What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-14 compared with 2022-03-15 · 351 added, 333 removed, 225 unchanged (75% of the section changed)

Business Overview

We are a leading producer and marketer of specialty

We are a leading producer and distributor of specialty

alcohols and essential ingredients, and the largest producer of specialty alcohols in the United States.

We operate five alcohol production facilities.

Three of our production facilities are located in the Midwestern state of Illinois and two of our facilities are located in the Western

states of Oregon and Idaho.

We have an annual alcohol production capacity of 350 million gallons.

We market all of the alcohols produced

at our facilities as well as fuel-grade ethanol produced by third parties.

In 2021, we marketed approximately 480 million gallons combined

of our own alcohols as well as fuel-grade ethanol produced by third parties, and over 1.2 million tons of essential ingredients on a

dry matter basis.

Through our recent acquisition of Eagle Alcohol Company LLC, or Eagle Alcohol, we now specialize in break bulk distribution

Three of our production facilities are located in Illinois, one is located in Oregon and another is located in Idaho.

We have an annual

alcohol production capacity of 350 million gallons, comprised of 210 million gallons of fuel-grade ethanol and up to 140 million gallons

of specialty alcohols.

We report our financial and operating performance in three segments:

(1) marketing and distribution, which includes marketing and merchant trading for company-produced alcohols and essential ingredients

on an aggregated basis, and third party fuel-grade ethanol, (2) Pekin production, which includes the production and sale of alcohols and

essential ingredients produced at our Pekin, Illinois campus, or Pekin Campus, and (3) Other production, which includes the production

and sale of renewable fuel and essential ingredients produced at all of our other production facilities on an aggregated basis, none of

which are individually so significant as to be considered a reportable segment.

We market and distribute all of the alcohols produced at our facilities as well as fuel-grade ethanol produced

by third parties.

In 2022, we marketed and distributed approximately 420 million gallons combined of our own alcohols as well as fuel-grade

ethanol produced by third parties, and over 1.6 million tons of essential ingredients.

We report our financial and operating performance

in three segments:

(1) marketing and distribution, which includes marketing and merchant trading for company-produced alcohols and essential

ingredients on an aggregated basis, and sales of fuel-grade ethanol sourced from third parties, (2) Pekin production, which includes the

production and sale of alcohols and essential ingredients produced at our three production facilities located in Pekin, Illinois, which

we refer to as our Pekin Campus, and (3) Other production, which includes the production and sale of renewable fuel and essential ingredients

produced at all of our other production facilities on an aggregated basis, none of which are individually so significant as to be considered

a separately reportable segment.

Our mission is to expand our business as a leading

producer and marketer of specialty alcohols and essential ingredients.

producer and distributor of specialty alcohols and essential ingredients.

We intend to accomplish this goal in part by investing in our

specialized and higher value specialty alcohol production and distribution infrastructure, expanding production in high-demand essential

ingredients, expanding and extending the sale of our products into new regional and international markets, building efficiencies and

economies of scale and by capturing a greater portion of the value stream.

ingredients, expanding and extending the sale of our products into new regional and international markets, building efficiencies and economies

of scale and by capturing a greater portion of the value stream.

Our wholly-owned subsidiary,

Eagle Alcohol Company LLC, or Eagle Alcohol, specializes in break bulk distribution of specialty alcohols.

Eagle Alcohol purchases bulk

alcohol from suppliers and then stores, denatures, packages, and resells alcohol products in smaller sizes, including tank trucks, totes,

and drums, that typically garner a premium price to bulk alcohols.

Eagle Alcohol delivers products to customers in the beverage, food,

industrial and related-process industries via its own dedicated trucking fleet and common carrier.

Production Segments

We produce specialty alcohols, renewable fuel and essential ingredients,

focusing on four key markets:

We produce specialty alcohols, fuel-grade ethanol

and essential ingredients, focusing on four key markets:

Health, Home & Beauty ;

1 unchanged sentence

Essential Ingredients ;

and Renewable

Products for the Health, Home & Beauty market include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals,

hand sanitizers, disinfectants and cleaners.

Products for the Food & Beverage markets include grain neutral spirits used in alcoholic

beverages and vinegar as well as corn germ used for corn oils.

Products for Essential Ingredients markets include yeast, corn gluten and

distillers grains used in commercial animal feed and pet foods.

Our Renewable Fuels products include fuel-grade ethanol and distillers

corn oil used as a feedstock for renewable diesel fuel.

and Renewable Fuels .

Products for the Health, Home & Beauty market include specialty alcohols used in mouthwash, cosmetics,

pharmaceuticals, hand sanitizers, disinfectants and cleaners.

Products for the Food & Beverage market include grain neutral

spirits used in alcoholic beverages and vinegar as well as corn germ used for corn oils.

Products for Essential Ingredients market

include dried yeast, corn gluten meal, corn gluten feed, corn germ, and distillers grains and liquid feed used in commercial animal feed

and pet foods.

We also sell yeast for human consumption.

Products for the Renewable Fuels market include fuel-grade ethanol and

distillers corn oil used as a feedstock for renewable diesel and biodiesel fuels.

Our specialty alcohols for the Food & Beverage

and Health, Home & Beauty markets represented approximately 10% and 4%, respectively, of our sales in 2022 from our two production

We produce our alcohols and essential ingredients

at our production facilities described below.

Our production facilities located in the Midwest are in the heart of the Corn Belt, benefit

Our production facilities located in Illinois are in the heart of the Corn Belt, benefit

from low-cost and abundant feedstock and enjoy logistical advantages that enable us to provide our products to both domestic and international

markets via truck, rail or barge.

Our production facilities located on the West Coast are near their respective fuel and feed customers,

Our production facilities located in Oregon and Idaho are near their respective fuel and feed customers,

offering significant timing, transportation cost and logistical advantages.

We restarted our Magic Valley facility in November 2021 and we are

now operating all of our production facilities.

Our production facilities were operating for

On January 1, 2023, we temporarily hot-idled our Magic Valley production facility due to extreme natural gas prices,

other unfavorable market conditions and to facilitate the installation of our new high protein systems.

As market conditions change, we may increase, decrease or idle production at one or more

operating facilities or resume operations at any idled facility.

