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Item 1. Financial Statements

2026-05-08 compared with 2025-11-07 · 253 added, 478 removed, 183 unchanged (80% of the section changed)

1 unchanged sentence

ALTO INGREDIENTS, INC.

CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

September 30,

Current Assets:

2 unchanged sentences

Accounts receivable (net of allowance for credit losses of $ 61 and $ 76 , respectively) 59,700 55,069

Inventories 52,831 61,676

Transferable tax credits, net 11,530 7,500

Derivative instruments 7,831 525

5 unchanged sentences

Intangible assets, net 7,419 7,574

Other assets 9,908 9,863

Total other assets 34,542 34,368

* Amounts derived from the

audited consolidated financial statements for the year ended December 31, 2024.

See accompanying notes to consolidated financial

Total Assets $ 386,293 $ 388,786

* Amounts derived from the audited financial statements for the year ended December 31, 2025.

See accompanying

notes to condensed consolidated financial statements.

ALTO INGREDIENTS, INC.

CONSOLIDATED BALANCE SHEETS (CONTINUED)

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(in thousands, except par value)

September 30,

LIABILITIES AND STOCKHOLDERS’ EQUITY

2 unchanged sentences

Accrued liabilities 12,332 16,691

Current portion – long-term debt — 16,600

Current portion – operating leases 4,975 4,958

2 unchanged sentences

Total current liabilities 41,652 59,071

Long-term debt, net

Long-term debt 73,056 63,027

Operating leases, net of current portion 13,240 13,012

6 unchanged sentences

1,684 shares authorized;

no shares issued and outstanding

as of September 30, 2025 and December 31, 2024;

no shares issued and outstanding as of March 31, 2026 and December 31, 2025;

1,581 shares authorized;

927 shares issued and outstanding

as of September 30, 2025 and December 31, 2024;

liquidation preference of $ 18,075 as of September 30, 2025

927 shares issued and outstanding as of March 31, 2026 and December 31, 2025;

liquidation preference of $ 18,075 as of March 31, 2026 1 1

Common stock, $ 0.001 par value;

300,000 shares authorized;

77,342 and 76,565 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

77,946 and 77,307 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively 78 77

Non-voting common stock, $ 0.001 par value;

3,553 shares authorized;

1 share issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

1 share issued and outstanding as of March 31, 2026 and December 31, 2025 — —

Additional paid-in capital 1,052,472 1,051,795

4 unchanged sentences

* Amounts derived from the

audited consolidated financial statements for the year ended December 31, 2024.

See accompanying notes to consolidated financial

audited financial statements for the year ended December 31, 2025.

See accompanying

notes to condensed consolidated financial statements.

ALTO INGREDIENTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share

Three Months Ended

September 30,

Nine Months Ended

September 30,

Net sales $ 224,680 $ 226,540

Cost of goods sold 215,461 228,347

Gross profit (loss) 9,219 ( 1,807 )

Selling, general and administrative expenses 6,699 7,190

Gain on sale of assets

Income (loss) from operations 2,520 ( 8,997 )

Interest expense, net ( 2,198 ) ( 2,729 )

Other income (expense), net

Transferable tax credits, net 3,900 —

Other income, net 49 47

Income (loss) before provision for income taxes 4,271 ( 11,679 )

3 unchanged sentences

Net income (loss) attributable to common stockholders $ 3,959 $ ( 11,991 )

Net income (loss) per share, basic and diluted

Weighted-average shares outstanding, basic and diluted

See accompanying notes to consolidated financial

Net income (loss) per share, basic $ 0.05 $ ( 0.16 )

Net income (loss) per share, diluted $ 0.05 $ ( 0.16 )

Weighted-average shares outstanding, basic 74,789 73,836

Weighted-average shares outstanding, diluted 76,639 73,836

See accompanying notes to condensed consolidated

financial statements.

ALTO INGREDIENTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

Nine Months Ended

September 30,

Three Months Ended

Operating Activities:

Adjustments to reconcile net loss to

Net cash provided by operating activities:

Net income (loss) $ 4,271 $ ( 11,679 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization 6,366 6,266

Transferable tax credits, net, generated ( 3,900 ) —

Gains on derivative instruments ( 8,416 ) ( 1,773 )

Gain on sale of assets

Stock-based compensation

Non-cash compensation 705 848

Inventory valuation — 1,170

Amortization of deferred financing fees 249 250

3 unchanged sentences

Accounts receivable ( 4,616 ) ( 7,040 )

Inventories 8,845 ( 1,711 )

Other assets 1,918 417

Operating leases ( 1,675 ) ( 1,575 )

Accounts payable and accrued liabilities 279 ( 3,616 )

Net cash provided by operating activities

Net cash provided by (used in) operating activities 4,209 ( 18,231 )

Investing Activities:

Additions to property and equipment ( 909 ) ( 532 )

Proceeds from sale of assets

Purchase of Kodiak Carbonic, net of cash acquired — ( 7,278 )

Deferred purchase price payments for Eagle Alcohol

Net cash used in investing activities ( 909 ) ( 7,810 )

Financing Activities:

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

Net proceeds from Kinergy’s line of credit 9,582 17,313

Principal payments on term debt ( 16,600 ) —

Preferred stock dividends paid ( 312 ) ( 312 )

Net cash provided by (used in) financing activities

Net change in cash, cash equivalents and restricted cash

Net cash (used in) provided by financing activities ( 7,330 ) 17,001

Net decrease in cash, cash equivalents and restricted cash ( 4,030 ) ( 9,040 )

Cash, cash equivalents and restricted cash at beginning of period 25,673 36,211

6 unchanged sentences

Interest paid $ 1,764 $ 2,230

Proceeds from sale of assets – note receivable

Capitalized interest

Shares vested for Eagle Alcohol

See accompanying notes to

consolidated financial statements.

