What changed in this filing

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Item 1A. Risk Factors

2023-02-27 compared with 2022-02-25 · 99 added, 50 removed, 378 unchanged (28% of the section changed)

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• changes in the availability or cost of maritime shipping;

• pandemics, public health crises, or other widespread emergencies such as the novel coronavirus (COVID-19);

• pandemics, public health crises, or other widespread emergencies such as COVID-19;

• government regulations or mandated production curtailments or limitations;

• weather conditions, hurricanes, or other natural disasters.

For example, the COVID-19 pandemic resulted in significant demand reduction for crude oil and refined products, particularly in the Hawaii market, and abnormal volatility in oil commodity prices, which may continue for the foreseeable future.

In addition, the Organization of the Petroleum Exporting Countries (“OPEC”) has agreed to adjust downwards their overall production of crude oil through April 30, 2022, with the agreement to be reassessed in December 2021, to support crude oil prices.

And the Alberta government has previously mandated crude oil production cuts in a region where our Washington refinery sources crude oil.

For example, the COVID-19 pandemic resulted in significant demand reduction for crude oil and refined products, particularly in the Hawaii market, and abnormal volatility in oil commodity prices.

Additionally, the Alberta government has mandated crude oil production cuts in a region where our Washington refinery sources crude oil.

Such an action, or any similar actions, could result in an increase in the price we pay for crude oil, which may result in a decrease in the expected earnings and cash flows generated by our refining business.

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Price level changes during the periods between purchasing and selling these refined products could also have a material adverse effect on our business, financial condition, and results of operations.

Our business, financial condition, results of operations, and liquidity have been adversely affected by the COVID-19 pandemic that has caused, and is expected to continue to cause, the global slowdown of economic activity (including the decrease in demand for crude oil and the refined products that we produce and sell), disruptions in global supply chains,

and significant volatility and disruption of financial markets and that also has adversely affected workforces, customers, and regional and local economies.

Our business, financial condition, results of operations, and liquidity have been adversely affected by the ongoing COVID-19 pandemic that has caused, and is expected to continue to cause, the global slowdown of economic activity (including the decrease in demand for crude oil and the refined products that we produce and sell), disruptions in global

supply chains, and significant volatility and disruption of financial markets and that also has adversely affected workforces, customers, and regional and local economies.

Because the severity, magnitude, and duration of the COVID-19 pandemic and its economic consequences are uncertain, rapidly changing, and difficult to predict, the impact on our business, results of operations, financial condition, and liquidity remains uncertain and difficult to predict.

The ultimate impact of the COVID-19 pandemic on our results of operations and financial condition remains uncertain and depends on numerous evolving factors, many of which are not within our control, and which we may not be able to effectively respond to, including, but not limited to:

The ultimate impact of the COVID-19 pandemic on our results of operations and financial condition continues to be uncertain and depends on numerous factors that continue to evolve, many of which are not within our control, and which we may not be able to effectively respond to, including, but not limited to:

governmental, business, and individuals’ actions that have been and continue to be taken in response to the pandemic (including restrictions on travel and transport, workforce pressures and social distancing, and stay-at-home orders);

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Further, the COVID-19 pandemic, and the volatile regional and global economic conditions stemming from the pandemic, could also precipitate or aggravate the other risk factors that we identify in this Annual Report on Form 10-K, which could materially adversely affect our business, financial condition, results of operations (including revenues and profitability), and liquidity and/or stock price.

Additionally, COVID-19 may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not consider to present significant risks to our operations.

Additionally, COVID-19 may also continue to affect our operating and financial results in a manner that is not presently known to us or that we currently do not consider to present significant risks to our operations.

Instability in the global economic and political environment can lead to volatility in the cost and availability of crude oil and prices for refined products, which could adversely impact our results of operations.

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Any such events may limit or disrupt markets, which could negatively impact our ability to access global crude oil commodity flows or sell our refined products.

