What changed in this filing

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Item 1A. Risk Factors

2022-03-08 compared with 2021-03-10 · 96 added, 98 removed, 188 unchanged (51% of the section changed)

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The order in which the following risk factors are presented is not intended as an indication of the relative seriousness of any given risk.

Risks relating to Refined Coal

The ability to generate Section 45 tax credits from existing operating RC facilities ends in 2021, which will effectively eliminate Tinuum Group’s and Tinuum Services' income and cash flows from operations and significantly impact our financial condition and results of operations beyond 2021.

Substantially all of our earnings and cash flows in 2020 and 2019 were comprised of equity method earnings from Tinuum Group and license royalties generated from certain of Tinuum Group’s invested RC facilities.

Risks related to our business

As of December 31, 2021, earnings in our RC segment have substantially ended and beginning in 2022, we will be solely dependent on earnings from our APT segment to fund our operations.

We will need to grow the earnings from our APT segment substantially to make up for the loss of earnings of our RC segment.

The Section 45 tax credit period expired on December 31, 2021.

As a result, both Tinuum Group and Tinuum Services have substantially ceased operations and we expect to receive limited, final distributions from each during the first half of 2022.

Substantially all of our earnings and cash flows in 2021 and 2020 were comprised of equity method earnings from Tinuum Group and M-45 Royalties generated from certain of Tinuum Group’s invested RC facilities.

For the year ended December 31, 2021, our RC segment generated segment operating income of $82.6 million.

As of December 31, 2020, Tinuum Group has 23 invested facilities and no retained facilities.

Absent an extension to the Section 45 tax credit period, the 23 invested facilities will no longer generate Section 45 tax credits beyond 2021.

As a result, we believe that substantially all of the invested RC facilities will be returned to Tinuum Group upon the expiration of the Section 45 tax credit period.

If Tinuum Group continues to operate these RC facilities, if any, its earnings will be significantly reduced and accordingly, our pro rata share will also be substantially reduced.

We will need to grow the earnings from our APT segment substantially to make up for the earnings we expect to lose from the winding down of our RC segment after the end of 2021, and there can be no assurances we will be able to fully replace these earnings.

From an earnings standpoint, our RC segment has been the larger of our two segments, and the APT segment must grow substantially, either organically or acquisitively, in order to replace earnings from Tinuum Group that will substantially end during 2021.

There can be no assurance that we will be able to increase our APT segment earnings during 2021 or beyond to cover our current operating expenses or to provide a return to shareholders that is comparable to the return currently provided by our RC segment.

From an earnings standpoint, our APT segment must grow substantially, either organically or through acquisition, in order to replace earnings from our RC segment.

There can be no assurance that we will be able to increase our APT segment earnings during 2022 or beyond to cover our current operating expenses or to provide a return to shareholders that is comparable to the return that we previously provided while our RC segment was operating.

We do not expect our overall selling, general and administrative portions of our operating expenses to materially decrease in 2022 as a result of the wind down of our RC segment.

If we are not able to cover operating expenses, we could be forced to raise additional capital, significantly reduce our operating expenses or take other alternative actions.

The ability of Tinuum Group to continue to generate revenues from the operation of RC facilities by tax equity investors is not assured, and the inability to operate RC facilities to produce and sell RC and generate Section 45 production tax credits could adversely affect our future growth and profitability.

Tinuum Group has successfully sold and leased RC facilities to third party investors.

The termination or cancellation of existing RC facility leases, or the cessation of the production of refined coal by existing facilities, in the near term, would likely have an adverse effect on our future growth and profitability.

Our RC businesses are joint ventures and managed under operating agreements where we do not have sole control of the decision-making process, and we cannot mandate decisions or ensure outcomes.

We oversee our joint ventures under the terms of their respective operating agreements by participating in the following activities:

(1) representation on the respective governing boards of directors, (2) regular oversight of financial and operational performance and controls and establishing audit and reporting requirements, (3) hiring of management personnel, (4) technical support of RC facilities, and (5) other regular and routine involvement with our joint venture partners.

