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Share-Based Compensation | 3 Months Ended
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Mar. 31, 2025
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | NOTE 14 – SHARE-BASED COMPENSATION The board of directors of Montauk Renewables adopted the Montauk Renewables, Inc. Equity and Incentive Compensation Plan (“MRI EICP”) in January 2021. Following the closing of the IPO, the board of directors of Montauk Renewables approved the grant of non-qualified stock options, restricted stock units and restricted share awards to the employees of Montauk Renewables and its subsidiaries in January 2021. In connection with the restricted share awards, the officers of the Company made elections under Section 83(b) of the Code. Pursuant to such elections, the Company withheld 950,214 shares of common stock from such awards at a price of $11.38 per share from such awards. The Company records and reports restricted shares and restricted stock units when vested and in the case of options, when such awards are settled in the Company’s common stock. Stock compensation expense related to these awards was $197 and $357 for the three months ended March 31, 2025 and 2024, respectively. In connection with a May 2021 asset acquisition, 1,250,000 restricted share awards (“RS Awards”) were granted to two employees that were hired by the Company in connection with such acquisition. The RS Awards were to vest over a five-year period and subject to the achievement of time and performance-based vesting criteria over such period. In May 2022, the RS Awards were amended to remove the performance-based vesting criteria and will only be subject to time-based vesting requirements over a five-year period. The awards were revalued at $15,500. Stock compensation expense related to these awards was $420 and $1,227 for the three months ended March 31, 2025 and 2024, respectively. In 2023, the board of directors of the Company approved the grant of non-qualified stock options to the executive officers of the Company, which vest ratably over a period of three to five years. Stock compensation expense related to these awards was $657 for both the three months ended March 31, 2025 and 2024. The restricted shares, restricted stock units and option awards are subject to vesting schedules and are subject to the terms and conditions of the MRI EICP and related award agreements including, in the case of the restricted share awards, each officer having made an election under Section 83(b) of the Code. Options granted under the MRI EICP allow the recipient to receive the Company’s common stock equal to the appreciation in the fair market value of the Company’s common stock between the grant date and the exercise and settlement of options into shares as of the exercise dates. The fair value of the MRI EICP options was estimated using the Black-Scholes option pricing model. Three blocks of options have been awarded since inception of the plan with the following weighted-average assumptions (no dividends were expected):
|  | September 2023 Awards |
Options awarded |  |  | 225,000 |
Risk-free interest rate |  | 4.44%-4.65% |
Expected volatility |  | 71%-73% |
Expected option life (in years) |  | 3.5-5.5 |
Grant-date fair value |  | $ | 5.72 |
|  | April 2023 Awards |
Options awarded |  |  | 2,100,000 |
Risk-free interest rate |  | 3.71%-3.97% |
Expected volatility |  | 78%-80% |
Expected option life (in years) |  | 3.5-5.5 |
Grant-date fair value |  | $ | 4.25 |
|  | January 2021 Awards |
Options awarded |  |  | 950,214 |
Risk-free interest rate |  |  | 0.5 | %
Expected volatility |  |  | 32 | %
Expected option life (in years) |  |  | 5.5 |
Grant-date fair value |  | $ | 3.44 |
The following table summarizes the restricted shares, restricted stock units and options outstanding under the MRI EICP as of March 31, 2025 and 2024, respectively:
|  | Restricted Shares |  |  | Restricted Stock Units |  |  | Options |
|  | Number of shares |  |  | Weighted Average Grant Date Fair Value |  |  | Number of shares |  |  | Weighted Average Grant Date Fair Value |  |  | Number of shares |  |  | Weighted Average Exercise Price |
End of period - December 31, 2024 |  |  | 626,108 |  |  | $ | 11.93 |  |  |  | 170,000 |  |  | $ | 7.63 |  |  |  | 2,325,000 |  |  | $ | 7.04 |
Beginning of period - January 1, 2025 |  |  | 626,108 |  |  | $ | 11.93 |  |  |  | 170,000 |  |  | $ | 7.63 |  |  |  | 2,325,000 |  |  | $ | 7.04 |
Granted |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Vested |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Forfeited |  |  | — |  |  |  | — |  |  |  | — |  |  |  | - |  |  |  | — |  |  |  | — |
End of period - Balance at March 31, 2025 |  |  | 626,108 |  |  | $ | 11.93 |  |  |  | 170,000 |  |  | $ | 7.63 |  |  |  | 2,325,000 |  |  | $ | 7.04 |
End of period - December 31, 2023 |  |  | 1,638,678 |  |  | $ | 11.91 |  |  |  | 150,000 |  |  | $ | 10.09 |  |  |  | 2,325,000 |  |  | $ | 7.04 |
Beginning of period - January 1, 2024 |  |  | 1,638,678 |  |  | $ | 11.91 |  |  |  | 150,000 |  |  | $ | 10.09 |  |  |  | 2,325,000 |  |  | $ | 7.04 |
Granted |  |  | — |  |  | — |  |  |  | 10,000 |  |  |  | 6.48 |  |  |  | — |  |  |  | — |
Vested |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Forfeited |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
End of period - March 31, 2024 |  |  | 1,638,678 |  |  | $ | 11.91 |  |  |  | 160,000 |  |  | $ | 9.87 |  |  |  | 2,325,000 |  |  | $ | 7.04 |
As of March 31, 2025 no vested options have been exercised. Unrecognized MRI EICP compensation expense for awards the Company expects to vest as of March 31, 2025 was $7,269 and will be recognized over approximately 3.5 years.

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