Geopolitical conflicts, including the conflict between Russia and Ukraine, could increase the cost of our crude oil feedstocks and affect the demand for our products.

In February 2022, following Russia’s invasion of Ukraine, the U.S.

and other countries announced sanctions against Russia, including restrictions on the importation of Russian crude oil.

On March 3, 2022, we suspended purchases of Russian crude oil for our Hawaii refinery in response to the Russia-Ukraine conflict.

and other countries may impose wider sanctions and take stronger actions should the conflict further escalate.

While it is difficult to predict the impact these sanctions will ultimately have on Par Pacific, any further sanctions imposed or actions taken by the U.S.

or other countries, and any retaliatory measures by Russia in response, such as restrictions on energy supplies from Russia, may increase our costs, reduce our sales and earnings, or otherwise have an adverse effect on our operations.

Additionally, Russia’s invasion of Ukraine and the international response to the conflict may exacerbate inflationary pressures, including with respect to commodity prices and energy costs.

Rapid and significant changes in commodity costs may increase the cost of our crude oil feedstocks and affect the demand for our products.

Many of our refined products could cause serious injury or death if mishandled or misused by us or our purchasers, or if defects occur during manufacturing.

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Our business is impacted by increased risks of spills, discharges, or other releases of petroleum or hazardous substances in our refining and logistics operations.

The operation of refineries, pipelines, and refined products terminals is subject to increased risks of spills, discharges, or other inadvertent releases of petroleum or hazardous substances, and we operate in and around environmentally sensitive coastal waters that are closely regulated and monitored.

coastal waters that are closely regulated and monitored.

These events could occur in connection with the operation of our refineries, pipelines, or refined products terminals.

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We operate fueling stations with underground storage tanks used primarily for storing and dispensing refined fuels.

In addition, some fueling stations where we sell fuel are owned or operated by third parties who are

not under our control.

In addition, some fueling stations where we sell fuel are owned or operated by third parties who are not under our control.

Federal and state regulations and legislation govern the storage tanks and compliance with these requirements can be costly.

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Additionally, legislation designed to protect animal and plant species, such as the Magnuson amendment to the Marine Mammal Protection Act, may limit or restrict our ability to construct or expand new oil terminals and oil-by-rail infrastructure in the state of Washington, which could have a material impact on our business, financial condition, and results of operations.

Renewable fuels mandates may reduce demand for the petroleum fuels we produce, which could have a material adverse effect on our business results of operations and financial condition.

Renewable fuels mandates and other mandates may reduce demand for the petroleum fuels we produce, which could have a material adverse effect on our business results of operations and financial condition.

The RFS program sets annual quotas for the quantity of renewable fuels that must be blended into transportation fuels consumed in the U.S.

A RIN is assigned to each gallon of renewable fuel produced in or imported into the U.S.

As a producer of petroleum-based transportation fuels, we are obligated to blend renewable fuels into the petroleum fuels we produce and sell in the U.S.

As a producer of petroleum-based transportation fuels, we are obligated to blend renewable fuels into the petroleum fuels we produce and sell

To the extent we do not, we are required to purchase RINs in the market to satisfy our obligations under the RFS program.

During 2022, we incurred $169.4 million of RINs expense for our Hawaii, Wyoming, and Washington refineries.

On December 21, 2021, the EPA published proposed renewable volume obligations (“RVO”) for 2021 consistent with amounts of renewable fuels actually blended that year.

Until that rule is finalized and the RVO is set, however, the potential associated expense associated with meeting the 2021 obligations remains uncertain.

In addition, as a result of the annual volume mandates, we may experience a decrease in demand for refined products due to refined products being replaced by renewable fuels.

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RINs prices are dependent upon a variety of factors, including EPA regulations, the availability of RINs for purchase, and levels of transportation fuels produced, which can vary significantly from quarter to quarter.

The ultimate outcome of the 2021 RVO rule will also likely affect RIN prices.

