Our Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) is provided in addition to the accompanying consolidated
condensed financial statements and notes to assist readers in understanding our
results of operations, financial condition, and cash flows. MD&A is organized
as follows:
· Overview. Discussion of our business and overall analysis of financial and
other highlights affecting us, to provide context for the remainder of
MD&A.
· Results of Operations. An analysis of our financial results comparing the
three months ended March 31, 2022 and 2021.
· Liquidity and Capital Resources. An analysis of changes in our balance
sheets and cash flows and discussion of our financial condition.
· Critical Accounting Estimates. Accounting estimates that we believe are
important to understanding the assumptions and judgments incorporated in
our reported financial results and forecasts.
The following discussion should be read in conjunction with our consolidated
condensed financial statements and accompanying notes included elsewhere in this
report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements. Factors that
could cause or contribute to these differences include those discussed below and
elsewhere in this Report, particularly under "Part II, Item 1A. Risk Factors,"
and in other reports we file with the SEC. All references to years relate to
the calendar year ended December 31 of the particular year.
Overview
Founded in 2006 and headquartered in Cupertino, California, we are an
international renewable natural gas, renewable fuels and byproducts company
focused on the acquisition, development and commercialization of innovative
negative carbon intensity products and technologies that replace traditional
petroleum-based products. We operate in three reportable segments "California
Ethanol", "Dairy Renewable Natural Gas", and "India Biodiesel". We have other
operating segments determined not to be reportable segments, and are
collectively represented by the "All Other" category.
Our California Ethanol segment consists of a 65 million gallon per year ethanol
production facility located in Keyes, California (the "Keyes Plant") that we own
and operate. In addition to low carbon renewable fuel ethanol, the Keyes Plant
produces Wet Distillers Grains ("WDG"), Distillers Corn Oil ("DCO"), and
Condensed Distillers Solubles ("CDS"), all of which are sold as animal feed to
local dairies and feedlots. In the fourth quarter of 2021, we installed and are
commissioning an ethanol zeolite membrane dehydration system at the Keyes Plant.
The installation is a key first step in the electrification of the Keyes Plant,
which will significantly reduce the use of petroleum based natural gas as
process energy. The electrification, along with the future installation of a
two-megawatt zero carbon intensity solar microgrid system and a mechanical vapor
recompression (MVR) system will greatly reduce GHG emissions and decreases the
carbon intensity of fuel produced at the Keyes Plant, allowing us to realize a
higher price for the ethanol produced and sold.
Our Dairy Renewable Natural Gas segment consists of our subsidiary, Aemetis
Biogas, LLC ("ABGL"), which was formed to construct bio-methane anaerobic
digesters at local dairies near the Keyes Plant, many of whom also purchase WDG
produced at the Keyes Plant. The digesters are connected via an underground
private pipeline owned by ABGL to a gas cleanup and compression unit being built
at the Keyes Plant to produce RNG. Upon receiving the bio-methane from the
dairies, impurities are removed, and the bio-methane is converted to negative
carbon intensity RNG where it will be either injected into the statewide PG&E
gas utility pipeline, supplied as compressed RNG that will service local
trucking fleets, or used as renewable process energy at the Keyes Plant. Our
Dairy Renewable Natural Gas segment, ABGL, has completed Phase 1 of our
California biogas digester network and pipeline system that converts waste dairy
methane gas into Dairy Renewable Natural Gas ("RNG"), including two operational
dairy's and seven miles of pipeline. ABL is now executing Phase 2 construction
with the completion of sixteen miles of pipeline and the commissioning of the
biogas-to-RNG upgrade unit at the Keyes plant as well as beginning construction
of additional dairy digesters.
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Our "Carbon Zero" biofuels production plants designed to produce biofuels,
including sustainable aviation fuel ("SAF") and diesel fuel utilizing renewable
hydrogen and non-edible renewable oils sourced from existing Aemetis biofuels
plants and other sources. The first plant to be built, in Riverbank,
California, "Carbon Zero 1", is expected to utilize hydroelectric and other
renewable power available onsite to produce 90 million gallons per year of SAF,
renewable diesel, and other byproducts. The plant is expected to supply the
aviation and truck markets with ultra-low carbon renewable fuels to reduce GHG
emissions and other pollutants associated with conventional petroleum-based
fuels. By producing ultra-low carbon renewable fuels, the Company expects to
capture higher value D3 Renewable Identification Numbers ("RINs") and
California's LCFS credits. D3 RINs have a higher value in the marketplace than
D6 RINs due to D3 RINs' relative scarcity and mandated pricing formula from the
United States Environmental Protection Agency ("EPA").
