FINANCIAL STATEMENTS.
−Removed: INGREDIENTS, INC.
+Added: ALTO INGREDIENTS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
−Removed: September 30,
Current Assets:
Cash and cash equivalents
−Removed: Accounts receivable, net (net of allowance for doubtful accounts of $ 360 and $ 260 , respectively)
−Removed: Prepaid inventory
+Added: Restricted cash
+Added: Accounts receivable (net of allowance for doubtful accounts of $ 409 and $ 378 , respectively)
Derivative instruments
−Removed: Assets held-for-sale
+Added: Notes receivable, current
Other current assets
3 unchanged sentences
Right of use operating lease assets, net
−Removed: Notes receivable
−Removed: Intangible assets
+Added: Notes receivable, noncurrent
+Added: Intangible assets, net
Total other assets
−Removed: derived from the audited consolidated financial statements for the year ended December 31, 2020.
+Added: derived from the audited financial statements for the year ended December 31, 2021.
See accompanying notes to consolidated financial
−Removed: INGREDIENTS, INC.
+Added: ALTO INGREDIENTS, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(in thousands, except par value)
−Removed: September 30,
LIABILITIES AND STOCKHOLDERS’ EQUITY
3 unchanged sentences
Current portion – operating leases
−Removed: Current portion – long-term debt
Derivative instruments
−Removed: Liabilities held-for-sale
Other current liabilities
Total current liabilities
−Removed: Long-term debt, net of current portion
+Added: Long-term debt
Operating leases, net of current portion
8 unchanged sentences
1,684 shares authorized;
−Removed: no shares issued and outstanding as of September 30, 2021 and December 31, 2020;
+Added: no shares issued and outstanding as of March 31, 2022 and December 31, 2021;
1,581 shares authorized;
−Removed: 927 shares issued and outstanding as of September 30, 2021 and December 31, 2020;
−Removed: liquidation preference of $ 20,609 as of September 30, 2021
+Added: 927 shares issued and outstanding as of March 31, 2022 and December 31, 2021;
+Added: liquidation preference of $ 18,075 as of March 31, 2022
Common stock, $ 0.001 par value;
300,000 shares authorized;
−Removed: 72,800 and 72,487 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively
+Added: 74,411 and 72,778 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively
Non-voting common stock, $ 0.001 par value;
3,553 shares authorized;
−Removed: 1 share issued and outstanding as of September 30, 2021 and December 31, 2020
+Added: 1 share issued and outstanding as of March 31, 2022 and December 31, 2021
Additional paid-in capital
3 unchanged sentences
Total Liabilities and Stockholders’ Equity
−Removed: * Amounts derived from the audited
−Removed: consolidated financial statements for the year ended December 31, 2020.
−Removed: INGREDIENTS, INC.
+Added: * Amounts derived from the audited financial statements for the year ended December 31, 2021.
+Added: See accompanying notes to consolidated financial
+Added: ALTO INGREDIENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
−Removed: in thousands, except per share data)
+Added: (unaudited, in thousands, except per share
Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
Cost of goods sold
−Removed: Gross profit (loss)
Selling, general and administrative expenses
−Removed: Asset impairments
−Removed: Gain on litigation settlement
+Added: Asset impairment
Income (loss) from operations
Interest expense, net
−Removed: Income from loan forgiveness
−Removed: Fair value adjustments
−Removed: Other income (expense), net
−Removed: Income (loss) before benefit for income taxes
−Removed: Benefit for income taxes
−Removed: Consolidated net income (loss)
−Removed: Net loss attributed to noncontrolling interests
−Removed: Net income (loss) attributed to Alto Ingredients, Inc.
+Added: Other income, net
+Added: Income (loss) before provision for income taxes
+Added: Provision for income taxes
+Added: Net income (loss)
Preferred stock dividends
Net income (loss) available to common stockholders
−Removed: Net income (loss) per share, basic
−Removed: Net income (loss) per share, diluted
+Added: Net income (loss) per share, basic and
Weighted-average shares outstanding, basic
1 unchanged sentence
See accompanying notes to consolidated financial
−Removed: INGREDIENTS, INC.
+Added: ALTO INGREDIENTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended
Operating Activities:
−Removed: Consolidated net income
−Removed: Adjustments to reconcile consolidated net income to net
−Removed: cash (used in) provided by operating activities:
+Added: Consolidated net income (loss)
+Added: Adjustments to reconcile consolidated net income (loss) to
+Added: net cash provided by (used in) operating activities:
Depreciation and amortization of intangibles
−Removed: Asset impairments
−Removed: Income from loan forgiveness
+Added: Asset impairment
+Added: Gains on derivative instruments
Non-cash compensation
Amortization of deferred financing fees
−Removed: Fair value adjustments
−Removed: Interest added to debt
Bad debt expense
−Removed: Changes in operating assets and liabilities:
+Added: Changes in operating assets and liabilities, net of business
Accounts receivable
−Removed: Prepaid expenses and other assets
−Removed: Prepaid inventory
Operating leases
1 unchanged sentence
Liabilities held-for-sale
−Removed: Accounts payable and accrued expenses
−Removed: Net cash (used in) provided by operating activities
+Added: Accounts payable and accrued liabilities
+Added: Net cash provided by (used in) operating
Investing Activities:
−Removed: Proceeds from Madera Sale
−Removed: Proceeds from PAL Sale
Additions to property and equipment
−Removed: Net cash provided by investing activities
+Added: of Eagle Alcohol, net of cash acquired
+Added: Net cash used in investing activities
Financing Activities:
−Removed: Net proceeds from (payments on) Kinergy’s line of credit
+Added: Net proceeds from Kinergy’s line of credit
+Added: Proceeds from principal payments on notes receivable
Proceeds from stock option exercises
−Removed: Principal payments on borrowings
−Removed: Proceeds from warrant exercises
−Removed: Proceeds from issuance of common stock
−Removed: Proceeds from borrowings
Preferred stock dividends paid
−Removed: Net cash provided by (used in) financing activities
−Removed: Net change in cash and cash equivalents
−Removed: Cash and cash equivalents at beginning of period
−Removed: Cash and cash equivalents at end of period
−Removed: Supplemental Cash Flow Information:
+Added: Principal payments on borrowings
+Added: Net cash provided by financing activities
+Added: Net decrease in cash, cash equivalents and restricted cash
+Added: Cash, cash equivalents and restricted cash at beginning
+Added: Cash, cash equivalents and restricted cash at end of period
+Added: Reconciliation of total cash, cash equivalents and restricted
+Added: Cash and cash equivalents
+Added: Restricted cash
+Added: Total cash, cash equivalents and restricted cash
+Added: Supplemental Information:
Interest paid
+Added: Income tax refunds
Accrued preferred stock dividends
See accompanying notes to consolidated financial
−Removed: INGREDIENTS, INC.