If sufficient RINs are unavailable for purchase, if we have to pay a significantly higher price for RINs, or if we are otherwise unable to meet the EPA’s RFS mandates, our results of operations and cash flows could be adversely affected.

The current administration has also been critical of exemptions from the RFS mandates granted to small refineries during the previous administration.

While litigation over the issue is currently before the U.S.

Supreme Court, the

EPA under the current administration may be less willing to grant such waivers going forward and may increase the RVO in future years.

While litigation over the issue is currently before various courts, the EPA under the current administration may be less willing to grant such waivers going forward and may increase the RVO in future years.

To the extent fewer waivers are granted in the future or the RVO is increased, the demand for and the price of RINs would likely also increase, and our results of operations and cash flows could be adversely affected.

Ongoing litigation and regulatory activity regarding the standards for 2016, 2017, 2018, 2019, and 2020 creates some potential that the final volumes of renewable fuels that the EPA established will be revised for one or more of those years.

In addition, the EPA is considering changes to the existing RFS program regulations and other regulatory initiatives under the RFS program that could impact future standards.

Although uncertain, any of these events may cause the price of RINs to rise and result in additional costs in connection with RFS compliance for prior years, costs that exceed our estimates in connection with RFS compliance for 2021, and/or increased compliance costs in future years.

Although uncertain, any of these events may cause the price of RINs to rise and result in additional costs in connection with RFS compliance.

Such increased costs could be material and may have a material adverse impact on our business, financial condition, and results of operations.

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In addition, Hawaii’s alternative fuels standard requires the State to facilitate the development of alternate fuels so such fuels provide 20% of highway fuel demand by 2020 and 30% by 2030.

These state programs could increase the cost of consuming, and thereby reduce demand for, our refined petroleum products, which could have a material adverse effect on our business, results of operations, and financial condition.

Finally, California and a small number of other states have announced a ban on new internal combustion engine-powered cars by 2035.

These state actions could reduce demand for our refined petroleum products, which could have a material adverse effect on our business, results of operations, and financial condition.

Potential legislative and regulatory actions addressing climate change could increase our costs, reduce our revenue and cash flow from natural gas and oil sales, or otherwise alter the way we conduct our business.

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In November 2020, the United States’ previously-announced withdrawal from the Paris Agreement became effective.

On January 20, 2021, President Biden announced that the United States would be reentering the Paris Agreement.

On January 20, 2021, President Biden announced that the

United States would be reentering the Paris Agreement.

This reentry became effective on February 19, 2021.

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In response, the EPA has adopted regulations under existing provisions of the federal Clean Air Act that, among other things, establish Prevention of Significant Deterioration (“PSD”) construction and Title V operating permit program requiring reviews for GHG emissions from certain large stationary sources.

Facilities required to obtain PSD permits for their GHG emissions will also be required to meet “best available control technology” standards,

which will be established by the states or, in some instances, by the EPA on a case-by-case basis.

Facilities required to obtain PSD permits for their GHG emissions will also be required to meet “best available control technology” standards, which will be established by the states or, in some instances, by the EPA on a case-by-case basis.

In addition, the EPA has adopted rules requiring the monitoring and reporting of GHG emissions from specified large GHG emission sources in the U.S., including petroleum refineries and certain onshore petroleum and natural gas production activities, on an annual basis.

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The adoption of any legislation or regulations that limits emissions of GHG from our or such drilling and production entities’ facilities, equipment, and operations could require us or such entities to incur costs to reduce emissions of GHG associated with our or such entities’ operations or could adversely affect demand for the refined petroleum products that we produce or the crude oil or natural gas that such drilling and production entities in which we hold a working interest produce.

At the state level, the State of Hawaii has announced its intention to reduce statewide GHG emissions to 1990 levels by 2020.

Other states, including Washington, have passed low carbon fuel standard legislation and other initiatives to reduce emissions from the transportation sector.

At the state level, Washington and other states have passed low carbon fuel standard legislation and other initiatives, including a cap and invest program, to reduce emissions from the transportation sector.

