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Stockholders' Equity

12 Months Ended

Dec. 31, 2024

Stockholders' Equity Note [Abstract]

Note 12 —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, each having $0.0001 par value per share. On June 14, 2021, the Company’s 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, 2024, 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, 2022, 2023 and 2024.

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 Securities and Exchange Commission 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, 2024, 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, 2024, there were no repurchases of the Company’s common stock under the Repurchase Program. As of December 31, 2024, the Company has utilized a total of $23.5 million under the Repurchase Program from its inception to repurchase 9,387,340 shares of common stock, and a total of $26.5 million of authorized funds remain available for common stock repurchase under the Repurchase Program. 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 plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Any share repurchases under the Repurchase Program will require consent from the Company’s creditor, Stonepeak Partners LP, to remain in compliance with covenants under the Credit Agreement. See Note 11 – Debt for details on the customary representations and warranties, and covenants associated with the Credit Agreement.

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,

	2022		2023		2024
Stock-based compensation expense, net of $0 tax in 2022, 2023 and 2024	$	26,473	$	23,336	$	10,803

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.

In May 2024, the Company adopted its 2024 Performance Incentive Plan (“2024 Plan”), which became effective on May 20, 2024, the date of approval of the 2024 Plan by the Company’s stockholders. The 2016 Plan became unavailable for new awards upon the effectiveness of the 2024 Plan. Unissued awards under the 2016 Plan will be added to the share reserve under the 2024 Plan and will be available for grant under the 2024 Plan. If any outstanding award under the 2006 or 2016 Plan expires or is canceled, the shares allocable to the unexercised portion of that award will be added to the share reserve under the 2024 Plan and will be available for grant under the 2024 Plan. As of December 31, 2024, the Company had 5,070,074 shares available for future grant under the 2024 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, 2016 and 2024 Plans and a Notice of Grant of Stock Option and Stock Option Agreement.

The following table summarizes the Company’s service-based stock option activities for the year ended December 31, 2024:


				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, 2023	12,560,577	$	5.68
Granted	3,216,932	$	2.83
Exercised	(35,911)	$	1.71
Forfeited or expired	(825,986)	$	7.40
Options outstanding as of December 31, 2024	14,915,612	$	4.98	6.56	$	1,215
Options exercisable as of December 31, 2024	9,879,896	$	5.69	5.42	$	1,213
Options vested and expected to vest as of December 31, 2024	14,915,612	$	4.98	6.56	$	1,215

As of December 31, 2024, there was $8.1 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 1.6 years. The total fair value of options vested during the year ended December 31, 2024 was $11.7 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,
	2022	2023	2024
Dividend yield	0.0%	0.0%	0.0%
Expected volatility	73.7% to 76.9%	75.2% to 76.6%	76.5% to 76.9%
Risk-free interest rate	1.52% to 4.34%	3.68% to 4.73%	4.18% to 4.39%
Expected life in years	5.6 to 5.9	5.9 to 6.2	6.1 to 6.2

The volatility amounts used were estimated based on the historical volatility of the Company’s common stock over a term equal to the estimated life of the 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, 2022, 2023 and 2024 were $4.40, $3.30, and $1.98, respectively. The aggregate intrinsic value of service-based options exercised during the years ended December 31, 2022, 2023 and 2024 were $1.3 million, $0.2 million, and $0.1 million, respectively. The Company recorded $11.9 million, $11.7 million, and $8.7 million of stock option expense relating to service-based stock options for the years ended December 31, 2022, 2023 and 2024, respectively. The Company has not recorded any tax benefit related to its service-based stock option expense.

Performance-Based Stock Options

The Company granted 1,640,000 performance-based stock options to certain executives and key employees in 2021. The options granted vest in multiple tranches in which the 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 activities for the year ended December 31, 2024:


				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, 2023	1,615,000	$	6.77
Granted	—	$	—
Exercised	—	$	—
Forfeited or expired	(25,000)	$	6.77
Options outstanding as of December 31, 2024	1,590,000	$	6.77	6.94	$	—
Options vested and exercisable as of December 31, 2024	397,500	$	6.77	6.94	$	—

As of December 31, 2024, there was $3.9 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 shares subject to outstanding performance-based stock options vested in the year ended December 31, 2024; as such, the total fair value of options vested during the year ended December 31, 2024 was $0.0 million.

