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What changed in Alto Ingredients, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Alto Ingredients, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+301 added−325 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-13)

Top changes in Alto Ingredients, Inc.'s 2025 10-K

301 paragraphs added · 325 removed · 230 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

73 edited+13 added−13 removed62 unchanged
Biggest changeOther states, including New York, Vermont, Massachusetts, Michigan, Illinois, Colorado and New Mexico, currently have proposed legislation or policies that would establish a low carbon fuel standard program. Blending fuel-grade ethanol into gasoline is one of the primary means of attaining these goals.
Biggest changeNew Mexico has enacted a Clean Transportation Fuel Program, a state low carbon fuel standard that is scheduled to take effect no later than July 1, 2026. In addition, various states, including New York, New Jersey, Minnesota, Hawaii, Pennsylvania, Vermont, Massachusetts, Michigan and Illinois, currently have proposed legislation or policies that would establish a low carbon fuel standard program.
For fuel-grade ethanol, the resulting anhydrous alcohol is then blended with up to 2.5% denaturant, usually gasoline, and then shipped to renewable fuels markets. For specialty alcohols, the products can be sold pure or as one of the Alcohol Tobacco Tax & Trade Bureau (TTB) approved specially denatured alcohol (SDA) formulations to meet customer specifications.
For fuel-grade ethanol, the resulting anhydrous alcohol is then blended with up to 2.5% denaturant, usually gasoline, and then shipped to renewable fuels markets. For specialty alcohols, the products can be sold pure or as one of the Alcohol and Tobacco Tax and Trade Bureau (TTB) approved specially denatured alcohol (SDA) formulations to meet customer specifications.
These laws, their underlying regulatory requirements and their potential enforcement, some of which are described below, impact, or may impact, nearly every aspect of our operations, including our alcohol production (including distillation), our liquid CO 2 production, our essential ingredient production, our storage facilities, and our water usage, wastewater discharge, disposal of hazardous wastes and emissions, and other matters pertaining to our existing and proposed business by imposing: ● restrictions on our existing and proposed operations and/or the need to install enhanced or additional controls; ● special requirements applicable to food and drug additives; ● the need to obtain and comply with permits and authorizations; ● liability for exceeding applicable permit limits or legal requirements, in some cases for the remediation of contaminated soil and groundwater at our production facilities, contiguous and adjacent properties and other properties owned and/or operated by third parties; and ● other specifications for the specialty alcohols and essential ingredients we produce, market and sell. - 12 - In addition, some governmental regulations are helpful to our production and marketing business.
These laws, their underlying regulatory requirements and their potential enforcement, some of which are described below, impact, or may impact, nearly every aspect of our operations, including our alcohol production (including distillation), our essential ingredient production, including CO 2 , our storage facilities, and our water usage, wastewater discharge, disposal of hazardous wastes and emissions, and other matters pertaining to our existing and proposed business by imposing: ● restrictions on our existing and proposed operations and/or the need to install enhanced or additional controls; ● special requirements applicable to food and drug additives; ● the need to obtain and comply with permits and authorizations; ● liability for exceeding applicable permit limits or legal requirements, in some cases for the remediation of contaminated soil and groundwater at our production facilities, contiguous and adjacent properties and other properties owned and/or operated by third parties; and ● other specifications for the specialty alcohols and essential ingredients we produce, market and sell. -12- In addition, some governmental regulations are helpful to our production and marketing business.
Pekin Campus Production Facilities Pekin Wet Facility Pekin Dry Facility Pekin ICP Facility Location Pekin, IL Pekin, IL Pekin, IL Current operating status Operating Operating Operating Approximate maximum annual alcohol production capacity (in millions of gallons) 100 60 90 Approximate maximum annual specialty alcohol production capacity (in millions of gallons) 74 — 66 Production milling process Wet Dry Dry Primary energy source Natural Gas Natural Gas Natural Gas - 10 - Western Production Facilities Magic Valley Facility Columbia Facility Liquid CO 2 Facility Location Burley, ID Boardman, OR Boardman, OR Current operating status Cold-Idled Operating Operating Approximate maximum annual fuel-grade ethanol production capacity (in millions of gallons) 60 40 - Approximate maximum annual liquid CO 2 capacity (in thousands of tons) - - 70 Production milling process Dry Dry N/A Primary energy source Natural Gas Natural Gas Electricity Commodity Risk Management We employ various risk mitigation techniques.
Pekin Campus Production Facilities Pekin Wet Facility Pekin Dry Facility Pekin ICP Facility Location Pekin, IL Pekin, IL Pekin, IL Current operating status Operating Operating Operating Approximate maximum annual alcohol production capacity (in millions of gallons) 100 60 70 Approximate maximum annual specialty alcohol production capacity (in millions of gallons) 74 — 66 Production milling process Wet Dry Dry Primary energy source Natural Gas Natural Gas Natural Gas Western Production Facilities Columbia Facility Liquid CO 2 Facility Magic Valley Facility Location Boardman, OR Boardman, OR Burley, ID Current operating status Operating Operating Cold-Idled Approximate maximum annual fuel-grade ethanol production capacity (in millions of gallons) 40 - 60 Approximate maximum annual liquid CO 2 capacity (in thousands of tons) - 70 - Production milling process Dry N/A Dry Primary energy source Natural Gas Electricity Natural Gas -10- Commodity Risk Management We employ various risk mitigation techniques.
We anticipate that continued limited opportunities for gasoline refinery expansions and the growing importance of reducing CO 2 emissions using renewable fuels will generate additional growth in the demand for fuel-grade ethanol. Overview of Alcohol Production Process Alcohol production from starch- or sugar-based feedstock is a highly efficient process.
We anticipate that continued limited opportunities for gasoline refinery expansions and the growing importance of reducing CO 2 emissions using renewable fuels will generate additional growth in the demand for fuel-grade ethanol. -6- Overview of Alcohol Production Process Alcohol production from starch- or sugar-based feedstock is a highly efficient process.
Our senior executives have successfully navigated a wide variety of business and industry-specific challenges and deeply understand the business of successfully producing and marketing specialty alcohols, renewable fuels and essential ingredients. ● The strategic location of our Midwest production facilities . We operate three distinct but integrated production facilities at our Pekin Campus in the Midwest.
Our senior executives have successfully navigated a wide variety of business and industry-specific challenges and deeply understand the business of successfully producing and marketing specialty alcohols, renewable fuels and essential ingredients. -4- ● The strategic location of our Midwest production facilities . We operate three distinct but integrated production facilities at our Pekin Campus in the Midwest.
At the direction and with the involvement of our Sustainability and Governance board committees, we have established a Sustainability working committee that draws from our many administrative and operational departments to review key policies and procedures, conduct employee engagement surveys, champion volunteering and charitable drives, develop and implement formalized recruiting and training efforts to prioritize collecting data and improving on key metrics from industry frameworks such as the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) standards which are maintained by the International Sustainability Standards Board of the IFRS Foundation. - 14 -
At the direction and with the involvement of our Sustainability and Governance board committees, we have established a Sustainability working committee that draws from our many administrative and operational departments to review key policies and procedures, conduct employee engagement surveys, champion volunteering and charitable drives, develop and implement formalized recruiting and training efforts to prioritize collecting data and improve on key metrics from industry frameworks such as the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) standards which are maintained by the International Sustainability Standards Board of the IFRS Foundation. -14-
We also sell yeast and liquid CO 2 for human consumption. Our products for the Renewable Fuels markets include fuel-grade ethanol and distillers corn oil used as a feedstock for renewable diesel and biodiesel fuels.
We also sell yeast and gas and liquid CO 2 for human consumption. Our products for the Renewable Fuels markets include fuel-grade ethanol and distillers corn oil used as a feedstock for renewable diesel and biodiesel fuels.
We have an annual alcohol production capacity of 350 million gallons, including both renewable fuels and specialty alcohols ranging from industrial-, pharmaceutical-, and high-quality food- and beverage-grade alcohols. Of this amount, we can produce up to 110 million gallons annually of specialty alcohols, depending on our product mix among high-quality beverage-grade alcohol and other quality specification alcohols.
We have an annual alcohol production capacity of 330 million gallons, including both renewable fuels and specialty alcohols ranging from industrial-, pharmaceutical-, and high-quality food- and beverage-grade alcohols. Of this amount, we can produce up to 110 million gallons annually of specialty alcohols, depending on our product mix among high-quality beverage-grade alcohol and other quality specification alcohols.
These customers use our feed products for livestock as a substitute for corn and other sources of starch and protein. We sell our corn oil to poultry, renewable diesel and biodiesel customers. See “Note 4 – Segments” to our Notes to Consolidated Financial Statements included elsewhere in this report for financial information about our business segments.
These customers use our feed products for livestock as a substitute for corn and other sources of starch and protein. We sell our corn oil to poultry, renewable diesel and biodiesel customers. See “Note 5 – Segments” to our Notes to Consolidated Financial Statements included elsewhere in this report for financial information about our business segments.
E15 has historically been prohibited in most states during the summer driving season due to concerns over evaporative emissions and to meet federal clean air standards. For the 2024, 2023 and 2022 summer driving seasons, the EPA issued emergency fuel waivers to allow the sale of E15 to help alleviate high gasoline prices.
E15 has historically been prohibited in most states during the summer driving season due to concerns over evaporative emissions and to meet federal clean air standards. For the 2025, 2024 and 2023 summer driving seasons, the EPA issued emergency fuel waivers to allow the sale of E15 to help alleviate high gasoline prices.
Company History We are a Delaware corporation formed in 2005. Our common stock trades on The Nasdaq Capital Market under the symbol “ALTO.” Our Internet website address is http://www.altoingredients.com. Information contained on our website is not part of this Annual Report on Form 10-K.
Company History We are a Delaware corporation formed in 2005. Our common stock trades on The Nasdaq Capital Market under the symbol “ALTO.” Our Internet website address is http://www.altoingredients.com. In formation contained on our website is not part of this Annual Report on Form 10-K.
Our fuel-grade ethanol also competes on a global market against production from other countries, such as Brazil, which may have lower production costs than United States producers. Lower feedstock input costs such as sugarcane used in Brazil as compared to corn used in the Unites States may give foreign producers a competitive advantage.
Our fuel-grade ethanol also competes in a global market against production from other countries, such as Brazil, which may have lower production costs than United States producers. Lower feedstock input costs such as sugarcane used in Brazil as compared to corn used in the United States may give foreign producers a competitive advantage.
Products for Industry & Agriculture markets include alcohols and other products for paint applications, vehicle fluids and fertilizers. Products for Essential Ingredients markets include dried yeast, corn protein meal, corn protein feed, corn germ, distillers grains, liquid CO 2 and liquid feed used in commercial animal feed and pet foods.
Products for Industry & Agriculture markets include alcohols and other products for paint applications, inks, vehicle fluids and fertilizers. Products for Essential Ingredients markets include dried yeast, corn protein meal, corn protein feed, corn germ, distillers grains, gas and liquid CO 2 and liquid feed used in commercial animal feed and pet foods.
The fuel-grade ethanol industry in particular is supported by federal and state mandates and environmental regulations that favor the use of fuel-grade ethanol in motor fuel blends in North America. Some of the governmental regulations applicable to our production and marketing business are briefly described below.
The fuel-grade ethanol industry in particular is supported by federal and state mandates and environmental regulations that favor the use of fuel-grade ethanol in motor fuel blends. Some of the governmental regulations applicable to our production and marketing business are briefly described below.
Products for Health, Home & Beauty markets include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants and cleaners. Products for Food & Beverage markets include grain neutral spirits used in alcoholic beverages and vinegar and corn germ used for corn oils.
Products for Health, Home & Beauty markets include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants and cleaners. Products for Food & Beverage markets include grain neutral spirits used in alcoholic beverages and vinegar, as well as corn germ used for corn oils.
Our production facilities located in Oregon and Idaho are near their respective fuel and feed customers, offering significant timing, product transportation cost and logistical advantages. All of our production facilities, other than our Magic Valley plant, were operating for all of 2024, subject to scheduled and unscheduled downtimes to address facility repair and maintenance.
Our production facilities located in Oregon and Idaho are near their respective fuel and feed customers, offering significant timing, product transportation cost and logistical advantages. All of our production facilities, other than our Magic Valley plant, were operating for all of 2025, other than for scheduled and unscheduled downtimes to address facility repair and maintenance.
Food & Beverage Our products for the food and beverage market include specialty alcohols used in alcoholic beverages, flavor extracts and vinegar as well as corn germ used for corn oils and CO 2 used for beverage carbonation and dry ice. We offer grain neutral spirits, or GNS, alcohol as our primary specialty alcohol for beverage-grade products.