Annual Production Capacity

Annual Alcohol Production Capacity

(estimated, in gallons)

3 unchanged sentences

Marketing and Distribution Segment

We market all of the alcohols and essential ingredients

we produce at our facilities.

We also market fuel-grade ethanol produced by third parties.

Beginning in January 2022, we now break bulk

and distribute specialty alcohols from our own production as well as from third-party producers.

We market and distribute all of the alcohols and

essential ingredients we produce at our facilities.

We also market and distribute alcohol produced by third parties.

We have extensive and long-standing customer relationships,

3 unchanged sentences

personal health/consumer health and personal care hygiene products, and global trading firms.

Our renewable fuel customers are located throughout the Western and

Midwestern United States and consist of integrated oil companies and gasoline marketers who blend fuel-grade ethanol into gasoline.

customers depend on us to provide a reliable supply of fuel-grade ethanol and manage the logistics and timing of delivery with very little

effort on their part.

Our customers collectively require fuel-grade ethanol volumes in excess of the supplies we produce at our facilities.

We secure additional fuel-grade ethanol supplies from third-party fuel-grade ethanol producers.

We arrange for transportation, storage

and delivery of fuel-grade ethanol purchased by our customers through our agreements with third-party service providers in the Western

United States as well as in the Midwest from a variety of sources.

Our renewable fuel customers are located throughout

the Western and Midwestern United States and consist of integrated oil companies and gasoline marketers who blend fuel-grade ethanol into

Our customers depend on us to provide a reliable supply of fuel-grade ethanol and manage the logistics and timing of delivery.

Collectively, our customers require fuel-grade ethanol volumes in excess of the supplies we produce at our facilities.

We secure additional

fuel-grade ethanol supplies from third-party ethanol producers.

We arrange for transportation, storage and delivery of fuel-grade ethanol

purchased by our customers through our agreements with a variety of third-party service providers in the Western United States as well

as in the Midwest.

We market our essential ingredient feed products

18 unchanged sentences

Our goal is to expand our business as a leading

producer and marketer of specialty alcohols and essential ingredients.

producer and distributor of specialty alcohols and essential ingredients.

The key elements of our business and growth strategy to achieve

this objective include:

● Focus on our customer

relationships.

We have repositioned our business to focus on specialty alcohols and essential

As a result, our business is service-oriented and focused on specialty products

compared to a price-oriented business focused on commodity products.

We strive to make our

business ever more customer-centric to enable our premium services to support premium prices

and new differentiated and higher-margin products.

our break bulk capabilities.

Through our acquisition of Eagle Alcohol, we plan

to further diversify our business to focus on break bulk distribution of specialty alcohols.

With the specialty alcohols we produce and purchase from other suppliers, we now can store,

denature, package and resell alcohol in smaller sizes, including tank trucks, totes and drums,

that garner a premium price to bulk specialty alcohols.

We deliver to customers in the beverage,

food, pharmaceutical and related-process industries using our own trucking fleet and common

product offerings.

We are pursuing initiatives to broaden our product offerings to appeal

to a wider range of customers and uses in our key markets.

For example, we have secured ISO

9001, ICH Q7 and EXCiPACT certifications at all of our Pekin Campus production facilities.

These certifications appeal to customers with stringent

quality demands and enable us to offer alcohol certified for use as an active pharmaceutical

ingredient, or API, and as an excipient—an inactive component of a drug or medication,

such as solvents, carriers or tinctures—in the pharmaceutical industry.

We are reviewing

additional certifications and product positioning within our key markets to expand the range

of customers we serve and the uses our products support.

● Focus on our customer relationships.

Although we continue to produce more fuel-grade ethanol than specialty alcohols, we have

repositioned our business to focus on expanding the production and sale of specialty alcohols and essential ingredients.

our business is now more service-oriented and focused on specialty products compared to a price-oriented business focused on commodity

We strive to make our business ever more customer-centric to enable our premium services to support premium prices and new differentiated

and higher-margin products.

● Increase our break bulk capabilities.

With the addition of Eagle Alcohol, we have further diversified our business to include

break bulk distribution of specialty alcohols.

We can now store, denature, package and resell alcohol in smaller sizes, including tank

trucks, totes and drums, that typically garner a premium price to bulk specialty alcohols.

We deliver these products to customers in the

Health, Home & Beauty , Food & Beverage and related-process industries using our own trucking fleet and common carrier.

● Expand product offerings.

We are pursuing initiatives to broaden our product offerings to appeal to a wider range of customers

and uses in our key markets.

For example, we have secured ISO 9001, ICH Q7 and EXCiPACT certifications at all of our Pekin Campus production

These certifications appeal to customers with stringent quality demands and enable us to offer alcohol certified for use as

an active pharmaceutical ingredient, or API, and as an excipient—an inactive component of a drug or medication, such as solvents,

carriers or tinctures—in the pharmaceutical industry.

All ingredients we produce for use in beverages, human and pet foods are third-party

certified for ISO 9001 and hazard analysis and critical control points (HACCP).

In addition, all of our alcohols with pharmaceutical end-uses

are ICH Q7, EXCiPACT and ISO 9001 certified, and our animal feed production, including at our Oregon and Idaho facilities, has undergone

third-party Food Safety Modernization Act (FSMA) auditing.

We are reviewing additional certifications and product positioning within our

key markets to expand the range of customers we serve and the uses our products support.

● Implement new equipment and technologies.

2 unchanged sentences

and revenues, and increase our profitability as financial resources and market conditions justify these investments.

and pursue strategic opportunities .

We are examining opportunities to expand our business

such as joint ventures, strategic partnerships, synergistic acquisitions and other opportunities.

We intend to pursue these opportunities as financial resources and business prospects make

these opportunities desirable.

In February 2023,

we completed Together for Sustainability, or TfS, certification at our Pekin Campus, which is an initiative to raise corporate social

responsibility (CSR) standards in our industry.

We are also conducting Scope 1 and 2 greenhouse gas emissions (GHG) third party verification

for all of our production facilities for 2021 and 2022.

See “Management’s Discussion and Analysis of Financial

Condition and Results of Operations—Current Initiatives and Outlook.”

