Stockholders' Equity | Note 13 —Stockholders’ Equity Authorized Shares The Company’s certificate of incorporation authorizes the issuance of two classes of capital stock designated as common stock and preferred stock stockholders approved an increase in the number of shares of Common Stock the Company is authorized to issue from 304,000,000 to 454,000,000. As of December 31, 2021, the Company is authorized to issue 455,000,000 shares, of which 454,000,000 shares of capital stock are designated common stock and 1,000,000 shares are designated preferred stock. Dividend Provisions The Company did not declare or pay any dividends during the years ended December 31, 2019, 2020 and 2021. Voting Rights Each holder of common stock has the right to one vote per share owned on matters presented for stockholder action. TotalEnergies Private Placement On May 9, 2018, the Company entered into a stock purchase agreement (the “Purchase Agreement”) with TotalEnergies Marketing Services, S.E. (“TMS”), a wholly owned subsidiary of TotalEnergies. Pursuant to the Purchase Agreement, the Company agreed to sell and issue, and TMS agreed to purchase, up to 50,856,296 shares of the Company’s common stock at a purchase price of $1.64 per share, all in a private placement (the “TotalEnergies Private Placement”). The purchase price per share was determined based on the volume-weighted average price for the Company’s common stock between March 23, 2018 (the day on which discussions began between the Company and TotalEnergies) and May 3, 2018 (the day on which the Company agreed in principle with TotalEnergies regarding the structure and basic terms of its investment). As of the date of the Purchase Agreement, TotalEnergies did not hold or otherwise beneficially own any shares of the Company’s common stock, and TotalEnergies has agreed, until the later of May 9, 2020 or such date when it ceases to hold more than 5.0% of the Company’s common stock then outstanding, among other similar undertakings and subject to customary conditions and exceptions, to not purchase shares of the Company’s common stock or otherwise pursue transactions that would result in TotalEnergies beneficially owning more than 30.0% of the Company’s equity securities without the approval of the Company’s board of directors. On June 13, 2018, the Company and TMS closed the TotalEnergies Private Placement, in which: (1) the Company issued to TMS all of the 50,856,296 shares of its common stock issuable under the Purchase Agreement, resulting in TotalEnergies beneficially holding approximately 25.0% of the outstanding shares of the Company’s common stock and the largest ownership position of the Company as of September 30, 2018; (2) TotalEnergies paid to the Company an aggregate of $83.4 million in gross proceeds, which the Company has used and expects to continue to use for working capital and general corporate purposes, which may include executing its business plans, pursuing opportunities for further growth, and retiring a portion of its outstanding indebtedness; and (3) the Company and TotalEnergies entered into a registration rights agreement, described below. In connection with the issuance of common stock, the Company incurred transaction fees of $1.9 million. Pursuant to the Purchase Agreement, the Company and TotalEnergies also entered into a registration rights agreement on June 13, 2018, upon the closing under the Purchase Agreement. Pursuant to the registration rights agreement, the Company filed a registration statement with the SEC to cover the resale of the shares issued and sold under the Purchase Agreement, which was declared effective on August 16, 2018, and is obligated to use its commercially reasonable efforts to maintain the effectiveness of such registration statement until all such shares are sold or may be sold without restriction under Rule 144 under the Securities Act of 1933, as amended. As of December 31, 2021, the Company was in compliance with all of its registration covenants set forth in the registration rights agreement. At-The-Market Offerings On May 10, 2021, the Company entered into an equity distribution agreement with Goldman Sachs & Co. LLC, as sales agent, to sell shares of the Company’s common stock having an aggregate offering price of up to $100.0 million in an at-the-market offering program (the “May ATM Program”). Through June 3, 2021, the Company sold 12,362,237 shares of common stock under the May ATM Program, which exhausted the May ATM Program. On June 7, 2021, the Company entered into a new equity distribution agreement with Goldman Sachs & Co. LLC, as sales agent, to sell additional shares of common stock having an aggregate offering price of up to $100.0 million in a new at-the-market offering program (the “June ATM Program” and, together with the May ATM Program, the “ATM Programs”). On June 8, 2021, the Company sold 10,473,946 shares of common stock under the June ATM Program which exhausted the June ATM Program. For the year ended December 31, 2021, the Company issued 22,836,183 