Food & Beverage Our products for the food and beverage market include specialty alcohols used in alcoholic beverages, flavor extracts and vinegar as well as corn germ used for corn oil and CO 2 gas used for beverage carbonation and dry ice. We offer grain neutral spirits, or GNS, as our primary specialty alcohol for beverage-grade products.
WDGS is sold to customers proximate to the plants and DDGS is delivered by truck, rail and barge to customers in domestic and international markets. Producing WDGS uses up to one-third less process energy, thus reducing production costs and lowering the carbon footprint of our Western production facilities.
Our facilities produce both WDGS and DDGS. WDGS is sold to customers proximate to the facilities and DDGS is delivered by truck, rail and barge to customers in domestic and international markets. Producing WDGS uses up to one-third less process energy, thus reducing production costs and lowering the carbon footprint of our Western production facilities.
Overall, we believe there are over 200 fuel-grade ethanol production facilities in the United States with a total installed production capacity of approximately 18 billion gallons and many brokers and marketers with whom we compete for sales of fuel-grade ethanol and its co-products.
Overall, we believe there are over 190 fuel-grade ethanol production facilities in the United States with a total installed production capacity of approximately 18.5 billion gallons and many brokers and marketers with whom we compete for sales of fuel-grade ethanol and its co-products.
We cannot predict the manner by which, or extent to which, these regulations will harm or help our business or the alcohol production and marketing industry in general. Human Capital Resources As of March 12, 2025, we had approximately 393 full-time employees. Our human capital resources objectives include attracting and retaining well-qualified and highly skilled and motivated employees and executives.
We cannot predict the manner by which, or extent to which, these regulations will harm or help our business or the alcohol production and marketing industry in general. Human Capital Resources As of March 12, 2026, we had approximately 390 full-time employees. Our human capital resources objectives include attracting and retaining well-qualified and highly skilled and motivated employees and executives.
We use a mix of competitive salaries and other benefits to attract and retain employees and executives. Some of these benefits include matching 401K contributions of up to 6% of salary, health and wellness programs and a paid service day for employees to give back to their communities.
We use a mix of competitive salaries and other benefits to attract and retain employees and executives. Some of these benefits include matching 401(k) contributions of up to 6% of salary, health and wellness programs and a paid service day for employees to give back to their communities.
These contracts generally run from year-to-year, subject to termination by either party upon advance written notice before the end of the then-current annual term. During 2024, 2023 and 2022, we purchased and resold from third parties an aggregate of approximately 108 million, 103 million and 118 million gallons, respectively, of fuel-grade ethanol.
These contracts generally run from year-to-year, subject to termination by either party upon advance written notice before the end of the then-current annual term. During 2025, 2024 and 2023, we purchased and resold from third parties an aggregate of approximately 107 million, 108 million and 103 million gallons, respectively, of fuel-grade ethanol.
Our Corporate and other segment, which includes Eagle Alcohol’s business, generated $11 million, $16 million and $16 million in net sales for the years ended December 31, 2024, 2023 and 2022, respectively, and sold 3.6 million, 4.0 million and 4.0 million gallons of alcohols, respectively, for those years.
Our Corporate and other segment, which includes Eagle Alcohol’s business, generated $7 million, $11 million and $16 million in net sales for the years ended December 31, 2025, 2024 and 2023, respectively, and sold 2.2 million, 3.6 million and 4.0 million gallons of alcohols, respectively, for those years.
We report our financial and operating performance in three distinct segments: ● Pekin production , which includes the production and sale of alcohols and essential ingredients produced at our three production facilities located in Pekin, Illinois, which we refer to as our Pekin Campus; ● Marketing and distribution , which includes marketing and merchant trading for company-produced alcohols and essential ingredients on an aggregated basis, and sales of fuel-grade ethanol sourced from third parties; and ● Western production , which includes the production and sale of renewable fuels and essential ingredients and, beginning in 2025, liquid CO 2, produced at our western production facilities, including our liquid CO 2 plant, on an aggregated basis, none of which are individually so significant as to be considered a separately reportable segment.
We report our financial and operating performance in three distinct segments: ● Pekin production , which includes the production and sale of alcohols and other products we refer to as “essential ingredients” described below, produced at our three production facilities located in Pekin, Illinois, which we refer to as our Pekin Campus; ● Marketing and distribution , which includes marketing and merchant trading for company-produced alcohols and essential ingredients on an aggregated basis, and sales of fuel-grade ethanol sourced from third parties; and ● Western production , which includes the production and sale of renewable fuels and essential ingredients produced at our Western production facilities, including our liquid CO 2 plant, on an aggregated basis, none of which are individually so significant as to be considered a separately reportable segment.
Our marketing and distribution segment generated $217 million, $263 million and $229 million in net sales for the years ended December 31, 2024, 2023 and 2022, respectively, from the sale of our own alcohols and third-party produced alcohols.
Our marketing and distribution segment generated $221 million, $217 million and $263 million in net sales for the years ended December 31, 2025, 2024 and 2023, respectively, from the sale of our own alcohols and third-party produced alcohols.
According to the United States Department of Energy, total annual gasoline consumption in the United States is approximately 137 billion gallons and total annual fuel-grade ethanol blended with gasoline represented approximately 10.4% of this amount in 2024.
According to the United States Department of Energy, total annual gasoline consumption in the United States is approximately 137 billion gallons and total annual fuel-grade ethanol blended with gasoline represented approximately 10.5% of this amount in 2025.
Our Pekin Campus production segment generated $169 million, $218 million and $226 million in net sales for the years ended December 31, 2024, 2023 and 2022, respectively, from the sale of essential ingredients.
Our Pekin Campus production segment generated $175 million, $169 million and $218 million in net sales for the years ended December 31, 2025, 2024 and 2023, respectively, from the sale of essential ingredients.
Under the Federal Food, Drug, and Cosmetic Act, or FDCA, the FDA regulates the processing, formulation, safety, manufacture, packaging, labeling and distribution of food ingredients, vitamins, cosmetics and pharmaceuticals for active and inactive ingredients. In 2022, The Modernization of Cosmetics Regulation Act (MoCRA) was added to the FDCA.
Under the Federal Food, Drug, and Cosmetic Act, or FDCA, the FDA regulates the processing, formulation, safety, manufacture, packaging, labeling and distribution of food ingredients, vitamins, cosmetics and pharmaceuticals for active and inactive ingredients. In 2022, The Modernization of Cosmetics Regulation Act (MoCRA) was enacted as part of the FDCA.
Our Western production segment generated $115 million, $167 million and $254 million in net sales for the years ended December 31, 2024, 2023 and 2022, respectively, from the sale of alcohols.
Our Western production segment generated $67 million, $115 million and $167 million in net sales for the years ended December 31, 2025, 2024 and 2023, respectively, from the sale of alcohols.
We have strong, extensive and long-standing close customer and supplier relationships, both domestic and international, for our specialty alcohols, renewable fuels and essential ingredients. We have an excellent reputation for developing specialty alcohols under stringent quality control standards.
Competitive Strengths We believe that our competitive strengths include: ● Strong customer and supplier relationships . We have strong, extensive and long-standing close customer and supplier relationships, both domestic and international, for our specialty alcohols, renewable fuels and essential ingredients. We have an excellent reputation for developing specialty alcohols under stringent quality control standards.
We market our essential ingredient feed products to dairies and feedlots, in many cases located near our production facilities. These customers use our feed products for livestock as a substitute for corn and other sources of starch and protein.
We market our essential ingredient feed products to dairies and feedlots, in many cases located near our production facilities. These customers use our feed products for livestock as a substitute for corn and other sources of starch and protein. We sell our corn oil to poultry, renewable diesel and biodiesel customers.
We also produce and sell liquid CO 2 . The raw materials for our essential ingredients are generated as co-products from our production of alcohols. These co-products are further manufactured, altered and refined into our essential ingredients, including for special customer applications.
The raw materials for our essential ingredients are generated as co-products from our production of alcohols. These co-products are further manufactured, altered and refined into our essential ingredients, including for special customer applications.
During 2024, 2023 and 2022, we produced or purchased from third parties and resold an aggregate of 386 million, 383 million and 419 million gallons of alcohols to approximately 85, 88 and 114 customers, respectively.
During 2025, 2024 and 2023, we produced or purchased from third parties and resold an aggregate of 350 million, 386 million and 383 million gallons of alcohols to approximately 82, 85 and 88 customers, respectively.
Increases in regional corn basis and declining market prices for protein and corn oil resulted in overall margin compression, outweighing the economic benefits of our plant improvements. As a consequence, we cold-idled our Magic Valley facility on December 31, 2024 to minimize financial losses.
Increases in regional corn basis and declining market prices for protein and corn oil resulted in overall margin compression, outweighing the economic benefits of our plant improvements. As a consequence, we cold-idled our Magic Valley facility for all of 2025 and through the filing of this report to minimize financial losses.
We are evaluating and plan to implement new equipment and technologies to increase our production yields, improve our operating efficiencies and reliability, reduce our overall carbon footprint, diversify our products and revenues, and increase our profitability as financial resources and market conditions Left these investments. ● Evaluate and pursue strategic opportunities . We are exploring opportunities to expand our business.
We are evaluating and plan to implement new equipment and technologies to increase our production yields, improve our operating efficiencies and reliability, reduce our overall carbon footprint, diversify our products and revenues, and increase our profitability as financial resources and market conditions justify these investments.
For example, fuel-grade ethanol prices, as reported by the Chicago Mercantile Exchange, or CME, ranged from $1.38 to $2.12 per gallon during 2024, from $1.58 to $2.67 per gallon during 2023 and from $2.00 to $2.88 per gallon during 2022; and corn prices, as reported by the CME, ranged from $3.62 to $4.71 per bushel during 2024, from $4.50 to $6.85 per bushel during 2023 and from $5.64 to $8.18 per bushel during 2022.
For example, fuel-grade ethanol prices, as reported by the Chicago Mercantile Exchange, or CME, ranged from $1.57 to $2.07 per gallon during 2025, from $1.38 to $2.12 per gallon during 2024 and from $1.58 to $2.67 per gallon during 2023; and corn prices, as reported by the CME, ranged from $3.72 to $5.02 per bushel during 2025, from $3.62 to $4.71 per bushel during 2024 and from $4.50 to $6.85 per bushel during 2023.
We believe the financial benefits under the Inflation Reduction Act and the substantial additional economic benefits of the environmental attributes associated with low carbon ethanol will result in excellent returns on investment.
We believe the financial benefits under the Inflation Reduction Act and the One Big Beautiful Bill Act and the substantial additional economic benefits of the environmental attributes associated with low carbon ethanol will result in excellent returns on investment. ● Focus on our customer relationships.
Renewable Fuels Energy Legislation Under the RFS, the mandated use of all renewable fuels, including fuel-grade ethanol, rose incrementally and peaked at 36.0 billion gallons in 2022, of which 15.0 billion gallons are required from conventional, or corn-based, ethanol for 2025.
Renewable Fuels Energy Legislation Under the RFS, the mandated use of all renewable fuels, including fuel-grade ethanol, rose incrementally and peaked at 36 billion gallons in 2022, including an implied 15 billion gallons of conventional, or corn-based, ethanol.
We market and distribute all of the alcohols produced at our facilities as well as alcohols produced by third parties. In 2024, we marketed and distributed approximately 386 million gallons combined of our own produced alcohols as well as fuel-grade ethanol produced by third parties, and over 1.4 million tons of essential ingredients on a dry matter basis.
We market and distribute all of the alcohols produced at our facilities as well as alcohols produced by third parties. In 2025, we marketed and distributed approximately 350 million gallons combined of our own produced alcohols as well as fuel-grade ethanol produced by third parties, and over 1.2 million tons of essential ingredients.
After steeping, the grain is coarse milled to gently open the kernels to separate the corn germ and from which corn oil is further extracted in a separate process.
After steeping, the grain is coarse milled to gently open the kernels to separate the corn germ and from which corn oil is further extracted in a separate process. The remaining fiber, protein and starch components are further separated and sold.
Our specialty alcohols for the Industry & Agriculture, Food & Beverage and Health, Home & Beauty markets represented approximately 12%, 7% and 3%, respectively, of our sales in 2024 from these three markets. We produce our alcohols and essential ingredients at our facilities described below.
Our specialty alcohols for the Industry & Agriculture, Food & Beverage and Health, Home & Beauty markets represented approximately 11%, 6% and 2%, respectively, of our sales in 2025 to customers in these three markets. We produce our alcohols and essential ingredients at our facilities described below.
