What changed in this filing

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Item 1A. Risk Factors

2024-02-09 compared with 2023-02-10 · 160 added, 190 removed, 339 unchanged (51% of the section changed)

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Our operating results are highly sensitive to the spread between the corn and natural gas we purchase, and the ethanol, distillers grains, Ultra-High Protein and renewable corn oil we sell.

Price and supply are subject to various market forces, such as weather, domestic and global demand, global political or economic issues, including but not limited to the war in Ukraine including sanctions associated therewith, shortages, export prices, crude oil prices, currency valuations and government policies in the United States and around the world, over which we have no control.

Price and supply are subject to various market forces,

such as weather, domestic and global demand, global political or economic issues, including but not limited to the war in Ukraine including sanctions associated therewith, other global conflicts, shortages, export prices, crude oil prices, currency valuations and government policies in the United States and around the world, over which we have no control.

Price volatility of these commodities may cause our operating results to fluctuate substantially.

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Consequently, our results of operations and financial position may be adversely affected by increases in corn or natural gas prices or decreases in ethanol, distillers grains, Ultra-High Protein and renewable corn oil prices.

We have made significant investments in our biorefinery platform to produce Ultra-High Protein, and our financial results are increasingly dependent on our ability to operate these new systems consistently and to sell the products into new markets at a premium to distillers grains.

Rapid expansion of soybean crushing capacity to meet the soybean oil demands of the growing renewable diesel and biomass-based diesel industry could result in an oversupply of soybean meal, which could depress prices for various protein feed ingredients, and negatively impact our anticipated financial returns.

We continuously monitor the margins at our ethanol plants using a variety of risk management tools and hedging strategies when appropriate.

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We are generally unable to pass increased corn costs to our customers since ethanol competes with other fuels.

We continue to see considerable price volatility in corn prices.

We continue to see considerable volatility in corn prices.

Ethanol plants, livestock industries and other corn-consuming enterprises put significant price pressure on local corn markets.

In addition, local corn supplies and prices could be adversely affected by, but not limited to, prices for alternative crops, increasing input costs, changes in government policies, shifts in global supply and demand, global political or economic issues, including but not limited to the war in Ukraine including sanctions associated therewith, or global or regional growing conditions, such as plant disease, pests or adverse weather, including drought, as well as global conflicts.

In addition, local corn supplies and prices could be adversely affected by, but not limited to:

prices for alternative crops, increasing pricing for seed corn, fertilizers, crop protection products and other input costs;

changes in government policies, including crop insurance, conservation programs, regulation of farmland, and other regulations;

shifts in global supply and demand;

global political or economic issues, including but not limited to the war in Ukraine including sanctions associated therewith;

other global conflicts;

and global or regional growing conditions, such as plant disease, pests or adverse weather, including drought.

Our revenues are dependent on market prices for ethanol which can be volatile as a result of a number of factors, including but not limited to:

the price and availability of competing fuels;

the overall supply and demand for ethanol, gasoline and corn;

the price and availability of competing fuels and oxygenates for fuels;

the domestic and global supply and demand for ethanol, gasoline and corn;

the price of gasoline, crude oil and corn;

global political or economic issues, including but not limited to the war in Ukraine including sanctions associated therewith, and government policies.

Ethanol is marketed as a fuel additive that reduces vehicle emissions, an economical source of octanes and, to a lesser extent, a gasoline substitute.

global political or economic issues, including but not limited to the war in Ukraine including sanctions associated therewith, other global conflicts;

and government policies that impact the supply, demand and pricing of corn, crude oil, gasoline, ethanol and other liquid fuels.

Ethanol is marketed as a fuel additive that reduces vehicle emissions, an economical source of octane and, to a lesser extent, as a gasoline substitute through higher blends such as E15 and E85.

Consequently, gasoline supply and demand can affect the price of ethanol.

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Ethanol imports also affect domestic supply and demand.

Imported ethanol is not subject to an import tariff and, under the RFS, sugarcane ethanol from Brazil can be used as a means for obligated parties to meet the advanced biofuel standard.

Imported ethanol is not subject to an import tariff and, under the RFS, sugarcane ethanol from Brazil can be used as a means for obligated parties to meet the advanced biofuel standard in addition to state level low-carbon fuel standards.

Brazil is also rapidly expanding corn and corn ethanol production, which can have a lower CI score if it is produced from the second crop or “Safrinha” crop, which could be imported into the U.S.

or displace our exports elsewhere globally.

Distillers Grains .

Distillers grains compete with other protein-based animal feed products.

Downward pressure on other commodity prices, such as corn, soybean meal, and other feed ingredients, will generally cause the price of competing animal feed products to decline, resulting in downward pressure on the price of distillers grains.

Downward pressure on other commodity prices, such as corn, wheat, soybeans, soybean meal, and other feed ingredients, will generally cause the price of competing animal feed products to decline, resulting in downward pressure on the price of distillers grains.

Occasionally, the price of distillers grains will lag behind fluctuations in corn or other feedstock prices, lowering our cost recovery percentage.

Additionally, exports of distiller grains could be impacted by the enactment of foreign policy.

Additionally, exports of distiller grains could be impacted by the enactment of foreign policy, or expanded production of soybean meal or distillers grains elsewhere.

The price and availability of natural gas are subject to volatile market conditions.

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Reliable production of Ultra-High Protein from both consistent operations of the biorefinery as well as the MSC™ technology is necessary to produce anticipated volumes.

Inconsistency in volumes, quality or downward pressure on prices could result in adverse impact on our business and profitability.

Changes in our customers willingness to accept these ingredients, inconsistency in production volumes, quality or downward pressure on prices could result in adverse impact on our business and profitability.

Renewable Corn Oil.

Renewable corn oil is generally marketed as a renewable diesel and biodiesel feedstock;

therefore, the price of renewable corn oil is affected by demand for renewable diesel and biodiesel.

Expanded demand from the renewable diesel and biodiesel industry due to the extended blending tax credit and growing LCFS markets could impact renewable corn oil demand.

In general, renewable corn oil prices follow the prices of heating oil and soybean oil.

Renewable corn oil is generally marketed as a low-carbon feedstock for biofuel production including renewable diesel, biodiesel and currently to a lesser extent, sustainable aviation fuel;

therefore, the price of renewable corn oil is largely driven by demand for renewable diesel and biodiesel.

Expanded demand from the renewable diesel and biodiesel industry due to the extended blending tax credit, new tax credits included in the IRA and growing LCFS markets in California, Oregon, Washington state or Canada, as well as customer acceptance for such fuels could impact renewable corn oil demand.

