What changed in this filing

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Item 1A. Risk Factors

2023-08-08 compared with 2023-05-09 · 91 added, 76 removed, 390 unchanged (30% of the section changed)

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In that event, the market price for our common stock will likely decline, and you may lose all or part of your investment.

Risks Related to our

Risks Related to our Business

Our results of operations and our ability to operate

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Inflation, including as a result of commodity price

inflation or supply chain constraints due to the war in Ukraine, and higher prices in general may adversely impact our results of operations.

inflation or supply chain constraints due to the war in Ukraine or other geopolitical events, and higher prices in general may adversely

impact our results of operations.

We have experienced inflationary impacts on key

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Commodity prices in particular have

risen significantly over the past year.

risen significantly over the past two years.

Inflation and its negative impacts could escalate in future periods.

Ukraine is the third largest exporter of grain

in the world.

Russia is one of the largest producers of natural gas and oil and is the largest exporter of fertilizers.

The commodity

price impact of the war in Ukraine has been a sharp and sustained rise in grain and energy prices, including for corn and natural gas,

our two most important production input commodities.

Ukraine, prior to its war with Russia, was one

of the largest exporters of grain in the world.

Russia is one of the largest producers of grain, natural gas and oil, and is the largest

exporter of fertilizers.

The commodity price impact of the war in Ukraine has been a sharp and sustained rise in grain prices, including

for corn, our most important production input commodity.

In addition, the war in Ukraine has adversely affected and may continue to adversely

affect global supply chains resulting in further commodity price inflation for our production inputs.

Lower fertilizer supplies may also

impact future growing seasons, further impacting grain supplies and prices.

Also, given high global grain prices, U.S.

farmers may prefer

to lock in prices and export additional volumes, reducing domestic grain supplies and resulting in further inflationary pressures on key

production inputs.

Lower fertilizer supplies and higher

prices may also impact future growing seasons, further impacting grain supplies and prices.

India also recently banned certain rice exports

to ensure adequate domestic availability at reasonable prices.

Wheat, corn, rice and other grains are considered economic substitutes

and their relative prices affect one another to varying degrees.

Given higher global grain prices, U.S.

farmers may prefer to lock in

prices and export additional volumes, reducing domestic grain supplies and resulting in further inflationary pressures on key production

Even if inflation stabilizes or abates, the prices

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above or we may be unable to renew our insurance on commercially reasonable terms or at all.

Climate change, and governmental regulations

aimed at addressing climate-related issues, may affect conditions to which our business is highly sensitive, many of which could materially

Climate change, and governmental regulations aimed

at addressing climate-related issues, may affect conditions to which our business is highly sensitive, many of which could materially

and adversely harm our business, results of operations and financial condition.

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the following:

is one of our key production inputs;

water resource limitations may result from drought and other inclement weather;

water resource limitations

may also result from rationing and other governmental regulations limiting water use;

Higher water temperatures due to increased global or regional temperatures may negatively affect production efficiencies due to water temperature production requirements given the poor cooling capacities of our older facilities;

Flooding and other inclement weather may negatively affect our river access, other transportation logistics and costs, and storage requirements;

An overall increase in energy costs will negatively impact our production costs generally and may critically impact certain high energy-intensive production technologies, such as our wet milling and multiple distillation processes for high-quality alcohol;

Regulatory and market transition away from combustion fuels and fuel-grade ethanol blending may threaten the viability of our renewable fuels business;

Costs and regulatory burdens associated with governmental regulations that limit or tax greenhouse gas emissions, such as carbon dioxide, from alcohol production and distribution, or from truck transport and packaging associated with Eagle Alcohol’s business and use of drums and totes, will negatively impact us.

● water is one of our key production inputs;

water resource

limitations may result from drought and other inclement weather;

water resource limitations may also result from rationing and other

governmental regulations limiting water use;

● higher water temperatures due to increased global or regional

temperatures may negatively affect production efficiencies due to water temperature production requirements given the poor cooling capacities

of our older facilities;

● flooding and other inclement weather may negatively affect

our river access, other transportation logistics and costs, and storage requirements;

● an overall increase in energy costs will negatively impact

our production costs generally and may critically impact certain high energy-intensive production technologies, such as our wet milling

and multiple distillation processes for high-quality alcohol;

● regulatory and market transition away from combustion fuels

and fuel-grade ethanol blending may threaten the viability of our renewable fuels business;

● costs and regulatory burdens associated with governmental

regulations that limit or tax greenhouse gas emissions, such as carbon dioxide, from alcohol production and distribution, or from truck

transport and packaging associated with Eagle Alcohol’s business and use of drums and totes, will negatively impact us.

