Arq(ARQ) - 2022 Q1 - Quarterly Report

PART I. - FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the reporting period Item 1. Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes. Key financial highlights include a net loss for Q1 2022, a significant decrease in equity method investment earnings, and changes in cash flows, primarily due to the wind-down of Tinuum Group and Tinuum Services Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific points in time Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | :-------------------- | | Total Assets | $181,571 | $185,436 | $(3,865) | | Total Liabilities | $37,221 | $38,135 | $(914) | | Total Stockholders' Equity | $144,350 | $147,301 | $(2,951) | | Cash and cash equivalents | $79,807 | $78,753 | $1,054 | | Inventories, net | $10,280 | $7,850 | $2,430 | | Equity method investments | $711 | $2,391 | $(1,680) | - Total assets and stockholders' equity slightly decreased from December 31, 2021, to March 31, 2022, while total liabilities also saw a minor reduction[10] Condensed Consolidated Statements of Operations This section details the company's revenues, expenses, and net income or loss over specific periods, reflecting operational performance Condensed Consolidated Statements of Operations Highlights | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | Change (%) | | :------------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Consumables Revenue | $26,402 | $18,541 | $7,861 | 42% | | License royalties, related party | $0 | $4,066 | $(4,066) | (100)% | | Total revenues | $26,402 | $22,607 | $3,795 | 17% | | Operating (loss) income | $(3,335) | $330 | $(3,665) | (1111)% | | Earnings from equity method investments | $833 | $18,312 | $(17,479) | (95)% | | Net (loss) income | $(3,033) | $13,737 | $(16,770) | (122)% | | Basic (Loss) Earnings Per Share | $(0.17) | $0.76 | $(0.93) | (122)% | | Diluted (Loss) Earnings Per Share | $(0.17) | $0.75 | $(0.92) | (123)% | - The company reported a net loss of $3.033 million for Q1 2022, a significant decline from a net income of $13.737 million in Q1 2021, primarily due to the cessation of license royalties and a sharp drop in equity method investment earnings[12] Condensed Consolidated Statements of Changes in Stockholders' Equity This section outlines changes in the company's equity accounts, including net income, dividends, and other comprehensive income, over a period Condensed Consolidated Statements of Changes in Stockholders' Equity Highlights | Metric | January 1, 2022 (in thousands) | March 31, 2022 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :---------------------------- | :-------------------- | | Total Stockholders' Equity | $147,301 | $144,350 | $(2,951) | | Net loss | N/A | $(3,033) | $(3,033) | - Total stockholders' equity decreased by $2.951 million from January 1, 2022, to March 31, 2022, primarily driven by the net loss incurred during the period[15] Condensed Consolidated Statements of Cash Flows This section details the cash inflows and outflows from operating, investing, and financing activities, illustrating liquidity and solvency Condensed Consolidated Statements of Cash Flows Highlights | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | | :--------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Net cash provided by operating activities | $2,094 | $21,947 | $(19,853) | | Net cash (used in) provided by investing activities | $(439) | $4,886 | $(5,325) | | Net cash used in financing activities | $(628) | $(10,531) | $9,903 | | Increase in Cash and Cash Equivalents and Restricted Cash | $1,027 | $16,302 | $(15,275) | | Cash and Cash Equivalents and Restricted Cash, end of period | $89,807 | $52,234 | $37,573 | - Net cash provided by operating activities significantly decreased by $19.853 million in Q1 2022 compared to Q1 2021, primarily due to lower net income and reduced distributions from equity method investees[18] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements Note 1 - Basis of Presentation This note describes the accounting principles and reporting framework used in preparing the financial statements - The Company's primary business is the sale of consumable air and water treatment solutions, including activated carbon (AC) and chemical technologies, for various markets[19] - Tinuum Group and Tinuum Services ceased material operations effective December 31, 2021, due to the expiration of the Section 45 Tax Credit Program, which previously generated substantial earnings and royalties[20] - The Company now operates as a single reportable segment, Advanced Purification Technologies (APT), as the historical RC segment no longer meets reporting criteria[31][32] Note 2 - Customer Supply Agreement This note details the long-term supply agreement with Norit Activated Carbon, including terms, payments, and related financial impacts - The Company has a 15-year Supply Agreement with Norit Activated Carbon - Americas for lignite-based AC products, with automatic 10-year renewal terms[35] - On February 25, 2022, the Company received $10.6 million in cash from Norit due to a change in control, which included full payment of the Reclamation Reimbursement and unbilled Specific Capital amounts[38] - A $0.5 million loss was recognized on the early settlement of the Reclamation Reimbursement due to the difference between cash proceeds received and the carrying amount[39] Note 3 - Acquisition of Marshall Mine This note discusses the acquisition and reclamation activities of Marshall Mine, including Norit's reimbursement obligations and asset retirement obligations - The Company acquired Marshall Mine in September 2020 and immediately began reclamation activities due to no remaining economic reserves[42] - Norit's $10.2 million obligation for Reclamation Reimbursement was fully paid in February 2022 as part of the Change in Control[42] - The carrying value of the Marshall Mine Asset Retirement Obligation (ARO) was $4.7 million as of March 31, 2022, down from $6.3 million at December 31, 2021[43] Note 4 - Leases This note provides details on the company's operating and finance lease assets and obligations, along with total lease costs Lease Financial Information | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Operating lease right-of-use assets, net | $8,754 | $6,000 | | Total operating lease obligation | $9,015 | $6,335 | | Finance lease right-of-use assets, net | $1,602 | $1,743 | | Total finance lease obligations | $3,912 | $4,163 | - Total lease cost for the three months ended March 31, 2022, was $1.277 million, slightly down from $1.288 million in the prior year[54] Note 5 - Revenues This note details the composition of receivables and the timing and geographical distribution of revenue recognition Receivables, net Components | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------- | :------------------------------ | :------------------------------- | | Trade receivables, net | $12,987 | $10,476 | | Norit Receivable - current | $0 | $2,146 | | Total Receivable, net | $13,008 | $12,622 | - All revenues recognized for the three months ended March 31, 2022 and 2021, were satisfied at a point in time[57] - Approximately 11% of Consumables revenue was generated in Canada for Q1 2022, compared to 19% in Q1 2021[57] Note 6 - Inventories, net This note provides a breakdown of inventory components and explains changes in inventory levels over the period Inventories, net Summary | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------- | :------------------------------ | :------------------------------- | | Product inventory, net | $5,706 | $4,901 | | Raw material inventory | $4,574 | $2,949 | | Total Inventories, net | $10,280 | $7,850 | - Total inventories, net, increased to $10.280 million as of March 31, 2022, from $7.850 million at December 31, 2021, driven by increases in both product and raw material inventory[59] Note 7 - Commitments and Contingencies This note discloses the company's legal proceedings, surety bonds, and restricted cash related to reclamation obligations - The Company had no significant legal proceedings as of March 31, 2022[60] - The Company had a $16.6 million surety bond for Marshall Mine reclamation and a $7.5 million surety bond for Five Forks Mine reclamation as of March 31, 2022[61][62] - $10.0 million in restricted cash is posted as collateral for the Marshall Mine surety bonds[61] Note 8 - Supplemental Financial Information This note provides additional details on prepaid expenses, other long-term assets, and mine reclamation liabilities Prepaid expenses and other assets & Other long-term assets, net | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Prepaid expenses and other assets | $7,387 | $6,661 | | Other long-term assets, net | $28,913 | $33,243 | | Norit Receivable (long-term) | $0 | $6,846 | - Mine development costs are depleted over the estimated life of related mine reserves, with no impairment indicators as of March 31, 2022[67] - Mine reclamation liabilities decreased from $9.959 million at December 31, 2021, to $8.346 million at March 31, 2022, after liabilities settled and changes due to scope and timing of reclamation[70] Note 9 - Equity Method Investments This note details earnings and carrying values of equity method investments, particularly Tinuum Group and Tinuum Services Earnings from Equity Method Investments | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | | :-------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Earnings from Tinuum Group | $1,012 | $16,362 | $(15,350) | | (Loss) earnings from Tinuum Services | $(180) | $1,950 | $(2,130) | | Total Earnings from equity method investments | $833 | $18,312 | $(17,479) | - Tinuum Group's operations ceased as of December 31, 2021, leading to significantly lower earnings in Q1 2022, primarily from distributions exceeding the investment balance[73][130] - The carrying value of equity method investment in Tinuum Services decreased from $2.391 million at December 31, 2021, to $711 thousand at March 31, 2022[78] Note 10 - Stockholders' Equity This note covers details regarding the company's stock repurchase program and the Tax Asset Protection Plan - $7.0 million remained under the Stock Repurchase Program as of March 31, 2022[84] - The Tax Asset Protection Plan (TAPP) was amended on March 15, 2022, extending its expiration date to December 31, 2023, or December 31, 2022, if stockholder approval is not obtained[87][89] Note 11 - Stock-Based Compensation This note outlines the total stock-based compensation expense and unrecognized compensation expense for the period Total Stock-Based Compensation Expense | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | RSA expense | $427 | $407 | | PSU expense | $37 | $14 | | Total stock-based compensation expense | $464 | $421 | - Total stock-based compensation expense for Q1 2022 was $464 thousand, up from $421 thousand in Q1 2021[91] - Unrecognized stock-based compensation expense totaled $3.870 million as of March 31, 2022, with an average recognition period of 2.34 years[91] Note 12 - Income Taxes This note explains the company's income tax provision, including the impact of pretax losses and valuation allowances Income Tax Expense and Effective Tax Rate | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------- | :-------------------------------- | :-------------------------------- | | Income tax expense | $0 | $4,489 | | Effective tax rate | 0% | 25% | - The company recorded no income tax expense in Q1 2022, compared to $4.5 million in Q1 2021, due to a pretax loss offset by a valuation allowance[96] Note 13 - Fair Value Measurements This note provides information on the fair value of financial instruments, including investments and obligations Fair Value of Financial Instruments | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :---------------- | :------------------------------ | :------------------------------- | | Highview Investment | $552 | $552 | | Highview Obligation | $221 | $227 | - The Company had no financial instruments carried and measured at fair value on a recurring basis as of March 31, 2022, and December 31, 2021[101] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results for Q1 2022. It highlights the significant impact of the wind-down of Tinuum Group and Tinuum Services, the growth in consumables revenue, and the factors affecting profitability and liquidity. The company reported a net loss for the quarter, a substantial decrease from net income in the prior year, primarily due to the cessation of tax credit-driven operations Overview This section provides a high-level summary of the company's business, operational changes, and segment reporting structure - The Company's core business involves selling activated carbon (AC) and chemical-based purification solutions to various markets, including coal-fired utilities, industrials, and water treatment[105] - Earnings from equity investments in Tinuum Group and Tinuum Services ceased as of December 31, 2021, due to the expiration of the Section 45 Tax Credit Program[106] - The Company now operates as a single reportable segment, Advanced Purification Technologies (APT), following the wind-down of the Refined Coal (RC) segment[107] Drivers of Demand and Key Factors Affecting Profitability This section identifies the primary factors influencing the company's sales volumes, pricing, and overall profitability - Key profitability drivers include sales volumes, price and product mix, coal-fired dispatch, and demand for water treatment contaminant removal[108] - Increased demand for AC products in Q1 2022 led to higher product volumes for power generation customers, driven by higher natural gas prices and electricity demand[108][119] Supply Agreement This section discusses the terms and financial implications of the company's supply agreement with Norit, including reimbursements and settlements - The Supply Agreement with Norit includes reimbursements for Shared Capital and Specific Capital expenditures[109] - A $10.6 million cash payment was received from Norit in February 2022 due to a change in control, settling the Reclamation Reimbursement and providing advance payments for Specific Capital[110] - A $0.5 million loss was recognized on the early settlement of the Reclamation Reimbursement[112] Acquisition of Marshall Mine This section details the acquisition and subsequent reclamation of Marshall Mine, including related financial obligations and collateral - Marshall Mine was acquired in September 2020 and immediately shuttered for reclamation, with Norit's $10.2 million reimbursement obligation fully paid in February 2022[114] - A $16.6 million surety bond is required for Marshall Mine reclamation, with $10.0 million in restricted cash as collateral[115] Results of Operations This section analyzes the company's financial performance, including revenue, expenses, and net income, highlighting key changes and their drivers - The company experienced a net loss of $3.0 million in Q1 2022, a significant decline from $13.7 million net income in Q1 2021, primarily due to the cessation of Section 45 tax credit-driven operations of Tinuum Group[116] Total Revenue and Cost of Revenue This section examines the company's revenue streams and associated costs, detailing changes in sales volumes, pricing, and gross margins Revenue and Cost of Revenue Summary | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | Change (%) | | :------------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Consumables Revenue | $26,402 | $18,541 | $7,861 | 42% | | License royalties, related party | $0 | $4,066 | $(4,066) | (100)% | | Total revenues | $26,402 | $22,607 | $3,795 | 17% | | Consumables cost of revenue | $21,507 | $13,984 | $7,523 | 54% | - Consumables revenue increased by $7.861 million (42%) due to higher product volumes ($4.9 million) and favorable pricing mix ($2.8 million)[119] - Consumables gross margin was positively impacted by higher product volumes (lower fixed costs per pound) but negatively by inflationary costs for raw materials, transportation, and operational costs[120] Other Operating Expenses This section analyzes changes in various operating expenses, including payroll, legal fees, and depreciation, and their underlying causes Other Operating Expenses Summary | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | Change (%) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Payroll and benefits | $2,626 | $2,469 | $157 | 6% | | Legal and professional fees | $2,172 | $1,803 | $369 | 20% | | Depreciation, amortization, depletion and accretion | $1,506 | $2,106 | $(600) | (28)% | - Payroll and benefits increased by $0.4 million due to Retention Agreements, partially offset by a $0.2 million decrease from reduced headcount[125] - Legal and professional fees increased by $0.4 million due to costs related to the strategic alternatives review process[126] Other Income (Expense), net This section details non-operating income and expenses, including equity method investment earnings and interest expense Other Income (Expense), net Summary | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | Change (%) | | :-------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Earnings from equity method investments | $833 | $18,312 | $(17,479) | (95)% | | Interest expense | $(86) | $(837) | $751 | (90)% | | Other | $(445) | $421 | $(866) | (206)% | | Total other income | $302 | $17,896 | $(17,594) | (98)% | - Earnings from equity method investments decreased significantly due to Tinuum Group and Tinuum Services ceasing operations as of December 31, 2021[130][132] - Interest expense decreased by $0.8 million due to the pay-off of a senior term loan as of June 1, 2021[133] Income tax expense This section explains the company's income tax provision, including the impact of pretax losses and valuation allowances - No income tax expense was recorded in Q1 2022 due to a pretax loss, with the tax benefit offset by a valuation allowance based on the forecast of a full-year pretax loss[136] Non-GAAP Financial Measures This section presents non-GAAP financial measures like EBITDA and Adjusted EBITDA, providing supplemental insights into core operating performance Consolidated EBITDA and Adjusted EBITDA | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Consolidated (EBITDA loss) EBITDA | $(1,336) | $21,188 | $(22,524) | | Consolidated Adjusted EBITDA | $880 | $26,127 | $(25,247) | - Consolidated Adjusted EBITDA decreased significantly to $0.880 million in Q1 2022 from $26.127 million in Q1 2021[143] - Consolidated EBITDA and Adjusted EBITDA are presented as non-GAAP measures to provide supplemental insights into core operating performance, excluding certain non-cash items and non-recurring events[138][140] Liquidity and Capital Resources This section analyzes the company's ability to generate and manage cash, including sources, uses, and future capital requirements - The company's primary liquidity sources are cash on hand (excluding restricted cash) and operations, with distributions from Tinuum Group and Tinuum Services no longer a significant source[146] - Principal uses of liquidity include business operating expenses, capital and spare parts expenditures, lease obligations, and ARO liabilities[146] Tinuum Group and Tinuum Services Distributions This section details the cash distributions received from equity method investees, highlighting the significant decrease due to operational cessation Cash Distributions from Equity Method Investees | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Tinuum Services | $1,501 | $3,502 | $(2,001) | | Tinuum Group | $1,012 | $19,749 | $(18,737) | | Total Distributions from equity method investees | $2,514 | $23,251 | $(20,737) | - Cash distributions from equity method investees significantly decreased by $20.7 million in Q1 2022 compared to Q1 2021, primarily due to Tinuum Group and Tinuum Services ceasing material operations[147] Stock Repurchases and Dividends This section reports on the company's stock repurchase activities and dividend declarations during the reporting period - The company did not repurchase any shares under the Stock Repurchase Program or declare/pay any cash dividends in Q1 2022 or Q1 2021[149] Cash Flows This section summarizes the net changes in cash and cash equivalents from operating, investing, and financing activities Cash Flow Summary | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | | :------------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Cash and cash equivalents and restricted cash provided by (used in): | | | | | Operating activities | $2,094 | $21,947 | $(19,853) | | Investing activities | $(439) | $4,886 | $(5,325) | | Financing activities | $(628) | $(10,531) | $9,903 | | Net change in cash and cash equivalents and restricted cash | $1,027 | $16,302 | $(15,275) | - Cash flows from operating activities decreased by $19.9 million, primarily due to lower equity earnings and deferred income tax expense[152] - Cash flows from financing activities decreased by $9.9 million, primarily from decreases in principal loan repayments on a senior term loan[154] Material Cash Requirements This section outlines the company's anticipated capital expenditures, retention agreement payments, and liquidity outlook for the next 12 months - Expected capital expenditures for 2022 are $13.0 million, an increase from $7.6 million in 2021, primarily for Red River Plant improvements ($7.0 million) and product-specific capital ($1.0 million)[155] - $2.0 million is expected to be paid in 2022 for Retention Agreements with