15 unchanged sentences
Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2020.
−Removed: Moss Adams LLP, an independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting as of December 31, 2019 and its report is included herein.
Changes in Internal Control Over Financial Reporting
−Removed: During the fourth quarter of 2019 , we completed the integration of Carbon Solutions into our internal control over financial reporting.
−Removed: Except for this change, there has been no change in our internal control over financial reporting (as defined in Rules 13a‑15(f) and 15d‑15(f) under the Exchange Act) during the fourth quarter of 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
−Removed: Report of Independent Registered Public Accounting Firm
−Removed: To the Stockholders and the Board of Directors of
−Removed: Advanced Emissions Solutions, Inc.
−Removed: and Subsidiaries
−Removed: Opinion on Internal Control over Financial Reporting
−Removed: We have audited Advanced Emissions Solutions, Inc.
−Removed: and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
−Removed: In our opinion, the Company maintained, in all material respects, effective control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of Advanced Emissions Solutions, Inc.
−Removed: as of December 31, 2019 and 2018, the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”), and our report dated March 16, 2020 expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph relating to the adoption of ASC 842 - Leases .
−Removed: Basis for Opinion
−Removed: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control over Financial Reporting.
−Removed: Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
−Removed: Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
−Removed: Our audit also included performing such other procedures as we considered necessary in the circumstances.
−Removed: We believe that our audit provides a reasonable basis for our opinion.
−Removed: Definition and Limitations of Internal Control Over Financial Reporting
−Removed: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
−Removed: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
−Removed: Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
−Removed: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
−Removed: /s/ Moss Adams LLP
−Removed: Denver, Colorado
−Removed: March 16, 2020
+Added: There has been no change in our internal control over financial reporting (as defined in Rules 13a‑15(f) and 15d‑15(f) under the Exchange Act) during the fourth quarter of 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Other Information
10 unchanged sentences
The following table is a summary of the shares of our common stock authorized for issuance under the equity compensation plans as of December 31, 2020:
−Removed: Plan Category
−Removed: Number of securities to be issued upon exercise of outstanding options, warrants and rights
−Removed: Weighted-average exercise price of outstanding options, warrants and rights (2)
−Removed: Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) (3)
+Added: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) (2)
Equity compensation plans approved by security holders (1) — $ — 1,748,491
Equity compensation plans not approved by security holders — $ — —
+Added: Total — 1,748,491
(1) Includes the Amended and Restated 2007 Equity Incentive Plan, as amended, the Amended and Restated 2010 Non-Management Compensation and Incentive Plan, as amended, and the 2017 Omnibus Incentive Plan.
−Removed: (2) The weighted-average price pertains only to 300,000 shares of common stock issuable upon the exercise of outstanding options.
(2) The number of securities is reduced by 373,860 shares of restricted common stock for which restrictions have not lapsed.
4 unchanged sentences
Exhibits and Financial Statement Schedules
−Removed: The following consolidated financial statements of Advanced Emissions Solutions, Inc.
+Added: (a) The following consolidated financial statements of Advanced Emissions Solutions, Inc.
are filed as part of this Report under Item 8:
2 unchanged sentences
(3) Exhibits – Those exhibits required by Item 601 of Regulation S-K and by paragraph (b) below.
−Removed: The following exhibits are filed as part of this Report or, where indicated, were heretofore filed and are hereby incorporated by reference:
+Added: (b) The following exhibits are filed as part of this Report or, where indicated, were heretofore filed and are hereby incorporated by reference:
+Added: Description Form File No.
Incorporated by Reference
+Added: Exhibit Filing Date
3.1 Second Amended and Restated Certificate of Incorporation of Advanced Emissions Solutions, Inc.
−Removed: August 9, 2013
+Added: 10-Q 000-54992 3.1 August 9, 2013
3.2 Conformed Copy of the Bylaws of Advanced Emissions Solutions, Inc., as amended
−Removed: March 12, 2018
+Added: 10-K 001-37822 3.2 March 12, 2018
3.3 Certificate of Designation, Preferences, and Rights of Series B Junior Participating Preferred Stock of Advanced Emissions Solutions, Inc
+Added: 8-K 001-37822 3.1 May 8, 2017
4.1 Form of Specimen Common Stock Certificate
−Removed: August 9, 2013
+Added: 10-Q 000-54992 4.1 August 9, 2013
4.2 Tax Asset Protection Plan dated as of May 5, 2017, by and between the Company and Computershare Trust Company, N.A., as rights agent, which includes as Exhibit B the Form of Rights Certificate
+Added: 8-K 001-37822 3.2 May 8, 2017
4.3 First Amendment to Tax Asset Protection Plan dated as of April 6, 2018, by and between the Company and Computershare Trust Company, N.A., as rights agent
−Removed: April 11, 2018
+Added: 8-K 001-37822 4.2 April 11, 2018
4.4 Second Amendment to Tax Asset Protection Plan dated as of April 5, 2019, by and between the Company and Computershare Trust Company, N.A., as rights agent
−Removed: April 11, 2019
+Added: 8-K 001-37822 4.3 April 11, 2019
+Added: 4.5 Third Amendment to Tax Asset Protection Plan dated as of April 8, 2020, by and between the Company and Computershare Trust Company, N.A., as rights agent
+Added: 8-K 001-37822 4.4 April 9, 2020
10.1 Advanced Emissions Solutions, Inc.
2017 Omnibus Incentive Plan **
−Removed: June 22, 2017
+Added: 8-K 001-37822 10.1 June 22, 2017
10.2 Form of Employment Agreement dated August 27, 2014, among L.
1 unchanged sentence
and Advanced Emissions Solutions, Inc., as amended **
−Removed: February 29, 2016
+Added: 10-K 000-54992 10.19 February 29, 2016
10.3 Rider to Employment Agreement dated August 27, 2014 between Heath Sampson and ADA-ES, Inc.
and Advanced Emissions Solutions, Inc.
−Removed: September 2, 2014
+Added: 8-K 000-54992 10.66 September 2, 2014
+Added: 10.4 Form of Amendment No.
+Added: 2 to Employment Agreement of Greg Marken and Theodore Sanders **
+Added: 10-Q 001-37822 10.1 August 6, 2018
+Added: 10.5 Employment Agreement dated May 7, 2020, between the Company and Christine Bellino **
+Added: 8-K 001-37822 10.1 May 11, 2020
+Added: 10.6 Release of Claims and Separation Agreement dated as of June 30, 2020, between the Company and Heath Sampson
+Added: 10-Q 001-37822 10.3 August 10, 2020
+Added: 10.7 Advisor Services Agreement dated as of July 1, 2020, between the Company and Heath Sampson
+Added: 10-Q 001-37822 10.4 August 10, 2020
+Added: 10.8 Employment Agreement dated February 26, 2021 between the Company and Morgan Fields **
+Added: 8-K 001-37822 10.1 March 3, 2021
+Added: Description Form File No.
+Added: Incorporated by Reference
+Added: Exhibit Filing Date
10.9 Second Amended and Restated Operating Agreement of Clean Coal Solutions, LLC dated May 27, 2011, by and among Clean Coal Solutions, LLC, ADA-ES, Inc., GSFS Investments I Corp.
and NexGen Refined Coal, LLC ***
−Removed: September 28, 2011
+Added: 10-Q/A 000-50216 10.33 September 28, 2011
10.10 The First Amendment to the Second Amended and Restated Operating Agreement of Clean Coal Solutions, LLC, by and among Clean Coal Solutions, LLC, ADA-ES, Inc., GSFS Investments I Corp.
and NexGen Refined Coal, LLC dated September 9, 2011
−Removed: November 14, 2011
+Added: 10-Q 000-50216 10.89 November 14, 2011
10.11 Second Amendment to the Second Amended and Restated Operating Agreement of Clean Coal Solutions, LLC by and among ADA-ES, Inc., NexGen Refined Coal, LLC and GSFS Investments I Corp.
dated July 31, 2012
−Removed: November 9, 2012
+Added: 10-Q 000-50216 10.59 November 9, 2012
10.12 Contribution Agreement dated May 27, 2011 between ADA-ES, Inc.
and NexGen Refined Coal, LLC
−Removed: August 12, 2011
−Removed: Incorporated by Reference
+Added: 10-Q 000-50216 10.87 August 12, 2011
10.13 Amended and Restated Limited Liability Company Operating Agreement by and between ADA-ES, Inc., NexGen Refined Coal, LLC and Clean Coal Solutions Services, LLC dated November 20, 2013
−Removed: February 29, 2016
+Added: 10-K 000-54992 10.38 February 29, 2016
10.14 Amended and Restated License Agreement between ADA-ES, Inc.
and Clean Coal Solutions, LLC dated October 30, 2009
−Removed: August 16, 2010
+Added: 10-Q 000-50216 10.77 August 16, 2010
10.15 First Amendment to the Amended and Restated License Agreement between ADA-ES, Inc.
and Clean Coal Solutions, LLC dated as of August 4, 2010
−Removed: March 28, 2011
+Added: 10-K 000-50216 10.81 March 28, 2011
10.16 Second Amendment to Amended and Restated License Agreement by and between ADA-ES, Inc.
and Clean Coal Solutions, LLC dated as of July 23, 2013 ***
−Removed: November 12, 2013
+Added: 10-Q 000-54992 10.63 November 12, 2013
10.17 Technology Sublicense Agreement between ADA-ES, Inc., Clean Coal Solutions, LLC, and GS RC Investments LLC dated June 29, 2010
−Removed: August 16, 2010
+Added: 10-Q 000-50216 10.74 August 16, 2010
10.18 Amendment to Technology Sublicense Agreement between ADA-ES, Inc., GS RC Investments, LLC, and Clean Coal Solutions, LLC dated November 21, 2011 ***
−Removed: February 29, 2016
+Added: 10-K 000-54992 10.44 February 29, 2016
10.19 Amendment #2 to Technology Sublicense Agreement between ADE-ES, Inc, GS RC Investments, LLC, and Clean Coal Solutions, LLC dated December 15, 2011
−Removed: March 15, 2012
+Added: 10-K 000-50216 10.49 March 15, 2012
10.20 Exclusive Right to Lease Agreement dated May 27, 2011 between Clean Coal Solutions, LLC and GSFS Investments I Corp ***
−Removed: September 28, 2011
+Added: 10-Q/A 000-50216 10.84 September 28, 2011
+Added: 10.21 ADA-ES, Inc.
