SEC Filing | Clean Energy Fuels Corp.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2020

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

For the transition period from to

Commission File Number: 001-33480

CLEAN ENERGY FUELS CORP.

(Exact name of registrant as specified in its charter)

Delaware	33-0968580
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4675 MacArthur Court, Suite 800, Newport Beach, CA 92660

(Address of principal executive offices, including zip code)

(949) 437-1000

(Registrant’s telephone number, including area code)

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.0001 par value per share

CLNE

The Nasdaq Select Market LLC

(Nasdaq Global Select Market)

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, a smaller reporting company, or an emerging growth company. See 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 October 30, 2020, there were 198,270,294 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.

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CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES

INDEX

Table of Contents

PART I.—FINANCIAL INFORMATION	3
Item 1.—Financial Statements (Unaudited)	3
Item 2.—Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.—Quantitative and Qualitative Disclosures about Market Risk	40
Item 4.—Controls and Procedures	41

PART II.—OTHER INFORMATION	43
Item 1.—Legal Proceedings	43
Item 1A.—Risk Factors	43
Item 2.—Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.—Defaults upon Senior Securities	57
Item 4.—Mine Safety Disclosures	58
Item 5.—Other Information	58
Item 6.—Exhibits	58

Unless the context indicates otherwise, all references to “Clean Energy,” the “Company,” “we,” “us,” or “our” in this report refer to Clean Energy Fuels Corp. together with its consolidated subsidiaries.

This report contains forward-looking statements. See the cautionary note regarding these statements in Part I, Item 2.-Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report.

We own registered or unregistered trademark or service mark rights to Redeem™, NGV Easy Bay™, Clean Energy™, Clean Energy Renewables™, and Clean Energy Cryogenics™. Although we do not use the “®” or “™” symbol in each instance in which one of our trademarks appears in this report, this should not be construed as any indication that we will not assert our rights thereto to the fullest extent under applicable law. Any other service marks, trademarks and trade names appearing in this report are the property of their respective owners.

Table of Contents

PART I.—FINANCIAL INFORMATION

Item 1.—Financial Statements (Unaudited)

Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data; Unaudited)


	December 31,		September 30,
	2019		2020
Assets
Current assets:
Cash, cash equivalents and current portion of restricted cash	$	49,222	$	91,605
Short-term investments		56,929		530
Accounts receivable, net of allowance of $2,412 and $1,931 as of December 31, 2019 and September 30, 2020, respectively		61,760		52,904
Other receivables		84,898		23,152
Inventory		29,874		28,830
Prepaid expenses and other current assets		11,109		8,492
Derivative assets, related party		—		3,269
Total current assets		293,792		208,782
Operating lease right-of-use assets		28,627		26,567
Land, property and equipment, net		323,912		298,088
Long-term portion of restricted cash		4,000		4,000
Notes receivable and other long-term assets, net		31,622		28,453
Long-term portion of derivative assets, related party		3,270		6,570
Investments in other entities		26,305		25,985
Goodwill		64,328		64,328
Intangible assets, net		1,229		627
Total assets	$	777,085	$	663,400
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of debt	$	56,013	$	6,126
Current portion of finance lease obligations		615		964
Current portion of operating lease obligations		3,359		3,189
Accounts payable		27,376		17,081
Accrued liabilities		67,697		50,202
Deferred revenue		7,338		1,720
Derivative liabilities, related party		164		—
Total current liabilities		162,562		79,282
Long-term portion of debt		32,872		29,047
Long-term portion of finance lease obligations		2,715		2,727
Long-term portion of operating lease obligations		26,206		24,008
Other long-term liabilities		9,701		4,867
Total liabilities		234,056		139,931
Commitments and contingencies (Note 17)
Stockholders’ equity:
Preferred stock, $0.0001 par value. 1,000,000 shares authorized; no shares issued and outstanding		—		—
Common stock, $0.0001 par value. 304,000,000 shares authorized; 204,723,055 shares and 198,412,898 shares issued and outstanding as of December 31, 2019 and September 30, 2020, respectively		20		20
Additional paid-in capital		1,203,186		1,191,140
Accumulated deficit		(668,232)		(675,535)
Accumulated other comprehensive loss		(1,566)		(1,791)
Total Clean Energy Fuels Corp. stockholders’ equity		533,408		513,834
Noncontrolling interest in subsidiary		9,621		9,635
Total stockholders’ equity		543,029		523,469
Total liabilities and stockholders’ equity	$	777,085	$	663,400

See accompanying notes to condensed consolidated financial statements.

