5E Advanced Materials, Inc. (FEAM) Earnings Call Transcript & Summary

Good afternoon, and thank you for joining us today for 5E Advanced Materials Special Conference Call Shareholder Update, following the last week's announcement that the company has completed its acquisition of the assets and operations of Searles Valley Minerals. During today's call, management will reference the company's annual report on Form 10-K for the fiscal year ended June 30, 2026. Current report on Form 8-K filed with the SEC on September 15, 2026, including the asset purchase agreement and press release furnished as Exhibits, each of which is available in the Investor Relations section of the company's website. For copies of these materials, you may also contact PRA Communications at team@pracommunications.com. As a reminder, remarks made on today's conference call will contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our business strategy, plans, goals and objectives, the completed acquisition of the assets and operations of Searles Valley Minerals, the expected benefits of the acquisition, including the company's transition to revenue-generating production, management plans for the acquired operations, including recontracting of production, cost reduction and targeted financial performance, the company's base plan and upside case adjusted EBITDA targets, financing plans, including the bridge facility and the evaluation of additional financing alternatives, the company's liquidity and expectations regarding the timing and terms on which it may raise capital. The potential future of evaluation or development of tungsten, sulfate of potash, lithium, borates expansion and opportunities. Potential monetization of noncore assets, third-party and management projections of market supply, demand and pricing and the continued investment of the Ford Cady project. These statements are based on management's current expectations and assumptions and are based on currently available information involving risks and uncertainties that could cause actual results to differ materially and adversely from those projected or discussed. Additional information concerning factors that could cause actual results to differ materially and adversely from these forward-looking statements is contained in our disclosure and public filings with the SEC, including the Form 8-Ks filed in the connection -- with this transaction on September 15, 2026, and October 1, 2026, and our most recent annual report on Form 10-K. The company undertakes no obligation to update forward-looking statements as except required by law. Today's call may also include a discussion of non-GAAP financial measures as that term is defined in Regulation G including adjusted EBITDA and the future annualized adjusted EBITDA targets. Non-GAAP financial measures should not be considered in isolation from or a substitute for financial information presented in compliance with GAAP. Reconciliation of the company's non-GAAP financial measures guidance to the most directly comparable GAAP financial measures cannot be provided without unreasonable efforts and are not provided herein because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, the amount of which could be material. Today's call may include also forward-looking statement referenced to mineral resources, mineral reserves and other scientific and technical information. This information has not been prepared in accordance with subpart 1300 of Regulation SK, and we do warrant with that any information is compliant under SK-1300. We encourage you to reference the full technical support and report and the related summary once filed with the SEC. This afternoon's conference call will be hosted by 5E's Chief Executive Officer, Paul Weibel. Management will first lead off the call by making prepared comments after which we will open the call to your questions. I'll now turn the call over to Paul. Paul?

Good afternoon. And thank you for joining us today, and thank you for making time for what we believe is one of the most important events in this company's history. Last week, we announced that we have completed our acquisition of the assets and operations of Searles Valley Minerals. The purchase was completed through a court-supervised sale process under Section 363 of the U.S. Bankruptcy Code following entry of a sale order by the bankruptcy court and satisfaction of other customary closing conditions. This transaction transforms 5E from a pre-revenue development company into a revenue-generating American producer of boron and critical minerals. There are 2 things I want shareholders to take away from today's call. First, we acquired an operating business where we see a clear path towards approximately $40 million of steady-state consolidated adjusted EBITDA through 3 identifiable operating levers: price, cost and volume. Second, we acquired a much broader critical mineral platform with additional opportunities in borates, lithium, sulfate of potash and tungsten that are not included in that base plan. That combination an operating reset, which we believe we can execute today and significant optionality beyond the base plan is what makes this transaction so important for 5E. In the simplest terms, up until last week, 5E was a company with a significant boron deposit working towards commercial production at Ford Cady. With the completion of this transaction, we are now also the operator of a working industrial minerals complex that produced more than 1 million short tons of borates, salt, sodium sulfate and soda ash in its last fiscal year. While we are excited about the base industrial minerals business we have