Limited Guaranty for the benefit of GSFS Investments I Corp.
dated May 27, 2011
−Removed: August 12, 2011
+Added: 10-Q 000-50216 10.86 August 12, 2011
+Added: 10.22 ADA-ES, Inc.
Limited Guaranty for the benefit of GS RC Investments LLC dated November 21, 2011
−Removed: March 15, 2012
+Added: 10-K 000-50216 10.44 March 15, 2012
+Added: 10.23 ADA-ES, Inc.
Limited Guaranty for the benefit of GS RC Investments LLC dated December 15, 2011
−Removed: March 15, 2012
+Added: 10-K 000-50216 10.50 March 15, 2012
10.24 M-45 Technology License Agreement between ADA-ES, Inc.
and Clean Coal Solutions, LLC dated July 27, 2012 ***
−Removed: November 9, 2012
+Added: 10-Q 000-50216 10.58 November 9, 2012
10.25 Undertaking and Assumption Agreement by and among Advanced Emissions Solutions, Inc., ADA-ES, Inc., and ADA Environmental Solutions, LLC dated as of July 1, 2013
−Removed: November 12, 2013
+Added: 10-Q 000-54992 10.62 November 12, 2013
10.26 2013 Loan and Security Agreement by and among ADA-ES, Inc., Advanced Emissions Solutions, Inc., and CoBiz Bank d/b/a Colorado Business Bank in the State of Colorado dated as of September 19, 2013
−Removed: February 29, 2016
−Removed: Form of Amendment No.
−Removed: 2 to Employment Agreement of Greg Marken and Theodore Sanders **
−Removed: August 6, 2018
−Removed: Purchase and Sale Agreement by and among Energy Capital Partners I, LP, Energy Capital Partners I-A, LP, Energy Capital Partners I-B IP, LP, Energy Capital Partners I (Crowfoot IP), LP, and Carbon Solutions Management, LLC, as Sellers, and Advanced Emissions Solutions, Inc., as Purchaser, dated as of November 15, 2018
−Removed: November 15, 2018
−Removed: Term Loan and Security Agreement among Advanced Emissions Solutions, Inc., certain subsidiaries as Guarantors, the Bank of New York Mellon as administrative agent, and Apollo dated as of December 7, 2018
−Removed: December 13, 2018
+Added: 10-K 000-54992 10.69 February 29, 2016
+Added: Description Form File No.
Incorporated by Reference
+Added: Exhibit Filing Date
10.27 Thirteenth Amendment of 2013 Loan and Security Agreement by and among ADA-ES, Inc., Advanced Emissions Solutions, Inc., and CoBiz Bank d/b/a Colorado Business Bank in the State of Colorado dated as of December 7, 2018
−Removed: December 13, 2018
+Added: 8-K 001-37822 10.2 December 13, 2018
+Added: 10.28 Fourteenth Amendment of 2013 Loan and Security Agreement by and among ADA-ES,Inc., Advanced Emissions Solutions, Inc., and BOK, NA d/b/a Bank of Oklahoma dated as of September 29, 2020
+Added: 8-K 001-37822 10.1 September 29, 2020
+Added: 10.29 Purchase and Sale Agreement by and among Energy Capital Partners I, LP, Energy Capital Partners I-A, LP, Energy Capital Partners I-B IP, LP, Energy Capital Partners I (Crowfoot IP), LP, and Carbon Solutions Management, LLC, as Sellers, and Advanced Emissions Solutions, Inc., as Purchaser, dated as of November 15, 2018
+Added: 8-K 001-37822 2.1 November 15, 2018
+Added: 10.30 Term Loan and Security Agreement among Advanced Emissions Solutions, Inc., certain subsidiaries as Guarantors, the Bank of New York Mellon as administrative agent, and Apollo dated as of December 7, 2018
+Added: 8-K 001-37822 10.1 December 13, 2018
+Added: 10.31 First Amendment to Term Loan and Security Agreement dated April 20, 2020, among the Company, the Company’s Subsidiaries named therein, the Lenders named therein and The Bank of New York Mellon as administrative agent to the Lenders
+Added: 8-K 001-37822 10.2 April 22, 2020
10.32 Lignite Mining Agreement between Demery Resources Company, L.L.C.
and Five Forks Mining, LLC dated as of June 29, 2009 ***
−Removed: March 18, 2019
+Added: 10-K 001-37822 10.43 March 18, 2019
10.33 First Amendment to Lignite Mining Agreement between Demery Resources Company, L.L.C.
and Five Forks Mining, LLC, dated as of March 22, 2017 ***
−Removed: March 18, 2019
+Added: 10-K 001-37822 10.44 March 18, 2019
10.34 Third Amendment to the Second Amended and Restated Operating Agreement of Tinuum Group, LLC.
dated September 4, 2019 ***
−Removed: November 12, 2019
+Added: 10-Q 001-37822 10.1 November 12, 2019
+Added: 10.35 Promissory Note of the Company dated April 21, 2020, made under the Paycheck Protection Program sponsored by the U.S.
+Added: Small Business Administration through BOK, NA dba Bank of Oklahoma
+Added: 8-K 001-37822 10.1 April 22, 2020
+Added: 10.36 Master Agreement for Supply of Furnace Products between ADA Carbon Solutions, LLC and Cabot Norit Americas, Inc.
+Added: 8-K 001-37822 10.1 September 30, 2020
+Added: 10.37 Amended and Restated Lignite Mining Agreement among Caddo Creek Resources Company, L.L.C., ADA Carbon Solutions (Operations), LLC, Marshall Mine, LLC and The North American Coal Corporation dated as of September 30, 2020 ***
+Added: 8-K 001-37822 10.2 September 30, 2020
21.1 Subsidiaries of Advanced Emissions Solutions, Inc.
1 unchanged sentence
23.2 Consent of Moss Adams LLP *
−Removed: Certification of Chief Executive Officer of Advanced Emissions Solutions, Inc.
+Added: 31.1 Certification of Principal Executive Officer of Advanced Emissions Solutions, Inc.
Pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a) *
−Removed: Certification of Chief Financial Officer of Advanced Emissions Solutions, Inc.
+Added: 31.2 Certification of Principal Finan cial Officer of Advanced Emissions Solutions, Inc.
Pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a) *
−Removed: Certification of Chief Executive Officer and Principal Financial Officer of Advanced Emissions Solutions, Inc.
+Added: Description Form File No.
+Added: Incorporated by Reference
+Added: Exhibit Filing Date
+Added: 32.1 Certification of Principal Executive Officer and Principal Financial Officer of Advanced Emissions Solutions, Inc.
Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
13 unchanged sentences
001-37822) starting on July 6, 2016.
−Removed: The following financial statements are included in this report pursuant to Regulation S-X:
+Added: (c) The following financial statements are included in this report pursuant to Regulation S-X:
(1) Tinuum Group, LLC and Subsidiaries;
4 unchanged sentences
December 31, 2020 and 2019
−Removed: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
+Added: REPORT OF INDEPENDENT AUDITORS 106
FINANCIAL STATEMENTS
3 unchanged sentences
CONSOLIDATED STATEMENTS OF CASH FLOWS 111
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATMENTS
−Removed: Report of Independent Registered Public Accounting Firm
−Removed: To the Board of Managers and Members of
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 113
+Added: Report of Independent Auditors
+Added: The Board of Managers and Members of
Tinuum Group, LLC
−Removed: Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of Tinuum Group, LLC and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, members’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the consolidated financial statements).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2019 and 2018, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
−Removed: Change in Accounting Principle
−Removed: As discussed in Note 1 to the consolidated financial statements, in 2019 the Company changed its method of accounting for revenue recognition due to the adoption of Accounting Standards Codification ("ASC") Topic No.
−Removed: 606, and its method of accounting for leases due to the adoption of ASC Topic No.
−Removed: Basis for Opinion
−Removed: These consolidated financial statements are the responsibility of the Company’s management.
−Removed: Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
−Removed: The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
−Removed: As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
+Added: Report on the Financial Statements
+Added: We have audited the accompanying consolidated financial statements of Tinuum Group, LLC and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the related consolidated statements of operations, members’ equity, and cash flows for the years then ended, and the related notes to the financial statements.
+Added: Management’s Responsibility for the Financial Statements
+Added: Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America;
+Added: this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
+Added: Auditor’s Responsibility
+Added: Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
+Added: We conducted our audits in accordance with auditing standards generally accepted in the United States of America.
+Added: Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
+Added: An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
+Added: The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.
+Added: In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
Accordingly, we express no such opinion.
−Removed: Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.
−Removed: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
−Removed: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
−Removed: We believe that our audits provide a reasonable basis for our opinion.
+Added: An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
+Added: We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
+Added: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tinuum Group, LLC and its subsidiaries as of December 31, 2020 and 2019, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
+Added: Emphasis of Matter Regarding Going Concern
+Added: The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
+Added: As discussed in Note 1 to the consolidated financial statements, with cash inflows ending in January 2022 and with legislation to extend the production tax credit (PTC) expiration date not in process or having been passed, management has assumed the reduced emissions fuel (REF) facilities and the related PTCs will expire as scheduled by December 31, 2021, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern.