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Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data; Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Revenue:
Product revenue	$	62,808	$	60,310	$	190,947	$	186,438
Service revenue		11,626		10,576		33,503		30,328
Total revenue		74,434		70,886		224,450		216,766
Operating expenses:
Cost of sales (exclusive of depreciation and amortization shown separately below):
Product cost of sales		43,145		38,767		137,696		118,494
Service cost of sales		6,787		6,522		18,674		18,280
Change in fair value of derivative warrants		(10)		—		1,587		(40)
Selling, general and administrative		17,640		16,639		54,007		51,790
Depreciation and amortization		12,247		11,744		37,331		35,718
Total operating expenses		79,809		73,672		249,295		224,242
Operating loss		(5,375)		(2,786)		(24,845)		(7,476)
Interest expense		(1,704)		(1,009)		(5,437)		(5,060)
Interest income		560		427		1,707		1,081
Other income, net		165		919		2,928		3,381
Income (loss) from equity method investments		377		(11)		(123)		(368)
Loss before income taxes		(5,977)		(2,460)		(25,770)		(8,442)
Income tax expense		(68)		(79)		(194)		(235)
Net loss		(6,045)		(2,539)		(25,964)		(8,677)
Loss attributable to noncontrolling interest		1,711		268		5,301		1,374
Net loss attributable to Clean Energy Fuels Corp.	$	(4,334)	$	(2,271)	$	(20,663)	$	(7,303)
Net loss attributable to Clean Energy Fuels Corp. per share:
Basic and diluted	$	(0.02)	$	(0.01)	$	(0.10)	$	(0.04)
Weighted-average common shares outstanding:
Basic and diluted		204,712,888		198,785,394		204,522,984		201,472,851

See accompanying notes to condensed consolidated financial statements.

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Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(In thousands; Unaudited)


	Clean Energy Fuels Corp.				Noncontrolling Interest				Total
	Three Months Ended				Three Months Ended				Three Months Ended
	September 30,				September 30,				September 30,
	2019		2020		2019		2020		2019		2020
Net loss	$	(4,334)	$	(2,271)	$	(1,711)	$	(268)	$	(6,045)	$	(2,539)

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of $0 tax in 2019 and 2020		(623)		687		—		—		(623)		687
Unrealized gains (losses) on available-for-sale securities, net of $0 tax in 2019 and 2020		5		(3)		—		—		5		(3)
Total other comprehensive income (loss)		(618)		684		—		—		(618)		684
Comprehensive loss	$	(4,952)	$	(1,587)	$	(1,711)	$	(268)	$	(6,663)	$	(1,855)


	Clean Energy Fuels Corp.				Noncontrolling Interest				Total
	Nine Months Ended				Nine Months Ended				Nine Months Ended
	September 30,				September 30,				September 30,
	2019		2020		2019		2020		2019		2020
Net loss	$	(20,663)	$	(7,303)	$	(5,301)	$	(1,374)	$	(25,964)	$	(8,677)

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of $0 tax in 2019 and 2020		7		(227)		—		—		7		(227)
Unrealized gains on available-for-sale securities, net of $0 tax in 2019 and 2020		73		2		—		—		73		2
Total other comprehensive income (loss)		80		(225)		—		—		80		(225)
Comprehensive loss	$	(20,583)	$	(7,528)	$	(5,301)	$	(1,374)	$	(25,884)	$	(8,902)

See accompanying notes to condensed consolidated financial statements.

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Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands; except share data)


								Accumulated
				Additional				Other		Noncontrolling		Total
	Common Stock			Paid-In		Accumulated		Comprehensive		Interest in		Stockholders’
	Shares	Amount		Capital		Deficit		Loss		Subsidiary		Equity
Balance, December 31, 2018	203,599,892	$	20	$	1,198,769	$	(688,653)	$	(2,138)	$	17,011	$	525,009
Issuance of common stock	1,052,040		—		175		—		—		—		175
Stock-based compensation	—		—		1,246		—		—		—		1,246
Net loss	—		—		—		(10,946)		—		(1,879)		(12,825)
Other comprehensive income	—		—		—		—		374		—		374
Increase in ownership in subsidiary	—		—		228		—		—		(228)		—
Balance, March 31, 2019	204,651,932		20		1,200,418		(699,599)		(1,764)		14,904		513,979
Issuance of common stock	3,214		—		4		—		—		—		4
Stock-based compensation	—		—		918		—		—		—		918
Net loss	—		—		—		(5,383)		—		(1,711)		(7,094)
Other comprehensive income	—		—		—		—		324		—		324
Balance, June 30, 2019	204,655,146		20		1,201,340		(704,982)		(1,440)		13,193		508,131
Issuance of common stock	64,849		—		107		—		—		—		107
Stock-based compensation	—		—		892		—		—		—		892
Net loss	—		—		—		(4,334)		—		(1,711)		(6,045)
Other comprehensive loss	—		—		—		—		(618)		—		(618)
Balance, September 30, 2019	204,719,995	$	20	$	1,202,339	$	(709,316)	$	(2,058)	$	11,482	$	502,467