acquired, we view this acquisition as a critical mineral platform that in addition to the boron includes lithium, SOP and tungsten, which we will discuss in detail later. As of today, we have 2 Southern California production complexes of 129 miles apart operating under 1 integrated commercial organization with 1 mission, secured domestic supply of critical minerals. Let me walk through the transaction itself before I get into the rationale for the transaction and provide a more detailed introduction of Searles Valley Minerals. The acquisition closed last Thursday following entry of a sale order by the bankruptcy court and satisfaction of other customary closing conditions. Total consideration was comprised of $3.4 million in cash plus 8.3 million shares of our common stock and an unsecured 5-year promissory note of approximately $6.2 million and the assumption of specified liabilities. I want to be direct about 1 point here because it matters. Identified legacy environmental liabilities, including CARB, greenhouse gas allowance obligations remained with the seller's estate under the transaction structure. Those liabilities did not transfer to 5E. And with the bankruptcy sale order and states resolution with [indiscernible], 5E receives a fresh start with the state of California and will be treated as a new covered entity within the Cap and Invest program. This was intentional and a specific term for this transaction, not an afterthought. The clean start goes well beyond the card. This was a Section 363 asset purchase, not an acquisition of the old SVM corporate balance sheet. We acquired the operating assets selected only the contracts we desired and assumed only specified liabilities, the legacy debt capital structure, historical creditor and workers' compensation claims and other exclusive liabilities remain with the bankrupt state while many uneconomic legacy contracts were rejected or left behind through the bankruptcy process. We believe we are taking over an industrial and critical mineral platform that has substantially cleansed of the leverage and contractual overhang of the predecessor. That platform includes 3 processing sites, 54 megawatts of on-site cogeneration capacity, the Trona railroad, the water utility, mineral tenure and bring rights, real property wells, pipelines, utilities, laboratories, equipment and experienced workforce. This is infrastructure built over generations, with hundreds of millions of dollars of historical capital invested. With total consideration paid for the acquisition equal to approximately $22.9 million when measured against SVM's gross fixed assets, the transaction value is approximately $0.05 on the dollar before signing any value to the mineral resource base or an optionality we will discuss today. Put simply, we bought the operating platform, not the old balance sheet. I also want to take a moment to thank the Searles Valley Minerals team, including Dennis Cruise and his colleagues for their partnership throughout this process, along with the previous owner of Searles Valley Minerals, who is now 5E's third largest shareholder. With this closing, we've inherited an experienced, capable operating workforce of approximately 257 employees and we are now looking forward to working alongside them, restoring all bore operations to scale and expanding the critical minerals portfolio. So why are we doing this? For years, 5E's mission has been to secure a domestic supply of Boron, which the United States Department of the Interior added to its critical minerals list last year, along with other adjacent critical industrial minerals. This transaction advances that mission immediately. There is more than 150 years of production heritage at Searles Lake, low disturbance solution mining with roughly 75% of depleted brine returned to the lakebed and integrated logistics through short line rail with access to the Port of Long Beach. Just as important, we know this market. Through our operations at Ford Cady, we have already qualified our boric acid with many customers across multiple market segments, our commercial plan is grounded in the structure of the boric market itself with significant global boric producers, Rio Tinto, U.S. Borax and Eddie Madden operating at what we believe is high utilization and no material capacity additions expected over the medium term. This acquisition will advance 5E to become yet another significant boric producer in that market and the only American-owned operator. As a refresher for newcomers to the boric market, the boric market has 2 primary global producers. Boron is irreplaceable in glass, fertilizers as a micronutrient, insulation and critical to nuclear energy, semiconductors, defense and permanent magnets. An independent, supply and demand study recently completed in August, projects that demand will continue to exceed supply through 2032 with market pricing rerating as utilization holds above roughly 90% tightness threshold. While 5E has historically discussed the boric acid market, Searles Valley's primary boric product is Borax pentahydrate, more commonly known as VBR for hosting 5 molecules of water. There are 4 types of minerals where borates are economically extracted, and 5G now holds both Tinkal and Culmonite with the ability to produce v-bor, boric acid and various boric derivatives. What's incredibly important to note is that for VBOR, there were only 3 producers of significance in the world: Eddie, Rio and SVM. This is a market that is already tight yet continues to grow. While Eddie and Rio currently produce approximately 90% of global VBOR supply, both currently account for approximately 65% of global