+Added: Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1.
+Added: The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
+Added: Our opinion is not modified with respect to this matter.
/s/ Moss Adams LLP
1 unchanged sentence
March 8, 2021
−Removed: We have served as the Company’s auditor since 2017.
−Removed: TINUUM GROUP, LLC AND SUBSIDIARIES
−Removed: CONSOLIDATED BALANCE SHEETS
−Removed: As of December 31, 2019 and 2018
−Removed: (in thousands)
CURRENT ASSETS
1 unchanged sentence
Accounts receivable 8,029 6,086
−Removed: Related party receivables
+Added: Income tax receivable 5,966 904
Contract receivables – current 47,264 42,916
Contract costs – current 5,541 21,503
+Added: Inventory 13,730 11,866
Other current assets 11,370 1,661
4 unchanged sentences
Other assets, net 19 17,780
+Added: TOTAL ASSETS $ 171,089 $ 254,293
The following table presents certain assets of the consolidated variable interest entities ("VIEs"), which are included in the Consolidated Balance Sheets above.
4 unchanged sentences
Accounts receivable 25 22
+Added: Income tax receivable 5,966 904
+Added: Inventory 13,724 11,840
Other current assets 403 381
Non-current assets 10,631 13,934
+Added: TOTAL ASSETS $ 62,799 $ 58,562
Statement continues on the next page
−Removed: The accompanying notes are an integral part of the consolidated financial statements.
TINUUM GROUP, LLC AND SUBSIDIARIES
10 unchanged sentences
Note payable to customer – current 5,400 21,600
+Added: Secured promissory notes – current 6,313 —
Total current liabilities 44,278 59,392
−Removed: Secured promissory notes
−Removed: Deferred revenue – long term
Asset retirement obligations 2,070 1,449
+Added: Accrued retention compensation 3,116 —
+Added: Secured promissory notes – long term — 6,491
Note payable to customer – long term — 5,400
21 unchanged sentences
Reduced emissions and unrefined fuel $ 619,101 $ 500,404
−Removed: Lease revenues
REF Facility revenues – over time 89,478 142,028
REF Facility revenues – point-in-time (1,129) 45,608
+Added: Other 594 733
TOTAL REVENUES 708,044 688,773
2 unchanged sentences
Cost of REF facilities (12) 11,509
+Added: Chemicals 27,496 22,521
Site and production fees 35,950 27,523
1 unchanged sentence
TOTAL COST OF SALES 701,395 583,797
+Added: GROSS PROFIT 6,649 104,976
OPERATING EXPENSES 11,217 8,983
−Removed: SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
+Added: IMPAIRMENT OF REF FACILITIES 2,968 —
DEPRECIATION AND AMORTIZATION EXPENSE 28,175 16,361
−Removed: INCOME FROM OPERATIONS
+Added: SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 15,648 12,297
+Added: (LOSS) INCOME FROM OPERATIONS (51,359) 67,335
OTHER (INCOME) EXPENSE
3 unchanged sentences
TOTAL OTHER (INCOME) EXPENSE 582 (370)
−Removed: INCOME BEFORE INCOME TAXES
+Added: (LOSS) INCOME BEFORE INCOME TAXES (51,941) 67,705
+Added: Deferred tax benefit (18,979) (904)
Income tax expense 1,137 1,369
−Removed: Class B holders preferred return
+Added: NET (LOSS) INCOME (34,099) 67,240
Loss attributable to noncontrolling interests 91,501 78,544
5 unchanged sentences
(in thousands)
−Removed: Temporary Class B Member
−Removed: Class A Members
−Removed: Class B Member
−Removed: Non-Controlling Interests
−Removed: Total Members' Equity
+Added: Class A Members Class B Member Non-Controlling Interests Total Members' Equity
BALANCES, JANUARY 1, 2019 $ 49,102 $ 16,983 $ 16,510 $ 82,595
−Removed: Class B holders preferred return
+Added: Change in accounting principle 74,463 13,141 — 87,604
Member contributions — — 97,622 97,622
Member distributions (130,475) (23,025) — (153,500)
−Removed: Reclassification of member equity
Net income available to members 123,916 21,868 — 145,784
1 unchanged sentence
BALANCES, DECEMBER 31, 2019 117,006 28,967 35,588 181,561
−Removed: Change in accounting principle
Member contributions — — 113,465 113,465
Member distributions (106,577) (18,808) — (125,385)
+Added: Member distributions, noncontrolling interests — — (13,917) (13,917)
Net income available to members 48,792 8,610 — 57,402
8 unchanged sentences
CASH FLOWS FROM OPERATING ACTIVITIES
+Added: Net (loss) income (34,099) 67,240
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 28,175 16,361
+Added: Amortization of contract costs 21,188 871
Noncash operating lease expense 176 159
1 unchanged sentence
Loss on sale of assets 264 1,803
−Removed: Gain on removal of asset retirement obligation
+Added: Impairment of REF facilities 2,968 —
+Added: Loss on removal of asset retirement obligation (194) (129)
Accretion of asset retirement obligation 184 134
−Removed: Deferred taxes
−Removed: Amortization of contract costs
Effects of changes in operating assets and liabilities:
1 unchanged sentence
Related party receivables — 6,294
+Added: Income tax receivable (5,062) (904)
Contract receivables 43,117 (7,387)
−Removed: Payments on inventory purchase contract
+Added: Inventory (1,864) 2,766
+Added: Other assets 8,047 263
Accounts payable and accrued liabilities 1,010 2,033
+Added: Accrued retention compensation 3,116 —
+Added: Payments on operating leases (200) (176)
Related party payables (2,196) 1,524
−Removed: Settlement of asset retirement obligation
Deferred revenue 2,088 (13,795)
−Removed: Payments on operating leases
+Added: Settlement of asset retirement obligation — (230)
Net cash provided by operating activities 64,763 89,524
4 unchanged sentences
CASH FLOWS FROM FINANCING ACTIVITIES
−Removed: Borrowings (repayments) under secured promissory note
Borrowings under line of credit 8,900 7,500
Repayments under line of credit (14,400) (2,000)
+Added: Borrowings (repayments) on note payable to customer (21,600) —
+Added: Repayments under secured promissory note (178) (3,231)
Contributions from noncontrolling interest members 113,465 97,622
+Added: Distributions paid to minority interest members (13,917) —
Distributions paid to members (125,385) (153,500)
1 unchanged sentence
NET INCREASE IN CASH 6,099 18,230
−Removed: CASH, END OF YEAR
The accompanying notes are an integral part of the consolidated financial statements.
3 unchanged sentences
(in thousands)
+Added: CASH, END OF YEAR $ 50,540 $ 44,441
SUPPLEMENTAL DISCLOSURES
12 unchanged sentences
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
−Removed: Tinuum Group, LLC (together with its subsidiaries, “Tinuum” or “TG” or the “Company”) develops, manages, sells and leases facilities used in the production and sale of reduced emissions fuel (“REF Facilities”).
−Removed: The production and sale of reduced emissions fuel (a/k/a refined coal or "REF") via these REF Facilities qualifies for production tax credits that are available under Section 45 of the Internal Revenue Code (“PTCs”).
+Added: Tinuum Group, LLC (together with its subsidiaries, "Tinuum" or "TG" or the "Company") develops, manages, sells and leases facilities ("REF Facilities") used in the production and sale of reduced emissions fuel.
+Added: The production and sale of reduced emissions fuel (refined coal or "REF") via these REF Facilities qualifies for production tax credits that are available under Section 45 of the Internal Revenue Code ("PTCs").
The value of the PTC is adjusted annually based on inflation adjustment factors published in the Federal Register.
6 unchanged sentences
Each REF Facility has demonstrated the required emissions reductions from the production of REF to qualify for PTCs.
−Removed: The REF produced at these REF Facilities is burned at coal-fired generation stations (the owner of which is a “Generator”) and is expected to continue to qualify for PTCs for a period of ten years following the applicable placed in service date.
−Removed: The two REF Facilities that were placed in service prior to January 1, 2010 no longer qualify for PTCs as of December 31, 2019.
+Added: The REF produced at these REF Facilities is burned at coal-fired generation stations (the owner of which is a "Generator") and is expected to continue to qualify for PTCs for a period of 10 years following the applicable placed in service date.
+Added: The two REF Facilities that were placed in service prior to January 1, 2010 no longer qualified for PTCs as of December 31, 2019.
+Added: The remaining 26 REF Facilities that were placed in service prior to January 1, 2012 will no longer qualify for PTCs as of December 31, 2021.
At December 31, 2020 and 2019, respectively, 23 and 20 REF Facilities had been sold to or were under lease with third-party investors ("TP Investors") who utilize the REF Facilities to produce REF (each of these REF Facilities is owned or leased by a "Producer Entity").
1 unchanged sentence
The REF Facilities are located at coal-fired generation stations throughout the United States.
−Removed: Tinuum may also produce REF from REF Facilities for the benefit of its Members.
−Removed: As of December 31, 2019 and 2018, none of the REF Facilities were retained to produce REF for the Members.
In instances where Tinuum retains certain member interests in a Producer Entity, PTCs generated are allocated to Tinuum in proportion to its member interests and are therefore available for the benefit of Tinuum’s Members.
1 unchanged sentence
TS is owned 50% each by ADA and NexGen and is not consolidated with the accounts of Tinuum.
−Removed: TP Investors of REF Facilities and Tinuum for retained REF Facilities pay TS, subject to certain limitations, a fee for procuring certain proprietary chemical additives, an operating fee for the production of REF, and for the other operating and maintenance costs associated with running the REF Facilities.