+Added: ALTO INGREDIENTS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
4 unchanged sentences
stock issued to employees and directors, net of cancellations and tax
−Removed: option exercises
+Added: issued for Eagle Alcohol acquisition
stock dividends
1 unchanged sentence
$ ( 694,695 )
−Removed: stock issued to employees and directors, net of cancellations and tax
−Removed: stock dividends
−Removed: June 30, 2021
−Removed: $ ( 724,157 )
−Removed: stock issued to employees and directors, net of cancellations and tax
−Removed: stock dividends
−Removed: September 30, 2021
−Removed: $ ( 727,608 )
January 1, 2021
1 unchanged sentence
stock issued to employees and directors, net of cancellations and tax
−Removed: of common stock
+Added: option exercises
stock dividends
1 unchanged sentence
$ ( 732,232 )
−Removed: stock issued to employees and directors, net of cancellations and tax
−Removed: Stock-based compensation
−Removed: Sale of interests in PAL
−Removed: Preferred stock dividends
−Removed: Net income (loss)
−Removed: Balances, June 30, 2020
−Removed: $ ( 730,980 )
−Removed: Restricted stock issued to employees and directors, net of cancellations and tax
−Removed: Stock-based compensation
−Removed: Issuances of common stock
−Removed: Warrant exercise
−Removed: Preferred stock dividends
−Removed: Balances, September 30, 2020
−Removed: $ ( 716,084 )
−Removed: See accompanying notes to consolidated financial
−Removed: INGREDIENTS, INC.
−Removed: TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: accompanying notes to consolidated financial statements.
+Added: ALTO INGREDIENTS, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ORGANIZATION AND BASIS OF PRESENTATION.
−Removed: and Business – The consolidated financial statements include, for all periods presented, the accounts of Alto Ingredients,
−Removed: Inc., a Delaware corporation (“Alto Ingredients”), and its direct and indirect subsidiaries (collectively, the “Company”),
−Removed: including its wholly-owned subsidiaries, Kinergy Marketing LLC, an Oregon limited liability company (“Kinergy”), Alto Nutrients
−Removed: LLC, a California limited liability company, Alto Op Co., a Delaware corporation, and all seven of the Company’s production facilities
−Removed: through May 14, 2021.
−Removed: As discussed in Note 2, on May 14, 2021, the Company completed the sale of its production facility located in Madera,
−Removed: Company is a leading producer and marketer of specialty alcohols and essential ingredients.
−Removed: The Company also produces and markets fuel-grade
−Removed: The Company’s production facilities in Pekin, Illinois are located in the heart of the Corn Belt, benefit from low-cost
−Removed: and abundant feedstock and allow for access to many additional domestic markets.
−Removed: In addition, the Company’s ability to load unit
−Removed: trains and barges from these facilities allows for greater access to international markets.
−Removed: The Company’s three production facilities
−Removed: in California, Oregon and Idaho, located in close proximity to both feed and fuel-grade ethanol customers, enjoy unique advantages in
−Removed: efficiency, logistics and product pricing.
−Removed: The Company had, as of September
−Removed: 30, 2021, a combined alcohol production capacity of 410 million gallons per year and produces, on an annualized basis, nearly
−Removed: 1.2 million tons of essential ingredients on a dry matter basis, such as dried yeast, corn gluten meal, corn gluten feed, and distillers
−Removed: grains and liquid feed used in commercial animal feed and pet foods.
−Removed: In addition, the Company markets, on an annualized basis, over 250
−Removed: million gallons combined of its own alcohol production and third-party production.
−Removed: On November 5, 2021, the Company closed the sale of
−Removed: its Stockton facility, reducing its alcohol production capacity by 60 million gallons of fuel-grade ethanol per year.
−Removed: Company focuses on four key markets:
+Added: Organization and Business
+Added: – The consolidated financial statements include, for all periods presented, the accounts of Alto Ingredients, Inc., a Delaware
+Added: corporation (“Alto Ingredients”), and its direct and indirect wholly-owned subsidiaries (collectively, the “Company”),
+Added: including Kinergy Marketing LLC, an Oregon limited liability company (“Kinergy”), Alto Nutrients, LLC, a California limited
+Added: liability company (“Alto Nutrients”), Alto Op Co., a Delaware corporation (“Alto Op Co.”), Alto Pekin, LLC, a
+Added: Delaware limited liability company (“Alto Pekin”) and Alto ICP, LLC, a Delaware limited liability company (“ICP”),
+Added: and the Company’s production facilities in Oregon and Idaho.
+Added: On May 14, 2021 and November
+Added: 4, 2021, the Company completed the sale of its production facilities located in Madera and Stockton, California, respectively.
+Added: results of these facilities are included in the Company’s results reported for the three months ended March 31, 2021.
+Added: discussed in Note 2, on January 14, 2022, the Company acquired 100 % ownership of Eagle Alcohol Company LLC, a Missouri limited
+Added: liability company (“Eagle Alcohol”), which is now a wholly-owned subsidiary of Alto Ingredients, Inc.
+Added: The results of
+Added: Eagle Alcohol since the date of the acquisition are included in the Company’s results reported for the three months ended
+Added: March 31, 2022.
+Added: The Company is a leading
+Added: producer and distributor of specialty alcohols and essential ingredients.
+Added: The Company also produces, markets and distributes
+Added: renewable fuel.
+Added: The Company’s production facilities in Pekin, Illinois are located in the heart of the Corn Belt, benefit from
+Added: low-cost and abundant feedstock and allow for access to many additional domestic markets.
+Added: In addition, the Company’s ability
+Added: to load unit trains and barges from these facilities allows for greater access to international markets.
+Added: The Company’s two
+Added: production facilities in Oregon and Idaho are located in close proximity to both feed and renewable fuel ethanol customers and
+Added: thus enjoy unique advantages in efficiency, logistics and product pricing.
+Added: The Company has a combined
+Added: alcohol production capacity of 350 million gallons per year and produces, on an annualized basis, nearly 1.2 million tons of
+Added: essential ingredients on a dry matter basis, such as dried yeast, corn gluten meal, corn gluten feed, and distillers grains and
+Added: liquid feed used in commercial animal feed and pet foods.
+Added: In addition, the Company sells alcohols acquired from other producers, and
+Added: markets and distributes fuel-grade ethanol produced by third parties.
+Added: The Company focuses on four
Health, Home & Beauty ;
1 unchanged sentence
Essential Ingredients ;
−Removed: Renewable Fuels .
−Removed: Products for the Health, Home & Beauty market include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals,
−Removed: hand sanitizers, disinfectants and cleaners.
−Removed: Products for the Food & Beverage markets include grain neutral spirits used in alcoholic
−Removed: beverages and vinegar as well as corn germ used for corn oils.
−Removed: Products for Essential Ingredients markets include yeast, corn gluten
−Removed: and distillers grains used in commercial animal feed and pet foods.
−Removed: Renewable Fuels includes fuel-grade ethanol and distillers corn oil
−Removed: used as a feedstock for renewable diesel fuel.
−Removed: of September 30, 2021, the Company was operating at approximately 71% of its 410 million gallon annual production capacity.
−Removed: conditions change, the Company may increase, decrease or idle production at one or more operating facilities or resume operations at
−Removed: any idled facility.
−Removed: of Presentation – Interim Financial Statements – The accompanying unaudited consolidated financial statements
−Removed: and related notes have been prepared in accordance with accounting principles generally accepted in the United States for interim financial
−Removed: information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
−Removed: Results for interim periods should not be considered
−Removed: indicative of results for a full year.
−Removed: These interim consolidated financial statements should be read in conjunction with the consolidated
−Removed: financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31,
−Removed: The accounting policies used in preparing these consolidated financial statements are the same as those described in Note 1 to
−Removed: the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
−Removed: opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the
−Removed: results for interim periods have been included.
+Added: and Renewable Fuels .
+Added: Products for the Health, Home & Beauty market include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers,
+Added: disinfectants and cleaners.
+Added: Products for the Food & Beverage markets include grain neutral spirits used in alcoholic beverages and
+Added: vinegar as well as corn germ used for corn oils.