On April 1, 2021, Aemetis Carbon Capture, Inc. was established to build Carbon
Capture and Sequestration (CCS) projects that generate LCFS and IRS 45Q credits
by injecting CO? into wells which are monitored for emissions to ensure the
long-term sequestration of carbon underground. California's Central Valley has
been identified as the state's most favorable region for large-scale CO?
injection projects due to the subsurface geologic formation that absorbs and
retains gases.
Our India Biodiesel segment consist of the Kakinada Plant with a nameplate
capacity of 150 thousand metric tons per year, or about 50 million gallons per
year, producing high quality distilled biodiesel and refined glycerin for
customers in India and Europe. We believe the Kakinada Plant is one of the
largest biodiesel production facilities in India on a nameplate capacity basis.
The Kakinada Plant is capable of processing a variety of vegetable oils and
animal fat waste feedstocks into biodiesel that meet international product
standards. The Kakinada Plant also distills the crude glycerin byproduct from
the biodiesel refining process into refined glycerin, which is sold to the
pharmaceutical, personal care, paint, adhesive and other industries.
California Ethanol Revenue
Our revenue development strategy for our California Ethanol segment relies upon
supplying ethanol into the transportation fuel market in Northern California and
supplying feed products to dairy and other animal feed operations in Northern
California. We are actively seeking higher value markets for our ethanol in an
effort to improve our overall margins and to add incremental income to the
California Ethanol segment, including the development of the Carbon Zero Plants,
the expansion of the biogas project, and the implementation of the Solar
Microgrid System, the installation of the membrane dehydration system and other
technologies. We are also actively working with local dairy and feed potential
customers to promote the value of our WDG product in an effort to strengthen
demand for this product.
During the first quarter of 2022, we produced five products at the Keyes Plant:
denatured fuel ethanol, WDG, DCO, CO?, and CDS. During the first quarter of
2020, we transitioned from selling the ethanol we produce to J.D. Heiskell
pursuant to the J.D. Heiskell Purchase Agreement, to a model where the ethanol
is sold directly to our fuel marketing customers. We own the ethanol stored in
our finished goods tank. WDG continues to be sold to A.L. Gilbert and DCO is
sold to other customers under the J.D. Heiskell Purchase Agreement. Smaller
amounts of CDS were sold to various local third parties. We began selling CO? to
Messer Gas in the second quarter of 2020.
California Ethanol revenue is dependent on the price of ethanol, WDG, high-grade
alcohol, and DCO. Ethanol pricing is influenced by local and national inventory
levels, local and national ethanol production, imported ethanol, corn prices and
gasoline demand, and is determined pursuant to a marketing agreement with a
single fuel marketing customer and is generally based on daily and monthly
pricing for ethanol delivered to the San Francisco Bay Area, California, as
published by Oil Price Information Service ("OPIS"), as well as quarterly
contracts negotiated by our marketing customer with local fuel blenders. The
price for WDG is influenced by the price of corn, the supply and price of
distillers dried grains, and demand from the local dairy and feed markets and
determined monthly pursuant to a marketing agreement with A.L. Gilbert and is
generally determined in reference to the local price of dried distillers' grains
and other comparable feed products. Our revenue is further influenced by the
price of natural gas, our decision to operate the Keyes Plant at various
capacity levels, conduct required maintenance, and respond to biological
processes affecting output.
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Dairy Renewable Natural Gas Revenue
In December 2018, we leveraged our relationship with California's Central Valley
dairy farmers by signing leases and raising funds to construct dairy digesters
that collect bio-methane and pipelines that convey bio-methane to our Keyes
Plant. We are currently producing gas from two digesters connected to the Keyes
plant by four miles of pipeline, and using this gas to reduce the carbon
intensity at the Keyes plant. A biogas-to-RNG upgrade unit at the Keyes Plant
is commissioned, allowing us to inject RNG into the statewide PG&E gas utility
pipeline. In addition, we have signed agreements with over 25 additional dairies
to construct dairy digesters. Our revenue development strategy for the Dairy
Renewable Natural Gas segment relies upon continuing to collect bio-methane gas
from the existing dairy digesters, and continuing to build out the network of
dairy digesters and pipeline in Northern California to grow the supply of RNG
available for sale and to utilize the biogas-to-RNG upgrade unit to distribute
RNG to customers statewide.