● Evaluate and pursue strategic opportunities .

We are examining opportunities to expand our business such as joint ventures,

strategic partnerships, synergistic acquisitions and other opportunities.

We intend to pursue these opportunities as financial resources

and business prospects make these opportunities desirable.

Competitive Strengths

2 unchanged sentences

We believe that our competitive strengths include:

customer and supplier relationships .

We have extensive and long-standing close customer

and supplier relationships, both domestic and international, for our specialty alcohols and

essential ingredients.

We have an excellent reputation for developing specialty alcohols

under stringent quality control standards, particularly at our Pekin Campus.

management systems are supported by ISO 9001, ICH Q7 and EXCiPACT certifications which are

viewed by our customers as important attestations of our quality control standards.

Our production facilities use specialized equipment, technologies and processes

to achieve stringent quality controls, higher yields and efficient

production of alcohols and essential ingredients.

Our specialized equipment, technologies

and processes, together with our quality management certifications, strict regulatory requirements,

and close customer and supplier relationships create significant barriers to entry to new

market participants.

experienced management .

Our senior management team has a proven track record with significant

operational and financial expertise and many years of experience in the alcohol production

Our senior executives have successfully navigated a wide variety of business and

industry-specific challenges and deeply understand the business of successfully producing

and marketing specialty alcohols and essential ingredients.

strategic location of our Midwest production facilities .

We operate three distinct but

integrated production facilities at our Pekin Campus in the Midwest.

We are able to participate

from that location in the largest regional specialty alcohol market in the United States

as well as international markets.

Midwest location enhances our overall hedging opportunities with a greater correlation to

the highly-liquid physical and paper markets in Chicago.

Midwest location provides excellent logistical access via rail, truck and barge.

In particular,

barge access via the Illinois River to the Mississippi River enables us to efficiently bring

our products to international markets.

relatively unique wet milling process at one of our production facilities at our Pekin Campus

allows us to extract the highest use and value from each component of the corn kernel.

a result, the wet milling process generates a higher level of cost recovery from corn than

that produced at a dry mill.

Midwest location allows us deep market insight and engagement in major fuel-grade ethanol

and feed markets, thereby improving pricing opportunities.

● Our customer and supplier relationships .

We have extensive and long-standing close customer and supplier relationships, both

domestic and international, for our specialty alcohols and essential ingredients.

We have an excellent reputation for developing specialty

alcohols under stringent quality control standards, particularly at our Pekin Campus.

Our quality management systems are supported by

ISO 9001, ICH Q7, TfS and EXCiPACT certifications which are viewed by our customers as important attestations of our quality control standards.

● Barriers to entry .

Our production facilities use specialized equipment, technologies and processes to achieve stringent quality

controls, higher yields and efficient production of alcohols and essential ingredients.

Our specialized equipment, technologies and processes,

together with our quality management certifications, strict regulatory requirements, and close customer and supplier relationships create

significant barriers to entry to new market participants.

● Our experienced management .

Our senior management team has a proven track record with significant operational and financial

expertise and many years of experience in the alcohol production industry.

Our senior executives have successfully navigated a wide variety

of business and industry-specific challenges and deeply understand the business of successfully producing and marketing specialty alcohols

and essential ingredients.

● The strategic location of our Midwest production facilities .

We operate three distinct but integrated production facilities

at our Pekin Campus in the Midwest.

We are able to participate from that location in the largest regional specialty alcohol market in

the United States as well as international markets.

◾ We believe that our Midwest location enhances our overall hedging opportunities with a greater correlation to the highly-liquid physical

and paper markets in Chicago.

◾ Our Midwest location provides excellent logistical access via rail, truck and barge.

In particular, barge access via the Illinois

River to the Mississippi River enables us to efficiently bring our products to international markets.

◾ The relatively unique wet milling process at one of our production facilities at our Pekin Campus allows us to extract the highest

use and value from each component of the corn kernel.

As a result, the wet milling process generates a higher level of cost recovery from

corn than that produced at a dry mill.

◾ Our Midwest location allows us deep market insight and engagement in major specialty alcohol, fuel-grade ethanol, pet food and feed

markets, thereby improving pricing opportunities.

We believe that these competitive strengths will

help us attain our goal of expanding our business as a leading producer and marketer of specialty alcohols and essential ingredients.

help us attain our goal of expanding our business as a leading producer and distributor of specialty alcohols and essential ingredients.

Overview of Our Key Markets and Market Opportunity

13 unchanged sentences

offerings within the health, home and beauty markets through quality management systems certifications.

We have ISO 9001, ICH Q7 and EXCiPACT certifications at each of our

Pekin Campus production facilities, all of which are viewed as important attestations of quality control standards.

We have ISO 9001, ICH Q7 and EXCiPACT

certifications at each of our Pekin Campus production facilities, all of which are viewed as important attestations of quality control

In particular, our ICH Q7 certification qualifies our specialty alcohols for use as an API, and our EXCiPACT certification

3 unchanged sentences

Food & Beverage

Our products for the food and beverage market

include specialty alcohols used in alcoholic beverages, flavor extracts and vinegar as well as corn germ used for corn oils and carbon

dioxide, or CO 2 , used for beverage carbonation and dry ice.

The principal specialty alcohol we offer for alcoholic beverages

and vinegar is our grain neutral spirits, or GNS, alcohol.

Our products for the food and beverage market include

specialty alcohols used in alcoholic beverages, flavor extracts and vinegar as well as corn germ used for corn oils and carbon dioxide,

or CO 2 , used for beverage carbonation and dry ice.

The principal specialty alcohol we offer for beverage-grade product is our

grain neutral spirits, or GNS, alcohol.

In addition, we primarily sell FCC 190 and USP 190 Ultra into vinegar markets.

We are also introducing new high-quality 190 proof and low-moisture 200-proof GNS products to our existing and

target customers in the beverage, food, flavor, personal care and pharmaceutical industries.

We believe the key drivers in the food and beverage

1 unchanged sentence

consumers seeking unique and personalized

younger adults drawn to the caché of luxury brands, including super-premium spirits;

improved consumer access to

spirits products;

improved consumer access to spirits products;

the growth of craft distillers;

and the ability to meet wide-ranging consumer preferences through a broad diversity

of spirits categories and cocktails.

and the ability to meet wide-ranging consumer

preferences through a broad diversity of spirits categories and cocktails.

