GNE Genie Energy Ltd

2005 Accelerated Filer DE false true NJ false 06-30-2023 06-30-2023 false true NYSE Q1 2022 --12-31 false 0001528356 Genie Energy Ltd. 18 24 2322 2322 2322 Stock-based compensation included in selling, general and administrative expenses 0001528356 2021-04-01 2021-04-26 0001528356 2022-02-01 2022-02-28 0001528356 2021-05-11 0001528356 2021-01-01 2021-09-30 0001528356 2021-07-01 2021-09-30 0001528356 2021-06-01 2021-06-30 0001528356 2021-11-01 2021-11-30 0001528356 us-gaap:CommonClassBMember 2022-05-06 0001528356 us-gaap:CommonClassAMember 2022-05-06 0001528356 gne:ClassACommonStockAndClassBCommonStockMember 2022-05-03 2022-05-03 0001528356 us-gaap:PreferredStockMember 2022-04-14 2022-04-14 0001528356 gne:CreditAgreementMember 2018-12-13 2018-12-13 0001528356 2021-05-01 2021-05-11 0001528356 gne:LumoEnergiaOyjMember 2020-06-30 0001528356 us-gaap:PreferredStockMember 2021-03-31 0001528356 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001528356 us-gaap:TreasuryStockMember 2021-03-31 0001528356 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-03-31 0001528356 us-gaap:NoncontrollingInterestMember 2021-03-31 0001528356 us-gaap:RetainedEarningsMember 2021-03-31 0001528356 us-gaap:AccountsReceivableMember gne:CustomerAMember us-gaap:CustomerConcentrationRiskMember 2022-01-01 2022-03-31 0001528356 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember gne:CustomerMember 2021-01-01 2021-03-31 0001528356 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember gne:CustomerMember 2022-01-01 2022-03-31 0001528356 gne:NatanOhayonMember 2022-01-01 2022-03-31 0001528356 gne:NatanOhayonMember 2022-02-21 0001528356 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-03-31 0001528356 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-03-31 0001528356 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-01-01 2021-03-31 0001528356 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-01-01 2021-03-31 0001528356 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2020-12-31 0001528356 gne:NatanOhayonMember 2022-03-31 0001528356 gne:GenieEnergyInternationalCorporationMember 2021-12-31 0001528356 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2020-12-31 0001528356 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2022-03-31 0001528356 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2022-01-01 2022-03-31 0001528356 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-12-31 0001528356 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2022-03-31 0001528356 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2022-01-01 2022-03-31 0001528356 gne:ElectricitiesMember 2021-03-31 0001528356 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-12-31 0001528356 gne:ClassACommonStockAndClassBCommonStockMember gne:FebruarySevenTwoThousandTwentyTwoMember 2022-01-01 2022-03-31 0001528356 gne:RenewableEnergyCreditsMember 2021-01-01 2021-03-31 0001528356 us-gaap:CommonClassBMember 2021-10-01 2021-10-31 0001528356 2020-03-21 2020-03-21 0001528356 gne:Atid613Member 2021-05-31 0001528356 2020-01-01 2020-03-31 0001528356 2022-04-01 2022-04-04 0001528356 srt:BoardOfDirectorsChairmanMember 2022-02-09 0001528356 us-gaap:CommonClassBMember 2021-09-01 2021-09-30 0001528356 gne:StateOfConnecticutPublicUtilitiesRegulatoryAuthorityMember gne:TownSquareMember gne:SettlementAgreementMember 2021-07-31 0001528356 us-gaap:DividendPaidMember 2021-01-01 2021-12-31 0001528356 us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember gne:CustomerMember 2021-01-01 2021-12-31 0001528356 srt:MaximumMember 2021-06-01 2021-06-30 0001528356 us-gaap:SegmentDiscontinuedOperationsMember 2021-01-01 2021-03-31 0001528356 gne:GenieEnergyInternationalCorporationMember 2021-01-01 2021-03-31 0001528356 srt:MinimumMember 2021-06-01 2021-06-30 0001528356 us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember gne:CustomerMember 2022-01-01 2022-03-31 0001528356 gne:AccountsReceivableNetMember gne:CustomerAMember 2021-01-01 2021-12-31 0001528356 gne:ClassACommonStockAndClassBCommonStockMember gne:FebruaryNineTwoThousandTwentyTwoMember 2022-03-31 0001528356 gne:LoanWithTokyoStarBankMember 2020-05-10 2020-05-13 0001528356 gne:FebruaryTwentyTwoTwoThousandTwentyTwoMember gne:ClassACommonStockAndClassBCommonStockMember 2022-01-01 2022-03-31 0001528356 us-gaap:FairValueMeasurementsRecurringMember 2022-03-31 0001528356 us-gaap:AccountsReceivableMember 2022-01-01 2022-03-31 0001528356 gne:CitizensChoiceEnergyMember 2022-03-31 0001528356 us-gaap:PreferredStockMember 2020-12-31 0001528356 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001528356 us-gaap:TreasuryStockMember 2020-12-31 0001528356 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-12-31 0001528356 us-gaap:RetainedEarningsMember 2020-12-31 0001528356 us-gaap:NoncontrollingInterestMember 2020-12-31 0001528356 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0001528356 us-gaap:NoncontrollingInterestMember 2022-01-01 2022-03-31 0001528356 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-01 2022-03-31 0001528356 us-gaap:PreferredStockMember 2022-03-31 0001528356 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0001528356 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0001528356 us-gaap:TreasuryStockMember 2022-03-31 0001528356 us-gaap:RetainedEarningsMember 2022-03-31 0001528356 us-gaap:NoncontrollingInterestMember 2022-03-31 0001528356 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-03-31 0001528356 us-gaap:ProductAndServiceOtherMember 2021-01-01 2021-03-31 0001528356 gne:NonvestedRestrictedClassBCommonStockMember 2022-01-01 2022-03-31 0001528356 gne:NonvestedRestrictedClassBCommonStockMember 2021-01-01 2021-03-31 0001528356 us-gaap:NoncontrollingInterestMember 2021-12-31 0001528356 us-gaap:RetainedEarningsMember 2021-12-31 0001528356 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-12-31 0001528356 us-gaap:TreasuryStockMember 2021-12-31 0001528356 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001528356 us-gaap:PreferredStockMember 2021-12-31 0001528356 gne:RafaelHoldingsMember 2021-12-31 0001528356 gne:IdtCorporationMember 2021-12-31 0001528356 gne:CitizensChoiceEnergyMember 2021-12-31 0001528356 gne:LicensesMember 2021-12-31 0001528356 us-gaap:CustomerRelationshipsMember 2021-12-31 0001528356 us-gaap:TrademarksMember 2021-12-31 0001528356 gne:LicensesMember 2021-01-01 2021-12-31 0001528356 us-gaap:CustomerRelationshipsMember 2021-01-01 2021-12-31 0001528356 us-gaap:TrademarksMember 2021-01-01 2021-12-31 0001528356 gne:EnergyContractsAndOptionsMember 2021-12-31 0001528356 us-gaap:FairValueMeasurementsRecurringMember 2021-12-31 0001528356 gne:Atid613Member 2018-09-30 0001528356 gne:RenewableEnergyCreditsMember 2022-03-31 0001528356 gne:ElectricitiesMember 2022-03-31 0001528356 gne:Atid613Member 2020-03-01 0001528356 gne:Atid613Member 2019-08-31 0001528356 gne:Atid613Member 2019-08-12 0001528356 gne:Atid613Member 2021-03-31 0001528356 gne:Atid613Member 2022-03-31 0001528356 gne:Atid613Member 2022-01-01 2022-03-31 0001528356 gne:IGMBrokerageCorpMember 2022-03-31 0001528356 gne:GenieJapanMember 2022-01-01 2022-03-31 0001528356 us-gaap:SeriesAMember 2021-12-31 0001528356 us-gaap:CommonClassBMember 2021-12-31 0001528356 us-gaap:CommonClassAMember 2021-12-31 0001528356 us-gaap:OtherAssetsMember 2022-03-31 0001528356 us-gaap:OtherCurrentAssetsMember 2022-03-31 0001528356 us-gaap:SellingAndMarketingExpenseMember 2021-01-01 2021-03-31 0001528356 us-gaap:SellingAndMarketingExpenseMember 2022-01-01 2022-03-31 0001528356 srt:MaximumMember 2022-03-31 0001528356 srt:MinimumMember 2022-03-31 0001528356 us-gaap:SeriesAMember 2022-03-31 0001528356 us-gaap:TreasuryStockMember 2022-01-01 2022-03-31 0001528356 us-gaap:PreferredStockMember 2022-01-01 2022-03-31 0001528356 us-gaap:TradeAccountsReceivableMember 2022-03-31 0001528356 us-gaap:CashMember 2022-03-31 0001528356 gne:BpEnergyCompanyAndBpCorporationNorthAmericaIncMember 2022-03-31 0001528356 gne:RenewableEnergyCreditsMember 2022-01-01 2022-03-31 0001528356 us-gaap:CorporateMember 2022-03-31 0001528356 gne:GreInternationalMember 2022-03-31 0001528356 us-gaap:CorporateMember 2021-01-01 2021-03-31 0001528356 gne:GenieEnergyServicesMember 2021-01-01 2021-03-31 0001528356 gne:GreInternationalMember 2021-01-01 2021-03-31 0001528356 gne:GenieRetailEnergyMember 2021-01-01 2021-03-31 0001528356 us-gaap:CorporateMember 2022-01-01 2022-03-31 0001528356 gne:GreInternationalMember 2022-01-01 2022-03-31 0001528356 gne:RafaelHoldingsMember 2021-01-01 2021-03-31 0001528356 gne:IdtCorporationMember 2021-01-01 2021-03-31 0001528356 gne:RafaelHoldingsMember 2022-03-31 0001528356 gne:IdtCorporationMember 2022-03-31 0001528356 gne:RafaelHoldingsMember 2022-01-01 2022-03-31 0001528356 gne:IdtCorporationMember 2022-01-01 2022-03-31 0001528356 gne:NonvestedDeferredStockUnitsMember 2021-01-01 2021-03-31 0001528356 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-03-31 0001528356 gne:NonvestedDeferredStockUnitsMember 2022-01-01 2022-03-31 0001528356 us-gaap:EmployeeStockOptionMember 2022-01-01 2022-03-31 0001528356 us-gaap:CommonClassBMember 2022-01-01 2022-03-31 0001528356 gne:LicensesMember 2022-03-31 0001528356 gne:LicensesMember 2022-01-01 2022-03-31 0001528356 us-gaap:CustomerRelationshipsMember 2022-03-31 0001528356 us-gaap:CustomerRelationshipsMember 2022-01-01 2022-03-31 0001528356 us-gaap:TrademarksMember 2022-03-31 0001528356 us-gaap:TrademarksMember 2022-01-01 2022-03-31 0001528356 gne:GenieEnergyServicesMember 2022-03-31 0001528356 gne:GenieEnergyInternationalCorporationMember 2022-03-31 0001528356 gne:GenieRetailEnergyMember 2022-03-31 0001528356 gne:GenieEnergyServicesMember 2022-01-01 2022-03-31 0001528356 gne:GenieEnergyInternationalCorporationMember 2022-01-01 2022-03-31 0001528356 gne:GenieRetailEnergyMember 2022-01-01 2022-03-31 0001528356 gne:EnergyContractsAndOptionsMember 2022-03-31 0001528356 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2022-01-01 2022-03-31 0001528356 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2021-01-01 2021-03-31 0001528356 us-gaap:CommonClassBMember 2022-03-31 0001528356 us-gaap:CommonClassAMember 2022-03-31 0001528356 gne:NonCommercialChannelMember 2021-01-01 2021-03-31 0001528356 gne:CommercialChannelMember 2021-01-01 2021-03-31 0001528356 gne:OtherCommercialChannelMember 2021-01-01 2021-03-31 0001528356 gne:NonCommercialAndCommercialMember 2021-01-01 2021-03-31 0001528356 gne:OtherCommercialChannelMember 2022-01-01 2022-03-31 0001528356 gne:CommercialChannelMember 2022-01-01 2022-03-31 0001528356 gne:NonCommercialChannelMember 2022-01-01 2022-03-31 0001528356 us-gaap:TimeAndMaterialsContractMember 2021-01-01 2021-03-31 0001528356 us-gaap:FixedPriceContractMember 2021-01-01 2021-03-31 0001528356 gne:OtherPricingPlansOfferedMember 2021-01-01 2021-03-31 0001528356 us-gaap:OilAndGasMember 2021-01-01 2021-03-31 0001528356 us-gaap:ElectricityMember 2021-01-01 2021-03-31 0001528356 us-gaap:ProductAndServiceOtherMember 2022-01-01 2022-03-31 0001528356 us-gaap:OilAndGasMember 2022-01-01 2022-03-31 0001528356 us-gaap:ElectricityMember 2022-01-01 2022-03-31 0001528356 gne:OtherPricingPlansOfferedMember 2022-01-01 2022-03-31 0001528356 us-gaap:TimeAndMaterialsContractMember 2022-01-01 2022-03-31 0001528356 us-gaap:FixedPriceContractMember 2022-01-01 2022-03-31 0001528356 gne:PrismSolarTechnologyMember 2022-03-31 0001528356 gne:LumoEnergiaOyjMember 2022-01-01 2022-03-31 0001528356 gne:GenieEnergyServicesMember 2022-01-01 2022-03-31 0001528356 gne:GenieRetailEnergyInternationalMember 2022-01-01 2022-03-31 0001528356 gne:GenieRetailEnergyMember 2022-01-01 2022-03-31 0001528356 gne:GenieEnergyInternationalCorporationMember 2022-01-01 2022-03-31 0001528356 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2022-03-31 0001528356 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2022-03-31 0001528356 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2022-03-31 0001528356 us-gaap:TreasuryStockMember 2021-01-01 2021-03-31 0001528356 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-01 2021-03-31 0001528356 us-gaap:NoncontrollingInterestMember 2021-01-01 2021-03-31 0001528356 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0001528356 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0001528356 us-gaap:PreferredStockMember 2021-01-01 2021-03-31 0001528356 gne:CitizensChoiceEnergyMember 2015-10-02 2015-10-31 0001528356 gne:CitizensChoiceEnergyMember gne:RestrictedCashMember 2022-03-31 0001528356 us-gaap:TradeAccountsReceivableMember gne:CitizensChoiceEnergyMember 2022-03-31 0001528356 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember gne:CitizensChoiceEnergyMember 2022-03-31 0001528356 us-gaap:OtherAssetsMember gne:CitizensChoiceEnergyMember 2022-03-31 0001528356 gne:CurrentLiabilitiesMember gne:CitizensChoiceEnergyMember 2022-03-31 0001528356 us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember gne:CitizensChoiceEnergyMember 2022-03-31 0001528356 us-gaap:NoncontrollingInterestMember gne:CitizensChoiceEnergyMember 2022-03-31 0001528356 us-gaap:NoncontrollingInterestMember gne:CitizensChoiceEnergyMember 2021-12-31 0001528356 us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember gne:CitizensChoiceEnergyMember 2021-12-31 0001528356 gne:CurrentLiabilitiesMember gne:CitizensChoiceEnergyMember 2021-12-31 0001528356 us-gaap:OtherAssetsMember gne:CitizensChoiceEnergyMember 2021-12-31 0001528356 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember gne:CitizensChoiceEnergyMember 2021-12-31 0001528356 us-gaap:TradeAccountsReceivableMember gne:CitizensChoiceEnergyMember 2021-12-31 0001528356 gne:CitizensChoiceEnergyMember gne:RestrictedCashMember 2021-12-31 0001528356 us-gaap:OtherLiabilitiesMember gne:EnergyContractsAndOptionsMember 2021-12-31 0001528356 gne:EnergyContractsAndOptionsMember us-gaap:OtherCurrentLiabilitiesMember 2021-12-31 0001528356 us-gaap:OtherAssetsMember gne:EnergyContractsAndOptionsMember 2021-12-31 0001528356 gne:EnergyContractsAndOptionsMember us-gaap:OtherCurrentAssetsMember 2021-12-31 0001528356 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2021-12-31 0001528356 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2021-12-31 0001528356 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2021-12-31 0001528356 gne:StateOfMainePublicUtilityCommissionMember gne:TownSquareMember gne:SettlementAgreementMember 2021-01-01 2021-03-31 0001528356 gne:StateOfMainePublicUtilityCommissionMember gne:TownSquareMember gne:SettlementAgreementMember 2022-01-01 2022-03-31 0001528356 gne:OfficeOfAttorneyGeneralOfStateOfIllinoisMember gne:SettlementAgreementMember gne:ResidentsEnergyMember 2022-03-31 0001528356 gne:OfficeOfAttorneyGeneralOfStateOfIllinoisMember gne:ResidentsEnergyMember gne:SettlementAgreementMember 2021-01-01 2021-03-31 0001528356 gne:OfficeOfAttorneyGeneralOfStateOfIllinoisMember gne:ResidentsEnergyMember gne:SettlementAgreementMember 2022-01-01 2022-03-31 0001528356 gne:StateOfConnecticutPublicUtilitiesRegulatoryAuthorityMember gne:TownSquareMember gne:SettlementAgreementMember 2021-01-01 2021-03-31 0001528356 gne:StateOfConnecticutPublicUtilitiesRegulatoryAuthorityMember gne:TownSquareMember gne:SettlementAgreementMember 2022-01-01 2022-03-31 0001528356 gne:RafaelHoldingsMember us-gaap:CommonClassBMember 2022-03-31 0001528356 srt:DirectorMember us-gaap:StockCompensationPlanMember 2021-02-28 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesSixMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesSixMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesFiveMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesFiveMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesFourMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesFourMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesThreeMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesThreeMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesTwoMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesTwoMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesOneMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesOneMember 2022-01-01 2022-03-31 0001528356 gne:ClassACommonStockAndClassBCommonStockMember gne:MarchOneTwoThousandTwentyTwoMember 2022-01-01 2022-03-31 0001528356 gne:FebruaryFifteenTwoThousandTwentyTwoMember us-gaap:SeriesAPreferredStockMember 2022-01-01 2022-03-31 0001528356 us-gaap:SeriesAPreferredStockMember gne:FebruarySevenTwoThousandTwentyTwoMember 2022-01-01 2022-03-31 0001528356 us-gaap:SeriesAPreferredStockMember gne:JanuaryFourteenTwoThousandTwentyTwoMember 2022-03-31 0001528356 us-gaap:SeriesAPreferredStockMember gne:JanuaryFourteenTwoThousandTwentyTwoMember 2022-01-01 2022-03-31 0001528356 gne:EnergyContractsAndOptionsMember us-gaap:CostOfSalesMember 2022-01-01 2022-03-31 0001528356 gne:EnergyContractsAndOptionsMember us-gaap:CostOfSalesMember 2021-01-01 2021-03-31 0001528356 gne:AccountsReceivableNetMember gne:CustomerAMember 2022-01-01 2022-03-31 0001528356 us-gaap:OtherLiabilitiesMember gne:EnergyContractsAndOptionsMember 2022-03-31 0001528356 gne:EnergyContractsAndOptionsMember us-gaap:OtherCurrentLiabilitiesMember 2022-03-31 0001528356 us-gaap:OtherAssetsMember gne:EnergyContractsAndOptionsMember 2022-03-31 0001528356 gne:EnergyContractsAndOptionsMember us-gaap:OtherCurrentAssetsMember 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesThirteenMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesThirteenMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesTwelveMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesTwelveMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesEighteenMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesEighteenMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesSeventeenMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesSeventeenMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesElevenMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesElevenMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesTenMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesTenMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesNineMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesNineMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesEightMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesEightMember 2022-01-01 2022-03-31 0001528356 gne:NaturalGasReserveMember gne:SettlementDatesSevenMember 2022-01-01 2022-03-31 0001528356 gne:ElectricityCommodityMember gne:SettlementDatesSevenMember 2022-01-01 2022-03-31 0001528356 gne:NonCommercialChannelMember us-gaap:OilAndGasMember 2021-01-01 2021-03-31 0001528356 gne:NonCommercialChannelMember us-gaap:ProductAndServiceOtherMember 2021-01-01 2021-03-31 0001528356 gne:CommercialChannelMember us-gaap:OilAndGasMember 2021-01-01 2021-03-31 0001528356 gne:CommercialChannelMember us-gaap:ProductAndServiceOtherMember 2021-01-01 2021-03-31 0001528356 gne:OtherCommercialChannelMember us-gaap:ProductAndServiceOtherMember 2021-01-01 2021-03-31 0001528356 gne:OtherCommercialChannelMember us-gaap:OilAndGasMember 2021-01-01 2021-03-31 0001528356 gne:OtherCommercialChannelMember us-gaap:ElectricityMember 2021-01-01 2021-03-31 0001528356 gne:CommercialChannelMember us-gaap:ElectricityMember 2021-01-01 2021-03-31 0001528356 gne:NonCommercialChannelMember us-gaap:ElectricityMember 2021-01-01 2021-03-31 0001528356 gne:OtherCommercialChannelMember us-gaap:ProductAndServiceOtherMember 2022-01-01 2022-03-31 0001528356 gne:OtherCommercialChannelMember us-gaap:OilAndGasMember 2022-01-01 2022-03-31 0001528356 gne:OtherCommercialChannelMember us-gaap:ElectricityMember 2022-01-01 2022-03-31 0001528356 gne:CommercialChannelMember us-gaap:ProductAndServiceOtherMember 2022-01-01 2022-03-31 0001528356 gne:CommercialChannelMember us-gaap:OilAndGasMember 2022-01-01 2022-03-31 0001528356 gne:CommercialChannelMember us-gaap:ElectricityMember 2022-01-01 2022-03-31 0001528356 gne:NonCommercialChannelMember us-gaap:ProductAndServiceOtherMember 2022-01-01 2022-03-31 0001528356 gne:NonCommercialChannelMember us-gaap:OilAndGasMember 2022-01-01 2022-03-31 0001528356 gne:NonCommercialChannelMember us-gaap:ElectricityMember 2022-01-01 2022-03-31 0001528356 gne:OtherPricingPlansOfferedMember us-gaap:ProductAndServiceOtherMember 2021-01-01 2021-03-31 0001528356 us-gaap:TimeAndMaterialsContractMember us-gaap:ProductAndServiceOtherMember 2021-01-01 2021-03-31 0001528356 us-gaap:FixedPriceContractMember us-gaap:ProductAndServiceOtherMember 2021-01-01 2021-03-31 0001528356 2020-01-01 2020-06-30 0001528356 gne:OtherPricingPlansOfferedMember us-gaap:OilAndGasMember 2021-01-01 2021-03-31 0001528356 us-gaap:TimeAndMaterialsContractMember us-gaap:OilAndGasMember 2021-01-01 2021-03-31 0001528356 us-gaap:FixedPriceContractMember us-gaap:OilAndGasMember 2021-01-01 2021-03-31 0001528356 gne:OtherPricingPlansOfferedMember us-gaap:ElectricityMember 2021-01-01 2021-03-31 0001528356 us-gaap:TimeAndMaterialsContractMember us-gaap:ElectricityMember 2021-01-01 2021-03-31 0001528356 us-gaap:FixedPriceContractMember us-gaap:ElectricityMember 2021-01-01 2021-03-31 0001528356 gne:OtherPricingPlansOfferedMember us-gaap:ProductAndServiceOtherMember 2022-01-01 2022-03-31 0001528356 gne:OtherPricingPlansOfferedMember us-gaap:OilAndGasMember 2022-01-01 2022-03-31 0001528356 gne:OtherPricingPlansOfferedMember us-gaap:ElectricityMember 2022-01-01 2022-03-31 0001528356 us-gaap:TimeAndMaterialsContractMember us-gaap:ProductAndServiceOtherMember 2022-01-01 2022-03-31 0001528356 us-gaap:TimeAndMaterialsContractMember us-gaap:OilAndGasMember 2022-01-01 2022-03-31 0001528356 us-gaap:TimeAndMaterialsContractMember us-gaap:ElectricityMember 2022-01-01 2022-03-31 0001528356 us-gaap:FixedPriceContractMember us-gaap:ProductAndServiceOtherMember 2022-01-01 2022-03-31 0001528356 us-gaap:FixedPriceContractMember us-gaap:OilAndGasMember 2022-01-01 2022-03-31 0001528356 us-gaap:FixedPriceContractMember us-gaap:ElectricityMember 2022-01-01 2022-03-31 0001528356 2022-01-01 2022-03-31 0001528356 2020-01-01 2020-12-31 0001528356 2021-01-01 2021-12-31 0001528356 2020-10-01 2020-10-08 0001528356 2021-12-31 0001528356 2020-12-31 0001528356 2022-03-31 0001528356 us-gaap:CommonClassBMember 2013-03-11 0001528356 2020-10-08 0001528356 2021-01-01 2021-03-31 0001528356 2021-03-31 0001528356 us-gaap:CommonClassBMember us-gaap:InvestorMember 2018-06-12 0001528356 gne:HowardsJonasMember us-gaap:CommonClassBMember 2018-06-08 0001528356 gne:HowardsJonasMember us-gaap:CommonClassBMember 2018-05-09 2018-06-08 0001528356 2018-08-01 2018-08-31 0001528356 2018-08-31 0001528356 2020-01-01 2020-09-30 0001528356 gne:StateOfConnecticutPublicUtilitiesRegulatoryAuthorityMember gne:ResidentsEnergyMember gne:SettlementAgreementMember 2021-06-01 2021-06-30 0001528356 gne:StateOfConnecticutPublicUtilitiesRegulatoryAuthorityMember gne:ResidentsEnergyMember gne:SettlementAgreementMember 2021-06-30 0001528356 gne:StateOfConnecticutPublicUtilitiesRegulatoryAuthorityMember gne:TownSquareMember gne:SettlementAgreementMember 2021-07-01 2021-07-31 0001528356 gne:StateOfConnecticutPublicUtilitiesRegulatoryAuthorityMember gne:ResidentsEnergyMember gne:SettlementAgreementMember 2021-01-01 2021-12-31 0001528356 gne:StateOfConnecticutPublicUtilitiesRegulatoryAuthorityMember gne:ResidentsEnergyMember gne:SettlementAgreementMember 2021-03-12 0001528356 us-gaap:CommonClassBMember us-gaap:InvestorMember 2018-06-12 2018-06-12 0001528356 gne:HowardsJonasMember us-gaap:CommonClassBMember 2018-06-08 2018-06-08 0001528356 us-gaap:CommonClassBMember us-gaap:StockCompensationPlanMember gne:StockOptionAndIncentivePlan2021Member us-gaap:ShareBasedPaymentArrangementEmployeeMember 2021-03-08 0001528356 gne:GenieRetailEnergyMember 2021-12-31 0001528356 gne:GenieEnergyServicesMember 2021-12-31 0001528356 gne:GreInternationalMember 2021-12-31 0001528356 gne:RafaelHoldingsMember us-gaap:CommonClassBMember 2021-01-01 2021-03-31 0001528356 gne:RafaelHoldingsMember us-gaap:CommonClassBMember 2020-12-07 2020-12-07 0001528356 gne:RafaelHoldingsMember us-gaap:CommonClassBMember 2020-12-07 0001528356 us-gaap:CorporateMember 2021-12-31 0001528356 gne:IGMBrokerageCorpMember 2021-01-01 2021-12-31 xbrli:shares xbrli:pure iso4217:JPY iso4217:ILS iso4217:USD iso4217:USD xbrli:shares gne:Segment

