of Texas experienced unprecedented cold weather and snow, which was named Winter Storm Uri. With the grid overtaxed due to demand and weather-related reduced supply and rolling blackouts being enforced, by order of the ~~ERCOT,~~Electricity Reliability Council of Texas ("ERCOT"), real-time commodity prices during the crisis escalated significantly. Although ~~our supply~~GRE's commitment for ~~our~~their customers in Texas was ~~reasonably~~ hedged for ~~reasonably~~ foreseen winter weather conditions, the market conditions exposed usthe Company to ~~further~~significant unexpected cost increases. ~~Despite our cost increases~~In the year ended December 31, 2021, GRE recognized approximately $13.0 million in additional costs related to the ~~unprecedented price volatility~~situation, which were included in ~~real-time electricity prices, we maintained customer rates under current agreements with customers. The impact on our~~the cost of revenue in the consolidated ~~profitability for the nine months ended September 30, 2021 was approximately$13.0 million.~~ statements of operation.

In June 2021, the state legislature of the State of Texas passed House Bill 4492 (“HB 4492”) which includes certain provisions for financing certain costs associated with electric markets caused by Winter Storm Uri. Pursuant to HB 4492, two categories of charges associated with Winter Storm Uri are to be securitized and the proceeds of the securitization will be provided ~~going~~ to the load serving entities who originally incurred the charges. Under HB 4492, ~~we are~~the Company is entitled to recover a portion of the costs incurred from the effect of Winter Storm Uri with a calculated range of $1.5 million to $2.6 million. In the second quarter of 2021,, the Company recorded a reduction in cost of revenues of $1.5 million.

In September 2021, the Public Utility Commission of Texas ("PUC") approved the Debt Obligation Order to grant ERCOT's application for a debt financing mechanism to pay for certain costs associated with Winter Storm Uri. Under the Debt Obligation Order, the amount that the Company is entitled to recover increased to approximately ~~$3.4~~$3.4 million. ~~For~~In the ~~three months ended September 30,~~ third quarter of 2021, the Company recorded an additional reduction in the cost of revenues of ~~$1.9~~$1.9 million for an aggregate amount of ~~$3.4~~$3.4 million for the ~~nine months~~year ended ~~September 30,~~December 31, 2021. In June 2022, the Company received a $3.5 million refund related to the cost of Winter Storm Uri.

~~United Kingdom Operations Update~~Purchase of Receivables and Concentration of Credit Risk

In the third quarter of 2021, as a result of the deterioration of the energy and natural gas market in the United Kingdom, the Company initiated the process of exiting the market which resulted in the impairment assets of $6.7 million, included in the statements of operations.

~~Purchase of Receivables~~

Utility companies offer purchase of receivable, or POR, programs in most of the service territories in which GRE operates. GRE’s REPs reduce their customer credit risk by participating in POR programs for a majority of their receivables. In addition to providing billing and collection services, utility companies purchase those REPs’ receivables and assume all credit risk without recourse to those REPs. GRE’s REPs’ primary credit risk is therefore nonpayment by the utility companies. In ~~each of~~ the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 the associated cost was approximately ~~1.0~~%1.0% and 1.1% of GRE's ~~revenue.~~ Inrevenue, respectively and approximately 1.0% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~ ~~the associated cost was approximately 1.2%, of~~ ~~GRE's~~ ~~revenue.~~ 2021. At ~~September~~June 30, ~~2021, 86.6%~~2022, 85.0% of GRE’s net accounts receivables were under a POR program.Certain of the utility companies represent significant portions of our consolidated revenues and consolidated gross trade accounts receivable balance during certain periods, and such concentrations increase our risk associated with nonpayment by those utility companies.

The following table summarizes the percentage of consolidated trade receivable by customers that equal or exceed 10.0% of consolidated net trade receivables at June 30, 2022 and December 31, 2021 (no other single customer accounted for 10.0% or greater of our consolidated net trade receivable as of June 30, 2022 or December 31, 2021.

		June 30, 2022				December 31, 2021
Customer A			12.5	%			na

na-less than 10.0% of consolidated revenue in the period

~~Class Action Lawsuits~~

		Three Months Ended June 30				Six Months Ended June 30
	2022		2021			2022		2021
Customer B		na		13.6	%		na		na
Customer A		na		10.2			na		na

na-less than 10.0% of consolidated revenue in the period

Legal Proceedings

Although GRE endeavors to maintain best sales and marketing practices, such practices have been the subject of certain class action lawsuits.

On February 18, 2020, named Plaintiff Danelle Davis filed a putative class action complaint against Residents Energy and GRE in United States District of New Jersey alleging violations of the Telephone Consumer Protection Act, 47 U.S.C § 227 et seq. Residents Energy denies allegations in the complaint and plans to vigorously defend this action. ~~On or around October 9, 2020, Residents Energy filed a preliminary motion to dismiss one of the counts in the complaint, and to dismiss GRE as a named defendant.~~ Although Residents Energy and GRE denies any wrongdoing in connection with the complaints, the parties settled the matter for a minimal amount which was included in selling general and administrative expenses for ~~three months ended March 31, 2021~~.

See Note ~~17,~~18, Commitments and Contingencies, in this Quarterly Report on Form 10-Q, which is incorporated by reference.

Agency and Regulatory Proceedings

From time to time, the Company responds to inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes. The Company cannot predict whether any of those matters will lead to claims or enforcement actions or whether the Company and the regulatory parties will enter into settlements before a formal claim is made. See Notes ~~17,~~18, Commitments and Contingencies, in this Quarterly Report on Form 10-Q, which is incorporated by reference, for further detail on agency and regulatory proceedings.

~~New York Public Service Commission Proceedings~~

In December 2017, the New York Public Service Commission (“PSC”) held an evidentiary hearing to assess the retail energy market in New York. On December 12, 2019, following the completion of post-hearing briefings in the proceedings, the PSC issued orders adopting changes to the New York retail energy market, effective April 14, 2021 (“2021 Orders”). The 2021 Orders limits the types of services energy retailer marketers may offer new customers or renewals, in terms of pricing for non-renewable commodities, and renewable product offerings. Although the Company is working to ensure that its products and services are fully compatible with the 2021 Orders, such compliance may adversely impact customer acquisition and renewal revenue and profitability. The Company is evaluating its options, both by itself and in tandem with other industry participants, to challenge or petition for additional clarity and changes to the 2021 Orders. There is insufficient basis to deem any loss probable or to assess the amount of any possible loss based on the changes instituted by the 2021 Orders. As of September 30, 2021, New York represented 18.0% of GRE’s total meters served and 14.2% of the total residential customer equivalents (“RCEs”) of GRE’s customer base. For the three and nine months ended September 30, 2021, New York gross revenues were $12.8 million and $40.1 million, respectively.

~~An RCE represents a natural gas customer with annual consumption of~~ ~~100~~ ~~mmbtu or an electricity customer with annual consumption of~~ 10 ~~MWh. Because different customers have different rates of energy consumption, RCEs are an industry standard metric for evaluating the consumption profile of a given retail customer base.~~

State of Connecticut Public Utilities Regulatory Authority

Town Square

On September 19, 2018, the State of Connecticut Public Utilities Regulatory Authority (“PURA”) commenced an investigation into Town Square following customer complaints of allegedly misleading and deceptive sales practices on the part of Town Square. The Connecticut Office of Consumer Counsel ~~has~~ joined in the ~~investigation~~ investigation.~~Although Town Square denies any basis for those complaints and any wrongdoing on its part, has cooperated with the investigation and responded to subpoenas for discovery.~~ On June 17, 2020, the PURA notified Town Square that it was advancing it’s investigation by assigning Prosecutorial ("PRO") staff for the purpose of investigating Town Square’s compliance with licensed electric supplier billing, marketing, and licensing requirements, and, if appropriate, facilitating settlement discussions among the ~~parties that contains, but is not limited to, an appropriate civil penalty, extensive retraining of the supplier’s third-party agents, and retention of all sales calls with continued auditing.~~ ~~In the first quarter of 2021, Town Square engaged in settlement discussions with PURA and accrued $0 million in the first quarter of 2021.~~ parties.

~~In July~~Although Town Square denies any basis for those complaints and any wrongdoing on its part, in May 2021, the parties ~~settled the dispute. Pursuant~~reached a settlement in principle, subject to ~~the terms~~finalization of ~~the~~a definitive settlement agreement, pursuant to which Town Square paid $0.4 million.Town Square has also ~~and has agreed~~volunteered to ~~voluntarily~~ refrain, from ~~in-person~~door-to-door marketing activities in Connecticut for ~~the~~a period of 15 months.

As of ~~September~~June 30, ~~2021,~~2022, Town Square’s Connecticut customer base represented ~~9.0%~~6.9% of GRE’s total meters served and ~~9.9%~~7.8% of the total RCEs of GRE’s customer base. For three and ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, Town Square’s gross revenues from sales in Connecticut were ~~$9.0~~$4.4 million and ~~$24.9~~$8.1 million, respectively.

An RCE represents a natural gas customer with annual consumption of 100 mmbtu or an electricity customer with annual consumption of 10 MWh. Because different customers have different rates of energy consumption, RCEs are an industry standard metric for evaluating the consumption profile of a given retail customer base.

