Revenue Generation - As of June 30, 2024, approximately 65% of the Company's annual revenues are generated from long-term contracts, while 35% come from sales to the general energy market[156]. - The Company expects first and fourth quarter solar revenue to be lower than in other quarters, with approximately 15% of annual revenues generated in Q1 and 11% in Q4[171]. - Revenue for the three months ended June 30, 2024, decreased by $2.2 million (36%) compared to the same period in 2023, primarily due to lower sales of Green Certificates and energy rates in Romania[183]. - The company's revenue from Romania for the three months ended June 30, 2024, was $3.754 million, a decrease of 24% from $4.942 million in 2023[183]. - Revenue for continuing operations decreased by $3.8 million for the six months ended June 30, 2024, representing a 28% drop year-on-year, primarily due to lower sales of Green Certificates and reduced energy rates in Romania[185]. - Total revenue for the period was $6,148 thousand, down 62% from $16,205 thousand in the same period of 2023[188]. - Revenue for discontinued operations decreased by $5.0 million for the three months and $6.2 million for the six months ended June 30, 2024, due to the sale of operating parks in Poland and the Netherlands[187]. Financial Position - The Company has a working capital deficiency and negative equity, raising doubts about its ability to continue as a going concern without planned financing[161]. - As of June 30, 2024, 95.5% of the Company's total liabilities were project-related debt[172]. - As of June 30, 2024, total debt was $120.2 million, a decrease of 39.4% from $198.4 million as of December 31, 2023[218]. - Cash and cash equivalents decreased to $1.1 million as of June 30, 2024, down from $4.6 million as of December 31, 2023[218]. - Solis Bond Company DAC had $86.6 million in outstanding green bonds as of June 30, 2024, down from $166.1 million as of December 31, 2023[218]. - Solis was in breach of three financial covenants under the bond terms as of June 30, 2024, including a minimum liquidity covenant of €5.5 million[219]. - The Company is currently in discussions to secure project financing to address going concern issues[227]. - The Company has until November 4, 2024, to regain compliance with Nasdaq's minimum market value of listed securities requirement of $35 million[226]. Operational Performance - The total nameplate capacity of the company's renewable energy facilities as of June 30, 2024, was 144.1 MW, down from 151.9 MW in 2023, indicating a decrease in overall production capacity[179]. - Megawatt hours (MWh) sold for the six months ended June 30, 2024, totaled 29,118 MWh, a decrease of 66% compared to 85,548 MWh in the same period of 2023[180]. - The company reported a net loss from continuing operations of $6.837 million for the three months ended June 30, 2024, compared to a net loss of $2.890 million in the same period of 2023[181]. - The company’s total revenue for discontinued operations was $122,000 for the three months ended June 30, 2024, down 98% from $6.344 million in 2023[184]. - The company sold its renewable energy parks in Italy, Poland, and the Netherlands, which contributed to a significant drop in revenue from these regions[182]. Cost and Expenses - The company’s operating expenses for the three months ended June 30, 2024, increased to $5.441 million from $4.506 million in the same period of 2023[181]. - Cost of revenues for continuing operations increased by $0.6 million for the three months ended June 30, 2024, primarily due to higher operational costs in Romania[192]. - Gross margins for the three months ended June 30, 2024, were 57% compared to 82% for the same period in 2023, mainly due to a 24% reduction in revenues and a 99% increase in cost of revenues in Romania[192]. - Selling, general and administrative expenses for continuing operations increased by $1.4 million for the three months ended June 30, 2024, driven by higher compensation, audit, and legal costs[195]. - Management has discontinued certain development activities in Europe, resulting in approximately $3 million in annual savings[196]. - Development costs for the three months ended June 30, 2024, were $0, down from $644 thousand in the same period of 2023[197]. - Development costs decreased by $0.6 million (approximately 50%) for the three months ended June 30, 2024, and by $0.7 million (approximately 50%) for the six months ended June 30, 2024, compared to the same periods in 2023[198]. Financing and Investments - The Company intends to optimize financing sources to support long-term growth and profitability in a cost-efficient manner[163]. - The company intends to finance acquisitions or growth capital expenditures using long-term non-recourse debt that fully amortizes within the asset's contracted life[213]. - In July 2023, the Company acquired a 32 MWp solar PV project in Tennessee for $2.4 million, financed through a bank loan with a 24% APY[231]. - The Company had a principal outstanding balance of $7.0 million as of June 30, 2024, and December 31, 2023[231]. - Net cash provided by investing activities increased by $64.2 million, driven by cash received from the sale of Polish parks totaling $59.4 million[247]. Strategic Initiatives - The Company aims to own and operate over 3.0 giga-watts (GWs) of solar parks over the next five years[156]. - The Company is committed to expanding its transatlantic Independent Power Producer (IPP) portfolio in locations that deliver higher yields and attractive returns on investments[163]. - The Company believes that the renewable energy generation segment will continue to offer growth opportunities driven by the reduction in the cost of solar technologies and government policies encouraging renewable power development[174]. - Approximately 40% of annual revenue in Romania is currently under contract at rates lower than prevailing market rates, leading to strategic adjustments[193]. - The company is mitigating exposure to lower contract rates by entering into shorter-term contracts with customers[193].
Clean Earth Acquisitions (CLIN) - 2024 Q2 - Quarterly Report