What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-08 compared with 2023-08-08 · 207 added, 189 removed, 405 unchanged (49% of the section changed)

3 unchanged sentences

(in thousands)

September 30,

Current Assets:

12 unchanged sentences

consolidated financial statements for the year ended December 31, 2022.

See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial

ALTO INGREDIENTS, INC.

1 unchanged sentence

(in thousands, except par value)

September 30,

LIABILITIES AND STOCKHOLDERS’ EQUITY

15 unchanged sentences

1,684 shares authorized;

no shares issued and outstanding as of June 30, 2023 and December 31, 2022;

no shares issued and outstanding as of September 30, 2023 and December 31, 2022;

1,581 shares authorized;

927 shares issued and outstanding as of June 30, 2023 and December 31, 2022;

liquidation preference of $ 18,075 as of June 30, 2023

927 shares issued and outstanding as of September 30, 2023 and December 31, 2022;

liquidation preference of $ 18,075 as of September 30, 2023

Common stock, $ 0.001 par value;

300,000 shares authorized;

75,923 and 75,154 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

76,115 and 75,154 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Non-voting common stock, $ 0.001 par value;

3,553 shares authorized;

1 share issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

1 share issued and outstanding as of September 30, 2023 and December 31, 2022

Additional paid-in capital

5 unchanged sentences

consolidated financial statements for the year ended December 31, 2022.

See accompanying

notes to consolidated financial statements.

See accompanying notes to consolidated financial

ALTO INGREDIENTS, INC.

2 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Cost of goods sold

Gross profit (loss)

Selling, general and administrative expenses

Asset impairments

Income (loss) from operations

Loss from operations

Interest expense, net

1 unchanged sentence

Other income (expense), net

Income (loss) before provision for income taxes

Loss before provision for income taxes

Provision for income taxes

Net income (loss)

Preferred stock dividends

Income allocated to participating securities

Net income (loss) available to common stockholders

Net income (loss) per share, basic

Net income (loss) per share, diluted

Weighted-average shares outstanding, basic

Weighted-average shares outstanding, diluted

See accompanying

notes to consolidated financial statements.

Net loss available to common stockholders

Net loss per share, basic and diluted

Weighted-average shares outstanding, basic and diluted

See accompanying notes to consolidated financial

ALTO INGREDIENTS, INC.

1 unchanged sentence

(unaudited, in thousands)

Six Months Ended

Nine Months Ended

September 30,

Operating Activities:

Net income (loss)

Adjustments to reconcile net income (loss) to

net cash (used in) provided by operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization of intangibles

5 unchanged sentences

Amortization of debt discount

Bad debt (recovery) expense

Bad debt benefit

Changes in operating assets and liabilities, net of business acquisition:

2 unchanged sentences

Accounts payable and accrued expenses

Net cash (used in) provided by operating activities

Net cash provided by operating activities

Investing Activities:

5 unchanged sentences

Financing Activities:

Net proceeds from Kinergy’s line of credit

Net proceeds from (payments on) Kinergy’s line of credit

Stock repurchases

Preferred stock dividends paid

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Net change in cash, cash equivalents and restricted cash

7 unchanged sentences

Interest paid

ROU Assets obtained in exchange for new lease obligations

Capitalized interest

7 unchanged sentences

Other Comprehensive

Income (Loss)

Balances, January 1, 2023

12 unchanged sentences

$ ( 740,841 )

Stock-based compensation

Restricted stock issued to employees and directors, net of cancellations and tax

Preferred stock dividends

Balances, September 30, 2023

$ ( 744,649 )

Balances, January 1, 2022

7 unchanged sentences

Stock-based compensation

Restricted stock issued to employees and directors, net of cancellations and tax

Restricted stock issued to

employees and directors, net of cancellations and tax

Preferred stock dividends

1 unchanged sentence

$ ( 672,895 )

See accompanying notes to consolidated financial statements.

Stock-based compensation

Restricted stock issued to employees and directors, net of cancellations and tax

Stock repurchases

Preferred stock dividends

Balances, September 30, 2022

$ ( 701,252 )

See accompanying notes to consolidated

financial statements.

ALTO INGREDIENTS, INC.

31 unchanged sentences

include fuel-grade ethanol and distillers corn oil used as a feedstock for renewable diesel and biodiesel fuels.