We believe the key drivers in the food and beverage market include consumer preferences for the social currency of brand authenticity and heritage; consumers seeking unique and personalized experiences; improved consumer access to spirits products; the growth of craft distillers; and the ability to meet wide-ranging consumer preferences through a broad diversity of spirits categories and cocktails.
We believe the key drivers in the food and beverage market include consumer preferences for the social currency of brand authenticity and heritage; consumers seeking unique and personalized experiences; improved consumer access to spirits products; and the ability to meet wide-ranging consumer preferences through a broad diversity of spirits categories and cocktails. -5- Industry & Agriculture Our products for the industry and agriculture market include alcohols and other products for paint applications, inks, vehicle fluids and fertilizers.
The largest producers of fuel-grade ethanol in the United States are POET, LLC, Valero Renewable Fuels Company, LLC, Archer-Daniels-Midland Company and Green Plains Inc., collectively with approximately 39% of the total installed fuel-grade ethanol production capacity in the United States.
Together with many smaller producers, these companies account for a significant majority of the total installed specialty alcohol production capacity in the United States. -11- The largest producers of fuel-grade ethanol in the United States are POET, LLC, Valero Renewable Fuels Company, LLC, Archer-Daniels-Midland Company and Green Plains Inc., collectively with approximately 39% of the total installed fuel-grade ethanol production capacity in the United States.
Business Strategy The key elements of our business and growth strategy include: ● Focus on our customer relationships. Our primary business focus is to expand the production and sale of specialty alcohols and essential ingredients. Our business is now more service-oriented and focused on specialty products that yield premium prices compared to commodity products that yield predominantly passive, market-driven prices.
Our primary business focus is to expand the production and sale of specialty alcohols and essential ingredients. We are service-oriented and focus our efforts on specialty products that yield premium prices compared to commodity products that yield predominantly passive, market-driven prices.
During 2024, 2023 and 2022, our Pekin Campus production segment sold an aggregate of approximately 214 million, 209 million and 205 million gallons of alcohols and 906,300, 878,400, and 850,300 tons of essential ingredients, respectively, on a dry matter basis.
During 2025, 2024 and 2023, our Pekin Campus production segment sold an aggregate of approximately 208 million, 214 million and 209 million gallons of alcohols and 919,600, 906,300 and 878,400 tons of essential ingredients, respectively.
During 2024, 2023 and 2022, purchases of fuel-grade ethanol from our four largest third-party suppliers represented 79%, 86% and 69%, respectively, of our total third-party ethanol purchases for each of those periods. Purchases from each of our other third-party ethanol suppliers represented less than 10% of total third-party ethanol purchases in each of 2024, 2023 and 2022.
During 2025, 2024 and 2023, purchases of fuel-grade ethanol from our three largest third-party suppliers represented 74%, 79% and 86%, respectively, of our total third-party ethanol purchases for each of those periods.
As a result, the wet milling process generates a higher level of cost recovery from corn than that produced at a dry mill. ◾ Our Midwest location allows us deep market insight and engagement in major specialty alcohol, fuel-grade ethanol, pet food and feed markets, thereby improving pricing opportunities. ◾ Our Midwest location sits atop the Mount Simon formation, identified as one of the best and largest carbon storage locations in the country potentially allowing us to benefit from this close proximity to store CO 2 .
As a result, the wet milling process generates a higher level of cost recovery from corn than that produced at a dry mill. ● Our Midwest location allows us deep market insight and engagement in major specialty alcohol, fuel-grade ethanol, pet food and feed markets, thereby improving pricing opportunities.
We sell our corn oil to poultry, renewable diesel and biodiesel customers. - 8 - Our Pekin Campus production segment generated $416 million, $502 million and $521 million in net sales for the years ended December 31, 2024, 2023 and 2022, respectively, from the sale of alcohols.
Our Pekin Campus production segment generated $416 million, $416 million and $502 million in net sales for the years ended December 31, 2025, 2024 and 2023, respectively, from the sale of alcohols.
For 2024, 2023 and 2022, sales to our two largest customers, Chevron Products USA and Shell Trading (US) Company represented an aggregate of approximately 18%, 16% and 20% of our net sales, respectively. For 2024, 2023 and 2022, sales to each of our other customers represented less than 10% of our net sales.
For 2025, 2024 and 2023, sales to our largest customer, Chevron Products USA represented an aggregate of approximately 9%, 11% and 9% of our net sales, respectively. For 2025, 2024 and 2023, sales to each of our other customers represented less than 10% of our net sales.
During 2024, 2023 and 2022, purchases of corn from our three largest suppliers represented an aggregate of approximately 29%, 26% and 38% of our total corn purchases, respectively, for those periods.
During 2025, 2024 and 2023, purchases of corn from our two largest suppliers represented an aggregate of approximately 28%, 29% and 26% of our total corn purchases, respectively, for those periods. Purchases from each of our other corn suppliers represented less than 10% of total corn purchases in each of 2025, 2024 and 2023.
We have extensive and long-standing customer relationships, both domestic and international, for our specialty alcohols and essential ingredients. These customers include producers and distributors of ingredients for cosmetics, sanitizers and related products, distilled spirits producers, food products manufacturers, producers of personal health/consumer health and personal care hygiene products, and global trading firms.
These customers include producers and distributors of ingredients for cosmetics, sanitizers and related products, distilled spirits producers, food products manufacturers, producers of personal health/consumer health and personal care hygiene products, and global trading firms.
Production Facilities We operate five alcohol production facilities. Three of our production facilities are located in Illinois, one is located in Oregon and another is located in Idaho. We have an annual alcohol production capacity of up to 350 million gallons, including both fuel-grade ethanol and specialty alcohols ranging from industrial-, pharmaceutical-, and high-quality food- and beverage-grade alcohols.
We have an annual alcohol production capacity of up to 330 million gallons, including both fuel-grade ethanol and specialty alcohols ranging from industrial-, pharmaceutical-, and high-quality food- and beverage-grade alcohols.
The EPA set its annual requirement for conventional ethanol to 15.0 billion gallons for 2025. See “—Governmental Regulation.” - 6 - According to the Renewable Fuels Association, the domestic fuel-grade ethanol industry produced over 16.1 billion gallons of ethanol in 2024, up from 15.5 billion gallons of ethanol in 2023.
See “—Governmental Regulation.” According to the Renewable Fuels Association, the domestic fuel-grade ethanol industry produced approximately 16.4 billion gallons of ethanol in 2025, up from approximately 16.1 billion gallons of ethanol in 2024.
We also own and operate a liquid carbon dioxide, or CO 2 , production facility adjacent to our plant in Oregon for the offtake of CO 2 gas from the plant for conversion to liquid CO 2 and subsequent sale. We acquired this facility on January 1, 2025.
We also own and operate a liquid carbon dioxide, or CO 2 , production facility adjacent to our plant in Oregon for the offtake of CO 2 gas from the plant for conversion to liquid CO 2 and subsequent sale. In addition, we break bulk and distribute specialty alcohols, produced by us and third parties.
Industry & Agriculture Our products for the industry and agriculture market include alcohols and other products for paint applications, vehicle fluids and fertilizers. Essential Ingredients Our essential ingredients include dried yeast, corn protein meal, corn protein feed, and distillers grains and liquid feed used in commercial animal feed and pet foods. In addition, we sell yeast for human consumption.
Essential Ingredients Our essential ingredients include dried yeast, corn protein meal, corn protein feed, and distillers grains and liquid feed used in commercial animal feed and pet foods. In addition, we sell yeast for human consumption. We also produce and sell gas and liquid CO 2 .
Purchases from each of our other corn suppliers represented less than 10% of total corn purchases in each of 2024, 2023 and 2022. - 9 - Marketing and Distribution Segment Our marketing and distribution operations include alcohols and essential ingredients we produce but also depend upon various third-party producers of fuel-grade ethanol.
Marketing and Distribution Segment Our marketing and distribution operations include alcohols and essential ingredients we produce but also depend upon various third-party producers of fuel-grade ethanol.
The protein component is separated from the starch, filtered and dried to produce corn protein meal, a product with greater than 60% protein content. The starch component is processed into alcohol through fermentation. The fermentation process for alcohol at this stage is similar to the dry milling process. In addition, we separate and dry yeast to produce distillers yeast.
The stillage from the fermentation process is concentrated in an evaporator and is co-dried with the fiber component and sold as corn protein feed. The protein component is separated from the starch, filtered and dried to produce corn protein meal, a product with greater than 60% protein content. The starch component is processed into alcohol through fermentation.
Overview of Distillers Grains Market Distillers grains are produced as a co-product of alcohol production and are valuable components of feed rations primarily to dairies and beef cattle markets, both nationally and internationally. Our plants produce both WDGS and DDGS.
The fermentation process for alcohol at this stage is similar to the dry milling process. In addition, we separate and dry yeast to produce distillers yeast. -7- Overview of Distillers Grains Market Distillers grains are produced as a co-product of alcohol production and are valuable components of feed rations primarily to dairies and beef cattle markets, both nationally and internationally.
Our Western production segment generated $37 million, $57 million and $90 million in net sales for the years ended December 31, 2024, 2023 and 2022, respectively, from the sale of essential ingredients.
Our Western production segment generated $32 million, $37 million and $57 million in net sales for the years ended December 31, 2025, 2024 and 2023, respectively, from the sale of essential ingredients. -8- During 2025, 2024 and 2023, our Western production segment sold an aggregate of approximately 33 million, 61 million and 67 million gallons of alcohols and 299,600, 514,600 and 642,300 tons of essential ingredients, respectively.
Health, Home & Beauty Our products for the health, home and beauty markets include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants and cleaners.
Health, Home & Beauty Our products for the health, home and beauty markets include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants and cleaners. We offer a variety of specialty alcohols for the health, home and beauty markets, depending on usage and regulatory requirements, including API-grade or USP-grade ethyl alcohols, and industrial-grade ethyl alcohol.
We also market and distribute alcohols produced by third parties. - 11 - Competition We are a leading producer of specialty alcohols in the United States.
We also market and distribute alcohols produced by third parties. Competition We are a leading producer of specialty alcohols in the United States. Other significant producers of specialty alcohols in the United States are Archer-Daniels-Midland Company, Grain Processing Corporation, Golden Triangle Energy, CIE and Greenfield Global Inc.
Our senior management team has a proven track record with significant operational and financial expertise and many years of experience in the alcohol production industry.
Our specialized equipment, technologies and processes, together with our quality management certifications, strict regulatory requirements, and close customer and supplier relationships create significant barriers to entry to new market participants. ● Our experienced management . Our senior management team has a proven track record with significant operational and financial expertise and many years of experience in the alcohol production industry.
Under the provisions of the Energy Independence and Security Act of 2007, the EPA has the authority to waive the mandated RFS requirements in whole or in part.
The EPA set the implied conventional renewable fuel volume at 15 billion gallons for each of 2023, 2024 and 2025 and has proposed to maintain that level for 2026 and 2027. Under the provisions of the Energy Independence and Security Act of 2007, the EPA has the authority to waive the mandated RFS requirements in whole or in part.
In particular, our ICH Q7 certification qualifies our specialty alcohols for use as an API, and our EXCiPACT certification qualifies our specialty alcohols for use as an excipient in the pharmaceutical industry. These certifications enable us to offer products to a wider group of customers and generally at more profitable margins.
These certifications enable us to offer products to a wider group of customers and generally at more profitable margins.
E15 may, however, be sold year-round in states that have a reformulated gasoline program. In addition, the EPA proposed in late 2023 that E15 be permitted for sale year-round in various Midwestern states effective in April 2024. The U.S.
E15 may, however, be sold year-round in states that have a reformulated gasoline program.
Our liquid CO 2 facility and our food-grade yeast plant are both FSSC 22000 certified, meeting the Global Food Safety Initiative (GFSI) benchmarking requirements. In addition, we maintain ISO 9001, ICH Q7 and EXCiPACT certifications for all United States Pharmacopia, or USP, grade alcohol products.
For example, in 2025, we acquired a liquid CO 2 production facility located adjacent to our Oregon plant and now offer liquid CO 2 for sale. Our liquid CO 2 facility and our food-grade yeast plant are both FSSC 22000 certified, meeting the Global Food Safety Initiative (GFSI) benchmarking requirements.
We offer a variety of specialty alcohols for the health, home and beauty markets, depending on usage and regulatory requirements, including API-grade or USP-grade ethyl alcohols, and industrial-grade ethyl alcohol. - 5 - We have ISO 9001, FSSC 22000, ICH Q7 and EXCiPACT certifications, all of which are viewed as important attestations of quality control standards.
We have ISO 9001, FSSC 22000, ICH Q7 and EXCiPACT certifications, all of which are viewed as important attestations of quality control standards. In particular, our ICH Q7 certification qualifies our specialty alcohols for use as an API, and our EXCiPACT certification qualifies our specialty alcohols for use as an excipient in the pharmaceutical industry.