PART I. FINANCIAL INFORMATION

Item 1.        Financial Statements (Unaudited)

 GENIE ENERGY LTD.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	March 31, 2022				December 31, 2021
	(Unaudited)				(Note 1)
Assets
Current assets:
Cash and cash equivalents	$	88,185			$	95,492
Restricted cash—short-term		6,496				6,657
Marketable equity securities		657				1,336
Trade accounts receivable, net of allowance for doubtful accounts of $6,781 and $6,365 at March 31, 2022 and December 31, 2021, respectively		48,790				52,357
Inventory		18,865				17,720
Prepaid expenses		6,638				4,994
Other current assets		17,393				21,789
Total current assets		187,024				200,345
Property and equipment, net		350				297
Goodwill		11,709				11,755
Other intangibles, net		3,529				3,648
Deferred income tax assets, net		5,204				4,259
Other assets		12,369				9,161
Total assets	$	220,185			$	229,465
Liabilities and equity
Current liabilities:
Trade accounts payable		21,460				33,554
Accrued expenses		42,272				39,523
Income taxes payable		16,352				9,792
Due to IDT Corporation, net		141				532
Other current liabilities		1,848				2,125
Current liabilities of discontinued operations		8,934				30,766
Total current liabilities		91,007				116,292
Other liabilities		2,886				2,384
Total liabilities		93,893				118,676
Commitments and contingencies
Equity:
Genie Energy Ltd. stockholders’ equity:
Preferred stock, $0.01 par value; authorized shares—10,000:
Series 2012-A, designated shares—8,750; at liquidation preference, consisting of 2,322 shares issued and outstanding at March 31, 2022 and December 31, 2021		19,743				19,743
Class A common stock, $0.01 par value; authorized shares—35,000; 1,574 shares issued and outstanding at March 31, 2022 and December 31, 2021		16				16
Class B common stock, $0.01 par value; authorized shares—200,000; 26,642 and 26,620 shares issued and 24,625 and 24,615 shares outstanding at March 31, 2022 and December 31, 2021, respectively		266				266
Additional paid-in capital		144,089				143,249
Treasury stock, at cost, consisting of 2,017 and 2,005 shares of Class B common stock at March 31, 2022 and December 31, 2021		(14,105	)			(14,034	)
Accumulated other comprehensive income		3,499				3,160
Accumulated deficit		(13,530	)			(29,115	)
Total Genie Energy Ltd. stockholders’ equity		139,978				123,285
Noncontrolling interests		(13,686	)			(12,496	)
Total equity		126,292				110,789
Total liabilities and equity	$	220,185			$	229,465

 See accompanying notes to consolidated financial statements.  

1

---

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended March 31,
	2022				2021
	(in thousands, except per share data)
Revenues:
Electricity	$	71,784			$	87,613
Natural gas		24,504				17,280
Other		2,241				2,597
Total revenues		98,529				107,490
Cost of revenues		52,987				94,836
Gross profit		45,542				12,654
Operating expenses and losses:
Selling, general and administrative (i)		21,109				18,119
Income (loss) from operations		24,433				(5,465	)
Interest income		17				84
Interest expense		(50	)			(182	)
Unrealized (loss) gain on marketable equity securities and investments		(652	)			4,107
Other (loss) income, net		(498	)			407
Income (loss) before income taxes		23,250				(1,049	)
Provision for income taxes		(6,514	)			(535	)
Net income (loss) from continuing operations		16,736				(1,584	)
Loss from discontinued operations, net of taxes		—				(1,110	)
Net income (loss)		16,736				(2,694	)
Net loss attributable to noncontrolling interests		(1,153	)			(708	)
Net income (loss) attributable to Genie Energy Ltd.		17,889				(1,986	)
Dividends on preferred stock		(370	)			(370	)
Net income (loss) attributable to Genie Energy Ltd. common stockholders	$	17,519			$	(2,356	)
Amounts attributable to Genie Energy Ltd. common stockholders
Income (loss) from continuing operations	$	17,519			$	(1,246	)
Loss from discontinued operations		—				(1,110	)
Net income (loss) attributable to Genie Energy Ltd. common stockholders	$	17,519				(2,356	)
Earnings (loss) per share attributable to Genie Energy Ltd. common stockholders:
Basic:
Income (loss) from continuing operations	$	0.68			$	(0.05	)
Loss from discontinued operations		—				(0.04	)
Net income (loss) attributable to Genie Energy Ltd. common stockholders	$	0.68			$	(0.09	)
Diluted
Income (loss) from continuing operations	$	0.67			$	(0.05	)
Loss from discontinued operations		—				(0.04	)
Net income  (loss) attributable to Genie Energy Ltd. common stockholders	$	0.67			$	(0.09	)
Weighted-average number of shares used in calculation of earnings (loss) per share:
Basic		25,764				26,004
Diluted		26,128				26,004
Dividends declared per common share	$	0.075			$	—
(i) Stock-based compensation included in selling, general and administrative expenses	$	840			$	589

 

See accompanying notes to consolidated financial statements.

2

---

GENIE ENERGY LTD.

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

		Three Months Ended March 31,
	2022				2021
	(in thousands)
Net income (loss)	$	16,736			$	(2,694	)
Other comprehensive loss:
Foreign currency translation adjustments		302				(342	)
Comprehensive income (loss)		17,038				(3,036	)
Comprehensive gain attributable to noncontrolling interests		1,190				478
Comprehensive income (loss) attributable to Genie Energy Ltd.	$	18,228			$	(2,558	)

  

See accompanying notes to consolidated financial statements.

 

3

---

GENIE ENERGY LTD.