In general, renewable corn oil prices follow the prices of heating oil and soybean oil, though LCFS programs incentivize the lower CI of renewable corn oil as a feedstock relative to soybean oil.

Federal incentives for sustainable aviation fuel also provide higher credit values for lower CI.

Other feedstocks such as used cooking oil and animal fats and tallows are scored at a lower CI than renewable corn oil under most life cycle assessment models, and these feedstocks may be preferred to renewable corn oil.

Increased imports of used cooking oil could pressure all vegetable oil values lower.

Decreases in the price of or demand for renewable corn oil could have an adverse impact on our business and profitability.

While we believe our investments in MSC™ and other technologies have allowed us to capture more renewable corn oil from each bushel, these yields could be negatively impacted by any number of factors.

We may be affected by or unable to fulfill our total transformation strategies.

In May 2018, we announced that we were evaluating the performance of our entire portfolio of assets and businesses.

As part of that process, during the fourth quarter of 2018, we sold three ethanol plants, permanently closed one ethanol plant and sold Fleischmann’s Vinegar Company, Inc.

Furthermore, we sold our 50% interest in JGP Energy Partners during the fourth quarter of 2019.

We sold a 50% interest in GPCC during the third quarter of 2019 and the remaining 50% interest in GPCC during the fourth quarter of 2020.

In December 2020, we sold the Hereford, Texas ethanol plant and in March 2021, we sold our Ord, Nebraska ethanol plant.

As we continue to evaluate our portfolio, we may sell additional assets or businesses or exit particular markets that are no longer a strategic fit or no longer meet their growth or profitability targets.

We continually evaluate the makeup of our portfolio, and we may sell additional assets or businesses or exit particular markets that are no longer a strategic fit or no longer meet their growth or profitability targets.

Depending on the nature of the assets sold, our profitability may be impacted by lost operating income or cash flows from such businesses.

In addition, divestitures we complete may not yield the targeted improvements in our business and may divert management’s attention from our day-to-day operations.

We also undertook a number of project initiatives to improve margins, including our Project 24 initiative and Total Transformation Plan focused on expanding the products and value we can extract from a kernel of corn.

The Ultra-High Protein strategy includes substantial construction projects and cost to deploy FQT’s MSC™ technology, and FQT’s CST TM production capabilities to meet anticipated customers' demands.

We may not achieve our construction goals on time or our budget, we may not achieve the operating yields we project, we may not achieve product market sales, margins, or pricing we project, and our operating cost goals may not be achieved due to a variety of factors.

Our failure to achieve any of these, inclusive but not limited to construction, yield, sales, margin, pricing, or financial results associated with our total transformation strategies could have an adverse effect on our business, financial condition or results of operations.

Government mandates affecting ethanol could change and impact the ethanol market.

We also undertook a number of project initiatives to improve margins, focused on reducing operating costs and expanding the products and value we can extract from a kernel of corn.

The Ultra-High Protein and Clean Sugar strategy includes substantial construction projects and significant capital expenditures to deploy FQT’s MSC™ technology, and FQT’s CST™ production capabilities to meet anticipated customers' demands and these technology implementations may not perform as designed and are subject to various construction risks and delays in the supply chain.

These products may not be readily accepted as substitutes to existing sugars and proteins on the market, and we may not earn a premium for them, even if they are of higher quality and have a lower CI.

We may not achieve our construction goals on time or within our budget.

We may not achieve the operating yields we project or our technologies may not perform as expected.

We may not achieve product market sales, margins or pricing we project, and our operating cost goals may not be achieved due to a variety of factors.

Increasing costs for construction materials, supply chain issues limiting the availability of certain components, lack of available labor and delays in required permitting could all lead to projects being over budget and behind schedule.

Our failure to achieve our production, sales and pricing targets, including, but not limited to:

construction, yield, sales, margin, pricing, or financial results associated with our total transformation strategies could have an adverse effect on our business, financial condition or results of operations.

Government biofuels programs could change and impact the ethanol market.

The RFS mandates the minimum volume of renewable fuels that must be blended into the transportation fuel supply each year, which affects the domestic market for ethanol.

Each year the EPA is supposed to undertake rulemaking to set the RVO for the following year, though at times months or years pass without a finalized RVO.

Through 2022, the EPA undertook rulemaking to set the RVO for the following year, though at times months or years would pass without a finalized RVO.

Further, the EPA has the authority to waive the requirements, in whole or in part, if there is inadequate domestic renewable fuel supply or the requirement severely harms the economy or the environment.

After 2022, volumes shall be determined by the EPA in coordination with the Secretaries of Energy and Agriculture, taking into account such factors as impact on environment, energy security, future rates of production, cost to consumers, infrastructure, and other factors such as impact on commodity prices, job creation, rural economic development, or impact on food prices.

After 2022, volumes are determined by the EPA in coordination with the Secretaries of Energy and Agriculture, taking into account such factors as impact on environment, energy security, future rates of

production, cost to consumers, infrastructure, and other factors such as impact on commodity prices, job creation, rural economic development or food prices.

The EPA also has the authority to set volumes for multiple years at a time, rather than annually as required prior to 2022.

The EPA has stated an intention to finalize a post-2022 set rulemaking by June 14, 2023, in compliance with a consent decree from the U.S.

District Court for D.C.

In June 2023, the EPA finalized a multi-year RVO for 2023, 2024 and 2025.

Volumes can also be impacted as small refineries can petition the EPA for an SRE which, if approved, waives their portion of the annual RVO requirements.

The EPA, through consultation with the DOE and the USDA, can grant them a full or partial waiver, or deny it outright within 90 days of submittal.

Our operations could be adversely impacted by legislation, administration actions, EPA actions, or lawsuits that may reduce the RFS mandated volumes of conventional ethanol and other biofuels through the annual RVO, the 2022 set rulemaking, the point of obligation for blending, or SREs.

A recent Supreme Court ruling held that the small refineries can

continue to apply for an extension of their waivers from the RFS, even if they have not been awarded a continuous string of exemptions, though the current EPA, in conjunction with the RVO rulemaking for 2020, 2021 and 2022, denied all pending SREs, a stance they have reiterated in the proposed 2023, 2024 and 2025 rulemakings.

There are multiple legal challenges to how the EPA has handled SREs and RFS rulemakings.

Elimination of a refinery's obligation effectively lowers the amount of renewable fuels required to be blended, and by extension the amount of RINs that need to be retired, which can impact their values and ultimately blending levels of renewable fuels.

There are multiple on-going legal challenges to how the EPA has handled SREs and RFS rulemakings.