India Biodiesel Revenue
Our revenue strategy in India is based on continuing to sell biodiesel to our
bulk fuel customers, fuel station customers, mining customers, industrial
customers and tender offers placed by Government Oil Marketing Companies
("OMCs") for bulk purchases of fuels. In 2020, the tenders were delayed due to
COVID-19, and in 2021 ultimately changed in format to allow for monthly bidding
on volumes at a price set by the OMCs on an bi-annual basis. The Company did not
participate in tenders during 2021 due to low OMC offer prices, coupled with
very high feedstock prices as a result of COVID-19. Going forward, the Company
plans to participate in these tenders offers made by the OMCs on economically
reasonable terms.
Results of Operations
Three Months Ended March 31, 2022, Compared to Three Months Ended March 30, 2021
Revenues
Our revenues are derived primarily from sales of ethanol and WDG for California
Ethanol, renewable natural gas for Dairy Renewable Natural Gas, and biodiesel
and refined glycerin for India Biodiesel.
Three Months Ended March 31, (in thousands)
2022 2021 Inc/(dec) % change
California Ethanol $ 52,041 $ 42,328 $ 9,713 22.9 %
Dairy Renewable Natural Gas* 335 41 294 717.1 %
India Biodiesel 8 479 (471 ) -98.3 %
Eliminations (335 ) (41 ) (294 ) 717.1 %
Total $ 52,049 $ 42,807 $ 9,242 22.0 %
*All Dairy Renewable Natural Gas revenue is intercompany.
California Ethanol. For the three months ended March 31, 2022, the Company
generated 73% of revenue from sales of ethanol, 22% from sales of WDG, and 5%
from sales of corn oil, CDS, CO?, and other sales. During the three months ended
March 31, 2022, plant production averaged 107% of the 55 million gallon per year
nameplate capacity. The increase in revenues was due to the increase in price of
ethanol per gallon sold to $2.58 for the three months ended March 31, 2022,
compared to $1.91 for the year ended March 31, 2021, which was partially offset
by the decrease in volume of ethanol gallons sold from 15.6 million gallons for
the three months ended March 31, 2021 to 14.7 million gallons for the three
months ended March 31, 2022. The average price of WDG increased by 9% to $115
per ton for the three months ended March 31, 2022 while WDG sales volume also
decreased by 4% to 100 thousand tons in the three months ended March 31, 2022
compared to 104 thousand tons in the three months ended March 31, 2021.
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Dairy Natural Gas. During the three months ended March 31, 2022 and 2021, we
produced and sold to an intercompany 14.0 thousand and 9.4 thousand MMBtus of
dairy biogas, respectively. RNG sold to external customers was $0 and RNG stored
as inventory was $0, reflecting no external sales or storage of MMBtus during
the three months ended March 31, 2022 and 2021.
India Biodiesel. The decrease in revenues was primarily attributable to the
Kakinada Plant not receiving orders from the Indian government due to higher
feedstock costs making conversion to biodiesel unviable. Biodiesel sales volume
decreased by 100% to 0 metric tons in the three months ended March 31, 2022
compared to 349 metric tons in the three months ended March 31, 2021. Refined
glycerin sales volume decreased by 100% to 0 metric tons in the three months
ended March 31, 2022, compared to 121 metric tons in the three months ended
March 31, 2021. For the three months ended March 31, 2022, we generated 100% of
our revenues from the other sales, compared to 76% of our revenues from the sale
of biodiesel and 24% of our revenues from the sale of refined glycerin for the
three months ended March 31, 2021.
Cost of Goods Sold
Three Months Ended March 31, (in thousands)
2022 2021 Inc/(dec) % change
California Ethanol $ 54,921 $ 45,459 $ 9,462 20.8 %
Dairy Renewable Natural Gas 542 453 89 19.6 %
India Biodiesel - 534 (534 ) -100.0 %
All other 6 10 (4 ) -40.0 %
Eliminations (335 ) (41 ) (294 ) 717.1 %
Total $ 55,134 $ 46,415 $ 8,719 19 %
California Ethanol. We ground 5.0 million and 5.5 million bushels of corn in
the three months ended March 31, 2022 and 2021, respectively. Our average cost
of feedstock per bushel increased to $8.75 per bushel during the three months
ended March 31, 2022 compared to $6.87 per bushel for the three months ended
March 31, 2021. In addition, for the three months ended March 31, 2022, we
incurred $1.0 million more in natural gas costs, $0.4 million more in chemical
costs, and $0.3 million more in transportation costs compared to the same period
in 2021. Railroad logistics were also impacted on both gallons produced and the
price of delivered corn.