shares of common stock under the ATM Programs for gross proceeds of $200.0 million, and incurred transaction costs of $6.5 million, including $6.0 million in commissions paid to Goldman Sachs & Co. LLC. Share Repurchase Program On March 12, 2020, the Company’s Board of Directors approved a share repurchase program of up to $30.0 million (exclusive of fees and commissions) of the Company’s outstanding common stock (the “Repurchase Program”). On December 7, 2021, the Company’s Board of Directors approved an increase in the aggregate purchase amount under the Repurchase Program from $30.0 million to $50.0 million (exclusive of fees and commissions). The Repurchase Program does not have an expiration date, and it may be suspended or discontinued at any time. During the year ended December 31, 2021, the Company repurchased 452,700 shares of its common stock under the Repurchase Program for a total cost of $2.9 million. As of December 31, 2021, the Company had utilized a total of $17.4 million under the Repurchase Program to repurchase 8,197,086 shares of common stock. The Repurchase Program does not obligate the Company to acquire any specific number of shares. Repurchases under the Repurchase Program may be effected from time to time through open market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated share repurchase transactions, or other methods of acquiring shares, in each case subject to market conditions, applicable securities laws and other relevant factors. Repurchases may also be made under Rule 10b5-1 plans. Stock-Based Compensation The following table summarizes the compensation expense and related income tax benefit related to the Company’s stock-based compensation arrangements recognized in the accompanying consolidated statements of operations during the periods presented (in thousands): Year Ended December 31, 2019 2020 2021 Stock-based compensation expense, net of $0 tax in 2019, 2020, and 2021 $ 3,880 $ 2,957 $ 14,994 Equity Incentive Plans In December 2006, the Company adopted its 2006 Equity Incentive Plan (“2006 Plan”), which became effective on May 24, 2007, the date the Company completed its initial public offering of common stock. In May 2016, the Company adopted its 2016 Performance Incentive Plan (“2016 Plan”), which became effective on May 26, 2016, the date of approval of the 2016 Plan by the Company’s stockholders. The 2006 Plan became unavailable for new awards upon the effectiveness of the 2016 Plan. Unissued awards under the 2006 Plan are not available for future grant under the 2016 Plan. If any outstanding award under the 2006 Plan expires or is canceled, the shares allocable to the unexercised portion of that award will be added to the share reserve under the 2016 Plan and will be available for grant under the 2016 Plan. In May 2020, the Company adopted its Amended and Restated 2016 Performance Incentive Plan (“Amended 2016 Plan”), which increased the aggregate number of shares of the Company’s common stock to be delivered pursuant to all awards granted under the 2016 Performance Incentive Plan by an additional 17,500,000 shares, and became effective on May 15, 2020, the date of approval of the Amended 2016 Plan by the Company’s stockholders. As of December 31, 2021, the Company had 7,595,607 shares available for future grant under the Amended 2016 Plan. Service-Based Stock Options The Company has granted service-based stock options to key employees that vest annually over the three years following the date of grant at a rate of 34%, 33% and 33%, respectively, if the holder is in service to the Company at each vesting date. The service-based stock options granted have contractual terms of 10 years, and exercise price for the options granted is equal to the closing market price of the Company's common stock on the date of grant. The stock options are subject to the terms and conditions of the 2006 and 2016 Plans and a Notice of Grant of Stock Option and Stock Option Agreement. The following table summarizes the Company’s service-based stock option activity for the year ended December 31, 2021: Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Number of Exercise Term Value Shares Price (in years) (in thousands) Options outstanding as of December 31, 2020 8,142,831 $ 5.38 Granted 6,186,260 8.32 Exercised (1,219,976) 4.59 Forfeited or expired (1,295,444) 8.68 Options outstanding as of December 31, 2021 11,813,671 $ 6.64 7.27 $ 15,409 Options exercisable as of December 31, 2021 5,133,792 $ 5.52 4.37 $ 12,329 Options vested and expected to vest as of December 31, 2021 11,813,671 $ 6.64 7.27 $ 15,409 As of December 31, 2021, there was $25.9 million of total unrecognized compensation cost related to unvested shares subject to outstanding service-based stock options. That cost is expected to be expensed over a remaining weighted average period of approximately 2.3 years. The total fair value of shares vested during the year ended December 31, 2021 was $1.8 million. The fair value of each service-based stock option granted was