Our operations could be adversely impacted by legislation, administration actions, court rulings, EPA actions, or lawsuits that may reduce the RFS mandated volumes of conventional ethanol and other biofuels through the RVO levels, a change in the RFS point of obligation from blenders and importers to retailers, or SREs.

Circuit Court of Appeals ruled that the EPA overstepped its authority in extending the one pound Reid Vapor Pressure waiver for 10% ethanol blends to 15% ethanol blends in the summer, effectively limiting summertime sales of ethanol blends above 10% to FFVs from June 1 to September 15 each year.

Notwithstanding, on April 12, 2022, the President announced that he has directed the EPA to issue an emergency waiver to allow for the continued sale of E15 during the June 1 to September 15 period.

As of this filing, E15 is sold year-round at approximately 2,923 stations in 31 states.

Notwithstanding, on April 12, 2022, the President announced that he had directed the EPA to issue an emergency waiver to allow for the continued sale of E15 during the June 1 to September 15 period.

On April 28, 2023, the EPA issued an emergency waiver to allow for continued sale of E15 during the 2023 summer driving season.

As of this filing, according to Prime the Pump, E15 is sold year-round at approximately 3,244 stations.

Supreme Court currently has two cases on its docket that could impact one of the most important principles in administrative law called “Chevron deference,” based on a landmark case, Chevron U.S.A., Inc.

Natural Resources Defense Council, Inc .

The Chevron deference is a doctrine of judicial deference given to administrative actions.

Should the U.S.

Supreme Court modify this doctrine, it could adversely impact current and/or future rulemaking and regulations which in turn could negatively and materially impact our financial performance.

A change in Chevron precedent could impact how the EPA can administer the RFS, impose limitations on the Treasury Department’s ability to promulgate regulations around IRA provisions, including SAF tax credits and the 45Z Clean Fuel Production Credit, 45Q carbon capture and sequestration tax credits, EV tax credits and other clean energy programs.

Similarly, should federal mandates regarding oxygenated gasoline be repealed, the market for domestic ethanol could be adversely impacted.

Economic incentives to blend based on the relative value of gasoline versus ethanol, taking into consideration the octane value of ethanol, environmental requirements and the RFS mandate, may affect future demand.

A significant increase in supply beyond the RFS mandate could have an adverse impact on ethanol prices.

Moreover, changes to the RFS could negatively impact the price of ethanol or cause imported sugarcane ethanol to become more economical than domestic ethanol.

Likewise, national, state and regional LCFS like that of California, Oregon, Brazil or Canada could be favorable or harmful to conventional ethanol, depending on how the regulations are crafted, enforced and modified.

Future demand may be influenced by economic incentives to blend based on the relative value of gasoline versus ethanol, taking into consideration the octane value of ethanol, environmental requirements and the value of RFS credits or RINs.

A significant increase in supply beyond the RFS mandate could have an adverse impact on ethanol prices.

A significant increase in supply of biofuels beyond the RFS mandated volumes could have an adverse impact on ethanol prices.

Moreover, changes to the RFS could negatively impact the price of ethanol or cause imported sugarcane or corn ethanol from Brazil to become more economical than domestic corn ethanol.

Likewise, national, state and regional LCFS like that of California, Oregon, Washington state or Canada could be favorable or harmful to U.S.

corn ethanol, depending on how the regulations are crafted, enforced, repealed and/or modified.

A significant increase in supply of biofuels beyond the RFS mandated levels could have an adverse impact on ethanol prices.

Moreover, any changes to RFS, whether by legislation, EPA action or lawsuit, originating from issues associated with the market price of RINs could negatively impact the demand for ethanol, discretionary blending of ethanol and/or the price of ethanol.

Prior actions by the EPA to grant SREs without accounting for the lost gallons, for example, resulted in lower RIN prices.

Similarly, proposals to reduce annual RVO levels could also lead to lower RIN prices.

To the extent federal or state laws or regulations are modified and/or enacted, it may result in the demand for ethanol being reduced, which could negatively and materially affect our financial performance.

The final RVO for 2023, 2024 and 2025 set biodiesel and renewable diesel volumes below current production levels, which has contributed to lower D4, D5 and D6 RIN values in 2023 and 2024.

To the extent federal or state laws or regulations are modified, repealed and/or enacted, it may result in the demand for ethanol being reduced, which could negatively and materially affect our financial performance.

Future demand for ethanol is uncertain and changes in public perception, consumer acceptance and overall consumer demand for transportation fuel could affect demand.

While many trade groups, academics and government agencies support ethanol as a fuel additive that promotes a cleaner environment, others claim ethanol production consumes considerably more energy, emits more GHG than other fuels and depletes water resources.

While many trade groups, academics and government agencies support ethanol as a fuel additive that promotes cleaner air and reduces GHG emissions, others claim growing corn and producing ethanol consumes more energy, emits more GHG

emissions than other fuels and depletes water resources.

While we do not agree, some studies suggest ethanol produced from corn is less efficient than ethanol produced from switch grass or wheat grain.

Others claim corn-based ethanol negatively impacts consumers by causing the prices of meat and other food derived from corn-consuming livestock to increase.

Others claim corn ethanol negatively impacts consumers by causing the prices of food made from corn and corn byproducts, as well as meat derived from corn-consuming livestock to increase.

Ethanol critics also contend the industry redirects corn supplies from international food markets to domestic fuel markets, and contributes to land use change domestically and abroad.

There are limited markets for ethanol beyond the federal mandates.

We believe further consumer acceptance of E15 and E85 fuels may be necessary before ethanol can achieve significant market share growth.

Today there are limited markets for ethanol beyond its value as an oxygenate domestically and abroad.

We believe further consumer acceptance of E15 and E85 fuels may be necessary before ethanol can achieve significant market share growth in the U.S.

Discretionary and E85 blending are important secondary markets.

Discretionary blending is often determined by the price of ethanol relative to gasoline, the value of RINs, and availability to consumers.

Discretionary blending is often determined by the price of ethanol relative to gasoline, the value of RINs or other low-carbon fuel credits, and availability to consumers.

When discretionary blending is financially unattractive, the demand for ethanol may be reduced.

Demand for ethanol is also affected by overall demand for transportation fuel, which is affected by cost, number of miles traveled and vehicle fuel economy.

Miles traveled typically increases during the spring and summer months related to vacation travel, followed closely behind the fall season due to holiday travel.

New incentives for SAF could open new markets for ethanol through ATJ technologies, though existing commercial production is limited as of this filing.

Demand for ethanol is also affected by overall demand for surface transportation fuel, which is affected by cost, number of miles traveled and vehicle fuel economy.