Notwithstanding this regular participation and oversight, our joint venture partners also participate in the management of these businesses and they may have business or economic interests that divert their attention from the joint venture, or they may prefer to operate the business, make decisions or invest resources in a manner that is contrary to our preferences.

Since material business decisions must be made jointly with our joint venture partners, we cannot mandate decisions or ensure outcomes.

The financial effects of Tinuum Group providing indemnification under performance guarantees of its RC facilities are largely unknown and could adversely affect our financial condition.

Tinuum Group indemnifies certain utilities and lessees of RC facilities for particular risks associated with the operations of those facilities.

Tinuum Group indemnifies certain utilities and lessees of RC facilities for particular risks associated with the operations and tax treatment of those facilities.

We have provided limited, joint and several guarantees of Tinuum Group’s obligations under those leases.

Any substantial payments made under such guarantees could have a material adverse effect on our financial condition, results of operations and cash flows.

Presently, the GS Affiliates account for a substantial portion of earnings for Tinuum Group and any further lease renegotiation or termination by the GS Affiliates or any failure to continue to produce and sell RC at the GS Affiliates' RC facilities would have a material adverse effect on our business.

As of December 31, 2020, nine of Tinuum Group’s 26 RC facilities are leased to the GS Affiliates.

Significant components of our total cash flows come from Tinuum Group's distributions relating to payments received under these leases.

These leases may be terminated at the option of the lessee at periodic intervals or upon the occurrence of specified events.

In September 2019, Tinuum Group restructured all of the existing leases with the GS Affiliates, which resulted in a decrease in net lease payments for 2020 and 2021.

Additional restructurings have occurred on certain GS Affiliate leases in 2020 and 2021, which have also resulted in a decrease in net lease payments for 2020 and 2021.

If the GS Affiliates further renegotiate or terminate one or more of their leases, or if the utilities where the RC facilities are installed materially reduce their use of RC, these events would have a material adverse effect on our business, results of operations or financial condition.

Risks relating to our business

The COVID-19 pandemic and ensuing economic downturn has affected, and is expected to continue to affect and pose risks to our business, results of operations, financial condition and cash flows;

and other epidemics or outbreaks of infectious diseases may have a similar impact.

In March 2020, the World Health Organization ("WHO") declared the outbreak of COVID-19 a global pandemic, which continues to spread throughout the United States ("U.S.") and the world and has resulted in authorities implementing numerous measures to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns.

We have been designated by Cybersecurity and Infrastructure Security Agency ("CISA") of the Department of Homeland Security as a critical infrastructure supplier to the energy sector.

This designation provides some latitude in continuing to conduct our business operations compared to companies in other industries and markets.

While we are unable to accurately predict the full impact that COVID-19 will have on our results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic and containment measures, our compliance with these measures has impacted our day-to-day operations and could continue to disrupt our business and operations, as well as that of our key customers, suppliers and other counterparties, for an indefinite period of time.

To support the health and well-being of our employees, customers, partners and communities, a vast majority of our employees not directly involved in operating our plant have been working remotely since March 2020.

In addition, many of our customers are working remotely, which may delay the timing of some orders and deliveries.

We are reviewing strategic alternatives and there can be no assurance that we will be successful in identifying or completing any strategic transaction, that any such strategic transaction will result in additional value for our stockholders or that the process will not have an adverse impact on our business.

We have announced that our board of directors has initiated a strategic review to assess a range of strategic alternatives to maximize shareholder value.

No timetable has been set for completion of this process, and there can be no assurance that the review of strategic alternatives will result in the identification or consummation of any transaction.

The process of reviewing strategic alternatives may be time consuming and disruptive to our business operations and, if we are unable to effectively manage the process, our business, financial condition and results of operations could be adversely affected.

We have and will continue to incur substantial expenses associated with identifying, evaluating and negotiating potential strategic alternatives.

There can be no assurance that any potential transaction or other strategic alternative, if consummated, will provide greater value to our stockholders than that reflected in the current price of our common stock.

Until the review process is concluded, perceived uncertainties related to our future may result in the loss of potential business opportunities and volatility in the market price of our common stock and may make it more difficult for us to attract and retain qualified personnel and business partners.