executive officers and key employees[156] - The company believes cash on hand as of March 31, 2022, will provide sufficient liquidity to fund operations for the next 12 months[158] Critical Accounting Policies and Estimates This section confirms that there were no material changes to the company's critical accounting policies and estimates from the prior year - No material changes to critical accounting policies and estimates from those reported in the 2021 Form 10-K[161] Recently Issued Accounting Standards This section directs readers to relevant notes for information on recently issued accounting standards applicable to the company - Refer to Note 1 of the Condensed Consolidated Financial Statements for information regarding recently issued accounting standards applicable to the company[162] Forward-Looking Statements Found in this Report This section highlights the presence of forward-looking statements within the report and cautions about inherent risks and uncertainties - The report contains forward-looking statements regarding anticipated effects of pricing, costs, supply/demand, competition, strategic alternatives, R&D, technology effectiveness, guarantees, timing/amounts of revenues, capital expenditures, patents, regulations, and opportunities[163][164] - These statements involve risks and uncertainties, and actual events or results could differ materially from those discussed[164] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that the information regarding quantitative and qualitative disclosures about market risk is not required to be provided by smaller reporting companies - Information on quantitative and qualitative disclosures about market risk is not required for smaller reporting companies[166] Item 4. Controls and Procedures The company's disclosure controls and procedures were not effective as of March 31, 2022, due to a material weakness related to accounting for freight, inadequate monitoring of interpretive guidance, and a lack of control over annual policy reviews. Despite this, management concluded that the financial statements fairly present the company's financial position. Remediation efforts are ongoing and expected to be completed by Q2 2022 - Disclosure controls and procedures were not effective as of March 31, 2022, due to a material weakness[167] - The material weakness is related to the initial application of ASC 606 for freight accounting, inadequate monitoring of interpretive guidance, and a lack of control over annual policy reviews for material accounts[167] - Remediation efforts for the material weakness commenced in Q1 2022 and are expected to be completed by the end of Q2 2022[169] PART II. - OTHER INFORMATION This section provides additional non-financial information, including legal proceedings, risk factors, and other corporate disclosures Item 1. Legal Proceedings The company is involved in various legal actions in the ordinary course of business. Further information can be found in Note 7 "Commitments and Contingencies" to the consolidated financial statements - The company is involved in litigation, claims, and other proceedings related to the conduct of its business[172] - Information regarding legal proceedings can be found in Note 7 "Commitments and Contingencies" of the financial statements[172] Item 1A. Risk Factors There are no material updates to the risk factors disclosed in the 2021 Form 10-K - No material updates to risk factors from the 2021 Form 10-K[173] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds occurred during the reporting period - None[174] Item 3. Defaults Upon Senior Securities No defaults upon senior securities occurred during the reporting period - None[175] Item 4. Mine Safety Disclosures The required statement concerning mine safety violations or other regulatory matters is included in Exhibit 95.1 to this Quarterly Report - Mine safety disclosures are included in Exhibit 95.1[176] Item 5. Other Information The Board approved an amendment to the Retention Agreements for executive officers and key employees on May 4, 2022. The Amended Retention Agreements modify payment schedules and introduce an additional lump sum payment, contingent on continued employment. The total incremental amount payable is $0.5 million - Amended Retention Agreements for executive officers and key employees were approved on May 4, 2022[178] - The amendments modify payment schedules for Retention Pay and introduce an additional lump sum payment, contingent on continued employment[178][179] - The total incremental amount payable under the Amended Retention Agreements is $0.5 million[180] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including the Fifth Amendment to the Tax Asset Protection Plan, the form of Amended Retention Agreement, and various certifications and XBRL documents - Includes the Fifth Amendment to Tax Asset Protection Plan (Exhibit 4.6)[182] - Includes the Form of Amended Retention Agreement for executive officers (Exhibit 10.1)[182] - Various certifications (31.1, 31.2, 32.1) and XBRL documents (101.INS, SCH, CAL, LAB, PRE, DEF, 104) are filed[182] Signatures The report is signed by Greg Marken, Chief Executive Officer, and Morgan Fields, Chief Accounting Officer, on May 9, 2022, certifying its submission - The report was signed by Greg Marken (Chief Executive Officer) and Morgan Fields (Chief Accounting Officer) on May 9, 2022[184]