Dairy Natural Gas. Cost of Goods Sold expenses relate to dairy manure payments,
maintenance on the dairy digesters, production bonuses, and depreciation.
India Biodiesel. The decrease in costs of goods sold was attributable to the
decrease in biodiesel feedstock volume in the three months ended March 31, 2022.
Gross profit (loss)
Three Months Ended March 31, (in thousands)
2022 2021 Inc/(dec) % change
California Ethanol $ (2,880 ) $ (3,131 ) $ 251 8.0 %
Dairy Renewable Natural Gas (207 ) (412 ) 205 49.8 %
India Biodiesel 8 (55 ) 63 114.5 %
All other (6 ) (10 ) 4 40.0 %
Total $ (3,085 ) $ (3,608 ) $ 523 -14 %
California Ethanol. Gross loss decreased by 8% in the three months ended March
31, 2022 primarily due to increases in the prices of ethanol and WDG, partially
offset by an increase in the price of corn.
Dairy Natural Gas. Gross loss relates to incurring more expenses as we begin to
ramp up our Dairy Renewable Natural Gas business.
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Operating Expenses
Substantially all of our research and development expenses were related to
research and development activities in Minnesota.
Selling, general, and administrative ("SG&A") expenses consist primarily of
salaries and related expenses for employees, marketing expenses related to sales
of ethanol and WDG in California Ethanol and biodiesel and other products in
India Biodiesel, as well as professional fees, other corporate expenses, and
related facilities expenses.
Other (income) expense consists primarily of interest and amortization expense
attributable to our debt facilities and those of our subsidiaries and accretion
of our Series A preferred units. The debt facilities include stock or warrants
issued as fees. The fair value of stock and warrants are amortized as
amortization expense, except when the extinguishment accounting method is
applied, in which case refinanced debt costs are recorded as extinguishment
expense.
Three Months Ended March 31, (in thousands)
2022 2021 Inc/(dec) % change
Research and development expenses $ 36 $ 23 $ 13 56.5 %
Selling, general and administrative
expenses $ 7,306 $ 5,382 $ 1,924 35.7 %
Other expense (income):
Interest expense
Interest rate expense $ 4,435 $ 5,965 $ (1,530 ) -25.6 %
Debt related fees and amortization
expense 1,826 1,215 611 50.3 %
Accretion and other expenses of
Series A preferred units 1,640 1,943 (303 ) -15.6 %
Other income (41 ) (31 ) (10 ) 32.3 %
The increase in SG&A expenses for the three months ended March 31, 2022 was due
to increases in salaries and wages of $1.4 million, which was mostly attributed
to an increase in in stock based compensation, professional fees of $0.2
million, and miscellaneous expense increase of $0.3 million. SG&A expenses as a
percentage of revenue in the three months ended March 31, 2022 increased to 14%
as compared to 13% in the corresponding period of 2021.
Interest expense decreased in the three months ended March 31, 2022 due to
principal debt payments made to Third Eye Capital in the first quarter of 2022,
coupled with capitalizing interest on our capital projects. Debt related fees
and amortization increased due to debt issuance costs and extension fees being
incurred in 2022 related to extending the Third Eye Capital debt and obtaining
the Revolving Loans. The increase in accretion and other expenses of the Series
A Preferred Units was due to the issuance of additional units during 2021,
coupled with accrued preference payments.
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Liquidity and Capital Resources
Cash and Cash Equivalents
Cash and cash equivalents were $5.5 million at March 31, 2022, of which $4.7
million were held in North America and the rest was held at our Indian
subsidiary. Our current ratio at March 31, 2022 was 0.26, compared to a current
ratio of 0.32 at December 31, 2021. We expect that our future available
liquidity resources will consist primarily of cash generated from operations,
remaining cash balances, borrowings available, if any, under our senior debt
facilities and our subordinated debt facilities, and any additional funds raised
through sales of equity. The use of proceeds from all equity raises and debt
financings are subject to approval by our senior lender.