Office of Management and Budget approved the proposal in February 2024 but deferred the effective date to April 2025. - 13 - Various states including California, Oregon and Washington, and other regions such as the Canadian province of British Columbia, have implemented low carbon fuel standards focused on reducing the carbon intensity of transportation fuels.
In February 2024, the EPA issued a final rule approving the petitions of eight Midwestern states—Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin—to permit the sale of E15 year-round with an effective date in April 2025, except that the EPA has extended the effective date to April 2026 for Ohio and nine counties in South Dakota. -13- Various states including California, Oregon and Washington, and other regions such as the Canadian province of British Columbia, have implemented low carbon or clean fuel standard programs focused on reducing the carbon intensity of transportation fuels.
As market conditions change, we may increase, decrease or idle production at one or more operating facilities or resume operations at any idled facility. Marketing and Distribution Segment We market and distribute all the alcohols and essential ingredients we produce at our facilities. We also market and distribute alcohols produced by third parties.
We continue to provide ethanol terminaling services at the plant and may resume operations at the facility if the economic environment in the region sustainably improves. As market conditions change, we may increase, decrease or idle production at one or more operating facilities or resume operations at any idled facility.
Our production facilities use specialized equipment, technologies and processes to achieve stringent quality controls, higher yields and efficient production of alcohols and essential ingredients. Our specialized equipment, technologies and processes, together with our quality management certifications, strict regulatory requirements, and close customer and supplier relationships create significant barriers to entry to new market participants. ● Our experienced management .
We also offer a wide variety of essential ingredients and other products for food, feed and other markets. ● Barriers to entry . Our production facilities use specialized equipment, technologies and processes to achieve stringent quality controls, higher yields and efficient production of alcohols and essential ingredients.
We strive to make our business ever more customer-centric to enable our premium services to support premium prices and new differentiated and higher-margin products. ● Implement carbon capture and storage at our Pekin Campus, lowering our carbon footprint .
We strive to make our business ever more customer-centric to enable our premium services to support premium prices and new differentiated and higher-margin products. -3- ● Expand product offerings. We are pursuing initiatives to broaden our product offerings to appeal to a wider range of customers and uses in our key markets.
We offer multiple alcohol quality grades ranging from industrial-grade alcohol to the highest beverage grade low moisture 200 proof alcohol available. We also offer a wide variety of essential ingredients and other products for food, feed and other markets. - 4 - ● Barriers to entry .
We offer multiple alcohol quality grades ranging from industrial-grade alcohol to the highest beverage grade low moisture 200 proof alcohol available. In addition, we offer renewable fuel, including International Sustainability and Carbon Certification, or ISCC, fuel-grade ethanol for export to Europe.
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In addition, we break bulk and distribute specialty alcohols, produced by us and third parties, through our Eagle Alcohol business.
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Marketing and Distribution Segment We market and distribute all the alcohols and essential ingredients we produce at our facilities. We also market and distribute alcohols produced by third parties. We have extensive and long-standing customer relationships, both domestic and international, for our specialty alcohols, renewable fuels and essential ingredients.
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We continue to provide terminal services at the plant and intend to resume operations at the facility when the economic environment in the region sustainably improves. We believe that the cold-idling of our Magic Valley facility will have a positive impact on our overall financial results in 2025 compared to 2024.
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Business Strategy The key elements of our business and growth strategy include: ● Pursue further carbon strategies.
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The Inflation Reduction Act of 2022 raised the carbon capture tax credit to $85 per metric ton, reflecting the section 45Q tax incentive benefits established under the Act. Section 45Z low carbon fuel tax credits are also available under the Act.
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The Inflation Reduction Act of 2022, taken together with more recent changes made under the One Big Beautiful Bill Act increased the carbon capture tax credit to $85 per metric ton, providing enhanced section 45Q incentives for carbon capture, utilization, and storage projects, or CCUS.
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We produce over 600,000 metric tons of CO 2 per year at our Pekin Campus, which sits atop the Mount Simon formation, identified as one of the best and largest carbon storage locations in the country. We are prioritizing our carbon capture and storage, or CCS, project over other long-term capital projects.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

60 edited+18 added−16 removed90 unchanged
Biggest changeIn addition, our indebtedness could: ● make it more difficult to repay or refinance our indebtedness if it becomes due during adverse economic and industry conditions; ● result in adverse consequences due to a breach of our financial or other covenants and obligations in favor of our lenders; ● limit our flexibility to pursue strategic opportunities or react to changes in our business and the industries in which we operate and, consequently, place us at a competitive disadvantage to our competitors who have less debt; ● require a substantial portion of our cash flows from operations for debt service payments, thereby reducing the availability of our cash flows to fund working capital, additional capital expenditures, acquisitions, dividend payments and for other general corporate purposes; or ● limit our ability to procure additional financing for working capital or other purposes.
Biggest changeIn addition, our indebtedness could: ● require a substantial portion of our cash flows from operations for debt service payments, thereby reducing the availability of our cash flows to fund working capital, additional capital expenditures, acquisitions, dividend payments and for other general corporate purposes; make it more difficult to repay or refinance our indebtedness if it becomes due during adverse economic and industry conditions; ● limit our flexibility to pursue strategic opportunities or react to changes in our business and the industries in which we operate and, consequently, place us at a competitive disadvantage to our competitors who have less debt; ● limit our ability to procure additional financing for working capital or other purposes; or ● result in adverse consequences due to a breach of our financial or other covenants and obligations in favor of our lenders.
Our expected financial and other results from these projects are based on assumptions around many factors, including their costs, timing, operation and market prices prevailing at project completion and thereafter, as well as tax and other favorable environmental attributes associated with low carbon alcohol that may accrue to our benefit.
Our expected financial and other results from these initiatives and projects are based on assumptions around many factors, including their costs, timing, operation and market prices prevailing at project completion and thereafter, as well as tax and other favorable environmental attributes associated with low carbon alcohol that may accrue to our benefit.
As a result, inflation and sustained higher prices may have a material adverse effect on our results of operations and financial condition. Climate change, and governmental regulations aimed at addressing climate-related issues, may affect conditions to which our business is highly sensitive, many of which could materially and adversely harm our business, results of operations and financial condition.
As a result, inflation and sustained higher prices may have a material adverse effect on our results of operations and financial condition. -18- Climate change, and governmental regulations aimed at addressing climate-related issues, may affect conditions to which our business is highly sensitive, many of which could materially and adversely harm our business, results of operations and financial condition.
Failure to achieve our expected results may have a material adverse effect on our business, financial condition and results of operations. - 20 - We regularly incur significant expenses to repair, maintain and upgrade our production facilities and operating equipment, and any interruption in our operations would harm our operating performance.
Failure to achieve our expected results may have a material adverse effect on our business, financial condition and results of operations. We regularly incur significant expenses to repair, maintain and upgrade our production facilities and operating equipment, and any interruption in our operations would harm our operating performance.
There can be no assurance that any such appreciation will occur. Our bylaws contain exclusive forum provisions that could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
There can be no assurance that any such appreciation will occur. -27- Our bylaws contain exclusive forum provisions that could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
For example, for the year ended December 31, 2023, we recognized net losses of $8.0 million related to the change in the fair values of hedging contracts.
For example, for the year ended December 31, 2023, we recognized net losses of $8.0 million related to the aggregate change in the fair values of hedging contracts.
If any of these types of security breaches were to occur and we were unable to protect sensitive data, our relationships with our business partners and customers could be materially damaged, our reputation could be materially harmed, and we could be exposed to a risk of litigation and possible significant liability. - 27 - Further, if we fail to adequately maintain our information technology infrastructure, we may have outages and data loss.
If any of these types of security breaches were to occur and we were unable to protect sensitive data, our relationships with our business partners and customers could be materially damaged, our reputation could be materially harmed, and we could be exposed to a risk of litigation and possible significant liability. -28- Further, if we fail to adequately maintain our information technology infrastructure, we may have outages and data loss.
These views could also negatively impact public perception of the fuel-grade ethanol industry and acceptance of ethanol as an alternative fuel. - 24 - There are limited markets for fuel-grade ethanol beyond those established by federal mandates. Discretionary blending and E85 blending (i.e., gasoline blended with up to 85% fuel-grade ethanol by volume) are important secondary markets.
These views could also negatively impact public perception of the fuel-grade ethanol industry and acceptance of ethanol as an alternative fuel. -25- There are limited markets for fuel-grade ethanol beyond those established by federal mandates. Discretionary blending and E85 blending (i.e., gasoline blended with up to 85% fuel-grade ethanol by volume) are important secondary markets.
Additional losses and negative operating cash flow may hamper our operations and impede us from expanding our business. - 19 - We are engaged in multiple capital improvement projects. These projects, and their financing, costs, timing and effects, are based on our plans, expectations and various assumptions that may not eventuate.
Additional losses and negative operating cash flow may hamper our operations and impede us from expanding our business. We are engaged in multiple capital improvement initiatives and projects. These initiatives and projects, and their financing, costs, timing and effects, are based on our plans, expectations and various assumptions that may not eventuate.
In general, an ownership change occurs when stockholders owning 5% or more of a corporation entitled to use NOL or other loss carryforwards have increased their ownership by more than 50 percentage points during any three-year period.
In general, an ownership change occurs when one or more stockholders each owning 5% or more of a corporation entitled to use NOL or other loss carryforwards have increased their ownership by more than 50 percentage points during any three-year period.
Prices and supplies are subject to and determined by numerous market and other forces over which we have no control, such as inclement or favorable weather, domestic and global demand, supply excesses or shortages, export conditions, inflationary conditions, global geopolitical tensions and various governmental policies in the United States and throughout the world.
Prices and supplies are subject to and determined by numerous market and other forces over which we have no control, such as inclement or favorable weather, domestic and global demand, supply excesses or shortages, import and export conditions (including tariffs), inflationary conditions, global geopolitical tensions and various governmental policies in the United States and throughout the world.
Less industry-favorable rulemaking and agency interpretations of laws and regulations could materially and adversely affect our results of operations, cash flows and financial condition as well as the financial prospects of certain capital improvement projects, such as CCS.
Less industry-favorable rulemaking and agency interpretations of laws and regulations could materially and adversely affect our results of operations, cash flows, and financial condition, as well as the financial prospects of certain capital improvement projects.
We have experienced adverse inflationary impacts on key production inputs, wages and other costs of labor, equipment, services, and other business expenses. In addition, we have experienced adverse inflationary impacts on our budgets and expenses for many of our in-process and planned capital projects. Inflation and its negative impacts could escalate in future periods.
We have experienced adverse inflationary impacts on key production inputs, wages and other costs of labor, equipment, services and other business expenses. In addition, we have experienced adverse inflationary impacts on our budgets and expenses for many of our in-process and planned capital projects. Inflation, including through tariffs, and its negative impacts could escalate in future periods.
Higher natural gas prices would likewise increase our production input costs. - 18 - Other factors that may result from climate change, or that may result from governmental regulations aimed at addressing climate-related issues, may also adversely affect our business, including the following: ● water is one of our key production inputs; water resource limitations may result from drought and other inclement weather; water resource limitations may also result from rationing and other governmental regulations limiting water use; ● higher water temperatures due to increased global or regional temperatures may negatively affect production efficiencies due to water temperature production requirements given the limited cooling capacities of our older facilities; ● flooding and other inclement weather may negatively affect our river access, other transportation logistics and costs, and storage requirements; ● an overall increase in energy costs will negatively impact our production costs generally and may critically impact certain high energy-intensive production technologies, such as our wet milling and multiple distillation processes for the highest quality specialty alcohols; ● regulatory and market transition away from combustion fuels and fuel-grade ethanol blending may threaten the viability of our renewable fuels business; and ● costs and regulatory burdens associated with governmental regulations that limit or tax greenhouse gas emissions, such as CO 2 , from alcohol production and distribution, or from truck transport and packaging associated with Eagle Alcohol’s business and use of drums and totes, will negatively impact us.
Other factors that may result from climate change, or that may result from governmental regulations aimed at addressing climate-related issues, may also adversely affect our business, including the following: ● water is one of our key production inputs; water resource limitations may result from drought and other inclement weather; water resource limitations may also result from rationing and other governmental regulations limiting water use; ● higher water temperatures due to increased global or regional temperatures may negatively affect production efficiencies due to water temperature production requirements given the limited cooling capacities of our older facilities; ● flooding and other inclement weather may negatively affect our river access, other transportation logistics and costs, and storage requirements; ● an overall increase in energy costs will negatively impact our production costs generally and may critically impact certain high energy-intensive production technologies, such as our wet milling and multiple distillation processes for the highest quality specialty alcohols; ● regulatory and market transition away from combustion fuels and fuel-grade ethanol blending may threaten the viability of our renewable fuels business; and ● costs and regulatory burdens associated with governmental regulations that limit or tax greenhouse gas emissions, such as CO 2 , from alcohol production and distribution, will negatively impact us.