Our inability to meet customer supply requirements due to damage to or insufficient production capacity of our Red River manufacturing facility may have a material adverse effect on our business, results of operations and financial condition.

We own and operate a single activation-based manufacturing plant, which is our sole manufacturing plant for producing and selling products to our customers.

Our ability to meet customer expectations, manage inventory, complete sales and achieve our

objectives for operating efficiencies depends on the full-time operation of the Red River Plant.

We cannot replicate our manufacturing methods at another plant due to the limited availability of similar manufacturing plants, the additional costs incurred in supplying raw materials such as lignite to another plant, and the risk of revealing our confidential and proprietary technologies and manufacturing processes.

If the Red River Plant was destroyed or damaged in a significant manner, we would suffer a loss of inventory to supply customers, likely incur additional costs to deliver products to our customers, and disrupt the ordinary course of our business.

In addition, if contractual demand exceeds manufacturing capacity, we would jeopardize our ability to fulfill obligations under our contracts, which could, in turn, result in reduced sales, profitability, contract penalties or terminations and damage to our customer relationships and could have a material adverse effect on our business.

While we have insured the Red River Plant against damage or destruction as well as for losses from business interruptions, there can be no assurance that any insurance coverage will be sufficient to cover any such losses.

Further, a prolonged disruption in our operations due to Red River Plant downtime or having to meet customer requirements that exceed its maximum manufacturing capacity would require us to seek alternative customer supply arrangements, which may not be on attractive terms to us or could lead to delays in distribution of products to our customers, either of which could have a material adverse effect on our business, results of operations and financial condition.

Governmental regulations requiring mandatory COVID-19 vaccination of employees could have a material adverse impact on our business and results of operations

On September 9, 2021, President Biden issued Executive Order 14042 (the "Executive Order") requiring all employers with U.S.

Government contracts to ensure that their U.S.-based employees, contractors, and subcontractors that work on or in support of U.S.

Government contracts are fully vaccinated by December 8, 2021.

The executive order includes on-site and remote U.S.-based employees, contractors and subcontractors and it only permits limited exemptions for medical and religious reasons.

The Executive Order is facing legal challenges and currently is enjoined nationwide.

Removal of the injunction of the Executive Order or additional vaccine mandates may be announced in jurisdictions in which our business operates.

Our implementation of these required policies may result in employee attrition, including attrition of critically skilled labor, and difficulty securing future labor needs, which could have a material adverse effect on our business, financial condition and results of operations.

The COVID-19 pandemic is expected to continue to affect and pose risks to our business and other epidemics or outbreaks of infectious diseases may have a similar impact.

The COVID-19 pandemic has resulted in significant volatility in the general economy.

International, federal, state and local public health and governmental authorities have taken extraordinary actions to contain and combat the outbreak and spread of COVID-19, including travel bans, quarantines, "stay-at-home" orders and similar mandates that caused many individuals to substantially restrict their daily activities and many businesses to curtail or cease normal operations.

While certain governments eased restrictions during the balance of 2020 and 2021, the pandemic remains disruptive to our business operations.

We may not be able to operate at optimal levels of efficiency given new work rules and procedures that were or will be implemented to protect our employees, as well as potential increased absenteeism as a result of community spread of COVID-19.

Any suspension of production at our manufacturing facility, or difficulties or inefficiencies in resuming or increasing production, is likely to adversely impact our future results of operations, financial condition and liquidity, and that impact may be material.

Furthermore, COVID-19 and related supply chain disruptions have impacted and may further impact our ability to efficiently operate and may lead to production delays or increased costs of production.

While we are unable to accurately predict the full impact that COVID-19 will have on our results of operations, financial condition, liquidity and cash flows due to continued uncertainties, including the duration and severity of the pandemic and containment measures, our compliance with these measures has impacted our day-to-day operations and could continue to affect our business and operations, as well as that of our key customers, suppliers and other counterparties, for an indefinite period of time.

The disruptions to our operations caused by COVID-19 have resulted and are expected to continue to result in inefficiencies, delays and additional costs in our manufacturing, sales, marketing, and customer service efforts that we cannot fully mitigate through remote or other alternative work arrangements.