Liquidity
Cash and cash equivalents, current assets, current liabilities and debt at the
end of each period were as follows (in thousands):
As of
March 31, December 31,
2022 2021
Cash and cash equivalents $ 5,471 $ 7,751
Current assets (including cash, cash equivalents, and deposits) 16,153 20,693
Current and long term liabilities (excluding all debt) 91,854 92,302
Current & long term debt 203,223 188,767
Our principal sources of liquidity have been cash provided by the sale of
equity, operations, and borrowings under various debt arrangements.
We launched an EB-5 Phase II funding in 2016, under which we expect to issue
$50.8 million in additional EB-5 Notes on substantially similar terms and
conditions as those issued under our EB-5 Phase I funding. On November 21, 2019,
the minimum investment amount was raised from $0.5 million per investor to $0.9
million per investor. As of March 31, 2022, EB-5 Phase II funding in the amount
of $4.0 million had been released from escrow to us. Our principal uses of cash
have been to refinance indebtedness, fund operations, and for capital
expenditures. We anticipate these uses will continue to be our principal uses of
cash in the future. Global financial and credit markets have been volatile in
recent years, and future adverse conditions of these markets could negatively
affect our ability to secure funds or raise capital at a reasonable cost, or at
all.
We operate in a volatile market in which we have limited control over the major
components of input costs and product revenues and are making investments in
future facilities and facility upgrades that improve the overall margin while
lessening the impact of these volatile markets. As such, we expect cash provided
by operating activities to fluctuate in future periods primarily because of
changes in the prices for corn, ethanol, WDG, DCO, CDS, biodiesel, waste fats
and oils, glycerin, non-refined palm oil and natural gas. To the extent that we
experience periods in which the spread between ethanol prices, and corn and
energy costs narrow or the spread between biodiesel prices and waste fats and
oils or palm oil and energy costs narrow, we may require additional working
capital to fund operations.
As a result of negative capital and negative operating results, and
collateralization of substantially all of the company assets, the Company has
been reliant on its senior secured lender to provide additional funding and has
been required to remit substantially all excess cash from operations to the
senior secured lender. In order to meet its obligations during the next twelve
months, the company will need to either refinance the company's debt or receive
the continued of its senior lender. This dependence on the senior lender raises
substantial doubt about the company's ability to continue as a going concern.
The Company plans to pursue the following strategies to improve the course of
the business.
For the Keyes Plant, we plan to operate the plant and continue to improve
financial performance by adopting new technologies or process changes that allow
for energy efficiency, cost reduction or revenue enhancements, execute upon
awarded grants that improve energy and operational efficiencies resulting in
lower cost, lower carbon demands and overall margin improvement.
For the biogas project, we plan to operate the biogas digesters to capture and
monetize biogas as well as continue to build new dairy digesters and extend the
existing pipeline in order to capture the higher carbon credits available in
California. Funding for continued construction is based upon, obtaining
government guaranteed loans and executing on existing and new state grant
programs.
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For the Riverbank project, we plan to raise the funds necessary to construct and
operate the Carbon Zero 1 plant using loan guarantees and public debt financings
based upon the licensed technology that generate federal and state carbon
credits available for ultra-low carbon fuels utilizing lower cost, non-food
advanced feedstocks to significantly increase margins.
For the Kakinada Plant, we plan to develop sales channels for domestic products
as the costs of feedstock normalize against the price of diesel, as recently
announced governmental incentives take effect to promote the blending of
biodiesel, and as feedstocks such as refined animal tallow are used domestically
and exported. Additionally, we are in the process of obtaining approval to
export refined animal tallow and biodiesel produced using animal tallow into
international markets as the use of refined animal tallow received approval from
the Pollution Control Board of India for production of biodiesel. The
acquisition of land and equipment to refine crude animal tallow is underway.
In addition to the above we plan to continue to locate funding for existing and
new business opportunities through a combination of working with our senior
lender, restructuring existing loan agreements, selling equity through the ATM
and otherwise, selling the current EB-5 Phase II offering, or by vendor
financing arrangements.
At March 31, 2022, the outstanding balance of principal, interest and fees, net
of discounts, on all Third Eye Capital Notes equaled $137 million. The maturity
dates for the Third Eye Capital financing arrangements are April 1, 2023, for
$105 million, March 1, 2025, for $9 million and March 1, 2026, for $22 million.