+Added: Products for Essential Ingredients markets include yeast, corn gluten and distillers
+Added: grains used in commercial animal feed and pet foods.
+Added: Renewable Fuels includes fuel-grade ethanol and distillers corn oil used as a feedstock
+Added: for renewable diesel fuel.
+Added: As of March 31, 2022, all of
+Added: the Company’s production facilities were operating.
+Added: As market conditions change, the Company may increase, decrease or idle production
+Added: at one or more operating facilities or resume operations at any idled facility.
+Added: Basis of Presentation – Interim
+Added: Financial Statements – The accompanying unaudited consolidated financial statements and related notes have been prepared
+Added: in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions
+Added: to Form 10-Q and Rule 10-01 of Regulation S-X.
+Added: Results for interim periods should not be considered indicative of results for
+Added: These interim consolidated financial statements should be read in conjunction with the consolidated financial statements
+Added: and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
+Added: The accounting
+Added: policies used in preparing these consolidated financial statements are the same as those described in Note 1 to the consolidated financial
+Added: statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
+Added: In the opinion of management, all
+Added: adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods
+Added: have been included.
All significant intercompany accounts and transactions have been eliminated in consolidation.
8 unchanged sentences
attempted contacts with the customer at specified intervals.
−Removed: If, after a specified number of days, the Company has been unsuccessful in
−Removed: its collection efforts, a bad debt allowance is recorded for the balance in question.
+Added: If, after a specified number of days, the Company has been unsuccessful
+Added: in its collection efforts, a bad debt allowance is recorded for the balance in question.
Delinquent accounts receivable are charged against
the allowance for doubtful accounts once uncollectibility has been determined.
−Removed: The factors considered in reaching this determination are
−Removed: the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer.
−Removed: financial condition of the Company’s customers were to deteriorate, resulting in an impairment of ability to make payments, additional
−Removed: allowances may be required.
−Removed: Of the accounts receivable balance,
−Removed: approximately $ 59,997,000 and $ 35,839,000 at September 30, 2021 and December 31, 2020, respectively, were used as collateral under
−Removed: Kinergy’s operating line of credit.
−Removed: The allowance for doubtful accounts was $ 360,000 and $ 260,000 as of September 30, 2021 and
−Removed: December 31, 2020, respectively.
−Removed: The Company recorded a bad debt recovery of $ 3,000 and no bad debt expense for the three months
−Removed: ended September 30, 2021 and 2020, respectively.
−Removed: The Company recorded bad debt expense of $ 140,000 and $ 1,000 for the nine months
−Removed: ended September 30, 2021 and 2020, respectively.
−Removed: The Company does not have any off-balance sheet credit exposure related to its
+Added: The factors considered in reaching this determination
+Added: are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer.
+Added: If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of ability to make payments,
+Added: additional allowances may be required.
+Added: Of the accounts receivable balance, approximately
+Added: $ 52,008,000 and $ 63,929,000 at March 31, 2022 and December 31, 2021, respectively, were used as collateral under Kinergy’s operating
+Added: line of credit.
+Added: The allowance for doubtful accounts was $ 409,000 and $ 378,000 as of March 31, 2022 and December 31, 2021, respectively.
+Added: The Company recorded a bad debt expense of $ 31,000 and $ 91,000 for the three months ended March 31, 2022 and 2021, respectively.
+Added: Company does not have any off-balance sheet credit exposure related to its customers.
Financial Instruments – The
−Removed: carrying values of cash and cash equivalents, accounts receivable, derivative assets, accounts payable, accrued liabilities and derivative
−Removed: liabilities are reasonable estimates of their fair values because of the short maturity of these items.
−Removed: The Company believes the carrying
−Removed: value of its notes receivable are not considered materially different than fair value due to their recent issuances, and other long-term
−Removed: debt instruments’ carrying values are not considered materially different than fair value because the interest rates on these instruments
−Removed: are variable, and are considered Level 2 fair value measurements.
+Added: carrying values of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, derivative assets, accounts payable,
+Added: accrued liabilities and derivative liabilities are reasonable estimates of their fair values because of the short maturity of these items.
+Added: The Company believes the carrying value of its long-term debt instruments are not considered materially different than fair value because
+Added: the interest rates on these instruments are variable.
+Added: Business Combinations – Business
+Added: acquisitions are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
+Added: (“ASC”) 805 “Business Combinations”.
+Added: FASB ASC 805 requires the reporting entity to identify the acquirer, determine
+Added: the acquisition date, recognize and measure the identifiable tangible and intangible assets acquired, the liabilities assumed and recognize
+Added: and measure goodwill or a gain from the purchase.
+Added: Assets acquired and liabilities assumed are recorded at their fair values and the excess
+Added: of the purchase price over the amounts assigned is recorded as goodwill.
+Added: Adjustments to fair value assessments are recorded to goodwill
+Added: over the measurement period (not longer than twelve months).
Estimates and Assumptions –
−Removed: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions
−Removed: that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
−Removed: statements and the reported amounts of revenues and expenses during the reporting period.
−Removed: Significant estimates are required as part of
−Removed: determining the allowance for doubtful accounts, net realizable value of inventory, estimated lives of property and equipment, long-lived
−Removed: asset impairments, fair value of warrants, valuation allowances on deferred income taxes and the potential outcome of future tax consequences
−Removed: of events recognized in the Company’s financial statements or tax returns, and the valuation of assets acquired and liabilities
−Removed: assumed as a result of business combinations.
−Removed: Actual results and outcomes may materially differ from management’s estimates and
−Removed: ASSETS AND LIABILITIES HELD-FOR-SALE.
−Removed: In October 2020, the Company’s Board of
−Removed: Directors approved a plan to sell the Company’s fuel-grade ethanol production facilities located in Madera and Stockton, California.
−Removed: As a result, the Company determined the related long-lived asset groups should be classified as held-for-sale.
−Removed: During the nine months
−Removed: ended September 30, 2021, the Company provided for an additional impairment charge of $ 1.2 million based on revised fair value estimates.
−Removed: On May 14, 2021, the Company closed the sale of
−Removed: its Madera facility for total consideration of $ 28.3 million, comprised of $ 19.5 million in cash and $ 8.8 million in assumption of liabilities,
−Removed: resulting in a net loss on sale of less than $ 0.1 million, recorded as other income (expense), net in the Company’s consolidated
−Removed: statements of operations.
−Removed: All of the cash proceeds were used to repay a significant portion of the Company’s term debt and accrued
−Removed: On November 5, 2021, the Company closed the
−Removed: sale of its Stockton facility for gross proceeds of $ 24.0 million in cash.
−Removed: With the net cash proceeds, the Company repaid its
−Removed: parent notes payable and the Pekin and ICP loans in full.
−Removed: During 2021, the Company has agreed to sell certain
−Removed: assets of the Company’s idled facility in Canton, Illinois.
−Removed: As a result, the Company determined the related long-lived asset groups
−Removed: should be classified as held-for-sale at September 30, 2021.
−Removed: During the nine months ended September 30, 2021, the Company recorded an
−Removed: estimated impairment charge of $ 1.9 million based on fair value estimates.
−Removed: The Company classified the following assets and
−Removed: liabilities as held-for-sale as of September 30, 2021 (in thousands):
−Removed: Property and equipment, net
−Removed: Right of use operating lease assets, net
−Removed: Assets held-for-sale
−Removed: Liabilities held-for-sale – operating leases
−Removed: The Company classified the following assets and
−Removed: liabilities as held-for-sale as of December 31, 2020 (in thousands):
−Removed: Property and equipment, net
−Removed: Right of use operating lease assets, net
−Removed: Assets held-for-sale
−Removed: Operating lease obligations
−Removed: Assessment financing
−Removed: Liabilities held-for-sale
−Removed: For the three months ended September 30, 2021,
−Removed: net sales attributed to the results of operations for Stockton and Madera were $ 1.5 million and $ 0 , respectively.