estimated as of the date of grant using the Black-Scholes option pricing model and using the following assumptions: Year Ended December 31, 2019 2020 2021 Dividend yield 0.0% 0.0% 0.0% Expected volatility 57.3% to 61.5% 65.8% to 83.9% 76.8% to 96.8% Risk-free interest rate 2.11% to 2.53% 0.37% to 1.21% 0.58% to 1.31% Expected life in years 6.0 6.0 5.6 to 5.8 The volatility amounts used were estimated based on (i) the historical volatility of the Company’s common stock over a term equal to the estimated life of the options and on (ii) implied volatility of the Company’s traded options. The expected lives used were based on historical exercise experience and the Company’s anticipated exercise periods for its outstanding stock options. The risk-free interest rates used were based on the U.S. Treasury yield curve with terms approximating the expected life of the stock options at the time of grant. The weighted-average grant date fair value per share of service-based stock options granted during the years ended December 31, 2019, 2020 and 2021, were $1.28, $1.54 and $5.90, respectively. The aggregate intrinsic value of service- based options exercised during the years ended December 31, 2019, 2020 and 2021 was $0.1 million, $1.8 million and $10.1 million, respectively. The Company recorded $2.2 million, $1.7 million and $9.9 million of stock option expense relating to service-based stock options during the years ended December 31, 2019, 2020 and 2021, respectively. The Company has not recorded any tax benefit related to its service-based stock option expense. Performance-Based Stock Options The Company has granted 1,640,000 performance-based stock options to certain executives and key employees during 2021. The options granted vest in multiple tranches in which vesting of each tranche is contingent upon securing a defined RNG production volume following the date of grant, if the holder is in service to the Company upon the achievement of such performance hurdles. The performance-based stock options have contractual terms of 10 years, and the exercise price for the options granted is equal to the closing market price of the Company's common stock on the date of grant. The stock options are subject to the terms and conditions of the 2016 Plan and a Notice of Grant of Stock Option and Stock Option Agreement. The following table summarizes the Company’s performance-based stock option activity for the year ended December 31, 2021: Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Number of Exercise Term Value Shares Price (in years) (in thousands) Options outstanding as of December 31, 2020 — Granted 1,640,000 6.77 Exercised — Forfeited or expired — Options outstanding as of December 31, 2021 1,640,000 $ 6.77 9.94 $ — Options exercisable as of December 31, 2021 — $ — — $ — As of December 31, 2021, there was $6.6 million of total unrecognized compensation cost related to unvested shares subject to outstanding performance-based stock options. Compensation cost for the performance-based stock options is recognized when attainment of the performance hurdles is determined to be probable and over a period in which the Company estimates the performance hurdles will be achieved. No vesting occurred during the year ended December 31, 2021. The fair value of each performance-based stock option granted was estimated as of the date of grant using the Black-Scholes option pricing model and using the following assumptions: Year Ended December 31, 2021 Dividend yield 0.0% Expected volatility 77.1% Risk-free interest rate 1.36% Expected life in years 6.2 The volatility amount used was estimated based on (i) the historical volatility of the Company’s common stock over a term equal to the estimated life of the options and on (ii) implied volatility of the Company’s traded options. The expected life used was based on historical exercise experience and the Company’s anticipated exercise period for its outstanding performance-based stock options. The risk-free interest rate used was based on the U.S. Treasury yield curve with terms approximating the expected life of the stock options at the time of grant. The weighted-average grant date fair value per share of performance-based stock options granted during the year ended December 31, 2021, was $4.58. There were no performance-based stock options exercised during the year ended December 31, 2021. The Company recognizes the grant date fair value of the options that are probable of being earned over the estimated performance period. Compensation cost on performance-based stock options was $1.0 million for the year ended December 31, 2021. The Company has not recorded any tax benefit related to its performance-based stock option expense. Market-Based Stock Options The Company has granted 3,700,000 market-based stock options to select executives and employees during 2021. Market-based stock options vest if (i) the closing price of the Company’s common stock equals or exceeds $14.00 for twenty The following table summarizes the Company’s market-based stock