As of June 30, 2023, all of

the Company’s production facilities were operating, however, from January 2023 to April 2023, its Magic Valley plant in Idaho was

temporarily hot-idled due to extreme natural gas prices, other unfavorable market conditions and to facilitate the installation of its

new high protein systems at the plant.

As of September 30, 2023, all

of the Company’s production facilities were operating, however, from January 2023 to April 2023, its Magic Valley plant in Idaho

was temporarily hot-idled due to extreme natural gas prices, other unfavorable market conditions and to facilitate the installation of

its new high protein systems at the plant.

The Company restarted the facility in April 2023.

As market conditions change, the Company may

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

As market conditions change, the Company

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

Basis of Presentation – Interim

21 unchanged sentences

Of the accounts receivable balance, approximately

$ 52,732,000 and $ 55,667,000 at June 30, 2023 and December 31, 2022, respectively, were used as collateral under Kinergy’s operating

$ 60,173,000 and $ 55,667,000 at September 30, 2023 and December 31, 2022, respectively, were used as collateral under Kinergy’s operating

line of credit.

The allowance for credit losses was $ 59,000 and $ 105,000 as of June 30, 2023 and December 31, 2022, respectively.

Company recorded a bad debt recovery of $ 7,000 and bad debt expense of $ 35,000 for the three months ended June 30, 2023 and 2022, respectively.

The Company recorded a bad debt recovery of $ 46,000 and bad debt expense $ 66,000 for the six months ended June 30, 2023 and 2022, respectively.

The allowance for credit losses was $ 51,000 and $ 105,000 as of September 30, 2023 and December 31, 2022, respectively.

The Company recorded a bad debt recovery of $ 8,000 and $ 253,000 for the three months ended September 30, 2023 and 2022, respectively.

The Company recorded a bad debt recovery of $ 54,000 and $ 187,000 for the nine months ended September 30, 2023 and 2022, respectively.

The Company does not have any off-balance sheet credit exposure related to its customers.

10 unchanged sentences

made, the Company will retire the shares, resulting in a reduction of issued and outstanding shares.

For the three and six months ended

June 30, 2023, the Company repurchased an aggregate of 389,000 shares and 1,249,000 shares for $ 1,001,000 and $ 2,683,000 in cash, respectively.

As of June 30, 2023, total repurchases under the program since its inception equaled 1,600,000 shares for $ 4,008,000 in cash.

For the nine months ended September

30, 2023, the Company repurchased an aggregate of 1,249 ,000 shares for $ 2,683 ,000 in cash.

The Company did not repurchase any shares during

the three months ended September 30, 2023.

As of September 30, 2023, total repurchases under the program since its inception equaled 1,600 ,000

shares for $ 4,008 ,000 in cash.

Financial Instruments – The

4 unchanged sentences

Income from Cash Grant –

In 2022, the Company applied for and received $ 22,652,000 in cash from the USDA’s Biofuel Producer Program.

The program was created

as part of the CARES Act in 2020, which allocated $ 700,000,000 to support biofuel producers who experienced market losses due to the pandemic.

The cash grant is not required to be repaid.

Since these funds are provided to subsidize historical losses of the Company, and are not

required to be repaid, the Company accounted for the proceeds by analogy to International Accounting Standards 20 Accounting for Government

In 2022, the Company applied for the USDA’s Biofuel Producer Program (“BPP”).

The program was created as part of the

CARES Act in 2020, which allocated $ 700,000,000 to support biofuel producers who experienced market losses due to the pandemic.

grant is not required to be repaid.

Since these funds are provided to subsidize historical losses of the Company, and are not required

to be repaid, the Company accounted for the proceeds by analogy to International Accounting Standards 20, Accounting for Government

Grants and Disclosure of Government Assistance , and reported the amount as income from cash grant in the accompanying consolidated

statements of operations.

Estimates and Assumptions –

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting

Significant estimates are required as part of determining the allowance for credit losses, net realizable value of inventory,

long-lived asset impairments, valuation allowances on deferred income taxes, the potential outcome of future tax consequences of events

recognized in the Company’s financial statements or tax returns, and the valuation of assets acquired and liabilities assumed as

a result of business combinations.

Actual results and outcomes may materially differ from management’s estimates and assumptions.