−Removed: For the three months
−Removed: ended September 30, 2020, net sales attributed to the results of operations for Stockton and Madera were $ 0.2 million and less than $ 0.1
−Removed: million, respectively.
−Removed: For the three months ended September 30, 2021, pre-tax income (loss) attributed to the results of operations for
−Removed: Stockton and Madera was income of $ 0.3 million and loss of $ 0.2 million, respectively.
−Removed: For the three months ended September 30, 2020,
−Removed: pre-tax loss attributed to the results of operations for Stockton and Madera was $ 1.8 million and $ 1.8 million, respectively.
−Removed: For the nine months ended September 30, 2021,
−Removed: net sales attributed to the results of operations for Stockton and Madera were $ 2.0 million and $ 0 , respectively.
−Removed: For the nine months
−Removed: ended September 30, 2020, net sales attributed to the results of operations for Stockton and Madera were $ 22.6 million and $ 22.5 million,
−Removed: respectively.
−Removed: For the nine months ended September 30, 2021, pre-tax loss attributed to the results of operations for Stockton and Madera
−Removed: was $ 1.9 million and $ 0.8 million, respectively.
−Removed: For the nine months ended September 30, 2020, pre-tax loss attributed to the results
−Removed: of operations for Stockton and Madera was $ 5.4 million and $ 5.4 million, respectively.
+Added: The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States
+Added: requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
+Added: assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
+Added: Significant estimates are required as part of determining the allowance for doubtful accounts, net realizable value of inventory,
+Added: estimated lives of property and equipment, long-lived asset impairments, fair value of warrants, valuation allowances on deferred income
+Added: taxes, the potential outcome of future tax consequences of events recognized in the Company’s financial statements or tax returns,
+Added: and the valuation of assets acquired and liabilities assumed as a result of business combinations.
+Added: Actual results and outcomes may materially
+Added: differ from management’s estimates and assumptions.
+Added: ACQUISITION OF EAGLE ALCOHOL.
+Added: On January 14, 2022, the Company purchased 100 %
+Added: of the membership interests of Eagle Alcohol.
+Added: The purchase price was $ 14.0 million in cash plus an estimated net working capital adjustment
+Added: of $ 1.3 million in cash.
+Added: The selling members of Eagle Alcohol are eligible to receive up to an additional $ 14.0 million of contingent
+Added: consideration, payable through a combination of $ 9.0 million in cash over the next three years and an aggregate of $ 5.0 million in the
+Added: Company’s common stock on the fourth and fifth year anniversaries of the closing date, subject to the satisfaction of certain conditions,
+Added: including continued employment with the Company.
+Added: With respect to these payments, the Company has recognized an estimated $ 0.9 million
+Added: for the three months ended March 31, 2022, in selling, general and administrative expenses in the accompanying consolidated statements
+Added: of operations.
+Added: Eagle Alcohol specializes in break bulk distribution
+Added: of specialty alcohols.
+Added: Eagle Alcohol purchases bulk alcohol from suppliers.
+Added: Eagle Alcohol then stores, denatures, packages, and resells alcohol
+Added: products in smaller sizes, including tank trucks, totes, and drums, that garner a premium to bulk alcohols.
+Added: Eagle Alcohol delivers products
+Added: to customers in the beverage, food, pharma, and related-process industries via its own dedicated trucking fleet and common carrier.
+Added: acquisition will provide the Company further vertical integration and access to new markets in the specialty alcohol industry.
+Added: Eagle Alcohol’s unaudited results for the
+Added: three months ended March 31, 2022 and 2021 generated $ 3.8 million and $ 6.8 million in net sales and $ 0.2 million and $ 0.9 million in
+Added: net income, respectively.
+Added: The following table presents unaudited pro forma combined financial information assuming the acquisition
+Added: occurred on January 1, 2021 (dollars in thousands except per share amounts):
+Added: Three Months Ended
+Added: Revenues – pro forma
+Added: Net income (loss) available to common stockholders – pro forma
+Added: Diluted net income (loss) per share – pro forma
+Added: Diluted shares
+Added: The following preliminary allocation of the estimated
+Added: purchase price assumes, with the exception of property and equipment and intangibles, carrying values approximate fair value.
+Added: of uncollectible accounts receivable are not considered material due to the short-term nature and customer collection history.
+Added: The preliminary
+Added: estimate of working capital is under review by management and is subject to change.
+Added: Based upon these
+Added: assumptions, the preliminary purchase price allocation is as follows (in thousands):
+Added: Cash and equivalents
+Added: Accounts receivables
+Added: Total current assets
+Added: Property and equipment
+Added: Right of use assets
+Added: Total tangible assets
+Added: Current liabilities
+Added: Right of use liabiltiy
+Added: Total liabiltiies
+Added: Net tangible assets acquired
+Added: Customer relationships
+Added: Total Purchase Price
+Added: Goodwill represents the value of the downstream
+Added: integration that the operations of Eagle Alcohol will add to the Company.
+Added: The Company expects the amortization of goodwill to be
+Added: deductible for tax purposes.
+Added: For the identifiable intangible assets, the Company has estimated 12 years for useful lives for
+Added: customer relationships and 10 years for tradename.
+Added: For the three months ended March 31, 2022, the Company recorded amortization of
+Added: these intangibles of $ 108,000 and $ 9,000 , respectively.
+Added: Any changes to the initial estimates of the fair value of the acquired
+Added: assets and assumed liabilities will be recorded as adjustments to those assets and liabilities and residual amounts will be
+Added: allocated to goodwill if net assets acquired are less than the purchase price.
+Added: The Company did not incur any material acquisition
The Company reports its financial and operating
performance in three segments:
−Removed: (1) marketing and distribution, which includes marketing and merchant trading for Company-produced alcohols
−Removed: and essential ingredients on an aggregated basis, and third-party fuel-grade ethanol (2) Pekin production, which includes the production
−Removed: and sale of alcohols and essential ingredients produced at the Company’s Pekin, Illinois campus (“Pekin Campus”), and
−Removed: (3) Other production, which includes the production and sale of fuel-grade ethanol and essential ingredients produced at all of the Company’s
−Removed: other production facilities on an aggregated basis (“Other production”), none of which are individually so significant as
−Removed: to be considered a reportable segment.
+Added: (1) marketing and distribution, which includes marketing and merchant trading for Company-produced
+Added: alcohols and essential ingredients on an aggregated basis and third-party fuel-grade ethanol sales (2) Pekin production, which
+Added: includes the production and sale of alcohols and essential ingredients produced at the Company’s Pekin, Illinois campus
+Added: (“Pekin Campus”), and (3) Other production, which includes the production and sale of renewable fuel and
+Added: essential ingredients produced at all of the Company’s other production facilities on an aggregated basis (“Other
+Added: production”), none of which are individually so significant as to be considered a reportable segment.