boric acid supply. There is an incremental conversion cost to convert VBOR to boric acid thus creating what we believe is a competitive advantage relative to other boric acid producers and providing 5E, Eddy and Rio, these lower cost options to produce boric acid. Given the structural realities of the VBOR market, 5E will and has entered into new offtake agreements at market based pricing that reflects current supply and demand conditions. In practice, the re-contracting and market-based pricing during a time in which we believe utilization is hitting approximately 90% is one of the more immediate ways. We anticipate this transaction will create value and I want to credit 5E's commercial team and our understanding of supply demand in the boric market for our initial success here. During the bankruptcy process, we stood up for placement contracts contingent on a successful acquisition. We see these contracts as the single biggest lever driving value on a go-forward basis. We believe the supply and demand chart, as seen on the screen is being realized in real time and has been executed as part of 5E's acquisition strategy. Before we get into the numbers, let me formally introduce Searles Valley Minerals and highlight the critical mineral firepower these assets possess. While the headline of approximately 9,000 acres and operating infrastructure is true, it is an understatement of the actual infrastructure and capabilities we have acquired. Searles Valley sits approximately 40 miles southwest of Death Valley, tucked into the southeast corner of the beautiful Sierra Nevada mountain range. Mineral tenure and rights are secured through fee-based land where approximately 25% of minerals are conveyed through real property. The remainder of the minerals sit on federal BLM land where long-term leases secure mineral tenor with a negotiated 5% royalty as compensation paid to the BLM for the mineral tenure. Because of the 25% to 75% split of feed property relative to the BLM land, SVM remits a 3.75% royalty to BLM. [indiscernible] Lake is a dry lake bed with 3 geological zones. The upper salt zone is approximately 70 feet deep and is rich in tinkal brines where the borates are extracted. The lower salt zone includes trona and borates, which is further separated by a mud layer where Trona Rich Minerals extend to depth of approximately 500 feet. Extraction occurs through warm solution mining at approximately 5,000 gallons per minute using heated water. This is different than Ford Cady's operation and that the wells are materially shallower less expensive to drill and materials of construction are exponentially simpler as there are no leaching reagents. Infrastructure includes 3 chemical plants. Today, the Argus plant which has historically produced hundreds of thousands of tons of soda ash will remain idled except the sac plan, which we'll discuss here shortly. Plant #2 is Trona, which has capacity to produce 45,000 tons of boric acid annually, along with 2 furnaces to produce anhydrous Borax and a sulfate of potash plant that was built in 2018. The facilities at Trona are currently idled. However, we have plans to restart boric acid as production ramps. The Weston facility remains operational today, which is where the plant can produce up to 135,000 tons of VBOR and has capacity to produce about 140,000 tons of sodium sulfate. There is a bolt-on industrial salt operation that historically produced 190,000 tons in services customers with reputable and strong brands in oil and gas. Additionally, does have an operational direct lithium extraction pilot plant and the complex power is supplied via 2 twin boilers that operate on natural gas and can each push 27 megawatts of power, and the company plans to fully decouple from the [indiscernible] Edison grid in the near term. Once we have decoupled from the grid, we believe this will generate meaningful savings with a positive impact to OpEx and adjusted EBITDA. In addition to the mining, chemical plant and power infrastructure, the acquisition includes a water utility provider, along with the Trona Railroad, which supplies products back and forth to the Union Pacific Rail line, providing logistical access at global scale. One point of scale is worth emphasizing. This is not a short-life turnaround asset. Though the assets are generating revenue from minerals today and we have commenced a work stream for an SK-1300 technical report. Today, we do not have a formal mineral resource and reserve statement that complies with [ SK-1300 ] standards. However, our filed transaction materials estimate Searles Lake at a roughly 200-year resource life based on current extraction rates. Ford Cady adds the largest resource in the United States with 28.3 million short tons of measured and indicated boric acid resources, while its Phase 1 reserves alone support a technical report, with a 37.5 year mine life. We now have 2 multigenerational Southern California Boron resources inside 1 company. That combination gives 5E one of the most strategically significant Boron resource positions outside of Turkey, together with existing processing, power, rail, water, and logistics infrastructure that would be extraordinarily difficult and costly to replicate today. That leads me to the plan. This is a reset based business and we are approaching it as operators. With this closing, we have now recapitalized an operation that entered Chapter 11 without access to capital and which was burdened by legacy liabilities. Going forward, Boron is not a byproduct for us, it is core to the mission and we'll be bringing our own commercial organization and customer relations shifts to recontract production at market-based pricing. Our plan runs on 3 levers. The first is price. Under prior ownership, annualized VBOR production stood at approximately 82,000 short tons per year with a realized VBOR netback of $4.24 per short ton under the legacy contracts. These legacy contracts are no longer valid contracts and have been rejected by the bankruptcy process. These contracts generated approximately $35 million in VBOR revenue for the legacy business. During the bankruptcy process, we stood up replacement contracts contingent on a successful asset acquisition. That condition precedence has been met, and we now have new valid contracts that are expected to yield 5E a VBOR net [indiscernible] at least 65% higher than prior contracted pricing of the legacy business on a per short ton basis. The new contracts are structured as take-or-pay include fixed pricing and our repriced debt market. We expect to remain disciplined on price, and our commercial team is currently in the market at higher prices than our initial offtake agreements we have executed prior to the acquisition. Beginning on day 1 and assuming the same annualized short-term production schedule, 5E Searles Valley mineral targets approximately $57 million in annual VBOR revenue. Our expectation is that out of the gate, we will run at the current annualized rates and with operational improvements by restarting the SAC plant, our VBOR production for the remaining fiscal year targets 95,000 to 100,000 tons of VBOR. Given the new contracting structure, we expect to bank an incremental $22 million in VBOR relative to our base plan with the majority of output derived from a limited number of creditworthy customers and segmenting the sales mix towards higher value products. The second lever is cost, which we have already substantially achieved where we have rejected many legacy contracts through the bankruptcy process. The legacy soda ash business generated its power to burning coal. While the business today is operating on natural gas, this limits CO2 exposure and with the Soda Ash exit reduced the fixed cost footprint. Additionally, we believe we can reduce annual OpEx approximately 13.8 million per year by fully decoupling from the grid for a nominal CapEx of $0.5 million. The third and final lever is volume. With the largest drivers coming from our plans to restart the SAC plant, ramp VBOR, restart boric acid production in year 2 and grow sodium bicarbonate output towards base plan capacity over the next 3 years. The restart of the SAC plant is a critical milestone, we believe can provide 2 primary levers. The SAC plant is the facility where natural gas emissions are captured into the brine process thus providing a free source of the certification with lower brine carbonation expected to increase VBOR output 20,000 tons on an annualized basis. This is the driver that is expected to yield 95,000 to 100,000 tons of VBOR production in the current fiscal year relative to the 80 gap to 2,000 tons they're doing today. The full restart of SAC is targeted to be completed by the end of the quarter. With the restart of SAC, this will push additional heat to the lake, which is expected to increase brine grades further driving output towards West End's capacity, which stands at 135,000 tons of VBOR. Stack restart can also produce a sodium bicarbonate byproduct that can be sold, which we expect can generate incremental revenue. The SAC plant has the capacity to produce 700 tons per day of sodium bicarb with approximately 40,000 tons of demand available to sell in the regional and lower segments of the market on an annualized basis with a greater opportunity to mature this market to 200,000 tons annual towards higher segments of the market. Taken together, our base plan targets approximately $40 million of steady-state annual consolidated adjusted EBITDA and we expect to reach positive fiscal year consolidated adjusted EBITDA in fiscal year 2028. However, adjusting for the acquisition-related and integration costs on an adjusted EBITDA basis today, we expect to be very close to breakeven for our current fiscal year ending June 30, 2027. We believe for nominal consideration we acquired a significant asset base and a very close to cash flow positive business based on our contracting strategy that has positioned 5E to win. I want to be very clear on the $40 million adjusted EBITDA number. It is our expectation under our base plan, not a ceiling on the earnings potential of these assets. It is built around the immediate operating levers we identified and can execute, repricing, the cost reset, the SAC restart, boric acid and volume recovery. It does not include the longer dated optionality from further boron expansion, lithium or tungsten. We estimate that the boric's expansion case already identified in our work could add approximately $30 million -- $38 million of annual adjusted EBITDA on its own, nearly doubling the base case earnings before any contribution from tungsten or lithium. And if the boron market develops, as our market work suggests, we believe our potential earnings can scale further. Investors should view $40 million as the operating expected base case, we believe we can build on, not as our view of the ultimate potential of Searles Valley. On financing, this transaction is already supported by 5E's balance sheet that includes $15 million cash and a $10 million senior secured bridge facility from the prior owner, where $7 million has already been funded. Beyond the bridge facility, our go-forward financing plan includes working with our banking partners to set up a working capital debt facility and I have been actively in