+Added: TP Investors of REF Facilities pay TS, subject to certain limitations, a fee for procuring certain proprietary chemical additives, an operating fee for the production of REF, and for the other operating and maintenance costs associated with running the REF Facilities.
Basis of Presentation
1 unchanged sentence
An entity is referred to as a VIE if it meets any of the following criteria outlined in Accounting Standard Codification 810 - Consolidation ("ASC 810"), which are:
−Removed: (i) the entity has equity that is insufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, (ii) the entity has equity investors that, as a group, lack the characteristics of a controlling financial interest or (iii) the entity is structured with non-substantive voting rights.
+Added: (i) the entity has equity that is insufficient to permit the entity to finance its activities without additional subordinated financial support from other parties;
+Added: (ii) the entity has equity investors that, as a group, lack the characteristics of a controlling financial interest;
+Added: or (iii) the entity is structured with non-substantive voting rights.
The Company consolidates a VIE when it has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the entity that could be potentially significant to the VIE (i.e., it is the primary beneficiary).
All intercompany balances and transactions have been eliminated in consolidation.
−Removed: Use of Estimates
−Removed: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
TINUUM GROUP, LLC AND SUBSIDIARIES
2 unchanged sentences
(in thousands)
−Removed: statements and the reported amounts of revenue and expenses during the reporting period.
+Added: Going Concern
+Added: Currently, with cash inflows ending in January 2022 and with legislation to extend the PTC expiration date not in process or having been passed, management has assumed the REF Facilities and the related PTCs will expire as scheduled by December 31, 2021.
+Added: To date, management has not developed an alternative business strategy and thus management currently expects that 100% of the business operations will be wound down in 2022, which decision will be subject to approval by the Members.
+Added: The Company’s line of credit expired on December 31, 2020 and debt financing is no longer available.
+Added: Management has budgeted, and is planning, to reserve enough cash from the final cash inflows of 2021 and 2022 to satisfy anticipated remaining liabilities and obligations, including identified contingent liabilities that have been asserted by December 31, 2021.
+Added: These cash reserves will be utilized to conduct an orderly wind down of business operations.
+Added: No new business opportunities or cash inflows are expected to occur.
+Added: The only exception to management’s plan would be if the U.S.
+Added: Congress were to extend the PTC expiration date beyond December 31, 2021.
+Added: If that event were to occur in a timely manner or prior to decommissioning of REF Facilities, management would seek to renegotiate its contracts with the various TP Investors and the host stations at which the REF Facilities are located and to continue to operate the business until the latter expiration date.
+Added: Management has concluded that these factors, in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern.
+Added: The consolidated financial statements have been prepared on a basis which assumes the Company will be able to continue as a going concern and contemplates the realization of assets and satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern.
+Added: Use of Estimates
+Added: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.
4 unchanged sentences
The Company accounted for the change in the useful life of the REF Facilities as a change in accounting estimate beginning August 1, 2019.
−Removed: The impact of the change in estimate resulted in a decrease in net income of $11,644 for the year ended December 31, 2019.
+Added: For the year ended December 31, 2019, the impact of the change in estimate resulted in a decrease in net income of $11,644.
Cash and Cash Equivalents
6 unchanged sentences
Accounts receivable consist primarily of payments due from TP Investors that own or lease the REF Facilities.
−Removed: The carrying amount of accounts receivable may be reduced by a valuation allowance that reflects management's best estimate of amounts that will not be collected.
+Added: The carrying amount of accounts receivable may be reduced by a valuation allowance that reflects management's best estimate of amounts
+Added: TINUUM GROUP, LLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2020 and 2019
+Added: (in thousands)
+Added: that will not be collected.
Under the Company’s agreements, interest can accrue on delinquent balances.
16 unchanged sentences
Actual costs of asset retirements, such as removing the REF Facility from a generation station and related site restoration, are charged against the related liability.
−Removed: Any difference between
−Removed: TINUUM GROUP, LLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: DECEMBER 31, 2019 and 2018
−Removed: (in thousands)
−Removed: costs incurred upon settlement of an ARO and the recorded liability is recognized in other expense as a gain or loss in the Company’s consolidated statements of operations.
+Added: Any difference between costs incurred upon settlement of an ARO and the recorded liability is recognized in other expense as a gain or loss in the Company’s consolidated statements of operations.
Intangible Assets
9 unchanged sentences
Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.
−Removed: At December 31, 2019 and 2018, there were no such impairments.
−Removed: Adoption of New Accounting Policies
−Removed: Tinuum elected to early adopt ASC 842, Leases (“ASC 842”), effective January 1, 2019, concurrent with the adoption of ASC 606, Revenue from Contracts with Customers ("ASC 606").
−Removed: As a result, the Company, on January 1, 2019, recognized right-of-use (“ROU”) assets and lease liabilities on a modified retrospective basis.
−Removed: The practical expedients known as the “package of practical expedients or Group of 3” permit companies to retain prior conclusions about lease identification, lease classification and initial direct costs.
−Removed: The Company did not elect the “package of practical expedients” and thus has reassessed its contracts (both as lessee and lessor) under the updated ASC 842 criteria.
−Removed: Tinuum did elect the use-of hindsight practical expedient as it relates to the assessment of lease or contract terms.
−Removed: Lessee contracts
−Removed: In contracts where the Company is a lessee, each contract was reassessed using the new lease criteria and the Company identified operating and financing leases primarily related to its office space and office equipment.
−Removed: Tinuum’s accounting for finance leases, previously known as capital leases, remained substantially unchanged.
−Removed: Tinuum recognized ROU assets of $750 and an operating lease liability of $816 for operating leases and derecognized $66 of deferred rents on January 1, 2019.
−Removed: The Company determines if a contractual arrangement is a lease at inception.
−Removed: Effective January 1, 2019, operating leases are included in the ROU assets within fixed assets, net;
−Removed: and lease liabilities are included within accrued liabilities, on the consolidated balance sheets.
−Removed: Lessor contracts
−Removed: Under ASC 842, the definition of a lease was modified to include the right to control the use of an identified asset.
−Removed: Utilizing the revised definition of a lease under ASC 842, the Company has reassessed its existing revenue generating contracts which include leases (“Leases”), membership interest purchase agreements (“MIPAs”) and asset purchase agreements ("APAs").
−Removed: These contracts have historically been accounted for as leases under ASC 840, Leases ("ASC 840"), or via analogy based upon other accounting guidance that was superseded by the issuance of the ASC 606 guidance.
−Removed: As a result of this reassessment, the Company determined that the contracts previously accounted for as leases under ASC 840 no longer meet the control criteria of a lease and the MIPAs and APAs, previously accounted for via analogy to ASC 840, were required to be analyzed and recorded utilizing the guidance in ASC 606.
+Added: As part of the Company’s on-going monitoring of its REF Facilities, the Company evaluated the REF Facility assets for potential impairment as of December 31, 2020.
+Added: Given the expiration of the original PTC period, December 31, 2021, the fact that no extension of the PTC period has been passed by Congress, and the fact that the Company does not have an expectation of additional future cash flows associated with the REF Facilities beyond the PTC period, any REF Facilities that have not been invested by TP Investors have been considered to be impaired.
+Added: Impairment was assessed based upon the future
TINUUM GROUP, LLC AND SUBSIDIARIES
2 unchanged sentences
(in thousands)
−Removed: On January 1, 2019 the Company adopted ASC 606, using the modified retrospective method.
−Removed: Comparative information has not been restated and continues to be accounted for under the historical revenue recognition accounting standards in effect for those periods.
−Removed: The Company recorded the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of Members’ equity.
−Removed: As part of the adoption of ASC 606, the Company elected the following transition practical expedients:
−Removed: (i) to reflect the aggregate of all contract modifications that occurred prior to the date of initial application when identifying satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price, and (ii) to apply the standard to all contracts at the date of initial application.
−Removed: Because contract modifications are minimal, there was not a significant impact as a result of electing these practical expedients.
−Removed: The adoption of ASC 606 primarily impacted the revenues previously recorded as lease revenue associated with APAs that previously were accounted for under ASC 360-20, Property, Plant and Equipment - Real Estate Sales (“ASC 360-20”), which had required the Company to evaluate whether such arrangements had any forms of continuing involvement that may have affected the revenue or profit recognition of these transactions.
−Removed: When such forms of continuing involvement were present, revenues were recognized in a manner similar to an operating lease.
−Removed: The adoption of ASC 606, which superseded the real estate sales guidance under ASC 360-20, generally requires revenue to be recognized for APAs earlier than what Tinuum’s historical practice had been.
−Removed: Under ASC 606, revenue for APA transactions is recognized as of a “point-in-time” when control of the REF Facility transfers to the customer, rather than ratably over time.
−Removed: At contract inception, under ASC 606, the Company identifies performance obligations by reviewing the combination of customer agreements for material distinct goods and services.
+Added: undiscounted cash flows of each REF Facility as compared to its net book value.
+Added: As a result, the Company recognized an impairment loss of $2,968 as of and for the year ended December 31, 2020.
+Added: At December 31, 2019, there were no such impairments.
+Added: Revenue Recognition
+Added: REF Facilities
+Added: The Company identifies performance obligations by reviewing the combination of customer agreements for material distinct goods and services.
Goods and services are distinct when the customer can benefit from them on their own and the promises to transfer these items are separately identifiable from other promises within the contract.
1 unchanged sentence
The Company has identified the provision of the technology sublicense combined with the use of the REF Facility to be a single performance obligation.
−Removed: Commencing January 1, 2019, REF Facility revenues are recognized based upon the type of contract with the TP Investor.
−Removed: Generally, the Company has three types of contracts with customers (a) Leases, (b) MIPAs and (c) APAs.