Miles traveled typically increases during the spring and summer months related to vacation travel, followed closely by the fall season due to holiday travel.

Global events, such as COVID-19, greatly decreased miles traveled and in turn, the demand for ethanol.

Consumer demand for gasoline may be impacted by emerging transportation trends, such as electric vehicles or ride sharing.

In January 2021, General Motors announced a target date of 2035 for phasing out the production of gasoline and diesel powered vehicles.

Similarly, Nissan has stated that their entire fleet will be electric vehicles by the early 2030s.

Most OEMs have made similar commitments to phase out internal combustion engine production.

Consumer demand for gasoline may be impacted by various transportation trends, such as widespread adoption of electric vehicles.

Numerous automakers have announced plans to phase out the production of gasoline and diesel powered vehicles by the mid-2030s.

These announcements coincide with pledges to ban the sale of internal combustion engines in countries such as Japan and the United Kingdom by 2035, as well as a statewide ban in California, which several states are imitating.

If realized, these bans would accelerate the decline of liquid fuel demand and by extension demand for ethanol, biodiesel and renewable diesel.

We are closely monitoring legislation that may impact the future sales of electric vehicles as

well as vehicles with internal combustion engines in various states and around the world.

Additionally, factors such as over-supply of ethanol, which has been the case for some time, could continue to negatively impact our business.

Reduced demand for ethanol may depress the value of our products, erode its margins, and reduce our ability to generate revenue or operate profitably.

If realized, these bans would accelerate the decline of liquid fuel demand for surface transportation and by extension demand for ethanol, biodiesel and renewable diesel.

The EPA has proposed CAFE standards, which would require aggressive EV deployment by Original Equipment Manufacturers.

We are closely monitoring legislation and regulations that may impact the future sales of electric vehicles as well as vehicles with internal combustion engines in various states and around the world.

Our business is directly affected by the supply and demand for ethanol and other fuels in the markets served by our assets.

Reduced demand for ethanol, regardless of cause, may erode our margins and reduce our ability to generate revenue and operate profitably.

Additionally, factors such as changes in the supply and demand of ethanol, could continue to negatively impact our business.

Reduced demand for ethanol may depress the value of our products, erode our margins, and reduce our ability to generate revenue or operate profitably.

Our risk management and commodity trading strategies could be ineffective and expose us to decreased liquidity.

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While we continuously monitor our exposure to margin calls, we cannot guarantee we will be able to maintain adequate liquidity to cover margin calls in the future.

Carbon Capture and Sequestration projects we are committed to could be delayed or cease operations.

We have seven facilities committed to carbon capture and sequestration projects.

The projects we are committed to may

be delayed or suspend operations for various reasons prior to us realizing any benefit.

The CI benefits we anticipate from our carbon reduction strategy may not materialize.

Additionally, the regulatory modeling for CI reductions may be adjusted outside of our control in such a manner that reduces the anticipated benefits from these strategies.

Federal guidelines in the IRA may be changed in the future to preclude corn-based ethanol from recognizing tax incentives, or otherwise reduce our potential benefits.

Delays in regulations being issued, rescinding clean energy or carbon capture tax credits, could negatively impact our carbon capture endeavors.

Elimination of clean fuel tax credits and other incentives at the state, federal and international level could negatively impact our business.

In the past, we have had operating losses and could incur future operating losses.

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The outcome of trade negotiations or lack thereof, has had and/or may continue to have a material effect on our business, financial condition and results of operations.

Our ability to access the partnership’s terminals adjacent to our ethanol plants could cause disruptions in our operations and adversely affect our production levels, profitability and needed capital expenditures.

We are party to the storage and throughput agreement with our partnership, under which we access the storage and throughput services offered by the partnership.

In the event of a default by either party under that agreement, our ability to throughput our ethanol may be disrupted, which in turn could adversely affect our production levels, operating expenses, profitability and our need for capital expenditures for alternative throughput arrangements.

Our debt exposes us to numerous risks that could have significant consequences to our shareholders.

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In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.

We are required to comply with a number of covenants under our existing loan agreements that could hinder our growth.

We are required to comply with a number of covenants under our existing loan agreements that could impact our liquidity.

We are required to maintain specified financial ratios, including minimum cash flow coverage, working capital and tangible net worth under certain loan agreements.

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No assurance can be given that our future operating results will be sufficient to comply with these covenants or remedy default.

In the event we are unable to comply with these covenants in the future, we cannot provide assurance that we will be able to obtain the necessary waivers or amend our loan agreements to prevent default.

In the event we are unable to comply with these covenants in the future, we cannot provide assurance that we will be able

to obtain the necessary waivers or amend our loan agreements to prevent default.

Under our convertible senior notes, default on any loan in excess of $20.0 million could result in the notes being declared due and payable, which could have a material and adverse effect on our ability to operate.

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The cost of capital under our existing or future financing arrangements could increase and affect our ability to trade with various commercial counterparties or cause our counterparties to require additional forms of credit support.

If capital markets are disrupted, we

may not be able to access capital at all or capital may only be available under less favorable terms.

We are required to continue to make payments to the partnership to the minimum volume commitment regardless of our production levels.

We are party to the storage and throughput agreement with our partnership, under which we are obligated to pay a minimum volume commitment regardless of whether or not we operate.

We may not run our plants at volumes sufficient enough to cover the MVC resulting in payments being made to the partnership.

In times of sustained negative margins, our volumes may be insufficient to recover these MVC payments in the following four quarters as outlined in the partnership agreement.

If capital markets are disrupted, we may not be able to access capital at all or capital may only be available under less favorable terms.

Our production level may fluctuate due to planned and unplanned downtime at our assets.

Unplanned downtime may occur from time to time at our facilities.

Our plants may not produce at yields we expect due to a variety of reasons, including, but not limited to, equipment failures and other breakdowns;

labor shortages;

lack of adequate raw materials, including corn supply;

adverse pricing on raw materials and finished goods that becomes uneconomical;

poor rail service;

lack of adequate storage for distillers grains, Ultra-High Protein, renewable corn oil or ethanol;

permitting or regulatory issues, adverse weather and other reasons.

Any of these production events may adversely impact our profitability and financial position.

Our ability to maintain the required regulatory permits or manage changes in environmental, safety and TTB regulations is essential to successfully operating our plants.

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While we strive to comply with all environmental requirements, we cannot provide assurance that we have been in compliance at all times or will not incur material costs or liabilities in connection with these requirements.

Private parties, including current and former employees, could bring personal injury or other claims against us due to the presence of hazardous substances.