Essential Ingredients

Our essential ingredients products include dried

Our essential ingredients include dried

yeast, corn gluten meal, corn gluten feed, and distillers grains and liquid feed used in commercial animal feed and pet foods.

materials for our essential ingredients products are generated as co-products from our production of alcohols.

These co-products are

further manufactured, altered and refined into our essential ingredients products, including for special customer applications.

Many of our essential ingredients are used in

a variety of food products to affect their nutrition, including protein and fat content, as well as other product attributes such as

taste, texture, palatability and stability.

also sell yeast for human consumption.

The raw materials for our essential ingredients are generated as co-products from our

production of alcohols.

These co-products are further manufactured, altered and refined into our essential ingredients, including

for special customer applications.

Many of our essential ingredients are used in a

variety of food products to affect their nutrition, including protein and fat content, as well as other product attributes such as taste,

texture, palatability and stability.

Our high quality and high purity manufacturing enable our customers to use some of our essential

ingredients in human foods while others are used in pet foods and animal feed.

See “—Overview of Distillers Grains Market”.

We expect the essential ingredients market to

grow significantly due to global demand for higher-grade protein feed, such as feed used in fisheries and other applications.

We expect the essential ingredients market to grow

significantly due to global demand for higher-grade protein feed, such as feed used in fisheries and other applications.

Renewable Fuels

1 unchanged sentence

ethanol used as transportation fuel and distillers corn oil used as a biodiesel feedstock.

Our renewable fuels business is supported

by our own production of fuel-grade ethanol as well as fuel-grade ethanol produced by third parties.

Our renewable fuels business is supported by

our own production of fuel-grade ethanol as well as fuel-grade ethanol produced by third parties.

Renewable fuels, primarily fuel-grade ethanol,

2 unchanged sentences

for fuel blending to extend fuel supplies and reduce reliance on crude oil and refined products;

comply with a variety of governmental programs, in particular, the national Renewable Fuel Standard, or RFS, which was enacted to promote

alternatives to fossil fuels.

Under the RFS, the mandated use of all renewable fuels rises incrementally and peaks at 36.0 billion gallons

by 2022, of which 15.0 billion gallons are required from conventional, or corn-based, ethanol.

The RFS allows the Environmental Protection

Agency, or EPA, to adjust the annual requirement based on certain facts and circumstances.

and to comply

with a variety of governmental programs, in particular, the national Renewable Fuel Standard, or RFS, which was enacted to promote alternatives

to fossil fuels.

Under the RFS, the mandated use of all renewable fuels rises incrementally and peaks at 36.0 billion gallons by 2022,

of which 15.0 billion gallons are required from conventional, or corn-based, ethanol.

The RFS allows the Environmental Protection Agency,

or EPA, to adjust the annual requirement based on certain facts and circumstances.

In 2022, the EPA proposed 15.0 billion gallons from

conventional ethanol for 2023, increasing to 15.25 billion gallons for both 2024 and 2025.

See “—Governmental Regulation”.

According to the Renewable Fuels Association, the domestic fuel-grade

ethanol industry produced 15.0 billion gallons of ethanol in 2021, up from 13.8 billion gallons in 2020.

According to the United States

Department of Energy, total annual gasoline consumption in the United States is approximately 123.5 billion gallons and total annual fuel-grade

ethanol consumption represented approximately 11% of this amount in 2020.

We anticipate that increased transportation and economic activity

as the coronavirus pandemic subsides together with continued limited opportunities for gasoline refinery expansions and the growing importance

of reducing CO 2 emissions through the use of renewable fuels will generate additional growth in the demand for fuel-grade ethanol.

According to the Renewable Fuels Association, the

domestic fuel-grade ethanol industry produced 15.4 billion gallons of ethanol in 2022, up from 15.0 billion gallons in 2021.

to the United States Department of Energy, total annual gasoline consumption in the United States is approximately 134.8 billion gallons

and total annual fuel-grade ethanol consumption represented approximately 11% of this amount in 2021.

We anticipate that continued limited

opportunities for gasoline refinery expansions and the growing importance of reducing CO 2 emissions through the use of renewable

fuels will generate additional growth in the demand for fuel-grade ethanol.

Overview of Alcohol Production Process

2 unchanged sentences

Modern alcohol production requires large amounts of corn, or other high-starch grains, and water

as well as chemicals, enzymes and yeast, and denaturants including unleaded gasoline or liquid natural gas, in addition to natural gas

and electricity.

as well as chemicals, enzymes and yeast, in addition to natural gas and electricity.

Dry Milling Process

In the dry milling process, corn or other high-starch

grain is first ground into meal, then slurried with water to form a mash.

grain is first ground into flour, then slurried with water to form a mash.

Enzymes are added to the mash to convert the starch into dextrose,

a simple sugar.

Ammonia is added for acidic (pH) control and as a nutrient for the yeast.

The mash is processed through a high temperature

cooking procedure, which reduces bacteria levels prior to fermentation.

The mash is then cooled and transferred to fermenters, where

yeast is added and the conversion of sugar to alcohol and CO 2 begins.

The mash is processed through a high temperature cooking procedure, which reduces bacteria levels prior to fermentation.

The mash is then cooled and transferred to fermenters, where yeast is added and the conversion of sugar to alcohol and CO 2 begins.

After fermentation, the resulting “beer”

2 unchanged sentences

to 190 proof using conventional distillation methods and then is dehydrated to approximately 200 proof, representing 100% alcohol levels,

in a molecular sieve system.

For fuel-grade ethanol, the resulting anhydrous alcohol is then blended with approximately 2.5% denaturant,

which is usually gasoline, and is then ready for shipment to renewable fuels markets.

in either a molecular sieve system or a grits system.

For fuel-grade ethanol, the resulting anhydrous alcohol is then blended with approximately

2.5% denaturant, which is usually gasoline, and is then ready for shipment to renewable fuels markets.

For specialty alcohols, the products

can be sold pure or as one of the Tobacco Tax & Trade Bureau (TTB) approved specially denatured alcohol (SDA) formulations to meet

customer specifications.