 

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands, except dividend per share)

Genie Energy Ltd. Stockholders

		Preferred						Class A						Class B						Additional						Accumulated Other
		Stock						Common Stock						Common Stock						Paid-In			Treasury			Comprehensive			Accumulated			Noncontrolling			Total
		Shares			Amount			Shares			Amount			Shares			Amount			Capital			Stock			Income			Deficit			Interests			Equity
BALANCE AT JANUARY 1, 2022		2,322		$	19,743			1,574		$	16			26,633		$	266		$	143,249		$	(14,034	)	$	3,160		$	(29,115	)	$	(12,496	)	$	110,789
Dividends on preferred stock ($ 0.01594 per share)		—			—			—			—			—			—			—			—			—			(370	)		—			(370	)
Dividends on common stock ($0.075 per share)		—			—			—			—			—			—			—			—			—			(1,934	)		—			(1,934	)
Stock-based compensation		—			—			—			—			9			—			840			—			—			—			—			840
Restricted Class B common stock purchased from employees		—			—			—			—			—			—			—			(71	)		—			—			—			(71	)
Other comprehensive income (loss)		—			—			—			—			—			—			—			—			339			—			(37	)		302
Net income (loss) for three months ended March 31, 2022		—			—			—			—			—			—			—			—			—			17,889			(1,153	)		16,736
BALANCE AT  MARCH 31, 2022		2,322			19,743			1,574			16			26,642			266			144,089			(14,105	)		3,499			(13,530	)		(13,686	)		126,292

4

---

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF EQUITY
(in thousands) — (Continued)

Genie Energy Ltd. Stockholders 

		Preferred						Class A						Class B						Additional						Accumulated Other
		Stock						Common Stock						Common Stock						Paid-In			Treasury			Comprehensive			Accumulated			Noncontrolling			Total
		Shares			Amount			Shares			Amount			Shares			Amount			Capital			Stock			Income			Deficit			Interests			Equity
BALANCE AT JANUARY 1, 2021		2,322		$	19,743			1,574		$	16			25,811		$	260		$	140,746		$	(9,839	)	$	3,827		$	(56,658	)	$	(12,016	)	$	86,079
Dividends on preferred stock ($0.01594 per share)		—			—			—			—			—			—			—			—			—			(370	)		—			(370	)
Stock-based compensation		—			—			—			—			121			1			588			—			—			—			—			589
Issuance of Class B common stock to Howard Jonas		—			—			—			—			20			—			162			—			—			—			—			162
Other comprehensive (loss) income		—			—			—			—			—			—			—			—			(572	)		—			230			(342	)
Net loss for three months ended March 31, 2021		—			—			—			—			—			—			—			—			—			(1,986)			(708)			(2,694)
BALANCE AT  MARCH 31, 2021		2,322			19,743			1,574			16			25,952			261			141,496			(9,839	)		3,255			(59,014	)		(12,494	)		83,424

5

---

GENIE ENERGY LTD. 

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) 

		Three Months Ended March 31,
		2022				2021
		(in thousands)
Operating activities
Net income (loss)		$	16,736			$	(2,694	)
Net loss from discontinued operations, net of tax			—				(1,110	)
Net income (loss) from continuing operations			16,736				(1,584	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			284				380
Deferred income taxes			(87	)			228
Provision for doubtful accounts receivable			398				430
Unrealized loss (gain) marketable equity securities and investment			652				(4,107	)
Stock-based compensation			840				589
Equity in the net income in equity method investees			(125	)			(110	)
Change in assets and liabilities:
Trade accounts receivable			3,169				(5,201	)
Inventory			(1,145	)			(2,090	)
Prepaid expenses			(1,644	)			(1,451	)
Other current assets and other assets			2,746				390
Trade accounts payable, accrued expenses and other current liabilities			(9,653	)			7,618
Due to IDT Corporation			(391	)			(68	)
Income taxes payable			6,560				(768	)
Net cash provided by (used in) operating activities of continuing operations			18,340				(5,744	)
Net cash used in discontinued operations			—				(4,209	)
Net cash provided by (used in) operating activities			18,340				(9,953	)
Investing activities
Capital expenditures			(59	)			(20	)
Investment in notes receivables with related party			(1,388	)			—
Purchase of marketable equity securities and other investment			(200	)			(1,000	)
Repayment of notes receivable			19				13
Net cash used in investing activities of continuing operations			(1,628	)			(1,007	)
Net cash used in investing activities of discontinued operations			(21,832	)			—
Net cash used in investing activities			(23,460	)			(1,007	)
Financing activities
Dividends paid			(2,304	)			(370	)
Repurchases of Class B common stock from employees			(71	)			—
Net cash used in by financing activities			(2,375	)			(370	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			27				(69	)
Net decrease in cash, cash equivalents, and restricted cash, including cash balances classified as held for sale			(7,468	)			(11,399	)
Less: Cash balances classified as held for sale			—				(587	)
Net decrease in cash, cash equivalents, and restricted cash			(7,468	)			(11,986	)
Cash, cash equivalents, and restricted cash (including discontinued operations) at beginning of period			102,149				43,184
Cash, cash equivalents and restricted cash (including discontinued operations) at end of the period			94,681				31,198
Less: Cash of discontinued operations at end of period			—				`1,156
Cash, cash equivalents, and restricted cash (excluding discontinued operations) at end of period		$	94,681			$	30,042

See accompanying notes to consolidated financial statements.

6

---

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

Note 1—Basis of Presentation and Business Changes and Development

 

The accompanying unaudited consolidated financial statements of Genie Energy Ltd. and its subsidiaries (the “Company” or “Genie”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The balance sheet at December 31, 2021 has been derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission (the “SEC”). 

 

The Company owns 99.5% of Genie Energy International Corporation (“GEIC”), which owns 100% of Genie Retail Energy (“GRE”), 100% of Genie Retail Energy International LLC ("GRE International" or "GREI") and 95.5% of Genie Renewables. 

GRE owns and operates retail energy providers (“REPs”), including IDT Energy, Inc. (“IDT Energy”), Residents Energy, Inc. (“Residents Energy”), Town Square Energy, LLC and Town Square Energy East, LLC (collectively, "TSE"), Southern Federal Power LLC ("Southern Federal") and Mirabito Natural Gas, LLC (“Mirabito”). GRE's REP businesses resell electricity and natural gas to residential and small business customers primarily in the Eastern and Midwestern United States and Texas. 

GRE International holds the Company's 90.8% controlling interest in Lumo Energia Oyj ("Lumo Finland"), a REP serving residential customers in Finland, and its 97.7% interest in Lumo Energi AB ("Lumo Sweden"). GRE International also held the Company's 98.8% interest in venture in Japan, which the Company sold on May 11, 2021. GRE International also holds 100% interest in Orbit Energy, a REP operating in the United Kingdom ("U.K."), which was discontinued in November 2021 as discussed below.

Genie Renewables consists of Genie Solar Energy ("Genie Solar"), a rooftop solar system sales and general contracting company, a 93.5% interest in CityCom Solar, a marketer of community solar energy solution, Diversegy LLC ("Diversegy"), an energy broker for commercial customers, and GRE's 60% interest in Prism Solar Technology, Inc. ("Prism"), a solar solutions company that is engaged in U.S.-based manufacturing of solar panels, solar installation design and solar energy project management.  

Discontinued Operations in United Kingdom

In the third quarter of 2021, the natural gas and energy market in the United Kingdom deteriorated which prompted the Company to start the process of orderly withdrawal from the United Kingdom market. In October 2021, as part of the orderly exit process from the United Kingdom market, Orbit and Shell U.K. Limited ("Shell") agreed to terminate the exclusive supply contract between them. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities with Shell. 

Following the termination of the contract with Shell, Orbit filed a petition with the High Court of Justice Business and Property of England and Wales (the “Court”) to declare Orbit insolvent based on the Insolvency Act of 1986. On November 29, 2021, the Court declared Orbit insolvent, revoked Orbit's license to supply electricity and natural gas in the United Kingdom, ordered the current customers to be transferred to “supplier of last resort” and transferred the administration of Orbit to Administrators effective December 1, 2021. All of the customers of Orbit were transferred to a third-party supplier effective December 1, 2021 as ordered by the Court. All assets and liabilities of Orbit, including cash and receivables remain with Orbit, in which Genie retains 100% interest, however, the management and control of Orbit was transferred to the Administrators.  

7

---

 

The Company determined that the discontinued operations in the United Kingdom represented a strategic shift that will have a major effect on the Company's operations and financial statements. Since the appointment of the Administrators, the Company has accounted for these businesses as discontinued operations and accordingly, has presented the results of operations and related cash flows as discontinued operations. The results of operations and related cash flows are presented as discontinued operations for all periods presented. Any remaining assets and liabilities of the discontinued operations have been presented separately, and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of March 31, 2022 and December 31, 2021. Since the Company lost control of the management of Orbit in favor of the Administrators, the accounts of Orbit were deconsolidated effective December 1, 2021 and the Company estimated the remaining liability related to its ownership of Orbit.

 

Energy Price Volatility in Texas and Japan

 

In January 2021, weather volatility and the lack of adequate gas reserves significantly increased the price of energy at Japan Electric Power Exchange ("JEPX") for an extended period of time. The spike in demand associated with this situation, exposed Genie Japan to unexpected cost increases. Genie Japan incurred approximately $2.5 million in additional costs related to the price increases, which were included in the cost of revenue in the three months ended March 31, 2021.

 

In February of 2021, the State of Texas experienced unprecedented cold weather and snow, with was named Winter Storm Uri. With the grid overtaxed due to demand and weather-related reduced supply and rolling blackouts being enforced, by order of the Electricity Reliability Council of Texas ("ERCOT"), real-time commodity prices during the crisis escalated significantly. Although GRE's commitment for their customers in Texas was hedged for foreseen winter weather conditions, the market conditions exposed the Company to significant unexpected cost increases. GRE recognized approximately $13.0 million in additional costs of revenue for the three months ended March 31, 2021. 

In June 2021, the state legislature of the State of Texas passed House Bill 4492 (“HB 4492”) which includes certain provisions for financing certain costs associated with electric markets caused by Winter Storm Uri. Pursuant to HB 4492, two categories of charges associated with Winter Storm Uri are to be securitized and the proceeds of the securitization will be provided to the load serving entities who originally incurred the charges. Under HB 4492, the Company is entitled to recover a portion of the costs incurred from the effect of Winter Storm Uri with a calculated range of $1.5 million to $2.6 million. In the second quarter of 2021, the Company recorded a reduction in cost of revenues of $1.5 million.

In September 2021, the Public Utility Commission of Texas ("PUC") approved the Debt Obligation Order to grant ERCOT's application for a debt financing mechanism to pay for certain costs associated with Winter Storm Uri. Under the Debt Obligation Order, the amount that the Company is entitled to recover increased to approximately $3.4 million. In the third quarter of 2021, the Company recorded an additional reduction in the cost of revenues of $1.9 million for an aggregate amount of $3.4 million for the year ended December 31, 2021. 

Seasonality and Weather

 

The weather and the seasons, among other things, affect GRE’s revenues. Weather conditions have a significant impact on the demand for natural gas used for heating and electricity used for heating and cooling. Typically, colder winters increase demand for natural gas and electricity, and hotter summers increase demand for electricity. Milder winters or summers have the opposite effect. Unseasonable temperatures in other periods may also impact demand levels. Natural gas revenues typically increase in the first quarter due to increased heating demands and electricity revenues typically increase in the third quarter due to increased air conditioning use. Approximately 44.5% and 47.7% of GRE’s natural gas revenues for the relevant years were generated in the first quarters of 2021 and 2020 respectively, when demand for heating was highest. Although the demand for electricity is not as seasonal as natural gas (due, in part, to usage of electricity for both heating and cooling), approximately 30.3% and 31.8% of GRE’s electricity revenues for the relevant years were generated in the third quarters of 2021 and 2020, respectively. GRE’s REPs’ revenues and operating income are subject to material seasonal variations, and the interim financial results are not necessarily indicative of the estimated financial results for the full year. 

8

---

 

Note 2—Cash, Cash Equivalents, and Restricted Cash

 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet and the corresponding amounts reported in the consolidated statements of cash flows:

 

		March 31, 2022				December 31, 2021
		(in thousands)
Cash and cash equivalents		$	88,185			$	95,492
Restricted cash—short-term			6,496				6,657
Total cash, cash equivalents, and restricted cash		$	94,681			$	102,149

 

Restricted cash—short-term includes amounts set aside in accordance with the Amended and Restated Preferred Supplier Agreement with BP Energy Company (“BP”) (see Note 18) and Credit Agreement with JPMorgan Chase (see Note 19).

Included in the cash and cash equivalents as of March 31, 2022 and  December 31, 2021 is cash received from Orbit Energy (see Note 5).  

 

Note 3—Inventories

 

Inventories consisted of the following:

 

		March 31, 2022				December 31, 2021
		(in thousands)
Natural gas		$	445			$	1,891
Renewable credits			18,029				15,610
Solar Panels:
Finished goods			391				219
Totals		$	18,865			$	17,720

 

9

---

Note 4—Revenue Recognition

Revenue from the single performance obligation to deliver a unit of electricity and/or natural gas is recognized as the customer simultaneously receives and consumes the benefit. Variable quantities in requirements contracts are considered to be options for additional goods and services because the customer has a current contractual right to choose the amount of additional distinct goods to purchase. GRE and Genie Japan (prior to its sale in May 2021) record unbilled revenues for the estimated amount customers will be billed for services rendered from the time meters were last read to the end of the respective accounting period. The unbilled revenue is estimated each month based on available per day usage data, the number of unbilled days in the period and historical trends.

Many utility companies offer purchase of receivable, or POR, programs in most of the service territories in which GRE operates, and GRE’s REPs participate in POR programs for a majority of their receivables. The Company estimates variable consideration related to its rebate programs using the expected value method and a portfolio approach. The Company’s estimates related to rebate programs are based on the terms of the rebate program, the customer’s historical electricity and natural gas consumption, the customer’s rate plan, and a churn factor. Taxes that are imposed on the Company’s sales and collected from customers are excluded from the transaction price. 

Revenue from sales of solar panels are recognized at a point in time following the transfer of control of the solar panels to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. For sales contracts that contain multiple performance obligations, such as the shipment or delivery of solar modules, the Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices, or estimates of such prices, and recognize the related revenue as control of each individual product is transferred to the customer, in satisfaction of the corresponding performance obligations. Revenues from sale of solar panels are included in other revenues in the consolidated statements of operations. 

The Company recognizes the incremental costs of obtaining a contract with a customer as an asset if it expects the benefit of those costs to be longer than one year. The Company determined that certain sales commissions to acquire customers meet the requirements to be capitalized. For GRE, the Company applies a practical expedient to expense costs as incurred for sales commissions to acquire customers as the period would have been one year or less. Incremental customer acquisition cost of certain GRE International entities are capitalized and amortized over the range of between eighteen and twenty-four months. These costs and the related amortization are recorded within sales and marketing expenses. Total capitalized customer acquisition costs to obtain customer contracts were $0.2 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022, customer acquisition costs of $0.5 million and $0.2 million included in other current assets and other assets, respectively, on the consolidated balance sheet. The Company recognized $0.2 million of amortization of capitalized customer acquisition cost, in each of the three months ended March 31, 2022 and 2021. The Company continuously monitors its customer relationship periods to ensure compliance with the application of the standard.

Disaggregated Revenues  

The following table shows the Company’s revenues disaggregated by pricing plans offered to customers: 

		Electricity				Natural Gas				Other				Total
		(in thousands)
Three Months Ended March 31, 2022
Fixed rate		$	21,354			$	3,784			$	—			$	25,138
Variable rate			50,430				20,720				—				71,150
Other			—				—				2,241				2,241
Total		$	71,784			$	24,504			$	2,241			$	98,529
Three Months Ended March 31, 2021
Fixed rate		$	39,097			$	1,741			$	—			$	40,838
Variable rate			48,516				15,539				—				64,055
Other			—				—				2,597				2,597
Total		$	87,613			$	17,280			$	2,597			$	107,490

10

---

The following table shows the Company’s revenues disaggregated by non-commercial and commercial channels: 

 

		Electricity				Natural Gas				Other				Total
		(in thousands)
Three Months Ended March 31, 2022
Non-Commercial Channel		$	62,175			$	19,638			$	—			$	81,813
Commercial Channel			9,609				4,866				—				14,475
Other			—				—				2,241				2,241
Total		$	71,784			$	24,504			$	2,241			$	98,529
Three Months Ended March 31, 2021
Non-Commercial Channel		$	73,147			$	15,171			$	—			$	88,318
Commercial Channel			14,466				2,109				—				16,575
Other			—				—				2,597				2,597
Total		$	87,613			$	17,280			$	2,597			$	107,490

 

Note 5—Discontinued Operations and Divestiture

 

United Kingdom Operations

On July 17, 2017, the Company’s subsidiary, Genie Energy UK Ltd. (“GEUK”), entered into a definitive agreement with Energy Global Investments Pty Ltd (“EGC”) to launch Shoreditch Energy Limited (“Shoreditch”), a joint venture to offer electricity and natural gas service to residential and small business customers in the U.K., under the trade name Orbit Energy. In the second quarter of 2020, the Company contributed $1.5 million to Shoreditch, which increased GEUK's total contribution to $9.5 million as of October 8, 2020. Prior to October 8, 2020, the Company owned 77.0% of the outstanding equity of Shoreditch.

Prior to the Company acquiring the 23.0% of Shoreditch it did not previously own, EGC had significant participation rights in the management of Shoreditch that limited GEUK’s ability to direct the activities that most significantly impact Shoreditch’s economic performance. GEUK, therefore, accounted for its ownership interest in Shoreditch using the equity method since GEUK had the ability to exercise significant influence over its operating and financial matters, although it did not control Shoreditch.

On October 8, 2020, the Company entered into an agreement (the “Purchase Agreement”) with EGC under which GEUK purchased EGC’s remaining interest in Shoreditch, in exchange for a cash payment of £1.3 million (equivalent to $1.7 million on the date of closing) offset by £0.2 million (equivalent to $0.2 million on the date of closing) in amounts owing from EGC to the Company under a loan provided to EGC in 2018 related to EGC’s capital contributions to Shoreditch. Prior to October 8, 2020, the estimated fair value and net book value of the Company's investment in Shoreditch was $5.5 million and nil, respectively. Following the transaction, Shoreditch is a wholly-owned subsidiary of GEUK.