Although such disruptions did not have a material adverse impact on our financial results for the first quarter of fiscal 2020, we incurred additional operating costs for the second quarter of fiscal year 2020, which included hazard pay, cleaning costs and sequestration costs related to our operating plant personnel.

For 2021, we may see reduced demand for our products due to reduced interaction with our customers and our inability to target new customers and markets.

More generally, the pandemic raises the possibility of an extended global economic downturn and has caused volatility in financial markets, which could affect demand for our products and services and impact our results and financial condition even after the pandemic is contained and the shelter-in-place orders are lifted.

For example, a decrease in orders in a given period could negatively affect our revenues in future periods, particularly if experienced on a sustained basis.

The situation surrounding the COVID-19 pandemic remains fluid.

The ultimate impact of the COVID-19 pandemic on our results of operations, financial condition and liquidity will depend on future developments, some of which are beyond our knowledge or control.

These include the duration and scope of the pandemic, travel restrictions, government mandated

restrictions and regulations, business and workforce disruptions, the impact on demand for our products, the effectiveness of actions taken to contain and treat the disease, including the efficacy of and ability to widely distribute vaccinations and therapeutics, and whether the pandemic leads to recessionary conditions in any of our key markets.

We will continue to evaluate the nature and extent of the impact of COVID-19 to our business.

As previously disclosed, in April 2020, we entered into a loan (the "PPP Loan") in the amount of $3.3 million through a bank under the Paycheck Protection Program sponsored by the U.S.

Small Business Administration ("SBA").

We entered into the PPP Loan to provide additional liquidity in light of our COVID-19-related higher employee costs.

Proceeds from the PPP Loan were used to cover a portion of our existing payroll and related expenses, including sequestration pay for certain employees, as well as certain other operating costs as permitted under the Paycheck Protection Program.

We expect that current cash and cash

equivalent balances, inclusive of the PPP Loan, and cash flows that are generated from operations will be sufficient to meet our working capital needs and other capital and liquidity requirements for at least the next 12 months.

However, if our business is more adversely impacted by COVID-19 than we expect, and our personnel costs remain higher than budgeted, our cash needs could increase.

Demand for our products and services depends significantly on environmental laws and regulations.

Uncertainty as to the future of such laws and regulations, as well as changes to such laws and regulations, or granting of extensions of compliance deadlines has had, and will likely continue to have a material effect on our business.

Uncertainty as to the future of such laws and regulations, changes to such laws and regulations or granting of extensions of compliance deadlines has had, and will likely continue to have, a material effect on our business.

A significant market driver for our existing products and services and those planned in the future are present and expected environmental laws and regulations, particularly those addressing the reduction of mercury and other emissions from coal-fired electricity generating units.

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That, in turn, will depend on a number of factors, including the specific requirements imposed by any such laws or regulations, the periods over which those laws or regulations are or will be phased in, the amount of public opposition and the state and cost of commercial development of related technologies and processes.

In addition, Public Utility Commissions ("PUCs") may not allow utilities to charge consumers for, and pass on the cost of, emissions control technologies without federal or state mandate.

In addition, Public Utility Commissions ("PUCs") may not allow utilities to charge consumers for, and pass on the cost of, emissions control technologies without federal or state mandates.

We cannot reasonably predict the impact that any such future laws or regulations or public opposition may have on our results of operations, financial condition or cash flows.

Action by the EPA related to MATS that decreases demand for our mercury removal products could have a material adverse effect on our APT segment.

Performance in our APT segment is largely dependent upon demand for mercury removal related product, which is largely impacted by the amount of coal-based power generation used in the U.S.

Performance in our APT segment is largely dependent upon demand for mercury removal-related product, which is largely affected by the amount of coal-based power generation used in the U.S.

and the continued regulation of utilities under MATS.

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However, the EPA expressly stated that the reconsideration neither removed coal- and oil-fired EGUs from the list of sources that must comply with the MATS rule, nor rescinded the MATS Rule, which has remained continuously in effect.

ADES joined a number of parties in seeking review of this EPA action before the U.S.

Court of Appeals for the D.C.