Residents Energy

In August of 2020, Residents Energy began marketing retail energy services in Connecticut. For the ~~three and nine months~~year ended ~~September 30,~~December 31, 2021 Residents Energy's gross revenues from sales in Connecticut ~~were nil and~~was $0.2 ~~million, respectively.~~million. During the fourth quarter of 2020, the enforcement division of PURA contacted Residents Energy concerning customer complaints received in connection with alleged door-to-door marketing activities in violation of various rules and regulations, including a ban on door-to-door activities during the pertinent time period as a result of the COVID-19 pandemic. In January and February of 2021, Residents Energy responded to the limited information requests and discovery made by the enforcement division.regulations. On March 12, 2021, the enforcement division filed a motion against Resident Energy with the adjudicating body of PURA, seeking the assessment of $1.5 million in penalties, along with a suspension of license for eighteen months, auditing of marketing practices upon reinstatement and an invitation for settlement discussions. ~~Residents Energy believes that the initial demand is disproportionate to its scope of activity. In the first quarter of 2021, Residents Energy engaged in settlement discussions with PURA~~ ~~and accrued $0.3 million in the first quarter of 2021.~~

In ~~September~~May 2021, the parties ~~settled the dispute. Pursuant~~reached a settlement, pursuant to ~~the terms of the settlement agreement,~~ which Residents will pay $0.3 million.Residents Energy ~~paid $0.3 million and~~has also volunteered to withdraw from the market in Connecticut for a period of 36 months.

Critical Accounting Policies

Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities. Critical accounting policies are those that require the application of management’s most subjective or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. Our critical accounting policies include those related to revenue recognition, allowance for doubtful accounts, acquisitions, goodwill, and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. For additional discussion of our critical accounting policies, see our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Recently Issued Accounting Standards

Information regarding new accounting pronouncements is included in Note 20—Recently Issued Accounting Standards, to the current period’s consolidated financial statements.

Results of Operations

We evaluate the performance of our operating business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations.

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Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and Compared to Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021

Genie Retail Energy Segment

	Three months ended September 30,				Change							Nine months ended September 30,				Change							Three months ended June 30,				Change							Six months ended June 30,				Change
(amounts in thousands)	2021		2020		$			%				2021		2020		$			%				2022		2021		$			%				2022		2021		$			%
Revenues:
Electricity	$	82,801	$	86,200	$	(3,399	)		(3.9	)	%	$	218,082	$	210,350	$	7,732			3.7		%	$	53,063	$	61,895	$	(8,832	)		(14.3	)	%	$	112,443	$	135,282	$	(22,839	)		(16.9	)	%
Natural gas		3,516		2,724		792			29.1				25,878		24,190		1,688			7.0				10,098		5,082		5,016			98.7				34,601		22,362		12,239			54.7
Total revenues		86,317		88,924		(2,607	)		(2.9	)			243,960		234,540		9,420			4.0				63,161		66,977		(3,816	)		(5.7	)			147,044		157,644		(10,600	)		(6.7	)
Cost of revenues		52,166		63,122		(10,956	)		(17.4	)			176,523		164,084		12,439			7.6				34,159		48,657		(14,498	)		(29.8	)			71,459		124,358		(52,899	)		(42.5	)
Gross profit		34,151		25,802		8,349			32.4				67,437		70,456		(3,019	)		(4.3	)			29,002		18,320		10,682			58.3				75,585		33,286		42,299			127.1
Selling, general and administrative expenses		14,437		13,573		864			6.4				41,010		39,253		1,757			4.5				14,589		12,811		1,778			13.9				30,996		26,574		4,422			16.6
Income from operations	$	19,714	$	12,229	$	7,485			61.2		%	$	26,427	$	31,203	$	(4,776	)		(15.3	)	%	$	14,413	$	5,509	$	8,904			(161.6	)	%	$	44,589	$	6,712	$	37,877			564.3		%

Revenues. Electricity revenues decreased by ~~3.9%~~14.3% in the three months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021. The decrease iswas due to a ~~decrease~~decline in el~~ectricity~~electricity consumption partially offset by an increase in the average ~~rate~~price per kilowatt hour ~~sold~~ charged to customers in the three months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020~~.2021. Electricity consumption by GRE’sREPs' customers decreased by ~~9.2~~33.6% in the three months ended ~~September~~June 30, ~~2021~~2022, compared to the same period in ~~2020~~2021. The decrease in electricity consumption reflected a ~~5.9% decrease in average number of meters served and a 3.5%~~0.8% decrease in average consumption per meter and a 33.1% decrease in the average number of meters served. The reduction in meters served was driven, in part, by our decision to pause certain customer acquisitions efforts and allow certain lower margin customers, including those acquired through municipal aggregation deals to move to other suppliers. The average rate per kilowatt hour sold increased 29.1% in the three months ended June 30, 2022 compared to the same period in 2021. The increase is due to the increase in the average wholesale price of electricity in the three months ended June 30, 2022 compared to the same period in 2021.

Electricity revenues decreased by 16.9% in the six months ended June 30, 2022 compared to the same period in 2021. The decrease was due to a decline in electricity consumption partially offset by an increase in the average price charged per kilowatt hour charged to customers in the six months ended June 30, 2022 compared to the same period in 2021. Electricity consumption by GRE’sREPs' customers decreased by 35.3% in the six months ended June 30, 2022, compared to the same period in 2021. The decrease in electricity consumption reflected a 3.1% decrease in average consumption per meter and a 33.2% decrease in the average number of meters served. As discussed above, the reduction in meters served was driven, in part, by the decision to pause certain customer acquisitions efforts and allow certain lower margin customers to move to other suppliers. The average rate per kilowatt hour sold increased ~~by 5.2%~~28.4% in the ~~three~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020.~~ 2021. The ~~decrease~~increase is due to the increase in ~~per meter consumption reflects a decrease~~the wholesale price of electricity in ~~residential electricity as many COVID-~~19 ~~"stay-at-home" orders have been lifted or relaxed in some territories.~~

~~Electricity revenues increased by 3.7% in nine~~the six months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in 2020. The increase is due to increases in electricity consumption and in the average rate per kilowatt hour sold in the nine months ended September 30, 2021 compared to the same period in 2020. Electricity consumption by GRE’s REPs' customers increased 1.8% in the nine months ended September 30, 2021, compared to the same period in 2020. The increase in electricity consumption reflected a 5.5% increase in the average consumption per meter partially offset by a 3.5% decrease in the average number of meters served~~. The average rate per kilowatt hour sold increased by 1.8% in the nine months ended September 30, 2021 compared to the same period in 2020.~~ 2021.

GRE’s natural gas revenues increased by ~~29.1%~~98.7% in the three months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020.~~2021. The increase in natural gas revenues in the three months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 was a result of increases in natural gas consumption and ~~the~~in average ~~rate~~revenue per therm sold. Natural gas consumption by GRE’s REPs’ customers increased by ~~9.3%~~57.8% in the three months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020,~~2021, reflecting a ~~0.6%~~48.6% increase in average consumption per meter and ~~an 8.7%~~a 6.2% increase in average meters served in the three months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020.~~2021. The ~~average revenue per therm increased by 18.1% in the three months ended September 30, 2021, compared to the same period in 2020.~~

GRE’s natural gas revenues increased by 7.0% in the nine months ended September 30, 2021 compared to the same period in 2020. The increase is due to increases in natural gas consumption by GRE's REPs' customers and in the average rate per therm sold in the nine months ended September 30, 2021, compared to the same period in 2020. Natural gas consumption by GRE’s REPs’ customers increased by 6.1% in the nine months ended September 30, 2021 compared to the same period in 2020 reflecting a 5.2% increase in average consumption per meter in the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 was a result of entering new, natural gas-only markets during the last four quarters and anenrolling relatively high average consumption natural gas meters. The average revenue per therm sold increased by 25.9% in the three months ended June 30, 2022, compared to the same period in 2021.

GRE’snatural gas revenues increased by 54.7% in the six months ended June 30, 2022 compared to the same period in2021.The increase in natural gas revenues in the six months ended June 30, 2022 compared to the same period in 2021 was a result of ~~0.8%~~increases in natural gas consumption partially offset by a decrease in average revenue per therm sold. Natural gas consumption by GRE’sREPs’ customers increased by 29.1% in the six months ended June 30, 2022 compared to the same period in 2021, reflecting a 21.9% increase in average consumption per meter and a 5.9% increase in average meters served in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021. ~~Average rate~~ The average revenue per therm sold ~~slightly~~ increased by ~~0.9%~~19.9% in the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, compared to the same period in ~~2020.~~2021.

3438

The customer base for GRE’s REPs as measured by meters served consisted of the following:

(in thousands)	September 30, 2021	June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2022	March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021
Meters at end of quarter:
Electricity customers	289		292		308		305		309	203		209		210		289		292
Natural gas customers	72		69		65		65		67	77		77		75		72		69
Total meters	361		361		373		370		376	280		286		285		361		361

Gross meter acquisitions in the three months ended ~~September~~June 30, ~~2021,~~2022, were ~~46,000~~34,000 compared to ~~44,000~~35,000 for the same period in ~~2020.~~2021. Gross meter acquisitions in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022, were ~~144,000~~79,000 compared to ~~154,000~~97,000 for the same period in ~~2020~~2021. The decrease in the gross meter acquisitions for the three and six months ended June 30, 2022 compared to the same period in 2021 was due to a “strategic pause” on certain customer acquisition channels to protect margins due to unfavorable market conditions that started in the fourth quarter 2021.