See accompanying notes to condensed consolidated

financial statements.

ALTO INGREDIENTS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited, in thousands)

1 unchanged sentence

Additional Paid-In

Other Comprehensive

Accumulated Other Comprehensive

Balances, January 1, 2026 927 $ 1 77,307 $ 77 $ 1,051,795 $ ( 812,093 ) $ 5,461 $ 245,241

$ ( 824,166 )

Stock-based compensation — — — — 705 — — 705

1 unchanged sentence

Preferred stock dividends — — — — — ( 312 ) — ( 312 )

Net income — — — — — 4,271 — 4,271

Balances, March 31, 2026 927 $ 1 77,946 $ 78 $ 1,052,472 $ ( 808,134 ) $ 5,461 $ 249,878

$ ( 836,157 )

Stock-based compensation

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

Shares vested for Eagle Alcohol

Preferred stock dividends

Balances, June 30, 2025

$ ( 847,469 )

Stock-based compensation

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

Preferred stock dividends

Balances, September 30, 2025

$ ( 833,580 )

Balances, January 1, 2025 927 $ 1 76,565 $ 77 $ 1,044,176 $ ( 824,166 ) $ 4,975 $ 225,063

$ ( 763,913 )

Stock-based compensation — — — — 848 — — 848

1 unchanged sentence

Preferred stock dividends — — — — — ( 312 ) — ( 312 )

Net loss — — — — — ( 11,679 ) — ( 11,679 )

Balances, March 31, 2025 927 $ 1 76,497 $ 77 $ 1,045,024 $ ( 836,157 ) $ 4,975 $ 213,920

$ ( 775,953 )

Stock-based compensation

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

Preferred stock dividends

Balances, June 30, 2024

$ ( 779,375 )

Stock-based compensation

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

Preferred stock dividends

Balances, September 30, 2024

$ ( 782,135 )

accompanying notes to consolidated financial statements.

See accompanying notes to condensed consolidated

financial statements.

ALTO INGREDIENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ORGANIZATION AND BASIS OF PRESENTATION.

Organization and Business

– The consolidated financial statements include, for all periods presented, the accounts of Alto Ingredients, Inc., a Delaware corporation

(“Alto Ingredients”), and its direct and indirect wholly-owned subsidiaries (collectively, the “Company”), including

Kinergy Marketing LLC, an Oregon limited liability company (“Kinergy”), Alto Nutrients, LLC, a California limited liability

company (“Alto Nutrients”), Alto Op Co., a Delaware corporation, Alto Pekin, LLC, a Delaware limited liability company (“Alto

Pekin”) and Alto ICP, LLC, a Delaware limited liability company (“ICP”), and the Company’s production facilities

in Oregon and Idaho.

As discussed in Note 2, on January 1, 2025, the

Company’s wholly-owned subsidiary, Alto Carbonic, LLC (“Alto Carbonic”), acquired Kodiak Carbonic, LLC, a beverage-grade

liquid CO 2 processor, for $ 7.6 million.

Alto Carbonic’s facility is co-located at the Company’s Columbia ethanol

plant in Boardman, Oregon.

The Company began reporting the results of Alto Carbonic in the Company’s Western Production segment

on January 1, 2025.

The Company produces and distributes

renewable fuels, essential ingredients and specialty alcohols.

Organization and Business – The condensed consolidated financial statements include, for all periods presented, the accounts of Alto Ingredients, Inc., a Delaware corporation (“Alto Ingredients”), and its direct and indirect wholly-owned subsidiaries (collectively, the “Company”), including Kinergy Marketing LLC, an Oregon limited liability company (“Kinergy”), Alto Nutrients, LLC, a California limited liability company (“Alto Nutrients”), Alto Op Co., a Delaware corporation, Alto Pekin, LLC, a Delaware limited liability company (“Alto Pekin”) and Alto ICP, LLC, a Delaware limited liability company (“ICP”), and the Company’s production facilities in Oregon and Idaho.

On January 1, 2025, the Company’s wholly-owned subsidiary, Alto Carbonic, LLC (“Alto Carbonic”), acquired Kodiak Carbonic, LLC, a beverage-grade liquid carbon dioxide, or CO 2 , processor, for $ 7.6 million.

Alto Carbonic’s facility is co-located at the Company’s Columbia ethanol plant in Boardman, Oregon.

The Company began reporting the results of Alto Carbonic in the Company’s Western Production segment on January 1, 2025.

The Company produces and distributes specialty alcohols, renewable fuels and essential ingredients.

The Company also markets fuel-grade ethanol produced by third parties.

The Company’s production facilities in Pekin, Illinois are located in the heart of the Corn Belt.

The Company’s two production

facilities in Boardman, Oregon and Burley, Idaho are located in close proximity to both feed and fuel-grade ethanol customers.

The Company has a combined alcohol

production capacity of 350 million gallons per year and produces, on an annualized basis, over 1.4 million tons of essential ingredients,

such as dried yeast, corn protein meal, corn protein feed, corn germ, and distillers grains and liquid feed used in commercial animal

feed and pet foods.

In addition, the Company markets and distributes fuel-grade ethanol produced by third parties.

The Company focuses on Health,

Home & Beauty ;

The Company’s two production facilities in Boardman, Oregon and Burley, Idaho are located in close proximity to both feed and fuel-grade ethanol customers.

The Company has a combined alcohol production capacity of 330 million gallons per year and produces, on an annualized basis, over 1.2 million tons of essential ingredients.

The Company’s Eagle Alcohol business specializes in break bulk distribution of specialty alcohols.

The Company focuses on Health, Home & Beauty ;

Food & Beverage ;

1 unchanged sentence

Essential Ingredients ;

and Renewable Fuels

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

sanitizers, disinfectants and cleaners.

Products for the Food & Beverage 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.

Products 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.

Products for Renewable Fuels markets

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

The Company’s production

facilities, other than its Magic Valley plant located in Burley, Idaho, were operating for all periods presented subject to scheduled

and unscheduled downtimes to address facility repair and maintenance.

In January 2024, the Company temporarily hot-idled its 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 the Company’s corn oil and high protein system at the facility.

restarted its 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 the Company was able to expand its corn oil yields.

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

the economic benefits of these plant improvements.

As a consequence, the Company cold-idled its Magic Valley facility on December 31,

2024 to minimize financial losses.

The Company continues to provide terminal services at the plant.

Basis of Presentation – Interim

Financial Statements – The accompanying unaudited consolidated financial statements and related notes have been prepared

in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions

to Form 10-Q and Rule 10-01 of Regulation S-X.

Results for interim periods should not be considered indicative of results for

These interim consolidated financial statements should be read in conjunction with the consolidated financial statements

and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The accounting

policies used in preparing these consolidated financial statements are the same as those described in Note 1 to the consolidated financial

statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

In the opinion of management, all adjustments

(consisting of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included.

and Renewable Fuels markets.

Products for the Health, Home & Beauty market include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants and cleaners.

Products for the Food & Beverage markets include grain neutral spirits used in alcoholic beverages and vinegar as well as corn germ used for corn oils.

Products for Industry & Agriculture markets include alcohols and other products for paint applications, inks, vehicle fluids and fertilizers.

Products for Essential Ingredients markets include gas and liquid CO 2 , dried yeast, corn protein meal, corn protein feed, corn germ, and distillers grains and liquid feed used in commercial animal feed and pet foods.

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

The Company’s production facilities, other than its Magic Valley plant located in Burley, Idaho, were operating for all periods presented subject to scheduled and unscheduled downtimes to address facility repair and maintenance.

In January 2024, the Company temporarily hot-idled its 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 the Company’s corn oil and high protein system at the facility.

The Company restarted its 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 the Company was able to expand its corn oil yields.

Increases in regional corn basis and declining market prices for protein and corn oil resulted in overall margin compression, outweighing the economic benefits of these plant improvements.

As a consequence, the Company cold-idled its Magic Valley facility on December 31, 2024, and through the filing of this report, to minimize financial losses.

The Company continues to provide ethanol terminaling services at the plant.

Basis of Presentation – Interim Financial Statements – The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.

Results for interim periods should not be considered indicative of results for a full year.

These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

The accounting policies used in preparing these condensed consolidated financial statements are the same as those described in Note 1 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Accounts Receivable and Allowance for Credit

Losses – Trade accounts receivable is presented at original invoice amount, net of the allowance for credit losses.

Company sells specialty alcohols to large consumer product companies, sells fuel-grade ethanol to gasoline refining and distribution companies,

sells essential ingredients such as dried yeast for human and pet food and to animal feed customers, including distillers grains to export

markets, sells those same and other feed co-products to dairy operators and animal feedlots and sells corn oil to poultry, renewable diesel

and biodiesel customers, in each case generally without requiring collateral.

The carrying amount of accounts receivable is

reduced by a valuation allowance that reflects the Company’s best estimate of the amounts that will not be collected.

regularly reviews accounts receivable and based on assessments of current customer creditworthiness, estimates the portion, if any, of

the customer balance that will not be collected.

Of the accounts receivable balance, approximately

$ 46,146,000 and $ 44,750,000 at September 30, 2025 and December 31, 2024, respectively, were used as collateral under Kinergy’s operating

line of credit.

The allowance for credit losses was $ 19 ,000 and $ 23 ,000 as of September 30, 2025 and December 31, 2024, respectively.

The Company recorded a credit loss recovery of $ 3 ,000 and $ 24 ,000 for the three months ended September 30, 2025 and 2024, respectively.

The Company recorded a credit loss recovery of $ 4 ,000 and $ 23 ,000 for the nine months ended September 30, 2025 and 2024, respectively.

Accounts Receivable and Allowance for Credit Losses – Trade accounts receivable is presented at original invoice amount, net of the allowance for credit losses.

The Company sells specialty alcohols to large consumer product companies, sells fuel-grade ethanol to gasoline refining and distribution companies, sells essential ingredients such as dried yeast for human and pet food and to animal feed customers, including distillers grains to export markets, sells those same and other feed co-products to dairy operators and animal feedlots and sells corn oil to poultry, renewable diesel and biodiesel customers, in each case generally without requiring collateral.

The carrying amount of accounts receivable is reduced by a valuation allowance that reflects the Company’s best estimate of the amounts that will not be collected.

The Company regularly reviews accounts receivable and based on assessments of current customer creditworthiness, estimates the portion, if any, of the customer balance that will not be collected.

Of the accounts receivable balance, approximately $ 52,728,000 and $ 41,379,000 at March 31, 2026 and December 31, 2025, respectively, were used as collateral under Kinergy’s operating line of credit.

The allowance for credit losses was $ 61,000 and $ 76,000 as of March 31, 2026 and December 31, 2025, respectively.

The Company recorded bad debt recoveries of $ 15 ,000 and bad debt expense of $ 15 ,000 for the three months ended March 31, 2026 and 2025, respectively.

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

Financial Instruments – The

carrying values of cash and cash equivalents, restricted cash, accounts receivable, derivative assets, accounts payable, accrued liabilities

and derivative liabilities are reasonable estimates of their fair values because of the short maturity of these items.

The Company believes

the carrying value of its long-term debt instruments are not considered materially different than fair value.

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.

Transferable Tax Credits, net – The Company generates and recognizes tax credits under Section 45Z of the Internal Revenue Code for domestic clean fuel production.

The Company accounts for these tax credits under IAS 20 - Accounting for Government Grants and Disclosure of Government Assistance .

In accordance with IAS 20, the tax credits are recognized when there is reasonable assurance the Company will comply with the applicable provisions of the Internal Revenue Code and that the tax credits will be received.

Financial Instruments – The carrying values of cash and cash equivalents, restricted cash, accounts receivable, derivative assets, accounts payable, accrued liabilities and derivative liabilities are reasonable estimates of their fair values because of the short maturity of these items.

The Company believes the carrying values of its long-term debt instruments are not considered materially different than fair value.

Estimates and Assumptions – The preparation of the condensed 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.

ACQUISITION OF KODIAK CARBONIC.

On January 1, 2025, Alto Carbonic purchased 100 %

of the equity interests in Kodiak Carbonic, LLC, a beverage-grade liquid CO 2 processor, for $ 7.6 million in cash.

Alto Carbonic’s

facility is co-located at the Company’s Columbia ethanol plant.

The acquisition has provided the Company further vertical integration

and access to new markets in the liquid CO 2 market out of its Columbia plant.

Kodiak Carbonic’s unaudited net sales for

the three months ended September 30, 2025 and 2024 were $ 2.6 million and $ 1.4 million and its unaudited net income was $ 1.7 million and

$ 0.5 million, respectively.

Kodiak Carbonic’s unaudited net sales for the nine months ended September 30, 2025 and 2024 were $ 7.0

million and $ 4.1 million and its unaudited net income was $ 4.6 million and $ 1.4 million, respectively.

The following table presents the

Company’s unaudited pro forma combined financial information assuming the acquisition occurred on January 1, 2024 (dollars in thousands

except per share amounts):

Three Months Ended

September 30,

Revenues – pro forma

Net income (loss) attributable to common stockholders – pro forma

Basic and diluted net income (loss) per share – pro forma

Nine Months Ended

September 30,

Revenues – pro forma

Net loss attributable to common stockholders – pro forma

Basic and diluted net loss per share – pro forma

The following allocation of the estimated purchase

price assumes, with the exception of property and equipment and intangibles, that carrying values approximate fair value.

uncollectible accounts receivable are not considered material due to the short-term nature and customer collection history.

price allocation is as follows (in thousands):

Cash and equivalents

Accounts receivable

Total current assets

Property and equipment

Total tangible assets

Current liabilities

Total liabilities

Net tangible assets acquired

Customer relationships

Total Purchase Price

For the identifiable intangible assets, the Company

has estimated 9 years for useful lives for customer relationships.

For the three and nine months ended September 30, 2025, the Company

recorded amortization of these intangibles of $ 102,000 and $ 306,000 , respectively.

The Company did not incur any material acquisition

A segment is a component of an enterprise whose

operating results are regularly reviewed by the enterprise’s chief operating decision maker (“CODM”) to make decisions

about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

The Company’s CODM is the Company’s Executive Committee, which is led by the Company’s Chief Executive Officer (“CEO”)

and includes its Chief Financial Officer, Chief Operating Officer, Chief Commercial Officer and Chief Legal Officer (“Executive

A segment is a component of an enterprise whose operating results are regularly reviewed by the enterprise’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

The Company’s CODM is the Company’s executive committee, which is led by the Company’s Chief Executive Officer (“CEO”) and includes its Chief Financial Officer, Chief Operating Officer, Chief Commercial Officer and Chief Legal Officer (“ Executive Committee ”).

The Company manages and assesses the performance of its reportable segments by its gross profit (loss).

the Executive Committee’s review of segment-level performance, each member of the Executive Committee reviews the gross profit of

the Company’s reportable segments and provides expertise and analysis from their respective areas which drive the evaluation of

the performance of the Company’s reportable segments and allocation of resources to those segments.

Even though the CEO has the

authority to override the other members for strategic or other reasons, key decisions are made jointly by the Executive Committee.

The Company reports financial and operating performance

in three reportable segments (1) Pekin production, which includes the entire campus in Pekin, Illinois (“Pekin Campus”), (2)

marketing and distribution, which includes marketing and merchant trading for Company-produced specialty alcohols, fuel-grade ethanol

and essential ingredients, and sales of fuel-grade ethanol sourced from third parties, and (3) Western production, which includes the

Company’s two western production facilities in Boardman, Oregon and Burley, Idaho and, beginning for the three and nine months ended

September 30, 2025, its liquid CO 2 plant on an aggregated basis (“Western production”).

For the three and nine months ended September

30, 2025, capital expenditures incurred by the Pekin Campus segment were approximately $ 1.6 million and $ 2.6 million, respectively, and

none for the Western production segment.

For the three and nine months ended September 30, 2024, capital expenditures incurred by the

Pekin Campus segment were approximately $ 0.2 million and $ 7.1 million, respectively, and $ 0.3 million and $ 2.7 million for the Western

production segment, respectively.

For all periods presented, there were no capital expenditures for the marketing and distribution segment.

The following tables set forth certain financial

data for the Company’s operating segments (in thousands):

As part of the Executive Committee’s review of segment-level performance, each member of the Executive Committee reviews the gross profit of the Company’s reportable segments and provides expertise and analysis from their respective areas which drive the evaluation of the performance of the Company’s reportable segments and allocation of resources to those segments.

Even though the CEO has the authority to override the other members for strategic or other reasons, key decisions are made jointly by the Executive Committee.

The Company reports financial and operating performance in three reportable segments (1) Pekin production, which includes three production facilities located in Pekin, Illinois (“Pekin Campus”), (2) marketing and distribution, which includes marketing and merchant trading for Company-produced specialty alcohols, fuel-grade ethanol and essential ingredients, and sales of fuel-grade ethanol sourced from third parties, and (3) Western production, which includes the Company’s two production facilities located in Burley, Idaho and Boardman, Oregon, and its liquid CO 2 plant on an aggregated basis (“Western production”).

The following tables set forth certain financial data for the Company’s operating segments (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Pekin Campus production, recorded as gross:

Net Sales 2026 2025

Pekin Campus production:

Alcohol sales $ 107,952 $ 107,234

3 unchanged sentences

Marketing and distribution:

Alcohol sales, gross

Alcohol sales, net

Alcohol sales 47,326 49,058

Intersegment sales 2,450 2,506

Total marketing and distribution sales 49,776 51,564

Western production, recorded as gross:

Western production:

Alcohol sales 16,680 16,194

18 unchanged sentences

Intersegment eliminations ( 1,976 ) ( 1,337 )

Gross profit as reported

Gross profit (loss) as reported $ 9,219 $ ( 1,807 )

Income (loss) before provision for income taxes:

3 unchanged sentences

Corporate and other ( 1,757 ) ( 1,973 )

$ 4,271 $ ( 11,679 )

Depreciation and amortization expense:

2 unchanged sentences

Corporate and other 128 170

$ 6,366 $ 6,266

Interest expense, net of capitalized interest:

3 unchanged sentences

Corporate and other 724 677

The following table sets forth the Company’s

total assets by operating segment (in thousands):

September 30,

$ 2,198 $ 2,729

The following table sets forth the Company’s total assets by operating segment (in thousands):

2026 December 31, 2025

Total assets:

3 unchanged sentences

Corporate and other 22,970 32,797

Inventories consisted primarily of bulk ethanol,

specialty alcohols, corn, essential ingredients and unleaded fuel, and are valued at the lower of cost or net realizable value, with cost

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

Inventory is net of a valuation allowance of $ 0 and $ 2,050,000 as of September 30, 2025 and

December 31, 2024, respectively.

$ 386,293 $ 388,786

Inventories consisted primarily of bulk ethanol, specialty alcohols, corn, essential ingredients and unleaded fuel, and are valued at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis.

Inventory is net of a valuation allowance of $ 0 and $ 1,007,000 as of March 31, 2026 and December 31, 2025, respectively.

Inventory balances consisted of the following (in thousands):

September 30,

2026 December 31, 2025

Finished goods $ 34,223 $ 40,735

Work in progress

Raw materials 7,895 10,041

The business and activities of the Company expose

it to a variety of market risks, including risks related to changes in commodity prices.

The Company monitors and manages these financial

exposures as an integral part of its risk management program.

This program recognizes the unpredictability of financial markets and seeks

to reduce the potentially adverse effects that market volatility could have on operating results.

Commodity Risk – Cash

Flow Hedges – The Company uses derivative instruments to protect cash flows from fluctuations caused by volatility in commodity

prices for periods of up to twelve months in order to protect gross profit margins from potentially adverse effects of market and price

volatility on alcohol sales and purchase commitments where the prices are set at a future date and/or if the contracts specify a floating

or index-based price.

In addition, the Company hedges anticipated sales of alcohol to minimize its exposure to the potentially adverse

effects of price volatility.

These derivatives may be designated and documented as cash flow hedges and effectiveness is evaluated by

assessing the probability of the anticipated transactions and regressing commodity futures prices against the Company’s purchase

and sales prices.

Ineffectiveness, which is defined as the degree to which the derivative does not offset the underlying exposure, is

recognized immediately in cost of goods sold.

For the three and nine months ended September 30, 2025 and 2024, the Company did not designate

any of its derivatives as cash flow hedges.

Commodity Risk – Non-Designated Hedges

– The Company uses derivative instruments to lock in prices for certain amounts of corn and alcohols by entering into exchange-traded

futures contracts or options for those commodities.

Work in progress 4,252 4,620

Other 6,461 6,280

Total $ 52,831 $ 61,676

The business and activities of the Company expose it to a variety of market risks, including risks related to changes in commodity prices.

The Company monitors and manages these financial exposures as an integral part of its risk management program.

This program recognizes the unpredictability of financial markets and seeks to reduce the potentially adverse effects that market volatility could have on operating results.

Commodity Risk – Cash Flow Hedges – The Company uses derivative instruments in connection with its commodity risk management activities to stabilize margins between input costs and product sales.

For example, the Company uses ethanol swaps to align fixed-price alcohol sales with current market rates and uses corn futures to offset price fluctuations in its corn purchase commitments.

The Company does not enter into derivative instruments for speculative purposes.

These derivatives may be designated and documented as cash flow hedges and effectiveness is evaluated by assessing the probability of the anticipated transactions and regressing commodity futures prices against the Company’s purchase and sales prices.

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

For the three months ended March 31, 2026 and 2025, the Company did not designate any of its derivatives as cash flow hedges.

Commodity Risk – Non-Designated Hedges – The Company uses derivative instruments to align pricing for certain amounts of corn and alcohols with prevailing market prices by entering into exchange-traded futures contracts or options for those commodities.

These derivatives are not designated for hedge accounting treatment.

The changes in

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 $ 5,809,000 and net losses of $ 2,566,000 as the change in the fair value of these contracts for the three months ended September

30, 2025 and 2024, respectively.

The Company recognized net gains of $ 10,179,000 and $ 9,002,000 as the change in the fair value of these

contracts for the nine months ended September 30, 2025 and 2024, respectively.

Non-Designated Derivative Instruments

– The classification and amounts of the Company’s derivatives not designated as hedging instruments, and related cash collateral

balances, are as follows (in thousands):

As of September 30, 2025

Type of Instrument

Balance Sheet Location

Cash collateral balance

Restricted cash

Commodity contracts

Derivative instruments

The changes in 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 $ 8,416,000 and $ 1,773,000 as the change in the fair value of these contracts for the three months ended March 31, 2026 and 2025, respectively.

Non-Designated Derivative Instruments – The classification and amounts of the Company’s derivatives not designated as hedging instruments, and related cash collateral balances, are as follows (in thousands):

As of March 31, 2026

Assets Liabilities

Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value

Cash collateral balance Restricted cash

Commodity contracts Derivative instruments $ 7,831 Derivative instruments $ 301

As of December 31, 2025

of Instrument

Sheet Location

Cash collateral balance

Restricted cash

Commodity contracts

Derivative instruments

The above amounts represent the gross balances

of the contracts;

however, the Company does have a right of offset with each of its derivative brokers, but the Company’s intent

is to close out positions individually, therefore, the positions are reported at gross.

The classification and amounts of the Company’s

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

the Three Months Ended

September 30,

Type of Instrument

Statements of

Operations Location

Commodity contracts

Cost of goods sold

the Nine Months Ended

September 30,

Type of Instrument

Statements of

Operations Location

Commodity contracts

Cost of goods sold

Gains (Losses)

the Three Months Ended

September 30,

of Instrument

of Operations Location

Commodity contracts

Cost of goods sold

the Nine Months Ended

September 30,

Type of Instrument

Statements of

Operations Location

Commodity contracts

Cost of goods sold

Long-term borrowings are summarized as follows

(in thousands):

September 30,

Assets Liabilities

Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value

Cash collateral balance Restricted cash $ 2,258

Commodity contracts Derivative instruments $ 525 Derivative instruments $ 1,067

The above amounts represent the gross balances of the contracts;

however, the Company does have a right of offset with each of its derivative brokers, but the Company’s intent is to close out positions individually, therefore the positions are reported at gross.

The classification and amounts of the Company’s realized gains for its derivatives not designated as hedging instruments are as follows (in thousands):

Realized Gains

For the Three Months

Ended March 31,

Type of Instrument Statements of Operations Location 2026 2025

Commodity contracts Cost of goods sold $ 343 $ 139

Unrealized Gains

For the Three Months

Ended March 31,

Type of Instrument Statements of Operations Location 2026 2025

Commodity contracts Cost of goods sold $ 8,073 $ 1,634

$ 8,073 $ 1,634

Long-term borrowings are summarized as follows (in thousands):

2026 December 31, 2025

Kinergy line of credit $ 39,168 $ 29,586

Orion term loan 38,400 55,000

77,568 84,586

Less unamortized debt discount ( 2,090 ) ( 2,288 )

2 unchanged sentences

Long-term debt $ 73,056 $ 63,027

Excess Availability – As of

September 30, 2025, Kinergy had $ 20.3 million in unused borrowing availability under its line of credit and the Company had $ 65.0 million

that may be available for capital improvement projects under its Orion term loan, subject to certain conditions.

Excess Availability – As of March 31, 2026, Kinergy had $ 29.3 million in unused borrowing availability under its line of credit and the Company had $ 65.0 million that may be available for capital improvement projects under its Orion term loan.

The Kinergy line of credit matures in November 2027 and the Orion term loan matures in November 2028.

COMMITMENTS AND CONTINGENCIES.

Sales Commitments – At September

30, 2025, the Company had entered into sales contracts with its major customers to sell certain quantities of alcohol and essential ingredients.

The Company had open indexed-price alcohol sales contracts for 66,860,000 gallons as of September 30, 2025 and open fixed-price alcohol

sales contracts totaling $ 111,979,000 as of September 30, 2025.

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

totaling $ 10,025,000 and open indexed-price sales contracts of essential ingredients for 61,000 tons as of September 30, 2025.

contracts are scheduled to be completed throughout 2025.

Purchase Commitments – At

September 30, 2025, the Company had indexed-price purchase contracts to purchase 21,188,000 gallons of alcohol from its suppliers.

Company had fixed-price purchase contracts to purchase $ 8,997,000 of corn from its suppliers as of September 30, 2025.

The Company had

indexed-price contracts to purchase 10,974,000 MMBTU of natural gas as of September 30, 2025.

The Company also had future commitments

for certain capital projects totaling $ 6,257,000 .

Sales Commitments – At March 31, 2026, the Company had entered into sales contracts with its major customers to sell certain quantities of alcohol and essential ingredients.

The Company had open indexed-price alcohol sales contracts for 93,556,000 gallons as of March 31, 2026 and open fixed-price alcohol sales contracts totaling $ 186,958,000 as of March 31, 2026.

The Company had open fixed-price sales contracts for essential ingredients totaling $ 10,507,000 and open indexed-price sales contracts of essential ingredients for 29,000 tons as of March 31, 2026.

These sales contracts are scheduled to be completed throughout 2026.

Purchase Commitments – At March 31, 2026, the Company had indexed-price purchase contracts to purchase 21,592,000 gallons of alcohol and fixed-price purchase contracts to purchase $ 161,000 of alcohol from its suppliers.

The Company had fixed-price purchase contracts to purchase $ 31,464,000 of corn from its suppliers as of March 31, 2026.

The Company had indexed-price contracts to purchase 6,319,000 MMBTU of natural gas as of March 31, 2026.

The Company also had future commitments for certain capital projects totaling $ 18,362,000 .

These purchase commitments are scheduled to be satisfied throughout 2026.

Litigation – General –

The Company is subject to various claims and contingencies in the ordinary course of its business, including those related to litigation,

business transactions, employee-related matters, environmental regulations, and others.

When the Company is aware of a claim or potential

claim, it assesses the likelihood of any loss or exposure.

If it is probable that a loss will result and the amount of the loss can be

reasonably estimated, the Company will record a liability for the loss.

If the loss is not probable or the amount of the loss cannot be

reasonably estimated, the Company discloses the claim if the likelihood of a potential loss is reasonably possible and the amount 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.

PENSION AND RETIREMENT BENEFIT PLANS.

The Company sponsors a defined

benefit pension plan (the “Retirement Plan”) and a healthcare and life insurance plan (the “Postretirement Plan”).

The Retirement Plan is noncontributory

and covers only “grandfathered” unionized employees at the Company’s Pekin, Illinois facility who fulfill minimum age

and service requirements.

Litigation – General – The Company is subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business transactions, employee-related matters, environmental regulations, and others.

When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure.

If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss.

If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the claim if the likelihood of a potential loss is reasonably possible and the amount 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.

PENSION PLANS.

The Company sponsors a defined benefit pension plan (the “Retirement Plan”) and a healthcare and life insurance plan (the “Postretirement Plan”).

The Retirement Plan is noncontributory and covers only “grandfathered” unionized employees at the Company’s Pekin, Illinois facility who fulfill minimum age and service requirements.

Benefits are based on a prescribed formula based upon the employee’s years of service.

The Retirement

Plan, which is part of a collective bargaining agreement, covers only union employees hired prior to November 1, 2010.

The Company uses a December

31 measurement date for its Retirement Plan.

The Company’s funding policy is to make the minimum annual contribution required by

applicable regulations.

As of December 31, 2024, the Retirement Plan’s accumulated projected benefit obligation was $ 17.5 million,

with a fair value of plan assets of $ 20.1 million.

The overfunded amount of $ 2.6 million is recorded on the Company’s consolidated

balance sheet in other assets.

For the three months ended September

30, 2025, the Retirement Plan’s net periodic benefit was $ 22,000 , comprised of $ 313,000 in expected return on plan assets, partially

offset by $ 234,000 in interest cost and $ 57,000 in service cost.

For the nine months ended September 30, 2025, the Retirement Plan’s

net periodic benefit was $ 65,000 , comprised of $ 938,000 in expected return on plan assets, partially offset by $ 702,000 in interest cost

and $ 171,000 in service cost.

For the three months ended September 30, 2024, the Retirement Plan’s net periodic expense was $ 13,000 ,

comprised of $ 222,000 in interest cost and $ 67,000 in service cost, partially offset by $ 276,000 of expected return on plan assets.

the nine months ended September 30, 2024, the Retirement Plan’s net periodic expense was $ 39,000 , comprised of $ 666,000 in interest

cost and $ 201,000 in service cost, partially offset by $ 828,000 of expected return on plan assets.

The Postretirement Plan provides

postretirement medical benefits and life insurance to certain “grandfathered” unionized employees at the Company’s Pekin,

Illinois facility.

The Retirement Plan, which is part of a collective bargaining agreement, covers only union employees hired prior to November 1, 2010.

The Company uses a December 31 measurement date for its Retirement Plan.

The Company’s funding policy is to make the minimum annual contribution required by applicable regulations.

As of December 31, 2025, the Retirement Plan’s accumulated projected benefit obligation was $ 18.0 million, with a fair value of plan assets of $ 22.1 million.

The overfunded amount of $ 4.1 million is recorded on the Company’s condensed consolidated balance sheets in other assets.

Components of the Retirement Plan’s net periodic cost are as follows (in thousands):

Three Months Ended

Interest cost $ 236 $ 234

Service cost 50 57

Expected return on Plan Assets ( 331 ) ( 313 )

Net periodic benefit $ ( 45 ) $ ( 22 )

The Postretirement Plan provides postretirement medical benefits and life insurance to certain “grandfathered” unionized employees at the Company’s Pekin, Illinois facility.

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 reduces at

age 65 from a defined benefit to a defined dollar cap based upon years of service.

As of December 31, 2024, the Postretirement Plan’s

accumulated projected benefit obligation was $ 3.8 million and is recorded on the Company’s consolidated balance sheet in other liabilities.

The Postretirement Plan is contributory, with contributions required at the same rate as active employees.

Benefit eligibility under the plan reduces at age 65 from a defined benefit to a defined dollar cap based upon years of service.

As of December 31, 2025, the Postretirement Plan’s accumulated projected benefit obligation was $ 4.0 million and is recorded on the Company’s condensed consolidated balance sheets 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, 2025, the Postretirement Plan’s net periodic expense was $ 25,000 , comprised of $ 48,000 of interest cost and $ 4,000 of service

cost, partially offset by $ 27,000 in amortization of net gains.