To partially offset the effects of production input and product price volatility, in particular, corn and natural gas costs and fuel-grade ethanol prices, we may enter into contracts to purchase a portion of our corn or natural gas requirements on a forward basis or fix the sale price of portions of our alcohol production.
To partially offset the effects of production input and product price volatility, in particular, corn and natural gas costs and fuel-grade ethanol prices, we may enter into contracts to purchase a portion of our corn or natural gas requirements on a forward basis or to lock in the premium to fuel-grade ethanol market prices on portions of our alcohol production.
Our fuel-grade ethanol sales are tied to prevailing spot market prices rather than long-term, fixed-price contracts. Fuel-grade ethanol prices, as reported by the Chicago Mercantile Exchange, ranged from $1.38 to $2.12 per gallon in 2024, from $1.58 to $2.67 per gallon in 2023 and from $2.00 to $2.88 per gallon in 2022.
Our fuel-grade ethanol sales are tied to prevailing spot market prices rather than long-term, fixed-price contracts. Fuel-grade ethanol prices, as reported by the Chicago Mercantile Exchange, ranged from $1.57 to $2.07 per gallon in 2025, $1.38 to $2.12 per gallon in 2024 and from $1.58 to $2.67 per gallon in 2023.
In addition, certain provisions of the Inflation Reduction Act lack proposed or final regulations and guidance. Regulators could issue new regulations or guidance that significantly narrows the application of clean energy tax incentives, and could even defer or withdraw regulations, which could materially and adversely affect the economic outcome of our CCS project.
In addition, certain provisions of the Inflation Reduction Act lack proposed or final regulations and guidance. Regulators could issue new regulations or guidance that significantly narrows the application of clean energy tax incentives, and could even defer or withdraw regulations, which could materially and adversely affect the economic outcome of our capital improvement initiatives and projects.
We restarted the Magic Valley facility in July 2024, but due to challenging market economics, we cold-idled the plant at the end of 2024. In addition, some of our fuel-grade ethanol marketing and distribution activities will likely be unprofitable in a market of generally declining prices due to the nature of our business.
We restarted the Magic Valley facility in July 2024, but due to challenging market economics, we cold-idled the plant at the end of 2024, which remains idled. -15- In addition, some of our fuel-grade ethanol marketing and distribution activities for third-party gallons will likely be unprofitable in a market of generally declining prices due to the nature of our business.
For example, we recognized asset impairments of $24.8 million and $6.5 million for the years ended December 31, 2024 and 2023, respectively. We may recognize additional impairments of the values of our long-lived assets in the future based on then-prevailing financial and other circumstances. Impairments of our long-lived assets may materially and adversely affect our results of operations.
For example, we recognized asset impairments of $0.8 million, $24.8 million and $6.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. We may recognize additional impairments of the values of our long-lived assets in the future based on then-prevailing financial and other circumstances.
We may therefore be unable to timely achieve, or achieve at all, the results we expect, including as to projected additional EBITDA and Adjusted EBITDA. We are engaged in multiple capital improvement projects to diversify and enhance our revenue streams and to expand margins and profitability by reducing costs. These projects have different timelines, returns on investment and risk profiles.
We may therefore be unable to timely achieve, or achieve at all, the results we expect. We are engaged in multiple capital improvement initiatives and projects to diversify and enhance our revenue streams and to expand margins and profitability by reducing costs. These initiatives and projects have different timelines, returns on investment and risk profiles, including regulatory risks.
In addition, we believe that additional consumer acceptance of E15 and E85 fuels is necessary before fuel-grade ethanol can achieve any significant growth in market share relative to other transportation fuels. The United States Supreme Court’s decision in the case of Chevron U.S.A., Inc. v.
In addition, we believe that additional consumer acceptance of E15 and E85 fuels is necessary before fuel-grade ethanol can achieve any significant growth in market share relative to other transportation fuels. The United States Supreme Court’s decision in the case of Loper Bright Enterprises v.
In addition, governmental regulators may disfavor carbon-based energy sources, such as natural gas, leading to regulations that disincentivize their use or otherwise make their production more difficult and costly, driving up their prices.
In addition, governmental regulators may disfavor carbon-based energy sources, such as natural gas, leading to regulations that disincentivize their use or otherwise make their production more difficult and costly, driving up their prices. Higher natural gas prices would likewise increase our production input costs.
The market price of our common stock may continue to fluctuate in response to one or more of the following factors, or any of the other risks or uncertainties discussed in this report, many of which are beyond our control: ● fluctuations in our quarterly or annual operating results; ● fluctuations in the market prices of our products; ● fluctuations in the costs of key production input commodities such as corn and natural gas; ● the timing, cost and effects of, and our ability to fund, our capital improvement projects, including our CCS project; ● anticipated trends in our financial condition and results of operations; ● our ability to obtain any necessary financing; - 25 - ● the volume and timing of the receipt of orders for our products from major customers, including annual contracted sales volumes for our specialty alcohols; ● competitive pricing pressures; ● changes in market valuations of companies similar to us; ● stock market price and volume fluctuations generally; ● regulatory developments or increased enforcement; ● additions or departures of key personnel; ● environmental, product or other liabilities we may incur; ● our financing activities and future sales of our common stock or other securities; and ● our ability to maintain contracts that are critical to our operations.
The market price of our common stock may continue to fluctuate in response to one or more of the following factors, or any of the other risks or uncertainties discussed in this report, many of which are beyond our control: ● fluctuations in our quarterly or annual operating results; ● fluctuations in the market prices of our products; ● fluctuations in the costs of key production input commodities such as corn and natural gas; ● the timing, cost and effects of, and our ability to fund, our capital improvement projects; ● regulatory developments or increased enforcement relating to our initiatives and projects or to our business; -26- ● our ability to qualify for and receive Section 45Z tax credits under the Inflation Reduction Act of 2022 for low carbon fuel, including in the anticipated amounts and at the expected times; ● anticipated trends in our financial condition and results of operations; ● our ability to obtain any necessary financing; ● the volume and timing of the receipt of orders for our products from major customers, including annual contracted sales volumes for our specialty alcohols; ● competitive pricing pressures; ● changes in market valuations of companies similar to us; ● stock market price and volume fluctuations generally; ● additions or departures of key personnel; ● environmental, product or other liabilities we may incur; ● our financing activities and future sales of our common stock or other securities; and ● our ability to maintain contracts that are critical to our operations.
We expect to rely on cash on hand, cash, if any, generated from our operations, borrowing availability under our lines of credit and proceeds from our future financing activities, if any, to fund all of the cash requirements of our business.
We may incur losses and negative operating cash flow in the future. We expect to rely on cash on hand, cash, if any, generated from our operations, borrowing availability under our lines of credit and proceeds from our future financing activities, if any, to fund all of the cash requirements of our business.
Court of Appeals for the Fifth Circuit, in the fourth quarter of 2023, struck down the EPA’s decision to deny numerous small refinery waivers, finding that the EPA’s denials were impermissibly retroactive, contrary to law and counter to evidence in the litigation record.
Court of Appeals for the Fifth Circuit, in November 2023, struck down the EPA’s decision to deny numerous small refinery exemption petitions, holding that the EPA’s denials were impermissibly retroactive, contrary to law and counter to evidence in the litigation record.
The EPA finalized mandatory volumes of 15.0 billion gallons for each of 2023, 2024, and 2025 of conventional renewable fuels, or corn-based fuel-grade ethanol, which could decline in future years.
The EPA finalized mandatory volumes of 15 billion gallons for each of 2025, 2024 and 2023 of conventional renewable fuels, or corn-based fuel-grade ethanol, and has proposed mandatory volumes of 15 billion gallons for each of 2026 and 2027, which could decline for those or other future years.
For example, for the years ended December 31, 2024, 2023 and 2022, we incurred consolidated net losses of approximately $59.0 million, $28.0 million and $41.6 million, respectively. For the year ended December 31, 2024, we incurred negative operating cash flow of $3.5 million. We may incur losses and negative operating cash flow in the future.
We have incurred significant losses and negative operating cash flow in the past. For example, for the years ended December 31, 2024 and 2023, we incurred consolidated net losses of approximately $59.0 million and $28.0 million, respectively. For the year ended December 31, 2024, we incurred negative operating cash flow of $3.5 million.
Future demand for fuel-grade ethanol will largely depend on incentives to blend ethanol into motor fuels, including the price of ethanol relative to the price of gasoline, the relative octane value of ethanol, constraints on the ability of vehicles to use higher ethanol blends, and the EPA’s, established volumes from time to time, small refinery waivers, and other applicable environmental requirements.
Future demand for fuel-grade ethanol will largely depend on incentives to blend ethanol into motor fuels, including the price of ethanol relative to the price of gasoline, the relative octane value of ethanol, constraints on the ability of vehicles to use higher ethanol blends, and the EPA’s established volumes from time to time, small refinery waivers, and other applicable environmental requirements. -24- The EPA has implemented the Renewable Fuel Standard under the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007.
Our failure to timely service or satisfy our debt obligations, including to meet our financial covenants, could result in our indebtedness being immediately due and payable, and would have a material adverse effect on our business, business prospects, liquidity, financial condition, cash flows and results of operations. - 21 - Our ability to utilize net operating loss carryforwards and certain other tax attributes may be limited.
Our failure to timely service or satisfy our debt obligations, including to meet our financial covenants, could result in our indebtedness being immediately due and payable, and would have a material adverse effect on our business, business prospects, liquidity, financial condition, cash flows and results of operations.
Events that result in significant personal injury or damage to our property or third parties or other losses that are not fully covered by insurance could have a material adverse effect on our results of operations and financial condition. Our CCS project may be adversely affected by the SAFE CCS Act and other Regulations.
Events that result in significant personal injury or damage to our property or third parties or other losses that are not fully covered by insurance could have a material adverse effect on our results of operations and financial condition. -23- We may be adversely affected by food and drug laws and regulations, as well as related liabilities that may not be adequately covered by insurance.
Federal and state income tax laws impose restrictions on our use of net operating loss, or NOL, and tax credit carryforwards in the event that an “ownership change” occurs for tax purposes, as defined by section 382 of the Internal Revenue Code, or Code.
Our ability to utilize net operating loss carryforwards and certain other tax attributes may be limited. Federal and state income tax laws impose restrictions on our ability to use net operating loss, or NOL, and tax credit carryforwards if an “ownership change” occurs for tax purposes, as defined in Section 382 of the Internal Revenue Code, or Code.
New legislation in the United States to address climate change issues, especially at the state and local levels, may be passed and implemented, materially and adversely impacting our business. Any of these factors could materially and adversely harm our business, results of operations and financial condition.
New legislation in the United States to address climate change issues, especially at the state and local levels, may be passed and implemented, materially and adversely impacting our business.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Delaware Court of Chancery shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of us to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, or (d) any action asserting a claim governed by the internal affairs doctrine. - 26 - Our bylaws also provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by applicable law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the Securities Act, including all causes of action asserted against any defendant named in such complaint, including our officers and directors, underwriters for any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
Our bylaws also provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by applicable law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the Securities Act, including all causes of action asserted against any defendant named in such complaint, including our officers and directors, underwriters for any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
Events that result in significant personal injury or other losses that are not fully covered by insurance could have a material adverse effect on our results of operations and financial condition. - 23 - The United States fuel-grade ethanol industry is highly dependent upon various federal and state laws and regulations and any changes in or reinterpretations of those laws or regulations could have a material adverse effect on our results of operations, cash flows and financial condition.
The United States fuel-grade ethanol industry is highly dependent upon various federal and state laws and regulations and any changes in or reinterpretations of those laws or regulations could have a material adverse effect on our results of operations, cash flows and financial condition.
Risks Related to our Finances We have incurred significant losses and negative operating cash flow in the past and we may incur losses and negative operating cash flow in the future, which may hamper our operations and impede us from expanding our business. We have incurred significant losses and negative operating cash flow in the past.
Any of these factors could materially and adversely harm our business, results of operations and financial condition. -19- Risks Related to our Finances We have incurred significant losses and negative operating cash flow in the past and we may incur losses and negative operating cash flow in the future, which may hamper our operations and impede us from expanding our business.