The Company received $ 2,812 ,000 in cash from the BPP during the three and nine months ended September 30, 2023

and $ 22,652 ,000 in cash from the BPP for the nine months ended September 30, 2022.

Estimates and Assumptions – The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the

United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and

expenses during the reporting period.

Significant estimates are required as part of determining the allowance for credit losses, net

realizable value of inventory, long-lived asset impairments, valuation allowances on deferred income taxes, the potential outcome of

future tax consequences of events recognized in the Company’s financial statements or tax returns, and the valuation of assets

acquired and liabilities assumed as a result of business combinations.

Actual results and outcomes may materially differ from

management’s estimates and assumptions.

The Company reports its 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 the Company’s Pekin, Illinois campus (“Pekin

Campus”), and (3) Other production, which includes the production and sale of fuel-grade ethanol and essential ingredients produced

(1) Pekin production, which includes the production and sale of alcohols and essential ingredients produced

at the Company’s Pekin, Illinois campus (“Pekin Campus”), (2) 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, and (3) Other production, which includes the production and sale of fuel-grade ethanol and essential ingredients produced

at all of the Company’s other production facilities on an aggregated basis (“Other production”), none of which are individually

3 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Pekin Campus, recorded as gross:

22 unchanged sentences

Cost of goods sold as reported

Gross profit:

Gross profit (loss):

Marketing and distribution

2 unchanged sentences

Intersegment eliminations

Gross profit as reported

Gross profit (loss) as reported

Income (loss) before provision for income taxes:

11 unchanged sentences

total assets by operating segment (in thousands):

September 30, 2023

December 31, 2022

Total assets:

5 unchanged sentences

determined on a first-in, first-out basis.

Inventory is net of a valuation adjustment of $ 0 and $ 4,612,000 as of June 30, 2023 and December

31, 2022, respectively.

Inventory is net of a valuation adjustment of $ 0 and $ 4,612,000 as of September 30, 2023 and

December 31, 2022, respectively.

Inventory balances consisted of the following (in thousands):

September 30, 2023

December 31, 2022

Finished goods

16 unchanged sentences

which is defined as the degree to which the derivative does not offset the underlying exposure, is recognized immediately in cost of goods

For the three and six months ended June 30, 2023 and 2022, the Company did not designate any of its derivatives as cash flow hedges.

For the three and nine months ended September 30, 2023 and 2022, the Company did not designate any of its derivatives as cash flow

Commodity Risk – Non-Designated Hedges

3 unchanged sentences

The changes in

fair value of these contracts are recorded on the balance sheet and recognized immediately in cost of goods sold.

the fair value of these contracts are recorded on the balance sheet and recognized immediately in cost of goods sold.

The Company recognized

net gains of $ 6,951,000 and $ 16,619,000 as the change in the fair value of these contracts for the three months ended June 30, 2023 and

2022, respectively.

The Company recognized net gains of $ 5,174,000 and $ 21,936,000 as the change in the fair value of these contracts

for the six months ended June 30, 2023 and 2022, respectively.

net losses of $ 2,711 ,000 and net gains of $ 1,772 ,000 as the change in the fair value of these contracts for the three months ended September

30, 2023 and 2022, respectively.

The Company recognized net gains of $ 2,463 ,000 and $ 20,164 ,000 as the change in the fair value of these

contracts for the nine months ended September 30, 2023 and 2022, respectively.

Non-Designated Derivative Instruments

1 unchanged sentence

balances, are as follows (in thousands):

As of June 30, 2023

As of September 30, 2023

Type of Instrument

20 unchanged sentences

The classification and amounts of the Company’s

recognized gains for its derivatives not designated as hedging instruments are as follows (in thousands):

Realized Gains

For the Three Months Ended June 30,

recognized gains (losses) for its derivatives not designated as hedging instruments are as follows (in thousands):

Realized Gains (Losses)

For the Three Months Ended

September 30,

Type of Instrument

2 unchanged sentences

Cost of goods sold

Realized (Losses) Gains

For the Six Months Ended

Realized Gains

For the Nine Months Ended

September 30,

Type of Instrument

2 unchanged sentences

Cost of goods sold

Unrealized Gains

For the Three Months Ended June 30,

Unrealized Gains (Losses)

For the Three Months Ended

September 30,

Type of Instrument

3 unchanged sentences

Unrealized Gains (Losses)

For the Six Months Ended

For the Nine Months Ended

September 30,

Type of Instrument

4 unchanged sentences

(in thousands):

September 30,

Kinergy line of credit

5 unchanged sentences

Excess Availability – As

of June 30, 2023, the Company had $ 49.4 million in unused borrowing availability under the Kinergy line of credit and $ 40.0 million available

under the Orion term loan.

The Company also has an option to expand the Orion term loan by up to $ 25.0 million upon the satisfaction

of certain conditions.

of September 30, 2023, the Company had $ 53.4 million in unused borrowing availability under Kinergy’s line of credit and $ 40.0

million available under the Orion term loan.

The Company also has an option to expand the Orion term loan by up to $ 25.0 million upon

the satisfaction of certain conditions.

COMMITMENTS AND CONTINGENCIES.

Sales Commitments – At June

Sales Commitments – At September

30, 2023, the Company had entered into sales contracts with its major customers to sell certain quantities of alcohol and essential ingredients.

The Company had open alcohol indexed-price contracts for 78,432,000 gallons as of June 30, 2023 and open fixed-price alcohol sales contracts

totaling $ 73,909,000 as of June 30, 2023.

The Company had open fixed-price sales contracts for essential ingredients totaling $ 12,075,000

and open indexed-price sales contracts of essential ingredients for 113,000 tons as of June 30, 2023.

These sales contracts are scheduled

to be completed throughout 2023.

The Company had open alcohol indexed-price contracts for 92,138,000 gallons as of September 30, 2023 and open fixed-price alcohol sales

contracts totaling $ 248,902,000 as of September 30, 2023.

The Company had open fixed-price sales contracts for essential ingredients

totaling $ 7,863,000 as of September 30, 2023.

These sales contracts are scheduled to be completed throughout 2023 and 2024.

Purchase Commitments – At

June 30, 2023, the Company had indexed-price purchase contracts to purchase 18,593,000 gallons of alcohol and fixed-price purchase contracts

to purchase $ 2,461,000 of alcohol from its suppliers.

The Company had fixed-price purchase contracts to purchase $ 43,984,000 of corn

from its suppliers as of June 30, 2023.

The Company had indexed-price purchase contracts for natural gas totaling 448,500 MMBTU as of

June 30, 2023.

September 30, 2023, the Company had indexed-price purchase contracts to purchase 11,516,000 gallons of alcohol and fixed-price purchase

contracts to purchase $ 1,948,000 of alcohol from its suppliers.

The Company had fixed-price purchase contracts to purchase $ 14,961,000

of corn from its suppliers as of September 30, 2023.

The Company had fixed-price purchase contracts for natural gas totaling $ 10,020,000 .

The Company also had future commitments for certain capital projects totaling $ 23,639,000 .

These purchase commitments

are scheduled to be satisfied throughout 2023 and 2024.

These purchase commitments are scheduled to

be satisfied throughout 2023 and 2024.

Litigation – General –

8 unchanged sentences

involved could be material.

While the Company can provide no assurances, the Company does not expect that any of its pending legal proceedings

will have a material impact on the Company’s financial condition or results of operations.

While there can be no assurances, the Company does not expect that any of its pending legal proceedings will

have a material impact on the Company’s financial condition or results of operations.

PENSION AND RETIREMENT BENEFIT PLANS.

15 unchanged sentences

balance sheet in other liabilities.

For the three months ended

June 30, 2023, the Retirement Plan’s net periodic expense was $ 39,000 , comprised of $ 225,000 in interest cost and $ 62,000 in service

For the three months ended September

30, 2023, the Retirement Plan’s net periodic expense was $ 39,000 , comprised of $ 225,000 in interest cost and $ 62,000 in service

cost, partially offset by $ 248,000 of expected return on plan assets.

For the three months ended June 30, 2022, the Retirement Plan’s

For the three months ended September 30, 2022, the Retirement Plan’s

net periodic benefit was $ 8,000 , comprised of $ 273,000 of expected return on plan assets, partially offset by $ 164,000 in interest cost

and $ 101,000 in service cost.

For the six months ended June 30, 2023, the Retirement Plan’s net periodic expense was $ 78,000 , comprised

of $ 450,000 in interest cost and $ 124,000 in service cost, partially offset by $ 496,000 of expected return on plan assets.

months ended June 30, 2022, the Retirement Plan’s net periodic benefit was $ 16,000 , comprised of $ 546,000 of expected return on

plan assets, partially offset by $ 328,000 in interest cost and $ 202,000 in service cost.

For the nine months ended September 30, 2023, the Retirement Plan’s net periodic expense was $ 117,000 ,

comprised of $ 675,000 in interest cost and $ 186,000 in service cost, partially offset by $ 744,000 of expected return on plan assets.

the nine months ended September 30, 2022, the Retirement Plan’s net periodic benefit was $ 24,000 , comprised of $ 819,000 of expected

return on plan assets, partially offset by $ 492,000 in interest cost and $ 303,000 in service cost.

The Postretirement Plan provides

postretirement medical benefits and life insurance to certain “grandfathered” unionized employees.

Employees hired after

December 31, 2000 are not eligible to participate in the Postretirement Plan.

The Postretirement Plan is contributory, with contributions

required at the same rate as active employees.

Benefit eligibility under the plan declines at age 65 from a defined benefit to a defined

dollar cap based upon years of service.

As of December 31, 2022, the Postretirement Plan’s accumulated projected benefit obligation

was $ 3.9 million and is recorded on the Company’s consolidated balance sheet in other liabilities.

The Company’s funding

policy is to make the minimum annual contribution required by applicable regulations.

For the three months ended

June 30, 2023, the Postretirement Plan’s net periodic expense was $ 36,000 , comprised of $ 46,000 of interest cost and $ 3,000 of

service cost, partially offset by $ 13,000 in amortization of gains.

For the three months ended June 30, 2022, the Postretirement Plan’s

Employees hired after December

31, 2000 are not eligible to participate in the Postretirement Plan.

The Postretirement Plan is contributory, with contributions required

at the same rate as active employees.

Benefit eligibility under the plan declines at age 65 from a defined benefit to a defined dollar

cap based upon years of service.

As of December 31, 2022, the Postretirement Plan’s accumulated projected benefit obligation was

$ 3.9 million and is recorded on the Company’s consolidated balance sheet in other liabilities.

The Company’s funding policy

is to make the minimum annual contribution required by applicable regulations.

For the three months ended September

30, 2023, the Postretirement Plan’s net periodic expense was $ 36,000 , comprised of $ 46,000 of interest cost and $ 3,000 of service

cost, partially offset by $ 13,000 in amortization of gains.

For the three months ended September 30, 2022, the Postretirement Plan’s

net periodic expense was $ 32,000 , comprised of $ 6,000 of interest cost and $ 26,000 of service cost.

For the six months ended June

For the nine months ended September

30, 2023, the Postretirement Plan’s net periodic expense was $ 108,000 , comprised of $ 138,000 of interest cost and $ 9,000 of service

cost, partially offset by $ 39,000 in amortization of gains.

For the six months ended June 30, 2022, the Postretirement Plan’s net

periodic expense was $ 64,000 , comprised of $ 12,000 of interest cost and $ 52,000 of service cost.

For the nine months ended September 30, 2022, the Postretirement Plan’s

net periodic expense was $ 96,000 , comprised of $ 18,000 of interest cost and $ 78,000 of service cost.

FAIR VALUE MEASUREMENTS.

The fair value hierarchy prioritizes the inputs

used in valuation techniques into three levels, as follows:

● Level 1 – Observable inputs – unadjusted quoted

prices in active markets for identical assets and liabilities;

● Level 2 – Observable inputs other than quoted prices

included in Level 1 that are observable for the asset or liability through corroboration with market data;

● Level 3 – Unobservable inputs – includes amounts

derived from valuation models where one or more significant inputs are unobservable.

For fair value measurements using significant unobservable

inputs, a description of the inputs and the information used to develop the inputs is required along with a reconciliation of Level 3

values from the prior reporting period.

Pooled separate accounts –

Pooled separate accounts invest primarily in domestic and international stocks, commercial paper or single mutual funds.

The net asset

value is used as a practical expedient to determine fair value for these accounts.

Each pooled separate account provides for redemptions

by the Retirement Plan at reported net asset values per share, with little to no advance notice requirement, therefore these funds are

classified within Level 2 of the valuation hierarchy.

fair value hierarchy prioritizes the inputs used in valuation techniques into three levels, as follows:

1 – Observable inputs – unadjusted quoted prices in active markets for identical

assets and liabilities;

2 – Observable inputs other than quoted prices included in Level 1 that are observable

for the asset or liability through corroboration with market data;

3 – Unobservable inputs – includes amounts derived from valuation models where

one or more significant inputs are unobservable.

For fair value measurements using significant

unobservable inputs, a description of the inputs and the information used to develop the

inputs is required along with a reconciliation of Level 3 values from the prior reporting

separate accounts – Pooled separate accounts invest primarily in domestic and international stocks, commercial paper or

single mutual funds.

The net asset value i s used as a practical expedient to determine fair value for these accounts.

separate account provides for redemptions by the Retirement Plan at reported net asset values per share, with little to no advance notice

requirement, therefore these funds are classified within Level 2 of the valuation hierarchy.

Other Derivative Instruments –

2 unchanged sentences

on quoted prices on the commodity exchanges and are designated as Level 1 inputs.

The following table summarizes recurring and

nonrecurring fair value measurements by level at June 30, 2023 (in thousands):

The following table summarizes recurring and nonrecurring

fair value measurements by level at September 30, 2023 (in thousands):

Derivative financial instruments

The following table summarizes recurring and

nonrecurring fair value measurements by level at December 31, 2022 (in thousands):

The following table summarizes recurring and nonrecurring

fair value measurements by level at December 31, 2022 (in thousands):

Derivative financial instruments

5 unchanged sentences

(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.

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.

(3) This category includes investments in funds comprised of

equity securities of small- and medium-sized U.S.

(2) This category includes investments in funds comprised of equity

securities of large U.S.

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.

(3) This category includes investments in funds comprised of equity

securities of small- and medium-sized U.S.

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.

(4) This category includes investments in funds comprised of equity

securities of foreign companies including emerging markets.

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.

(4) This category includes investments in funds comprised of

equity securities of foreign companies including emerging markets.

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.

1 unchanged sentence

treasury securities, mortgage-backed securities, and other asset-backed securities.

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.

EARNINGS PER SHARE.

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.

LOSS PER SHARE.

The following tables compute basic and diluted

earnings per share (in thousands, except per share data):

Three Months Ended June 30, 2023

loss per share (in thousands, except per share data):

Three Months Ended

September 30,

Preferred stock dividends

Income allocated to participating securities

Basic income per share:

Income available to common stockholders

Dilutive instruments

Diluted income per share:

Income available to common stockholders

Three Months Ended June 30, 2022

Basic and Diluted loss per share:

Loss available to common stockholders

Three Months Ended

September 30,

Preferred stock dividends

Income allocated to participating securities

Basic income per share:

Income available to common stockholders

Dilutive instruments

Diluted income per share:

Income available to common stockholders

Six Months Ended June 30, 2023

Basic and Diluted loss per share:

Loss available to common stockholders

Nine Months Ended

September 30,

Preferred stock dividends

1 unchanged sentence

Loss available to common stockholders

Six Months Ended June 30, 2022

Nine Months Ended

September 30,

Preferred stock dividends

Income allocated to participating securities

Basic income per share:

Income available to common stockholders

Dilutive instruments

Diluted income per share:

Income available to common stockholders

Basic and Diluted loss per share:

Loss available to common stockholders

There were an additional aggregate potentially

dilutive weighted-average shares of 981,000 from convertible securities outstanding for the three and six months ended June 30, 2023.

There were an additional aggregate potentially dilutive weighted-average shares of 964,000 from convertible securities outstanding for

the three and six months ended June 30, 2022.

These securities were not considered in calculating diluted net income (loss) per share

for the three and six months ended June 30, 2023 and 2022, as their effect would have been anti-dilutive.

dilutive weighted-average shares of 981,000 from convertible securities outstanding for the three and nine months ended September 30,

There were an additional aggregate potentially dilutive weighted-average shares of 964,000 from convertible securities outstanding

for the three and nine months ended September 30, 2022.

These securities were not considered in calculating diluted net loss per share

for the three and nine months ended September 30, 2023 and 2022, as their effect would have been anti-dilutive.

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 1. Financial Statements