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:



		December 7, 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. No performance-based stock options were granted during the years ended December 31, 2022, 2023 and 2024. In addition, there were no performance-based stock options exercised during the years ended December 31, 2022, 2023 and 2024. The Company recognizes the grant date fair value of the options that are probable of being earned over the estimated performance period. Compensation cost relating to performance-based stock options was $2.0 million, $0.4 million, and $0.0 million for the years ended December 31, 2022, 2023 and 2024, respectively. The Company has not recorded any tax benefit related to its performance-based stock option expense.

Market-Based Stock Options

The Company granted 3,700,000 market-based stock options to select executives and employees in 2021. Market-based stock options vest if (i) the closing price of the Company’s common stock equals or exceeds $14.00 for twenty consecutive trading days, representing 207% of the closing market price of the Company’s common stock on the option grant date (the “Stock Price Condition”) and (ii) the holder is employed by the Company at the time the Stock Price Condition is satisfied. The market-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 market-based stock option activities for the year ended December 31, 2024:


				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, 2023	3,650,000	$	6.77
Granted	—	$	—
Exercised	—	$	—
Forfeited or expired	—	$	6.77
Options outstanding as of December 31, 2024	3,650,000	$	6.77	6.94	$	—
Options vested and exercisable as of December 31, 2024	—	$	—	—	$	—

As of December 31, 2024, there was no unrecognized compensation cost related to unvested shares subject to outstanding market-based stock options. That cost was fully expensed and recognized over the estimated derived service period of 2 years beginning on the date of grant. The Stock Price Condition was not met during the year ended December 31, 2024; as such, no vesting occurred.

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:



		December 7, 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. No market-based stock options were granted during the years ended December 31, 2022, 2023 and 2024. In addition, there were no market-based stock options exercised during the years ended December 31, 2022, 2023 and 2024. The Company recorded $9.4 million, $8.2 million, and $0.0 million of compensation cost relating to market-based stock options during the years ended December 31, 2022, 2023 and 2024, respectively. 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 and 2024 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 activities for the year ended December 31, 2024:


		Weighted
		Average
	Number of	Fair Value at
	Shares	Grant Date
RSU outstanding and unvested as of December 31, 2023	399,709	$	8.10
Granted	1,889,502	$	2.83
Vested	(347,482)	$	8.64
Forfeited or expired	(13,129)	$	4.57
RSU outstanding and unvested as of December 31, 2024	1,928,600	$	2.86

The weighted average grant-date fair value of RSUs granted during the years ended December 31, 2022, 2023 and 2024 was $6.41, $4.19 and $2.83, respectively.

As of December 31, 2024, there was $3.9 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 2.0 years.

The Company recorded $3.1 million, $3.0 million, and $2.0 million of expense during the years ended December 31, 2022, 2023 and 2024, 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 “2013 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 2013 ESPP, and the first offering period under the ESPP commenced on September 1, 2013. At the Company’s annual meeting of stockholders held on May 19, 2022, the Company’s stockholders voted and approved the 2022 Employee Stock Purchase Plan (the “2022 ESPP”), making 2,500,000 shares of the Company's common stock available for issuance under the 2022 ESPP. Upon approval of the 2022 ESPP, the 2013 ESPP was terminated following the conclusion of the offering period dated June 30, 2022. The 2022 ESPP does not have a “pour over” feature; as such, any unissued shares under the 2013 ESPP are no longer available for issuance under the 2022 ESPP.

The Company recorded $0.1 million, $0.1 million, and $0.1 million of expense for the years ended December 31, 2022, 2023 and 2024, respectively, related to the Company’s ESPPs. The Company has not recorded any tax benefit related to its ESPP expense. As of December 31, 2024, the Company had issued an aggregate of 337,190 shares pursuant to the 2022 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 (61) days before such waiver or modification becomes effective (or immediately upon written notice 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, using the Black-Scholes option pricing model and the following assumptions:


	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 activities for the year ended December 31, 2024:


		Warrant
		Shares
Outstanding and unvested as of December 31, 2023		37,613,035
Granted		—
Vested		(7,640,152)
Outstanding and unvested as of December 31, 2024		29,972,883

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 years ended December 31, 2022, 2023 and 2024, Amazon Warrant Charges in the consolidated statements of operations were $24.3 million, $60.6 million and $60.8 million, respectively. Amazon Warrant Charges for 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. Amazon Warrant Charges for the years ended December 31, 2022, 2023 and 2024 were related to customer fuel purchases. As of December 31, 2022, the Company had a customer incentive asset of $22.2 million, classified in “Prepaid expenses and other current assets” in the accompanying consolidated balance sheets. As of December 31, 2023 and 2024, the customer incentive asset had been fully amortized.

Stonepeak Warrant

In connection with the Stonepeak Credit Agreement and the related Loan Facility (see Note 11), on December 12, 2023, the Company issued warrants (the “Stonepeak Warrant”) to Stonepeak, pursuant to a warrant agreement, dated December 12, 2023 (the “Warrant Agreement”), allowing Stonepeak to purchase 10,000,000 shares of the Company’s common stock at an exercise price of $5.50 and an additional 10,000,000 shares of the Company’s common stock at an exercise price of $6.50.

The Stonepeak Warrant vested upon the execution of the Warrant Agreement and is exercisable at any time after December 12, 2025. The Stonepeak Warrant has an 8.5 year term, and the right to exercise the warrants expires on June 15, 2032. The Stonepeak Warrant contains a “cashless exercise” feature that allows the holder(s) to exercise the warrants without a cash payment to the Company upon the terms set forth in the Warrant Agreement. The number of shares of the Company’s common stock for which the Stonepeak Warrant is exercisable and the associated exercise price are subject to certain customary anti-dilution and continuity adjustments as set forth in the Warrant Agreement.

Stonepeak may not exercise the Stonepeak Warrant to the extent such exercise would cause Stonepeak to beneficially own more than 9.999% of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise (the “Stonepeak Beneficial Ownership Limitation”). Stonepeak may, however, waive or amend the Stonepeak Beneficial Ownership Limitation by providing written notice to the Company sixty-one (61) days before such waiver or amendment becomes effective (or immediately upon written notice to the Company to the extent the Company is subject to certain acquisition transactions pursuant to a tender or exchange offer).

The Stonepeak Warrant, issued in conjunction with the funding of the Senior Term Loan, was determined to be a separate unit of account from the Loan Facility based on evaluation of the contractual terms of the Stonepeak Credit

Agreement and the Warrant Agreement. As a result, amounts were allocated to the Stonepeak Warrant using the relative fair value method. The Stonepeak Warrant is deemed an equity classified instrument because the underlying warrants (1) do not embody an obligation of the Company, (2) are deemed to be indexed to the Company’s own common stock, and (3) meet all the conditions for equity classification. As such, the Stonepeak Warrant is measured at fair value as of the issuance date, and subsequent changes in fair value will not be recognized in earnings. The fair values of the Stonepeak Warrant as of the issuance date were determined using the Black-Scholes option pricing model and the following assumptions:


	December 12, 2023	December 12, 2023
Exercise price	5.50	6.50
Dividend yield	0.0%	0.0%
Expected volatility	72.96%	72.96%
Risk-free interest rate	4.22%	4.22%
Expected term in years	8.5	8.5

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 Stonepeak Warrant. The expected terms used were based on the term of the Stonepeak Warrant on 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 Stonepeak Warrant on the date of issuance.

As a result of the issuance and vesting of the Stonepeak Warrant, the Company recognized $42.4 million, representing the fair value of the Stonepeak Warrant, in “Additional paid-in capital” included in “Stockholders’ equity” and recorded $31.8 million, classified as debt discount to the gross principal of the Senior Term Loan, and $10.6 million, classified as a warrant asset included in “Notes receivable and other long-term assets, net” in the consolidated balance sheets as of December 31, 2023. The debt discount relating to the Stonepeak Warrant will be amortized using the interest method in accordance with ASC 835-30, Imputation of Interest, over the contractual term of the Loan Facility and will be recognized in earnings as interest expense in the consolidated statements of operations. The warrant asset represents value the Company obtained from the issuance of the Stonepeak Warrant in exchange for the $100.0 million delayed draw term loan commitment (see Note 11). The warrant asset will be proportionately reclassified to debt discount when amounts are drawn from the delayed draw term loan commitment, reducing the initial net carrying amount of the funded debt. These amounts recognized in connection with the Stonepeak Warrant were excluded from the accompanying consolidated statements of cash flows as they were non-cash financing activities. In accordance with the terms of the Warrant Agreement, due to issuance of additional shares of common stock under the Company’s equity incentive plans in the year ended December 31, 2024, the number of shares of the Company’s common stock that may be purchased pursuant to the Stonepeak Warrant increased by 28,918 shares, consisting of 14,459 shares at an exercise price of $5.50 per share and 14,459 shares at an exercise price of $6.50 per share.

The following table summarizes the Stonepeak Warrant activities for the year ended December 31, 2024:


		Warrant
		Shares
Outstanding and unexercised as of December 31, 2023		20,000,000
Granted		28,918
Exercised		—
Outstanding and unexercised as of December 31, 2024		20,028,918