As of March 31, 2022, we have $14.2 million available under the revolving credit
lines.
As of the date of this report, the Company has $40.0 million additional
borrowing capacity to fund future cash flow requirements under the Reserve
Liquidity Notes due on April 1, 2023.
We also rely on our working capital lines with Secunderabad Oils in India to
fund our commercial arrangements for the acquisitions of feedstock. We currently
provide our own working capital for the Keyes Plant; Secunderabad Oils currently
provide us with working capital for the Kakinada Plant. The ability of
Secunderabad Oils to continue to provide us with working capital depends in part
on both of their respective financial strength and banking relationships.
Change in Working Capital and Cash Flows
The below table (in thousands) describes the changes in current and long-term
debt during the three months ended March 31, 2022:
Increases to debt:
Accrued interest $ 4,710
Maturity date extension fee and other fees added to senior
debt
1,751
Sub debt extension fees 340
Fuels Revolving Line draw 10,454
Carbon Revolving Line draw 24,586
Total increases to debt $ 41,841Decreases to debt:
Principal, fees, and interest payments to senior lender $ (21,435 )
Principal and interest payments to EB-5 investors
(26 )
Change in debt issuance costs, net of amortization (5,922 )
Term loan payments (2 )
Total decreases to debt $ (27,385 )
Change in total debt $ 14,456Working capital changes resulted in (i) a $0.3 million increase in inventories
due to decreases in in-process and finished goods inventory, (ii) a $0.9 million
decrease in accounts receivable due to repayments of Murex accounts receivable,
(iii) a $0.7 million decrease in prepaid expenses mainly due the use of a $2.5
million J.D. Heiskell pre-payment, partially offset by an increase in prepaid
guarantee fees of $1.7 million, (iv) a decrease in other current assets of $0.3
million mainly due to use of money paid for raw materials and others in India
operations of $0.3 million, and (v) a $2.3 million decrease in cash.
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Net cash used in operating activities during the three months ended March 31,
2022 was $8.2 million, consisting of non-cash charges of $6.9 million, net cash
provided by operating assets and liabilities of $3.3 million, and net loss of
$18.3 million. The non-cash charges consisted of: (i) $1.8 million in
amortization of debt issuance costs and other intangible assets, (ii) $1.3
million in depreciation expenses, (iii) $2.0 million in stock-based compensation
expense, and (iv) $1.6 million in preferred unit accretion and other expenses of
Series A preferred units. Net changes in operating assets and liabilities
consisted primarily of a decrease in (i) inventories of $0.3 million, (ii)
prepaid expenses of $2.5 million, and (iii) an increase in accounts payable of
$0.8 million, (iv) a decrease in accounts receivable of $0.9 million, (v) a
decrease in other assets of $0.3 million, and (vi) an increase in accrued
interest expense and fees of $4.7 million, partially offset by (vii) a decrease
in other liabilities of $6.1 million.
Cash used by investing activities was $8.0 million, of which $9.5 million were
used by capital projects, partially offset by grant proceeds and other
reimbursements of $1.5 million.
Cash provided by financing activities was $13.9 million, consisting primarily of
$0.2 million from exercises of stock options, and $18.5 million from proceeds
from borrowings, partially offset by repayments of borrowings of $4.0 million,
debt renewal and waiver fee payments of $0.7 million, and payments on finance
leases of $0.1 million.
Critical Accounting Policies
Our discussion and analysis of financial condition and results of operations are
based upon our consolidated financial statements, which have been prepared in
accordance with U.S. GAAP. The preparation of these financial statements
requires us to make estimates and judgments 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 amount of net sales and
expenses for each period. We believe that of our most significant accounting
policies, defined as those policies that we believe are the most important to
the portrayal of our financial condition and results of operations and that
require management's most difficult, subjective or complex judgments, often as a
result of the need to make estimates about the effects of matters that are
inherently uncertain are: revenue recognition; recoverability of long-lived
assets, and debt modification and extinguishment accounting. These significant
accounting principles are more fully described in "Management's Discussion and
Analysis of Financial Condition and Results of Operations-Critical Accounting
Policies" in our Annual Report on Form 10-K for the year ended December 31,
2021.
Recently Issued Accounting Pronouncements
None reported beyond those disclosed in our Annual Report on Form 10-K for the
year ended December 31, 2021.
Off Balance Sheet Arrangements
We had no off-balance sheet arrangements during the three months ended March 31,
2022.
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