The residual stillage is separated into a coarse

grain portion and a liquid portion through a centrifugation process.

The soluble liquid portion is concentrated to about 40% dissolved

solids by an evaporation process.

grain portion and a liquid portion through a screw press or centrifugation process.

The soluble liquid portion is concentrated to about

40% dissolved solids by an evaporation process.

This intermediate state is called condensed distillers solubles, or syrup.

The coarse grain and syrup

portions are then mixed to produce wet distillers grains, or WDG, or can be mixed and dried to produce dried distillers grains with solubles,

grain and syrup portions are then mixed to produce wet distillers grains, or WDG, or can be mixed and dried to produce dried distillers

grains with solubles, or DDGS.

Both WDG and DDGS are high-protein animal feed products.

1 unchanged sentence

In the wet milling process, corn or other high-starch

grain is first soaked or “steeped” in water for 24 – 48 hours to separate the grain into its many components.

steeping, the grain slurry is processed first to separate the grain germ, from which the grain oil can be further separated.

The remaining

fiber, gluten and starch components are further separated and sold.

The steeping liquor is concentrated in an evaporator.

The concentrated product, called heavy steep water, is co-dried with the fiber component and is then sold as gluten feed.

component is filtered and dried to produce gluten meal.

The starch and any remaining water from the mash

is then processed into alcohol or dried and processed into corn syrup.

The fermentation process for alcohol at this stage is similar

to the dry milling process.

grain is first soaked or “steeped” in sulfurous acid for approximately 24 hours to soften the whole corn kernel ahead of milling.

After steeping, the grain goes through coarse milling to gently open the kernels to separate the corn germ from which the corn oil can

be further extracted in a separate process.

The remaining fiber, gluten and starch components are further separated and sold.

The stillage from the fermentation process is concentrated

in an evaporator and is co-dried with the fiber component to be sold as corn gluten feed.

The gluten component is filtered and dried to

produce a high protein corn gluten meal.

The starch is then processed into alcohol through

fermentation.

The fermentation process for alcohol at this stage is similar to the dry milling process.

In addition, we separate and dry

yeast to produce distillers yeast.

Overview of Distillers Grains Market

6 unchanged sentences

production costs and lowering the carbon footprint of our production facilities.

Historically, the market price for distillers

grains has generally tracked the value of corn.

We believe that the market price of WDG and DDGS is determined by a number of factors,

including the market value of corn, soybean meal and other competitive ingredients, the performance or value of WDG and DDGS in a particular

feed formulation and general market forces of supply and demand, including export markets for these co-products.

The market price of

distillers grains is also often influenced by nutritional models that calculate the feed value of distillers grains by nutritional content,

as well as reliability of consistent supply.

Historically, the market price for distillers grains

has generally tracked the price of corn.

We believe that the market price of WDG and DDGS is determined by a number of factors, including

the market prices of corn, soybean meal and other competitive ingredients, the performance or value of WDG and DDGS in a particular feed

formulation and general market forces of supply and demand, including export markets for these co-products.

The market price of distillers

grains is also often influenced by nutritional models that calculate the feed value of distillers grains by nutritional content, as well

as reliability of consistent supply.

We market and sell through our wholly-owned subsidiary, Kinergy Marketing

3 unchanged sentences

through our wholly-owned subsidiary, Alto Nutrients, LLC, all of the essential ingredients we produce.

We also now sell break bulk quantities

through Eagle Alcohol to customers in the beverage, food, pharma and related-process industries.

We also sell break bulk quantities

through Eagle Alcohol to customers in the beverage, food, industrial and related-process industries.

We have extensive and long-standing customer relationships,

both domestic and international, for our specialty alcohols and essential ingredients.

These customers include producers and distributors

of ingredients for cosmetics, sanitizers and related products, distilled spirits producers, food products manufacturers, producers of

personal health/consumer health and personal care hygiene products, and global trading firms.

Our renewable fuel customers

are located throughout the Western and Midwestern United States and consist of integrated oil companies and gasoline marketers who

blend fuel-grade ethanol into gasoline.

Our customers depend on us to provide a reliable supply of fuel-grade ethanol and manage the

logistics and timing of delivery with very little effort on their part.

Our customers collectively require fuel-grade ethanol

volumes in excess of the supplies we produce at our facilities.

We secure additional fuel-grade ethanol supplies from third-party

fuel-grade ethanol plants in California and other third-party suppliers in the Midwest where a majority of fuel-grade ethanol

producers are located.

We arrange for transportation, storage and delivery of fuel-grade ethanol purchased by our customers through

our agreements with third-party service providers in the Western United States as well as in the Midwest from a variety of

both domestic and international, for our specialty alcohols and essential ingredients, including yeast for pet food and human foods.

customers include producers and distributors of ingredients for cosmetics, sanitizers and related products, distilled spirits producers,

food products manufacturers, producers of personal health/consumer health and personal care hygiene products, and global trading firms.

Our renewable fuel customers are located throughout

the Western and Midwestern United States and consist of integrated oil companies and gasoline marketers who blend fuel-grade ethanol into

Our customers depend on us to provide a reliable supply of fuel-grade ethanol and manage the logistics and timing of delivery.

We secure additional fuel-grade ethanol supplies from third-party fuel-grade ethanol plants.

We market our essential ingredient feed products

2 unchanged sentences

a substitute for corn and other sources of starch and protein.

We sell our corn oil to poultry and biodiesel customers.

We do not market

essential ingredients from other producers.

We sell our corn oil to poultry, renewable diesel and biodiesel customers.

We do not market essential ingredients from other producers.

Our Pekin Campus production segment generated $521.3

$498.2 million, $330.4 million and $343.6 million in net sales for the years ended December 31, 2021, 2020 and 2019, respectively, from

the sale of alcohols.

Our Pekin Campus production segment generated $189.5 million, $130.3 million and $139.0 million in net sales for

the years ended December 31, 2021, 2020 and 2019, respectively, from the sale of essential ingredients.

During 2021, 2020 and 2019, our Pekin Campus production

segment sold an aggregate of approximately 213.0 million, 193.9 million and 218.5 million gallons of alcohols and 875,000, 829,000 and

913,000 tons of essential ingredients, respectively, on a dry matter basis.