−Removed: In all instances the contracts relate to the use of the REF Facility and the related sublicensed patented technology which is necessary for each Producer Entity to produce REF utilizing the REF Facilities.
+Added: REF Facility revenues are recognized based upon the type of contract with the TP Investor.
+Added: Generally, the Company has three types of contracts with customers (a) Leases, (b) Member Interest Purchase Agreements ("MIPA") and (c) Asset Purchase Agreements ("APA").
+Added: In all instances the contracts relate to the use of the REF Facility and the related sublicensed patented technology which is necessary for each Producer Entity to produce REF utilizing the REF Facility.
Depending upon the agreement, the Company may receive fixed payments or a combination of fixed and variable payments over the contract term.
1 unchanged sentence
Certain prepayments are received upon execution of TP Investor agreements.
+Added: Significant judgments and estimates are used in the Company’s revenue policies.
+Added: Throughout the revenue cycle, the Company evaluates contractual evidence, monitors performance and evaluates variable consideration changes.
For the Leases and MIPA contracts, revenue is recognized "over time" using the output method, utilizing actual REF production volumes.
4 unchanged sentences
Additionally, since the payments are made quarterly over a time period exceeding one year, a financing component exists to these transactions.
−Removed: Interest recorded related to these contracts is recorded as interest income in the statement of operations and was $2,346 for the year ended December 31, 2019.
−Removed: As a result of the recording of APA revenues as of a point-in-time, future cash flows will be received according to the contractual payment schedules, but no future revenues, other than changes in estimates,
+Added: For the years ended December 31, 2020 and 2019, interest recorded related to these contracts was $1,619 and $2,346, respectively, and is recorded as interest income in the statement of operations.
+Added: As a result of the recording of APA revenues as of a point-in-time, future cash flows will be received according to the contractual payment schedules, but no future revenues, other than changes in estimates, will be recognized for these contracts.
+Added: Changes in estimates for variable consideration can occur for a variety of reasons, including but not limited to (i) annual inflation adjustment factors being different from what was originally estimated and (ii) changes in actual versus expected production volumes of REF.
+Added: For the year ended December 31, 2020, the impact of the change in estimate resulted in a decrease in revenues of $1,129.
+Added: Generally, the REF Facility is collateral for the outstanding contract receivable balances recorded by Tinuum.
+Added: The Company recognizes a contract receivable when the Company transfers control of a REF Facility to the customer in advance of receiving consideration.
+Added: Contracts with variable consideration are billed quarterly in arrears, once production volumes are known, under similar payment terms.
TINUUM GROUP, LLC AND SUBSIDIARIES
2 unchanged sentences
(in thousands)
−Removed: will be recognized for these contracts.
−Removed: Generally, the REF Facility is collateral for the outstanding contract receivable balances recorded by Tinuum.
−Removed: The Company recognizes a contract receivable when the Company transfers control of a REF Facility to the customer in advance of receiving consideration.
+Added: Reduced Emissions and Unrefined Fuel
+Added: The Company’s consolidated VIEs, which are Producer Entities, purchase and take title to feedstock fuel under purchase agreements with each respective Generator or other supplier of feedstock fuel.
+Added: Each Producer Entity purchases chemicals from third-party vendors and applies them to the feedstock fuel to produce REF utilizing REF Facilities.
+Added: The REF is sold by the Producer Entities, under REF sale agreements, to a Generator or to another third-party at the discretion of the Manager of each Producer Entity, as permitted under the applicable Generator agreements.
+Added: The Company performs REF recertification or redetermination testing periodically as required by Section 45 with respect to production and sale of REF at each of its REF Facilities.
+Added: During the years ended December 31, 2020 and 2019, each of the Producer Entities sold all of its REF and unrefined fuel (coal untreated but part of the REF process) to third parties that used the fuel to generate electricity and recorded such amounts as reduced emissions and unrefined fuel revenues.
+Added: Each VIE utilizes the combination of the REF Facility and the technology license to combine raw materials (feedstock coal and chemicals) to produce REF which is then sold as a separate manufactured product to its customer, the Generator.
+Added: As a result, the Company recognizes both REF Facility revenues and reduced emissions and unrefined fuel on a gross basis.
An accounts receivable balance represents the Company’s right to consideration that is unconditional and only the passage of time is required before payment of that consideration is due.
+Added: No allowance for doubtful accounts related to accounts receivable balances or impairment of contract receivables has been recorded as of December 31, 2020 and 2019.
Deferred revenue is recognized when the Company receives consideration in advance of performance.
−Removed: Prior to adoption of ASC 606, under certain REF Facility transactions, an initial deposit or prepayment was received.
−Removed: Any prepayments received were recorded as deferred revenue and were amortized into revenue under the straight-line method over the amortization period defined in the respective agreement.
−Removed: As of December 31, 2018, the Company recorded $34,626 of deferred revenue related to prepayments.
The Company disaggregates revenue based upon the revenue recognition methodology (over time vs.
point-in-time).
−Removed: The following table represents a disaggregation of revenue from contracts with customers for the year ended December 31, 2019 compared with the revenue that would have been recognized prior to the adoption of ASC 606.
−Removed: Statement of Operations
−Removed: Balance without ASC 606 Adoption
−Removed: REF Facility revenues - point-in-time
−Removed: REF Facility revenues - over time
−Removed: Interest income
−Removed: Balance Sheet
−Removed: Balance without ASC 606 Adoption
−Removed: Contract receivables
−Removed: Contract costs
−Removed: Interest receivable, within other current assets
−Removed: Deferred revenues
−Removed: Significant judgments and estimates are used in the Company’s revenue policies.
−Removed: Throughout the revenue cycle, the Company evaluates contractual evidence, monitors performance and evaluates variable consideration changes.
Taxes assessed by a governmental agency that are imposed on and concurrent with a specific revenue producing transaction collected by the Company from a customer are excluded from revenues.
1 unchanged sentence
No amounts have been recorded for returns, refunds, or other similar obligations.
−Removed: Impact of ASC 606 and ASC 842 Adoption
−Removed: The cumulative effect of the changes made to the consolidated balance sheet for the adoption of ASC 606 and ASC 842 on January 1, 2019 were as follows (in thousands):
−Removed: TINUUM GROUP, LLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: DECEMBER 31, 2019 and 2018
−Removed: (in thousands)
−Removed: Balance at December 31, 2018
−Removed: Adjustments Due to ASC 606
−Removed: Adjustments Due to ASC 842
−Removed: Balance at January 1, 2019
−Removed: Contract receivables
−Removed: Interest receivables, within other current assets
−Removed: Fixed assets, net
−Removed: Deferred revenues
−Removed: Accrued expenses -
−Removed: Operating lease liability
−Removed: Deferred operating lease rents
−Removed: Members' Equity
The Company, with the consent of its Members, has elected to be taxed under applicable sections of federal and state income tax laws as a limited liability company treated as a partnership for income tax purposes.
3 unchanged sentences
In these instances, the Company records and pays the applicable tax directly to the state agency.
−Removed: In 2019, one of the Company’s consolidated VIEs has elected to be a C corporation for federal and state income tax purposes.
+Added: One of the Company’s consolidated VIEs has elected to be a C corporation for federal and state income tax purposes.
As a result, that VIE’s income tax provision and related deferred tax assets and liabilities are included within the consolidated financial statements.
3 unchanged sentences
The Company applies the requirement of ASC 740, Income Taxes, related to accounting for uncertain tax positions.
+Added: In January 2021, the Company was notified that one of its consolidating VIEs was selected for audit by the IRS.
+Added: Tinuum is the partnership representative and intends to cooperate with the IRS audit requirements.
Reclassifications
1 unchanged sentence
These reclassifications had no effect on previously reported results of operations or Members’ equity.
−Removed: Recent Accounting Pronouncements
−Removed: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).
−Removed: This ASU provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model.
−Removed: The FASB subsequently issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses to clarify and address certain items related to the amendments in ASU 2016-13.
−Removed: ASU 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842) amends the mandatory effective date for ASU 2016-13.
TINUUM GROUP, LLC AND SUBSIDIARIES
2 unchanged sentences
(in thousands)
−Removed: amendments are effective for fiscal years beginning after December 15, 2022 for private companies.
−Removed: Although the impact upon adoption will depend on the financial instruments held by the Company at that time, the Company does not anticipate a significant impact on its consolidated financial statements.
−Removed: In October 2018, the FASB issued ASU 2018-17, Consolidation:
−Removed: Targeted Improvements to Related Party Guidance for Variable Interest Entities , which modifies the guidance related to indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests.
−Removed: The guidance is effective for annual reporting periods beginning after December 15, 2019 and early adoption is permitted.
−Removed: The Company does not expect this standard to have a material impact on the Company’s consolidated financial statements.
+Added: Recent Accounting Pronouncements
+Added: Effective January 1, 2019, the Company adopted ASC 606, Revenue from Contracts with Customers , and ASC 842, Leases .
+Added: As a result, the Company reassessed its revenue generating contracts and determined that the contracts previously accounted for as leases under ASC 840 no longer met the control criteria of a lease and the MIPAs and APAs, previously accounted for via analogy to ASC 840, were required to be analyzed and recorded utilizing the guidance in ASC 606.
+Added: The Company recorded the cumulative effect of applying the new revenue standard as an adjustment to the opening balance of Members’ equity.
+Added: The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 2 - FIXED ASSETS
4 unchanged sentences
The two REF Facilities originally placed in service in 2009 were fully depreciated as of December 31, 2019.
−Removed: Under the site license agreements between the Producer Entities or Tinuum and the Generators, Tinuum may be required to return the site upon which the REF Facility is located at a Site to its original condition at the end of the applicable contract period.