								Accumulated
				Additional				Other		Noncontrolling		Total
	Common Stock			Paid-In		Accumulated		Comprehensive		Interest in		Stockholders’
	Shares	Amount		Capital		Deficit		Loss		Subsidiary		Equity
Balance, December 31, 2019	204,723,055	$	20	$	1,203,186	$	(668,232)	$	(1,566)	$	9,621	$	543,029
Issuance of common stock	871,010		—		194		—		—		—		194
Repurchase of common stock	(2,810,449)		—		(4,244)		—		—		—		(4,244)
Stock-based compensation	—		—		1,054		—		—		—		1,054
Net income (loss)	—		—		—		1,704		—		(805)		899
Other comprehensive loss	—		—		—		—		(1,915)		—		(1,915)
Increase in ownership in subsidiary	—		—		(1,388)		—		—		1,388		—
Balance, March 31, 2020	202,783,616		20		1,198,802		(666,528)		(3,481)		10,204		539,017
Issuance of common stock	25,214		—		41		—		—		—		41
Repurchase of common stock	(3,302,050)		—		(6,406)		—		—		—		(6,406)
Stock-based compensation	—		—		760		—		—		—		760
Net loss	—		—		—		(6,736)		—		(301)		(7,037)
Other comprehensive income	—		—		—		—		1,006		—		1,006
Balance, June 30, 2020	199,506,780		20		1,193,197		(673,264)		(2,475)		9,903		527,381
Issuance of common stock	141,310		—		248		—		—		—		248
Repurchase of common stock	(1,235,192)		—		(3,013)		—		—		—		(3,013)
Stock-based compensation	—		—		708		—		—		—		708
Net loss	—		—		—		(2,271)		—		(268)		(2,539)
Other comprehensive income	—		—		—		—		684		—		684
Balance, September 30, 2020	198,412,898	$	20	$	1,191,140	$	(675,535)	$	(1,791)	$	9,635	$	523,469

See accompanying notes to condensed consolidated financial statements.

Table of Contents

Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands; Unaudited)


	Nine Months Ended
	September 30,
	2019		2020
Cash flows from operating activities:
Net loss	$	(25,964)	$	(8,677)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		37,331		35,718
Provision for credit losses and inventory		1,071		1,421
Stock-based compensation expense		3,056		2,522
Change in fair value of derivative instruments		4,854		(4,055)
Derivative settlement loss		(210)		—
Amortization of discount and debt issuance cost		(555)		(69)
Gain on disposal of property and equipment		(4,043)		(3,314)
Gain from sale of certain assets of subsidiary		—		(176)
Loss from equity method investments		123		368
Non-cash lease expense		2,597		2,060
Deferred income taxes		—		90
Changes in operating assets and liabilities:
Accounts and other receivables		3,947		62,602
Inventory		2,799		437
Prepaid expenses and other assets		(4,593)		4,626
Operating lease liabilities		(3,053)		(2,368)
Accounts payable		(3,215)		(8,630)
Deferred revenue		(3,121)		(11,957)
Accrued liabilities and other		(6,421)		(17,476)
Net cash provided by operating activities		4,603		53,122
Cash flows from investing activities:
Purchases of short-term investments		(138,260)		(45,293)
Maturities and sales of short-term investments		137,896		101,850
Purchases of and deposits on property and equipment		(12,252)		(9,985)
Loans made to customers		—		(40)
Payments on and proceeds from sales of loans receivable		556		1,442
Cash received from sale of certain assets of subsidiary, net		4,973		4,830
Investments in other entities		—		(150)
Proceeds from disposal of property and equipment		6,569		4,615
Net cash provided by (used in) investing activities		(518)		57,269
Cash flows from financing activities:
Issuances of common stock		286		483
Repurchase of common stock		—		(13,663)
Proceeds from debt instruments		3,694		300
Repayments of debt instruments and finance lease obligations		(5,066)		(55,009)
Fees paid for debt issuance costs		(29)		—
Net cash used in financing activities		(1,115)		(67,889)
Effect of exchange rates on cash, cash equivalents and restricted cash		109		(119)
Net increase in cash, cash equivalents and restricted cash		3,079		42,383
Cash, cash equivalents and restricted cash, beginning of period		34,624		53,222
Cash, cash equivalents and restricted cash, end of period	$	37,703	$	95,605
Supplemental disclosure of cash flow information:
Income taxes paid	$	36	$	46
Interest paid, net of $391 and $57 capitalized, respectively	$	4,913	$	4,841

See accompanying notes to condensed consolidated financial statements.