The following tables set forth certain financial
1 unchanged sentence
Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: Marketing and distribution:
−Removed: Alcohol sales, gross
−Removed: Alcohol sales, net
−Removed: Intersegment sales
−Removed: Total marketing and distribution sales
Pekin Campus production, recorded as gross:
3 unchanged sentences
Total Pekin Campus sales
+Added: Marketing and distribution:
+Added: Alcohol sales, gross
+Added: Alcohol sales, net
+Added: Intersegment sales
+Added: Total marketing and distribution sales
Other production, recorded as gross:
3 unchanged sentences
Total Other production sales
+Added: Corporate and other
Intersegment eliminations
2 unchanged sentences
Marketing and distribution
−Removed: Pekin Campus production
Other production
+Added: Corporate and other
Intersegment eliminations
Cost of goods sold as reported
−Removed: Income (loss) before benefit for income taxes:
+Added: Gross profit (loss):
+Added: Pekin Campus production
Marketing and distribution
+Added: Other production
+Added: Corporate and other
+Added: Intersegment eliminations
+Added: Gross profit (loss) as reported
+Added: Income (loss) before provision
+Added: for income taxes:
Pekin Campus production
+Added: Marketing and distribution
Other production
−Removed: Corporate activities
−Removed: Depreciation:
+Added: and amortization:
Pekin Campus production
Other production
−Removed: Corporate activities
−Removed: Interest expense (income):
−Removed: Marketing and distribution
+Added: Interest expense:
Pekin Campus production
+Added: Marketing and distribution
Other production
−Removed: Corporate activities
The following table sets forth the Company’s
total assets by operating segment (in thousands):
−Removed: September 30,
Total assets:
−Removed: Marketing and distribution
Pekin Campus production
+Added: Marketing and distribution
Other production
−Removed: Corporate assets
+Added: Corporate and other
Inventories consisted primarily of bulk ethanol,
−Removed: specialty alcohols, corn, essential ingredients and unleaded fuel, and are valued at the lower of cost or net realizable value, with cost
−Removed: determined on a first-in, first-out basis.
−Removed: Inventory is net of valuation adjustments of $ 0 and $ 1,033,000 as of September 30, 2021 and
−Removed: December 31, 2020, respectively.
+Added: specialty alcohols, corn, essential ingredients and unleaded fuel, and are valued at the lower of cost or net realizable value, with
+Added: cost determined on a first-in, first-out basis.
+Added: Inventory is net of a valuation adjustment of $ 249,000 and $ 0 as of
+Added: March 31, 2022 and December 31, 2021, respectively.
Inventory balances consisted of the following (in thousands):
−Removed: September 30,
Finished goods
19 unchanged sentences
recognized immediately in cost of goods sold.
−Removed: For the three and nine months ended September 30, 2021 and 2020, the Company did not designate
−Removed: any of its derivatives as cash flow hedges.
−Removed: Commodity Risk – Non-Designated
−Removed: Hedges – The Company uses derivative instruments to lock in prices for certain amounts of corn and alcohols by
−Removed: entering into exchange-traded forward contracts or options for those commodities.
−Removed: These derivatives are not designated for hedge
−Removed: accounting treatment.
−Removed: The changes in fair value of these contracts are recorded on the balance sheet and recognized immediately in
−Removed: cost of goods sold.
−Removed: The Company recognized net losses of $ 976,000 and gains of $ 1,582,000 as the change in the fair value of these
−Removed: contracts for the three months ended September 30, 2021 and 2020, respectively.
−Removed: The Company recognized net gains of $ 18,435,000 and
−Removed: $ 1,582,000 as the change in the fair value of these contracts for the nine months ended September 30, 2021 and 2020,
−Removed: respectively.
+Added: For the three months ended March 31, 2022 and 2021, the Company did not designate any of
+Added: its derivatives as cash flow hedges.
+Added: Commodity Risk – Non-Designated Hedges
+Added: – The Company uses derivative instruments to lock in prices for certain amounts of corn and ethanol by entering into exchange-traded
+Added: forward contracts or options for those commodities.
+Added: These derivatives are not designated for hedge accounting treatment.
+Added: in fair value of these contracts are recorded on the balance sheet and recognized immediately in cost of goods sold.
+Added: The Company recognized
+Added: net gains of $ 5,316,000 and $ 10,543,000 as the change in the fair value of these contracts for the three months ended March 31, 2022
+Added: and 2021, respectively.
Non Designated Derivative Instruments
1 unchanged sentence
balances, are as follows (in thousands):
−Removed: As of September 30, 2021
+Added: As of March 31, 2022
Type of Instrument
2 unchanged sentences
Cash collateral balance
−Removed: Other current assets
+Added: Restricted cash
Commodity contracts
6 unchanged sentences
Cash collateral balance
−Removed: Other current assets
+Added: Restricted cash
Commodity contracts
1 unchanged sentence
Derivative liabilities
+Added: The above amounts represent the gross balances
+Added: of the contracts;
+Added: however, the Company does have a right of offset with each of its derivative brokers, but its intent is to close out
+Added: positions individually, therefore, they are reported at gross.
The classification and amounts of the Company’s
recognized gains for its derivatives not designated as hedging instruments are as follows (in thousands):
−Removed: Realized Losses
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Type of Instrument
−Removed: Statements of Operations Location
−Removed: Commodity contracts
−Removed: Cost of goods sold
−Removed: Unrealized Gains
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Type of Instrument
−Removed: Statements of Operations Location
−Removed: Commodity contracts
−Removed: Cost of goods sold
Realized Gains
−Removed: Nine Months Ended
−Removed: September 30,
+Added: For the three months Ended March 31,
Type of Instrument
3 unchanged sentences
Unrealized Gains (Losses)
−Removed: Nine Months Ended
−Removed: September 30,
+Added: For the three months Ended March 31,
Type of Instrument
4 unchanged sentences
(in thousands):
−Removed: September 30,
Kinergy line of credit
−Removed: Pekin revolving loan
−Removed: ICP revolving loan
−Removed: Parent notes payable
−Removed: CARES Act loans
−Removed: Less unamortized debt premium
Less unamortized debt financing costs
1 unchanged sentence
Long-term debt
−Removed: Parent Notes Payable – On
−Removed: May 14, 2021, with proceeds from the Company’s sale of its Madera, California facility, the Company repaid $ 19.3 million of principal
−Removed: on its notes payable, resulting in an aggregate remaining balance of $ 0.7 million.
−Removed: On November 5, 2021, with proceeds from the Company’s
−Removed: sale of its Stockton, California facility, the Company repaid the remaining outstanding balance on these notes.
−Removed: Pekin and ICP Revolving Loans
−Removed: – On November 5, 2021, with proceeds from the Company’s sale of its Stockton, California facility, the Company repaid in
−Removed: full the outstanding balances on these loans.
−Removed: CARES Act Loans – On May 4,
−Removed: 2020, Alto Ingredients, Inc.
−Removed: and Alto Pekin, LLC, or Alto Pekin, received loan proceeds from Bank of America, NA under the Coronavirus
−Removed: Aid, Relief, and Economic Security Act (“CARES Act”), through the Paycheck Protection Program administered by the U.S.
−Removed: Business Administration (“SBA”).
−Removed: Alto Ingredients, Inc.
−Removed: received $ 6.0 million and Alto Pekin received $ 3.9 million in loan
−Removed: Under the terms of the loans, certain amounts may be forgiven if they are used for qualifying expenses as described in the CARES
−Removed: In June 2021, the SBA approved Alto Pekin’s forgiveness application for the full amount of $ 3.9 million, and accordingly, the
−Removed: Company recognized income from loan forgiveness for the three months ended June 30, 2021.