discussions with various critical mineral debt lenders where the take-or-pay offtake structure, fixed pricing, escalators and liquidated damage provisions of the contracts have driven active discussions. That plan is sized against a peak prefinancing capital need of approximately $24 million in its first year post the acquisition. It is the company's intention to explore all financing options that minimize cost of capital and ensure a smooth execution of our plan. Now that we have presented our base plan for the go-forward business, I want to highlight the tremendous optionality SVM provides. As I mentioned, we have acquired a critical minerals platform, which includes 4 core minerals on the critical minerals list. The first includes borates where we believe existing infrastructure provides 5E the ability to produce 135,000 tons of VBOR and 45,000 tons of boric acid as well as anhydrous borax. This represents materially more demand than what we originally contracted for as this market is structurally very tight on supply. There are additional CapEx projects we can implement to expand VBOR production, and we believe expanding VBOR capacity, complemented by the scale of our resource position, gives 5E the opportunity to continue its position as a significant global boron producer and the only American-owned operator. Additionally, brine includes Potash, a critical mineral and fertilizer where infrastructure currently sits mothballed, which we believe can be restarted based on market conditions and demand. The third critical mineral is lithium, where SVM has an installed DLE pilot operation that has successfully produced lithium and we believe has real potential to become a California-based lithium provider. The final critical mineral and what excites me the most about SVM is that the brine includes approximately 40 to 50 ppm of the Element W, also known as Tungsten. In fact, over 35 years was devoted to R&D on the tungsten brine and is well documented in historical reports and literature. The R&D culminated and work performed in the 1980s by the U.S. Bureau of Mines. While not compliant with SK-1300's under standards, Bureau of Mines report of investigations released in 1985 described Searles Lake as the largest known domestic tungsten resource and estimated approximately 135 million pounds of tungsten contained in the brines. Recovering it has been a target of industrial and federal research for many years and the recovery process itself is not novel or unproven. It was independently piloted at meaningful scale by 2 separate organizations, including the United States Bureau of Mines using compatible ion exchange chemistry with the Bureau of Mines campaign alone processing over 500,000 gallons of real West End brine. The historical conclusion was that process worked technically but was only marginally economic. The Bureau of Mines 1984 evaluation found a 1% after-tax return had been prevailing tungsten prices reaching a 15% return would have required prices last seen around 1981. Current Tungsten pricing today, elevated by China's 2025 export restrictions is now running at multiples of that historical threshold on an inflation-adjusted basis. Using a mass balance and an economic model benchmarked against the historical pilot record and a deliberately conservative price range of $380 to $675 per metric ton unit of WO3, we believe the stand-alone Tungsten project is a meaningful opportunity and economic level for growth. While this economic analysis is preliminary, we believe the upside is very real. During our diligence, we have gained multiple brine samples in the production process and independently validated presidents of Tungsten. Further, Tungsten production is viewed as a bolt-on operation, and we believe would position 5E's operation to be a global low-cost producer of tungsten. You see the SAC plant can provide a free source of certification, and we'll eliminate any need to procure sulfuric acid. For the record, this is not included in our base plan we presented, and 5E expects this news can trigger outreach and non-dilutive funding opportunities. Elevate the status of SVM as a near-term domestic solution and provide an opportunity to diversify U.S. tungsten supply, which currently relies heavily on Chinese imports. What we believe makes the tungsten opportunity unusual is that this is not a conventional new mine development. We are already pumping, heating and processing Searles lake brine to recover borates at 5,000 gallons per minute. And historically, the depleted brine was returned to the lake with the tungsten still in it. The United States Bureau of Mines demonstrated at West End that more than 90% of the tungsten could be extracted from the existing brine stream using Ion Exchange. As a result, there is essentially no separate mining operation required to access the tungsten feed. The brine is already being mined and moved for the core business. The incremental work is a recovery and purification circuit before the brine is returned. That is why our preliminary capital concept is measured in tens of millions of dollars rather than hundreds. While we work to achieve a VBOR and boric acid turnaround, we intend to derisk tungsten in parallel through current sampling, updated recovery and metallurgical work, engineering, product qualification and an updated economic case with the objective of moving into production as quickly as those work streams justify. Tungsten is on the 2025 U.S. Critical Minerals last and the USGS identifies it among the highest risk critical mineral supply chains with the Department of Defense already using funding to support domestic tungsten projects