Our other production segment generated $107.9

million, $137.7 million and $455.3 million in net sales for the years ended December 31, 2021, 2020 and 2019, respectively, from the

sale of alcohols.

Our other production segment generated $31.1 million, $40.9 million and $130.0 million in net sales for the years ended

December 31, 2021, 2020 and 2019, respectively, from the sale of essential ingredients.

During 2021, 2020 and 2019, our other production

segment sold an aggregate of approximately 37.6 million, 78.0 million and 272.5 million gallons of alcohols and 361,000, 619,000 and

1,908,000 tons of essential ingredients, respectively, on a dry matter basis.

Our marketing segment generated $381.2 million,

$257.7 million and $356.9 million in net sales for the years ended December 31, 2021, 2020 and 2019, respectively, from the sale of all

million, $498.2 million and $330.4 million in net sales for the years ended December 31, 2022, 2021 and 2020, respectively, from the sale

Our Pekin Campus production segment generated $225.8 million, $189.5 million and $130.3 million in net sales for the years

ended December 31, 2022, 2021 and 2020, respectively, from the sale of essential ingredients.

During 2022, 2021 and 2020, our Pekin Campus production segment sold

an aggregate of approximately 201.1 million, 213.0 million and 193.9 million gallons of alcohols and 851,500, 875,100 and 829,000 tons

of essential ingredients, respectively, on a dry matter basis.

Our Other production segment generated $253.6 million,

$107.9 million and $137.7 million in net sales for the years ended December 31, 2022, 2021 and 2020, respectively, from the sale of alcohols.

Our Other production segment generated $90.2 million, $31.1 million and $40.9 million in net sales for the years ended December 31, 2022,

2021 and 2020, respectively, from the sale of essential ingredients.

During 2022, 2021 and 2020, our Other production segment sold an aggregate

of approximately 92.3 million, 37.6 million and 78.0 million gallons of alcohols and 785,900, 361,000 and 619,000 tons of essential ingredients,

respectively, on a dry matter basis.

Our marketing and distribution segment generated $228.9 million, $381.2

million and $257.7 million in net sales for the years ended December 31, 2022, 2021 and 2020, respectively, from the sale of all alcohols.

Our Corporate and other segment generated $15.8 million in net sales

from Eagle Alcohol and sold 7.6 million gallons of alcohols.

During 2022, 2021 and 2020, we produced or purchased

1 unchanged sentence

99 and 65 customers, respectively.

For 2021, 2020 and 2019, sales to our three largest customers, Shell Trading US Company, Chevron

Products USA and Valero Energy Corporation represented an aggregate of approximately 23%, 17% and 33%, of our net sales, respectively.

For 2021, 2020 and 2019, sales to each of our other customers represented less than 10% of our net sales.

Production Segments

Our production operations depend upon various

raw materials suppliers, including suppliers of corn, natural gas, electricity and water.

For 2022, 2021 and 2020, sales to our two largest customers, Shell Trading US Company and Chevron Products

USA represented an aggregate of approximately 20%, 22% and 12%, of our net sales, respectively.

For 2022, 2021 and 2020, sales to each

of our other customers represented less than 10% of our net sales.

Pekin Campus and Other Production Segments

Our production operations depend upon various raw

materials suppliers, including suppliers of corn, natural gas, electricity and water.

The cost of corn is the most important variable

5 unchanged sentences

materials futures contracts and options.

During 2021, 2020 and 2019, purchases of corn

from our two largest suppliers represented an aggregate of approximately 14%, 25% and 41% of our total corn purchases, respectively,

for those periods.

Purchases from each of our other corn suppliers represented less than 10% of total corn purchases in each of 2021,

2020 and 2019.

Marketing Segment

Our marketing operations cover alcohols and essential

During 2022, 2021 and 2020, purchases of corn from our two largest

suppliers represented an aggregate of approximately 27%, 16% and 16% of our total corn purchases, respectively, for those periods.

from each of our other corn suppliers represented less than 10% of total corn purchases in each of 2022, 2021 and 2020.

Marketing and Distribution Segment

Our marketing and distribution operations include alcohols and essential

ingredients we produce but also depend upon various third-party producers of fuel-grade ethanol.

7 unchanged sentences

During 2022, 2021 and 2020, purchases of fuel-grade

ethanol from our three largest third-party suppliers represented 76%, 62% and 53%, respectively, of our total third-party ethanol purchases

ethanol from our four largest third-party suppliers represented 69%, 76% and 62%, respectively, of our total third-party ethanol purchases

for each of those periods.

3 unchanged sentences

We operate five production facilities.

our production facilities are located in the Midwestern state of Illinois and two of our facilities are located in the Western states

of Oregon and Idaho.

We have a combined annual alcohol production capacity of 350 million gallons.

As market conditions change, we may

increase, decrease or idle production at one or more operating facilities or resume operations at any idled facility.

The tables below

provide an overview of our five production facilities.

our production facilities are located in Pekin, Illinois at our Pekin Campus, one is located in Oregon and another is located in Idaho.

We have an annual alcohol production capacity of 350 million gallons, comprised of 210 million gallons of fuel-grade ethanol and up to

140 million gallons of specialty alcohols.

As market conditions change, we may increase, decrease or idle production at one or more operating

facilities or resume operations at any idled facility.

The tables below provide an overview of our five production facilities.

Pekin Campus Production Facilities

Operating status

Approximate maximum annual alcohol production

capacity (in millions of gallons)

Approximate maximum annual specialty alcohol production capacity

(in millions of gallons)

Current operating status

Approximate maximum annual alcohol production capacity (in millions of gallons)

Approximate maximum annual specialty alcohol production capacity (in millions of gallons)

Production milling process

1 unchanged sentence

Western Production Facilities

Operating status

Approximate maximum annual fuel-grade ethanol

production capacity (in millions of gallons)

Current operating status

Approximate maximum annual fuel-grade ethanol production capacity (in millions of gallons)

Production milling process

Primary energy source

* Restarted operations in November 2021.

Commodity Risk Management

We employ various risk mitigation techniques.