We could also face increased climate-related litigation with respect to our operations or products.

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In connection with the WRC Acquisition, we will be required to undertake significant remediation and other corrective actions with respect to certain environmental matters.

In connection with the July 14, 2016 purchase of Hermes Consolidated, LLC (d/b/a Wyoming Refining Company) and, indirectly, Wyoming Refining Company’s wholly owned subsidiary, Wyoming Pipeline Company, LLC (collectively, “Wyoming Refining” or “WRC”) (the “WRC Acquisition”), there are several environmental conditions that will require us to undertake significant remediation efforts and other corrective actions.

undertake significant remediation efforts and other corrective actions.

The Wyoming refinery is subject to a number of consent decrees, orders, and settlement agreements involving the EPA and/or the Wyoming Department of Environmental Quality, some of which date back to the late 1970s and several of which remain in effect, requiring further actions at the Wyoming refinery.

As is typical of older, small refineries like the Wyoming refinery, the largest cost component arising from these various decrees relates to the investigation, monitoring, and remediation of soil, groundwater, surface water, and sediment contamination associated with the facility’s historic operations.

Investigative work by Wyoming Refining and negotiations with the relevant agencies as to remedial approaches remain ongoing on a number of aspects of the contamination, meaning that

investigation, monitoring, and remediation costs are not reasonably estimable for some elements of these efforts.

Investigative work by Wyoming Refining and negotiations with the relevant agencies as to remedial approaches remain ongoing on a number of aspects of the contamination, meaning that investigation, monitoring, and remediation costs are not reasonably estimable for some elements of these efforts.

As of December 31, 2022, we have accrued $14.8 million for the well-understood components of these efforts based on current information, approximately one-third of which we expect to incur in the next five years and the remainder to be incurred over approximately 30 years.

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These requirements could require us to install new or modified safety controls, pursue additional capital projects, or conduct maintenance programs on an accelerated basis, any or all of which tasks could result in us incurring increased operating costs that could be significant and have a material adverse effect on our financial position or results of operations.

Additionally, we are subject to periodic inspection and audit regarding these requirements.

Moreover, changes to pipeline safety laws by Congress and regulations by PHMSA that result in more stringent or costly safety standards could result in our incurring increased operating costs that could have a material adverse effect on our financial position or results of operations.

Compliance with and changes in tax laws could materially and adversely affect our financial condition, results of operations and cash flows.

We are subject to extensive tax liabilities imposed by multiple jurisdictions including, without limitation, income taxes, indirect taxes (excise/duty, sales/use, gross receipts), payroll taxes, franchise taxes, withholding taxes, and ad valorem taxes.

We are subject to extensive tax liabilities imposed by multiple jurisdictions including, without limitation, income taxes, indirect taxes (excise/duty, sales/use, gross receipts, GHG emissions), payroll taxes, franchise taxes, withholding taxes, and ad valorem taxes.

New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that could result in increased expenditures for tax liabilities in the future.

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Although we believe we have used reasonable interpretations and assumptions in calculating our tax liabilities, the final determination of these tax audits and any related proceedings cannot be predicted with certainty.

Any adverse outcome of such tax audits or related proceedings could result in unforeseen tax-related liabilities that may, individually or in the aggregate, materially affect our cash tax liabilities, results of operations, and financial condition.

Additionally, tax rates or tax interpretations in the various jurisdictions in which we operate may change significantly as a result of political or economic factors beyond our control.

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The development of alternative and competing fuels in the retail market could also adversely impact our business.

Increased competition from these alternatives as a result of governmental regulations, technological advances, and consumer demand could have an impact on pricing and demand for our products and our profitability.

Increased competition from these alternatives as a result of

governmental regulations, technological advances, and consumer demand could have an impact on pricing and demand for our products and our profitability.

If we are unable to obtain crude oil supplies for our refineries without the benefit of certain intermediation agreements, the capital required to finance our crude oil supply could negatively impact our liquidity.