This outcome could also materially and adversely affect the Treasury Department’s ability to promulgate favorable regulations under the Inflation Reduction Act of 2022, including tax credits such as the section 45Q carbon capture and storage tax credits and section 45Z low carbon fuel tax credits, as well as other industry-favorable tax credits.
It could also materially and adversely affect the Treasury Department’s ability to promulgate and sustain favorable regulations under the Inflation Reduction Act of 2022, including regulations implementing tax credits such as the Section 45Z clean fuel production tax credit, as well as other industry-favorable tax credits.
Competitors and other third parties have undertaken research to develop competing products to corn-based alcohols, and ethanol in particular, as well as new process technologies.
We produce our alcohols from corn and our plants are constructed and operate primarily as corn-based alcohol production facilities. Competitors and other third parties have undertaken research to develop competing products to corn-based alcohols, and ethanol in particular, as well as new process technologies.
Natural Resources Defense Council, Inc. may result in less industry-favorable rulemaking and agency interpretations of laws and regulations, which could materially and adversely affect our results of operations, cash flows and financial condition as well as the business and financial prospects of certain capital improvement projects, such as CCS.
Raimondo may result in less industry-favorable rulemaking and agency interpretations of laws and regulations, which could materially and adversely affect our results of operations, cash flows and financial condition as well as the business and financial prospects of certain capital improvement projects. In June 2024, the United States Supreme Court, in Loper Bright Enterprises v.
In the third quarter of 2023 we experienced unusually high unscheduled production downtime for repairs and maintenance at our Pekin Campus which reduced sales volumes and increased losses.
In the first quarter of 2024, production at our Columbia facility was hampered by equipment issues that extended the facility’s regularly scheduled outage. In the third quarter of 2023 we experienced unusually high unscheduled production downtime for repairs and maintenance at our Pekin Campus which reduced sales volumes and increased losses.
To be properly marketed and sold in the United States, a relevant product must be generally recognized as safe, approved and not adulterated or misbranded under the FDCA and relevant regulations issued under the FDCA.
Many of the FDA’s and FDCA’s rules and regulations apply directly to us as well as indirectly through their application in our customers’ products. To be properly marketed and sold in the United States, a relevant product must be generally recognized as safe, approved and not adulterated or misbranded under the FDCA and relevant regulations issued under the FDCA.
In addition, we must raise significant additional capital to complete some of our projects, including our CCS project.
In addition, we may have to raise significant additional capital to complete some of our initiatives and projects.
We also can provide no assurances that our project assumptions will reflect prevailing future conditions or that our projects will achieve the results we expect, including as to projected additional EBITDA and Adjusted EBITDA.
We can provide no assurances that our projects will be completed, or if completed, will be completed timely or within budget. We also can provide no assurances that our project assumptions will reflect prevailing future conditions or that our projects will achieve the results we expect.
As protection against operating hazards, we maintain insurance coverage against some, but not all, potential losses. However, we could sustain losses for uninsurable or uninsured risks, or in amounts in excess of existing insurance coverages.
However, we could sustain losses for uninsurable or uninsured risks, or in amounts in excess of existing insurance coverages.
Moreover, we procure much of our fuel-grade ethanol inventory outside of contracted third-party marketing and distribution arrangements and therefore must buy fuel-grade ethanol at a price established at the time of purchase and sell fuel-grade ethanol at an index price established later at the time of sale that is generally reflective of movements in the market price of fuel-grade ethanol.
When quantities in excess of our own production are needed to meet customer demand, we procure fuel-grade ethanol from third parties and therefore must buy fuel-grade ethanol at a price established at the time of purchase and sell fuel-grade ethanol at an index price established later at the time of sale that is generally reflective of movements in the market price of fuel-grade ethanol.
In the past, poor weather has caused disruptions in rail transportation, which slowed the delivery of fuel-grade ethanol and/or corn by rail to and from our facilities. For example, in the first quarter of 2024, extreme cold weather conditions in January at our Pekin Campus restricted barge deliveries and increased standby fees.
In the past, poor weather has caused disruptions in rail transportation, which slowed the delivery of fuel-grade ethanol and/or corn by rail to and from our facilities.
Present and future environmental laws and regulations, and interpretations of those laws and regulations, applicable to our operations, more vigorous enforcement policies and discovery of currently unknown conditions may require substantial expenditures that could have a material adverse effect on our results of operations and financial condition. - 22 - The hazards and risks associated with producing and transporting our products (including fires, natural disasters, explosions and abnormal pressures and blowouts) may also result in personal injury claims or damage to property and third parties.
Present and future environmental laws and regulations, and interpretations of those laws and regulations, applicable to our operations, more vigorous enforcement policies and discovery of currently unknown conditions may require substantial expenditures that could have a material adverse effect on our results of operations and financial condition.
The FDA regulates, under the Federal Food, Drug, and Cosmetic Act, or FDCA, the processing, formulation, safety, manufacture, packaging, labeling and distribution of food ingredients, vitamins, cosmetics and pharmaceuticals for active and inactive ingredients. Many of the FDA’s and FDCA’s rules and regulations apply directly to us as well as indirectly through their application in our customers’ products.
Some of our products are subject to regulation by the U.S. Food and Drug Administration, or FDA, as well as similar state agencies. The FDA regulates, under the Federal Food, Drug, and Cosmetic Act, or FDCA, the processing, formulation, safety, manufacture, packaging, labeling and distribution of food ingredients, vitamins, cosmetics and pharmaceuticals for active and inactive ingredients.
Our indebtedness may expose us to risks that could negatively impact our business, prospects, liquidity, cash flows and results of operations. We have incurred, and anticipate incurring additional, substantial indebtedness for our capital improvement projects. We expect that these projects, when completed, will generate financial returns sufficient to service and ultimately repay or refinance our indebtedness.
We have incurred substantial indebtedness for our capital improvement projects. We expect that these projects, when completed, will generate financial returns sufficient to service and ultimately repay or refinance our indebtedness. However, the costs, timing, and effects of our capital improvement projects may not meet our projections.
As a result, our margins for fuel-grade ethanol sold in these transactions generally decline and may turn negative as the market price of fuel-grade ethanol declines. - 15 - We can provide no assurances that corn, natural gas or other production inputs can be purchased at or near current or any specific prices, or that our alcohols or essential ingredients will sell at or near current or any particular prices.
We can provide no assurances that corn, natural gas or other production inputs can be purchased at or near current or any specific prices, or that our alcohols or essential ingredients will sell at or near current or any particular prices.
Our alcohol production relies on traditional corn-based feedstock and process technologies. New technologies could make corn-based alcohol production and traditional process technologies less competitive or even obsolete, materially and adversely harming our business. We produce our alcohols from corn. Moreover, our plants are constructed and operate primarily as corn-based alcohol production facilities.
Impairments of our long-lived assets may materially and adversely affect our results of operations. Our alcohol production relies on traditional corn-based feedstock and process technologies. New technologies could make corn-based alcohol production and traditional process technologies less competitive or even obsolete, materially and adversely harming our business.
Some legislative bills are directed at halting or reversing expansion of, or even eliminating in its entirety, the renewable fuel program.
Various bills in Congress introduced from time to time are also directed at altering existing renewable fuels energy legislation, but none have passed in recent years. Some legislative bills are directed at halting or reversing expansion of, or even eliminating in its entirety, the renewable fuel program.
Risks Related to Legal and Regulatory Matters We may be adversely affected by environmental, health and safety laws and regulations, as well as related liabilities that may not be adequately covered by insurance .
Any such limitation could result in increased future tax obligations, which could have a material adverse effect on our financial condition and results of operations. -22- Risks Related to Legal and Regulatory Matters We may be adversely affected by environmental, health and safety laws and regulations, as well as related liabilities that may not be adequately covered by insurance .
For example, we completed our biennial wet mill outage at our Pekin Campus in Spring 2024. The wet mill was offline for ten days, which negatively impacted sales and margins for the second quarter. In the first quarter of 2024, production at our Colombia facility was hampered by equipment issues that extended the facility’s regularly scheduled outage.
In addition, our production facilities require periodic shutdowns to perform major maintenance and upgrades. Our production facilities also occasionally require unscheduled shutdowns to perform repairs. For example, we completed our biennial wet mill outage at our Pekin Campus in Spring 2024. The wet mill was offline for ten days, which negatively impacted sales and margins for the second quarter.
To manage inventory levels, we transported more product by rail, a higher cost mode of transportation. Cold weather conditions also required us to shift to lower margin feed products and reduced our production rates across our Pekin Campus, hindering our ability to produce specialty alcohol at full capacity.
Cold weather conditions also required us to shift to lower margin feed products and reduced our production rates across our Pekin Campus, hindering our ability to produce specialty alcohol at full capacity. In the third quarter of 2023 we experienced unusually high unscheduled production downtime for repairs and maintenance which reduced sales volumes and profits.
We regularly incur significant expenses to repair, maintain and upgrade our production facilities and operating equipment, estimated at an average of $30.0 million per year. We incurred $35.0 million of these expenses for 2024. The machines and equipment we use to produce our alcohols and essential ingredients are complex, have many parts, and some operate on a continuous basis.
We regularly incur significant expenses to repair, maintain and upgrade our production facilities and operating equipment, estimated at an average of $30.0 million per year. For the years ended December 31, 2025, 2024 and 2023, we incurred $30.1 million, $34.6 million and $29.5 million, respectively.
We must perform routine equipment maintenance and must periodically replace a variety of parts such as motors, pumps, pipes and electrical parts, and engage in other repairs. In addition, our production facilities require periodic shutdowns to perform major maintenance and upgrades. Our production facilities also occasionally require unscheduled shutdowns to perform repairs.
The machines and equipment we use to produce our alcohols and essential ingredients are complex, have many parts, and some operate on a continuous basis. We must perform routine equipment maintenance and must periodically replace a variety of parts such as motors, pumps, pipes and electrical parts, and engage in other repairs.
We can provide no assurances that any particular benefit will be available to us upon completion of our CCS project, or thereafter, or any other capital improvement project. Capital improvement projects require significant outlays of capital and are often subject to material execution risks and delays.
We can provide no assurances that any particular benefit will be available to us upon completion of any capital improvement initiative or project. -20- We may have insufficient financial resources, and we may be unable to raise sufficient capital, to complete our projects timely or at all.
Our ability to utilize our NOL and other loss carryforwards may be substantially limited. These limitations could result in increased future tax obligations, which could have a material adverse effect on our financial condition and results of operations.
As a result, our ability to utilize our NOL and other loss carryforwards may be substantially limited.
The EPA may issue small refinery waivers, in full or in part, to reduce or eliminate annual renewable fuel volume requirements for small refineries that process fewer than 75,000 barrels of petroleum daily. In the past, the EPA has issued small refinery waivers that have materially and adversely affected overall demand for and the price of fuel-grade ethanol. The U.S.
If granted, these exemptions can remove the affected refinery’s gasoline and diesel from applicable RFS percentage standards for the relevant compliance year. In the past, the EPA has granted small refinery exemptions that have materially and adversely affected overall demand for and the price of fuel-grade ethanol. The U.S.
This outcome could materially and adversely affect rulemaking and agencies’ interpretations favorable to the renewable fuels industry, such as the EPA’s administration of the Renewable Fuel Standard.
Raimondo, overruled its prior Chevron doctrine, which had required courts to defer to reasonable administrative interpretations of ambiguous federal statutes. This outcome could increase litigation risk and uncertainty around rulemaking and agency interpretations that are favorable to the renewable fuels industry, such as the EPA’s administration of the RFS.
Removed
In the third quarter of 2023 we experienced unusually high unscheduled production downtime for repairs and maintenance which reduced sales volumes and profits.
Added
As a result, our margins for fuel-grade ethanol sold in these transactions generally decline and may turn negative as the market price of fuel-grade ethanol declines.
Removed
In 2022, a lightning strike at the utility servicing our Pekin Campus disrupted our operations, cutting power to our facilities and materially affecting our production, resulting in unexpected repair and maintenance costs, lost production and degradation in the quality of work-in-progress inventories.
Added
For example, in late April 2025, during a period of rapidly rising river levels, our loadout dock at our Pekin Campus was damaged, negatively impacting production and logistics, and requiring our use of more costly third-party river transload vendors to minimize business interruption.
Removed
For example, our assumptions around the anticipated results of our CCS project rely heavily on the tax benefits that may accrue to us under the Inflation Reduction Act of 2022 as well as other favorable environmental attributes associated with carbon capture and storage and low carbon alcohol production.
Added
In addition, in the first quarter of 2024, extreme cold weather conditions in January at our Pekin Campus restricted barge deliveries and increased standby fees. To manage inventory levels, we transported more product by rail, a higher cost mode of transportation.