For example, we may seek to mitigate our exposure to commodity price fluctuations by purchasing forward a portion of our corn and natural

example, we may seek to mitigate our exposure to commodity price fluctuations by purchasing forward a portion of our corn and natural

gas requirements through fixed-price or variable-price contracts with our suppliers, as well as entering into derivative contracts for

11 unchanged sentences

For example, fuel-grade ethanol prices, as reported by the Chicago Board of Trade, or CBOT, ranged from $2.00 to $2.88 per

gallon during 2021, from $0.81 to $1.62 per gallon during 2020 and from $1.25 to $1.70 per gallon during 2019;

gallon during 2022, $1.48 to $3.75 per gallon during 2021 and from $0.81 to $1.62 per gallon during 2020;

and corn prices, as reported

by the CBOT, ranged from $4.84 to $7.73 per bushel during 2021, from $3.03 to $4.84 per bushel during 2020 and from $3.41 to $4.55 per

bushel during 2019.

by the CBOT, ranged from $5.64 to $8.18 per bushel during 2022, $4.84 to $7.73 per bushel during 2021 and from $3.03 to $4.84 per bushel

Climate-Related and Other Risks

Short- to medium-term climate-related and other risks include high

sensitivity to certain commodity prices such as corn and natural gas;

regulatory changes and political volatility, both domestic and international;

ethanol supply and demand imbalances;

logistics and storage constraints from river access during inclement or volatile weather conditions;

lack of automation of process optimization;

high repair, maintenance and production costs resulting from older facilities;

capacity of our older facilities as water temperatures increase;

and international market competition.

Long-term climate-related risks include water resource limitations;

lower or volatile grain availability in local markets;

market transition away from combustion fuels that include renewables;

and the energy

cost impact of technology such as wet milling and multiple distillation processes for high-quality alcohol.

We also may be impacted by

costs and regulatory burdens associated with carbon emissions from our production and distribution as well as truck transport and packaging

associated with Eagle Alcohol’s use of drums and totes.

See “Risk Factors.”

Marketing Arrangements

1 unchanged sentence

produced at our facilities.

In addition, we have exclusive fuel-grade ethanol marketing arrangements with two third-party ethanol producers,

Calgren Renewable Fuels, LLC and Pelican Renewables, LLC, to market and sell their entire fuel-grade ethanol production volumes.

Renewable Fuels, LLC owns and operates a fuel-grade ethanol production facility in Pixley, California with annual production capacity

of 55 million gallons.

Pelican Renewables, LLC, owns and operates a fuel-grade ethanol production facility in Stockton, California with

annual production capacity of 60 million gallons.

In addition, we market and sell the entire fuel-grade ethanol production volume of a third-party producer.

We are the largest producer of specialty alcohols

4 unchanged sentences

along with many smaller producers.

The largest producers of fuel-grade ethanol in

the United States are POET, LLC, Valero Renewable Fuels Company, LLC, Archer-Daniels-Midland Company and Green Plains Inc., collectively

with approximately 36% of the total installed fuel-grade ethanol production capacity in the United States.

In addition, there are many

mid-sized fuel-grade ethanol producers with several plants under ownership, smaller producers with one or two plants, and several fuel-grade

ethanol marketers that create significant competition.

Overall, we believe there are over 200 fuel-grade ethanol production facilities

in the United States with a total installed production capacity of approximately 17.5 billion gallons and many brokers and marketers

with whom we compete for sales of fuel-grade ethanol and its co-products.

The largest producers of fuel-grade ethanol in the United States are

POET, LLC, Valero Renewable Fuels Company, LLC, Archer-Daniels-Midland Company and Green Plains Inc., collectively with approximately

41% of the total installed fuel-grade ethanol production capacity in the United States.

In addition, there are many mid-sized fuel-grade

ethanol producers with several plants under ownership, smaller producers each with one or two plants, and several fuel-grade ethanol marketers

that create significant competition.

Overall, we believe there are over 200 fuel-grade ethanol production facilities in the United States

with a total installed production capacity of approximately 17.5 billion gallons and many brokers and marketers with whom we compete for

sales of fuel-grade ethanol and its co-products.

Our fuel-grade ethanol also competes on a global

1 unchanged sentence

feedstock input costs such as sugarcane used in Brazil as compared to corn used in the Unites States may give foreign producers a competitive

In addition, fuel-grade ethanol from sugarcane feedstock qualifies as an advanced biofuel, unlike corn ethanol, allowing required

parties to economically satisfy an advanced biofuel standard.

In addition, fuel-grade ethanol from sugarcane feedstock qualifies as an advanced biofuel, unlike corn ethanol, allowing certain

producers to economically satisfy an advanced biofuel standard.

Moreover, new products and production technologies are under continuous

2 unchanged sentences

our customer and supplier relationships, the barriers to entry to our most profitable lines of business—including our modern technologies

at our production facilities—our experienced management, and the strategic location of our Midwest production facilities.

that these advantages will help us to attain our goal to expand our business as a leading producer and marketer of specialty alcohols

and essential ingredients.

and certifications at our production facilities—our experienced management, and the strategic location of our Midwest production

We believe that these advantages will help us to attain our goal to expand our business as a leading producer and distributor

of specialty alcohols and essential ingredients.

See “—Competitive Strengths”.

Governmental Regulation

Our business is subject to a wide range of

federal, state and local laws and regulations directed at protecting public health and the environment, including those promulgated

by the Occupational Safety and Health Administration, or OSHA, the U.S.

Food and Drug Administration, or FDA, the EPA, and numerous

state and local authorities.

These laws, their underlying regulatory requirements and their potential enforcement, some of which are

described below, impact, or may impact, nearly every aspect of our operations, including our production of alcohols (including

distillation), our production of essential ingredients, our storage facilities, and our water usage, wastewater discharge, disposal of hazardous wastes and emissions, and other matters pertaining to our existing and proposed business by

● restrictions

on our existing and proposed operations and/or the need to install enhanced or additional

requirements applicable to food and drug additives;

need to obtain and comply with permits and authorizations;

for exceeding applicable permit limits or legal requirements, in some cases for the remediation

of contaminated soil and groundwater at our production facilities, contiguous and adjacent

properties and other properties owned and/or operated by third parties;

specifications for the specialty alcohols and essential ingredients we produce and market.