Meters served ~~were flat at 361,000~~slightly decreased by 6,000 meters or 2.1% from March 31, 2022 to June 30, 2022. Meters served slightly decreased by 5,000 meters or 1.8% from December 31, 2021 to June 30, 2022. The decreases in the number of meters served at June 30, ~~2021~~2022 compared to March 31, 2022 and ~~September 30, 2021. Meters served decreased by 9,000 meters or 2.4%~~ ~~from~~ December 31, ~~2020~~2021 were due to a decrease in average churn during the period and the "strategic pause" on certain customer acquisition channels discussed above. GRE's REPs also returned some customers to their underlying utility in certain markets in the fourth quarter of 2021 to minimize the impact of ~~September 30, 2021~~.expected higher prices on our margins. In the three months ended ~~September~~June 30, 2022, average monthly churn increased to 4.4% compared to 3.8% for same period in 2021. In the six months ended June 30, 2022, the average monthly churn slightly increased to ~~4.0%~~4.5% compared to ~~3.7~~4.3% for same period in ~~2020. In the nine months ended September 30, 2021, average monthly churn slightly increase to 4.2% compared to 4.1% compared to same period in 2020.~~2021.

The average rates of annualized energy consumption, as measured by RCEs, are presented in the chart below. An RCE represents a natural gas customer with annual consumption of 100 mmbtu or an electricity customer with annual consumption of 10 MWh. Because different customers have different rates of energy consumption, RCEs are an industry standard metric for evaluating the consumption profile of a given retail customer base.

RCEs ~~increased by 1.8%~~decreased 20.6% at ~~September~~June 30, ~~2021~~2022 compared to June 30, 2021. The decreases are primarily due to the "strategic pause" on customer acquisitions and transfer of some customers to their underlying utilities as discussed above. RCEs ~~were relatively flat~~slightly increased by 0.8% at June 30, 2022 compared to December 31, ~~2020 and September 30,~~ 2021. ~~The fluctuations reflect the focus on adding higher consumption meters~~.

Cost of Revenues and Gross Margin Percentage. GRE’s cost of revenues and gross margin percentage were as follows:

~~nm—~~Cost of revenues for electricity decreased in the three months ended June 30, 2022 compared to the same period in ~~not~~2021 primarily because of decreases in electricity consumption by GRE’s REPs’ customers and the average unit cost of electricity. The average unit cost of electricity decreased ~~meaningful~~19.7% in the three months ended June 30, 2022 compared to the same period in 2021. A significant portion of the decrease in the average cost of electricity resulted from the favorable results of hedging activities for the three months ended June 30, 2022 compared to the same period in 2021. We recognized gains from derivative instruments of $22.2 million in the three months ended June 30, 2022 compared to $0.2 million recognized in the same period of 2021. Gross margin on electricity sales increased in the three months ended June 30, 2022 compared to the same period in 2021 because the average rate charged to customers increased while the average unit cost of electricity decreased.

Cost of revenues for electricity decreased in the ~~three~~six months ended ~~September~~June 30, ~~2021~~ 2022compared to the same period in ~~2020~~2021 primarily because of decreases in electricity consumption by GRE’s REPs’ customers and the average unit cost of electricity. The average unit cost of electricity decreased ~~6.7~~31.7% in the ~~three~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021. A significant portion of the decrease in the average cost of electricity resulted from the favorable results of hedging activities for the six months ended June 30, 2022 compared to the same period in 2021 and the incremental cost incurred in the six months ended June 30, 2021 as an effect of a major winter storm in Texas as discussed above. We recognized gains from derivative instruments of $53.2 million in the six months ended June 30, 2022 compared to $3.2 million recognized in the same period of 2021. Gross margin on electricity sales increased in the ~~three~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 because the average rate charged to customers increased while the average unit cost of electricity decreased.

Cost of revenues for ~~electricity~~natural gas increased in the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020~~ 2021 primarily because of increases in ~~electricity~~natural gas consumption by ~~GRE’s REPs’~~GRE'sREPs' customers and ~~the~~in average unit cost of ~~electricity.~~natural gas. The average unit cost of ~~electricity~~natural gas increased ~~7.3%~~120.1% in the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020. A significant portion of the increase resulted from incremental cost incurred as an effect of the major winter storm in Texas discussed above.~~2021. Gross margin on ~~electricity~~natural gas sales decreased in the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 because the average rate charged to customers increased less than the increase in the average unit cost of natural gas.

Cost of revenues for natural gas increased in the six months ended June 30, 2022 compared to the same period in 2021 primarily because of increases in natural gas consumption byGRE'sREPs' customers and in average unit cost of natural gas. The average unit cost of natural gas increased 40.2% in the six months ended June 30, 2022 compared to the same period in 2021. Gross margin on natural gas sales decreased in the six months ended June 30, 2022 compared to the same period in 2021 because the average rate charged to customers increased less than the increase in the average unit cost of ~~electricity.~~
natural gas.

~~Cost of revenues for natural gas decreased in the~~ ~~three months ended September 30, 2021~~ ~~compared to the same period in2020primarily because of a decrease in the average unit cost of natural gas partially offset by an increase in natural gas consumption byGRE's REPs' customers. The average unit cost of natural gas decreased~~ ~~96.2~~% ~~in the~~ ~~three months ended September 30, 2021~~ ~~compared to the same period in2020. A significant portion of the decrease resulted from the favorable fluctuation of the fair value of the Company's natural gas hedges.~~ ~~Gross margin on natural gas sales increased in the~~ ~~three months ended September 30, 2021~~ ~~compared to the same period in2020because the average rate charged to customers increased while the average unit cost of natural gas decreased.~~

~~Cost of revenues for natural gas decreased in the nine months ended September 30, 2021compared to the same period in 2020 primarily because of a decrease in~~ ~~the average unit cost of natural gas partially offset by an increase in natural gas consumption byGRE'sREPs' customers~~. The average unit cost of natural gas decreased 15.6% in the nine months ended September 30, 2021 compared to the same period in 2020. Gross margin on natural gas sales increased in the nine months ended September 30, 2021 compared to the same period in 2020 because the average rate charged to customers slightly increased while the average unit cost of natural gas decreased.

Selling, General and Administrative. The increase in selling, general and administrative ~~expenses~~expense in the three months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 was primarily due to increases in marketing and customer acquisition costs and employee-related costs partially offset by a decrease in legal settlement costs. Employee-related expenses increased by $0.7 million in the three months ended June 30, 2022 compared to the same period in 2021 primarily due to an increase in ~~marketing~~accrued bonuses as a result of improved results of operations during the period. Marketing and ~~employee-related expenses. Employee-related~~customer acquisition expenses increased by ~~$0.6~~$1.1 million in the three months ended ~~September~~June 30, ~~2021,~~2022 compared to the same period in ~~2020 due to an increase in the number~~2021 as a result of ~~employees. Marketing expenses increased by $0.2 in the three months ended September 30, 2021, compared to the same period in 2020~~ ~~due to~~ ~~expenses incurred on different~~expansion of marketing ~~channels~~activities to offset the effect of COVID-19 related to public health restrictions ~~on door-to-door marketing~~.to traditional customer acquisition methods. As a percentage of GRE’s total revenues, selling, general and administrative expense increased from ~~15.3%~~19.1% in the three months ended ~~September~~June 30, ~~2020~~2021 to ~~16.7%~~23.1% in the three months ended ~~September~~June 30, ~~2021.~~2022.

The increase in selling, general and administrative ~~expenses~~expense in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 was primarily due to increases in marketing ~~expenses. Marketing~~and customer acquisition costs and employee-related costs partially offset by a decrease in legal settlement costs. Employee-related expenses increased by ~~$1.5~~$1.8 million in the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022 compared to the same period in ~~2020~~2021 primarily due to an increase in accrued bonuses as a result of improved results of operations during the period. Marketing and customer acquisition expenses ~~incurred on different~~increased by $3.1 million in the six months ended June 30, 2022 compared to the same period in 2021 as a result of expansion of marketing ~~channels~~activities to offset the effect of COVID-19 related to public health restrictions ~~on door-to-door marketing.~~to traditional customer acquisition methods. As a percentage of GRE’s total revenues, selling, general and administrative ~~expenses~~expense increased from ~~15.3%~~16.9% in the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 to ~~16.7%~~21.1%% in the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

GRE International holds our stakes in REPs outside of North America. These businesses currently include ~~Shoreditch, which operates as Orbit Energy~~our controlling stakes in ~~the U.K.,~~Lumo Finland and Lumo Sweden and included Genie Japan ~~(prior~~prior to its sale in May ~~2021),~~2021. GRE International also holds our ~~controlling stakes~~stake in ~~Lumo Finland and Lumo Sweden.~~ ~~Lumo Sweden began~~Orbit, which discontinued operations inat the ~~second quarter~~end of November 2021. ~~2020~~.