−Removed: In September 2021, the SBA approved Alto Ingredients,
−Removed: Inc.’s forgiveness application for the full amount of $ 6.0 million, and accordingly, the Company recognized income from loan forgiveness
−Removed: for the three months ended September 30, 2021.
−Removed: The SBA may audit the loan forgiveness applications and further examine eligibility for
−Removed: forgiveness, including the facts and circumstances existing at the time the loans were made.
−Removed: The Company can provide no assurances that
−Removed: any loan forgiven will not require repayment following an audit by the SBA.
−Removed: Maturities of Long-term Debt –
−Removed: The Company’s long-term debt matures as follows (in thousands):
−Removed: Restrictions – At September
−Removed: 30, 2021, there were approximately $ 250.3 million of net assets at the Company’s subsidiaries that were not available for transfer
−Removed: to Alto Ingredients, Inc.
−Removed: in the form of dividends, loans or advances due to restrictions contained in the credit facilities of the Company’s
−Removed: subsidiaries.
+Added: Excess Availability – As
+Added: of March 31, 2022, Kinergy had $ 15.2 million in unused borrowing availability under its line of credit.
COMMITMENTS AND CONTINGENCIES.
−Removed: Sales Commitments – At September
+Added: Sales Commitments – At March
31, 2022, the Company had entered into sales contracts with its major customers to sell certain quantities of alcohol and essential ingredients.
−Removed: The Company had open alcohol indexed-price contracts for 93,403,000 gallons as of September 30, 2021 and open fixed-price alcohol sales
−Removed: contracts totaling $ 242,181,000 as of September 30, 2021.
−Removed: The Company had open fixed-price sales contracts for essential ingredients
−Removed: totaling $ 18,448,000 and open indexed-price sales contracts of essential ingredients for 5,044,000 tons as of September 30, 2021.
−Removed: sales contracts are scheduled for completion over the next twelve months.
+Added: The Company had open alcohol indexed-price contracts for 125,438,000 gallons as of March 31, 2022 and open fixed-price alcohol sales
+Added: contracts totaling $ 124,713,000 as of March 31, 2022.
+Added: The Company had open fixed-price sales contracts for essential ingredients totaling
+Added: $ 23,023,000 and open indexed-price sales contracts of essential ingredients for 5,242,000 tons as of March 31, 2022.
+Added: These sales contracts
+Added: are scheduled to be completed throughout 2022.
Purchase Commitments – At
−Removed: September 30, 2021, the Company had indexed-price purchase contracts to purchase 33,233,000 gallons of alcohol and fixed-price
−Removed: purchase contracts to purchase $ 54,988,000 of alcohol from its suppliers.
−Removed: The Company had fixed-price purchase contracts to purchase
−Removed: $ 29,916,000 of corn from its suppliers as of September 30, 2021.
−Removed: The Company had fixed-price purchase contracts for natural gas
−Removed: totaling $ 4,464,000 .
−Removed: The Company also had future commitments for certain capital projects totalling $ 19,100,000 .
−Removed: These purchase
−Removed: commitments are scheduled to be satisfied through mid-2022.
+Added: March 31, 2022, the Company had indexed-price purchase contracts to purchase 17,439,000 gallons of alcohol and fixed-price purchase contracts
+Added: to purchase $ 81,601,000 of alcohol from its suppliers.
+Added: The Company had fixed-price purchase contracts to purchase $ 67,584,000 of corn
+Added: from its suppliers as of March 31, 2022.
+Added: The Company had fixed-price purchase contracts for natural gas totaling $ 13,439,000 and indexed-price
+Added: purchase contracts for natural gas totaling 2,140,000 MMBTU.
+Added: The Company also had future commitments for certain capital projects totaling
+Added: $ 26,769,000 .
+Added: These purchase commitments are scheduled to be satisfied throughout 2022 and 2023.
Litigation – General –
10 unchanged sentences
have a material impact on the Company’s financial condition or results of operations.
−Removed: PENSION AND RETIREMENT BENEFIT PLANS.
+Added: PENSION PLANS.
The Company sponsors a defined
−Removed: benefit pension plan (the “Retirement Plan”) and a health care and life insurance plan (the “Postretirement Plan”).
−Removed: The Company assumed the Retirement Plan and the Postretirement Plan as part of its acquisition of Aventine Renewable Energy Holdings,
−Removed: on July 1, 2015.
−Removed: The Retirement Plan is noncontributory,
−Removed: and covers only “grandfathered” unionized employees at the Company’s Pekin, Illinois facility who fulfill minimum age
−Removed: and service requirements.
−Removed: Benefits are based on a prescribed formula based upon the employee’s years of service.
−Removed: The Retirement
−Removed: Plan, which is part of a collective bargaining agreement, covers only union employees hired prior to November 1, 2010.
−Removed: The Company uses a December
−Removed: 31 measurement date for its Retirement Plan.
−Removed: The Company’s funding policy is to make the minimum annual contribution required by
−Removed: applicable regulations.
−Removed: As of December 31, 2020, the Retirement Plan’s accumulated projected benefit obligation was $ 24.6 million,
−Removed: with a fair value of plan assets of $ 17.6 million.
−Removed: The underfunded amount of $ 7.0 million is recorded on the Company’s consolidated
−Removed: balance sheet in other liabilities.
−Removed: For the three months ended September
−Removed: 30, 2021, the Retirement Plan’s net periodic expense was $ 22,000 , comprised of $ 151,000 in interest cost and $ 109,000 in service
−Removed: cost, partially offset by $ 238,000 of expected return on plan assets.
−Removed: For the three months ended September 30, 2020, the Retirement Plan’s
−Removed: net periodic expense was $ 48,000 , comprised of $ 173,000 in interest cost and $ 101,000 in service cost, partially offset by $ 226,000 of
−Removed: expected return on plan assets.
−Removed: For the nine months ended September
−Removed: 30, 2021, the Retirement Plan’s net periodic expense was $ 66,000 , comprised of $ 453,000 in interest cost and $ 327,000 in service
−Removed: cost, partially offset by $ 714,000 of expected return on plan assets.
−Removed: For the nine months ended September 30, 2020, the Retirement Plan’s
−Removed: net periodic expense was $ 144,000 , comprised of $ 519,000 in interest cost and $ 303,000 in service cost, partially offset by $ 678,000 of
−Removed: expected return on plan assets.
−Removed: The Postretirement Plan provides
−Removed: postretirement medical benefits and life insurance to certain “grandfathered” unionized employees.
−Removed: Employees hired after December
−Removed: 31, 2000 are not eligible to participate in the Postretirement Plan.
−Removed: The Postretirement Plan is contributory, with contributions required
−Removed: at the same rate as active employees.
−Removed: Benefit eligibility under the plan declines at age 65 from a defined benefit to a defined dollar
−Removed: cap based upon years of service.
−Removed: As of December 31, 2020, the Postretirement Plan’s accumulated projected benefit obligation was
−Removed: $ 5.3 million and is recorded on the Company’s consolidated balance sheet in other liabilities.
−Removed: The Company’s funding policy
−Removed: is to make the minimum annual contribution required by applicable regulations.
−Removed: For the three months ended September
−Removed: 30, 2021, the Postretirement Plan’s net periodic expense was $ 42,000 , comprised of $ 10,000 of interest cost, $ 26,000 of service
−Removed: cost and $ 6,000 of amortization expense.
−Removed: For the three months ended September 30, 2020, the Postretirement Plan’s net periodic expense
−Removed: was $ 59,000 , comprised of $ 38,000 of interest cost, $ 14,000 of service cost and $ 7,000 of amortization expense.