New legislation in the United States to address

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us from expanding our business.

We have incurred

significant losses and negative operating cash flow in the past.

For example, for the three months ended March 31, 2023, three

months ended March 31, 2022, three months and year ended December 31, 2022 and for the year ended December 31, 2020, we incurred

consolidated net losses of approximately $13.2 million, $2.6 million, $33.1 million, $41.6 million and $17.3 million, respectively.

For the three months ended March 31, 2023, we experienced negative operating cash flow of approximately $23.3 million.

losses and negative operating cash flow in the future.

We expect to rely on cash on hand, cash, if any, generated from our

operations, borrowing availability under our lines of credit and proceeds from our future financing activities, if any, to fund all

of the cash requirements of our business.

Additional losses and negative operating cash flow may hamper our operations and impede us

from expanding our business.

We have incurred significant losses and negative

operating cash flow in the past.

For example, for the three months ended March 31, 2023, three months ended March 31, 2022, three months

and year ended December 31, 2022 and for the year ended December 31, 2020, we incurred consolidated net losses of approximately $13.2

million, $2.6 million, $33.1 million, $41.6 million and $17.3 million, respectively.

For the three months ended March 31, 2023, we experienced

negative operating cash flow of approximately $23.3 million.

We may incur losses and negative operating cash flow in the future.

to rely on cash on hand, cash, if any, generated from our operations, borrowing availability under our lines of credit and proceeds from

our future financing activities, if any, to fund all of the cash requirements of our business.

Additional losses and negative operating

cash flow may hamper our operations and impede us from expanding our business.

We incur significant expenses to maintain and upgrade

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● make it more difficult to pay or refinance our indebtedness if it becomes due during adverse economic and industry conditions;

limit our flexibility to pursue strategic opportunities or react to changes in our business and the industries in which we operate and, consequently, place us at a competitive disadvantage to our competitors who have less debt;

require a substantial portion of our cash flows from operations for debt service payments, thereby reducing the availability of our cash flows to fund working capital, additional capital expenditures, acquisitions, dividend payments and for other general corporate purposes;

● limit our flexibility to pursue strategic opportunities or react to changes in our business and the industries in which we operate

and, consequently, place us at a competitive disadvantage to our competitors who have less debt;

● require a substantial portion of our cash flows from operations for debt service payments, thereby reducing the availability of our

cash flows to fund working capital, additional capital expenditures, acquisitions, dividend payments and for other general corporate purposes;

● limit our ability to procure additional financing for working capital or other purposes.

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by the number of miles traveled by consumers and vehicle fuel economy.

Lower demand for fuel-grade ethanol and co-products would reduce

the value of our ethanol and related products, erode our overall margins and diminish our ability to generate revenue or to operate profitably.

In addition, we believe that consumer acceptance of E15 and E85 fuels is necessary before fuel-grade ethanol can achieve any significant

growth in market share relative to other transportation fuels.

Lower demand for fuel-grade ethanol and essential ingredients would

reduce the value of our ethanol and related products, erode our overall margins and diminish our ability to generate revenue or to operate

In addition, we believe that consumer acceptance of E15 and E85 fuels is necessary before fuel-grade ethanol can achieve any

significant growth in market share relative to other transportation fuels.

The United States fuel-grade ethanol industry is highly

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cash flows and financial condition.

The domestic market for

fuel-grade ethanol is significantly impacted by federal mandates for volumes of renewable fuels (such as ethanol) required to be

blended with gasoline.

Future demand for fuel-grade ethanol will largely depend on incentives to blend ethanol into motor fuels,

including the price of ethanol relative to the price of gasoline, the relative octane value of ethanol, constraints on the ability

of vehicles to use higher ethanol blends, and the Environmental Protection Agency’s, or EPA’s, established volumes from

time to time, small refinery waivers, and other applicable environmental requirements.