Removed
Our CCS project in particular requires Environmental Protection Agency, or EPA, approval but the EPA’s own projected timeline for approval has lengthened and may lengthen further. We may have insufficient financial resources, and we may be unable to raise sufficient capital, to complete our projects timely or at all.
Added
We may be unable to qualify for and receive anticipated Section 45Z tax credit benefits available to low carbon fuel producers.
Removed
In addition, our CCS project may be adversely affected by the SAFE CCS Act or the United States Supreme Court’s decision in the case of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., or both, as discussed below. The timing and economics of our CCS project may also be adversely affected by new rules proposed by the U.S.
Added
Section 45Z of the Inflation Reduction Act of 2022 provides a technology-neutral tax credit for the production of “clean fuel” that is produced in the United States and sold to an unrelated person during calendar years 2025 through 2029, with the amount of the credit determined in part by the fuel’s carbon intensity relative to a statutory baseline.
Removed
Department of Transportation’s Pipeline and Hazardous Materials Safety Administration that impose stronger standards for CO 2 pipelines and establish new standards for transporting CO 2 in a gaseous state via pipeline, adding additional requirements and costs to the project. We can provide no assurances that our projects will be completed, or if completed, will be completed timely or within budget.
Added
We currently expect our Columbia plant and our Pekin Campus dry mill to be eligible to apply for and claim Section 45Z tax credits with respect to qualifying fuel they produce and sell.
Removed
However, the costs, timing, and effects of our capital improvement projects may not meet our projections.
Added
Our ability to qualify for and receive these tax credits will depend on, among other things, our ability to produce qualifying low carbon fuel in anticipated volumes, to achieve and document the carbon intensity levels required under Section 45Z and applicable Treasury and IRS guidance, and to comply with related registration, measurement, reporting and substantiation requirements.
Removed
The SAFE CCS Act was signed into law in Illinois in July 2024. We are pursuing at our Pekin Campus, located in Illinois, a CCS project that will require significant financial and personnel resources. Our CCS project is our most important ongoing capital improvement initiative.
Added
If we are unable to produce low carbon fuel in anticipated amounts (including as a result of plant outages or other operational issues), if our fuels do not achieve the required or expected carbon intensities under the applicable carbon intensity methodology, or if we fail to satisfy applicable tax, regulatory, or documentation requirements, we may be unable to qualify for and receive Section 45Z tax credits in the amounts we currently anticipate, or at all, which could materially and adversely affect our results of operations and financial condition.
Removed
The SAFE CCS Act establishes stringent safety, financial and insurance requirements on CO 2 pipelines and imposes a moratorium on the construction of new CO 2 pipelines until the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration finalizes its new safety rules or July 1, 2026, whichever occur sooner.
Added
In addition, Section 45Z is scheduled to be available only for qualifying fuel produced and sold from January 1, 2025 through December 31, 2029, and there can be no assurance that Congress will extend or replace this credit. -21- Our indebtedness may expose us to risks that could negatively impact our business, prospects, liquidity, cash flows and results of operations.
Removed
The SAFE CCS Act will result in increased compliance and other requirements likely adding costs and potentially adding time to complete our CCS project. In January 2025, the U.S.
Added
For example, our Pekin Campus used coal as its primary source of fuel for steam production until 2016. We managed associated waste in part through a coal ash pond, an engineered impoundment site used to store waste byproducts.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Management and Strategy We maintain a cybersecurity program aligned with NIST CSF standards designed to identify critical assets and vulnerabilities, protect them with appropriate safeguards, promptly detect cybersecurity events, respond effectively to mitigate their impact and recover from incidents to restore services. Our cybersecurity program is designed to safeguard the confidentiality, integrity and availability of information.
Biggest changeWe align our policies, standards and practices with these benchmarks and dynamically refine them to address evolving cybersecurity threats. -29- Risk Management and Strategy We maintain a cybersecurity program aligned with NIST CSF standards designed to identify critical assets and vulnerabilities, protect them with appropriate safeguards, promptly detect cybersecurity events, respond effectively to mitigate their impact and recover from incidents to restore services.
Our Chief Financial Officer and Director of Information Technology, along with key executives, have roles in governance and facilitating alignment across our organization. - 28 - ● Compliance and Standards: We design our cybersecurity program for compliance with industry-specific and other regulations (e.g., the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA)) demonstrating our commitment to both domestic and international information security standards.
Our Chief Financial Officer and Director of Information Technology, along with key executives, have roles in governance and facilitating alignment across our organization. ● Compliance and Standards: We design our cybersecurity program for compliance with industry-specific and other regulations (e.g., the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA)) demonstrating our commitment to both domestic and international information security standards.
As of the filing of this report, we do not believe that any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect, Alto Ingredients, Inc. Governance ● We take a comprehensive and forward-looking approach to cybersecurity risk management under the oversight of our Audit Committee.
As of the filing of this report, we do not believe that any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect Alto Ingredients, Inc. -30- Governance ● We take a comprehensive and forward-looking approach to cybersecurity risk management under the oversight of our Audit Committee.
Management is notified of, and monitors, cybersecurity incidents through our EDR and SIEM systems. ● Our Director of Information Technology has over 20 years of experience in information technology and five years of experience serving directly as a Chief Information Security Officer for other organizations. - 29 - ● Our networks and systems are continuously monitored by a combination of third-party service providers and an internal cybersecurity team.
Management is notified of, and monitors, cybersecurity incidents through our EDR and SIEM systems. ● Our Director of Information Technology has over 20 years of experience in information technology and five years of experience serving as a Virtual Chief Information Security Officer for other organizations. ● Our networks and systems are continuously monitored by a combination of third-party service providers and an internal cybersecurity team.
Our cybersecurity framework is rooted in the National Institute of Standards and Technology, or NIST, Cybersecurity Framework, or CSF, as well as the International Organization for Standardization (ISO/IEC 27001), reflecting our commitment to uphold the highest cybersecurity standards. We align our policies, standards and practices with these benchmarks and dynamically refine them to address evolving cybersecurity threats.
Our cybersecurity framework is rooted in the National Institute of Standards and Technology, or NIST, Cybersecurity Framework, or CSF, as well as the International Organization for Standardization and the International Electrotechnical Commission (ISO/IEC 27001), reflecting our commitment to uphold the highest cybersecurity standards.
Our cybersecurity risk management strategy includes: ● Governance: The Audit Committee of our Board of Directors oversees our cybersecurity risk management.
Our cybersecurity program is designed to safeguard the confidentiality, integrity and availability of information. Our cybersecurity risk management strategy includes: ● Governance: The Audit Committee of our Board of Directors oversees our cybersecurity risk management.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters, located in Pekin, Illinois, consists of plants and facilities comprising our Pekin Campus production segment and totaling 145 acres on land we own. In Sacramento, California, we lease office space totaling approximately 3,400 square feet under a lease expiring in 2026. In St.
Biggest changeItem 2. Properties. Our corporate headquarters, located in Pekin, Illinois, consists of plants and facilities comprising our Pekin Campus production segment totaling 145 acres on land we own. In Sacramento, California, we lease office space totaling approximately 3,400 square feet under a lease expiring in July 2026. In St.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 4. Mine Safety Disclosures. Not applicable. - 30 - PART II
Biggest changeItem 4. Mine Safety Disclosures. Not applicable. -31- PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeYears Ended 12/2019 12/2020 12/2021 12/2022 12/2023 12/2024 Alto Ingredients, Inc. 100.00 835.38 740.00 443.08 409.23 240.00 Nasdaq Composite 100.00 144.92 177.06 119.45 172.77 223.87 Nasdaq Clean Edge Green Energy 100.00 284.83 277.30 193.70 174.51 141.58 - 31 - Dividend Policy We have never paid cash dividends on our common stock and do not intend to pay cash dividends on our common stock in the foreseeable future.
Biggest changeYears Ended 12/2020 12/2021 12/2022 12/2023 12/2024 12/2025 Alto Ingredients, Inc. 100.00 88.58 53.04 48.99 28.73 53.04 Nasdaq Composite 100.00 122.18 82.43 119.22 154.48 187.14 Nasdaq Clean Edge Green Energy 100.00 97.36 68.01 61.27 49.71 65.63 -32- Dividend Policy We have never paid cash dividends on our common stock and do not intend to pay cash dividends on our common stock in the foreseeable future.
For 2024, 2023 and 2022, we declared and paid cash dividends on our outstanding shares of Series B Preferred Stock as they became due. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved] Not Applicable.
For 2025, 2024 and 2023, we declared and paid cash dividends on our outstanding shares of Series B Preferred Stock as they became due. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved] Not Applicable.
Performance Graph The graph below shows a comparison of the cumulative total stockholder return on our common stock with the cumulative total return on The Nasdaq Composite Index and The Nasdaq Clean Edge Green Energy Index, or Peer Group, in each case over the five-year period ended December 31, 2024.
Performance Graph The graph below shows a comparison of the cumulative total stockholder return on our common stock with the cumulative total return on The Nasdaq Composite Index and The Nasdaq Clean Edge Green Energy Index, or Peer Group, in each case over the five-year period ended December 31, 2025.
This graph assumes that the value of the investment in our common stock and each of the comparison groups was $100 on December 31, 2019.
This graph assumes that the value of the investment in our common stock and each of the comparison groups was $100 on December 31, 2020.
These holders of record include depositories that hold shares of stock for brokerage firms which, in turn, hold shares of stock for numerous beneficial owners. On March 12, 2025, the closing sales price of our common stock on The Nasdaq Capital Market was $1.39 per share.
These holders of record include depositories that hold shares of stock for brokerage firms which, in turn, hold shares of stock for numerous beneficial owners. On March 12, 2026, the closing sales price of our common stock on The Nasdaq Capital Market was $4.75 per share.
Security Holders As of March 12, 2025, we had 76,611,090 shares of common stock outstanding held of record by approximately 305 stockholders and 896 shares of non-voting common stock outstanding held of record by one stockholder.
Security Holders As of March 12, 2026, we had 77,292,548 shares of common stock outstanding held of record by approximately 280 stockholders and 896 shares of non-voting common stock outstanding held of record by one stockholder.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Selected Financial Information The following selected financial information should be read in conjunction with our consolidated financial statements and notes to our consolidated financial statements included elsewhere in this report, and the other sections of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in this report. - 39 - Certain performance metrics that we believe are important indicators of our results of operations include: Certain performance metrics that we believe are important indicators of our results of operations include the following: Percentage Change Years Ended December 31, 2024 vs 2023 vs 2024 2023 2022 2023 2022 Alcohol Sales (gallons in millions) Pekin Campus renewable fuel gallons sold 125.7 136.2 116.1 (8 )% 17 % Western production renewable fuel gallons sold 60.5 67.0 92.4 (10 )% (27 )% Third-party renewable fuel gallons sold 108.3 102.6 117.9 6 % (13 )% Total renewable fuel gallons sold 294.5 305.8 326.4 (4 )% (6 )% Specialty alcohol gallons sold 91.5 76.7 92.5 19 % (17 )% Total gallons sold 386.0 382.5 418.9 1 % (9 )% Sales Price per Gallon Pekin Campus $ 1.95 $ 2.40 $ 2.55 (19 )% (6 )% Western production $ 1.91 $ 2.49 $ 2.75 (23 )% (9 )% Marketing and distribution $ 2.00 $ 2.56 $ 2.83 (22 )% (10 )% Total $ 1.95 $ 2.47 $ 2.64 (21 )% (6 )% Alcohol Production (gallons in millions) Pekin Campus 212.4 209.7 208.8 1 % 0 % Western production 58.7 68.1 91.2 (14 )% (25 )% Total 271.1 277.8 300.0 (2 )% (7 )% Corn Cost per Bushel Pekin Campus $ 4.45 $ 6.32 $ 7.32 (30 )% (14 )% Western production $ 5.73 $ 7.45 $ 8.97 (23 )% (17 )% Total $ 4.72 $ 6.58 $ 7.77 (28 )% (15 )% Average Market Metrics PLATTS Ethanol price per gallon $ 1.69 $ 2.22 $ 2.47 (24 )% (10 )% CME Corn cost per bushel $ 4.24 $ 5.64 $ 6.94 (25 )% (19 )% Board corn crush per gallon (1) $ 0.18 $ 0.21 $ 0.00 (14 )% — Essential Ingredients Sold (in thousands of tons) Pekin Campus Distillers grains 336.4 332.7 334.4 1 % (1 )% CO 2 188.6 182.4 164.8 3 % 11 % Corn wet feed 121.8 95.0 89.9 28 % 6 % Corn dry feed 87.2 90.6 81.6 (4 )% 11 % Corn oil and germ 75.1 73.8 66.7 2 % 11 % Syrup and other 38.6 41.2 56.9 (6 )% (28 )% Corn meal 35.4 36.8 32.1 (4 )% 15 % Yeast 23.2 25.9 23.9 (10 )% 8 % Total Pekin Campus 906.3 878.4 850.3 3 % 3 % Western production Distillers grains 394.5 459.7 643.7 (14 )% (29 )% CO 2 57.7 119.1 77.4 (52 )% 54 % Syrup and other 54.8 55.5 55.8 (1 )% (1 )% Corn oil 7.6 8.0 10.2 (5 )% (22 )% Total Western Production 514.6 642.3 787.1 (20 )% (18 )% Total Essential Ingredients Sold 1,420.9 1,520.7 1,637.4 (7 )% (7 )% Essential Ingredients return % (2) Pekin Campus Return 49.7 % 45.7 % 41.3 % 9 % 11 % Western Production Return 32.0 % 33.4 % 31.6 % (4 )% 6 % Consolidated Total Return 45.2 % 42.4 % 37.9 % 7 % 12 % (1) Assumes corn conversion of 2.80 gallons of alcohol per bushel of corn.