Prior to our acquisition of the remaining 23.0% of Shoreditch in October 2020, we accounted for our 77.0% interest in Shoreditch under the equity method of accounting. Under this method, we recorded our share in the net income or loss of Shoreditch. Therefore, revenue generated, and expenses incurred were not reflected in our consolidated revenue and expenses.

In January 2021, weather volatility and the lack of adequate gas reserves drove the prices on the Japan Electric Power Exchange to $2,390 per megawatt hour for an extended period of time. Although our supply commitment for our customers in Japan was hedged reasonably for expected winter weather conditions, the extreme price spike exposed us to further unexpected cost increases. The impact on our ~~first quarter~~ 2021 consolidated result of operations was approximately $2.5 million.

On April 26, 2021, we entered into an Equity Purchase Agreement ("Purchase Agreement") with Hanhwa Q Cells Japan Co., Ltd. ("Hanhwa"), pursuant to which, we agreed to sell our interest in Genie Japan for ¥570.0 million (equivalent to approximately $5.3 million at April 26, 2021) subject to certain terms and conditions set forth in the Purchase Agreement. On May 11, 2021, upon the terms and subject to the conditions of Purchase Agreement, we completed the divestiture of Genie Japan for an aggregate cash consideration of ¥570.0 million (equivalent to approximately $5.2 million at May 11, 2021). Hanhwa also assumed the outstanding loans payable of Genie Japan. We paid $0.6 million of commission to certain former employees of Genie Japan and recognized a pre-tax gain of $4.2 million from the divestiture. For the period from January 1, 2021 to May 11, 2021, Genie Japan had revenues and cost of revenues of $3.9 million and $5.9 million, respectively.

Meters served by GRE International's REPs ~~(including those served by Orbit Energy for all periods) was flat~~slightly increased to 62,000 at ~~193,000 at September 30, 2021 compared to~~ June 30, ~~2021~~2022 from 61,000 at March 31, 2022 and ~~slightly~~ decreased by ~~2,000~~ ~~compared to~~from 67,000 at December 31, ~~2020. The decreases are~~2021 primarily due to a “strategic pause” on customer acquisition to protect margins due to unfavorable market conditions that started in the ~~sale of Genie Japan partially offset by the growth in Orbit Energy's customer bases.~~fourth quarter 2021.

RCEs ~~served by~~ of GRE ~~International's REPs (including those served by Orbit Energy for all periods) decreased to 98,000~~ International at ~~September 30, 2021~~ ~~from 106,000, at~~ June 30, ~~2021~~2022 is relatively flat at 40,000 compared to March 31, 2022 and ~~103,000 at~~ December 31, ~~2020. The decrease are~~2021 primarily due to the ~~sale of Genie Japan.~~

~~In the third quarter of 2021,~~"strategic pause" as a result of the deterioration of the energy and natural gas market in the United Kingdom, the Company initiated the process of exiting the market and is in discussion with the regulators for an oderly transfer of existing customers.discussed above.

~~Revenue.~~Revenues. GRE International's revenues increased in the three ~~and nine~~ months ended ~~September~~June 30, ~~2021~~2022 compared to the same ~~periods~~period in ~~2020~~2021 primarily due to an increase in the ~~consolidation~~average price charged to customers of ~~Orbit Energy~~ ~~in October 2020~~,Lumo Finland and Lumo Sweden partially offset by a decrease in electricity consumption of customers of Lumo Finland and Lumo Sweden and the ~~decrease from~~effect of the sale of Genie Japan in May 2021. ~~Orbit Energy~~The average price charged to customers of Lumo Finland and Lumo Sweden increased by 123.3% for the three months ended June 30, 2022 compared to the same period in 2021. The increase in the average price charged to customers in the three months ended June 30, 2022 compared to the same period in 2021 is due to a significant increase in the price of electricity in the wholesale market. Electricity consumption of customers of Lumo Finland and Lumos Sweden decreased by 26.8% for the three months ended June 30, 2022 compared to the same period in 2021. Revenues from Genie Japan were $0.8 million for the three months ended June 30, 2021.

GRE International's revenues decreased in the six months ended June 30, 2022 compared to the same period in 2021 primarily due to the sale of Genie Japan in May 2021 and a decrease in electricity consumption of customers of Lumo Finland and Lumo Sweden partially offset by the increase in the average price charged to customers of Lumo Finland and Lumo Sweden. Revenues from Genie Japan were $3.9 million for the six months ended June 30, 2021. Electricity consumption of customers of Lumo Finland and Lumos Sweden decreased by 35.2% for the six months ended June 30, 2022 compared to the same period in 2021. The average price charged to customers of Lumo Finland and Lumo Sweden increased by 133.7% for the six months ended June 30, 2022 compared to the same period in 2021. The increase in the average price charged to customers in the ~~GREI's~~six months ended June 30, 2022 compared to the same period in 2021 is due to a significant increase in the price of electricity in the wholesale market.

Cost of Revenues. GRE International's cost of revenue decreased in the three ~~and nine~~ months ended ~~September~~June 30, ~~2021~~ ~~by $18.0 million and $67.2 million, respectively.~~

~~Cost of Revenues.~~ ~~Cost of revenue increased in the three and nine~~ ~~months ended September 30, 2021~~2022 compared to the same ~~periods~~period primarily due to the significant gain recognized from the settlement and change in ~~2020. The increases~~fair values of hedge instruments held by Lumo Finland and Lumo Sweden. Gain from settlement and change in ~~cost~~fair values of ~~revenues were consistent with the increases in revenues~~hedges of Lumo Finland and Lumo Sweden increased to $39.2 million for the ~~periods. Orbit Energy~~three months ended June 30, 2022 from $1.5 million for the three months ended June 30, 2021. The gains are primarily due to significant volatility in the wholesale electricity market in the Nordic regions since the third quarter of 2021.

~~increased~~GRE ~~GREI's~~International's cost of revenue decreased in the ~~three and nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same period primarily due to the significant gain recognized from the settlement and change in fair values of hedge instruments held by ~~$17.1~~Lumo Finland and Lumo Sweden and the sale of Genie Japan in May 2021. Gain from settlement and change in fair values of hedges of Lumo Finland and Lumo Sweden increased to $39.4 for the six months ended June 30, 2022 from $1.9 million ~~and $58.8 million, respectively.~~ for the six months ended June 30, 2021. Cost of ~~revenues~~revenue from Genie Japan was $5.9 million for ~~nine~~the six months ended ~~September~~June 30, 2021 ~~includes $2.5 million incremental cost recorded in Genie Japan as a result of weather volatility and the lack of adequate gas reserves in Japan in the first quarter of 2021.~~.

Selling, General and Administrative Expenses. The ~~increase~~decreases in selling, general and administrative expenses in the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same periods in ~~2020~~ 2021 was primarily due to ~~the consolidation of~~ ~~Orbit Energy~~ ~~in October 2020, the~~ ~~continued growth of operations at Lumo Finland and the start of commercial operation of Lumo Sweden in the second quarter of 2020, partially offset by~~ the sale of Genie Japan in May ~~2021. Orbit Energy~~ ~~increased~~ ~~GREI's~~ ~~selling, general and administrative expenses for the~~ ~~three and nine months ended September 30,~~ 2021 partially offset by ~~$10.7 million and $22.4 million, respectively.~~

~~Impairment of assets.In the third quarter of 2021,~~an increase in employee-related cost as a result of hiring additional personnel during the deterioration of the energy and natural gas market in the United Kingdom, the Company initiated the process of exiting the market which resulted in the impairment of trademark, customer relationship, non-compete agreements, property and equipment and right of use assets for an aggregate amount of $6.7 million.period.

The Genie Renewables (formerly GES) segment is composed of Genie Solar, CityCom Solar, Diversegy and Prism, in which we hold a 60.0% ~~60%~~controlling ~~interest.~~interest.

Revenue. Genie Renewables' revenues ~~decreased~~increased in the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same periods in ~~2020~~2021. The ~~decreases~~increases in revenues were the result of ~~the discontinuance of a relationship with a customer of Prism~~increases in the ~~second quarter~~activities of ~~2020.~~Genie Solar projects and commissions from selling third-party products to customers by CityCom Solar. Revenues from Diversegy include commissions, entry fees and other fees from our energy brokerage and marketing services businesses. ~~Revenues from CityCom Solar~~ ~~include commissions from selling third-party products to customers.~~

Cost of Revenues. Cost of revenue ~~decreased~~increased in the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same periods in ~~2020.~~2021. The ~~decreases~~increases in cost of revenues ~~were consistent with~~reflects the ~~decreases~~increase in revenues ~~for the periods.~~ ~~Cost~~ of ~~revenues also includes~~ ~~commissions incurred by our energy brokerage~~Genie Solar and ~~marketing services businesses.~~ CityCom Solar.

Selling, General and Administrative. Selling, general and administrative expenses ~~decreased~~increased in the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same ~~periods~~period in ~~2020~~2021 primarily ~~because of the streamlining of operations of Prism~~due to increases in headcount in Genie Solar and ~~the sale of the Prism facility in October 2020.~~

~~Impairment of assets.~~ ~~Impairment of assets in three~~Diversegy and nine months ended September 30, 2020 pertains to the impairments of property, plant and equipment and customer relationship of Prism as a result of the disposal of Prism's property in New York and renegotiation of the contract with the customer. consulting fees at Genie Solar.