For the nine months ended September 30, 2025, the Postretirement Plan’s

net periodic expense was $ 75,000 , comprised of $ 145,000 of interest cost and $ 11,000 of service cost, partially offset by $ 81,000 in amortization

of net gains.

For the three months ended September 30, 2024, the Postretirement Plan’s net periodic expense was $ 54,000 , comprised

of $ 49,000 in interest cost and $ 5,000 in service cost.

For the nine months ended September 30, 2024, the Postretirement Plan’s

net periodic expense was $ 162,000 , comprised of $ 147,000 in interest cost and $ 15,000 in service cost.

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 at December 31,

Components of the Postretirement Plan’s net periodic cost are as follows (in thousands):

Three Months Ended

Interest cost $ 47 $ 48

Service cost 4 4

Amortization of net gains ( 7 ) ( 27 )

Net periodic expense $ 44 $ 25

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.

Other Derivative Instruments –

The Company’s other derivative instruments consist of commodity positions.

The fair values of the commodity positions are based

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

Long-Lived Assets – Long-lived

assets consist of the Company’s estimated fair value associated with its Magic Valley facility at December 31, 2024.

The fair value

of the long-lived assets are based on present value of estimated future cash flows and are designated as Level 3 inputs.

The following table summarizes recurring and nonrecurring

fair value measurements by level at September 30, 2025 (in thousands):

Derivative instruments

The following table summarizes recurring and nonrecurring

fair value measurements by level at December 31, 2024 (in thousands):

Derivative instruments

Long-lived assets – Magic Valley

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.

Derivative Financial Instruments – The Company’s derivative financial instruments consist of commodity positions.

The fair values of the commodity positions are based on quoted prices on the commodity exchanges and are designated as Level 1 inputs.

Transferable Tax Credits – Transferable tax credits consist of the Company’s estimated net proceeds from the sale of credits.

The fair value is based on estimates of, among others, actual gallons qualified for sale, gross tax credit per gallon, sales discount, broker fees and insurance costs and are designated as Level 3 inputs.

See Note 1 for additional information.

The following table summarizes recurring and nonrecurring fair value measurements by level at March 31, 2026 (in thousands):

Value Level 1 Level 2 Level 3

Transferable tax credits, net $ 11,530 $ — $ — $ 11,530

Derivative financial instruments 7,831 7,831 — —

$ 19,361 $ 7,831 $ — $ 11,530

Derivative financial instruments $ 301 $ 301 $ — $ —

The following table summarizes recurring fair value measurements by level at December 31, 2025 (in thousands):

Fair Percentage

Value Level 1 Level 2 Level 3 Allocation

Derivative financial instruments $ 525 $ 525 $ — $ —

Transferable tax credits 7,500 — — 7,500

Defined benefit plan assets(1)

(pooled separate accounts):

Equity(2) 8,060 — 8,060 — 36 %

Small/Mid U.S.

Equity(3) 3,574 — 3,574 — 16 %

International Equity(4) 3,479 — 3,479 — 16 %

Fixed Income(5) 6,988 — 6,988 — 32 %

Derivative instruments

(1) Included in other assets in the consolidated balance sheets.

$ 30,126 $ 525 $ 22,101 $ 7,500

Derivative financial instruments $ 1,067 $ 1,067 $ — $ —

(1) Included in other assets in the condensed consolidated balance sheets.

(2) This category includes investments in funds comprised of equity securities of large U.S.

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

(3) This category includes investments in funds comprised of equity securities of small- and medium-sized

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.

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.

(5) This category includes investments in funds comprised of U.S.

and foreign investment-grade fixed income

securities, high-yield fixed income securities that are rated below investment-grade, U.S.

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.

and foreign investment-grade fixed income securities, high-yield fixed income securities that are rated below investment-grade, U.S.

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.

The following table summarizes the rollforward of Level 3 fair value measurements as of March 31, 2026 (in thousands):

Fair Value as of December 31, 2025 $ 7,500

Generated transferable tax credits 3,900

Fair Value as of March 31, 2026 $ 11,530

EARNINGS PER SHARE.

The following tables compute basic and diluted

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

Months Ended September 30, 2025

The following tables compute basic and diluted earnings per share (in thousands, except per share data):

Three Months Ended

March 31, 2026

Numerator Shares

Denominator Per-Share

Consolidated net income $ 4,271

Preferred stock dividends ( 312 )

Basic and diluted income per share:

Basic income per share:

Income attributable to common stockholders $ 3,959 74,789 $ 0.05

Nine Months Ended September 30, 2025

Preferred stock dividends

Basic and diluted loss per share:

Loss attributable to common stockholders

Months Ended September 30, 2024

Preferred stock dividends

Basic and diluted loss per share:

Loss attributable to common stockholders

Nine Months Ended September 30, 2024

Dilutive securities — 1,850

Diluted income per share:

Income attributable to common stockholders $ 3,959 76,639 $ 0.05

Three Months Ended

March 31, 2025

Numerator Shares

Denominator Per-Share

Net loss $ ( 11,679 )

Preferred stock dividends ( 312 )

Basic and diluted loss per share:

Loss attributable to common stockholders

There were an additional aggregate potentially

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

2025 and September 30, 2024.

These securities were not considered in calculating diluted net income (loss) per share for the three and

nine months ended September 30, 2025 and 2024, as their effects would have been anti-dilutive.

Net loss attributable to common stockholders $ ( 11,991 ) 73,836 $ ( 0.16 )

There were additional aggregate potentially dilutive weighted-average shares of 981,000 from convertible securities outstanding for the three months ended March 31, 2026 and 2025.

These securities were not considered in calculating diluted net loss per share for the three months ended March 31, 2026 and 2025, 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