Private parties, including current and former

employees, could bring personal injury or other claims against us due to the presence of hazardous substances.

We are also exposed to residual risk by our land and facilities which may have environmental liabilities from prior use.

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Any inability to generate or obtain RINs could adversely affect our operating margins.

Nearly all of our ethanol production is sold with RINs that are used by our customers to comply with the RFS.

Should our production not meet the EPA’s requirements for RIN generation in the future, we would need to purchase RINs in the open market or sell our ethanol at lower prices to compensate for the absence of RINs.

Under the RFS, biofuel producers generate different types of RINs to attach to each gallon produced depending on the feedstock, pathway and level of GHG reduction.

Cellulosic biofuel is assigned a D3 or D7 RIN, advanced biofuels such as biodiesel and renewable diesel generate D4 RINs, advanced biofuels generate D5 RINs, and all other biofuels that do not generate a D3, D4, D5 or D7 RIN qualify for a D6 RIN.

Nearly all of our ethanol production is sold with D6 RINs that are used by our customers to comply with their blending obligations under the RFS.

Should our production practices not meet the EPA’s requirements for RIN generation in the future, we would need to export the ethanol, purchase RINs in the open market or sell our ethanol at a discounted price to compensate for the absence of RINs.

Likewise, our renewable corn oil must meet regulatory requirements to be suitable as a feedstock for the production of renewable diesel, biodiesel and SAF, and changing production practices or regulations could impact its suitability as a feedstock.

The price of RINs depends on a variety of factors, including the availability of qualifying biofuels and RINs for purchase, production levels of transportation fuel and percentage mix of ethanol with other fuels, and cannot be predicted.

The values of D6 RINs, for which most conventional corn ethanol qualifies, have varied from a few pennies to well over a dollar.

Failure to obtain sufficient RINs or reliance on invalid RINs could subject us to fines and penalties imposed by the EPA which could adversely affect our results of operations, cash flows and financial condition.

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Compliance with evolving environmental, health and safety laws and regulations, particularly those related to climate change, could be costly.

Our plants emit carbon dioxide as a by-product of ethanol production.

While all eleven of our plants have grandfathered pathways allowing them to operate under their current authorized capacity under the RFS mandate, operating above these capacities requires an Efficient Producer Pathways and a 20% reduction in GHG emissions from a 2005 baseline.

Our plants emit biogenic carbon dioxide from fermentation as a by-product of ethanol production.

While all ten of our plants have grandfathered RFS pathways allowing them to operate under their current authorized capacity under their EPA approved grandfathered limits, operating above these capacities requires an Efficient Producer Pathway, demonstrating at least a 20% reduction in GHG emissions relative to petroleum-based gasoline from a 2005 baseline.

Four of our plants currently maintain Efficient Producer Pathways to operate at increased capacities.

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The most recent Scoping Plan from CARB in 2022 sets a target of 85% GHG reductions vs 1990 levels no later than 2045.

An ILUC component is included in the GHG emission calculation, which may have an adverse impact on the market for corn-based ethanol in California.

An indirect land usage charge component is included in the GHG emission calculation, which may have an adverse impact on the market for corn-based ethanol in California.

In late 2023, CARB proposed changes to the LCFS which would increase compliance requirements, including traceability of crop-based feedstocks beginning in 2028, an automatic accelerator mechanism to increase carbon credit values in the event of over-compliance by obligated parties, and other changes which could impact our ability to participate in and profit from the program.

To expand our production capacity, federal and state regulations may require us to obtain additional permits, achieve EPA’s efficient producer status under the pathway petition program, install advanced technology or reduce drying distillers grains.

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(1) difficulties integrating the operations, technologies, products, existing contracts, accounting processes and personnel and realizing anticipated synergies of the combined business;

(2) risks relating to environmental hazards on purchased sites;

(2) risks relating to environmental

hazards on purchased sites;

(3) risks relating to developing the necessary infrastructure for facilities or acquired sites, including access to rail networks;

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We compete with producers in the United States and abroad.

Depending on feedstock, labor and other production costs, producers in other countries, such as Brazil, may be able to produce ethanol cheaper than we can.

Depending on feedstock, labor and other production costs, producers in other countries, such as Brazil, may be able to produce ethanol, corn oil and distillers grains cheaper or with a lower CI than we can.

Under the RFS, certain parties are obligated to meet an advanced biofuel standard.

While transportation costs, infrastructure constraints and demand may temper the impact of ethanol imports, foreign competition remains a risk to our business.

While transportation costs, infrastructure constraints, currency valuations and demand may temper the impact of ethanol imports, foreign competition remains a risk to our business.

Moreover, significant additional foreign ethanol production could create excess supply, which could result in lower ethanol prices throughout the world, including the United States.

Any penetration of ethanol imports into the domestic market may have a material adverse

effect on our operations, cash flows and financial position.

Penetration of ethanol or distillers grains imports into the domestic or international market may have a material adverse effect on our operations, cash flows and financial position.

International activities such as boycotts, embargoes, product rejection, trade policies and compliance matters, may have an adverse effect on our results of operations.

Government actions abroad can have a significant impact on our business.

In 2022, we exported approximately 16% of our ethanol production.

We have experienced trade policy disputes, tariffs, changing foreign laws as well as investigations in various foreign countries over the past ten years that have adversely impacted the international demand for U.S.

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There can be no assurance that OPEC+ members and other oil exporting nations will agree to future production cuts or other actions to support and stabilize oil prices, nor can there be any assurance that they will not further reduce oil prices or increase production.

Uncertainty regarding future actions to be taken by OPEC+ members or other oil exporting countries could lead to increased volatility in the price of oil, which could adversely affect our business, future financial condition and results of operations.

results of operations.

Increased ethanol industry penetration by oil and other multinational companies could impact our margins.

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The remaining ethanol producers consist of smaller entities engaged exclusively in ethanol production and large integrated grain companies that produce ethanol in addition to their base grain businesses.

We compete for capital, labor, corn and other resources with these companies.

Historically, oil companies, petrochemical refiners and gasoline retailers were not engaged in ethanol production even though they form the primary distribution network for ethanol blended with gasoline.

We compete for capital, labor, corn, shipping and other resources with these companies.

Historically, oil companies, petrochemical refiners and gasoline retailers were not engaged in ethanol, biodiesel and other biofuel production even though they form the primary distribution network for finished liquid fuels.

As of this filing, oil refiners accounted for approximately 10% of domestic ethanol production.