−Removed: For the nine months ended September
−Removed: 30, 2021, the Postretirement Plan’s net periodic expense was $ 126,000 , comprised of $ 30,000 of interest cost, $ 78,000 of service
−Removed: cost and $ 18,000 of amortization expense.
−Removed: For the nine months ended September 30, 2020, the Postretirement Plan’s net periodic expense
−Removed: was $ 177,000 , comprised of $ 114,000 of interest cost, $ 42,000 of service cost and $ 21,000 of amortization expense.
+Added: benefit pension plan (the “Retirement Plan”) and a healthcare and life insurance plan (the “Postretirement Plan”).
+Added: Retirement Plan is noncontributory, and covers only “grandfathered” unionized employees at the Company’s Pekin, Illinois
+Added: facility who fulfill minimum age and service requirements.
+Added: Benefits are based on a prescribed formula based upon the employee’s
+Added: years of service.
+Added: The Retirement Plan, which is part of a collective bargaining agreement, covers only union employees hired prior to
+Added: November 1, 2010.
+Added: Company uses a December 31 measurement date for its Retirement Plan.
+Added: The Company’s funding policy is to make the minimum annual
+Added: contribution required by applicable regulations.
+Added: As of December 31, 2021, the Retirement Plan’s accumulated projected benefit obligation
+Added: was $ 23.8 million, with a fair value of plan assets of $ 20.0 million.
+Added: The underfunded amount of $ 3.8 million is recorded on the Company’s
+Added: consolidated balance sheet in other liabilities.
+Added: For the three months ended March 31, 2022, the Retirement Plan’s net periodic
+Added: expense (income) was ($ 8,000 ), comprised of $ 164,000 in interest cost and $ 101,000 in service cost, more than offset by $ 273,000 of expected
+Added: return on plan assets.
+Added: For the three months ended March 31, 2021, the Retirement Plan’s net periodic expense was $ 22,000 , comprised
+Added: of $ 151,000 in interest cost and $ 109,000 in service cost, partially offset by $ 238,000 of expected return on plan assets.
+Added: Postretirement Plan provides postretirement medical benefits and life insurance to certain “grandfathered” unionized employees.
+Added: Employees hired after December 31, 2000 are not eligible to participate in the Postretirement Plan.
+Added: The Postretirement Plan is contributory,
+Added: with contributions required at the same rate as active employees.
+Added: Benefit eligibility under the plan reduces at age 65 from a defined
+Added: benefit to a defined dollar cap based upon years of service.
+Added: As of December 31, 2021, the Postretirement Plan’s accumulated projected
+Added: benefit obligation was $ 4.3 million and is recorded on the Company’s consolidated balance sheet in other liabilities.
+Added: The Company’s
+Added: funding policy is to make the minimum annual contribution required by applicable regulations.
+Added: For the three months ended March 31, 2022,
+Added: the Postretirement Plan’s net periodic expense was $ 32,000 , comprised of $ 26,000 of interest cost and $ 6,000 of service cost.
+Added: the three months ended March 31, 2021, the Postretirement Plan’s net periodic expense was $ 42,000 , comprised of $ 10,000 of interest
+Added: cost, $ 26,000 of service cost and $ 6,000 of amortization expense.
FAIR VALUE MEASUREMENTS.
−Removed: The fair value hierarchy prioritizes the inputs
−Removed: used in valuation techniques into three levels, as follows:
−Removed: ● Level 1 – Observable inputs – unadjusted quoted
−Removed: prices in active markets for identical assets and liabilities;
−Removed: ● Level 2 – Observable inputs other than quoted prices
−Removed: included in Level 1 that are observable for the asset or liability through corroboration with market data;
−Removed: ● Level 3 – Unobservable inputs – includes amounts
−Removed: derived from valuation models where one or more significant inputs are unobservable.
−Removed: For fair value measurements using significant unobservable
−Removed: inputs, a description of the inputs and the information used to develop the inputs is required along with a reconciliation of Level 3
−Removed: values from the prior reporting period.
−Removed: Pooled separate accounts –
−Removed: Pooled separate accounts invest primarily in domestic and international stocks, commercial paper or single mutual funds.
−Removed: The net asset
−Removed: value is used as a practical expedient to determine fair value for these accounts.
−Removed: Each pooled separate account provides for redemptions
−Removed: by the Retirement Plan at reported net asset values per share, with little to no advance notice requirement, therefore these funds are
−Removed: classified within Level 2 of the valuation hierarchy.
−Removed: Long-Lived Assets Held-for-Sale
−Removed: – The Company recorded its long-lived assets associated with its property and equipment held-for-sale at fair value at September
−Removed: 30, 2021 and December 31, 2020 of $ 20,535,000 and $ 48,548,000 , respectively.
−Removed: The fair values of these assets are based on observable values
−Removed: for the assets through corroboration with market data and are designated as Level 3 inputs.
−Removed: Other Derivative Instruments –
−Removed: The Company’s other derivative instruments consist of commodity positions.
−Removed: The fair values of the commodity positions are based
−Removed: on quoted prices on the commodity exchanges and are designated as Level 1 inputs.
−Removed: The following table summarizes recurring and nonrecurring
−Removed: fair value measurements by level at September 30, 2021 (in thousands):
−Removed: Derivative financial instruments
−Removed: Long-lived assets held-for-sale
−Removed: Derivative financial instruments
−Removed: The following table summarizes recurring and nonrecurring
−Removed: fair value measurements by level at December 31, 2020 (in thousands):
+Added: fair value hierarchy prioritizes the inputs used in valuation techniques into three levels, as follows:
+Added: 1 – Observable inputs – unadjusted quoted prices in active markets for identical
+Added: assets and liabilities;
+Added: 2 – Observable inputs other than quoted prices included in Level 1 that are observable
+Added: for the asset or liability through corroboration with market data;
+Added: 3 – Unobservable inputs – includes amounts derived from valuation models where
+Added: one or more significant inputs are unobservable.
+Added: For fair value measurements using significant
+Added: unobservable inputs, a description of the inputs and the information used to develop the
+Added: inputs is required along with a reconciliation of Level 3 values from the prior reporting
+Added: separate accounts – Pooled separate accounts invest primarily in domestic and international stocks, commercial paper or
+Added: single mutual funds.
+Added: The net asset value is used as a practical expedient to determine fair value for these accounts.
+Added: Each pooled separate
+Added: account provides for redemptions by the Retirement Plan at reported net asset values per share, with little to no advance notice requirement,
+Added: therefore these funds are classified within Level 2 of the valuation hierarchy.
+Added: Assets Held-for-Sale – The Company recorded its long-lived assets associated with its property and equipment held-for-sale
+Added: at fair value at March 31, 2022 and December 31, 2021 of $ 1,000,000 .
+Added: The fair values of these assets are based on observable values for
+Added: the assets through corroboration with market data and are designated as Level 3 inputs.
+Added: Derivative Instruments – The Company’s other derivative instruments consist of commodity positions.
+Added: The fair values
+Added: of the commodity positions are based on quoted prices on the commodity exchanges and are designated as Level 1 inputs.
+Added: following table summarizes recurring and nonrecurring fair value measurements by level at March 31, 2022 (in thousands):
+Added: financial instruments
+Added: assets held-for-sale
Derivative financial instruments
+Added: following table summarizes recurring and nonrecurring fair value measurements by level at December 31, 2021 (in thousands):
+Added: financial instruments
Long-lived assets held-for-sale
−Removed: Defined benefit plan assets(1)
+Added: Defined benefit plan
(pooled separate accounts):
2 unchanged sentences
Fixed Income(5)
+Added: Derivative financial instruments
(1) Included in other assets in the consolidated balance sheets.
