Alto Ingredients, Inc. 10-Q

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. Unregistered Sales of Equity Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers We granted to certain employees shares of restricted stock under our 2016 Stock Incentive Plan pursuant to Restricted Stock Agreements dated and effective as of their respective grant dates by and between us and those employees. We were obligated to withhold minimum withholding tax amounts with respect to vested shares of restricted stock and upon future vesting of shares of restricted stock granted to our employees. Each employee was entitled to pay the minimum withholding tax amounts to us in cash or to elect to have us withhold a vested amount of shares of restricted stock having a value equivalent to our minimum withholding tax requirements, thereby reducing the number of shares of vested restricted stock that the employee ultimately receives. If an employee failed to timely make such election, we automatically withheld the necessary shares of vested restricted stock. For the three months ended June 30, 2023, in connection with satisfying our withholding requirements, we withheld the following number of shares of our common stock and remitted cash payments to cover the minimum withholding tax amounts, thereby effectively repurchasing from the employees such number of shares of our common stock at the following deemed purchase prices: Month Number of Shares Withheld Deemed Purchase Price Per Share Aggregate Purchase Price April 81,141 $ 1.50 $ 121,712 May — $ — $ — June — $ — $ — The following table sets forth information about repurchases of our common stock for the three months ended June 30, 2023: Period Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly-announced plans or programs (2) Approximate dollar value of shares that may yet be purchased under plans or programs (2)(3) April 1 to April 30, 2023 — $ — — May 1 to May 31, 2023 — $ — — June 1, to June 30, 2023 389,000 $ 2.57 389,000 Three months ended June 30, 2023 389,000 $ 2.57 389,000 $ 45,992,000 (1) We repurchased 389,000 shares as part of our publicly announced share repurchase program during the three months ended June 30, 2023. (2) On September 12, 2022, we announced a share repurchase program under which we may repurchase up to $50 million of our common stock with an initial purchase authorization of $10 million. Our lenders have further limited our purchase authorization to $5 million. Amounts in excess of our lenders’ initial purchase authorization of $5 million will require additional lender consent and amounts in excess of the initial purchase authorization of $10 million will require additional board and preferred stockholder authorization. The share repurchase program does not have an expiration date, does not require the repurchase of any particular amount of shares, and may be implemented, modified, suspended or discontinued in whole or in part at any time and without further notice. (3) Amount represents the share repurchase program size of $50 million less approximately $4.0 million in aggregate share repurchases, but is subject to authorizations for purchases in excess of our lenders’ purchase authorization of $5 million and our board and preferred stockholders’ initial purchase authorization of $10 million. 44 Dividends Our current and future debt financing arrangements may limit or prevent cash distributions from our subsidiaries to us, depending upon the achievement of specified financial and other operating conditions and our ability to properly service our debt, thereby limiting or preventing us from paying cash dividends. For the three and six months ended June 30, 2023 and 2022, we accrued and paid in cash an aggregate of $0.3 million and $0.6 million, respectively, in dividends on our Series B Cumulative Convertible Preferred Stock, or Series B Preferred Stock. We have never declared or paid cash dividends on our common stock and do not currently intend to pay cash dividends on our common stock in the foreseeable future. We currently anticipate that we will retain any earnings for use in the continued development of our business. The holders of our outstanding Series B Preferred Stock are entitled to dividends of 7% per annum, payable quarterly. Accrued and unpaid dividends in respect of our Series B Preferred Stock must be paid prior to the payment of any dividends in respect of shares of our common stock. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not applicable. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable.