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Item 1. Business

2025-03-13 compared with 2024-03-14 · 567 added, 507 removed, 90 unchanged (92% of the section changed)

We produce and distribute renewable fuel and essential

We are also the largest producer of specialty alcohols in the United States.

Business Overview

We are a leading producer and distributor of specialty

alcohols, renewable fuels and essential ingredients in the United States.

We operate five alcohol production facilities.

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We have an annual

alcohol production capacity of 350 million gallons, including both fuel-grade ethanol and specialty alcohols ranging from industrial-,

pharmaceutical-, and high-quality food- and beverage-grade alcohols.

Of this amount, we can produce up to 110 million gallons annually

of specialty alcohols, depending on our product mix among high-quality beverage-grade alcohol and alcohols of other quality specifications.

We market and distribute all the alcohols produced at our facilities as well as alcohols produced by third parties.

In 2023, we marketed

and distributed approximately 383 million gallons combined of our own alcohols as well as fuel-grade ethanol produced by third parties,

and over 1.5 million tons of essential ingredients on a dry matter basis.

We also specialize in break bulk distribution of

specialty alcohols through our Eagle Alcohol subsidiary.

We purchase bulk alcohol from suppliers and then store, denature, package, and

resell alcohol products in smaller sizes, including tank trucks, totes and drums that typically garner a premium price to bulk alcohols.

We deliver products to customers in the beverage, food, industrial and related-process industries via our own dedicated trucking fleet

and common carrier.

alcohol production capacity of 350 million gallons, including both renewable fuels and specialty alcohols ranging from industrial-, pharmaceutical-,

and high-quality food- and beverage-grade alcohols.

Of this amount, we can produce up to 110 million gallons annually of specialty alcohols,

depending on our product mix among high-quality beverage-grade alcohol and other quality specification alcohols.

We market and distribute

all of the alcohols produced at our facilities as well as alcohols produced by third parties.

In 2024, we marketed and distributed approximately

386 million gallons combined of our own produced alcohols as well as fuel-grade ethanol produced by third parties, and over 1.4 million

tons of essential ingredients on a dry matter basis.

We also own and operate a liquid carbon dioxide,

or CO 2 , production facility adjacent to our plant in Oregon for the offtake of CO 2 gas from the plant for conversion

to liquid CO 2 and subsequent sale.

We acquired this facility on January 1, 2025.

In addition, we break bulk and distribute

specialty alcohols, produced by us and third parties, through our Eagle Alcohol business.

We report our financial and operating performance

in three segments:

(1) 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, (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) Western production, which includes the production and sale of renewable fuel and essential

ingredients produced at our two western production facilities on an aggregated basis, none of which are individually so significant as

to be considered a separately reportable segment.

mission is to produce the highest quality, sustainable ingredients from renewable resources that make everyday products better.

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.

We produce specialty alcohols, fuel-grade ethanol

and essential ingredients, focusing on five key markets:

in three distinct segments:

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 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;

production , which includes the production and sale of renewable fuels and essential

ingredients and, beginning in 2025, liquid CO 2, produced at our western production

facilities, including our liquid CO 2 plant, on an aggregated basis, none of which

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

Our mission is to produce the highest quality,

sustainable ingredients that make everyday products better.

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.

Production Segments

We produce specialty alcohols, renewable

fuels and essential ingredients, focusing on five key markets:

Health, Home & Beauty ;

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and Renewable Fuels .

Products for the Health, Home & Beauty markets 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 Industry & Agriculture markets include alcohols and other products for paint applications and fertilizers.

for Essential Ingredients markets include dried yeast, corn protein meal, corn protein feed, corn germ, and distillers grains and

liquid feed used in commercial animal feed and pet foods.

We also sell yeast for human consumption.

Our products for the Renewable

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

specialty alcohols for the Industry & Agriculture, Food & Beverage and Health, Home & Beauty markets represented

approximately 6%, 4% and 2%, respectively, of our sales in 2023 from these three product segments.

Products for Health, Home & Beauty

markets include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants and cleaners.

Products for Food & Beverage markets include grain neutral spirits used in alcoholic beverages and vinegar and corn germ

used for corn oils.

Products for Industry & Agriculture markets include alcohols and other products for paint

applications, vehicle fluids and fertilizers.

Products for Essential Ingredients markets include dried yeast, corn protein

meal, corn protein feed, corn germ, distillers grains, liquid CO 2 and liquid feed used in commercial animal feed and pet

We also sell yeast and liquid CO 2 for human consumption.

Our products for the Renewable Fuels markets

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

Our specialty

alcohols for the Industry & Agriculture, Food & Beverage and Health, Home & Beauty markets represented

approximately 12%, 7% and 3%, respectively, of our sales in 2024 from these three markets.

We produce our alcohols and essential ingredients

at our production facilities described below.

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

from relatively 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 in Oregon and Idaho are near their respective fuel

and feed customers, offering significant timing, transportation cost and logistical advantages.

at our facilities described below.

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

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 in Oregon and Idaho are near their respective fuel and feed customers,

offering significant timing, product transportation cost and logistical advantages.

All of our production facilities, other than our

Magic Valley plant, were operating for all of 2024, subject to scheduled and unscheduled downtimes to address facility repair and maintenance.

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 corn oil and high protein system.

We brought the facility back online

in April 2023.

In January 2024, we again temporarily hot-idled our Magic Valley production facility to minimize losses from negative regional

crush margins and to expedite the installation of additional equipment needed to achieve our intended production rate, quality and consistency

from our corn oil and high protein system.

We intend to restart Magic Valley production in the second quarter once the upgrades are complete

and crush margins have improved.

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

or resume operations at any idled facility.

and Distribution Segment

We market and distribute all the alcohols and essential

ingredients we produce at our facilities.

In January 2024, we temporarily hot-idled our

Magic Valley facility to minimize losses from negative regional crush margins and to expedite the installation of additional equipment

to achieve the intended production rate, quality and consistency from our corn oil and high protein system at the facility.

our Magic Valley facility in July 2024 and by October 2024, the facility consistently achieved average ethanol production rates at full

capacity, the protein content yield from the plant reached 50% or greater, and we were able to expand our corn oil yields.

in regional corn basis and declining market prices for protein and corn oil resulted in overall margin compression, outweighing the economic

benefits of our plant improvements.

As a consequence, we cold-idled our Magic Valley facility on December 31, 2024 to minimize financial

We continue to provide terminal services at the plant and intend to resume operations at the facility when the economic environment

in the region sustainably improves.

We believe that the cold-idling of our Magic Valley facility will have a positive impact on our overall

financial results in 2025 compared to 2024.

As market conditions change, we may increase,

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

Marketing and Distribution Segment

We market and distribute all the alcohols and

essential ingredients we produce at our facilities.

We also market and distribute alcohols produced by third parties.

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.

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.

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 ethanol producers.

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.

market our essential ingredient feed products to dairies and feedlots, in many cases located near our production facilities.

These customers

use our feed products for livestock as 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.

“Note 5 – Segments” to our Notes to Consolidated Financial Statements included elsewhere in this report for financial

information about our business segments.

are a Delaware corporation formed in 2005.

Our common stock trades on The Nasdaq Capital Market under the symbol “ALTO.”

Our Internet website address is http://www.altoingredients.com.

Information contained on our website is not part of this Annual Report

on Form 10-K.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to such

reports filed with or furnished to the Securities and Exchange Commission and other Securities and Exchange Commission filings are available

free of charge through our website as soon as reasonably practicable after the reports are electronically filed with, or furnished to,

the Securities and Exchange Commission.

The key elements of our business

and growth strategy include:

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.

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 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.

We market food-grade essential ingredients to

human and pet food markets, our feed products (such as distillers grains) primarily to export markets from our Pekin Campus, and other

feed products to dairies and feedlots, in many cases located near our production facilities.

These customers use our feed products for

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

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

See “Note 4 – Segments” to our

Notes to Consolidated Financial Statements included elsewhere in this report for financial information about our business segments.

Company History

We are a Delaware corporation formed in 2005.

Our common stock trades on The Nasdaq Capital Market under the symbol “ALTO.” Our Internet website address is http://www.altoingredients.com.

Information contained on our website is not part of this Annual Report on Form 10-K.

Our Annual Reports on Form 10-K, Quarterly Reports

on Form 10-Q, Current Reports on Form 8-K and any amendments to such reports filed with or furnished to the Securities and Exchange Commission

and other Securities and Exchange Commission filings are available free of charge through our website as soon as reasonably practicable

after the reports are electronically filed with, or furnished to, the Securities and Exchange Commission.

Business Strategy

The key elements of our business and growth strategy

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

Our primary business focus is to expand the production

and sale of specialty alcohols and essential ingredients.

As a result, our business is now

more service-oriented and focused on specialty products compared to a price-taking 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

● Implement carbon capture and storage at our Pekin Campus, lowering our carbon footprint .

Inflation Reduction Act of 2022 raised the carbon capture tax credit to $85 per metric ton, reflecting the 45Q tax incentive

benefits established under the Act.

We produce over 600,000 metric tons of carbon dioxide, CO 2, per year at our Pekin

Campus, which sits atop the Mount Simon formation, identified as one of the best and largest aquafers in the country for carbon

We are prioritizing our carbon capture and storage, or CCS, project over other long-term capital projects.

We believe the

financial benefits under the Inflation Reduction Act and the substantial additional economic benefits of the environmental

attributes associated with low carbon ethanol will result in excellent returns on investment.

Our business is now more service-oriented

and focused on specialty products that yield premium prices compared to commodity products

that yield predominantly passive, market-driven prices.

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.

carbon capture and storage at our Pekin Campus, lowering our carbon footprint .

The Inflation

Reduction Act of 2022 raised the carbon capture tax credit to $85 per metric ton, reflecting

the section 45Q tax incentive benefits established under the Act.

Section 45Z low carbon

fuel tax credits are also available under the Act.

We produce over 600,000 metric tons of

CO 2 per year at our Pekin Campus, which sits atop the Mount Simon formation, identified

as one of the best and largest carbon storage locations in the country.

We are prioritizing

our carbon capture and storage, or CCS, project over other long-term capital projects.

believe the financial benefits under the Inflation Reduction Act and the substantial additional

economic benefits of the environmental attributes associated with low carbon ethanol will

result in excellent returns on investment.

In furtherance of this project, in November 2024,

we entered into a CO 2 Transportation and Sequestration Agreement with Vault 44.01, or Vault,

to provide transportation, injection and sequestration into the Mount Simon sandstone formation

in Illinois of CO 2 produced at our Pekin Campus.

In December, Vault submitted the formal application to the EPA for

our CCS project to obtain the Class VI permit required to begin construction of the CCS pipeline and for long-term CO 2 storage in deep

geological formations.

product offerings.

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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.

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.

We are evaluating and plan to implement new equipment and technologies to increase our production yields, improve our operating efficiencies

and reliability, reduce our overall carbon footprint, diversify our products and revenues, and increase our profitability as financial

resources and market conditions justify these investments.

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.

We intend to leverage Eagle Alcohol’s

transportation expertise across our entire distribution platform, replacing a portion of

our third-party trucking services, reducing our logistics costs and improving margins.

are also in the process of expanding our distribution territory into new geographies such

as Southern California.

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.

For example, on January 1, 2025,

we acquired a liquid CO 2 production facility located adjacent to our Oregon plant

and now offer liquid CO 2 for sale.

Our liquid CO 2 facility and our

food-grade yeast plant are both FSSC 22000 certified, meeting the Global Food Safety Initiative

(GFSI) benchmarking requirements.

In addition, we maintain ISO 9001, ICH Q7 and EXCiPACT

certifications for all United States Pharmacopia, or USP, grade alcohol products.

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

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).

all of 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.

new equipment and technologies.

We are evaluating and plan to implement new equipment

and technologies to increase our production yields, improve our operating efficiencies and

reliability, reduce our overall carbon footprint, diversify our products and revenues, and

increase our profitability as financial resources and market conditions Left these investments.

● Evaluate and pursue strategic opportunities .

We are exploring opportunities to expand our business.

For example, when the

opportunity arose, we moved quickly to acquire the liquid CO 2 production facility adjacent to our Oregon plant and

establish an improved, long-term liquid CO 2 sales agreement with a leading reseller of liquid CO 2 .

to pursue these and other strategic opportunities as financial resources and business prospects make these opportunities desirable.

We are also exploring divestiture opportunities for certain properties in an ongoing effort to continue to optimize our asset

portfolio and as part of our ongoing efforts to maximize shareholder value.

For example, we have engaged an investment banking firm

to explore the sale of our production facilities located in Oregon and Idaho.

In addition, with the assistance of our financial and legal advisors, we are considering a broad range of other

options, including asset sales, a merger or other strategic transactions to better align our long-term value potential.

Competitive Strengths

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.

Our quality 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 .

● Diverse product mix .

a wide range of specialty alcohol, essential ingredient and other products to meet customer demand.

We offer multiple alcohol quality

grades ranging from industrial-grade alcohol to the highest beverage grade low moisture 200 proof alcohol available.

We also offer a wide

variety of essential ingredients and other products for food, feed and other markets.

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

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

We have an excellent reputation for

developing specialty alcohols under stringent quality control standards.

Our quality management systems are supported by ISO 9001, FSSC

22000, ICH Q7 and EXCiPACT certifications which are viewed by our customers as important attestations of our quality control.

product mix .

We offer a wide range of specialty alcohols, essential ingredients and other

products to meet customer demand.

We offer multiple alcohol quality grades ranging from industrial-grade

alcohol to the highest beverage grade low moisture 200 proof alcohol available.

We also offer

a wide variety of essential ingredients and other products for food, feed and other markets.

Our production facilities use specialized equipment, technologies and processes

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

and marketing specialty alcohols and essential ingredients.

and marketing specialty alcohols, renewable fuels 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

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.

believe that our 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 specialty alcohol,

fuel-grade ethanol, pet food and feed markets, thereby improving pricing opportunities.

● Our Midwest location sits atop the

Mount Simon formation, identified as one of the best and largest aquafers in the country for carbon storage, potentially allowing us to

benefit from this close proximity to store CO 2 .

of Our Key Markets and Market Opportunity

We produce specialty alcohols, fuel-grade ethanol

◾ 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.

◾ Our Midwest location

sits atop the Mount Simon formation, identified as one of the best and largest carbon storage

locations in the country potentially allowing us to benefit from this close proximity to

Overview of Our Key Markets and Market Opportunity

We produce specialty alcohols, renewable fuels

and essential ingredients, focusing on five key markets:

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and Renewable Fuels .

Home & Beauty

products for the health, home and beauty markets include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers,

disinfectants and cleaners.

We offer a variety of specialty alcohols for the health, home and beauty markets, depending on usage and

regulatory requirements, including API-grade, United States Pharmacopeia, or USP, -grade ethyl alcohols, and industrial-grade ethyl alcohol.

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.

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

and our EXCiPACT certification qualifies our specialty alcohols for use as an excipient in the pharmaceutical industry.

These certifications

enable us to offer products to a wider group of customers and generally at more profitable margins.

Health, Home & Beauty

Our products for the health, home and beauty markets

include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants and cleaners.

We offer a variety

of specialty alcohols for the health, home and beauty markets, depending on usage and regulatory requirements, including API-grade or

USP-grade ethyl alcohols, and industrial-grade ethyl alcohol.

We have ISO 9001, FSSC 22000, ICH Q7 and EXCiPACT

certifications, all of which are viewed as important attestations of quality control standards.

In particular, our ICH Q7 certification

qualifies our specialty alcohols for use as an API, and our EXCiPACT certification qualifies our specialty alcohols for use as an excipient

in the pharmaceutical industry.

These certifications enable us to offer products to a wider group of customers and generally at more

profitable margins.

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 CO 2

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 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

192 proof and low-moisture 200-proof GNS products to our existing and target customers in the beverage, food, flavor, personal care and

pharmaceutical industries.

believe the key drivers in the food and beverage market include consumer preferences for the social currency of brand authenticity and

consumers seeking unique and personalized experiences;

We offer grain neutral spirits, or GNS, alcohol as our primary specialty alcohol for

beverage-grade products.

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

We also sell high-quality 192 proof and

low-moisture 200-proof GNS products to customers in the beverage, food, flavor and personal care industries.

We believe the key drivers in the food and beverage

market include consumer preferences for the social currency of brand authenticity and heritage;

consumers seeking unique and personalized

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.

Industry & Agriculture

Our products for the industry and agriculture market

include alcohols and other products for paint applications and fertilizers.

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.

We 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.

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.

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 products include fuel-grade ethanol used as transportation fuel and distillers corn oil used as a biodiesel feedstock.

Our products for the industry and agriculture

market include alcohols and other products for paint applications, vehicle fluids and fertilizers.

Essential Ingredients

Our essential ingredients include dried yeast,

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

we sell yeast for human consumption.

We also produce and sell liquid CO 2 .

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 enables our customers to use some of our essential

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

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 for plant-based

Renewable Fuels

Our renewable fuels products include fuel-grade

ethanol primarily used as a transportation fuel additive and distillers corn oil used as a renewable diesel and 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

fuels, primarily fuel-grade ethanol, are used for a variety of purposes, including as octane enhancers for premium gasoline and to enable

refiners to produce greater quantities of lower octane blend stock;

for fuel blending to extend fuel supplies and reduce reliance on

crude oil and refined products;

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 rose incrementally

and peaked at 36.0 billion gallons in 2022, of which 15.0 billion gallons were required to be produced from conventional, or corn-based,

The RFS allows the Environmental Protection Agency, or EPA, to adjust the annual requirement based on certain facts and circumstances.

The EPA has set its annual requirements for conventional ethanol to 15.0 billion gallons for each of 2023, 2024 and 2025.

See “—Governmental

According to the Renewable Fuels Association, the

domestic fuel-grade ethanol industry produced over 15.5 billion gallons of ethanol in 2023, up from 15.4 billion gallons in 2022.

to the United States Department of Energy, total annual gasoline consumption in the United States is approximately 137 billion gallons

and total annual fuel-grade ethanol blended with gasoline represented approximately 10.4% of this amount in 2023.

We anticipate that continued

limited opportunities for gasoline refinery expansions and the growing importance of reducing CO 2 emissions using renewable

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

of Alcohol Production Process

production from starch- or sugar-based feedstock is a highly-efficient process.

Modern alcohol production requires large amounts of corn,

or other high-starch grains, and water as well as chemicals, enzymes and yeast, in addition to natural gas and electricity.

Milling Process

the dry milling process, corn or other high-starch grain is first ground into flour, then slurried with water to form a mash.

are added to the mash to convert the starch into dextrose, a simple sugar.

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 CO2 begins.

Renewable fuels, primarily fuel-grade ethanol,

are used for a variety of purposes, including as octane enhancers for premium gasoline and to enable refiners to produce greater quantities

of lower octane blend stock;

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, enacted to promote alternatives

to fossil fuels.

Under the RFS, the mandated use of all renewable fuels rose incrementally and peaked at 36.0 billion gallons in 2022,

of which production of 15.0 billion gallons was 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.

The EPA set its annual requirement

for conventional ethanol to 15.0 billion gallons for 2025.

See “—Governmental Regulation.”

According to the Renewable Fuels Association,

the domestic fuel-grade ethanol industry produced over 16.1 billion gallons of ethanol in 2024, up from 15.5 billion gallons of ethanol

According to the United States Department of Energy, total annual gasoline consumption in the United States is approximately

137 billion gallons and total annual fuel-grade ethanol blended with gasoline represented approximately 10.4% of this amount in 2024.

We anticipate that continued limited opportunities for gasoline refinery expansions and the growing importance of reducing CO 2

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

Overview of Alcohol Production Process

Alcohol production from starch- or sugar-based

feedstock is a highly efficient process.

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

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 flour, then slurried with water to form a mash.

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

a simple sugar.

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”

is transferred to distillation where the alcohol is separated from the residual “stillage.” The resulting alcohol is concentrated

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

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

to 190 proof using conventional distillation methods.

It can then be dehydrated to approximately 200 proof, representing 100% alcohol

levels, in either a molecular sieve system or a grits system.

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

with up to 2.5% denaturant, usually gasoline, and then shipped to renewable fuels markets.

For specialty alcohols, the products can be

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

customer specifications.

residual stillage is separated into a coarse grain portion and a liquid portion through a screw press or centrifugation process.

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, or DDGS.

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

Milling Process

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

stillage from the fermentation process is concentrated in an evaporator and is co-dried with the fiber component to be sold as corn gluten

The gluten component is filtered and dried to produce a high protein corn gluten meal.

starch is then processed into alcohol through fermentation.

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

milling process.

The residual stillage is separated into a coarse

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.

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

dried distillers grains with solubles, or DDGS.

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

Wet Milling Process

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

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

After steeping, the grain is coarse milled to gently open the kernels to separate the corn germ and from which corn oil is further

extracted in a separate process.

The remaining fiber, protein 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 and sold as corn protein feed.

The protein component is

separated from the starch, filtered and dried to produce corn protein meal, a product with greater than 60% protein content.

starch component is 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.

of Distillers Grains Market

grains are produced as a co-product of alcohol production and are valuable components of feed rations primarily to dairies and beef cattle

markets, both nationally and internationally.

Our plants produce both WDG and DDGS.

WDG is sold to customers proximate to the plants

and DDGS is delivered by truck, rail and barge to customers in domestic and international markets.

Producing WDG also allows us to use

up to one-third less process energy, thus reducing production costs and lowering the carbon footprint of our production facilities.

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.

market and sell through our wholly-owned subsidiary, Kinergy Marketing LLC, or Kinergy, all of the alcohols we produce.

markets fuel-grade ethanol produced by third parties.

We market and sell through our wholly-owned subsidiary, Alto Nutrients, LLC, all

of the essential ingredients we produce.

We also sell break bulk quantities through Eagle Alcohol to customers in the beverage, food,

Overview of Distillers Grains Market

Distillers grains are produced as a co-product

of alcohol production and are valuable components of feed rations primarily to dairies and beef cattle markets, both nationally and internationally.

Our plants produce both WDGS and DDGS.

WDGS is sold to customers proximate to the plants and DDGS is delivered by truck, rail and barge

to customers in domestic and international markets.

Producing WDGS uses up to one-third less process energy, thus reducing production

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

Historically, the market price for distillers

grains has generally tracked the price of corn.

We believe that the market price of WDGS 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 WDGS and DDGS in a particular

feed formulation and general market forces of supply and demand, including export markets for these essential ingredients.

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.

Our Kinergy Marketing LLC, or Kinergy, subsidiary

sells all of our produced alcohols and also markets fuel-grade ethanol produced by third parties.

Our Alto Nutrients, LLC subsidiary

sells all of the essential ingredients we produce.

Our Alto Carbonic, LLC subsidiary sells all of the liquid CO 2 we produce

and our Eagle Alcohol business sells our alcohols and third-party alcohols in break bulk quantities to customers in the beverage, food,

industrial and related-process industries.

have extensive and long-standing customer relationships, both domestic and international, for our specialty alcohols and essential ingredients,

including yeast for pet food and human foods.

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.

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.

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

ethanol plants.

market our essential ingredient feed products to dairies and feedlots, in many cases located near our production facilities.

These customers

use our feed products for livestock as a substitute for corn and other sources of starch and protein.

We sell our corn oil to poultry,

renewable diesel and biodiesel customers.

We do not market essential ingredients from other producers.

Pekin Campus production segment generated $502.2 million, $521.3 million and $498.2 million in net sales for the years ended December

31, 2023, 2022 and 2021, respectively, from the sale of alcohols.

Our Pekin Campus production segment generated $217.7 million, $225.9

million and $189.5 million in net sales for the years ended December 31, 2023, 2022 and 2021, respectively, from the sale of essential

We have extensive and long-standing customer relationships,

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

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.

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

We market our essential ingredient feed products

to dairies and feedlots, in many cases located near our production facilities.

These customers use our feed products for livestock as

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

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

Our Pekin Campus production segment generated

$416 million, $502 million and $521 million in net sales for the years ended December 31, 2024, 2023 and 2022, respectively, from the

sale of alcohols.

Our Pekin Campus production segment generated $169 million, $218 million and $226 million in net sales for the years

ended December 31, 2024, 2023 and 2022, respectively, from the sale of essential ingredients.

During 2024, 2023 and 2022, our Pekin Campus production

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

Western production segment generated $167.0 million, $253.6 million and $107.9 million in net sales for the years ended December 31,

2023, 2022 and 2021, respectively, from the sale of alcohols.

Our Western production segment generated $57.3 million, $90.2 million and

$31.1 million in net sales for the years ended December 31, 2023, 2022 and 2021, respectively, from the sale of essential ingredients.

Our Western production segment generated $115

million, $167 million and $254 million in net sales for the years ended December 31, 2024, 2023 and 2022, respectively, from the sale

Our Western production segment generated $37 million, $57 million and $90 million in net sales for the years ended December

31, 2024, 2023 and 2022, respectively, from the sale of essential ingredients.

During 2024, 2023 and 2022, our Western production

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Our marketing and distribution segment generated

$263.0 million, $228.9 million and $381.2 million in net sales for the years ended December 31, 2023, 2022 and 2021, respectively, from

the sale of all alcohols.

Our Corporate and other segment generated $15.8

million in net sales from Eagle Alcohol’s business for each of the years ended December 31, 2023 and 2022, and sold 4.0 million

gallons of alcohols for each of those years.

$217 million, $263 million and $229 million in net sales for the years ended December 31, 2024, 2023 and 2022, respectively, from the

sale of our own alcohols and third-party produced alcohols.

Our Corporate and other segment, which includes

Eagle Alcohol’s business, generated $11 million, $16 million and $16 million in net sales for the years ended December 31, 2024,

2023 and 2022, respectively, and sold 3.6 million, 4.0 million and 4.0 million gallons of alcohols, respectively, for those years.

During 2024, 2023 and 2022, we produced or purchased

from third parties and resold an aggregate of 382.5 million, 418.9 million and 479.6 million gallons of alcohols to approximately 88,

114 and 99 customers, respectively.

For 2023, 2022 and 2021, sales to our two largest customers, Shell Trading US Company and Chevron

Products USA represented an aggregate of approximately 16%, 20% and 22% of our net sales, respectively.

For 2023, 2022 and 2021, sales

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

Campus and Western Production Segments

production operations depend upon various raw materials suppliers, including suppliers of corn, natural gas, electricity and water.

cost of corn is the most important variable cost associated with our alcohol production.

We source corn for our plants using standard

contracts, including spot purchase, forward purchase and basis contracts.

When resources are available, we seek to limit the exposure

of our production operations to raw material price fluctuations by purchasing forward a portion of our corn requirements on a fixed price

basis and by purchasing corn and other raw materials futures contracts and options.

2023, 2022 and 2021, purchases of corn from our three largest suppliers represented an aggregate of approximately 26%, 38% and 28% 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 2023, 2022 and 2021.

and Distribution Segment

marketing and distribution operations include alcohols and essential ingredients we produce but also depend upon various third-party

producers of fuel-grade ethanol.

In addition, we provide transportation, storage and delivery services through third-party service providers

with whom we have contracted to receive fuel-grade ethanol at agreed upon locations from our third-party suppliers and to store and/or

deliver the ethanol to agreed-upon locations on behalf of our customers.

These contracts generally run from year-to-year, subject to

termination by either party upon advance written notice before the end of the then-current annual term.

2023, 2022 and 2021, we purchased and resold from third parties an aggregate of approximately 103 million, 118 million and 229 million

gallons, respectively, of fuel-grade ethanol.

2023, 2022 and 2021, purchases of fuel-grade ethanol from our four largest third-party suppliers represented 86%, 69% and 76%, respectively,

of our total third-party ethanol purchases for each of those periods.

Purchases from each of our other third-party ethanol suppliers

represented less than 10% of total third-party ethanol purchases in each of 2023, 2022 and 2021.

operate five alcohol production facilities.

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 up to 350 million gallons, including both fuel-grade ethanol

and specialty alcohols ranging from industrial-, pharmaceutical-, and high-quality food- and beverage-grade alcohols.

Of this amount,

we are able to produce up to 110 million gallons annually of specialty alcohols, depending on our product mix among high-quality beverage-grade

alcohol and alcohols of other quality specifications.

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

Campus Production Facilities

operating status

maximum annual alcohol production capacity (in millions of gallons)

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

milling process

energy source

from third parties and resold an aggregate of 386 million, 383 million and 419 million gallons of alcohols to approximately 85, 88 and

114 customers, respectively.

For 2024, 2023 and 2022, sales to our two largest customers, Chevron Products USA and Shell Trading (US)

Company represented an aggregate of approximately 18%, 16% and 20% of our net sales, respectively.

For 2024, 2023 and 2022, sales to

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

Pekin Campus and Western Production Segments

Our production operations depend upon various

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

The cost of corn, including delivery costs,

is the most important variable cost associated with our alcohol production.

We source corn for our plants using standard contracts, including

spot purchase, forward purchase and basis contracts.

When resources are available, we seek to limit the exposure of our production operations

to raw material price fluctuations by purchasing forward a portion of our corn requirements on a fixed price basis and by purchasing

corn and other raw materials futures contracts and options.

During 2024, 2023 and 2022, purchases of corn

from our three largest suppliers represented an aggregate of approximately 29%, 26% and 38% 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 2024,

2023 and 2022.

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.

we provide transportation, storage and delivery services through third-party service providers with whom we have contracted to receive

fuel-grade ethanol at agreed upon locations from our third-party suppliers and to store and/or deliver the ethanol to agreed-upon locations

on behalf of our customers.

These contracts generally run from year-to-year, subject to termination by either party upon advance written

notice before the end of the then-current annual term.

During 2024, 2023 and 2022, we purchased and resold

from third parties an aggregate of approximately 108 million, 103 million and 118 million gallons, respectively, of fuel-grade ethanol.

During 2024, 2023 and 2022, purchases of fuel-grade

ethanol from our four largest third-party suppliers represented 79%, 86% and 69%, respectively, of our total third-party ethanol purchases

for each of those periods.

Purchases from each of our other third-party ethanol suppliers represented less than 10% of total third-party

ethanol purchases in each of 2024, 2023 and 2022.

Production Facilities

operating status

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

milling process

energy source

Risk Management

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 gas requirements through fixed-price or variable-price contracts with our suppliers, as well

as entering derivative contracts for fuel-grade ethanol, corn and natural gas.

To mitigate fuel-grade ethanol inventory price risks,

we may sell a portion of our production forward under fixed- or index-price contracts, or both.

We may hedge a portion of the price risks

by entering exchange-traded futures contracts and options.

Proper execution of these risk mitigation strategies can reduce the volatility

of our gross profit margins.

We operate five alcohol production facilities.

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 up to 350 million gallons, including both fuel-grade ethanol and specialty alcohols ranging from industrial-,

pharmaceutical-, and high-quality food- and beverage-grade alcohols.

Of this amount, we are able to produce up to 110 million gallons

annually of specialty alcohols, depending on our product mix among high-quality beverage-grade alcohol and other quality specification

We also own and operate a liquid CO 2 production facility adjacent to our plant in Oregon for the offtake of CO 2

gas from the plant for conversion to liquid CO 2 and subsequent sale.

The tables below provide an overview of our five

alcohol production facilities and our liquid CO 2 production facility.

As market conditions change, we may increase, decrease

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

Pekin Campus Production Facilities

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

Primary energy source

Western Production Facilities

Current operating status

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

Approximate maximum annual liquid CO 2 capacity (in thousands of tons)

Production milling process

Primary energy source

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

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

ethanol, corn and natural gas.

To mitigate fuel-grade ethanol inventory price risks, we may sell a portion of our production forward

under fixed- or index-price contracts, or both.

We may hedge a portion of the price risks by entering exchange-traded futures contracts

Properly executing these risk mitigation strategies can reduce the volatility of our gross profit margins.

Specialty alcohols have relatively low price volatility

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$8.18 per bushel during 2022.

Climate-Related

and Other Risks

to medium-term climate-related and other risks include high sensitivity to certain commodity prices such as corn and natural gas;

changes and political volatility, both domestic and international;

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;

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;

high repair, maintenance and production costs resulting from

older facilities;

poor cooling capacity of our older facilities as water temperatures increase;

international market competition.

climate-related risks include water resource limitations;

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.

“Risk Factors.”

market transition away from combustion fuels that include

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

We market all the alcohols and essential ingredients

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We also market and distribute alcohols produced by third parties.

are the largest producer of specialty alcohols in the United States.

significant producers of specialty alcohols in the United States are Archer-Daniels-Midland Company, Grain Processing Corporation, CIE

and Greenfield Global Inc., which collectively make up a significant majority of the total installed specialty alcohol production capacity

in the United States along with many smaller producers.

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 40% 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

17.8 billion gallons and many brokers and marketers with whom we compete for sales of fuel-grade ethanol and its co-products.

fuel-grade ethanol also competes on a global market against production from other countries, such as Brazil, which may have lower production

costs than United States producers.

Lower feedstock input costs such as sugarcane used in Brazil as compared to corn used in the Unites

States may give foreign producers a competitive advantage.

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 development, many of which, if adopted by competitors, could harm our ability to compete.

We are a leading producer of specialty alcohols

in the United States.

Other significant producers of specialty

alcohols in the United States are Archer-Daniels-Midland Company, Grain Processing Corporation, BioUrja Renewables, LLC, CIE and

Greenfield Global Inc., which collectively make up a significant majority of the total installed specialty alcohol production

capacity in the United States 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 39% 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 18 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

market against production from other countries, such as Brazil, which may have lower production costs than United States producers.

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 certain

producers to economically satisfy an advanced biofuel standard.

Moreover, new products and production technologies are under continuous

development, many of which, if adopted by competitors, could harm our ability to compete.

We believe that our competitive strengths include

our customer and supplier relationships, our diverse product mix, the barriers to entry to our most profitable lines of business—including

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

our Midwest production facilities.

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

of our Midwest production facilities.

See “—Competitive Strengths.”

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 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

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, 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 alcohol production (including distillation), our liquid CO 2

production, our essential ingredient production, 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

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

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

addition, some governmental regulations are helpful to our production and marketing business.

The fuel-grade ethanol industry in particular

is supported by federal and state mandates and environmental regulations that favor the use of fuel-grade ethanol in motor fuel blends

in North America.

Some of the governmental regulations applicable to our production and marketing business are briefly described below.

and Drug Regulation

products for the Health, Home & Beauty , 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.

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 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.

Fuels Energy Legislation

the RFS, the mandated use of all renewable 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 for each of 2023, 2024 and 2025.

the provisions of the Energy Independence and Security Act of 2007, the EPA has the authority to waive the mandated RFS requirements

in whole or in part.

To grant a waiver, the EPA administrator must determine, in consultation with the Secretaries of Agriculture and

Energy, that there is inadequate domestic renewable fuel supply or implementation of the requirement would severely harm the economy

or environment of a state, region or the United States as a whole.

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.

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

In addition, some governmental regulations are

helpful to our production and marketing business.

The fuel-grade ethanol industry in particular is supported by federal and state mandates

and environmental regulations that favor the use of fuel-grade ethanol in motor fuel blends in North America.

Some of the governmental

regulations applicable to our production and marketing business are briefly described below.

Food and Drug Regulation

Our products for the Health, Home & Beauty ,

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.

The Modernization of Cosmetics Regulation Act (MoCRA) was added to the FDCA.

This was a significant expansion to the FDCA, and established

requirements for cosmetic product facility registration and product listing, widening regulatory oversight of many more of our customers’

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.

For proper marketing and sale in the United States, an applicable 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, 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 for 2025.

Under the provisions of the Energy Independence and Security Act of 2007,

the EPA has the authority to waive the mandated RFS requirements in whole or in part.

To grant a waiver, the EPA administrator must determine,

in consultation with the Secretaries of Agriculture and Energy, that there is inadequate domestic renewable fuel supply or implementation

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 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 up to 15% fuel-grade ethanol by volume, or E15, for vehicles from model year 2001 and after.

to the Renewable Fuels Association, E15 is explicitly approved by the manufacturer for use in approximately 95% of model year 2024 cars

and light trucks based on its annual review of vehicle owner’s manuals and warranty statements.

Commercial sales of E15 have begun

in a majority of states.

E15 has historically been prohibited in most states during the summer driving season due to concerns over evaporative

emissions and to meet federal clean air standards.

For the 2022 and 2023 summer driving seasons, the EPA issued emergency fuel waivers

to allow the sale of E15 to help alleviate high gasoline prices.

E15 may, however, be sold year-round in states that have a reformulated

gasoline program.

In addition, the EPA proposed in late 2023 that E15 be permitted for sale year-round in various Midwestern states effective

in April 2024.

Office of Management and Budget approved the proposal in February 2024 but deferred the effective date to April

to the Renewable Fuels Association, E15 is explicitly approved by the manufacturer for use in approximately 95% of model year 2024 and

newer cars and light trucks based on its annual review of vehicle owner’s manuals and warranty statements.

Commercial sales of

E15 have begun in a majority of states.

E15 has historically been prohibited in most states during the summer driving season due to concerns

over evaporative emissions and to meet federal clean air standards.

For the 2024, 2023 and 2022 summer driving seasons, the EPA issued

emergency fuel waivers to allow the sale of E15 to help alleviate high gasoline prices.

E15 may, however, be sold year-round in states

that have a reformulated gasoline program.

In addition, the EPA proposed in late 2023 that E15 be permitted for sale year-round in various

Midwestern states effective in April 2024.

Office of Management and Budget approved the proposal in February 2024 but deferred

the effective date to April 2025.

Various states including California, Oregon and

1 unchanged sentence

reducing the carbon intensity of transportation fuels.

Other states, including New York, Vermont, Massachusetts, Michigan, Illinois, Colorado

and New Mexico, currently have proposed legislation or policies that would establish a low carbon fuel standard program.

Blending fuel-grade

ethanol into gasoline is one of the primary means of attaining these goals.

Environmental Regulations

addition to the governmental regulations applicable to the alcohol production and marketing industry described above, our business is

subject to additional federal, state and local environmental regulations, including regulations established by the EPA and state regulatory

agencies related to water quality and air pollution control.

We cannot predict the manner by which, or extent to which, these regulations

will harm or help our business or the alcohol production and marketing industry in general.

Capital Resources

of March 12, 2024, we had approximately 460 full-time employees.

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.

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.

Other states, including New York, Vermont, Massachusetts, Michigan, Illinois,

Colorado and New Mexico, currently have proposed legislation or policies that would establish a low carbon fuel standard program.

fuel-grade ethanol into gasoline is one of the primary means of attaining these goals.

Additional Environmental Regulations

In addition to the governmental regulations applicable

to the alcohol production and marketing industry described above, our business is subject to additional federal, state and local environmental

regulations, including regulations established by the EPA and state regulatory agencies related to water quality and air pollution control.

We cannot predict the manner by which, or extent to which, these regulations will harm or help our business or the alcohol production

and marketing industry in general.

Human Capital Resources

As of March 12, 2025, we had approximately 393

full-time employees.

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 51% 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 our Sustainability and Governance board

committees, we have established a Sustainability working committee that draws from our many administrative and operational departments

to review key policies and procedures, conduct employee engagement surveys, champion volunteering and charitable drives, develop and

implement formalized recruiting and training efforts to prioritize collecting data and improving on key metrics from industry frameworks

such as the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) standards which are maintained by

the International Sustainability Standards Board of the IFRS Foundation.

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What changed 10-K

Item 1. Business