President Biden identified EPA’s withdrawal of the supplemental finding as one of the actions to be reviewed for conformity with Biden Administration policy, and in February 2021, the Biden Administration moved that the pending judicial review of the withdrawal be held in abeyance.

The Court has granted the administration’s motion, and this appeal is also now in abeyance.

The MATS Rule remains in effect.

Any final action taken by the EPA related to MATS that decreases demand for our products for mercury removal will have a negative effect on the financial results of our PGI segment.

On February 9, 2022, the EPA published a new proposed rule revoking the May 2020 withdrawal of the 2016 supplemental finding and affirming that it is "appropriate and necessary" to regulate HAP emissions from coal- and oil-fired EGUs.

Any final action taken by the EPA related to MATS that decreases demand for our products for mercury removal will have a negative effect on the financial results of our APT segment.

The timing and content of the final reconsideration rule are unknown.

Uncertain geopolitical conditions could adversely affect our business.

Uncertain geopolitical conditions, including the invasion of Ukraine, sanctions against Russia and other potential impacts on this region's economic environment and currencies may cause disruptions in our business.

These include logistics delays or shortages in producing and shipping certain of our raw materials, increases in energy prices that could increase costs of certain

of our raw materials, increases in transportation costs from overall higher gasoline prices and cyber-attacks targeted at U.S.

power infrastructure that could impact demand for our products.

The failure of tariffs placed on U.S.

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We expect that a significant amount of the new power generation necessary to meet increasing demand for electricity generation will be fueled by these sources.

The price of natural gas has remained competitive for power generation and the use of natural gas is perceived as having a lower environmental impact than burning coal.

The price of natural gas has remained relatively competitive for power generation and the use of natural gas is perceived as having a lower environmental impact than burning coal.

Natural gas-fired plants are cheaper to construct, and permits to construct these plants are easier to obtain, and ongoing costs of natural gas-fired plants associated with meeting environmental compliance are lower.

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The loss of, or significant reduction in, purchases by our largest customers could adversely affect our business, financial condition or results of operations.

During the year ended December 31, 2020, we derived approximately 61% of our total consumable revenues from our ten largest customers.

Many of these customers purchase our products to comply with emissions regulations, and if coal-fired generation decreases, it may have a negative impact on the amount of consumable products purchased.

If any of our ten largest customers, were to significantly reduce the quantities of consumables they purchase from us, it may adversely affect our business, financial condition and results of operations.

During the year ended December 31, 2021, we derived approximately 50% of our total consumable revenues from our five largest customers.

Our top three customers accounted for approximately 37% of our total consumable revenue for our last fiscal year.

If any of our five largest customers were to significantly reduce the quantities of consumables they purchase from us, it may adversely affect our business, financial condition and results of operations.

Volatility in price and availability of raw materials can significantly impact our results of operations.

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Additionally, we obtain certain raw materials from selected key suppliers.

While we have inventory of such raw materials, if any of these suppliers are unable to meet their obligations with us on a timely basis or at an acceptable price, we may be forced to incur higher costs to obtain the necessary raw materials.

We may attempt to offset the increase in raw material costs with price increases allowed in our contractual relationships or through cost reduction efforts.

We may attempt to offset the increase in raw material costs or challenges in the supply of raw materials with price increases allowed in our contractual relationships or through cost reduction efforts.

If we are unable to fully offset the increased cost of raw materials through price increases, it could significantly impact our business, financial condition and results of operations.

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Mining operations by their nature involve a high level of uncertainty and are often affected by risks and hazards outside of our control.

At the Five Forks Mine, the risks are primarily operational risks associated with the maintenance and operation of the heavy equipment required to dig and haul the lignite and risks relating to lower than expected lignite quality or recovery rates.

At the Five Forks Mine, the risks are primarily operational risks associated with the maintenance and operation of the heavy equipment required to dig and haul the lignite and risks relating to producing lower than expected lignite quality or recovery rates.

The failure to adequately manage these risks could result in significant personal injury, loss of life, damage to mineral properties, production facilities or mining equipment, damage to the environment, delays in or reduced production and potential legal liabilities.

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Our operations and products are subject to extensive safety, health and environmental requirements that could increase our costs and/or impair our ability to manufacture and sell certain products.