Our business is subject to a wide range of federal,

state and local laws and regulations directed at protecting public health and the environment, including those promulgated by the Occupational

Safety and Health Administration, or OSHA, the U.S.

Food and Drug Administration, or FDA, the EPA, and numerous state, local and international

These laws, their underlying regulatory requirements and their potential enforcement, some of which are described below,

impact, or may impact, nearly every aspect of our operations, including our production of alcohols (including distillation), our production

of essential ingredients, our storage facilities, and our water usage, wastewater discharge, disposal of hazardous wastes and emissions,

and other matters pertaining to our existing and proposed business by imposing:

● restrictions on our existing and proposed operations and/or the need to install enhanced or additional controls;

● special requirements applicable to food and drug additives;

● the need to obtain and comply with permits and authorizations;

● liability for exceeding applicable permit limits or legal requirements, in some cases for the remediation of contaminated soil and

groundwater at our production facilities, contiguous and adjacent properties and other properties owned and/or operated by third parties;

● other specifications for the specialty alcohols and essential ingredients we produce and market.

In addition, some governmental regulations are

6 unchanged sentences

Our products for the Health, Home & Beauty ,

Food & Beverage and some Essential Ingredients markets are subject to regulation by the FDA as well as similar state agencies.

the Federal Food, Drug, and Cosmetic Act, or FDCA, the FDA regulates the processing, formulation, safety, manufacture, packaging, labeling

and distribution of food ingredients, vitamins and cosmetics.

Many of the FDA’s and FDCA’s rules and regulations apply directly

to us as well as indirectly through their application in our customers’ products.

To be properly marketed and sold in the United

States, a relevant product must be generally recognized as safe, approved and not adulterated or misbranded under the FDCA and relevant

regulations issued under the FDCA.

The FDA has broad authority to enforce the provisions of the FDCA.

Failure to comply with the laws

and regulations of the FDA or similar state agencies could prevent us from selling certain of our products or subject us to liability.

Food & Beverage and Essential Ingredients markets are subject to regulation by the FDA as well as similar state agencies.

Under the Federal Food, Drug, and Cosmetic Act, or FDCA, the FDA regulates the processing, formulation, safety, manufacture, packaging,

labeling and distribution of food ingredients, vitamins, cosmetics and pharmaceuticals for active and inactive ingredients.

FDA’s and FDCA’s rules and regulations apply directly to us as well as indirectly through their application in our customers’

To be properly marketed and sold in the United States, a relevant product must be generally recognized as safe, approved and

not adulterated or misbranded under the FDCA and relevant regulations issued under the FDCA.

The FDA has broad authority to enforce the

provisions of the FDCA.

Failure to comply with the laws and regulations of the FDA or similar state agencies could prevent us from selling

certain of our products or subject us to liability.

Renewable Fuels Energy Legislation

Under the RFS, the mandated use of all renewable

fuels, including fuel-grade ethanol, rises incrementally and peaks at 36.0 billion gallons by 2022, of which 15.0 billion gallons are

fuels, including fuel-grade ethanol, rose incrementally and peaked at 36.0 billion gallons in 2022, of which 15.0 billion gallons are

required from conventional, or corn-based, ethanol.

4 unchanged sentences

of the requirement would severely harm the economy or environment of a state, region or the United States as a whole.

Various bills in Congress introduced from time

to time are also directed at altering existing renewable fuels energy legislation, but none has passed in recent years.

Some legislative

bills are directed at halting or reversing expansion of, or even eliminating, the renewable fuel program, while other bills are directed

at bolstering the program or enacting further mandates or grants that would support the renewable fuels industry.

Various bills in Congress introduced from time to time are also directed

at altering existing renewable fuels energy legislation, but none have passed in recent years.

Some legislative bills are directed at

halting or reversing expansion of, or even eliminating, the renewable fuel program, while other bills are directed at bolstering the program

or enacting further mandates or grants that would support the renewable fuels industry.

The EPA has allowed fuel and fuel-additive manufacturers

to introduce into commercial gasoline that contains greater than 10% fuel-grade ethanol by volume, up to 15% fuel-grade ethanol by volume,

or E15, for vehicles from model year 2001 and beyond.

Commercial sale of E15 has begun in a majority of states, and the EPA has enacted

a rule allowing for year-round use of E15.

to introduce into commercial gasoline up to 15% fuel-grade ethanol by volume, or E15, for vehicles from model year 2001 and beyond.

sale of E15 has begun in a majority of states, and the EPA has enacted a rule allowing for year-round use of E15.

Various states including California, Oregon and

11 unchanged sentences

employees, including 439 full-time employees.

Our human capital resources objectives include attracting and retaining

well-qualified and highly skilled and motivated employees and executives.

Our compensation program is designed to attract, retain

and motivate these personnel.

We use a mix of competitive salaries and other benefits to attract and retain employees and

As of March 11, 2022, approximately 45% of our employees were represented by a labor union and covered by a collective

bargaining agreement.

We have never had a work stoppage or strike and we consider our relations with our employees to be good.

Our human capital resources objectives include attracting and retaining well-qualified and

highly skilled and motivated employees and executives.

As of that same date, approximately 44% of our employees were represented by a

labor union and covered by a collective bargaining agreement.

We have never had a work stoppage or strike and we consider our relations

with our employees to be good.

Our compensation program is designed to attract,

retain and motivate our personnel.

We use a mix of competitive salaries and other benefits to attract and retain employees and executives.

Some of these benefits include matching 401K contributions of up to 6% of salary, health and wellness programs and a paid service day

for employees to give back to their communities.

At the direction and with the involvement of an environmental, social and governance,

or ESG, committee established by our board of directors, we have established an ESG working committee that draws from our many administrative

and operational departments to review key policies and procedures, conduct employee engagement surveys and training, champion volunteering

and charitable drives, develop and implement recruiting efforts which promote diversity and inclusion and prioritize collecting and improving

on key metrics from industry frameworks such as the Global Reporting Initiative and Sustainability Accounting Standards Board standards

which are maintained by the International Sustainability Standards Board of the IFRS Foundation.

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.

What changed 10-K

Item 1. Business