If these companies increase their ethanol plant ownership or additional companies commence production, the need to purchase ethanol from independent producers like us or at pricing that provides us an acceptable margin could diminish and adversely effect on our operations, cash flows and financial position.

Integrated oil companies and merchant refiners are increasingly investing in retrofitting refineries or building new refineries to produce renewable diesel, and partnering with commodity processors to supply soybean oil, distillers corn oil and other feedstocks, which could adversely impact the market for our renewable corn oil and Ultra-High Protein.

Our agribusiness operations are subject to significant government regulations.

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Our production levels, markets and grains we merchandise are affected by federal government programs.

Government policies such as tariffs, duties, subsidies, import and export restrictions and embargos can also impact our business.

Government policies such as tariffs, duties, subsidies, import and export restrictions, tax incentives, commodity support programs, conservation incentives, fuel and vehicle standards and embargos can also impact our business.

Changes in government policies and producer support could impact the type and amount of grains planted, which could affect our ability to buy grain.

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This growth places substantial demands on our management, systems, internal controls, and financial and physical resources.

If we acquire or develop additional operations, we may need to further develop our financial and managerial controls and reporting systems, and could incur expenses related to hiring additional qualified personnel and expanding our information technology infrastructure.

If we acquire or develop additional operations, implement new technologies, sell into new markets, track the CI of the feedstocks we purchase and finished products we sell, we may need to further develop our financial and managerial controls and reporting systems, and could incur expenses related to hiring additional qualified personnel and expanding our information technology infrastructure.

Our ability to manage growth effectively could impact our results of operations, financial position and cash flows.

Replacement technologies could make corn-based ethanol or our process technology obsolete.

Ethanol is used primarily as an octane additive and oxygenate blended with gasoline.

Critics of ethanol blends argue that it decreases fuel economy, causes corrosion and damages fuel pumps.

Prior to federal restrictions and ethanol mandates, methyl tertiary-butyl ether, or MTBE, was the leading oxygenate.

Other oxygenate products could enter the market and prove to be environmentally or economically superior to ethanol.

Alternative biofuel alcohols, such as methanol and butanol, could evolve and replace ethanol.

Research is currently underway to develop products and processes that have advantages over ethanol, such as:

lower vapor pressure, making it easier to add to gasoline;

similar energy content as gasoline, reducing any decrease in fuel economy caused by blending with gasoline;

ability to blend at higher concentration levels in standard vehicles;

and reduced susceptibility to separation when water is present.

Products offering a competitive advantage over ethanol could reduce our ability to generate revenue and profits from ethanol production.

New ethanol process technologies could emerge that require less energy per gallon to produce and result in lower production costs.

Our process technologies could become less effective or competitive than competing technologies or obsolete and place us at a competitive disadvantage, which could have a material adverse effect on our operations, cash flows and financial position.

New ethanol process technologies could emerge that require less energy per gallon to produce or increase yields of various products and in some cases develop new coproducts and result in lower production costs or more favorable economics for a plant.

Our process technologies could become less effective or competitive than competing technologies or become obsolete and place us at a competitive disadvantage, which could have a material adverse effect on our operations, cash flows and financial position.

Newly constructed plants could operate more efficiently and reliably than the legacy fleet of plants constructed nearly 20 years ago, which includes our assets, putting us at a competitive disadvantage.

Competitors could successfully deploy carbon capture technology and achieve lower CI scores before we are able to do so, which could

put us at a competitive disadvantage.

We may be required to provide remedies for ethanol, distillers grains, Ultra-High Protein or renewable corn oil that do not meet the specifications defined in our sales contracts.

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Business disruptions due to unforeseen operational failures or factors outside of our control could impact our ability to fulfill contractual obligations.

Natural disasters, pandemics, transportation issues, significant track damage resulting from a train derailment or strikes by our transportation providers could delay shipments of raw materials to our plants or deliveries of ethanol, distillers grains, Ultra-High Protein and renewable corn oil to our customers.

If we are unable to meet customer demand or contract delivery requirements due to stalled operations caused by business disruptions, we could potentially lose customers.

Shifts in global markets, supply or demand changes, as well as adverse weather conditions, such as inadequate or excessive amounts of rain during the growing season, overly wet conditions, an early freeze or snowy weather during harvest could impact the supply of corn that is needed to produce ethanol.

Corn stored in an open pile may be damaged by rain or warm weather before the corn is dried, shipped or moved into a storage structure.

Our business may be adversely impacted by the continued impact of the COVID-19 outbreak.

The outbreak of the coronavirus, or COVID-19, including resurgences and variants of the virus, has created risk on all aspects of our business, including its impact on our employees, customers, vendors, and business partners.

Natural disasters, pandemics, transportation issues, significant track damage resulting from a train derailment, aging equipment breakdowns, coupled with supply chain challenges impacting repairs or replacements, or labor strikes by our transportation providers could adversely impact operations and/or delay shipments of raw materials to our plants or deliveries of ethanol, distillers grains, Ultra-High Protein and renewable corn oil to our customers.

If we are unable to meet customer demand or contract delivery requirements due to stalled operations caused by business disruptions, we could potentially lose customers or volume with such customers.

Shifts in global markets, supply or demand changes, as well as adverse weather conditions, such as inadequate or excessive amounts of rain during the growing season, overly wet conditions, hail, derecho wind events, an early freeze or snowy weather during harvest could impact the supply of corn that is needed to produce ethanol.

Corn stored in a temporary open pile may be damaged by rain or warm weather before the corn is dried, shipped or moved into a permanent storage structure.

Our business may be adversely impacted by the follow on impacts of the COVID-19 pandemic.

The outbreak of the coronavirus, or COVID-19, including resurgences and variants of the virus, created risk on all aspects of our business, including its impact on our employees, customers, vendors, and business partners.

There are uncertainties from COVID-19 that continue, and include but are not limited to (1) the health of our workforce, and our ability to meet staffing needs which are vital to our operations;

(2) the duration of additional outbreaks;

(3) the effect on customer demand resulting in a decline in the demand for our products;

(4) impacts on our supply chain and potential limitations of

supply of our feedstocks, chemicals and other products utilized as well as supply chain impacts on construction equipment, supplies and/or labor;

(3) the effect on customer demand resulting in a decline in the demand for our products due to reduced travel and commuting;

(4) impacts on our supply chain and potential limitations of supply of our feedstocks, chemicals and other products utilized as well as supply chain impacts on construction equipment, supplies and/or labor;

(5) interruptions of our rail and distribution systems and delays in the delivery of our product;

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Any of the foregoing may have an adverse impact our business, operations and/or profitability.