Corporate does not generate any revenues, nor does it incur any cost of revenues. Corporate costs include unallocated compensation, consulting fees, legal fees, business development expense and other corporate-related general and administrative expense.

Corporate general and administrative expenses increased in the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 ~~increased~~ compared to the same ~~periods~~period in ~~2020,~~2021 primarily ~~due to an increase~~because of increases in employee related cost and in stock-based ~~compensation.~~compensation expense. As a percentage of our consolidated revenues, Corporate general and administrative ~~expenses decreased~~expense increased to ~~1.5%~~2.4% in the three months ended ~~September~~June 30, ~~2021~~2022from ~~1.6%~~1.9% in the three months ended ~~September~~June 30, ~~2020~~ 2021 and decreased to ~~1.4%~~2.4% in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 from 1.7% in the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021.

Selling, general and administrative expenses. Stock-based compensation ~~expenses~~expense included in consolidated selling, general and administrative ~~expenses~~expense was ~~$0.5~~$0.7 million and ~~$0.4~~$0.6 million in the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively and ~~$1.7~~$1.6 million and ~~$1.3~~$1.1 million in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. At ~~September~~June 30, ~~2021,~~2022, aggregate unrecognized compensation cost related to non-vested stock-based compensation was ~~$5.4~~$5.5 million. The unrecognized compensation cost is recognized over the expected service period.

The following is a discussion of our consolidated income and expense line items below income from operations:

Other Income (loss) ~~income,~~, net. Other income (loss) ~~income,~~, net in thethree and ~~nine~~six months ended ~~September~~ June 30, ~~2021~~2022 and ~~2020~~2021 consisted primarily foreign currency ~~transactions.~~transactions and equity in net loss in equity method investees.

Provision for Income Taxes. ~~Our~~ ~~reported tax rate for the three months ended September 30, 2021 was 254.0%, an increase as compared to 28.0% for the same period in 2020.~~ ~~Our~~ ~~reported tax rate for the~~ ~~three months ended September 30, 2021~~ ~~was 96.5%, an increase as compared to 29.2% for the same period in~~ ~~2020~~. The ~~increases~~change in the reported tax rate for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the same periods in ~~2020~~2021, are athe result of favorable results of operations in the U.S. and GRE International and changes in the mix of ~~jurisdictions~~jurisdiction in which ~~the~~ taxable income was earned which was not offset by income tax benefit in ~~other~~some jurisdictions that had losses due to valuation allowances in those jurisdictions.~~The GRE International segment incurred significant losses as discussed above which resulted in lower consolidated income before income taxes.~~

Net ~~Loss~~Income (Loss) Attributable to Noncontrolling Interests. The ~~decrease~~increase in ~~the~~ net ~~loss~~income attributable to noncontrolling interests in the three and six months ended ~~September~~June 30, ~~2021~~2022 compared to the same periods in ~~2020~~2021 was primarily due to ~~a decrease in net losses of CCE, improvement of results of operations of Lumo Finland as discussed above and the acquisition of a noncontrolling interest of GRE International~~an increase in the ~~third quarter~~share of ~~2021.~~

~~The decrease~~noncontrolling interest in the net loss attributable to noncontrolling interests in the nine months ended September 30, 2021 compared to the same period in 2020 was primarily due to a decrease in net losses of CCE, improvement of results of operationsincome of Lumo ~~Finland as discussed above~~Sweden and ~~the~~ ~~streamline of operations at~~ ~~Prism.~~Lumo Finland.

Unrealized (loss) gain on ~~marketable equity securities~~Marketable Equity Securities and ~~investments.~~Investments. The unrealized (loss) gain on marketable equity securities and investment for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 pertains ~~primarily~~ to the ~~fluctuation of the market price~~change in fair value of the Company's investments in ~~common stock and warrants to purchase~~ common stock of Rafael Holdings, Inc. ("Rafael") which the Company acquired in December 2020.

~~Equity in~~Loss (Income) from Discontinued Operations, net ~~income (loss)~~of tax. Income from discontinued operations, net of tax in ~~equity method~~ ~~investees. The equity in net income (loss) in equity method investees for~~ the three and six months ended ~~September~~June 30, 2021 ~~and 2020 pertains~~is mainly due to ~~our share in~~losses incurred from the ~~result of operations of certain investee that are accounted for using the equity method of accounting.~~

The equity in net income from equity method investees for the nine months ended September 30, 2021 relates to our shares in the result of operation of certain investee. The equity in net loss from equity method investees for the nine months ended September 30, 2020, pertains to our share in the results of operations of Orbit. Prior to the acquisition of the controlling interest of Orbit in October 2020 as discussed above, we accounted for our ownership interest in Orbit using the equity method since we had the ability to exercise significant influence over Orbit's operating and financial matters, although we did not control Shoreditch.

~~Gain on sale of subsidiary.~~ ~~The gain on the sale of the subsidiary for the nine months ended September 30, 2021 pertains to the gain recognized related to the sale of Genie Japan in May 2021.~~

We currently expect that our cash flow from operations and the ~~$34.0~~$61.1 million balance of unrestricted cash and cash equivalents that we held at ~~September~~June 30, ~~2021~~2022 will be sufficient to meet our currently anticipated cash requirements for at least the period from ~~October~~July 1, ~~2021~~2022 to ~~November~~August 8, ~~2022.~~2023.

At ~~September~~June 30, ~~2021,~~2022, we had working capital (current assets less current liabilities) of ~~$44.4~~$125.8 million.

Cash, cash equivalents and restricted cash provided by operating activities ~~decreased by $24.0~~of continuing operations was $27.6 million in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to net cash used in operating activities of continuing operations of $2.0 million in the ~~same period in 2020. Net income after non-cash adjustments decreased cash flows by $10.5 million for the nine~~six months ended ~~September~~June 30, ~~2021,~~2021. The increase is primarily the result of favorable results of operations in the six months ended June 30, 2022 compared to the same period in ~~2020. The decrease in operating cash flows is primarily the result of unfavorable results of operations and the consolidation of operations of Orbit Energy in the nine months ended September 30,~~ 2021.

Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. Changes in ~~working capital~~assets and liabilities decreased cash flows by ~~$12.7~~$33.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, compared to the same period in ~~2020. Changes in other assets~~ ~~decreased~~ ~~cash flows by $0.4 million in the nine months ended September 30, 2021, compared to the same period in 2020.~~2021.

~~GRE’s REPs~~ are party to an Amended and Restated Preferred Supplier Agreement with BP Energy Company, or BP, which is to be in effect through November 30, ~~2020.~~2023. Under the agreement, the REPs purchase electricity and natural gas at market rate plus a fee. The obligations to BP are secured by a first security interest in deposits or receivables from utilities in connection with their purchase of the ~~REPs’~~REP’s customer’s receivables, and in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. ~~In addition, the REPs must pay an advance payment of $2.5 million to BP each month that BP will apply to the next invoiced amount due to BP.~~ The ability to purchase electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants. At ~~September~~June 30, ~~2021,~~2022, we were in compliance with such covenants. At ~~September~~June 30, ~~2021,~~2022, restricted cash—short-term of ~~$0.9~~$0.5 million and trade accounts receivable of ~~$51.7~~$42.1 million were pledged to BP as collateral for the payment of trade accounts payable to BP of ~~$15.5~~$13.2 million at ~~September~~June 30, ~~2021.~~2022.

We had purchase commitments of ~~$219.9~~$130.9 million at ~~September~~June 30, ~~2021,~~2022, of which ~~$170.7~~$103.7 million was for purchases of electricity.

Orbit Energy had an exclusive contract with Shell U.K. Limited ("Shell") to provide electricity and natural gas to Orbit Energy until June 2024, with an option (not an obligation) to extend through June 2027. Shell provides access to the forward market such that Orbit Energy can enter into forward hedge position for its customers which protects the Company from mark-to-market fluctuations. Shell also provides extended payment facilities of an additional 30 ~~days compared to the United Kingdom payment terms up to a limit of~~ ~~£5.0~~ ~~million at an interest of~~ ~~LIBOR~~ ~~plus~~ ~~5.0~~%. ~~Shell charges an additional~~ £~~0.9~~ per therm of natural gas and Mwh of electricity for all delivered volume on top of the wholesale costs. The contract with Shell is secured by a pledge of the outstanding equity interest of Orbit Energy. The contract is also subject to satisfaction of certain conditions including the maintenance of certain covenants which includes minimum levels of cash, gross margin, net worth, as defined in the contract, earnings before tax, as defined in the contract and provision for bad debts on accounts receivable. At ~~September 30, 2021, Orbit Energy was in compliance with such covenants. At~~ ~~September 30, 2021, Orbit Energy's total liability to Shell was~~ ~~$9.1~~ ~~million included in trade accounts payable and accrued expenses accounts in the consolidated balance sheet.~~

In October 2021, as part of the orderly exit process from the United Kingdom market discussed above, Orbit and Shell agreed to terminate the exclusive supply contract. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities~~with Shell.~~ These proceeds, together with the existing cash and accounts receivables as of September 30, 2021, are expected to cover the cost to supply its current customers with electricity and natural gas until the orderly transfer is completed, and to exceed Orbit’s liabilities and carrying value of goodwill at September 30, 2021 of $30.7 million and $13.9 million, respectively. Due to a wide range of outcomes related to the on-going exit from the United Kingdom market, the Company is unable to provide the expected net proceeds from the exit from the United Kingdom market at this time.