In the third quarter of 2021, the natural gas and energy market in the U.K. deteriorated which prompted the Company to start the process of orderly withdrawal from the U.K. market. In October 2021, as part of the orderly exit process, Orbit and Shell U.K. Limited agreed to terminate the exclusive supply contract between them. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities with Shell.  

Following the termination of the contract with Shell, Orbit filed a petition with the High Court of Justice Business and Property of England and Wales (the “Court”) to declare Orbit insolvent based on the Insolvency Act of 1986. On November 29, 2021, the Court declared Orbit insolvent, revoked Orbit's license to supply electricity and natural gas in the United Kingdom, ordered the current customers to be transferred to “supplier of last resort” and transfer the administration of Orbit to Administrators effective December 1, 2021. All of the customers of Orbit were transferred to a third-party supplier effective December 1, 2021 as ordered by the Court. All assets and liabilities of the Orbit, including cash and receivables remain with Orbit and the management and control of which was transferred to Administrators. The Company expects that the administration of Orbit will be completed in 2022.

11

---

In the fourth quarter of 2021, Orbit transferred to GEIC a net amount of $49.7 million from the proceeds of the settlement of the contact with Shell which is included in cash and cash equivalents in the consolidated balance sheet as of December 31, 2021. In January 2022, the Company transferred $21.5 million to the Administrators of Orbit Energy to fund the settlement of the expected remaining liabilities of Orbit of $30.8 million, which were included in the current liabilities of discontinued operations in the consolidated balance sheet as of December 31, 2021. In February 2022, the Company deposited $28.3 million into an attorney trust account to hold, preserve, and dispense funds to the extent needed in connection with the administration process. On February 24, 2022, the Administrators filed a petition under Chapter 15 of the U.S. Bankruptcy Code with the Bankruptcy Court of the Southern District of New York seeking (i) recognition of the U.K. administration proceeding as a foreign main proceeding and the U.K. Administrators as its foreign representatives, and (ii) entrusting distribution of the funds the Company deposited into its attorney’s trust fund to the U.K. Administrators. Following a hearing held on March 30, 2022, the Court issued an order dated April 4, 2022 which granted the Administrator’s petition to recognize the U.K. administration proceeding as a foreign main proceeding, and the U.K. Administrators as its foreign representatives, along with related relief. Although the Court's order did recognize that the realization of any Orbit assets located in the United States, other than the funds (the status of which remain subject to dispute), would be entrusted to the Administrators, rather than redirect or transfer the funds to the Administrators (per their petition), the Court ordered that the entirety of the funds would be deposited in the Court’s registry and subject to its control. On April 4, 2022, the $28.3 million was transferred to the Court's registry. Subsequent to the first quarter of 2022, the Administrators filed an application to transfer the funds back to the Administrators’ control in the U.K. Subject to certain representations and expectations regarding use and application of the funds to efficiently and expeditiously pay off creditors and bring a timely close to the insolvency administration, the Company decided not to oppose the application, and expects the transfer to take place in short order. The Company believes that the funds are more than sufficient to pay any remaining creditors of Orbit (with a significant surplus to be returned to it).

At March 31, 2022, the $28.3 million fund remained deposited in the Company's attorney trust account and was included as unrestricted cash and cash equivalent account in the consolidated balance sheet.

The Company determined that exiting operations in the United Kingdom represented a strategic shift that will have a major effect on the Company's operations and financial statements and accordingly, the results of operations and related cash flows are presented as discontinued operations for all periods presented. The assets and liabilities of the discontinued operations have been presented separately, and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of March 31, 2022 and December 31, 2021.

As a result of loss of control, the Company deconsolidated Orbit effective December 1, 2021 and estimated the remaining liability related to its ownership of Orbit.

The summary of results of operations of the discontinued operations for the three months ended March 31, 2021 was as follows:

Total revenues						$	27,851
Cost of revenues							22,976
Gross  profit							4,875
Selling, general and administrative expenses							5,985
Net loss before taxes							(1,110	)
Net loss before taxes							—
Loss from discontinued operations, net of taxes						$	(1,110	)

The carrying value of the Company's interest in Orbit was net liabilities of $8.9 million and $30.8 million as of March 31, 2022 and December 31, 2021, respectively. The carrying value was determined by estimating the net realizable values of assets and fair values of remaining liabilities which approximates its carrying values as of March 31, 2022 and December 31, 2021. 

12

---

The following table presents a summary of cash flows of the discontinued operations for the three months ended March 31, 2021:

Net loss						$	(1,110	)
Non-cash items							1,649
Changes in assets and liabilities							(4,748	)
Cash flows used in operating activities of discontinued operations						$	(4,209	)

The assets and liabilities of Orbit were included in the GRE International segment.  

 

Divestiture of Genie Japan

In March 2021, the Company initiated a plan to sell certain assets and liabilities of Genie Japan. In the first quarter of 2021, certain assets and liabilities of Genie Japan were reclassified as assets and liabilities held for sale and reported at lower of fair value less cost to sell and net book value.

On April 26, 2021, the Company entered into an Equity Purchase Agreement ("Purchase Agreement") with Hanhwa Q Cells Japan Co., Ltd. ("Hanhwa"), pursuant to which, the Company agreed to sell its interest in Genie Japan for ¥570.0 million (equivalent to approximately $5.3 million at April 26, 2021) subject to certain terms and conditions set forth in the Purchase Agreement. On May 11, 2021, upon the terms and subject to the conditions of Purchase Agreement, the Company completed the divestiture of Genie Japan for an aggregate cash consideration of ¥570.0 million (equivalent to approximately $5.2 million at May 11, 2021). Hanhwa also assumed the outstanding balance of the loan payable of Genie Japan. The Company paid $0.6 million of commission to certain former employees of Genie Japan and recognized a pre-tax gain of $4.2 million from the divestiture.

The carrying values of assets and liabilities divested at May 11, 2021 which were previously classified as held for sale included the following: :   

(in thousands)
Cash		$	83
Trade accounts receivable			1,737
Prepaid and other current assets			391
Intangible (license)			540
Other noncurrent assets			296
Accounts payables			(611	)
Accrued expenses and other current liabilities			(588	)
Loan payable			(1,372	)
Cumulative translation adjustment			(181	)
Noncontrolling interest			114
Net assets		$	409

 

The assets and liabilities of Genie Japan were included in GRE International segment. 

 

13

---

 

Note 6—Fair Value Measurements

 

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis: 

 

		Level 1 (1)				Level 2 (2)				Level 3 (3)				Total
		(in thousands)
March 31, 2022
Assets:
Marketable equity securities		$	657			$	—			$	—			$	657
Derivative contracts		$	15,972			$	—			$	—			$	15,972
Liabilities:
Derivative contracts		$	587			$	—			$	—			$	587
December 31, 2021
Assets:
Marketable equity securities		$	1,336			$	—			$	—			$	1,336
Derivative contracts		$	14,405			$	44			$	—			$	14,449
Liabilities:
Derivative contracts		$	1,230			$	—			$	—			$	1,230

 

(1) – quoted prices in active markets for identical assets or liabilities

(2) – observable inputs other than quoted prices in active markets for identical assets and liabilities

(3) – no observable pricing inputs in the market

 

The Company’s derivative contracts consist of natural gas and electricity put and call options and swaps. The underlying asset in the Company’s put and call options is a forward contract. The Company’s swaps are agreements whereby a floating (or market or spot) price is exchanged for a fixed price over a specified period.

The Company did not have any transfers of assets or liabilities between Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the three months ended March 31, 2022 and 2021.

 

14

---

 

 Fair Value of Other Financial Instruments

 

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting this data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

 

Restricted cash—short-term, trade receivables, due to IDT Corporation, other current assets and other current liabilities. At March 31, 2022 and December 31, 2021, the carrying amounts of these assets and liabilities approximated fair value. The fair value estimate for restricted cash—short-term was classified as Level 1. The carrying value of other current assets, due to IDT Corporation, and other current liabilities approximated fair value.  

Other assets. At March 31, 2022 and December 31, 2021, other assets included notes receivable. At March 31, 2022, the outstanding balance of the sellers of Lumo Finlands's one-time put option was not significant and was included in other liabilities account in the consolidated balance sheet. The carrying amount of the note receivable and loans payable approximated fair value. The fair values were estimated based on the Company’s assumptions, and were classified as Level 3 of the fair value hierarchy.

The primary non-recurring fair value estimates typically are in the context of goodwill impairment testing, which involves Level 3 inputs, and asset impairments (Note 9) which utilize Level 3 inputs.  

Concentration of Credit Risks

The Company holds cash, cash equivalents, and restricted cash at several major financial institutions, which may exceed Federal Deposit Insurance Corporation insured limits. Historically, the Company has not experienced any losses due to such concentration of credit risk. The Company’s temporary cash investments policy is to limit the dollar amount of investments with any one financial institution and monitor the credit ratings of those institutions. While the Company may be exposed to credit losses due to the nonperformance of the holders of its deposits, the Company does not expect the settlement of these transactions to have a material effect on its results of operations, cash flows or financial condition.

For the three months ended March 31, 2022 and 2021 no single customer accounted for 10.0% or greater of our consolidated revenues. 

The following table summarizes the percentage of consolidated trade receivable by customers that equal or exceed 10.0% of consolidated net trade receivables at March 31, 2022 and December 31, 2021 (no other single customer accounted for 10.0% or greater of our consolidated net trade receivable as March 31, 2022 or December 31, 2021):

		March 31, 2022				December 31, 2021
Customer A			12	%			na	%

na-less than 10.0% of consolidated revenue in the period

 

15

---

Note 7—Derivative Instruments

 

The primary risk managed by the Company using derivative instruments is commodity price risk, which is accounted for in accordance with Accounting Standards Codification 815 — Derivatives and Hedging. Natural gas and electricity put and call options and swaps are entered into as hedges against unfavorable fluctuations in market prices of natural gas and electricity. The Company does not apply hedge accounting to these options or swaps, therefore the changes in fair value are recorded in earnings. By using derivative instruments to mitigate exposures to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company minimizes the credit or repayment risk in derivative instruments by entering into transactions with high-quality counterparties. At March 31, 2022, GRE’s swaps and options were traded on the Intercontinental Exchange. GRE International's swaps and options were traded through counterparties.

The summarized volume of GRE’s outstanding contracts and options at March 31, 2022 was as follows (MWh – Megawatt hour and Dth – Decatherm):

 

Settlement Dates		Volume
		Electricity (in MWH)				Gas (in Dth)
Second quarter 2022			123,938				260,500
Third quarter 2022			89,153				347,090
Fourth quarter 2022			75,250				741,000
First quarter 2023			51,592				814,740
Second quarter 2023			31,005				97,900
Third quarter 2023			33,170				73,700
Fourth quarter 2023			38,918				75,900
First quarter 2024			18,000				70,600
Second quarter 2024			10,849				43,500
Third quarter of 2024			10,666				26,200
Fourth quarter of 2024			10,667				17,700
First quarter of 2025			9,312				231,900
Second quarter of 2025			—				227,600
Third quarter of 2025			6,080				230,000
Fourth quarter of 2025			—				230,000

 

The fair value of outstanding derivative instruments recorded in the accompanying consolidated balance sheets were as follows:  

 

Asset Derivatives		Balance Sheet Location		March 31, 2022				December 31, 2021
				(in thousands)
Derivatives not designated or not qualifying as hedging instruments:
Energy contracts and options1		Other current assets		$	13,760			$	13,750
Energy contracts and options		Other assets			2,212				699
Total derivatives not designated or not qualifying as hedging instruments — Assets				$	15,972			$	14,449
Liability Derivatives
Derivatives not designated or not qualifying as hedging instruments:
Energy contracts and options1		Other current liabilities		$	298				697
Energy contracts and options		Other liabilities			289				533
Total derivatives not designated or not qualifying as hedging instruments — Liabilities				$	587			$	1,230

 

(1) The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months.

  

16

---

 

The effects of derivative instruments on the consolidated statements of operations was as follows:

				Amount of Gain Recognized on Derivatives
Derivatives not designated or not qualifying as		Location of Gain Recognized		Three Months Ended March 31,
hedging instruments		on Derivatives			2022				2021
				(in thousands)
Energy contracts and options		Cost of revenues		$	37,728			$	2,887

Note 8—Other Current Assets

 

Other current assets consisted of the following: 

		March 31, 2022				December 31, 2021
		(in thousands)
Fair value of derivative contracts		$	13,760			$	13,750
Receivables from the settlement of derivative contracts			1,290				4,655
Other current assets			2,343				3,384
Total other current assets		$	17,393			$	21,789

 

Note 9—Goodwill and Other Intangible Assets

 

The table below reconciles the change in the carrying amount of goodwill for the period from January 1, 2022 to March 31, 2022:

 

		GRE				GRE International				Genie Renewables				Total
		(in thousands)
Balance at January 1, 2022		$	9,998			$	1,757			$	—			$	11,755
Cumulative translation adjustment			—				(46	)			—				(46	)
Balance at March 31, 2022		$	9,998			$	1,711			$	—			$	11,709

 

17

---

The table below presents information on the Company’s other intangible assets: 

		Weighted Average Amortization Period				Gross Carrying Amount				Accumulated Amortization				Net Balance
		(in thousands)
March 31, 2022
Patents and trademarks			17.1 years			$	3,796			$	(1,171	)		$	2,625
Customer relationships			9.0 years				1,100				(560	)			540
Licenses			10.0 years				479				(115	)			364
Total						$	5,375			$	(1,846	)		$	3,529
December 31, 2021
Trademark			17.1 years			$	3,805			$	(1,103	)		$	2,702
Customer relationships			9.0 years				1,100				(530	)			570
Licenses			10.0 years				479				(103	)			376
Total						$	5,384			$	(1,736	)		$	3,648

 

Amortization expense of intangible assets (including minimal amounts reported in cost of revenues) was $0.2 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively. The Company estimates that amortization expense of intangible assets will be $0.3 million, $0.4 million, $0.4 million, $0.4 million, $0.3 million and $1.7 million for the remainder of 2022, and for 2023, 2024, 2025, 2026 and thereafter, respectively. 

Note 10—Accrued Expenses

Accrued expenses consisted of the following:

 

		March 31, 2022				December 31, 2021
		(in thousands)
Renewable energy		$	26,855			$	23,247
Liability to customers related to promotions and retention incentives			9,034				9,071
Payroll and employee benefit			2,806				3,297
Other accrued expenses			3,577				3,908
Total accrued expenses		$	42,272			$	39,523

18

---

Note 11—Leases

The Company entered into operating lease agreements primarily for offices in domestic and foreign locations where it has operations with lease periods expiring between 2022 and 2030. The Company has no finance leases. 

 

The Company determine if a contract is a lease at inception. Right-of-Use ("ROU") assets are included under other assets in the consolidated balance sheet. The current portion of the operating lease liabilities are included in other current liabilities and the noncurrent portion is included in other liabilities in the consolidated balance sheet.

 

ROU assets and operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the incremental borrowing rate, because the interest rate implicit in most of our leases is not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized borrowing rate based on information available at the lease commencement date. ROU assets also include any prepaid lease payments and lease incentives. The lease terms include periods under options to extend or terminate the lease when it is reasonably certain that we will exercise that option. The Company use the base, non-cancelable, lease term when determining the lease assets and liabilities. Operating lease expense is recognized on a straight-line basis over the lease term. 

 

		March 31, 2022			December 31, 2021
		(in thousands)
ROU Assets		$	1,585		$	1,656
Current portion of operating lease liabilities			217			229
Noncurrent portion of operating lease liabilities			1,441			1,495
Total		$	1,658		$	1,724

At March 31, 2022, the weighted average remaining lease term is 7.3 years and the weighted average discount rate is 6.4%.

Supplemental cash flow information for ROU assets and operating lease liabilities are as follows:

		Three Months Ended March 31,
		2022			2021
Cash paid for amounts included in the measurement of lease liabilities:		(in thousands)
Operating cash flows from operating activities		$	143		$	183
ROU assets obtained in the exchange for lease liabilities
Operating leases		$	—		$	—

Future lease payments under operating leases as of March 31, 2022 were as follows:

(in thousands)
Remainder of 2022		$	240
2023			316
2024			282
2025			233
2026			239
Thereafter			833
Total future lease payments			2,143
Less imputed interest			(485	)
Total operating lease liabilities		$	1,658

Rental expenses under operating leases were $0.1 million and $0.2 million in the three months ended March 31, 2022 and 2021

19

---

Note 12—Equity

 

Dividend Payments

 

The following table summarizes the quarterly dividends paid by the Company during the three months ended March 31, 2022 (in thousands, except per share amounts):

 

Declaration Date

Dividend Per Share

Aggregate Dividend Amount

Record Date

Payment Date

Series 2012-A Preferred Stock ("Preferred Stock")

January 14, 2022

$

0.1594

$

370

February 7, 2022

February 15, 2022

Class A Common Stock and Class B Common Stock

February 7, 2022

$

0.0750

$

1,934

February 22, 2022

March 1, 2022

 

In March 2021, in light of the losses incurred from the effects of events in Texas and Japan discussed above, the Company suspended the payment of quarterly dividends on its common stock. However, in February 2022, the Company reinstated the quarterly dividends on our Class A and Class B common stock.