We continue to actively manage our response in collaboration with customers, government officials, and business partners and assess potential impacts to our future financial position and operating results, as well as adverse developments in our business.

While many restrictions have been lifted, it is not possible for us to predict whether there will be additional government-mandated orders that could affect our business, or how any additional measures could impact our operations.

We are unable to predict the overall impact these events will have on our future financial position and operations and it could have a material adverse impact on our business, operations and/or profitability.

Our ethanol-related assets may be at greater risk of terrorist attacks, threats of war or actual war, than other possible targets.

Terrorist attacks in the United States, including threats of war or actual war, may adversely affect our operations.

A direct attack on our ethanol plants, or our partnership’s storage facilities, fuel terminals and railcars could have a material adverse effect on our financial condition, results of operations and cash flows.

A direct attack on our ethanol plants, storage facilities, fuel terminals and railcars could have a material adverse effect on our financial condition, results of operations and cash flows.

Furthermore, a terrorist attack could have an adverse impact on ethanol prices.

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Subsequent changes to our tax liabilities as a result of these audits may subject us to interest and penalties.

Tax incentives for producing low-carbon fuels may add additional complexity to our business, and our ability to qualify for them relative to other producers may put us at a competitive disadvantage.

Federal, state and local jurisdictions may challenge our tax return positions.

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The inability by a third party to pay us for our sales, provide product that was paid for in advance or deliver on a fixed-price contract could result in a loss and adversely impact our liquidity and ability to make our own payments when due.

The interest rates under our credit facilities may be impacted by the phase-out of LIBOR and we have exposure to increases in interest rates.

LIBOR was historically the basic rate of interest widely used as a reference for setting the interest rates on loans globally.

We have and continue to use LIBOR as a reference rate for some of our credit facilities.

The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, ceased the publication of the one week and two month LIBOR settings immediately following the LIBOR publication on December 31, 2021, and will cease the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023.

Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, is considering replacing U.S.

dollar LIBOR with a new reference rate, the SOFR, calculated using short-term repurchase agreements backed by Treasury securities.

The potential effect of any such event on interest expense cannot yet be determined.

Our financial

condition, results of operations and cash flows could be materially adversely affected by significant increases in interest rates.

We have limitations, as a holding company, in our ability to receive distributions from a small number of our subsidiaries.

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We may be impacted by supply chain issues, due to factors largely beyond our control, which could escalate in future quarters.

Any of the foregoing factors may result in higher costs or operational disruptions, which could have an adverse impact on our business and financial statements.

Any of the foregoing factors may result in higher costs, operational disruptions or construction delays, which could have an adverse impact on our business and financial statements.

Such disruption has in the past and could in the future interrupt our ability to manufacture certain products.

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With the current administration, climate change legislation in the U.S.

is likely to receive increased focus and consideration over the next several years, with numerous proposals having been made and are likely to continue to be made at the international, national, regional and state levels of government that are intended to limit emissions of GHG and capture carbon.

is likely to receive increased focus and consideration over the next several decades, with numerous proposals having been made and are likely to continue to be made at the international, national, regional and state levels of government that are intended to limit emissions of GHG and capture carbon.

Several states have already adopted measures requiring reduction of GHG within state boundaries.

Other states have elected to participate in voluntary regional cap-and-trade programs.

While we have considered potential risks with transitioning to a low-carbon economy, and we believe our products are low carbon and result in a reduction of GHG emissions compared to alternatives, any significant legislative changes at the international, national, state or local levels could significantly affect our ability to produce and sell our products, could increase the cost of the production and sale of our products and could materially reduce the value of our products.

Other states have elected to participate in voluntary regional cap-and-trade programs, low-carbon fuel standards and low-carbon energy requirements.

While we have considered potential risks with transitioning to a low-carbon economy, and we believe our products are low

carbon and result in a reduction of GHG emissions compared to alternatives, any significant legislative changes at the international, national, state or local levels could significantly affect our ability to produce and sell our products, could increase the cost of the production and sale of our products and could materially reduce the value of our products.

Additionally, our industry receives adverse commentary related to food versus fuel and land use change/conversion debates.

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Transitioning to a low-carbon economy could also result in increased cost of raw materials, which could increase our overall production costs.

Apart from legislation and regulation, some banks based both domestically and internationally have announced that they have adopted environmental, social and corporate governance guidelines (ESG).

There have also been efforts in recent years affecting the investment community promoting the divestment of fossil fuel equities, and encouraging the consideration of

ESG practices of companies.

The impact of such efforts may adversely affect the demand for and price of securities issued by us, and impact our access to the capital and financial markets.

Apart from legislation and regulation, some banks based both domestically and internationally have announced that they have adopted non-financial metrics for evaluating companies on their environmental impact, governance structure, and other criteria.

There have also been efforts in recent years affecting the investment community promoting the divestment of fossil fuel equities, and encouraging the consideration of environmental factors in evaluating companies.

While we have made improvements to our corporate governance, and continue to reduce the environmental impact of our operations and ingredients, these trends may adversely affect the demand for and price of securities issued by us, and impact our access to the capital and financial markets.

Further, it is believed that climate change itself may cause more extreme temperatures and weather conditions such as more intense hurricanes, thunderstorms, tornadoes, droughts, floods, snow or ice storms as well as rising sea levels and increased volatility in temperatures.

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We have acquired insurance that we believe to be adequate to prevent loss from material foreseeable risks.

However, events may occur for which no insurance is available or for which insurance is not available on terms that are acceptable.

However, events may occur for which no insurance is available for some or all of the loss or for which insurance is not available on terms that are acceptable.

Loss from an event, such as, but not limited to war, riots, pandemics, terrorism or other risks, may not be insured and such a loss may have a material adverse effect on our operations, cash flows and financial position.

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We cannot assure our shareholders that we will be able to renew our insurance coverage on acceptable terms, if at all, or that we will be able to arrange for adequate alternative coverage in the event of non-renewal.

The occurrence of an event that is not fully covered by insurance, the failure by one or more insurers to honor its commitments for an insured event or the loss of insurance coverage could have a material adverse effect on our financial condition, results of operations, cash flows and ability of the partnership to make distributions to its unitholders.

Risks Related to the Partnership

We depend on the partnership to provide fuel storage and transportation services.

The partnership’s operations are subject to all of the risks and hazards inherent in the storage and transportation of fuel, including:

damages to storage facilities, railcars and surrounding properties caused by floods, fires, severe weather, explosions, embargoes, natural disasters or acts of terrorism;

mechanical or structural failures at the partnership’s facilities or at third-party facilities at which its operations are dependent;

curtailments of operations relative to severe weather;

and other hazards, resulting in severe damage or destruction of the partnership’s assets or temporary or permanent shut-down of the partnership’s facilities.