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This repurchase obligation could have a material adverse effect on our business, results of operations, or financial condition.

Our agreement with J.

Aron also requires us to pay substantial interest expense associated with the facility.

Given recent increases in crude oil prices and interest rates, the cost of this facility has significantly increased.

We also have the Washington Refinery Intermediation Agreement with MLC whereby our Washington refinery purchases certain crude oil supplies from third-party suppliers and MLC provides credit support for such purchases in exchange for our pledge of all crude oil and refined products inventories from such refinery.

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A breach of any of these covenants could result in a default in respect of the related indebtedness.

If a default occurs, the requisite lenders could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable and proceed against any collateral securing that indebtedness.

If a default occurs, the requisite lenders could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable and

proceed against any collateral securing that indebtedness.

If repayment of our indebtedness is accelerated as a result of such default, we cannot assure you that we would have sufficient assets or access to credit to repay such indebtedness.

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Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly and otherwise impact our ability to incur indebtedness for acquisitions and working capital needs.

We are subject to interest rate risk in connection with borrowings under certain of our debt agreements, which bear interest at variable rates.

We are subject to interest rate risk in connection with borrowings under certain of our debt agreements as well as our J.

Aron Supply and Offtake Agreement and MLC Washington Refinery Intermediation Agreement, which bear interest at variable rates.

Interest rate changes will not affect the market value of indebtedness incurred under such debt agreements, but could affect the amount of our interest payments and, accordingly, our future earnings and cash flows, assuming other factors are held constant.

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Oil and assets related to the Hawaii refinery.

We expect acquisitions to be

instrumental to our future growth.

We expect acquisitions to be instrumental to our future growth.

Successful acquisitions require an assessment of a number of factors, including estimates of potential unknown and contingent liabilities.

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A substantial portion of our refining workforce is unionized and we may face labor disruptions that would interfere with our operations.

As of December 31, 2021, we employed approximately 1,336 people, 226 of whom are covered by collective bargaining agreements.

At our Hawaii and Washington refineries, all 226 employees covered by collective bargaining agreements are represented by the USW with collective bargaining agreements which expired on January 31, 2022 and are currently subject to automatic extension periods while the parties continue negotiations.

As of December 31, 2022, we employed 1,397 people, 226 of whom are covered by collective bargaining agreements.

At our Hawaii and Washington refineries, all 226 employees covered by collective bargaining agreements are represented by the USW with collective bargaining agreements effective through January 31, 2026.

However, we may not be able to prevent a strike or work stoppage in the future and any such work stoppage could cause disruptions in our business and have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Changes in the availability of and the cost of labor could adversely affect our business.

Changes in labor markets due to COVID-19 and other factors, including inflationary pressures, have increased the competition for recruiting and retaining talent.

As a result of these factors, our business could be adversely impacted by increases in labor, health care, and benefits costs necessary to attract and retain high quality employees with the right skill sets to meet our needs.

In addition, our wages and benefits programs may be insufficient to attract and retain top performing employees, especially in a rising wage market.

Any failure by us to attract, develop, retain, motivate, and maintain good relationships with qualified individuals could adversely affect our business and results of operations.

Adverse changes in global economic conditions and the demand for transportation fuels may impact our business and financial condition in ways that we currently cannot predict.

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Any of these events may adversely affect our financial condition, cash flows, and profitability.

The pending acquisition of the ExxonMobil Billings refinery and associated marketing and logistics assets (the “Billings Acquisition”) may not close as anticipated.

The Billings Acquisition is expected to close in the second quarter of 2023, subject to the satisfaction of certain closing conditions.

If these conditions are not satisfied or waived, the Billings Acquisition will not be consummated.