+Added: Furniture, Fixtures and Equipment
+Added: Furniture, fixtures, and equipment is comprised of office furniture, fixtures and office equipment, including those under finance leases.
+Added: These assets are recorded at cost and depreciated using the straight-line method with estimated useful lives ranging from 3 to 8 years.
+Added: The following table summarizes the components of gross and net carrying amounts for fixed assets as of December 31, 2020 and 2019:
+Added: REF Facilities and related equipment $ 91,399 $ 86,832
+Added: Assets associated with removal obligations 1,637 1,129
+Added: Furniture, fixtures, equipment and other 1,397 1,414
+Added: ROU assets 711 702
+Added: Accumulated depreciation (67,668) (39,754)
+Added: Impairment reserve (2,968) —
+Added: Fixed assets, net $ 24,508 $ 50,323
+Added: Depreciation expense was $28,170 and $16,356, for the years ended December 31, 2020 and 2019, respectively.
+Added: Under the site license agreements between the Producer Entities or Tinuum and the Generators, Tinuum may be required to return the Site upon which the REF Facility is located to its original condition at the end of the applicable contract period.
In instances where the applicable agreements place this responsibility on the Company, the Company has recorded a liability for an ARO equal to the fair value of the estimated cost to retire the REF Facility and return each Site to its original condition.
7 unchanged sentences
For the years ended December 31, 2020 and 2019, within operating expenses, the Company recorded $184 and $134 of accretion expense, respectively.
+Added: TINUUM GROUP, LLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2020 and 2019
+Added: (in thousands)
The following table describes changes to the Company’s ARO liability for the years ended December 31, 2020 and 2019:
2 unchanged sentences
Removal of liability (194) (129)
+Added: Accretion 184 134
Settlement of obligations — (230)
Ending balance $ 2,070 $ 1,449
−Removed: Furniture, Fixtures and Equipment
−Removed: Furniture, fixtures, and equipment is comprised of office furniture, fixtures and office equipment, including those under finance leases.
−Removed: These assets are recorded at cost and depreciated using the straight-line method with estimated useful lives ranging from 3 to 8 years.
−Removed: TINUUM GROUP, LLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: DECEMBER 31, 2019 and 2018
−Removed: (in thousands)
−Removed: The following table summarizes the components of gross and net carrying amounts for fixed assets as of December 31, 2019 and 2018:
−Removed: REF Facilities and related equipment
−Removed: Assets associated with removal obligations
−Removed: Furniture, fixtures and equipment
−Removed: Accumulated depreciation
−Removed: Fixed assets, net
−Removed: Depreciation expense was $16,356 and $5,034, for the years ended December 31, 2019 and 2018, respectively.
NOTE 3 - INVENTORY
Inventory is comprised primarily of feedstock fuel and chemicals used in the production and sale of REF at REF Facilities.
−Removed: Inventory is valued at the lower of cost or net realizable value using the average cost method.
The Company assesses the inventory valuation on a monthly basis and reduces the value for any obsolete inventory.
1 unchanged sentence
Feedstock fuel $ 12,707 $ 11,187
+Added: Chemicals 1,023 679
Total inventory $ 13,730 $ 11,866
NOTE 4 - REVENUES
−Removed: REF Facility Revenues
As discussed in Note 1, revenue is recognized when a performance obligation is satisfied.
2 unchanged sentences
The Company receives payments from customers based upon specific payment schedules established under each contract.
−Removed: Payment schedules can include a combination of down payments, fixed payments and variable payments, based upon expected production volumes, and are generally made quarterly.
+Added: Payment schedules can include a combination of prepayments, fixed payments and variable payments, based upon expected production volumes, and are generally made quarterly.
When a contract is determined to contain variable consideration, the transaction price is estimated using the expected value (i.e., the most likely amount method) to predict revenue for that contract.
2 unchanged sentences
Estimates of variable consideration are estimated based upon contractual terms, historical experience and projected REF production volumes.
−Removed: Changes in estimates for variable consideration can occur for a variety of reasons, including but not limited to (i) annual inflation adjustment factors being different from what was originally estimated and (ii) changes in actual versus expected production volumes of REF.
−Removed: Changes in estimates may have a material effect on our consolidated statements of operations.
−Removed: Eight and eleven, respectively, of the REF Facility transactions with TP Investors are transactions with a related party as of December 31, 2019 and 2018.
−Removed: These transactions generally have terms that extend to the date ten years after the placed in service date for
−Removed: TINUUM GROUP, LLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: DECEMBER 31, 2019 and 2018
−Removed: (in thousands)
−Removed: the particular REF Facility, subject to earlier termination by the TP Investor at periodic intervals or upon the occurrence of specified events.
−Removed: During 2019, two of these transactions were terminated as a result of the Generators closing their coal-fired generation station and one additional transaction expired as that particular REF Facility met its date that was ten years after its place in service date.
+Added: Nine and eight, respectively, of the REF Facility transactions with TP Investors are transactions with a related party as of December 31, 2020 and 2019.
+Added: These transactions generally have terms that extend to the date ten years after the placed in service date for the particular REF Facility, subject to earlier termination by the TP Investor at periodic intervals or upon the occurrence of specified events.
Under the various TP Investor agreements, Tinuum has committed to provide the REF Facility and the related sublicense for a term as identified in each contract.
1 unchanged sentence
Generally, payments are made quarterly to Tinuum on a net 10 to 30 days basis, in advance of the respective quarter.
−Removed: Contracts with variable consideration are billed quarterly in arrears, once production volumes are known, under similar payment terms.
−Removed: No allowance for doubtful accounts related to accounts receivable balances or impairment of contract receivables has been recorded as of December 31, 2019 and 2018.
−Removed: The opening and closing balances of the Company’s contract receivables and deferred revenues are as follows:
−Removed: Contract Receivables
−Removed: Deferred Revenue (current)
−Removed: Deferred Revenue (long-term)
−Removed: Opening (January 1, 2019)
−Removed: Closing (December 31, 2019)
−Removed: Increase/(decrease)
−Removed: The amounts of revenue recognized in the period that were included in opening deferred revenues current and long-term balances were $21,890 and $1,039, respectively.
−Removed: The differences between the opening and closing balances of the Company’s contract receivables and deferred revenues primarily result from the timing differences between the customers’ payment and the Company’s delivery of the performance obligation.
The following is an estimate of the cash flows expected to be received from TP Investors through December 31, 2021, assuming no variations in estimated production volumes, no modifications of payments, non-renewals or early terminations of contracts.
1 unchanged sentence
Future REF Facility payments, including any eliminated in consolidation, are based on the estimated levels of REF production.
−Removed: No estimated amounts related to point-in-time revenues have been included below:
+Added: TINUUM GROUP, LLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2020 and 2019
+Added: (in thousands)
+Added: 2021 $ 154,805
In December 2019, the Company agreed to provide a future price concession to a significant customer.
−Removed: A portion of the price concession is to be provided via a note payable (“Customer Note”) under which the Company will make monthly principal and interest payments to the customer commencing in January 2020 and continuing through March 2021.
−Removed: The Customer Note is $27,000 and the Company has recorded the amount as contract costs on the consolidated balance sheet and has allocated the payments to the customer as a reduction to the transaction price of the existing contracts with the customer.
+Added: A portion of the price concession is provided via a note payable (“Customer Note”) under which the Company would make monthly principal and interest payments to the customer commencing in January 2020 and continuing through March 2021.
+Added: The Customer Note was $27,000 and the Company recorded the amount as contract costs on the consolidated balance sheet and allocated the payments to the customer as a reduction to the transaction price of the existing contracts with the customer.
The reduction in the transaction price is being recorded monthly, commencing with the contract date of December 2019 through the end of the term of the payments of March 31, 2021.
The reduction in the transaction price is recorded as production volumes are achieved (over time).
−Removed: During the year ended December 31, 2019, revenues were reduced by $871 under this price concession contract.
+Added: For the years ended December 31, 2020 and 2019, the Company reduced revenues under this price concession contract by $20,903 and $871, respectively.
In certain instances, the Company employs outside parties to facilitate the commencement of a Lease, MIPA or APA transaction.
2 unchanged sentences
These amounts are recorded as a component of cost of goods sold.
−Removed: Under the APA agreements, the Fees are capitalized as contract costs based on the estimated revenues recognized
−Removed: TINUUM GROUP, LLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: DECEMBER 31, 2019 and 2018
−Removed: (in thousands)
−Removed: at the commencement of the contract and are amortized as a reduction of revenue over the period of benefit.
−Removed: As of December 31, 2019, Fees included in contract costs on the consolidated balance sheet were $600.
−Removed: Reduced Emissions and Unrefined Fuel Revenues
−Removed: The Company’s consolidated VIEs, which are Producer Entities, purchase and take title to feedstock fuel under purchase agreements with each respective Generator or other supplier of feedstock fuel.
−Removed: Each Producer Entity purchases chemicals from third-party vendors and applies them to the feedstock fuel to produce REF utilizing REF Facilities.
−Removed: The REF is sold by the Producer Entities, under REF sale agreements, to a Generator or to another third party at the discretion of the Manager of each Producer Entity, as permitted under the applicable Generator agreements.
−Removed: The Company performs REF recertification or redetermination testing periodically as required by Section 45 with respect to production and sale of REF at each of its REF Facilities.
−Removed: During the years ended December 31, 2019 and 2018, each of the Producer Entities sold all of its REF and unrefined fuel (coal untreated but part of the REF process) to third parties that used the fuel to generate electricity and recorded such amounts as REF and unrefined fuel revenues.
−Removed: Each VIE utilizes the combination of the REF Facility and the technology license to combine raw materials (feedstock coal and chemicals) to produce REF which is then sold as a separate manufactured product to its customer, the Generator.