On December 31, 2021, the Company accrued Additional Dividends of $0.0848 per share on its Preferred Stock, equal to $0.2 million, in respect of the GRE results of operations through December 31, 2021, which is expected to be paid around May 15, 2022.

On April 14, 2022, the Company’s Board of Directors declared a quarterly Base Dividend of $0.1594 per share on the Preferred Stock for the first quarter of 2022. The dividend will be paid on or about May 16, 2022 to stockholders of record as of the close of business May 16, 2022.

On May 3, 2022, the Company’s Board of Directors declared a quarterly dividend of $0.0750 per share on its Class A common stock and Class B common stock for the first quarter of 2022. The dividend will be paid on or about May 31, 2022 to stockholders of record as of the close of business on May 20, 2022.

The Delaware General Corporation Law allows companies to declare dividends out of “Surplus,” which is calculated by deducting the par value of the company’s stock from the difference between total assets and total liabilities. The Company has elected to record dividends declared against accumulated deficit.  

Stock Repurchases

 

On March 11, 2013, the Board of Directors of the Company approved a program for the repurchase of up to an aggregate of 7.0 million shares of the Company’s Class B common stock. There were no repurchases under this program in the three months ended March 31, 2022 and 2021. At March 31, 2022, 5.3 million shares remained available for repurchase under the stock repurchase program.

As of March 31, 2022 and December 31, 2021, there were 2.0 million outstanding shares of Class B common stock held in the Company's treasury, with a cost of $14.1 million at a weighted average cost per share of $7.01. 

On March 21, 2020, the Board of Directors of the Company approved a program to redeem up to $4.0 million worth of the Company's Preferred Stock in accordance with the Certificate of Designations for the preferred stock. There was no redemption under this program in three months ended March 31, 2022 and 2021.

On February 7, 2022, the Board of Directors of the Company authorized a program to redeem up to $1.0 million per quarter of the Company's Preferred Stock at the liquidation preference of $8.50 per share beginning in the second quarter of 2022. On May 3, 2022, the Board of Directors authorized to redeem $2.0 million of the Company's Preferred Stock during the second quarter of 2022.  

 

20

---

Warrants to Purchase Class B Common Stock

 

On June 8, 2018, the Company sold to Howard S. Jonas, the Chairman of the Company’s Board of Directors and then the holder of the controlling portion of the Company's common stock, shares of the Company’s Class B common stock and warrants to purchase an additional 1,048,218 shares of the Company’s Class B common stock at an exercise price of $4.77 per share for an aggregate exercise price of $5.0 million. The warrants will expire in June 2023. In addition, on June 12, 2018, the Company sold to a third-party investor treasury shares of the Company’s Class B common stock for an aggregate sales price of $1.0 million and warrants to purchase an additional 209,644 shares of the Company’s Class B common stock at an exercise price of $4.77 per share, for an aggregate exercise price of $1.0 million. As of March 31, 2022, there were outstanding 1,257,862 warrants to purchase the Company’s Class B common stock at $4.77 per share, all of which will expire in June 2023.

Purchase of Equity of Subsidiaries 

 

In September 2021, the Company purchased from Howard S. Jonas, the Chairman of the Board of Directors of the Company, Michael Stein, the Chief Executive Officer of the Company, Avi Goldin, the Chief Financial Officer of the Company, certain employees and consultant an aggregate of 4.3% fully vested interest in GRE International by issuing 218,862 of the Company's Class B common stock. 

In October 2021, the Company purchased from Wes Perry, the Chairman of the Audit Committee of the Company's Board of Directors, a 0.2% interest in GEIC by issuing 36,591 of the Company's Class B common stock.

Stock-Based Compensation

 

The Company’s 2011 Stock Option and Incentive Plan (as amended, the "2011 Plan") is intended to provide incentives to executives, employees, directors and consultants of the Company. Incentives available under the Plan include stock options, stock appreciation rights, limited rights, deferred stock units, and restricted stock. The 2011 Plan expired in 2021 and no new grants are to be issued thereunder, however, outstanding grants are not impacted by the expiration of the plan.

On March 8, 2021, the Board of Directors adopted the Company 2021 Stock Option and Incentive Plan (the "2021 Plan"), subject to the approval of the Company's stockholders in May 2021, became effective and replaced the 2011 Plan on May 12, 2021. Similar to the 2011 Plan, the 2021 Plan provides incentives to executives, employees, directors and consultants of the Company. Incentives available under the 2021 Plan include stock options, stock appreciation rights, limited stock appreciation rights, deferred stock units, and restricted stock. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. The maximum number of shares reserved for the grant of awards under the 2021 Plan is 1.0 million shares of Class B Common Stock.

In February 2022, the Company granted certain employees and members of its Board of Directors an aggregate of 290,000 deferred stock units which will vest in two tranches contingent upon the achievement of a specified thirty-day average closing price of the Company's Class B common stock within a specified period of time (the "2022 market conditions") and the satisfaction of service-based vesting conditions. Each deferred stock unit entitles the recipient to receive, upon vesting, up to two shares of Class B common stock of the Company depending on market conditions. The Company used a Monte Carlo simulation model to estimate the grant-date fair value of the awards. Assumptions and estimates utilized in the model include the risk-free interest rate, dividend yield, expected stock volatility based on a combination of the Company’s historical stock volatility.

As of March 31, 2022, there were approximately $5.9 million of total unrecognized stock-based compensation costs related to outstanding and unvested equity-based grants. These costs are expected to be recognized over a weighted-average period of approximately 2.01 years.

   

21

---

Note 13—Variable Interest Entity

 

Citizens Choice Energy, LLC (“CCE”), is a REP that resells electricity and natural gas to residential and small business customers in the State of New York. The Company does not own any interest in CCE. Since 2011, the Company has provided CCE with substantially all of the cash required to fund its operations. The Company determined that it has the power to direct the activities of CCE that most significantly impact its economic performance and it has the obligation to absorb losses of CCE that could potentially be significant to CCE on a stand-alone basis. The Company therefore determined that it is the primary beneficiary of CCE, and as a result, the Company consolidates CCE within its GRE segment. The net income or loss incurred by CCE was attributed to noncontrolling interests in the accompanying consolidated statements of operations.

 

The Company has an option to purchase 100% of the issued and outstanding limited liability company interests of CCE for one dollar plus the forgiveness of $0.5 million that the Company loaned to CCE in October 2015. The option expires on October 22, 2023.

 

Net loss related to CCE and aggregate net funding provided by the Company were as follows: 

 

		Three Months Ended March 31,
		2022				2021
		(in thousands)
Net loss		$	986			$	322
Aggregate funding provided by the Company, net		$	1,458			$	403

 

Summarized combined balance sheet amounts related to CCE was as follows:

 

		March 31, 2022				December 31, 2021
		(in thousands)
Assets
Cash, cash equivalents and restricted cash		$	918			$	559
Trade accounts receivable			661				544
Prepaid expenses and other current assets			358				367
Other assets			359				359
Total assets		$	2,296			$	1,829
Liabilities and noncontrolling interests
Current liabilities		$	543			$	547
Due to IDT Energy			7,126				5,668
Noncontrolling interests			(5,373	)			(4,386	)
Total liabilities and noncontrolling interests		$	2,296			$	1,829

 

The assets of CCE may only be used to settle obligations of CCE, and may not be used for other consolidated entities. The liabilities of CCE are non-recourse to the general credit of the Company’s other consolidated entities.

 

22

---

 

Note 14—Income Taxes

 

The following table provides a summary of Company's effective tax rate: 

		Three Months Ended March 31,
		2022			2021
Reported tax rate		28.0	%		(51.0)	%

 

The change in the reported tax rate for three months ended March 31, 2022 compared to the same period in 2021 is a result of favorable results of operations in the U.S. and changes in the mix of jurisdictions in which the taxable income was earned which was not offset by income tax benefit in some jurisdictions that had losses due to valuation allowances in those jurisdictions.

Note 15— Earnings (Loss) Per Share

 

Basic earnings per share is computed by dividing net income or loss attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increases is anti-dilutive.

 

The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company’s common stockholders consists of the following:

 

		Three Months Ended March 31,
		2022				2021
		(in thousands)
Basic weighted-average number of shares			25,764				26,004
Effect of dilutive securities:
Stock options and warrants			308				—
Non-vested restricted Class B common stock			56				—
Diluted weighted-average number of shares			26,128				26,004

 

The following shares were excluded from the diluted earnings per share computations:

 

		Three Months Ended March 31,
		2022				2021
		(in thousands)
Shares underlying options and warrants			126				579
Non-vested restricted Class B common stock			—				71
Non-vested deferred stock units			580				610

Stock options were excluded from the diluted earnings per share computation in the three months ended March 31, 2022 because the exercise prices of the stock options were greater than the average market prices of the Company's stock during the period.

In three months ended March 31, 2021, the diluted loss per share computation equals basic loss per share because the Company had a net loss and the impact of the assumed exercise of stock options and warrants and the vesting of the restricted stock and deferred stock units would have been anti-dilutive.

 Non-vested deferred stock units were excluded from the basic and diluted weighted average shares outstanding calculation because the market condition for vesting of those deferred stock units were not met as of March 31, 2022 and 2021.

23

---

Note 16—Related Party Transactions 

 

On December 7, 2020, the Company invested $5.0 million to purchase 218,245 shares of Class B common stock of Rafael Holdings, Inc. ("Rafael"). Rafael, a publicly-traded company, is also a related party. Rafael is a former subsidiary of IDT that was spun off from IDT in March 2018. Howard S. Jonas is the Chairman of the Board of Directors of Rafael. In connection with the purchase, Rafael issued to the Company warrants to purchase an additional 43,649 shares of Rafael's Class B common stock with an exercise price of $22.91 per share. The warrants had a term expiring on June 6, 2022. The Company exercised the warrants in full on March 31, 2021 for a total exercise price of $1.0 million. The Company does not exercise significant influence over the operating or financial policies of Rafael. For the three months ended March 31, 2022, the Company recognized unrealized loss on investment of $0.7 million. For the three months ended March 31, 2021, the Company recognized unrealized gain on investment of $4.1 million.  At March 31, 2022, the carrying values of investments in the common stock was $0.7million. 

The Company was formerly a subsidiary of IDT Corporation (“IDT”). On October 28, 2011, the Company was spun-off by IDT. The Company entered into various agreements with IDT prior to the spin-off including an agreement for certain services to be performed by the Company and IDT. The Company also provides specified administrative services to certain of IDT’s foreign subsidiaries. Howard Jonas is the Chairman of the Board of IDT.

 

The Company leases office space and parking in New Jersey from Rafael. The leases expire in April 2025.

The charges for services provided by IDT to the Company, and rent charged by Rafael, net of the charges for the services provided by the Company to IDT, are included in “Selling, general and administrative” expense in the consolidated statements of operations.

 

		Three Months Ended March 31,
		2022				2021
	(in thousands)
Amount IDT charged the Company		$	406			$	250
Amount the Company charged IDT		$	37			$	39
Amount Rafael charged the Company		$	58			$	57

 

The following table presents the balance of receivables and payables to IDT and Rafael:

 

		March 31, 2022				December 31, 2021
		(in thousands)
Due to IDT		$	168			$	239
Due from IDT		$	27			$	51
Due to Rafael		$	—			$	—

 

On August 31, 2018, the Company extended a loan to a former employee for $0.1 million. The loan agreement requires scheduled payments from December 31, 2020 to December 2052. The loan bears the same interest equivalent to a minimum rate, in effect from time to time required by local regulations and is compounded annually. The Company recorded nominal amounts of interest income for the three months ended March 31, 2022 and 2021 related to this debt. The outstanding balance, including accrued interest was $0.1 million as of March 31, 2022.

The Company obtains insurance policies from several insurance brokers, one of which is IGM Brokerage Corp. (“IGM”). IGM is owned by the mother of Howard S. Jonas and Joyce Mason, who is a Director and Corporate Secretary of the Company. Jonathan Mason, husband of Joyce Mason and brother-in-law of Howard S. Jonas, provides insurance brokerage services via IGM. Based on information the Company received from IGM, the Company believes that IGM received commissions and fees from payments made by the Company (including payments from third party brokers). The Company paid IGM a total of $0.3 million in 2021 related to premium of various insurance policies that were brokered by IGM. There was no outstanding payable to IGM was as of March 31, 2022. Neither Howard S. Jonas nor Joyce Mason has any ownership or other interest in IGM other than via the familial relationships with their mother and Jonathan Mason. 

24

---

In the September and October of 2021, the Company purchased from certain related parties interests in GRE International and GEIC (see Note 12 — Equity).

In February 21, 2022, the Company entered into an Loan and Security Agreement to extend up to ILS5.5 million (equivalent to $1.7 million as at March 31, 2022) with Natan Ohayon (the "Ohayon Loan"). Natan Ohayon is a the holder of a minority interest in Petrocycle Ltd ("Petrocycle"), a subsidiary of the Company. Petrocycle is a preoperating entity engaged in the development of a process to recycle used engine oil into usable gasoline.  The Ohayon Loan, which is secured by all assets that Mr. Ohayon is acquiring from the proceeds of the loan bears a minimum interest as set by the Income Tax Regulations of Israel (3.23% in 2022) and is due, together with the principal amount on or before December 31, 2023. As of March 31, 2022, the outstanding balance, including accrued interest, of the Ohayon Loan was ILS4.5 million (equivalent to $1.4 million), included in other assets in the consolidated balance sheets. 

Investments in Atid 613

 

In September 2018, the Company divested a majority interest in Atid Drilling Ltd. in exchange for a 37.5% interest in a contracting drilling company in Israel ("Atid 613") which the Company accounts for using equity method of accounting. The Company did not recognize any equity in net loss from Atid 613 for the three months ended March 31, 2022 and 2021. The carrying value of the Company's investments in Atid was $0.1 million at March 31, 2022 and December 31, 2021 included in other noncurrent assets in the consolidated balance sheets.

The Company also entered into a Shareholder Agreement with Atid 613's other shareholders to govern certain issues regarding management of the new company. Under the Shareholder Agreement, among other things, a Company subsidiary agreed to make available to Atid 613 working capital financing up to $0.4 million ("Credit Facility"). Any outstanding borrowing under the Credit Facility would bear interest at a variable rate as described in the Shareholder Agreement. As of March 31, 2022, the outstanding balance of Credit Facility was nil.

On August 12, 2019, the Company, together with the other shareholders of Atid 613 signed a Funding Agreement to provide aggregate loans to Atid 613 in an amount of up to New Israeli Shekel or NIS5.1 million (equivalent to $1.5 million at March 31, 2022), including the Company's commitment to extend up to NIS1.9 million (equivalent to $0.5 million at March 31, 2022) of such amount. In August 2019, the Company extended NIS0.8 million (equivalent to $0.2 million) in loans. The loans which are secured by Atid 613’s assets bore no interest until March 1, 2020 and bear interest at 5.5% for all subsequent periods. In May 2021, Atid 613 paid the outstanding balance of the loan of $0.2 million. At March 31, 2022, the balance of loan receivables from Atid 613 was nil.

25

---

Note 17—Business Segment Information 

 

The Company has three reportable business segments: GRE, GRE International and Genie Renewables (formerly Genie Energy Services, or GES). GRE owns and operates REPs, including IDT Energy, Residents Energy, TSE, Southern Federal and Mirabito. GRE's REP businesses resell electricity and natural gas to residential and small business customers in the Eastern and Midwestern United States and Texas. GRE International, operates REPs in Finland and Sweden. Genie Renewables designs, manufactures and distributes solar panels, offers energy brokerage and advisory services and also sells third-party products to customers. Corporate costs include unallocated compensation, consulting fees, legal fees, business development expenses and other corporate-related general and administrative expenses. Corporate does not generate any revenues, nor does it incur any cost of revenues.

The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision-maker.

The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its business segments based primarily on income (loss) from operations. There are no significant asymmetrical allocations to segments. 

 

Operating results for the business segments of the Company were as follows:

(in thousands)		GRE				GRE International				Genie Renewables				Corporate				Total
Three Months Ended March 31, 2022
Revenues		$	83,884			$	12,603			$	2,042			$	—			$	98,529
Income (loss) from operations			30,176				(2,808	)			(479	)			(2,456	)			24,433
Depreciation and amortization			85				188				11				—				284
Stock-based compensation			246				36				—				558				840
Provision for (benefit from) income taxes			7,833				(821	)			—				(498	)			6,514
Three Months Ended March 31, 2021
Revenues		$	90,667			$	14,335			$	2,488			$	—			$	107,490
Income (loss) from operations			1,204				(5,551	)			559				(1,677	)			(5,465	)
Depreciation and amortization			118				250				12				—				380
Stock-based compensation			162				32				—				395				589
Provision for (benefit from) income tax			1,186				(837	)			128				58				535

Total assets for the business segments of the Company were as follows:

(in thousands)		GRE				GRE International				Genie Renewables				Corporate				Total
Total assets:
March 31, 2022		$	149,263			$	22,953			$	5,005			$	42,964			$	220,185
December 31, 2021			174,442				34,674				3,946				16,403				229,465

26

---

Note 18—Commitments and Contingencies

 

Legal Proceedings 

The Company may from time to time be subject to legal proceedings that arise in the ordinary course of business. Although there can be no assurance in this regard, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company’s results of operations, cash flows or financial condition.