Certain of the conditions that remain to be satisfied include, but are not limited to:

• the continued accuracy of the representations and warranties contained in the Billings Acquisition purchase agreement;

• the performance by each party of its obligations under the Billings Acquisition purchase agreement;

• the absence of any law or timing agreement that prohibits the Billings Acquisition or makes the Billings Acquisition illegal;

• the absence of any suit, action or other proceeding that seeks to prohibit the Billings Acquisition, seeks to make the Billings Acquisition illegal, or seeks substantial damages in connection with the Billings Acquisition;

• the absence of adverse action under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended;

• the absence of a material adverse effect with respect to the sellers relating to the ownership, operation or maintenance of the assets to be purchased in the Billings Acquisition and the assets, condition or business of Exxon Billings Cogeneration, Inc.

and Yellowstone Logistics Holding Company or the ability of the sellers to consummate the Billings Acquisition;

• the operation of the Billings refinery in accordance with certain operating standards for a certain period prior to the closing date of the Billings Acquisition;

• the delivery of certain carve-out financial statements related to the assets and equity interests to be acquired in the Billings Acquisition;

• the execution of certain agreements related to the consummation of the Billings Acquisition.

In addition, we and the sellers can mutually agree to terminate the Billings Acquisition purchase agreement without completing the Billings Acquisition.

Further, we or the sellers can unilaterally terminate the Billings Acquisition purchase agreement without the other party’s agreement and without completing the Billings Acquisition upon the occurrence of certain events.

We cannot assure you that the pending Billings Acquisition will close on our expected timeframe, or at all, or close without material adjustment.

We may fail to successfully integrate the assets to be acquired in the Billings Acquisition with our existing business in a timely manner, which could have a material adverse effect on our business, financial condition, results of operations, or cash flows, or we may fail to realize all of the expected benefits of the Billings Acquisition, which could negatively impact our future results of operations.

Integration of the assets to be acquired in the Billings Acquisition with our existing business will be a complex, time-consuming, and costly process.

A failure to successfully integrate the assets with our existing business in a timely manner may have a material adverse effect on our business, financial condition, results of operations, or cash flows.

The difficulties of combining the assets with our existing operations include, among other things:

• operating a larger combined organization and adding operations;

• difficulties in the assimilation of the acquired assets and operations;

• the diversion of management's attention from other business concerns;

• integrating personnel from diverse business backgrounds and organizational cultures;

• potential environmental or regulatory compliance matters or liabilities;

• coordinating and consolidating corporate and administrative functions.

If we consummate the Billings Acquisition and if any of these risks or unanticipated liabilities or costs were to materialize, then any desired benefits of the Billings Acquisition may not be fully realized, if at all, and our future results of operations could be negatively impacted.

In addition, the assets to be acquired in the Billings Acquisition may actually perform at levels below the forecasts we used to evaluate the assets, due to factors that are beyond our control.

If the assets perform at levels below the forecasts we used to evaluate the assets, then our future results of operations could be negatively impacted.

Flaws in our ongoing due diligence in connection with the assets to be acquired in the Billings Acquisition could have a significant negative effect on our financial condition and results of operations.

We conducted due diligence in connection with the Billings Acquisition prior to signing the purchase agreement with respect thereto and are continuing to conduct due diligence during the period between the signing and closing of the Billings Acquisition.

Intensive due diligence is time consuming and expensive due to the operations, accounting, finance, and legal professionals who must be involved in the due diligence process and the fact that such efforts do not always lead to a consummated transaction.

Diligence may not reveal all material issues that may affect the assets to be acquired in the Billings Acquisition.

In addition, factors outside of our control may later arise.

If, during the due diligence process, we fail to identify issues specific to the assets, we may be forced to later write down or write off assets, restructure our operations, or incur impairment or other charges that could result in other reporting losses.

We cannot assure you that we will not have to take write-downs or write-offs in connection with the acquisitions of certain of the assets and assumption of certain liabilities of the assets to be acquired in the Billings Acquisition, which could have a negative effect on our financial condition and results of operations following closing.

RISKS RELATED TO OUR COMMON STOCK

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We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate declaring or paying any cash dividends on our common stock in the near term.

Any future determination as to the declaration and payment of cash dividends will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects, and other factors that our board of directors considers relevant.