From time to time, we receive inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes, and we respond to those inquiries or requests. We cannot predict whether any of those matters will lead to claims or enforcement actions.

Our capital expenditures were ~~$0.2 million and $0.1 million for~~minimal in the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020, respectively.~~2021. We currently anticipate that our total capital expenditures in the twelve months ending December 31, ~~2021~~2022 will be between ~~$0.3~~$0.5 to ~~$0.6~~$1.0 million.

In December 2020, we invested $5.0 million in Class B common stock of Rafael. Rafael, a publicly-traded company, is also a related party. In connection with the purchase, Rafael issued to us warrants to purchase an additional 43,649 shares of Rafael's Class B common stock with an exercise price of $22.91 per share. The warrants had a term expiring on June 6, 2022. We exercised the warrants in full on March 31, 2021 for a total exercise price of $1.0 million. We do not exercise significant influence over the operating or financial policies of Rafael.

~~On May 11, 2021, upon~~In the ~~terms and subject to the conditions~~first half of ~~the Purchase Agreement,~~2022, we ~~completed the divestiture of Genie Japan~~acquired minimal interests in various ventures for an aggregate ~~consideration~~amount of ¥investments of $0.8 million.

In the fourth quarter of 2021, Orbit transferred to GEIC a net amount of $49.7 million ~~(equivalent~~from the proceeds of the settlement of the contact with Shell which is included in cash and cash equivalents in the consolidated balance sheet as of December 31, 2021. In January 2022, we transferred $21.5 million to ~~approximately $5.2~~the Administrators of Orbit Energy to fund the settlement of the expected remaining liabilities of Orbit of $30.8 million, ~~at May 11, 2021). We paid $0.6~~which were included in the current liabilities of discontinued operations in the consolidated balance sheet as of December 31, 2021. In February 2022, we deposited $28.3 million into an attorney trust account to hold, preserve, and dispense funds to the extent needed in connection with the administration process. On February 24, 2022, the Administrators filed a petition under Chapter 15 of ~~commission~~the U.S. Bankruptcy Code with the Bankruptcy Court of the Southern District of New York seeking (i) recognition of the U.K. administration proceeding as a foreign main proceeding and the U.K. Administrators as its foreign representatives, and (ii) entrusting distribution of the funds the Company deposited into its attorney’s trust fund to the U.K. Administrators. In the second quarter of 2022, the Administrators filed an application to transfer the funds back to the Administrators’ control in the U.K. Subject to certain ~~former employees~~representations and expectations regarding use and application of ~~Genie Japan~~the funds to efficiently and ~~included $0.1 million of cash in the assets transferred~~expeditiously pay off creditors and bring a timely close to the ~~buyer for a net proceed~~insolvency administration, we decided not to oppose the application, and the Court transferred the $28.3 million to the Administrator. We believe that the funds are more than sufficient to pay any remaining creditors of ~~$4.5 million.~~Orbit (with any surplus, which we expect to be significant, to be returned to us).

In each of the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we paid aggregate quarterly Base Dividends of ~~$0.4782~~$0.3188 per share, ~~$1.1~~$0.8 million in the aggregate, on our Series 2012-A Preferred Stock, or Preferred Stock. On ~~October 13, 2021,~~April 14, 2022, our Board of Directors declared a quarterly Base Dividend of $0.1594 per share of our Preferred Stock. The dividend will be paid on or about ~~November 15, 2021~~May 16, 2022 to stockholders of record as of the close of business on ~~November 8, 2021.~~May 6, 2022.

In March 2021, in light of the losses incurred from the effects of the events in Texas and Japan discussed above, the Company suspended the payment of quarterly dividends on its common stock to rebuild cash position.

On February 7, 2022, the Board of Directors reversed its earlier suspension of quarterly dividends and declared a quarterly dividend of $0.075 per share on our Class a common stock and Class B Common Stock. In the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2022, we paid an aggregate quarterly dividends of ~~$0.245~~$0.150 per share to stockholders of our Class A common stock and Class B common stock. The Company paid ~~$6.4~~$3.9 million in aggregate dividends on our common stock infor the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~
2022. On August 3, 2022, our Board of Directors declared a quarterly dividend of $0.075 per share of our Class A common stock and Class B Common Stock. The dividend will be paid on or about August 26, 2022 to stockholders of record as of the close of business on August 18, 2022.

On March 11, 2013, our Board of Directors approved a program for the repurchase of up to an aggregate of 7.0 million shares of our Class B common stock. In the three and six months ended ~~September~~June 30, ~~2021, we~~2022, the Company acquired ~~230,000~~639,393 Class B common stock under the stock purchase program for an aggregate amount of ~~$1.4~~$4.4 million. In the ~~nine~~three and six months ended ~~September~~June 30, 2021 we, the Company acquired ~~622,932~~392,932 Class B common stock under the stock purchase program for an aggregate amount of ~~$3.8~~$2.4 million.~~In the three months ended September~~At June 30, ~~2020, we acquired 11,738 Class B common stock under the stock purchase program for an aggregate amount of $0.1~~ ~~million. In the nine months ended September 30, 2020, we acquired~~ ~~224,944~~ ~~Class B common stock under the stock repurchase program for an aggregate amount of $1.6~~ ~~million.~~ ~~At September 30, 2021, 5.3~~2022, 4.9 million shares of Class B common stock remained available for repurchase under the stock repurchase program.

InOn March 21, 2020, our Board of Directors approved a program to redeem up to $4.0 million worth of our Preferred Stock in accordance with the ~~nine~~Certificate of Designations for the preferred stock. There were no redemptions under this program in the three and six months ended ~~September~~June 30, 2022 and 2021 ~~we paid $0.2 million to purchase 39,523 shares of our Class B common stock,~~ and in the nine months ended September 30, 2020, we paid $0.3 million to repurchase 32,907 shares of our Class B common stock tendered by our employees to satisfy tax withholding obligations in connection with theprogram terminated.
~~lapsing of restrictions on awards of restricted stock. Such shares were purchased by us based on their fair market value on the trading day immediately prior to the vesting date.~~

On February 7, 2022, our Board of Directors authorized a program to redeem up to $1.0 million per quarter of our Preferred Stock at the liquidation preference of $8.50 per share beginning in the second quarter of 2022. On May 3, 2022, our Board of Directors authorized to redeem $2.0 million of our Preferred Stock during the second quarter of 2022. In the three and six months ended June 30, 2022~~November 28, 2019,~~, the Company redeemed 235,294 Preferred Stock under the stock purchase program for an aggregate amount of $2.0 million. The Company accrued and paid $0.1296 per share on the redeemed Preferred Stock for a minimal aggregate amount

On May 13, 2020, Genie Japan entered into a Loan Agreement with Tokyo Star Bank for a ~~¥100.0 million (equivalent to $0.9 million) short-term credit facility. Genie Japan provided a letter of credit issued by JPMorgan~~ Chase amounting to ¥100.0 million (equivalent to $0.9 million) as collateral. The outstanding principal amount incurred interest at Tokyo Star Bank's short-term prime rate plus 0.25% per annum. Interest was payable monthly and all outstanding principal and any accrued and unpaid interest matured on of May 13, 2020. ~~Genie Japan settled the Loan agreement and paid the outstanding balance of~~ ~~¥100.0 million (equivalent to $0.9 million) on May 13, 2020.~~

~~On May 13, 2020, Genie Japan entered into a new Loan Agreement with Tokyo Star Bank for a~~ ¥150.0 million (equivalent to $1.4 million) short-term credit facility ("May 2020 Loan"). with maturity date of November 13, 2020. On November 13, 2020, Genie Japan and Tokyo Star Bank amended the May 2020 Loan to extend the maturity date to May 13, 2021. Genie Japan provided a letter of credit issued by JPMorgan Chase in the amount of ¥150.0 million (equivalent to $1.4 million) as collateral. The outstanding principal amount ~~incurs~~incurred interest at 3.0% per ~~annum. Interest is~~annum and was payable ~~monthly and all outstanding principal and any accrued and unpaid interest matured on November 13, 2020.~~ ~~On November 13, 2020, Genie Japan and Tokyo Star Bank amended the May 2020 Loan to extend the maturity date to March 13, 2021.~~ At ~~March 31, 2021, $1.4 million was outstanding under the May 2020 Loan. At March 31, 2021, the effective interest rate was 3.0%.~~

monthly. In May 2021, the Company completed the ~~sale~~divestiture of Genie Japan including ~~the outstanding~~ balance of the May 2020 ~~Loan of $1.4 million at the date of the sale.~~Loan.