option activity for the year ended December 31, 2021: Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Number of Exercise Term Value Shares Price (in years) (in thousands) Options outstanding as of December 31, 2020 — Granted 3,700,000 6.77 Exercised — Forfeited or expired — Options outstanding as of December 31, 2021 3,700,000 $ 6.77 9.94 $ — Options exercisable as of December 31, 2021 — $ — — $ — As of December 31, 2021, there was $17.8 million of total unrecognized compensation cost related to unvested shares subject to outstanding market-based stock options. That cost is expected to be expensed over a remaining weighted average period of approximately 6.8 years. No vesting occurred during the year ended December 31, 2021. The fair value of each market-based stock option granted was estimated on the date of grant using the Monte Carlo simulation model. The Monte Carlo simulation method is subject to variability as certain assumptions must be made, including the derived service period, which is estimated based on likely future stock price performance and volatility of the Company’s common stock price. The fair value of each market-based stock option granted was estimated using the following assumptions: Year Ended December 31, 2021 Dividend yield 0.0% Expected volatility 67.8% Risk-free interest rate 1.5% Expected life in years 10.0 The volatility amount used was based on the historical volatility of the Company’s common stock over a term equal to the estimated life of the options. The risk-free interest rate used was based on the U.S. Treasury yield curve with terms approximating the expected life of the stock options at the time of grant. The expected life used was based on the Company’s anticipated exercise period for its outstanding market-based stock options as the simulation was run from the valuation date through the end of the contractual life of the options using weekly time steps. The weighted-average grant date fair value per share of market-based stock options granted during the year ended December 31, 2021, was $4.87. There were no market-based stock options exercised during the year ended December 31, 2021. The Company recorded $0.2 million of compensation cost relating to market-based stock options during the year ended December 31, 2021. The Company has not recorded any tax benefit related to its market-based stock option expense. Service-Based Restricted Stock Units The Company has granted service-based restricted stock units (“Service-Based RSUs”) to key employees that vest annually over the three years following the date of grant at a rate of 34%, 33% and 33%, respectively, if the holder is in service to the Company at each vesting date. The Service-Based RSUs are subject to the terms and conditions of the 2016 Plan and a Notice of Grant of Restricted Stock Unit and Restricted Stock Unit Agreement. The following table summarizes the Company’s Service-Based RSU activity for the year ended December 31, 2021: Weighted Average Number of Fair Value at Shares Grant Date RSU outstanding and unvested as of December 31, 2020 978,716 $ 1.71 Granted 894,344 10.24 Vested (722,193) 2.54 Forfeited or expired (23,925) 6.86 RSU outstanding and unvested as of December 31, 2021 1,126,942 $ 8.08 The weighted average grant-date fair value of RSUs granted during the years ended December 31, 2020 and 2021 was $2.56 and $10.24, respectively. As of December 31, 2021, there was $6.2 million of total unrecognized compensation cost related to unvested shares subject to outstanding Service-Based RSUs. That cost is expected to be expensed over a remaining weighted-average period of approximately 1.8 years. The Company recorded $1.5 million, $1.0 million and $3.9 million of expense during the years ended December 31, 2019, 2020 and 2021, respectively, related to the Service-Based RSUs. The Company has not recorded any tax benefit related to its Service-Based RSU expense. Employee Stock Purchase Plan On May 7, 2013, the Company adopted an employee stock purchase plan (the “ESPP”), pursuant to which eligible employees may purchase shares of the Company’s common stock at 85% of the fair market value of the common stock on the last trading day of two consecutive, non-concurrent offering periods each year. The Company has reserved 2,500,000 shares of its common stock for issuance under the ESPP, and the first offering period under the ESPP commenced on September 1, 2013. The Company recorded $0.0 million of expense during the years ended December 31, 2019 and 2020 and $0.1 million of expense during the year ended December 31, 2021 related to the ESPP. The Company has not recorded any tax benefit related to its ESPP expense. As of December 31, 2021, the Company had issued an aggregate of 669,915 shares pursuant to the ESPP. Amazon Warrant On April 16, 2021, the Company entered into a Project Addendum to Fuel Pricing Agreement (“Fuel Agreement”) with Amazon Logistics, Inc., a subsidiary of Amazon.com, Inc. (“Amazon”), and a Transaction Agreement with Amazon (the “Transaction