Refer to Note 5—Discontinued Operations and Divestiture, for discussion related to the administration of Orbit.

 

Agency and Regulatory Proceedings 

From time to time, the Company receives inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes, and the Company responds to those inquiries or requests. The Company cannot predict whether any of those matters will lead to claims or enforcement actions or whether the Company and the regulatory parties will enter into settlements before a formal claim is made. 

         

State of Connecticut Public Utilities Regulatory Authority

Town Square

 

On September 19, 2018, the State of Connecticut Public Utilities Regulatory Authority (“PURA”) commenced an investigation into Town Square following customer complaints of allegedly misleading and deceptive sales practices on the part of Town Square. The Connecticut Office of Consumer Counsel subsequently joined in the investigation. On June 17, 2020, PURA notified Town Square that it was advancing its investigation by assigning Prosecutorial staff for the purpose of investigating Town Square’s compliance with licensed electric supplier billing, marketing, and licensing requirements, and, if appropriate, facilitating settlement discussions among the parties.

Although Town Square denies any basis for those complaints and any wrongdoing on its part, in July 2021, the parties settled the dispute. Pursuant to the terms of the settlement agreement, Town Square paid $0.4 million. Town Square has also agreed to voluntarily refrain from in-person marketing activities in Connecticut for a period of 15 months. For the three months ended March 31, 2022 and 2021, Town Square’s gross revenues from sales in Connecticut was $3.7 million and $9.4 million, respectively. 

Residents Energy

 

In August 2020, Residents Energy began marketing retail energy services to Connecticut. For the year ended December 31, 2021, Residents Energy's gross revenues from sales in Connecticut was $0.2 million. During the fourth quarter of 2020, the enforcement division of PURA contacted Residents Energy concerning customer complaints received in connection with alleged door-to-door marketing activities in violation of various rules and regulations. On March 12, 2021, the enforcement division filed a motion against Resident Energy with the adjudicating body of PURA, seeking the assessment of $1.5 million in penalties, along with a suspension of license, auditing of marketing practices upon reinstatement and an invitation for settlement discussions.

In June 2021, the parties settled the dispute. Pursuant to the terms of the settlement agreement, Residents Energy paid $0.3 million  and volunteered to withdraw from the market in Connecticut for a period of  36 months.

 

Other Reviews or Investigations

From time to time regulators may initiate reviews, compliance checks or issue subpoenas for information as means to evaluate the Company and its subsidiaries’ compliance with applicable laws, rules, regulations and practices.

On October 25, 2019, the Office of the Attorney General of the State of Illinois ("IL AG") notified Residents Energy (by way of subpoena) that it is conducting an investigation to assess compliance with the Illinois Consumer Fraud and Deceptive Business Practices Act. The notice was issued in the form of a subpoena in the course of the foregoing. The Company, which has responded as required, has challenged the merits of the subpoena and investigation. Residents Energy denies any wrongdoing on its part. As of March 31, 2022, no claims or demands have been made against Residents Energy by the IL AG, and there is insufficient basis to deem any loss probable or to assess the amount of any possible loss. For the three months ended March 31, 2022 and 2021, Resident Energy’s gross revenues from sales in Illinois was $8.3 million and $8.0 million, respectively. 

27

---

 

In response to certain customers complaints, the State of Maine Public Utility Commission ("MPUC") has opened a review of the door to door marketing practices of Town Square. In connection with the review, the MPUC has requested information from Town Square demonstrating compliance in the form of an order to show cause as to why its marketing practices are  in compliance and it should be permitted to continue licensed operations in Maine. In August 2021, the parties settled the dispute without any obligation for payment by Town Square. In connection with the settlement, Town Square has agreed to voluntarily refrain from door-to-door marketing activities in Maine through June 30, 2023, and to voluntarily refrain from outbound telemarketing to obtain new residential customers for a period of six months, along with certain compliance procedures. For the three months ended March 31, 2022 and 2021, Town Square’s gross revenues from sales in Maine was $0.4 million and $0.5 million, respectively. 

Other Commitments

 

Purchase Commitments

 

The Company had future purchase commitments of $132.5 million at March 31, 2022, of which $94.9 million was for future purchase of electricity. The purchase commitments outstanding as of March 31, 2022 are expected to be paid as follows: 

(in thousands)
Remainder of 2022		$	62,296
2023			52,707
2024			16,530
2025			1,006
2026			—
Thereafter			—
Total payments		$	132,539

 

In three months ended March 31, 2022, the Company purchased $20.1 million and $4.1 million of electricity and renewable energy credits, respectively, under these purchase commitments. In three months ended March 31, 2021, the Company purchased $79.2 million and $3.0 million of electricity and renewable energy credits, respectively, under these purchase commitments.

Renewable Energy Credits 

 

GRE must obtain a certain percentage or amount of its power supply from renewable energy sources in order to meet the requirements of renewable portfolio standards in the states in which it operates. This requirement may be met by obtaining renewable energy credits that provide evidence that electricity has been generated by a qualifying renewable facility or resource. At March 31, 2022, GRE had commitments to purchase renewable energy credits of $37.7 million.

Performance Bonds and Unused Letters of Credit

 

GRE has performance bonds issued through a third party for certain utility companies and for the benefit of various states in order to comply with the states’ financial requirements for REPs. At March 31, 2022, GRE had aggregate performance bonds of $15.5 million outstanding and minimal amount of unused letters of credit.  

BP Energy Company Preferred Supplier Agreement

 

Certain of GRE’s REPs are party to an Amended and Restated Preferred Supplier Agreement with BP, which is to be in effect through November 30, 2023. Under the agreement, the REPs purchase electricity and natural gas at market rate plus a fee. The obligations to BP are secured by a first security interest in deposits or receivables from utilities in connection with their purchase of the REPs’ customer’s receivables, and in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. The ability to purchase electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants. At March 31, 2022, the Company was in compliance with such covenants. At March 31, 2022, restricted cash—short-term of $1.3 million and trade accounts receivable of $47.9 million were pledged to BP as collateral for the payment of trade accounts payable to BP of $10.8 million at March 31, 2022.

28

---

Note 19—Debt

Loan with Tokyo Star Bank

 

On May 13, 2020, Genie Japan entered into a Loan Agreement with Tokyo Star Bank for a ¥150.0 million (equivalent to $1.4 million) short-term credit facility ("May 2020 Loan") with maturity date of November 13, 2020. On November 13, 2020, Genie Japan and Tokyo Star Bank amended the May 2020 Loan to extend the maturity date to May 13, 2021. Genie Japan provided a letter of credit issued by JPMorgan Chase in the amount of ¥150.0 million (equivalent to $1.4 million) as collateral. The outstanding principal amount incurred interest at 3.0% per annum and was payable monthly.  In May 2021, the Company completed the divestiture of Genie Japan including balance of the May 2020 Loan (see Note 5)

Credit Agreement with JP Morgan Chase Bank 

On December 13, 2018, the Company entered into a Credit Agreement with JPMorgan Chase Bank (“Credit Agreement”). On December 23, 2021, the Company entered into the third amendment of its existing Credit Agreement to extend the maturity date to December 31, 2022. The Company continues to have the aggregate principal amount of $5.0 million credit line facility (“Credit Line”). The Company pays a commitment fee of 0.1% per annum on unused portion of the Credit Line as specified in the Credit Agreement. The borrowed amounts will be in the form of letters of credit which will bear interest of 1.0% per annum. The Company will also pay a fee for each letter of credit that is issued equal to the greater of $500 or 1.0% of the original maximum available amount of the letter of credit. The Company agreed to deposit cash in a money market account at JPMorgan Chase Bank as collateral for the line of credit equal to $5.1 million. As of, March 31, 2022, there are no letters of credit issued by JP Morgan Chase Bank. At March 31, 2022, the cash collateral of $5.2 million was included in restricted cash—short-term in the consolidated balance sheet.

 

Note 20—Recently Issued Accounting Standards

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new provisions will be applied as a cumulative-effect adjustment to retained earnings. The Company will adopt the new standard on January 1, 2023. The Company is currently evaluating the requirements of this guidance and has not yet determined the impact of its adoption on the Company's consolidated financial statements. 

29

---

Item 2.       Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following information should be read in conjunction with the accompanying consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission (or SEC).

 

As used below, unless the context otherwise requires, the terms “the Company,” “Genie,” “we,” “us,” and “our” refer to Genie Energy Ltd., a Delaware corporation, and its subsidiaries, collectively.

 

Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are not limited to, those discussed below under Part II, Item IA and under Item 1A to Part I “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021. The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our Annual Report on Form 10-K for the year ended December 31, 2021.

Overview

 

We are comprised of Genie Retail Energy ("GRE"), Genie Retail Energy International ("GRE International") and Genie Renewables.

GRE owns and operates retail energy providers ("REPs"), including IDT Energy, Residents Energy, Town Square Energy ("TSE"), Southern Federal and Mirabito Natural Gas. GRE's REP businesses resell electricity and natural gas primarily to residential and small business customers, with the majority of the customers in the Eastern and Midwestern United States and Texas.

GRE International holds the Company's interest in REPs that serve retail customers in Scandinavia. It holds 90.8% controlling interest in Lumo Energia Oyj ("Lumo Finland"), a REP serving residential customers in Finland and 97.7% interest in Lumo Energi AB ("Lumo Sweden"). GREI previously held 98.8% in Genie Japan that was sold in May 2021. GRE International also holds a 100% ownership of Orbit Energy, a REP operating in the U.K., which was discontinued in November 2021 as discussed below.

Genie Renewables holds Genie Solar Energy, a rooftop solar system sales and general contracting company, a 93.5% interest in CityCom Solar, a marketer of community solar energy solutions, Diversegy LLC ("Diversegy"), an energy broker for commercial, and a 60.0% controlling interest in Prism Solar, a solar solutions company that is engaged in U.S. manufacturing of solar panels, solar installation design and solar energy project management.

As part of our ongoing business development efforts, we seek out new opportunities, which may include complementary operations or businesses that reflect horizontal or vertical expansion from our current operations. Some of these potential opportunities are considered briefly and others are examined in further depth. In particular, we seek out acquisitions to expand the geographic scope and size of our REP businesses.

30

---

Discontinued Operations

 

In 2021, the natural gas and energy market in the United Kingdom deteriorated which prompted us to suspend the spin-off and start the process of orderly withdrawal from the United Kingdom market. In October 2021, as part of the orderly exit process from the United Kingdom market, Orbit and Shell U.K. Limited ("Shell") agreed to terminate the exclusive supply contract between them. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities with Shell. A portion of the net cash proceeds was transferred to us (see Note 5, Discontinued Operations and Divestiture, to our financial statements included elsewhere in this Quarterly Report on Form 10-Q).

Following the termination of the contract with Shell, we filed a petition with the High Court of Justice Business and Property of England and Wales (the “Court”) to declare Orbit insolvent based on the Insolvency Act of 1986. On November 29, 2021, the Court declared Orbit insolvent based on the Insolvency Act of 1986, revoked Orbit's license to supply electricity and natural gas in the United Kingdom, ordered that Orbit's current customers be transferred to a “supplier of last resort” and transferred the administration of Orbit to Administrators effective December 1, 2021. All of the customers of Orbit were transferred to a third-party supplier effective December 1, 2021 as ordered by the Court. All assets and liabilities of Orbit, including cash and receivables remain with Orbit, the management and control of which was transferred to Administrators.

We determined that exiting the United Kingdom represented a strategic shift that would have a major effect on our operations and accordingly, presented the results of operations and related cash flows as discontinued operations for all periods presented. The assets and liabilities of the discontinued operations have been presented separately, and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of March 31, 2022 and December 31, 2021.

Coronavirus Disease (COVID 19)

 

Starting in the first quarter 2020, the world and the United States experienced the unprecedented impacts of the coronavirus disease 2019 (COVID-19) pandemic.

For the year ended December 31, 2021, the impacts of COVID-19 are evident in several key aspects of our business operations and the corresponding financial impact has been mixed. Our consolidated income from operations for the three months ended March 31, 2022 increased by $29.9 million compared to the same period in 2021.

Our customer base is predominantly residential, so we benefited from the increased demand for electricity when customers are working from their homes. On the other hand, like other retail energy providers, we suspended our face-to-face customer acquisition programs in March 2020 as public health measures were implemented to combat COVID-19, resulting in a decrease in gross meter acquisitions and a decrease in U.S. domestic meters served. The reduction in gross meter acquisitions decreased our customer acquisition expense in the year ended December 31, 2021 and 2020 compared to the period before the pandemic. Churn for three months ended March 31, 2022 and 2021, is below historical levels, in part, due to our competitors reducing face to face marketing programs.

We did not experience any significant changes in our workforce composition and were able to implement our business continuity plans with no significant impact to our ability to maintain our operations. We continue to maintain strong physical and cybersecurity measures in order to both serve our operational needs with a remote workforce and to ensure that we continue to provide services to our customers. We face challenges due to the need to operate with a remote workforce and are continuing to address those challenges so as to minimize the impact on our ability to operate.

Beginning in 2021, public health restrictions were eased in most of our markets which has allowed us to resume face-to-face sales and marketing. Looking ahead, we expect to see a modest rebound in meter acquisition, however, any reversal of the easing of restrictions would impact that expected rebound.

There are many uncertainties regarding the impacts of the COVID-19 pandemic, and we are closely monitoring those impacts of on all aspects of its business, including how it will impact our customers, employees, suppliers, vendors, and business partners. We are currently unable to predict the impact that COVID-19 will have on our financial position and operating results due to the complexities of the impacts and numerous uncertainties that are beyond the Company's control. We expect to continue to assess the evolving impact of COVID-19 on our business and assets and intend to make adjustments accordingly.

31

---

Genie Retail Energy

 

GRE operates REPs that resell electricity and/or natural gas to residential and small business customers in Connecticut, Delaware, Georgia, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Florida, Texas, Rhode Island, and Washington, D.C. GRE’s revenues represented approximately 85.1% and 84.3% of our consolidated revenues in the three months ended March 31, 2022 and 2021, respectively.

Seasonality and Weather; Climate Change

 

The weather and the seasons, among other things, affect GRE’s REPs' revenues. Weather conditions have a significant impact on the demand for natural gas used for heating and electricity used for heating and cooling. Typically, colder winters increase demand for natural gas and electricity, and hotter summers increase demand for electricity. Milder winters and/or summers have the opposite effects. Unseasonable temperatures in other periods may also impact demand levels. Potential changes in global climate may produce, among other possible conditions, unusual variations in temperature and weather patterns, resulting in unusual weather conditions, more intense, frequent and extreme weather events and other natural disasters. Some climatologists believe that these extreme weather events will become more common and more extreme which will have a greater impact on our operations. Natural gas revenues typically increase in the first quarter due to increased heating demands and electricity revenues typically increase in the third quarter due to increased air conditioning use. Approximately 44.5% and 47.9% of GRE’s natural gas revenues for the relevant years were generated in the first quarter of 2021 and 2020, respectively, when demand for heating was highest. Although the demand for electricity is not as seasonal as natural gas (due, in part, to usage of electricity for both heating and cooling), approximately 30.8% and 31.8% of GRE’s electricity revenues for 20212020, respectively, were generated in the third quarters of those years. GRE's REP's revenues and operating income are subject to material seasonal variations, and the interim financial results are not necessarily indicative of the estimated financial results for the full year.

In addition to the direct physical impact that climate change may have on our business, financial condition and results of operations because of the effect on pricing, demand for our offerings and/or the energy supple markets, we may also be adversely impacted by other environmental factors, including: (i) technological advances designed to promote energy efficiency and limit environmental impact; (ii) increased competition from alternative energy sources; (iii) regulatory responses aimed at decreasing greenhouse gas emissions; and (iv) litigation or regulatory actions that address the environmental impact of our energy products and services.

Winter Storm in Texas

 

In February of 2021, the State of Texas experienced unprecedented cold weather and snow, which was named Winter Storm Uri. With the grid overtaxed due to demand and weather-related reduced supply and rolling blackouts being enforced, by order of the Electricity Reliability Council of Texas ("ERCOT"), real-time commodity prices during the crisis escalated significantly. Although GRE's commitment for their customers in Texas was hedged for foreseen winter weather conditions, the market conditions exposed the Company to significant unexpected cost increases. In the year ended December 31, 2021, GRE recognized approximately $13.0 million in additional costs related to the situation, which were included in the cost of revenue in the consolidated statements of operation.

In June 2021, the state legislature of the State of Texas passed House Bill 4492 (“HB 4492”) which includes certain provisions for financing certain costs associated with electric markets caused by Winter Storm Uri. Pursuant to HB 4492, two categories of charges associated with Winter Storm Uri are to be securitized and the proceeds of the securitization will be provided to the load serving entities who originally incurred the charges. Under HB 4492, the Company is entitled to recover a portion of the costs incurred from the effect of Winter Storm Uri with a calculated range of $1.5 million to $2.6 million. In the second quarter of 2021, the Company recorded a reduction in cost of revenues of $1.5 million.

32

---

In September 2021, the Public Utility Commission of Texas ("PUC") approved the Debt Obligation Order to grant ERCOT's application for a debt financing mechanism to pay for certain costs associated with Winter Storm Uri. Under the Debt Obligation Order, the amount that the Company is entitled to recover increased to approximately $3.4 million. In the third quarter of 2021, the Company recorded an additional reduction in the cost of revenues of $1.9 million for an aggregate amount of $3.4 million for the year ended December 31, 2021.