On April 4, 2017, GRE, IDT Energy, and other GRE subsidiaries entered into a Credit Agreement with Vantage Commodities Financial Services II, LLC ("Vantage"), for a $20 million revolving loan facility. The borrowers consist of our subsidiaries that operate REP businesses, and those subsidiaries’ obligations are guaranteed by GRE. The borrowers have provided as collateral a security interest in their receivables, bank accounts, customer agreements, certain other material agreements and related commercial and intangible rights. The outstanding principal amount incurred interest at LIBOR plus 4.5% per annum. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest matured on April 3, 2020. In April 2020, the revolving line of credit expired and we paid outstanding balance of $3.5 million.

On December ~~5, 2019,~~13, 2018, we entered into ~~the first amendment of~~a Credit Agreement with JPMorgan Chase Bank (“Credit Agreement”) ~~to extend the maturity date to December 31, 2020.~~. On December ~~8, 2020, we~~23, 2021, the Company entered into the ~~second~~third amendment of ~~the~~its existing Credit Agreement to extend the maturity date toof December 31, ~~2021.~~2022. The Company continues to have ~~the~~an aggregate principal amount of $5.0 million credit line facility (“Credit Line”). The Company pays a commitment fee of 0.1% per annum on unused portion of the Credit Line as specified in the Credit Agreement. The borrowed amounts will be in the form of letters of credit which will bear interest of 1.0% per annum. The Company will also pay a fee for each letter of credit that is issued equal to the greater of $500 or 1.0% of the original maximum available amount of the letter of credit. We agreed to deposit cash in a money market account at JPMorgan Chase Bank as collateral for the line of credit equal to $5.1 ~~million.~~million. As of ~~September~~June 30, ~~2021,~~2022, there ~~was~~is no ~~letters~~issued letter of credit ~~issued~~ from ~~JP Morgan Chase Bank.~~the Credit Line. At ~~September~~June 30, ~~2021,~~2022, the cash collateral of $5.2 million was included in restricted cash—short-term in the consolidated balance sheet.

In ~~December 11, 2019,~~the six months ended June 30, 2022, we ~~refinanced Prism's outstanding~~ ~~5.95% notes payable~~ paid $0.1 million to repurchase 12,492 shares of our Class B common stock of our Class B common stock tendered by our employee and an officer to satisfy tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. There was no repurchase from ~~Catskill Hudson Bank~~ ~~that was due~~employees in ~~November 2019. The outstanding balance of notes payable of $0.9~~ ~~million at December 11, 2019 was payable in monthly equal installments for period of ten years. The outstanding principal amount incurred fixed interest at 4.75% per annum. The notes payable~~the six months ended June 30, 2021. Such shares were ~~secured~~repurchased by ~~Prism's commercial property in Highland, New York. In March 2020,~~us based on their fair market value on the~~outstanding balance of~~ trading day immediately prior to the notes payable was transferred to liabilities held for sale. On October 16, 2020, Prism settled the notes payable to Catskill Bank previously classified as liabilities held for sale with full payment of the principal amount of $0.8 million.
vesting date.

We do not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources, other than the following. GRE has performance bonds issued through a third party for the benefit of certain utility companies and for various states in order to comply with the states’ financial requirements for retail energy providers. At ~~September~~June 30, ~~2021,~~2022, the Company had outstanding aggregate performance bonds of ~~$13.4 million.~~$15.5 million and minimal amount of unused letters of credit.

TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION			1

	Item 1.	Financial Statements (Unaudited)	1

		CONSOLIDATED BALANCE SHEETS	1

		CONSOLIDATED STATEMENTS OF OPERATIONS	2

		CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~(LOSS)~~ INCOME	3

		CONSOLIDATED STATEMENTS OF EQUITY	4

		CONSOLIDATED STATEMENTS OF CASH FLOWS	76

		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	87

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3031

	Item 3	Quantitative and Qualitative Disclosures About Market Risks	4349

	Item 4	Controls and Procedures	4349

PART II. OTHER INFORMATION			4450

	Item 1.	Legal Proceedings	4450

	Item 1A.	Risk Factors	4450

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4450

	Item 3.	Defaults upon Senior Securities	4450

	Item 4.	Mine Safety Disclosures	4450

	Item 5.	Other Information	4450

	Item 6.	Exhibits	4551

SIGNATURES			4652

	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,					Six Months Ended June 30,
	2021			2020			2021			2020				2022			2021		2022			2021
	(in thousands, except per share data)													(in thousands, except per share data)
Revenues:
Electricity	$	103,799		$	91,793		$	290,783		$	227,671		$	60,832		$	68,681		$	132,616		$	156,294
Natural gas		7,609			2,724			48,458			24,190			10,098			5,082			34,601			22,362
Other		1,756			1,809			6,970			24,591			4,096			2,616			6,337			5,214
Total revenues		113,164			96,326			346,211			276,452			75,026			76,379			173,554			183,870
Cost of revenues		70,788			69,010			262,540			200,744			7,552			55,171			60,539			150,008
Gross profit		42,376			27,316			83,671			75,708			67,474			21,208			113,015			33,862
Operating expenses and losses:
Selling, general and administrative (i)		28,853			18,831			75,366			54,287			18,998			16,672			40,107			34,790
Impairment of assets		6,650			0—			6,650			993
Income from operations		6,873			8,485			1,655			20,428
Income (loss) from operations														48,476			4,536			72,908			(928	)
Interest income		8			21			28			164			48			10			65			20
Interest expense		(99	)		(48	)		(311	)		(223	)		(52	)		(103	)		(102	)		(212	)
Equity in the net income (loss) in equity method investees, net		52			(146	)		215			(1,698	)
Unrealized (loss) gain on marketable equity securities and investments		(5,312	)		0—			1,710			0—			(146	)		2,915			(799	)		7,022
Gain on sale of subsidiary		0—			0—			4,226			0—			0—			4,226			0—			4,226
Other (loss) income, net		(17	)		291			267			390			(372	)		39			(869	)		447
Income before income taxes		1,505			8,603			7,790			19,061			47,954			11,623			71,203			10,575
Provision for income taxes		(3,822	)		(2,406	)		(7,515	)		(5,563	)		(10,581	)		(3,143	)		(17,094	)		(3,679	)
Net (loss) income		(2,317	)		6,197			275			13,498
Net loss attributable to noncontrolling interests		(31	)		(531	)		(821	)		(1,026	)
Net (loss) income attributable to Genie Energy Ltd.		(2,286	)		6,728			1,096			14,524
Net income from continuing operations														37,373			8,480			54,109			6,896
Loss from discontinued operations, net of taxes														0—			(3,195	)		0—			(4,305	)
Net income														37,373			5,285			54,109			2,591
Net income (loss) attributable to noncontrolling interests														2,894			(82	)		1,741			(790	)
Net income attributable to Genie Energy Ltd.														34,479			5,367			52,368			3,381
Dividends on preferred stock		(370	)		(370	)		(1,111	)		(1,111	)		(624	)		(370	)		(994	)		(740	)
Net (loss) income attributable to Genie Energy Ltd. common stockholders	$	(2,656	)	$	6,358		$	(15	)	$	13,413
Net income attributable to Genie Energy Ltd. common stockholders													$	33,855		$	4,997		$	51,374		$	2,641

(Loss) earnings per share attributable to Genie Energy Ltd. common stockholders:
Basic	$	(0.10	)	$	0.25		$	(0.00	)	$	0.51
Amounts attributable to Genie Energy Ltd. common stockholders
Income from continuing operations													$	33,855		$	8,192		$	51,374		$	6,946
Loss from discontinued operations														0—			(3,195	)		0—			(4,305	)
Net income attributable to Genie Energy Ltd. common stockholders													$	33,855		$	4,997		$	51,374			2,641

Earnings per share attributable to Genie Energy Ltd. common stockholders:
Basic:
Income from continuing operations													$	1.33		$	0.31		$	2.01		$	0.27
Loss from discontinued operations														0—			(0.12	)		0—			(0.17	)
Net income attributable to Genie Energy Ltd. common stockholders													$	1.33		$	0.19		$	2.01		$	0.10
Diluted	$	(0.10	)	$	0.24		$	(0.00	)	$	0.50
Weighted-average number of shares used in calculation of (loss) earnings per share:
Income from continuing operations													$	1.30		$	0.31		$	1.97		$	0.26
Loss from discontinued operations														0—			(0.12	)		0—			(0.16	)
Net income attributable to Genie Energy Ltd. common stockholders													$	1.30		$	0.19		$	1.97		$	0.10

Weighted-average number of shares used in calculation of earnings per share:
Basic		25,514			25,928			25,867			26,107			25,463			25,804			25,613			25,903
Diluted		25,514			26,769			25,867			26,839			26,070			26,227			26,088			26,446

Dividends declared per common share	$	0—		$	0.085		$	0—		$	0.245		$	0.075		$	0—		$	0.150		$	0—
(i) Stock-based compensation included in selling, general and administrative expenses	$	531		$	447		$	1,680		$	1,331		$	730		$	559		$	1,570		$	1,148

		Three Months Ended June 30,					Six Months Ended June 30,
	2022			2021		2022			2021
	(in thousands)					(in thousands)
Net income	$	37,373		$	5,285	$	54,109		$	2,591
Other comprehensive loss:
Foreign currency translation adjustments		(2,139	)		105		(1,837	)		(237	)
Comprehensive income		35,234			5,390		52,272			2,354
Comprehensive gain attributable to noncontrolling interests		(3,131	)		82		(1,941	)		560
Comprehensive income attributable to Genie Energy Ltd.	$	32,103		$	5,472	$	50,331		$	2,914