Our ongoing operations are subject to extensive federal, state and local laws, regulations, rules and ordinances relating to safety, health and environmental matters, many of which provide for substantial monetary fines and criminal sanctions for violations.

These include requirements to obtain and comply with various environmental-related permits for constructing any new facilities (or modifications to existing facilities) and operating all of our existing facilities.

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The enactment of new environmental laws and regulations and/or the more aggressive interpretation of existing requirements could require us to incur significant costs for compliance or capital improvements or limit our current or planned operations, any of which could have a material adverse effect on our earnings or cash flow.

We attempt to offset the effects of these compliance costs through price increases, productivity improvements and cost reduction efforts, and our success in offsetting any such increased regulatory costs is largely influenced by competitive and economic conditions and could vary significantly depending on the segment served.

We may attempt to offset the effects of these compliance costs through price increases, productivity improvements and cost reduction efforts, and our success in offsetting any such increased regulatory costs is largely influenced by competitive and economic conditions and could vary significantly depending on the market segment served.

Such increases may not be accepted by our customers, may not be sufficient to compensate for increased regulatory costs or may decrease demand for our products and our volume of sales.

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These factors or delays could affect our future operating results.

We may make future acquisitions or form partnerships and joint ventures that may involve numerous risks that could impact our financial condition, results of operations and cash flows.

Our strategy may include expanding our scope of products and services organically or through selective acquisitions, investments or creating partnerships and joint ventures.

We have acquired, and may selectively acquire, other businesses, product or service lines, assets or technologies that are complementary to our business.

We may be unable to find or consummate future acquisitions at acceptable prices and terms, or we may be unable to integrate existing or future acquisitions effectively and efficiently, and may need to divest those acquisitions.

We continually evaluate potential acquisition opportunities in the ordinary course of business.

Acquisitions involve numerous risks, including among others:

• our evaluation of the synergies and/or long-term benefits of an acquired business;

We may not be successful in realizing the benefits associated with our acquisitions, dispositions and strategic partnerships, and our business could be adversely affected.

We have and may in the future expand the our scope of products, services, and technologies through selective acquisitions, investments or creating partnerships and joint ventures.

We may also dispose of assets or portions of our business that no longer complement our long-term strategic objectives.

We continually evaluate potential acquisition, disposition, and strategic partnership opportunities in the ordinary course of business.

Acquisitions, dispositions, and strategic partnerships involve numerous risks, including among others:

• inability to negotiate favorable prices and terms;

• incorrect evaluations of the synergies and/or long-term benefits of the acquisition, disposition, and strategic partnership;

• integration difficulties, including challenges and costs associated with implementing systems, processes and controls to comply with the requirements of a publicly-traded company;

• diverting management’s attention;

• litigation arising from acquisition activity;

• litigation arising from acquisition and disposition activity;

• potential increased debt leverage;

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• potential goodwill or other intangible asset impairments;

• potential requirements to provide transition services in connection with a disposition, which may result in the diversion of resources and focus of management and employees;

• potential loss of key employees and customers of the acquired businesses, product or service lines, assets or technologies;

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• increasing demands on our operational and IT systems.

The success of acquisitions of businesses, new technologies and products, or arrangements with third parties is not always predictable and we may not be successful in realizing our objectives as anticipated.

The Senior Term Loan and our bank line of credit facility contain certain covenants that limit, or that may have the effect of limiting, among other things, the payment of dividends, acquisitions, capital expenditures, the sale of assets and incurring additional indebtedness.

The success of an acquisition, disposition or strategic partnership is not always predictable, and we may not be successful in realizing our objectives as anticipated, and our business may be adversely affected as a result.

Natural disasters could affect our operations and financial results.

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If these plants were off-line for a significant period of time, the demand for our products could be less, which would impact our operations and financial results.

Conversely, abnormally high loads on geographic electrical grids, resulting in increased demand of coal-fired power plants to produce electricity, could impact our ability to meet customer contracts and demands.

Information technology vulnerabilities and cyberattacks on our networks could have a material adverse impact on our business.

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These perpetrators of cyberattacks also may be able to develop and deploy viruses, worms, malware and other malicious software programs that attack our information and networks or otherwise exploit any security vulnerabilities of our information and networks.