−Removed: As a result, the Company recognizes both REF Facility revenues and reduced emissions and unrefined fuel on a gross basis.
+Added: Under the APA agreements, the Fees are capitalized as contract costs based on the estimated revenues recognized at the commencement of the contract and are amortized as a reduction of revenue over the period of benefit.
+Added: For the years ended December 31, 2020 and 2019, Fees included in contract costs on the consolidated balance sheet were $315 and $600, respectively.
NOTE 5 - VARIABLE INTEREST ENTITIES
−Removed: The Company consolidates seven entities (the “TG VIEs”) that were created as REF production companies.
+Added: For the years ended December 31, 2020 and 2019, the Company consolidates nine and seven entities, respectively, (the "TG VIEs") that were created as REF production companies.
The operations include the purchase of feedstock fuel from a Generator, application of chemicals utilizing that Producer Entity’s REF Facility, and the subsequent sale of REF to the Generator.
−Removed: In six of the TG VIEs, CCS-AE, LLC (“CCS-AE”), a subsidiary of the Company, or another Tinuum entity is the Managing Member and holds a 0.2% or 1.0% member interest, depending on the transaction.
−Removed: In the remaining TG VIE, TG has retained a 49.9% member interest and Tinuum is the manager.
+Added: In all nine of the TG VIEs, CCS-AE, LLC ("CCS-AE"), a subsidiary of the Company, or another Tinuum entity is the Managing Member and holds a 0.2% or 1.0% member interest, depending on the transaction.
As the Managing Member of the TG VIEs, CCS-AE or Tinuum directs the activities that are considered most significant to the entities.
2 unchanged sentences
Creditors of the TG VIEs have no recourse against the general credit of the Company (outside of its member interest or specific guarantee obligations) and the assets of the Company are not collateral for any TG VIE obligations.
−Removed: The operations of all seven entities are financed through capital calls of the respective members in proportion to their member interests.
+Added: The operations of all nine entities are financed through capital calls of the respective members in proportion to their member interests.
In the event that a member defaults on a capital call request made by the Managing Member, the Managing Member may (i) withhold distributions payable to the defaulting member or sue for the amount due, and/or (ii) elect to transfer the defaulting member’s interest to a separate legal entity controlled by the Managing Member, or (iii) suspend operations of the REF Facility.
9 unchanged sentences
In September 2019, the 2013 Revolver ("Revolver") with BOK Financial ("BOK"), was amended and replaced with the Fifth Amendment to the Revolver ("Fifth Amendment").
−Removed: Under the Fifth Amendment, the available borrowing limit was reduced to:
+Added: The Fifth Amendment expired on December 31, 2020 and was not renewed.
+Added: Under the Fifth Amendment, prior to expiration, the available borrowing limit was:
Available Borrowing Limit
2 unchanged sentences
For the period after December 31, 2020 $ —
−Removed: The Fifth Amendment also requires any outstanding borrowings to be fully repaid for a period of fifteen consecutive days during two non-consecutive calendar quarters.
−Removed: Amounts outstanding under the Fifth Amendment may be repaid at the option of the Company.
−Removed: Any undrawn balance is subject to a quarterly unused facility fee in the amount of 0.826% annually.
−Removed: Interest on outstanding balances is payable monthly and is accrued at the greater of 5.5% per annum or the prime rate (as defined in the agreement) plus 1.0%.
−Removed: The Fifth Amendment is collateralized by the assets of the Company and the equity interests and proceeds related to such equity interests of each material subsidiary owned by the Company.
−Removed: The Fifth Amendment is also collateralized by the Company’s deposit accounts held at BOK.
−Removed: These accounts are not restricted by the Fifth Amendment.
−Removed: Tinuum is required to be in compliance with certain covenants under the Fifth Amendment, including tangible net worth as defined in the agreement.
−Removed: As of December 31, 2019, and 2018, the Company was in compliance with the loan covenants.
−Removed: As of December 31, 2019 and 2018, respectively, the outstanding balance on the Revolver was $5,500 and $0.
+Added: The Fifth Amendment required any outstanding borrowings to be fully repaid for a period of fifteen consecutive days during two non-consecutive calendar quarters.
+Added: Amounts outstanding under the Fifth Amendment were repaid at the option of the Company.
+Added: Any undrawn balance during the years ended December 31, 2020 and 2019, was subject to a quarterly unused facility fee in the amount of 0.826% annually.
+Added: Interest on outstanding balances was payable monthly and was accrued at the greater of 5.5% per annum or the prime rate (as defined in the agreement) plus 1.0%.
+Added: The Fifth Amendment was collateralized by the assets of the Company and the equity interests and proceeds related to such equity interests of each material subsidiary owned by the Company.
+Added: The Fifth Amendment was also collateralized by the Company’s deposit accounts held at BOK.
+Added: These accounts were not restricted by the Fifth Amendment.
+Added: Tinuum was required to be in compliance with certain covenants under the Fifth Amendment, including tangible net worth as defined in the agreement.
+Added: As of December 31, 2019, the Company was in compliance with the loan covenants.
+Added: As of December 31, 2019, the outstanding balance on the Revolver was $5,500.
Customer Note
As mentioned in Note 4, in December 2019, the Company agreed to provide a future price concession to a significant customer via a Customer Note.
−Removed: The Company will make monthly principal and interest payments to the customer commencing January 2020 through March 2021.
−Removed: The Customer Note amount is $27,000 and the Company has recorded the amount due to the customer as short-term and long-term notes payable in the consolidated balance sheets.
+Added: The Company makes monthly principal and interest payments to the customer.
+Added: Payments commenced in January 2020 and extend through March 2021.
+Added: As of December 31, 2020 and 2019, respectively, the Customer Note balance was $5,400 and $27,000.
The Customer Note bears interest at 8% per annum.
Under the Customer Note, Tinuum has agreed to maintain a Cash Reserve Account of $3,000, to limit additional indebtedness to $7,000 (plus amounts to finance Company insurance premiums plus a maximum of $500 for finance leases) and to maintain compliance with certain loan covenants.
−Removed: At December 31, 2019, the Company was in compliance with the loan covenants.
+Added: At December 31, 2020 and 2019, respectively, the Company was in compliance with the Customer Note covenants.
Secured Promissory Note
7 unchanged sentences
All outstanding amounts owed under the Note are due and payable on the earlier of December 31, 2021 or the termination or expiration of the Feedstock Coal Purchase Agreement between the TG VIE and the Generator.
+Added: As of December 31, 2020 and 2019, respectively, the outstanding balance on the Note was $4,327 and $4,505 with interest payable of $16 and $32, respectively.
TINUUM GROUP, LLC AND SUBSIDIARIES
2 unchanged sentences
(in thousands)
−Removed: As of December 31, 2019, and 2018, respectively, the outstanding balance on the Note was $4,505 and $7,736 with interest payable of $32 and $40.
In June 2018, a second VIE consolidated into the consolidated financial statements of the Company, entered into an $1,986 secured promissory note ("2018 Note") with a Generator to fund the initial purchase of feedstock fuel.
5 unchanged sentences
At each of December 31, 2020 and 2019, the outstanding balance on the Note was $1,986.
−Removed: Interest payable of $5 was recorded as of both December 31, 2019 and 2018.
+Added: Interest payable of $3 and $5 was recorded as of December 31, 2020 and 2019, respectively.
NOTE 7 - MEMBERS’ EQUITY
2 unchanged sentences
The Class B units were considered conditionally redeemable as specified in the Second Amended and Restated Operating Agreement and the Class B Agreement.
−Removed: GSFS’ Class B units included a guaranteed 15% annual return calculated monthly based upon the outstanding balance as of that date.
−Removed: The outstanding balance over time was based on the original investment, increased by the guaranteed return, and reduced by any distributions of cash or PTCs.
−Removed: In February 2018, the unrecovered investment balance in the Class B units was reduced to zero.
+Added: Upon satisfaction of the redemption criteria in 2018, GSFS continues to own the Class B units which have no further capital call requirements and have limited voting rights.
In September 2019, the Second Amended and Restated Operating Agreement was amended to eliminate the preferential redemption provisions for the Class B shares and simultaneously reallocated certain tax attributes between the Class A and B Members.
−Removed: As a result of the repayment of the guaranteed return and the unrecovered investment balance in February 2018, as of December 31, 2018, the Class B units were no longer considered conditionally redeemable and are now considered to be a non-voting class of Members’ equity.
−Removed: GSFS continues to own Class B units which have no further capital call requirements and have limited voting rights.
The Company had the following classes and percentages of Member units issued and outstanding at December 31, 2020 and 2019.
6 unchanged sentences
Under a tax sharing agreement with the specific TP Investor of this VIE, the deferred tax assets are allocated specifically to the TP Investor and are not for the benefit of Tinuum or its members.
−Removed: Net deferred tax assets are included within other long-term assets on the consolidated balance sheet:
+Added: On a quarterly basis, the TP Investor provides a cash payment to the VIE for the prior quarter’s tax benefits generated, generally production tax credits and net operating losses.
+Added: As a result, the quarterly estimated funding is presented as an income tax receivable in the consolidated balance sheets.
+Added: The income tax receivable as of December 31, 2020 and 2019, consists of:
Net operating losses $ 1,026 $ 287
+Added: Deferred tax liability (21) —
Production tax credits 4,961 617
1 unchanged sentence
Net operating loss carryforwards can be carried forward indefinitely and the PTCs can be carried forward for 20 years.