that has historically been uneconomic but only stand economic today based largely on China's constraint on supply and grip on pricing. We believe that creates credible pathways to pursue non-dilutive government support as we work to advance the opportunity. If current work validates the historical recovery results Tungsten has the potential to become economically as important as or more important than the current VBOR business. Importantly, none of that value is included in our $40 million base plan. Before I close today, I also want to spend a moment on our Board. The turnaround expertise sitting at our table is a real asset in executing our plan, not a formality. Graham van’t Hoff, our Chairman, ran Shell's $25 billion global chemicals business through 7 years of record profitability. -- incredibly grateful for 5G's Board's mentorship and counsel as we negotiated this highly complex transaction. Finally, I want to thank the 5E team for their relentless support in assessing the SVM business opportunity and identifying the turnaround plan to support the path to profitability. Let me close with Ford Cady because I don't want anyone to hear this news and conclude that we've walked away from it. We haven't. Ford Cady's large-scale SK-1300 supported project and reserve has meaningfully advanced and stands at a derisked position to turn on as market conditions determine. However, the immediate priority is SVM and the cash flow opportunity. These are not 2 separate stories. They are 1 integrated boron platform with a commercial organization selling into the same global customer base with near-term production at Searles Valley today and Ford Cady's long-life, low-cost capacity to follow. Overall, this transaction is the single largest step for this company. and has taken it towards its mission. We have transformed from a developer with a great deposit and a plan to a producer with revenue and experienced workforce, multiple operating plans and products an incredible, identified what we believe is a path to achieving annual steady-state adjusted EBITDA of approximately $40 million with potential meaningful upside opportunities that are not in our base plan today. We believe this transaction and the discipline with which we structured it will deliver shareholder value. The way I would frame the acquisition is in 2 layers: First, an immediate operating reset was a clear path towards achieving the $40 million adjusted EBITDA base case. And second, multigenerational critical minerals platform with several independent ways that could potentially expand the earnings base. We acquired the infrastructure and resource position at a fraction of historically invested capital and stripped away much of the predecessors legacy financial and contractual burden and did not pay for the Tungsten, lithium, a broader void expansion optionality in our base case. That asymmetry is what makes this transaction so compelling for 5E. Our priority now is straightforward: execute the base plan first, generate cash flow and systematically advance the upside. That is the opportunity we see in front of 5E. With that, we are ready to open up the call for questions.

[Operator Instructions] Our first question comes from the line of Tate Sullivan from Maxim Group.

And on Slide 12, you showed the EBITDA timing of getting to the $40 million run rate potentially. And then does most of this in year 1 and year 2 or all of it depend on just the West End processing facility. And then will Argus and Trona remain idle? Is that what you mentioned earlier?

Tate, thanks for the question. So in year 1, the focus is just West End and as our primary Borax increases at the end of year 1, we would look to restart Trona in year 2. And so for year 2, we're operating both West End and Trona and then in year 3, we're maxing out boric acid production. The only caveat being within Argus does it the stack plan, and that should turn on here, hopefully, in the next 3 months.

Okay. And you said you have started recontracting production? Or are you already finished that process.

So I would say about 2/3s are contracted. We wanted to materially derisk the revenue stream coming into this, but our commercial team is still out in the market.

And just a brief -- a little more history on the acquisition. Was it -- I mean, you have on 1 of the slides. Was it primarily the soda ash operations that were the loss generating on the economic contracts that you mentioned?

Sure. So the business is actually a pretty unfortunate series of events where there was a kind of 2x of [indiscernible] back in 2018 and 2019. That was the Ridgecrest Earthquake as well as the COVID-19 pandemic. And then coming out of COVID, ultimately, the soda ash market experienced some pretty substantial weakness in price, which led to losses and then ultimately, it was the California Air Resources Board, where approximately $76 million of liabilities was accumulated on an annual basis, just for simplicity, the company gets allowances and needs to surrender those allowances at the end of the year. And so -- but not all of the allowances need to be surrendered at each year. And so those basically, there was a bank account with CO2 credits in it and those CO2 credits, any excess that was not due to surrender was sold in the open market. So there was approximately $76 million due to the state of California and bankruptcy took care of that.

And one more for me. Is it in the release when you announced the acquisition mid-September, you mentioned near-term revenue. I'm right at close of the acquisition or you have closed -- I mean, are you generating some revenue from the current acquisition.