		Three Months Ended September 30,					Nine Months Ended September 30,
		2021			2020	2021			2020
		(in thousands)				(in thousands)
Net (loss) income	$	(2,317	)	$	6,197	$	275		$	13,498
Other comprehensive loss (income):
Foreign currency translation adjustments		(133	)		173		(370	)		214
Comprehensive (loss) income		(2,450	)		6,370		(95	)		13,712
Comprehensive (loss) gain attributable to noncontrolling interests		(20	)		605		540			1,098
Comprehensive (loss) income attributable to Genie Energy Ltd.	$	(2,470	)	$	6,975	$	445		$	14,810

	Nine Months Ended September 30,
	2021			2020
		(in thousands)
Contract liability, beginning	$	5,609		$	13,426
Recognition of revenue included in the beginning of year contract liability		(4,468	)		(13,004	)
Additions during the period, net of revenue recognized during the period		7,158			611
Cumulative translation adjustments		18			0—
Contract liability, end	$	8,317		$	1,033

(in thousands)
Cash	$	2,681
Trade accounts receivable		8,008
Other current assets		843
Intangible assets:
Trademark (10-year useful life)		1,594
Non-compete agreements (2-year useful life)		1,956
Customer relationships (2-year useful life)		3,620
Goodwill		13,426
Other assets		657
Accounts payable and other current liabilities		(20,490	)
Contract liabilities		(5,152	)
Net assets	$	7,143

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Customer A		12	%		13	%		na	%		11	%

		Amount of Gain Recognized on Derivatives
Derivatives not designated or not qualifying as	Location of Gain (Loss) Recognized	Three Months Ended September 30,				Nine Months Ended September 30,
hedging instruments	on Derivatives		2021		2020		2021		2020
		(in thousands)				(in thousands)
Energy contracts and options	Cost of revenues	$	24,305	$	4,764	$	29,100	$	23,352

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
	(in thousands)						(in thousands)
Net loss	$	(445	)	$	(399	)	$	(818	)	$	(1,147	)
Aggregate funding provided by the Company, net	$	(393	)	$	(932	)	$	(921	)	$	(1,454	)

(in thousands)	GRE		GRE International			Genie Renewables			Corporate			Total			GRE		GRE International		Genie Renewables			Corporate			Total
Three Months Ended September 30, 2021

Three Months Ended June 30, 2022
Revenues	$	86,317	$	25,509		$	1,338		$	0—		$	113,164		$	63,161	$	8,086	$	3,779		$	0—		$	75,026
Income (loss) from operations		19,714		(10,935	)		(203	)		(1,703	)		6,873			14,413		36,365		(517	)		(1,785	)		48,476
Depreciation and amortization		90		779			12			0—			881			84		153		11			0—			248
Impairment of assets		0—		6,650			0—			0—			6,650
Equity in net income of equity method investees		0—		0—			0—			52			52
Three Months Ended September 30, 2020
Revenues	$	88,924	$	5,829		$	1,573		$	0—		$	96,326
Income (loss) from operations		12,229		(1,575	)		(614	)		(1,555	)		8,485
Impairment of assets		0—		0—			0—			0—			0—
Depreciation and amortization		118		527			11			14			670
Equity in net loss of equity method investees		0—		0—			0—			(146	)		(146	)
Nine Months Ended September 30, 2021
Stock-based compensation																230		0—		35			465			730
Provision for (benefit from) income taxes																3,705		7,266		0—			(390	)		10,581

Three Months Ended June 30, 2021
Revenues	$	243,960	$	96,081		$	6,170		$	0—		$	346,211		$	66,977	$	7,058	$	2,344		$	0—		$	76,379
Income (loss) from operations		26,427		(20,630	)		690			(4,832	)		1,655			5,509		145		334			(1,452	)		4,536
Depreciation and amortization		295		2,996			34			1			3,326			88		216		11			0—			315
Impairment of assets		0—		6,650			0—			0—			6,650
Equity in net income of equity method investees		0—		0—			0—			215			215
Nine Months Ended September 30, 2020
Revenues	$	234,540	$	17,820		$	24,092		$	0—		$	276,452
Income (loss) from operations		31,203		(4,701	)		(1,385	)		(4,689	)		20,428
Depreciation and amortization		347		1,512			314			0—			2,219
Impairment of assets		0—		0—			993			0—			993
Equity in net loss of equity method investees		0—		(1,502	)		0—			(17	)		(1,698	)
Stock-based compensation																186		40		0—			333			559
Provision for (benefit from) income taxes																2,263		884		0—			(4)			3,143

Six Months Ended June 30, 2022
Revenues	$	147,044	$	20,689		$	5,821		$	0—		$	173,554
Income (loss) from operations		44,589		33,557			(997	)		(4,241	)		72,908
Depreciation and amortization		169		341			21			1			532
Stock-based compensation		476		70			0—			1,024			1,570
Provision for (benefit from) income taxes		11,538		6,445			0—			(889	)		17,094

Six Months Ended June 30, 2021
Revenues	$	157,644	$	21,394		$	4,832		$	0—		$	183,870
Income (loss) from operations		6,712		(5,404	)		894			(3,130	)		(928	)
Depreciation and amortization		205		467			23			1			696
Stock-based compensation		348		72			0—			728			1,148
Provision for (benefit from) income taxes		3,449		47			128			55			3,679

Remainder of 2021	$	34,397
2022		111,526
(in thousands)
Remainder of 2022			$	45,148
2023		61,927		68,226
2024		11,013		16,530
2025		1,006		1,005
2026				0—
Thereafter		0—		0—
Total payments	$	219,869	$	130,909

	Three months ended September 30						Nine months ended September 30,							Three months ended June 30,						Six months ended June 30,
(amounts in thousands)	2021		2020		Change		2021		2020		Change			2022		2021		Change		2022		2021		Change
Gross margin percentage:
Electricity	37.1	%	28.7	%	8.4	%	24.6	%	28.3	%	(3.8	)	%	53.8	%	25.9	%	27.9	%	55.8	%	17.0	%	38.8	%
Natural gas	98.0		39.2		58.8		53.3		44.8		8.6			4.6		45.4		(40.8	)	37.2		46.3		(9.1	)
Total gross margin percentage	39.6	%	29.0	%	10.5	%	27.6	%	30.0	%	(2.4	)	%	45.9	%	27.4	%	18.6	%	51.4	%	21.1	%	30.3	%

	Three Months Ended June 30,					Change						Six Months Ended June 30,						Change
(amounts in thousands)	2022			2021		$			%			2022			2021			$			%
Revenues
Electricity	$	7,769		$	6,786	$	983			14.5		$	20,173		$	21,012		$	(839	)		(4.0	)%
Others		317			272		45			16.5			516			382			134			35.1
Total revenues	$	8,086		$	7,058	$	1,028			14.6		$	20,689		$	21,394		$	(705	)		(3.3	)
Cost of revenue		(29,568	)		5,092		(34,660	)		nm			(15,400	)		22,858			(38,258	)		(167.4	)
Gross profit (loss)		37,654			1,966		35,688			nm			36,089			(1,464	)		37,553			nm
Selling, general and administrative expenses		1,289			1,821		(532	)		(29.2	)		2,532			3,940			(1,408	)		(35.7	)
Income (loss) from operations	$	36,365		$	145	$	36,220			nm		$	33,557		$	(5,404	)	$	38,961			nm

	Total Number of Shares Purchased			Average Price per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
July 1–31, 2021		125,000		$	6.20		125,000		5,413,366
August 1–31, 2021		136,431	(2)		6.02		105,000		5,308,366
September 1–30, 2021		8,092	(3)		6.53		—		5,308,366
Total		269,523		$	6.20		230,000

(1)	Under our existing stock repurchase program, approved by our Board of Directors on March 11, 2013, we were authorized to repurchase up to an aggregate of 7.0 million shares of our Class B common stock.

~~(2)~~	Includes 31,431 Class B Common stock that were tendered by the employees of ours to satisfy the tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. Such shares were repurchased by us based on their fair market value on the trading day immediately prior to the vesting date.

~~(3)~~	Consists of Class B Common stock that were tendered by the employees of ours to satisfy the tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. Such shares were repurchased by us based on their fair market value on the trading day immediately prior to the vesting date.

	Total Number of Shares Redeemed		Average Redemption Price per Share		Total Number of Shares Redeemed as part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Redeemed Under the Plans or Programs
							(in thousands)
April 1–30, 2022		—	$	—		—	$	2,322,699
May 1–31, 2022		235,294		8.50		235,294		2,087,405
June 1–30, 2022		—		—		—		2,087,405
Total		235,294	$	8.50		235,294

Exhibit Number		Description

31.1*		Certification of Chief Executive Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

101.INS*		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	Genie Energy Ltd.
~~November 9, 2021~~
August 8, 2022	By:	/s/ Michael M. Stein
		Michael M. Stein Chief Executive Officer
~~November 9, 2021~~
August 8, 2022	By:	/s/ Avi Goldin
		Avi Goldin Chief Financial Officer

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