+Added: TINUUM GROUP, LLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2020 and 2019
+Added: (in thousands)
For the years ended December 31, 2020 and 2019, income tax expense (benefit) consisted of the following:
−Removed: Total income tax expense
+Added: Current $ 1,137 $ 1,369
+Added: Deferred (18,979) (904)
+Added: Total income tax (benefit) expense $ (17,842) $ 465
NOTE 9 - RELATED PARTY TRANSACTIONS
During 2020 and 2019, the Company incurred expenses and capital expenditures and had amounts payable (excluding capital distributions) to and revenues recognized from the following related party entities:
−Removed: GSFS Affiliates
−Removed: NexGen and Affiliates
+Added: ADA TS GSFS Affiliates NexGen and Affiliates
+Added: (a) (b) (c) (d)
As of December 31, 2020
−Removed: Accounts receivable
Accounts payable $ 3,454 $ 4,179 $ — $ 20
As of December 31, 2019
−Removed: Accounts receivable
Accounts payable $ 4,104 $ 6,134 $ 20 $ 20
5 unchanged sentences
December 31, 2019 16,945 14,807 — 519
−Removed: ADA expenses include expenditures for royalties.
−Removed: TS expenses include operating expenses associated with the operations of retained REF Facilities.
−Removed: TS revenues include Asset Purchase Agreement payments from TP Investors included within the TS consolidated financial statements.
+Added: ADA expenses include expenditures for royalties and consulting services.
+Added: TS expenses include operating expenses associated with the operations of REF Facilities.
+Added: TS revenues include APA point in time revenue estimates and management fee revenues from TP Investors included within the TS consolidated financial statements.
GSFS affiliates revenues relate to REF Facility lease revenues recognized.
7 unchanged sentences
In December 2015 the Company was assigned, by TS, a Master Supply Agreement with a chemical vendor.
−Removed: Under the agreement the Company had a commitment commencing January 1, 2015, for minimum purchase quantities of the specified chemical that if not achieved would require a shortfall payment amount (“Shortfall”) to be paid to the vendor on a monthly basis.
+Added: Under the agreement the Company had a commitment commencing January 1, 2015, for minimum purchase quantities of the specified chemical that if not achieved would require a shortfall payment amount ("Shortfall") to be paid to the vendor on a monthly
+Added: TINUUM GROUP, LLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2020 and 2019
+Added: (in thousands)
Any Shortfall payment required would be applied to future chemical purchases once certain minimum volume levels were achieved.
−Removed: In 2018 an agreement was reached to further amend the Master Supply Agreement and the Company made an additional prepayment of $8,187 resulting in a total prepaid amount of $17,755 on deposit with the vendor as of both December 31, 2019 and 2018.
−Removed: This amount is included within long-term other assets in the Company’s consolidated balance sheets.
−Removed: The Company anticipates utilizing the prepaid deposit balance through ongoing chemical usage by the end of 2021.
+Added: In 2018 an agreement was reached to further amend the Master Supply Agreement and the Company made an additional prepayment of $8,187 resulting in a total prepaid amount of $17,755 on deposit with the vendor as of December 31, 2019.
+Added: Beginning in August 2020, the Company started utilizing the prepaid deposit balance through ongoing chemical usage.
+Added: As of December 31, 2020, the balance was $10,632, and is included within other current assets in the Company’s consolidated balance sheets.
+Added: The Company anticipates utilizing the prepaid deposit balance by the end of 2021.
+Added: Retention Compensation
+Added: It has been an ongoing practice of the Company to provide severance payments to employees that are involuntarily terminated for reasons other than for cause.
+Added: In anticipation of the wind down of operations expected by 2022, the Company has formalized that practice into a retention compensation program.
+Added: The purpose of the program is to incent employees to remain with the Company through the wind down dates necessary for the successful cessation of the Company.
+Added: Certain executive employees have contracts that do not have a defined retention date but provide for severance payment provisions equivalent to one year of base salary that only become due and payable upon a decision by the Board of Managers to terminate an executive other than for cause.
+Added: The potential estimated liability under these contracts is approximately $1,000.
+Added: Any executive employee who does not have an employment contract and all non-executive employees have a retention bonus agreement with a defined dollar amount that is payable by the Company upon the earlier of the Company's initiation of an involuntary termination or the employee remaining with the Company until the defined retention date within their agreement.
+Added: Any employees electing to voluntarily terminate employment with the Company prior to their defined retention date will forfeit their retention bonus amount.
+Added: The Company has determined these retention program costs to be reasonably estimable and probable for the year ended December 31, 2020.
+Added: As a result, the Company has recognized a retention compensation liability and compensation expense of $3,116 as of and for the year ended December 31, 2020.
+Added: No amount was recognized as of December 31, 2019.
401k Profit Sharing Plan and Other Benefits
1 unchanged sentence
Employees can deposit up to 80% of their eligible pay up to the statutory limit in the Plan.
−Removed: The Company contributes 3% of employees’ eligible pay to the Plan as safe harbor contributions.
−Removed: Commencing January 1, 2018, the Company began providing an additional matching contribution equivalent to 50% of the first 6% of employee contributions.
+Added: The Company contributes 3% of employees’ eligible pay to the Plan as safe harbor contributions and an additional matching contribution equivalent to 50% of the first 6% of employee contributions.
Company contributions charged to benefits expense was $194 and $186 for the years ended December 31, 2020 and 2019, respectively.
3 unchanged sentences
The Company has utilized its implicit borrowing rate of 5.75% to calculate the ROU asset and lease liabilities.
−Removed: Operating lease expense for each of the years ended December 31, 2019 and 2018 was $201.
+Added: Operating lease expense for each of the years ended December 31, 2020 and 2019 was $199 and $201 respectively.
+Added: Operating leases are included in the ROU assets within fixed assets, net, and lease liabilities are included within accrued liabilities on the consolidated balance sheets.
Real estate taxes and common area maintenance charges are expensed as incurred as operating expenses and are not included in the lease payments.
3 unchanged sentences
Present value of lease liabilities $ 438
−Removed: Prior to the adoption of ASC 842, as of December 31, 2018, future minimum lease payments under lease agreements through December 31, 2022 were as follows:
NOTE 11 - CONCENTRATIONS
+Added: The COVID-19 pandemic developed rapidly in 2020.
+Added: Measures taken by federal and local governments to contain the virus have affected economic activity, locally as well as nationally.
+Added: The Company's production of REF has to date been considered an element of power generation and therefore been considered an essential function under various government policies restricting business activity.
+Added: The Company has taken a number of steps to monitor and mitigate the effects of COVID-19 on its operations
+Added: TINUUM GROUP, LLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2020 and 2019
+Added: (in thousands)
+Added: and customers, such as safety and health measures for its employees.
+Added: At this stage, the impact on the financial and operational results has not been significant and based on the Company’s experience to date this is expected to remain the case.
+Added: The Company will continue to follow the applicable government policies and advice and, in parallel, the Company will continue to pursue operational modifications to allow continued REF production without jeopardizing the health of the Company’s employees or those of its customers.
The Company’s operations are currently dependent upon TP Investors leasing or purchasing REF Facilities.
1 unchanged sentence
The termination or modification of all or a material portion of any TP Investor agreements would have a significant adverse impact on the Company’s future operations and financial condition.
−Removed: During the year ended December 31, 2019, three TP Investor agreements were terminated, one due to the expiration of the PTC period of a specific REF Facility and the other two as a result of the Generator closing its coal-fired generating station.
Additionally, the production and sale of REF is dependent upon the plant operations of specific generating stations where the REF Facilities are located.
−Removed: Production at these locations could be impacted by the demand for electricity, the amount of fuel burned as compared to other electricity generation fuel sources utilized by the utility to produce electricity, disruptions due to foreseen or unforeseen plant outages, or changes in government regulations related to electricity generation or coal burning activities.
+Added: Production at these locations could be impacted by the COVID-19 pandemic, the demand for electricity, the amount of fuel burned as compared to other electricity generation fuel sources utilized by the utility to produce electricity, disruptions due to foreseen or unforeseen plant outages, or changes in government regulations related to electricity generation or coal burning activities.
Certain of the chemicals utilized by the Company to produce REF are available from a limited number of vendors in the United States.
5 unchanged sentences
Advanced Emissions Solutions, Inc.
−Removed: Heath Sampson
−Removed: Heath Sampson
−Removed: Chief Executive Officer (Principal Executive Officer)
−Removed: Chief Financial Officer (Principal Financial and Accounting Officer)
−Removed: March 16, 2020
+Added: By /s/ Greg P.
+Added: Marken By /s/ Christine A.
+Added: Marken Christine A.
+Added: Interim Chief Executive Officer (Principal Executive Officer) Chief Accounting Officer (Principal Financial and Accounting Officer)
+Added: March 10, 2021 Date:
March 10, 2021
Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
−Removed: /s/ Carol Eicher
−Removed: /s/ Brian Leen
−Removed: Carol Eicher, Director
−Removed: Brian Leen, Director
−Removed: March 16, 2020
+Added: By /s/ Carol Eicher By /s/ Brian Leen
+Added: Carol Eicher, Director Brian Leen, Director
+Added: March 10, 2021 Date:
March 10, 2021
−Removed: /s/ Gilbert Li
−Removed: Gilbert Li, Director
+Added: By /s/ Gilbert Li By /s/ R.
+Added: Gilbert Li, Director R.
Carter Pate, Director
−Removed: March 16, 2020
−Removed: March 16, 2020
−Removed: Heath Sampson
−Removed: Taylor Simonton
−Removed: Heath Sampson, Director and Chief Executive Officer
−Removed: Taylor Simonton, Director
−Removed: March 16, 2020
+Added: March 10, 2021 Date:
March 10, 2021
+Added: Taylor Simonton By /s/ L.
Spencer Wells
+Added: Taylor Simonton, Director L.
Spencer Wells, Director
+Added: March 10, 2021 Date:
March 10, 2021
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.