(2) This category includes investments in funds comprised of equity securities of large U.S.
−Removed: funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value
−Removed: (3) This category includes investments in funds comprised of equity securities of small- and medium-sized
−Removed: The funds are valued using the net asset value method in which an average of the market prices for the underlying investments
−Removed: is used to value the fund.
−Removed: (4) This category includes investments in funds comprised of equity securities of foreign companies including
−Removed: emerging markets.
−Removed: The funds are valued using the net asset value method in which an average of the market prices for the underlying investments
−Removed: is used to value the fund.
+Added: The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund.
+Added: (3) This category includes investments in funds comprised of equity securities of small- and medium-sized U.S.
+Added: The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund.
+Added: (4) This category includes investments in funds comprised of equity securities of foreign companies including emerging markets.
+Added: The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund.
(5) This category includes investments in funds comprised of U.S.
−Removed: and foreign investment-grade fixed income
−Removed: securities, high-yield fixed income securities that are rated below investment-grade, U.S.
−Removed: treasury securities, mortgage-backed securities,
−Removed: and other asset-backed securities.
−Removed: The funds are valued using the net asset value method in which an average of the market prices for
−Removed: the underlying investments is used to value the fund.
−Removed: EARNINGS PER SHARE.
−Removed: The following tables compute basic and diluted
−Removed: earnings per share (in thousands, except per share data):
−Removed: Three Months Ended September 30, 2021
−Removed: Loss Numerator
−Removed: Shares Denominator
−Removed: Per-Share Amount
−Removed: Net loss attributed to Alto Ingredients, Inc.
−Removed: Preferred stock dividends
−Removed: Basic and Diluted loss per share:
−Removed: Loss available to common stockholders
−Removed: Months Ended September 30, 2020
−Removed: income attributed to Alto Ingredients, Inc.
−Removed: Preferred stock dividends
−Removed: income per share:
−Removed: available to common stockholders
−Removed: Dilutive securities
−Removed: income per share:
−Removed: available to common stockholders
−Removed: Nine Months Ended September 30, 2021
−Removed: Net income attributed to Alto Ingredients, Inc.
−Removed: Preferred stock dividends
+Added: and foreign investment-grade fixed income securities, high-yield fixed income securities that are rated below investment-grade, U.S.
+Added: treasury securities, mortgage-backed securities, and other asset-backed securities.
+Added: The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund.
+Added: following tables compute basic and diluted earnings per share (in thousands, except per share data):
+Added: Months Ended March 31, 2022
+Added: Preferred stock
+Added: Basic and diluted loss per
+Added: Net loss available to
+Added: common stockholders
+Added: Months Ended March 31, 2021
+Added: Preferred stock
Basic income per share:
−Removed: Income available to common stockholders
+Added: Income available to common
Dilutive securities
Diluted income per share:
−Removed: Income available to common stockholders
−Removed: Months Ended September 30, 2020
−Removed: income attributed to Alto Ingredients, Inc.
−Removed: Preferred stock dividends
−Removed: income per share:
−Removed: available to common stockholders
−Removed: Dilutive securities
−Removed: income per share:
−Removed: available to common stockholders
−Removed: were an additional aggregate potentially dilutive weighted-average shares of 964,000 from convertible securities outstanding for the
−Removed: three and nine months ended September 30, 2021 and 2020.
−Removed: These securities were not considered in calculating diluted net income per share
−Removed: for the three and nine months ended September 30, 2021 and 2020, as their effect would have been anti-dilutive.
−Removed: PARENT COMPANY FINANCIALS.
−Removed: Net Assets – At September 30, 2021, the Company had approximately $ 250.3 million of net assets at its subsidiaries that
−Removed: were not available for transfer to Alto Ingredients in the form of dividends, distributions, loans or advances due to restrictions contained
−Removed: in the credit facilities of these subsidiaries.
−Removed: company financial statements for the periods covered in this report are set forth below (in thousands):
−Removed: September 30,
−Removed: Current Assets:
−Removed: Cash and cash equivalents
−Removed: Receivables from subsidiaries
−Removed: Other current assets
−Removed: Total current assets
−Removed: Property and equipment, net
−Removed: Other Assets:
−Removed: Investments in subsidiaries
−Removed: Alto West, LLC receivable
−Removed: Right of use operating lease assets, net
−Removed: Total other assets
−Removed: Current Liabilities:
−Removed: Accounts payable and accrued liabilities
−Removed: Accrued Alto Op Co.
−Removed: Current portion of long-term debt
−Removed: Other current liabilities
−Removed: Total current liabilities
−Removed: Long-term debt, net of current portion
−Removed: Other liabilities
−Removed: Total Liabilities
−Removed: Stockholders’ Equity:
−Removed: Preferred stock
−Removed: Common and non-voting common stock
−Removed: Additional paid-in capital
−Removed: Accumulated other comprehensive loss
−Removed: Accumulated deficit
−Removed: Total Alto Ingredients, Inc.
−Removed: stockholders’ equity
−Removed: Total Liabilities and Stockholders’ Equity
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: Management fees from subsidiaries
−Removed: Selling, general and administrative expenses
−Removed: Loss from operations
−Removed: Income from loan forgiveness
−Removed: Interest income (expense), net
−Removed: Fair value adjustments
−Removed: Other income (expense)
−Removed: Income (loss) before benefit for income taxes
−Removed: Benefit for income taxes
−Removed: Income (loss) before benefit for income taxes
−Removed: Equity in income (losses) of subsidiaries
−Removed: Net income (loss)
−Removed: For the Nine Months Ended
−Removed: September 30,
−Removed: Operating Activities:
−Removed: Adjustments to reconcile net income to cash used in operating activities:
−Removed: Equity in (income) losses of subsidiaries
−Removed: Income from loan forgiveness
−Removed: Fair value adjustments
−Removed: Amortization of debt discounts
−Removed: Changes in operating assets and liabilities:
−Removed: Accounts receivable
−Removed: Accounts payable and accrued expenses
−Removed: Accounts payable with subsidiaries
−Removed: Net cash used in operating activities
−Removed: Investing Activities:
−Removed: Additions to property and equipment
−Removed: Net cash used in investing activities
−Removed: Financing Activities:
−Removed: Proceeds from issuances of common stock
−Removed: Proceeds from plant receivables
−Removed: Proceeds from warrant exercises
−Removed: Proceeds from long-term debt
−Removed: Payments on senior notes
−Removed: Dividend from subsidiary
−Removed: Preferred stock dividend payments
−Removed: Net cash (used in) provided by financing activities
−Removed: Net change in cash and cash equivalents
−Removed: Cash and cash equivalents at beginning of period
−Removed: Cash and cash equivalents at end of period
+Added: Income available to common
+Added: were an additional aggregate potentially dilutive weighted-average shares of 1,339,000 and 3,265,000 from convertible securities outstanding
+Added: for the three months ended March 31, 2022 and 2021.
+Added: These securities were not considered in calculating diluted net income (loss) per
+Added: share for the three months ended March 31, 2022 and 2021, as their effect would have been anti-dilutive.
+Added: At March 31, 2022, the Company
+Added: had outstanding unexercised warrants to purchase 8.9 million shares of its common stock at an exercise price of $ 9.76 per share.
+Added: warrants expired unexercised on April 28, 2022.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.