If the partnership is unable to serve our storage and transportation needs, our ability to operate our business could be adversely impacted, which could adversely affect our financial condition and results of operations.

The inability of the partnership to continue operations, for any reason, could also impact the value of our investment in the partnership and, because the partnership is a consolidated entity, our business, financial condition and results of operations.

The partnership’s credit facility includes restrictions that may limit its ability to finance future operations, meet its capital needs or expand its business.

If the partnership fails to comply with covenants in its credit facility, the partnership may be required to repay its indebtedness thereunder, which may have an adverse effect on the partnership’s liquidity and its ability to operate and provide services to us.

The partnership is dependent upon the earnings and cash flow generated by its operations in order to meet its debt service obligations and to allow the partnership to pay cash distributions to its unitholders.

The operating and financial restrictions and covenants in the partnership’s credit facility or in any future financing agreements could restrict its ability to finance future operations or capital needs or to expand or pursue its business activities, which may, in turn, limit its ability to pay cash distributions to unitholders.

For example, the partnership’s credit facility restricts its ability to, among other things:

(1) make certain cash distributions;

(2) incur certain indebtedness;

(3) create certain liens;

(4) make certain investments;

merge or sell certain of our assets;

and (6) expand the nature of our business.

Furthermore, the partnership’s credit facility contains covenants requiring it to maintain certain financial ratios.

A failure to comply with the provisions of the partnership’s credit facility could result in an event of default that could enable the partnership’s lenders, subject to the terms and conditions of the partnership’s credit facility, to declare the outstanding principal of that debt, together with accrued interest, to be immediately due and payable and/or to proceed against the collateral granted to them to secure such debt.

If there is a default or event of default, the payment of the partnership’s debt is accelerated, defaults under its other debt instruments, if any, may be triggered, and its assets may be insufficient to repay such debt in full.

Therefore, the holders of its units could experience a partial or total loss of their investment.

Increases in interest rates could adversely impact the partnership’s unit price, ability to issue equity or incur debt, and pay cash distributions at intended levels.

The partnership’s cash distributions and implied distribution yield affect its unit price.

Distributions are often used by investors to compare and rank yield-oriented securities when making investment decisions.

A rising interest rate environment could have an adverse impact on the partnership’s unit price, ability to issue equity or incur debt or pay cash distributions at intended levels, which could adversely impact the value of our investment in the partnership.

The partnership may not have sufficient available cash to pay quarterly distributions on its units.

The amount of cash the partnership can distribute depends on how much cash is generated from operations, which can fluctuate from quarter to quarter based on ethanol and other fuel volumes, handling fees, payments associated with minimum volume commitments, timely payments by subsidiaries, and other third parties, and prevailing economic conditions.

The amount of cash available for distribution also depends on the partnership’s operating and general and administrative expenses, capital expenditures, acquisitions and organic growth projects, debt service requirements, working capital needs, ability to borrow funds and access capital markets, credit facility restrictions, cash reserves and other risks affecting cash levels.

Increasing the partnership’s borrowings or other debt to finance certain projects could increase interest expense, which could impact the amount of cash available for distributions.

There are no limitations in the partnership agreement regarding its ability to issue additional units.

Should the partnership issue additional units in connection with an acquisition or expansion, the distributions on the incremental units will increase the risk that the partnership will be unable to maintain or increase distributions on a per unit basis.

We may be required to pay taxes on our share of the partnership’s income that are greater than the cash distributions we receive from the partnership.

The unitholders of the partnership generally include, for purposes of calculating their U.S.

federal, state and local income taxes, their share of the partnership’s taxable income, whether they have received cash distributions from the partnership.

We ultimately may not receive cash distributions from the partnership equal to our share of taxable income or the taxes that are due with respect to that income, which could negatively impact our liquidity.

A majority of the executive officers and directors of the partnership are also officers of our company, which could result in conflicts of interest.

We indirectly own and control the partnership and appoint all of its officers and directors.

A majority of the executive officers and directors of the partnership are also officers or directors of our company.

Although our directors and officers have a fiduciary responsibility to manage the company in a manner that is beneficial to us, as directors and officers of the partnership, they also have certain duties to the partnership and its unitholders.

Conflicts of interest may arise between us and our affiliates, and the partnership and its unitholders, and in resolving these conflicts, the partnership may favor its own interests over the company’s interests.

In certain circumstances, the partnership may refer conflicts of interest or potential conflicts of interest to its conflicts committee, which must consist entirely of independent directors, for resolution.

The conflicts committee must act in the best interests of the public unitholders of the partnership.

As a result, the partnership may manage its business in a manner that differs from the best interests of the company or our stockholders, which could adversely affect our profitability.

Cash available for distributions could be reduced and likely cause a substantial reduction in unit value if the partnership became subject to entity-level taxation for federal income tax purposes.

The present federal income tax treatment of publicly traded partnerships or investments in its units could be modified, at any time, by administrative, legislative or judicial changes and interpretations.

From time to time, members of Congress propose and consider substantive changes to the existing federal income tax laws that affect publicly traded partnerships.

Should any legislative proposal eliminate the qualifying income exception, all publicly traded partnerships would be treated as corporations for federal income tax purposes.

The partnership would be required to pay federal income tax on its taxable income at the corporate tax rate and likely state and local income taxes at varying rates as well.

Distributions to unitholders would be taxed as corporate distributions.

The partnership’s cash available for distributions and the value of the units would be substantially reduced.

Our review of strategic alternatives may be disruptive to our business.

On February 7, 2024, we publicly announced that our Board of Directors has authorized a process to explore a range of strategic alternatives, which could include, among other things, acquisitions, divestitures, a merger or sale, partnerships and financings.

Exploring strategic alternatives may create a significant distraction for our management team and Board of Directors and require us to expend significant time and resources and incur expenses for advisors.

Moreover, the review of strategic alternatives may disrupt our business by causing uncertainty among current and potential employees, suppliers, customers and investors.

The selection and execution of a strategic alternative may lead to similar disruptions, and parties advocating for alternatives not selected may solicit support for such other alternatives, causing further disruption.

Risks Related to our Common Stock

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(5) changes in market prices for our products or raw materials and related substitutes;

(6) sales of common stock by our directors, executive officers and significant shareholders;

(6) sales or purchases of common stock by our directors, executive officers and significant shareholders;

(7) actions by institutional investors trading in our stock;

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real property holding corporation or will not become one in the future.

Unresolved Staff Comments.

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