Agreement”), pursuant to which, among other things, the Company issued to Amazon.com NV Investment Holdings LLC, a subsidiary of Amazon (“Amazon Holdings”), a warrant to purchase up to an aggregate of 53,141,755 shares (the “Warrant Shares”) of the Company’s common stock at an exercise price of $13.49 per share, which was a 21.3% premium to the $11.12 closing price of the common stock on April 15, 2021. The Warrant Shares vest in multiple tranches, the first of which for 13,283,445 Warrant Shares vested upon execution of the Fuel Agreement. Subsequent tranches will vest over time based on fuel purchases by Amazon and its affiliates, up to a total of $500.0 million, excluding any payments attributable to “Pass Through Costs,” which consist of all costs associated with the delivered cost of gas and applicable taxes determined by reference to the selling price of gallons or gas sold. Under the Transaction Agreement, the Company was required to use commercially reasonable efforts to obtain the approval of its stockholders with respect to the issuance of Warrant Shares in excess of 50,595,531 shares of common stock, pursuant to The Nasdaq Stock Market LLC’s Listing Rule 5635(b) (the “Stockholder Approval”). On June 14, 2021, the Company obtained Stockholder Approval. As a result of the issuance of additional shares of common stock under the ATM Programs and in accordance with the terms of the warrant, on June 14, 2021, the number of shares of the Company’s common stock that may be purchased pursuant to the warrant, at an exercise price of $13.49 per share, increased by an aggregate of 5,625,959 shares (the “Additional Warrant Shares”). The Additional Warrant Shares vest in multiple tranches, the first of which for 1,406,490 Additional Warrant Shares vested on June 14, 2021. Subsequent tranches of the Additional Warrant Shares will vest over time based on fuel purchases by Amazon and its affiliates, consistent with the vesting schedule for the Warrant Shares as described above. The right to exercise the warrants and receive the Warrant Shares and Additional Warrant Shares (the “Amazon Warrant”) that have vested expires April 16, 2031. Amazon Holdings may not exercise the Amazon Warrant to the extent such exercise would cause Amazon Holdings to beneficially own more than 4.999% of the number of shares of Common Stock outstanding immediately after giving effect to such exercise (excluding any unvested portion of the Amazon Warrant) (the “Beneficial Ownership Limitation”). Amazon Holdings may, however, waive or modify the Beneficial Ownership Limitation by providing written notice to the Company sixty-one to the Company to the extent the Company is subject to certain acquisition transactions pursuant to a tender or exchange offer). Non-cash stock-based sales incentive contra-revenue charges (“Amazon Warrant Charges”) associated with the Amazon Warrant are recognized as the customer purchases fuel and vesting conditions become probable of being achieved, based on the grant date fair value of the Amazon Warrant. The fair values of the Amazon Warrant were determined as of the grant date in accordance with ASC 718, Compensation – Stock Compensation April 16, 2021 June 14, 2021 Dividend yield 0.0% 0.0% Expected volatility 66.46% 67.97 Risk-free interest rate 1.59% 1.49% Expected term in years 10.0 9.8 The volatility amounts used were estimated based on the historical volatility of the Company’s common stock over a period matching the assumed term of the Amazon Warrant. The expected terms used were based on the term of the Amazon Warrant at the date of issuance. The risk-free interest rates used were based on the U.S. Treasury yield curve for the expected term of the Amazon Warrant at the date of issuance. The following table summarizes the Amazon Warrant activity for the year ended December 31, 2021: Warrant Shares Outstanding and unvested as of December 31, 2020 — Granted 58,767,714 Vested (14,689,935) Outstanding and unvested as of December 31, 2021 44,077,779 As a result of the immediate vesting of a portion of the Warrant Shares and Additional Warrant Shares, the Company recognized Amazon Warrant Charges, in the second quarter of 2021, of $76.6 million and a customer incentive asset of $38.4 million representing Amazon Warrant Charges associated with future contractually required minimum fuel purchases which will be recognized as the fuel is purchased. During the year ended December 31, 2021, Amazon Warrant Charges in the consolidated statements of operations were $83.6 million. Amazon Warrant Charges during the year ended December 31, 2021 included $76.6 million from the immediate vesting of a portion of the Warrant Shares and Additional Warrant Shares and $7.0 million associated with fuel purchases. As of December 31, 2021, the Company had a customer incentive asset of $12.4 million and $22.1 million, classified in “Prepaid expenses and other current assets” and “Notes receivable and other long-term assets, net,” respectively, in the accompanying consolidated balance sheets. |