The EPA has implemented the Renewable Fuel Standard

or RFS, under the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007.

The RFS program sets annual quotas for

the quantity of renewable fuels (such as fuel-grade ethanol) that must be blended into motor fuels consumed in the United States through

After 2022, the EPA is to determine volume requirements in coordination with the Secretary of Energy and the Secretary of Agriculture.

The EPA has proposed new post-2022 mandatory volumes of 15.0 billion and 15.25 billion gallons for 2023 and 2024, respectively, in compliance

with a consent decree by the United States District Court for the District of Columbia.

Under the provisions of the Clean Air Act, as amended

by the Energy Independence and Security Act of 2007, the EPA has limited authority to waive or reduce the mandated RFS requirements.

authority is subject to consultation with the Secretaries of Agriculture and Energy and is based on a determination that there is inadequate

domestic renewable fuel supply or implementation of the applicable requirements would severely harm the economy or environment of a state,

region or the United States in general.

In particular, the EPA may issue small refinery waivers, in full or in part, to reduce or eliminate

annual renewable fuel volume requirements for small refineries that process fewer than 75,000 barrels of petroleum daily.

of operations, cash flows and financial condition could be adversely impacted if the EPA reduces the RFS requirements from the statutory

levels specified in the RFS or continues to issue significant small refinery waivers.

The domestic market for fuel-grade ethanol is significantly

impacted by federal mandates under the RFS program for volumes of renewable fuels (such as ethanol) required to be blended with gasoline.

Future demand for fuel-grade ethanol will largely depend on incentives to blend ethanol into motor fuels, including the price of ethanol

relative to the price of gasoline, the relative octane value of ethanol, constraints on the ability of vehicles to use higher ethanol

blends, the RFS and the EPA’s established volumes from time to time, small refinery waivers, and other applicable environmental

requirements.

under the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007.

The EPA, in coordination with the Secretary

of Energy and the Secretary of Agriculture, determines annual quotas for the quantity of renewable fuels (such as fuel-grade ethanol)

that must be blended into motor fuels consumed in the United States.

The EPA finalized, in July 2023, mandatory volumes of 15.25 billion

and 15.0 billion gallons for 2023 and 2024, respectively, of conventional renewable fuel, or corn-based fuel-grade ethanol.

The EPA may issue small refinery waivers, in full

or in part, to reduce or eliminate annual renewable fuel volume requirements for small refineries that process fewer than 75,000 barrels

of petroleum daily.

Various bills in Congress introduced from time

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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.

Our results of operations,

cash flows and financial condition could be adversely impacted if any legislation is enacted that reduces the RFS volume requirements.

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

Our results of operations, cash flows and financial

condition could be adversely impacted if the EPA reduces mandatory volumes or issues significant small refinery waivers, or if any legislation

is enacted that reduces volume requirements.

Risks Related to Ownership of our Common Stock

price is highly volatile, which could result in substantial losses for investors purchasing shares of our common stock and in litigation

Our stock price

is highly volatile, which could result in substantial losses for investors purchasing shares of our common stock and in litigation against

The market price of our common

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● fluctuations in the market prices of our products;

● fluctuations in the costs of key production input commodities such as corn and natural gas;

● the volume and timing of the receipt of orders for our products from major customers;

● fluctuations in the costs of key production input commodities

such as corn and natural gas;

● the volume and timing of the receipt of orders for our products

from major customers;

● competitive pricing pressures;

● anticipated trends in our financial condition and results of operations;

● anticipated trends in our financial condition and results

of operations;

● changes in market valuations of companies similar to us;

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● the timing, cost and results of our capital improvement projects;

● our financing activities and future sales of our common stock or other securities;

● our ability to maintain contracts that are critical to our operations.

● our financing activities and future sales of our common stock

or other securities;

● our ability to maintain contracts that are critical to our

The price at which you purchase

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above could have a material adverse effect on our results of operations, the price of our common stock, or both.

we do not intend to pay any cash dividends on our shares of common stock in the near future, our stockholders will not be able to receive

do not intend to pay any cash dividends on our shares of common stock in the near future, our stockholders will not be able to receive

a return on their shares unless and until they sell them.

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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-Q

Item 1A. Risk Factors