Techniques used to obtain unauthorized access to or sabotage systems change frequently and often are not recognized until long after being launched against a target, and we may be unable to anticipate these techniques or to implement adequate preventative measures.

Techniques used to obtain unauthorized access to or sabotage systems change frequently and often are not recognized until after they are launched against a target, and we may be unable to anticipate these techniques or to implement adequate preventative measures.

A breach of our IT systems and security measures as a result of third party action, malware, employee error, malfeasance or otherwise could materially adversely impact our business and results of operations and expose us to customer, supplier and other third party liabilities.

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Notwithstanding these measures, a third party could copy or otherwise obtain and use our proprietary information without authorization.

We cannot provide assurance that the steps we have taken will prevent misappropriation of our technology and intellectual property, which could negatively impact our business and financial condition.

We cannot provide assurance that the steps we have taken will prevent misappropriation of our technology and intellectual property, which could negatively impact our business and

financial condition.

In addition, such actions by third parties could divert the attention of our management from the operation of our business.

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On May 5, 2017, our Board of Directors (the "Board") approved the Tax Asset Protection Plan (the "TAPP") and declared a dividend of one preferred share purchase right (each, a "Right") for each outstanding share of our common stock.

The TAPP was adopted in an effort to protect stockholder value by attempting to diminish the risk that our ability to use the Tax Credits to reduce potential future federal income tax obligations may become substantially limited.

On April 8, 2020, the Board approved the Third Amendment to the TAPP ("Third Amendment") that amended the TAPP, as previously amended by the First and Second Amendments that were approved by the Board on April 6, 2018 and April 5, 2019, respectively.

The Third Amendment amended the definition of "Final Expiration Date" under the TAPP to extend the duration of the TAPP and makes associated changes in connection therewith.

At our 2020 annual meeting of stockholders, our stockholders approved the Third Amendment, thus the Final Expiration Date will be the close of business on December 31, 2021.

was adopted in an effort to protect stockholder value by attempting to diminish the risk that our ability to use the Tax Credits to reduce potential future federal income tax obligations may become substantially limited.

On April 9, 2021, the Board approved the Fourth Amendment to the TAPP ("Fourth Amendment") that amends the TAPP, as previously amended by the First, Second and Third Amendments that were approved the Board on April 6, 2018, April 5, 2019 and April 9, 2020, respectively.

The Fourth Amendment amends the definition of "Final Expiration Date" under the TAPP to extend the duration of the TAPP and makes associated changes in connection therewith.

At the Company's 2021 annual meeting of stockholders, the Company's stockholders approved the Fourth Amendment, thus the Final Expiration Date will be the close of business on December 31, 2022.

The TAPP, as amended, is intended to act as a deterrent to any person acquiring beneficial ownership of 4.99% or more of our outstanding common stock without the approval of the Board.

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The Board may, in its sole discretion, also exempt any person from triggering the Protection Plan.

Risks relating to our common stock

Risks related to our common stock

Our stock price is subject to volatility.

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changes in laws or regulations and court rulings and trends in our industry;

The expiration of the Section 45 Tax credit period and/or Tinuum Group’s ability to lease or sell RC facilities;

announcements of sales awards;

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In June 2017, we commenced a quarterly cash dividend program and paid out cash dividends in each succeeding quarter through March 31, 2020.

In 2019 and 2020, we implemented stock repurchase programs, and repurchased a total of 553,958 shares of our common stock for the fiscal years 2019 and 2020 for cash of $6.0 million.

In 2018, we implemented stock repurchase programs, and repurchased a total of 20,613 shares of our common stock for the fiscal years 2021 and 2020 for cash of $0.2 million.

Stock price volatility over a given period may cause the average price at which we repurchase shares of our common stock to exceed the stock’s price at a given point in time.

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Future dividends are subject to declaration by the Board, and under our current stock repurchase program, we are not obligated to acquire any specific number of shares.

If we fail to meet expectations related to future growth, profitability, dividends, stock repurchases or other market expectations, our stock price may decline significantly, which could have a material adverse impact on our ability to obtain additional capital, investor confidence and employee retention, and could further reduce the liquidity of our common stock.