Purchase of Receivables and Concentration of Credit Risk

 

Utility companies offer purchase of receivable, or POR, programs in most of the service territories in which GRE operates. GRE’s REPs reduce their customer credit risk by participating in POR programs for a majority of their receivables. In addition to providing billing and collection services, utility companies purchase those REPs’ receivables and assume all credit risk without recourse to those REPs. GRE’s REPs’ primary credit risk is therefore nonpayment by the utility companies. In the three months ended March 31, 2022 the associated cost was approximately 1.2% of GRE's revenue. At March 31, 2022, 80.6% of GRE’s net accounts receivables were under a POR program. Certain of the utility companies represent significant portions of our consolidated revenues and consolidated gross trade accounts receivable balance during certain periods, and such concentrations increase our risk associated with nonpayment by those utility companies.

For the three months ended March 31, 2022 and 2021 no single customer accounted for 10.0% or greater of our consolidated revenues.

The following table summarizes the percentage of consolidated trade receivable by customers that equal or exceed 10.0% of consolidated net trade receivables at March 31, 2022 and December 31, 2021 (no other single customer accounted for 10.0% or greater of our consolidated net trade receivable as March 31, 2022 or December 31, 2021):

		March 31, 2022				December 31, 2021
Customer A			12	%			na	%

na-less than 10.0% of consolidated revenue in the period

Legal Proceedings

Although GRE endeavors to maintain best sales and marketing practices, such practices have been the subject of certain class action lawsuits.

See Note 18, Commitments and Contingencies, in this Quarterly Report on Form 10-Q, which is incorporated by reference. 

 

33

---

Agency and Regulatory Proceedings

From time to time, the Company responds to inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes. The Company cannot predict whether any of those matters will lead to claims or enforcement actions or whether the Company and the regulatory parties will enter into settlements before a formal claim is made. See Notes 18, Commitments and Contingencies, in this Quarterly Report on Form 10-Q, which is incorporated by reference, for further detail on agency and regulatory proceedings.

 

State of Connecticut Public Utilities Regulatory Authority

Town Square

 

On September 19, 2018, the State of Connecticut Public Utilities Regulatory Authority (“PURA”) commenced an investigation into Town Square following customer complaints of allegedly misleading and deceptive sales practices on the part of Town Square. The Connecticut Office of Consumer Counsel joined in the investigation. On June 17, 2020, the PURA notified Town Square that it was advancing it’s investigation by assigning Prosecutorial ("PRO") staff for the purpose of investigating Town Square’s compliance with licensed electric supplier billing, marketing, and licensing requirements, and, if appropriate, facilitating settlement discussions among the parties. 

Although Town Square denies any basis for those complaints and any wrongdoing on its part, in May 2021, the parties reached a settlement in principle, subject to finalization of a definitive settlement agreement, pursuant to which Town Square paid $0.4 million. Town Square has also volunteered to refrain, from door-to-door marketing activities in Connecticut for a period of 15 months.

As of March 31, 2022, Town Square’s Connecticut customer base represented 6.9% of GRE’s total meters served and 8.1% of the total RCEs of GRE’s customer base. For three months ended March 31, 2022 and 2021, Town Square’s gross revenues from sales in Connecticut were $3.7 million and $9.4 million, respectively.

An RCE represents a natural gas customer with annual consumption of 100 mmbtu or an electricity customer with annual consumption of 10 MWh. Because different customers have different rates of energy consumption, RCEs are an industry standard metric for evaluation the consumption profile of a given retail customer base.

 

34

---

Residents Energy

In August of 2020, Residents Energy began marketing retail energy services in Connecticut. For the year ended December 31, 2021 Residents Energy's gross revenues from sales in Connecticut was $0.2 million. During the fourth quarter of 2020, the enforcement division of PURA contacted Residents Energy concerning customer complaints received in connection with alleged door-to-door marketing activities in violation of various rules and regulations. On March 12, 2021, the enforcement division filed a motion against Resident Energy with the adjudicating body of PURA, seeking the assessment of $1.5 million in penalties, along with a suspension of license for eighteen months, auditing of marketing practices upon reinstatement and an invitation for settlement discussions. 

In May 2021, the parties reached a settlement, pursuant to which Residents will pay $0.3 million. Residents Energy has also volunteered to withdraw from the market in Connecticut for a period of 36 months.

 

Critical Accounting Policies

 

Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities. Critical accounting policies are those that require the application of management’s most subjective or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. Our critical accounting policies include those related to revenue recognition, allowance for doubtful accounts, acquisitions, goodwill, and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. For additional discussion of our critical accounting policies, see our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Issued Accounting Standards

 

Information regarding new accounting pronouncements is included in Note 20—Recently Issued Accounting Standards, to the current period’s consolidated financial statements.

 

Results of Operations

 

We evaluate the performance of our operating business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations. 

 

35

---

Three Months Ended March 31, 2022 and  Compared to Three Months Ended March 31, 2021

 

Genie Retail Energy Segment

  

			Three months ended March 31,							Change
(amounts in thousands)			2022			2021				$				%
Revenues:
Electricity		$	59,380			$	73,387			$	(14,007	)			(19.1	)%
Natural gas			24,504				17,280				7,224				41.8
Total revenues			83,884				90,667				(6,783	)			(7.5	)
Cost of revenues			37,301				75,701				(38,400	)			(50.7	)
Gross profit			46,583				14,966				31,617				211.3
Selling, general and administrative expenses			16,407				13,762				2,645				19.2
Income from operations		$	30,176			$	1,204			$	28,972				(2,406.3	)%

Revenues. Electricity revenues decreased by 19.1% in three months ended March 31, 2022 compared to the same period in 2021. The decrease is due to a decline in electricity consumption partially offset by an increase in the average price charged per kilowatt hour charged to customers in the three months ended March 31, 2022 compared to the same period in 2021. Electricity consumption by GRE’s REPs' customers decreased by 36.7% in the three months ended March 31, 2022, compared to the same period in 2021. The decrease in electricity consumption reflected a 5.1% decrease in average consumption per meter and a 33.3% decrease in the average number of meters served. The decrease in per meter consumption reflects a decrease in residential electricity consumption as many COVID-19 "stay-at-home" measures have been lifted thus reversing prior year increased levels of consumption related to those measures. The reduction in meters served was driven, in part, by the decision to pause certain customer acquisitions efforts and allow certain lower margin customers, including those acquired through municipal aggregation deals to move to other suppliers. The average rate per kilowatt hour sold increased 27.8% in the three months ended March 31, 2022 compared to the same period in 2021. The increase is due to the increase in the wholesale price of electricity in the three months ended March 31, 2022 compared to the same period in 2021.

GRE’s natural gas revenues increased by 41.8% in the three months ended March 31, 2022 compared to the same period in 2021.  The increase in natural gas revenues in the three months ended March 31, 2022 compared to the same period in 2021 was a result of increases in natural gas consumption partially offset by a decrease in average revenue per therm sold. Natural gas consumption by GRE’s REPs’ customers increased by 20.0% in the three months ended March 31, 2022 compared to the same period in 2021, reflecting a 13.6% increase in average consumption per meter partially and a 5.7% increase in average meters served in the three months ended March 31, 2022 compared to the same period in 2021. The average revenue per therm sold increased by 18.1% in the three months ended March 31, 2022, compared to the same period in 2021. 

36

---

The customer base for GRE’s REPs as measured by meters served consisted of the following: 

 

(in thousands)		March 31, 2022			December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021
Meters at end of quarter:
Electricity customers		209				210				289				292				308
Natural gas customers		77				75				72				69				65
Total meters		286				285				361				361				373

 

Gross meter acquisitions in three months ended March 31, 2022, were 44,000 compared to 62,000 for the same period in 2021. The decrease in the gross meter acquisitions for the three months ended March 31, 2022 compared to the same period in 2021 was due to a “strategic pause” on certain customer acquisition channels to protect margins due to unfavorable market conditions that started in the fourth quarter 2021. 

Meters served slightly increased by 1,000 meters or 0.4% from December 31, 2021 to March 31, 2022. The increase in the number of meters served at March 31, 2022 compared to December 31, 2021 was due to a decrease in average churn during the period. In three months ended March 31, 2022, average monthly churn decreased to 4.5% compared to 4.9% for same period in 2021. Meters served decreased by 87,000 meters or 25.1% from March 31, 2021 to March 31, 2022. The decrease in the number of meters served at March 31, 2021 compared to March 31, 2021 was due to the "strategic pause" discussed above. GRE's REPs also returned some customers to their underlying utility in certain markets in the fourth quarter of 2021 to minimize the impact of expected higher prices on our margins.

 

The average rates of annualized energy consumption, as measured by RCEs, are presented in the chart below. An RCE represents a natural gas customer with annual consumption of 100 mmbtu or an electricity customer with annual consumption of 10 MWh. Because different customers have different rates of energy consumption, RCEs are an industry standard metric for evaluating the consumption profile of a given retail customer base.

 

(in thousands)		March 31, 2022			December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021
RCEs at end of quarter:
Electricity customers		182				189				276				272				291
Natural gas customers		78				71				60				58				56
Total RCEs		260				260				336				330				347

 

37

---

RCEs decreased 25.1% at March 31, 2022 compared to March 31, 2021 primarily due to the "strategic pause" on customer acquisitions and transfer of some customers to their underlying utilities as discussed above.

 

Cost of Revenues and Gross Margin Percentage. GRE’s cost of revenues and gross margin percentage were as follows:

		Three months endedMarch 31,								Change
(amounts in thousands)		2022				2021				$				%
Cost of revenues:
Electricity		$	25,197			$	66,460			$	(41,263	)			(62.1	)%
Natural gas			12,104				9,241				2,863				31.0
Total cost of revenues		$	37,301			$	75,701			$	(38,400	)			(50.7	)%

 

		Three months endedMarch 31,
(amounts in thousands)		2022				2021				Change
Gross margin percentage:
Electricity		57.6	%			9.4	%			48.2	%
Natural gas		50.6				46.5				4.1
Total gross margin percentage		55.5	%			16.5	%			39.0	%

Cost of revenues for electricity decreased in the three months ended March 31, 2022 compared to the same period in 2021 primarily because of decreases in electricity consumption by GRE’s REPs’ customers and the average unit cost of electricity. The average unit cost of electricity decreased 40.1% in the three months ended March 31, 2022 compared to the same period in 2021. A significant portion of the decrease in the average cost of electricity resulted from the favorable results of hedging activities for the three months ended March 31, 2022 compared to the same period in 2021 and the incremental cost incurred in the three months ended March 31, 2021 as an effect of a major winter storm in Texas as discussed above. Gross margin on electricity sales increased in the three months ended March 31, 2022 compared to the same period in 2021 because the average rate charged to customers increased while the average unit cost of electricity decreased.  

Cost of revenues for natural gas increased in the three months ended March 31, 2022 compared to the same period in 2021 primarily because of increases in natural gas consumption by GRE's REPs' customers and in average unit cost of natural gas. The average unit cost of natural gas increased 9.1% in the three months ended March 31, 2022 compared to the same period in 2021. Gross margin on natural gas sales increased in the three months ended March 31, 2022 compared to the same period in 2021 because the average rate charged to customers increased more than the increase in the average unit cost of natural gas.

 

38

---

Selling, General and Administrative. The increase in selling, general and administrative expense in the three months ended March 31, 2022 compared to the same period in 2021 was primarily due to increases in marketing and customer acquisition costs and employee-related costs partially offset by a decrease in legal settlement costs. Employee-related expenses increased by $1.1 million in the three months ended March 31, 2022 compared to the same period in 2021 primarily due to an increase in accrued bonuses as a result of improved results of operations during the period. Marketing expenses increased by $2.0 million in three months ended March 31, 2022 compared to the same period in 2021 as a result of expansion of marketing activities to offset the effect of COVID-19 related to public health restrictions to traditional customer acquisition methods. As a percentage of GRE’s total revenues, selling, general and administrative expense increased from 15.2% in the three months ended March 31, 2021 to 19.6% in the three months ended March 31, 2022. 

 

GRE International Segment

GRE International holds our stakes in REPs outside of North America. These businesses currently include our controlling stakes in Lumo Finland and Lumo Sweden and included Genie Japan prior to its sale in May 2021. GRE International also holds our stake in Orbit, which discontinued operations at the end of November 2021.

In January 2021, weather volatility and the lack of adequate gas reserves drove the prices on the Japan Electric Power Exchange to $2,390 per megawatt hour for an extended period of time. Although our supply commitment for our customers in Japan was hedged reasonably for expected winter weather conditions, the extreme price spike exposed us to further unexpected cost increases. The impact on our 2021 consolidated result of operations was approximately $2.5 million.

On April 26, 2021, we entered into an Equity Purchase Agreement ("Purchase Agreement") with Hanhwa Q Cells Japan Co., Ltd. ("Hanhwa"), pursuant to which, we agreed to sell our interest in Genie Japan for ¥570.0 million (equivalent to approximately $5.3 million at April 26, 2021) subject to certain terms and conditions set forth in the Purchase Agreement. On May 11, 2021, upon the terms and subject to the conditions of Purchase Agreement, we completed the divestiture of Genie Japan for an aggregate cash consideration of ¥570.0 million (equivalent to approximately $5.2 million at May 11, 2021). Hanhwa also assumed the outstanding loans payable of Genie Japan. We paid $0.6 million of commission to certain former employees of Genie Japan and recognized a pre-tax gain of $4.2 million from the divestiture. For the three months ended March 31, 2021, Genie Japan had revenues and cost of revenues of $3.2 million and $5.4 million, respectively.

		Three Months Ended March 31,								Change
(amounts in thousands)		2022				2021				$				%
Revenues
Electricity		$	12,404			$	14,226			$	(1,822	)			(12.8	)%
Others			199				109				90				82.6
Total revenues		$	12,603			$	14,335			$	(1,732	)			(12.1	)
Cost of revenue			14,168				17,765				(3,597	)			(20.2	)
Gross loss			(1,565	)			(3,430	)			1,865				(54.4	)
Selling, general and administrative expenses			1,243				2,121				(878	)			(41.4	)
Loss from operations		$	(2,808	)		$	(5,551	)		$	(2,743	)			(49.4	)%

39

---

Meters served by GRE International's REPs decreased to 61,000 at March 31, 2022 from 67,000 at December 31, 2021 primarily a “strategic pause” on customer acquisition to protect margins due to unfavorable market conditions that started in the fourth quarter 2021.

RCEs of GRE International at March 31, 2022 decreased to 38,000 from 40,000 at December 31, 2021 primarily from the "strategic pause" as discussed above.

Revenues. GRE International's revenues decreased in the three months ended March 31, 2022 compared to the same period in 2021 primarily due to the sale of Genie Japan in May 2021 partially offset by increases in revenues in  Lumo Finland and Lumo Sweden. Revenues from Genie Japan were $3.2 million for the three months ended March 31, 2021. The increase in revenues from Lumo Finland and Lumo Sweden from the three months ended March 31, 2022 compared to the same period in 2021 was due to an increase in the average price charged to customers which increased by 138.0%, partially offset by the decrease in electricity consumption which decreased by 39.5%. The increase in the average price charged to customers in the three months ended March 31, 2022 compared to the same period in 2021 is due to a significant increase in the price of electricity in the wholesale market.

Cost of Revenues. GRE International's cost of revenue decreased in three months ended March 31, 2022 compared to the same period in primarily due to the sale of Genie Japan in May 2021 partially offset by an increase in the cost of revenue in Lumo Finland and Lumo Sweden. Cost of revenue from Genie Japan was $5.4 million for the three months ended March 31, 2021. The increases in cost of revenues from Lumo Finland and Lumo Sweden from the three months ended March 31, 2022 compared to the same period in 2021 was due to an increase in the average cost of electricity which increased by 141.7%, partially offset by the decrease in electricity consumption as discussed above.

Selling, General and Administrative Expenses. The decrease in selling, general and administrative expenses in three months ended March 31, 2022 compared to the same period in 2021 was primarily due to the sale of Genie Japan in May 2021.

 

Genie Renewables Segment

 

The Genie Renewables (formerly GES) segment is composed of Genie Solar, CityCom Solar, Diversegy and Prism, in which we hold a 60.0% controlling interest.

		Three Months Ended March 31,								Change
(amounts in thousands)		2022				2021				$				%
Revenues		$	2,042			$	2,488			$	(446	)			(17.9	)%
Cost of revenue			1,518				1,370				148				10.8
Gross profit			524				1,118				(594	)			(53.1	)
Selling, general and administrative expenses			1,003				559				444				79.4
(Loss) income from operations		$	(479	)		$	559			$	1,038				(185.7	)%

40

---

Revenue. Genie Renewables' revenues decreased in the three months ended March 31, 2022 compared to the same period in 2021. The decrease in revenues was the result of a decrease in the activities of Genie Solar projects and commissions from selling third-party products to customers by CityCom Solar. Revenues from Diversegy include commissions, entry fees and other fees from our energy brokerage and marketing services businesses.  