Any future determination as to the declaration and payment of cash

dividends will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects, and other factors that our board of directors considers relevant.

If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our common stock, or if our operating results do not meet their expectations, our stock price could decline.

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This volatility may affect the price at which you could sell your common stock.

The market price for our common stock has varied between a high of $19.74 on March 11, 2021, and a low of $12.91 on May 19, 2021, during the year ended December 31, 2021.

The market price for our common stock has varied between a high of $24.96 on November 22, 2022, and a low of $11.82 on March 16, 2022, during the year ended December 31, 2022.

This volatility may affect the price at which you could sell your common stock.

Our stock price is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors;

variations in our quarterly operating results from our expectations or those of securities

analysts or investors;

variations in our quarterly operating results from our expectations or those of securities analysts or investors;

downward revisions in securities analysts’ estimates;

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As a result of the global economic impact of the COVID-19 pandemic and a steep decline in current and forecasted prices and demand for crude oil and refined products, the goodwill at our refining reporting units in Hawaii and Washington was fully impaired and the goodwill associated with our retail reporting unit in Washington and Idaho was partially impaired, resulting in a charge of $67.9 million in our consolidated statement of operations for the year ended December 31, 2020.

Additionally, as a result of our impairment evaluations of our investment in Laramie Energy, we recorded impairment charges of $45.3 million and $81.5 million on our consolidated statement of operations for the years ended December 31, 2020 and 2019, respectively.

Additionally, as a result of our impairment evaluation of our investment in Laramie Energy, we recorded an impairment charge of $45.3 million on our consolidated statement of operations for the year ended December 31, 2020.

Any additional impairment charges could have a negative impact on the price of our common stock.

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The volume of trading in our common stock has historically been low.

In addition, a substantial amount of our common stock is beneficially owned by two shareholders.

The lack of substantial liquidity can adversely affect the price of our stock at a time when you might want to sell your shares.

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For example, the change in ownership limitations contained in Article 11 of our certificate of incorporation could have the effect of discouraging or impeding an unsolicited takeover proposal.

In addition, our board of directors or a committee thereof has the power, without stockholder approval, to designate the terms of one or more series of preferred stock and issue shares of preferred stock.

In addition, our board of directors or a committee thereof has the power, without stockholder approval, to designate the terms of one or more series of preferred stock and issue shares of

preferred stock.

The ability of our board of directors or a committee thereof to create and issue a new series of preferred stock and certain provisions of Delaware law and our certificate of incorporation and bylaws could impede a merger, takeover, or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce the market price of our common stock.

Zell Credit Opportunities Master Fund, L.P.

(“ZCOF”) and Blackrock, Inc., together with their respective affiliates, each owned or had the right to acquire as of December 31, 2021 approximately 19.8% and 12.6%, respectively, of our outstanding common stock.

The level of their combined ownership of shares of our common stock could have the effect of discouraging or impeding an unsolicited acquisition proposal.

Blackrock, Inc., together with its affiliates, owned or had the right to acquire as of December 31, 2022 approximately 13.4% of our outstanding common stock.

This level of ownership of shares of our common stock could have the effect of discouraging or impeding an unsolicited acquisition proposal.

We may issue preferred stock with terms that could adversely affect the voting power or value of our common stock and any future issuances of our common stock may reduce our stock price.

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If divestment efforts are continued, the price of our common stock or debt securities, and our ability to access capital markets or to otherwise obtain new investment or financing, may be negatively impacted.

Members of the investment community are also increasing their focus on ESG practices and disclosures, including practices and disclosures related to GHGs and climate change in the energy industry in particular, and diversity and inclusion initiatives and governance standards among companies more generally.

Members of the investment community are also increasing their focus on ESG practices and disclosures, including practices and disclosures related to GHG emissions and climate change in the energy industry in particular, and diversity and inclusion initiatives and governance standards among companies more generally.

As a result, we may face increasing pressure regarding our ESG practices and disclosures.

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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