There can be no assurance that we will resume declaring cash dividends at all or in any particular amounts.

We last paid a cash dividend on March 10, 2020.

If we fail to meet expectations related to future growth, profitability, dividends, stock repurchases or other market expectations, our stock price may decline significantly, which could have a material adverse impact on our ability to obtain additional capital and erode investor confidence, which could further reduce the liquidity of our common stock.

We do not expect to repurchase additional shares of our common stock in the near term.

We are unlikely to resume our quarterly cash dividend program.

The Board first approved a $0.25 per share of common stock quarterly dividend in June 2017.

During 2019 and 2020, we declared quarterly dividends in the aggregate amount of $23.2 million.

We last paid a cash dividend on March 10, 2020.

With the ceasing of our cash-generating RC segment, it is unlikely, for the foreseeable future, that we will resume declaring quarterly cash dividends under a dividend program.

The payment of future dividends will be affected by, among other factors:

compliance with debt covenants;

(1) our views on potential future capital requirements for investments in acquisitions;

(2) legal risks;

(3) stock repurchase programs;

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(5) changes to our business model;

and interest and principal payments for 2021 required under the terms of the Senior Term Loan;

and (6) any additional indebtedness that we may incur in the future.

Under a covenant provided for the Senior Term Loan that requires a minimum for expected future net cash flows from refined coal business, as of December 31, 2020, we are precluded from paying dividends or repurchasing shares of our common stock until such time that we repay all outstanding principal and accrued interest related to the Senior Term Loan, absent a modification to the Senior Term Loan.

Our dividend payments may change from time to time, and we cannot provide assurance that we will resume paying dividends at all or in any particular amounts.

Our election to not resume dividend payments could have a negative effect on our stock price.

Our certificate of incorporation and bylaws contain provisions that may delay or prevent an otherwise beneficial takeover attempt of us.

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These include provisions that:

Limit the business at special meetings to the purpose stated in the notice of the meeting;

Limit the business at special meetings of stockholders to the purpose stated in a notice of the meeting;

Authorize the issuance of "blank check" preferred stock, which is preferred stock with voting or other rights or preferences that could impede a takeover attempt and that the Board can create and issue without prior stockholder approval;

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Additional institutional investors may adopt similar ESG investment guidelines.

This could limit the demand for owning our common stock and/or our access to capital.

This could limit both the demand for owning our common stock and/or our access to capital.

If such capital is desired, we cannot assure you that we will be able to obtain any additional equity or debt financing on terms that are acceptable to us.

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We estimate our funding requirements in order to implement our growth plans.

If the funding required to implement growth plans should exceed these estimates significantly, or if we come across opportunities to grow through expansion plans which cannot be predicted at this time, or our funds generated from our operations prove insufficient for such purposes, we may need to raise additional funds to meet these funding requirements.

If the actual funding required to implement growth initiatives should exceed funding estimates significantly, or our funds generated from our operations from such growth initiatives prove insufficient for such purposes, we may need to raise additional funds to meet these funding requirements.

These additional funds may be raised by issuing equity or debt securities or by borrowing from banks or other resources.

We cannot assure you that we will be able to obtain any additional financing on terms that are acceptable to us, or at all.

If we fail to

obtain additional financing on terms that are acceptable to us, we may not be able to implement such plans fully.

Such financing, even if obtained, may be accompanied by conditions that limit our ability to pay dividends or require us to seek lenders’ consent for payment of dividends, or restrict our freedom to operate our business by requiring lender’s consent for certain corporate actions.

If we fail to obtain additional financing on terms that are acceptable to us, we may not be able to implement such plans fully.

Such financing, even if obtained, may be accompanied by conditions that limit our ability to pay dividends or require us to seek lenders’ consent for payment of dividends, or restrict our ability to operate our business by requiring lender’s consent for certain corporate actions.

Further, if we raise additional funds through the issuance of new shares of our common stock, any shareholders who are unable or unwilling to participate in such an additional round of fund raising may suffer dilution of their investment.

1 unchanged sentence

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-K

Item 1A. Risk Factors