Cost of Revenues. Cost of revenue increased in the three months ended March 31, 2022 compared to the same period in 2021. The increase in cost revenues was due to an increase in commissions paid out by Diversegy. 

Selling, General and Administrative. Selling, general and administrative expenses increased in the three months ended March 31, 2022 compared to the same period in 2021 primarily due to increases in headcount in Genie Solar and Diversegy and consulting fees at Genie Solar.

Corporate

 

Corporate does not generate any revenues, nor does it incur any cost of revenues. Corporate costs include unallocated compensation, consulting fees, legal fees, business development expense and other corporate-related general and administrative expense. 

(amounts in thousands)		Three months ended March 31,								Change
			2022				2021				$				%
General and administrative expenses and loss from operations		$	2,456			$	1,677			$	779				46.5	%

 

Corporate general and administrative expenses increased in three months ended March 31, 2022 compared to the same period in 2021 primarily because of increases in employee related cost and in stock-based compensation expense. As a percentage of our consolidated revenues, Corporate general and administrative expense increased to 2.5% in the three months ended March 31, 2022 from 1.6% in the three months ended March 31, 2021.

 

41

---

Consolidated

 

Selling, general and administrative expenses. Stock-based compensation expense included in consolidated selling, general and administrative expense was $0.8 million and $0.6 million in the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022, aggregate unrecognized compensation cost related to non-vested stock-based compensation was $5.9 million. The unrecognized compensation cost is recognized over the expected service period.

 

The following is a discussion of our consolidated income and expense line items below income from operations: 

 

		Three months ended March 31,								Change
(amounts in thousands)		2022				2021				$				%
Income from operations		$	24,433			$	(5,465)			$	29,898				547.1	%
Interest income			17				84				(67	)			(79.8	)
Interest expense			(50	)			(182	)			132				(72.5	)
Other income (loss), net			(498	)			407				(905	)			(222.4	)
Unrealized gain on marketable equity securities and investments			(652	)			4,107				(4,759	)			nm
Provision for benefit from income taxes			(6,514	)			(535	)			(5,979	)			1,117.6
Net income (loss) from discontinued operations			16,736				(1,584	)			18,320				1,156.6
Loss from discontinued operations, net of tax			—				(1,110	)			1,110				100.0
Net income (loss)			16,736				(2,694	)			19,430				721.2
Net (loss) income attributable to noncontrolling interests			(1,153	)			(708	)			(445	)			62.9
Net income attributable to Genie		$	17,889			$	(1,986	)		$	19,875				1,000.8	%

 

nm—not meaningful

42

---

Other Income (loss), net.  Other income (loss), net in the three months ended March 31, 2022 and 2021 consisted primarily foreign currency transactions.

 

Provision for Income Taxes. The change in the reported tax rate for the three months ended March 31, 2022 compared to the same period in 2021, is a result of favorable results of operations in the U.S. and changes in the mix of jurisdiction in which taxable income was earned which was not offset by income tax benefit in some jurisdictions that had losses due to valuation allowances in those jurisdictions.

Net Loss Attributable to Noncontrolling Interests. The increase in net loss attributable to noncontrolling interests in the three months ended March 31, 2022 compared to the same period in 2021 was primarily due to an increase in the share of noncontrolling interest in net losses of CCE. 

Unrealized gain on marketable equity securities and investments. The unrealized gain (loss) on marketable equity securities and investment for the three months ended March 31, 2022 pertains to the appreciation of the Company's investments in common stock of Rafael Holdings, Inc. ("Rafael") which the Company acquired in December 2020. 

Income from discontinued operations, net of tax. Income from discontinued operations, net of tax in the three months ended March 31, 2021 is mainly due to losses incurred from the operations of Orbit.

 

Liquidity and Capital Resources

 

General

 

We currently expect that our cash flow from operations and the $88.2 million balance of unrestricted cash and cash equivalents that we held at March 31, 2022 will be sufficient to meet our currently anticipated cash requirements for at least the period from April 1, 2022 to May 9, 2022.

 

At March 31, 2022, we had working capital (current assets less current liabilities) of $96.0 million.

 

		Three Months Ended March 31,
		2022				2021
		(in thousands)
Cash flows provided by (used in):
Operating activities		$	18,340			$	(5,744	)
Investing activities			(1,628	)			(1,007	)
Financing activities			(2,375	)			(370	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			27				(69	)
Cash balances transferred to assets held for sale			—				(587	)
Increase in cash, cash equivalents and restricted cash of continuing operations			14,364				(7,777	)
Cash flows used in discontinued operations			(21,832	)			(4,209	)
Net decrease in cash, cash equivalents and restricted cash		$	(7,468	)		$	(11,986	)

 

43

---

Operating Activities

 

Cash, cash equivalents and restricted cash provided by operating activities of continuing operations was $18.3 million in the three months ended March 31, 2022 compared to net cash used in operating activities of $5.7 million in the three months ended March 31, 2021. Net income after non-cash adjustments of continuing operations increased cash flows by $22.9 million for the three months ended March 31, 2022, compared to the same period in 2021. The increase is primarily the result of favorable results of operations in the  three months ended March 31, 2022 compared to the same period in 2021.

 

Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. Changes in assets and liabilities increased cash flows by $1.2 million for the three months ended March 31, 2022, compared to the same period in 2021. 

 

Certain of GRE's REPs are party to an Amended and Restated Preferred Supplier Agreement with BP Energy Company, or BP, which is to be in effect through November 30, 2023. Under the agreement, the REPs purchase electricity and natural gas at market rate plus a fee. The obligations to BP are secured by a first security interest in deposits or receivables from utilities in connection with their purchase of the REP’s customer’s receivables, and in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. The ability to purchase electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants. At March 31, 2022, we were in compliance with such covenants. At March 31, 2022, restricted cash—short-term of $1.3 million and trade accounts receivable of $47.9 million were pledged to BP as collateral for the payment of trade accounts payable to BP of $10.8 million at March 31, 2022.

We had purchase commitments of $132.5 million at March 31, 2022, of which $94.9 million was for purchases of electricity. 

From time to time, we receive inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes, and we respond to those inquiries or requests. We cannot predict whether any of those matters will lead to claims or enforcement actions.

 

Investing Activities

 

Our capital expenditures were minimal in the three months ended March 31, 2022 and 2021. We currently anticipate that our total capital expenditures in the twelve months ending December 31, 2022 will be between $0.5 to $1.0 million.

In December 2020, we invested $5.0 million in Class B common stock of Rafael. Rafael, a publicly-traded company, is also a related party. In connection with the purchase, Rafael issued to us warrants to purchase an additional 43,649 shares of Rafael's Class B common stock with an exercise price of $22.91 per share. The warrants had a term expiring on June 6, 2022. We exercised the warrants in full on March 31, 2021 for a total exercise price of $1.0 million. We do not exercise significant influence over the operating or financial policies of Rafael.

44

---

In the fourth quarter of 2021, Orbit transferred to GEIC a net amount of $49.7 million from the proceeds of the settlement of the contact with Shell which is included in cash and cash equivalents in the consolidated balance sheet as of December 31, 2021. In January 2022, we transferred $21.5 million to the Administrators of Orbit Energy to fund the settlement of the expected remaining liabilities of Orbit of $30.8 million, which were included in the current liabilities of discontinued operations in the consolidated balance sheet as of December 31, 2021. In February 2022, we deposited $28.3 million into an attorney trust account to hold, preserve, and dispense funds to the extent needed in connection with the administration process. On February 24, 2022, the Administrators filed a petition under Chapter 15 of the U.S. Bankruptcy Code with the Bankruptcy Court of the Southern District of New York seeking (i) recognition of the U.K. administration proceeding as a foreign main proceeding and the U.K. Administrators as its foreign representatives, and (ii) entrusting distribution of the funds the Company deposited into its attorney’s trust fund to the U.K. Administrators. Following a hearing held on March 30, 2022, the Court issued an order dated April 4, 2022 which granted the Administrator’s petition to recognize the U.K. administration proceeding as a foreign main proceeding, and the U.K. Administrators as its foreign representatives, along with related relief. Although the Court's order did recognize that the realization of any Orbit assets located in the United States, other than the funds (the status of which remain subject to dispute), would be entrusted to the Administrators, rather than redirect or transfer the funds to the Administrators (per their petition), the Court ordered that the entirety of the funds would be deposited in the Court’s registry and subject to its control. On April 4, 2022, the $28.3 million was transferred to the Court's registry. Subsequent to the first quarter of 2022, the Administrators filed an application to transfer the funds back to the Administrators’ control in the U.K. Subject to certain representations and expectations regarding use and application of the funds to efficiently and expeditiously pay off creditors and bring a timely close to the insolvency administration, we decided not to oppose the application, and expects the transfer to take place in short order. We believe that the funds are more than sufficient to pay any remaining creditors of Orbit (with a significant surplus to be returned to us).  

 

 Financing Activities

 

In each of the three months ended March 31, 2022 and 2021, we paid aggregate quarterly Base Dividends of $0.1594 per share, $0.4 million in the aggregate, on our Series 2012-A Preferred Stock, or Preferred Stock. On April 14, 2022, our Board of Directors declared a quarterly Base Dividend of $0.1594 per share of our Preferred Stock. The dividend will be paid on or about May 16, 2022 to stockholders of record as of the close of business on May 6, 2022.

In March 2021, in light of the losses incurred from the effects of the events in Texas and Japan discussed above, the Company suspended the payment of quarterly dividends on its common stock to rebuild cash position.

On February 7, 2022, the Board of Directors reversed its earlier suspension of quarterly dividends and declared a quarterly dividend of $0.075 per share on our Class a common stock and Class B Common Stock. The dividend was paid on March 1, 2022. On May 3, 2022, our Board of Directors declared a quarterly dividend of $0.075 per share of our Class A common stock and Class B Common Stock. The dividend will be paid on or about May 31, 2022 to stockholders of record as of the close of business on May 20, 2022.

On March 11, 2013, our Board of Directors approved a program for the repurchase of up to an aggregate of 7.0 million shares of our Class B common stock. There were no repurchases under this program in the three months ended March 31, 2022 and 2021. At March 31, 2022, 5.3 million shares of Class B common stock remained available for repurchase under the stock repurchase program.

On March 21, 2020, our Board of Directors approved a program to redeem up to $4.0 million worth of our Preferred Stock in accordance with the Certificate of Designations for the preferred stock. There were no redemptions under this program in the three months ended March 31, 2022 and 2021.

On February 7, 2022, our Board of Directors authorized a program to redeem up to $1.0 million per quarter of our Preferred Stock at the liquidation preference of $8.50 per share beginning in the second quarter of 2022. On May 3, 2022, our Board of Directors authorized to redeem $2.0 million of our Preferred Stock during the second quarter of 2022.

 

45

---

On May 13, 2020, Genie Japan entered into a Loan Agreement with Tokyo Star Bank for a ¥150.0 million (equivalent to $1.4 million) short-term credit facility ("May 2020 Loan") with maturity date of November 13, 2020. On November 13, 2020, Genie Japan and Tokyo Star Bank amended the May 2020 Loan to extend the maturity date to May 13, 2021. Genie Japan provided a letter of credit issued by JPMorgan Chase in the amount of ¥150.0 million (equivalent to $1.4 million) as collateral. The outstanding principal amount incurred interest at 3.0% per annum and was payable monthly. At March 31, 2022, $0 million was outstanding under the loan agreement. March 31, 2022 and December 31, 2021, the effective interest rate was 3.0%. In May 2021, the Company completed the divestiture of Genie Japan including balance of the May 2020 Loan.

In March 2021, certain assets and liabilities of Genie Japan were classified as assets and liabilities held for sale including the outstanding balance of the May 2020 Loan of $1.4 million.

On April 4, 2017, GRE, IDT Energy, and other GRE subsidiaries entered into a Credit Agreement with Vantage Commodities Financial Services II, LLC ("Vantage"), for a $20 million revolving loan facility. The borrowers consist of our subsidiaries that operate REP businesses, and those subsidiaries’ obligations are guaranteed by GRE. The borrowers have provided as collateral a security interest in their receivables, bank accounts, customer agreements, certain other material agreements and related commercial and intangible rights. The outstanding principal amount incurred interest at LIBOR plus 4.5% per annum. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest matured on April 3, 2020. In April 2020, the revolving line of credit expired and we paid outstanding balance of $3.5 million.

On December 13, 2018, we entered into a Credit Agreement with JPMorgan Chase Bank (“Credit Agreement”). On December 23, 2021, the Company entered into the third amendment of its existing Credit Agreement to extend the maturity date of December 31, 2022. The Company continues to have an aggregate principal amount of $5.0 million credit line facility (“Credit Line”). The Company pays a commitment fee of 0.1% per annum on unused portion of the Credit Line as specified in the Credit Agreement. The borrowed amounts will be in the form of letters of credit which will bear interest of 1.0% per annum. The Company will also pay a fee for each letter of credit that is issued equal to the greater of $500 or 1.0% of the original maximum available amount of the letter of credit. We agreed to deposit cash in a money market account at JPMorgan Chase Bank as collateral for the line of credit equal to $5.1 million. As of March 31, 2022, there is no issued letter of credit from the Credit Line. At March 31, 2022, the cash collateral of $5.2 million was included in restricted cash—short-term in the consolidated balance sheet. 

In three months ended March 31, 2022, we paid $0.1 million to repurchase 12,492 shares of our Class B common stock of our Class B common stock tendered by our employee and an officer to satisfy tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. Such shares were repurchased by us based on their fair market value on the trading day immediately prior to the vesting date.  

Off-Balance Sheet Arrangements

 

We do not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources, other than the following. GRE has performance bonds issued through a third party for the benefit of certain utility companies and for various states in order to comply with the states’ financial requirements for retail energy providers. At March 31, 2022, the Company had outstanding aggregate performance bonds of $15.5 million and minimal amount of unused letters of credit.  

46

---

Item 3.        Quantitative and Qualitative Disclosures About Market Risks.

 

Our primary market risk exposure is the price applicable to our natural gas and electricity purchases and sales. The sales price of our natural gas and electricity is primarily driven by the prevailing market price. Hypothetically, for our GRE segment, if our gross profit per unit in the three months ended March 31, 2022 had remained the same as in the three months ended March 31, 2021, our gross profit from electricity sales would have decreased by $29.8 million and our gross profit from natural gas sales would have increased by $2.7 million in the three months ended March 31, 2022. 

Hypothetically, for our GRE International segment, if our gross loss per unit in the three months ended March 31, 2022 had remained the same as in the three months ended March 31, 2021, our gross loss from electricity sales would have increased by $3.2 million in the three months ended March 31, 2022.

The energy markets have historically been very volatile, and we can reasonably expect that electricity and natural gas prices will be subject to fluctuations in the future. In an effort to reduce the effects of the volatility of the price of electricity and natural gas on our operations, we have adopted a policy of hedging electricity and natural gas prices from time to time, at relatively lower volumes, primarily through the use of put and call options and swaps. While the use of these hedging arrangements limits the downside risk of adverse price movements, it also limits future gains from favorable movements. We do not apply hedge accounting to these options or swaps, therefore the mark-to-market change in fair value is recognized in cost of revenue in our consolidated statements of operations. Refer to Note 7 – Derivative Instruments, for details of the hedging activities.

 

Item 4.             Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of March 31, 2022, due to the material weakness in internal control over financial reporting that was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Remediation. As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2021, we began implementing a remediation plan to address the material weakness mentioned above. The weakness will not be considered remediated, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We expect that the remediation of this material weakness will be completed in 2022.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

47

---

PART II. OTHER INFORMATION

 

Item 1.       Legal Proceedings

 

Legal proceedings in which we are involved are more fully described in Note 18 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.

 

Item 1A.       Risk Factors

 

There are no material changes from the risk factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

 

Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds

 

The following table provides information with respect to purchases by us of shares of our Class B common stock during the first quarter of 2022:

 

		Total Number of  Shares Purchased				Average Price per Share				Total Number  of Shares Purchased as  part of Publicly  Announced Plans or  Programs				Maximum  Number of  Shares that  May Yet Be Purchased Under the  Plans or Programs (1)
January 1–31, 2022			12,492	(2)		$	5.65				—				5,308,366
February 1–28, 2022			—				—				—				5,308,366
March 1–31, 2022			—				—				—				5,308,366
Total			12,492			$	—				—

 

(1)	Under our existing stock repurchase program, approved by our Board of Directors on March 11, 2013, we were authorized to repurchase up to an aggregate of 7.0 million shares of our Class B common stock.
(2)	Pertains to 12,492 Class B common stock that were tendered by employees of ours to satisfy the tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. Such shares were repurchased by us based on their fair market value on the trading day immediately prior to the vesting date. This purchase does not pertain to the existing stock repurchase program.

 

Item 3.         Defaults upon Senior Securities

 

None

 

Item 4.          Mine Safety Disclosures

 

Not applicable

 

Item 5.           Other Information

 

None 

48

---

Item 6.       Exhibits

 

Exhibit Number		Description
31.1*		Certification of Chief Executive Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed or furnished herewith.

  

49

---

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	Genie Energy Ltd.
May 9, 2022	By:	/s/ Michael M. Stein
		Michael M. Stein Chief Executive Officer
May 9, 2022	By:	/s/ Avi Goldin
		Avi Goldin Chief Financial Officer

50

---