Biggest changeResults of Operations Selected Financial Information The following selected financial information should be read in conjunction with our consolidated financial statements and notes to our consolidated financial statements included elsewhere in this report, and the other sections of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in this report. -39- Certain performance metrics that we believe are important indicators of our results of operations include the following: Percentage Change Years Ended December 31, 2025 vs 2024 vs 2025 2024 2023 2024 2023 Alcohol Sales (gallons in millions) Pekin Campus renewable fuel gallons sold 122.6 125.7 136.2 (2 )% (8 )% Western production renewable fuel gallons sold 32.6 60.5 67.0 (46 )% (10 )% Third-party renewable fuel gallons sold 106.9 108.3 102.6 (1 )% 6 % Total renewable fuel gallons sold 262.1 294.5 305.8 (11 )% (4 )% Specialty alcohol gallons sold 88.0 91.5 76.7 (4 )% 19 % Total gallons sold 350.1 386.0 382.5 (9 )% 1 % Sales Price per Gallon Pekin Campus $ 2.00 $ 1.95 $ 2.40 3 % (19 )% Western production $ 2.06 $ 1.91 $ 2.49 8 % (23 )% Marketing and distribution $ 2.07 $ 2.00 $ 2.56 3 % (22 )% Total $ 2.02 $ 1.95 $ 2.47 4 % (21 )% Alcohol Production (gallons in millions) Pekin Campus 215.3 212.4 209.7 1 % 1 % Western production 32.9 58.7 68.1 (44 )% (14 )% Total 248.2 271.1 277.8 (8 )% (2 )% Corn Cost per Bushel Pekin Campus $ 4.54 $ 4.45 $ 6.32 2 % (30 )% Western production $ 5.62 $ 5.73 $ 7.45 (2 )% (23 )% Total $ 4.68 $ 4.72 $ 6.58 (1 )% (28 )% Average Market Metrics PLATTS Ethanol price per gallon $ 1.76 $ 1.69 $ 2.22 4 % (24 )% CME Corn cost per bushel $ 4.39 $ 4.24 $ 5.64 4 % (25 )% Board corn crush per gallon (1) $ 0.19 $ 0.18 $ 0.21 6 % (14 )% Essential Ingredients Sold (in thousands of tons) Pekin Campus Distillers grains 337.6 336.4 332.7 — % 1 % CO 2 192.2 188.6 182.4 2 % 3 % Corn wet feed 107.3 121.8 95.0 (12 )% 28 % Corn dry feed 106.9 87.2 90.6 23 % (4 )% Corn oil and germ 78.0 75.1 73.8 4 % 2 % Syrup and other 36.4 38.6 41.2 (6 )% (6 )% Corn meal 36.8 35.4 36.8 4 % (4 )% Yeast 24.4 23.2 25.9 5 % (10 )% Total Pekin Campus 919.6 906.3 878.4 1 % 3 % Western Production Distillers grains 235.3 394.5 459.7 (40 )% (14 )% CO 2 56.5 57.7 119.1 (2 )% (52 )% Syrup and other 3.5 54.8 55.5 (94 )% (1 )% Corn oil 4.3 7.6 8.0 (43 )% (5 )% Total Western Production 299.6 514.6 642.3 (42 )% (20 )% Total Essential Ingredients Sold 1,219.2 1,420.9 1,520.7 (14 )% (7 )% Essential Ingredients return % (2) Pekin Campus Return 49.3 % 49.7 % 45.7 % (1 )% 9 % Western Production Return 50.4 % 32.0 % 33.4 % 58 % (4 )% Consolidated Total Return 49.5 % 45.2 % 42.4 % 10 % 7 % (1) Assumes corn conversion of 2.80 gallons of alcohol per bushel of corn.
We are not able to provide a quantitative reconciliation of forward-looking EBITDA or Adjusted EBITDA to forward-looking consolidated net income (loss) because certain items required for reconciliation are uncertain, outside of our control and/or cannot reasonably be predicted, such as net sales, cost of goods sold, unrealized derivative gains and losses, asset impairments and provision (benefit) for income taxes, which we view as the most material components of consolidated net income (loss) that are not presently estimable.
We are not able to provide a quantitative reconciliation of forward-looking Adjusted EBITDA to forward-looking consolidated net income (loss) because certain items required for reconciliation are uncertain, outside of our control and/or cannot reasonably be predicted, such as net sales, cost of goods sold, unrealized derivative gains and losses, asset impairments and provision (benefit) for income taxes, which we view as the most material components of consolidated net income (loss) that are not presently estimable.
For all monthly periods in which excess borrowing availability falls below a specified level, Kinergy and Alto Nutrients must collectively maintain a fixed-charge coverage ratio (calculated as a twelve-month rolling earnings before interest, taxes, depreciation and amortization divided by the sum of interest expense, capital expenditures, principal payments of indebtedness, indebtedness from capital leases and taxes paid during such twelve-month rolling period) of at least 1.1 and are prohibited from incurring certain additional indebtedness (other than specific intercompany indebtedness).
For all monthly periods in which excess borrowing availability falls below a specified level, Kinergy and Alto Nutrients must collectively maintain a fixed-charge coverage ratio (calculated as a twelve-month rolling earnings before interest, taxes, depreciation and amortization divided by the sum of interest expense, capital expenditures, principal payments of indebtedness, indebtedness from capital leases and taxes paid during such twelve-month rolling period) of at least 1.10 and are prohibited from incurring certain additional indebtedness (other than specific intercompany indebtedness).
As market conditions change, we may increase, decrease or idle production at one or more operating facilities or resume operations at any idled facility. Marketing and Distribution Segment We market and distribute all the alcohols and essential ingredients we produce at our facilities. We also market and distribute alcohols produced by third parties.
As market conditions change, we may increase, decrease or idle production at one or more operating facilities or resume operations at any idled facility. -34- Marketing and Distribution Segment We market and distribute all the alcohols and essential ingredients we produce at our facilities. We also market and distribute alcohols produced by third parties.
The obligations of Kinergy and Alto Nutrients under the credit facility are secured by all of our tangible and intangible assets. - 46 - We believe Kinergy and Alto Nutrients are in compliance with the fixed-charge coverage ratio covenant as of the filing of this report.
The obligations of Kinergy and Alto Nutrients under the credit facility are secured by all of our tangible and intangible assets. We believe Kinergy and Alto Nutrients are in compliance with the fixed-charge coverage ratio covenant as of the filing of this report.
Products for Essential Ingredients markets include dried yeast, corn protein meal, corn protein feed, corn germ, distillers grains, liquid CO 2 and liquid feed used in commercial animal feed and pet foods. We also sell yeast and liquid CO 2 for human consumption.
Products for Essential Ingredients markets include dried yeast, corn protein meal, corn protein feed, corn germ, distillers grains, gas and liquid CO 2 and liquid feed used in commercial animal feed and pet foods. We also sell yeast and gas and liquid CO 2 for human consumption.
The credit facility’s monthly unused line fee is 0.25% to 0.375% of the amount by which the maximum credit under the facility exceeds the average daily principal balance during the immediately preceding month.
The credit facility’s monthly unused line fee is 0.25% to 0.375% of the amount by which the maximum credit under the facility exceeds the average daily principal balance during the preceding month.
Kinergy’s Operating Line of Credit Kinergy maintains an operating line of credit for an aggregate amount of up to $100.0 million. The credit facility matures on November 7, 2027. Interest accrues under the credit facility at a rate equal to (i) the daily Secured Overnight Financing Rate, plus (ii) a specified applicable margin ranging from 1.25% to 1.75%.
Kinergy’s Operating Line of Credit Kinergy maintains an operating line of credit for an aggregate amount of up to $85.0 million. The credit facility matures on November 7, 2027. Interest accrues under the credit facility at a rate equal to (i) the daily Secured Overnight Financing Rate, plus (ii) a specified applicable margin ranging from 1.25% to 1.75%.
We have an annual alcohol production capacity of 350 million gallons, including both renewable fuels and specialty alcohols ranging from industrial-, pharmaceutical-, and high-quality food- and beverage-grade alcohols. Of this amount, we can produce up to 110 million gallons annually of specialty alcohols, depending on our product mix among high-quality beverage-grade alcohol and other quality specification alcohols.
We have an annual alcohol production capacity of 330 million gallons, including both renewable fuels and specialty alcohols ranging from industrial-, pharmaceutical-, and high-quality food- and beverage-grade alcohols. Of this amount, we can produce up to 110 million gallons annually of specialty alcohols, depending on our product mix among high-quality beverage-grade alcohol and other quality specification alcohols.
These customers use our feed products for livestock as a substitute for corn and other sources of starch and protein. We sell our corn oil to poultry, renewable diesel and biodiesel customers. See “Note 4 – Segments” to our Notes to Consolidated Financial Statements included elsewhere in this report for financial information about our business segments.
These customers use our feed products for livestock as a substitute for corn and other sources of starch and protein. We sell our corn oil to poultry, renewable diesel and biodiesel customers. See “Note 5 – Segments” to our Notes to Consolidated Financial Statements included elsewhere in this report for financial information about our business segments.
We also market essential ingredients produced by our production facilities, including dried yeast, corn protein meal, corn protein feed, corn germ, and distillers grains and liquid feed used in commercial animal feed and pet foods. We also sell yeast and liquid CO 2 for human consumption.
We also market essential ingredients produced by our production facilities, including dried yeast, corn protein meal, corn protein feed, corn germ, distillers corn oil and distillers grains and liquid feed used in commercial animal feed and pet foods. We also sell yeast and gas and liquid CO 2 for human consumption.
Year Ended December 31, 2023, Compared to the Year Ended December 31, 2022 An analysis of our financial results comparing 2023 to 2022 can be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on March 14, 2024, which is available free of charge on the Securities and Exchange Commission’s website at www.sec.gov.
Year Ended December 31, 2024, Compared to the Year Ended December 31, 2023 An analysis of our financial results comparing 2024 to 2023 can be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission on March 13, 2025, which is available free of charge on the Securities and Exchange Commission’s website at www.sec.gov.
Our production facilities located in Oregon and Idaho are near their respective fuel and feed customers, offering significant timing, product transportation cost and logistical advantages. - 33 - All of our production facilities, other than our Magic Valley plant, were operating for all of 2024, subject to scheduled and unscheduled downtimes to address facility repair and maintenance.
Our production facilities located in Oregon and Idaho are near their respective fuel and feed customers, offering significant timing, product transportation cost and logistical advantages. All of our production facilities, other than our Magic Valley plant, were operating for all of 2025, other than for scheduled and unscheduled downtimes to address facility repair and maintenance.
We define Adjusted EBITDA as unaudited consolidated net income (loss) before interest expense, interest income, unrealized derivative gains and losses, acquisition-related expense, provision for income taxes, asset impairments, and depreciation and amortization expense. A table is provided below to reconcile Adjusted EBITDA to its most directly comparable GAAP measure, consolidated net income (loss).
We define Adjusted EBITDA as unaudited consolidated net income (loss) before interest expense, interest income, unrealized derivative gains and losses, excess insurance proceeds, acquisition-related expense (recoveries), provision or benefit for income taxes, asset impairments, and depreciation and amortization expense. A table is provided below to reconcile Adjusted EBITDA to its most directly comparable GAAP measure, consolidated net income (loss).
EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP and should not be considered as alternatives to consolidated net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity.
Adjusted EBITDA is not a measure of financial performance under GAAP and should not be considered as an alternative to consolidated net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity.
Liquidity and Capital Resources During the year ended December 31, 2024, we funded our operations primarily from cash on hand and proceeds from Kinergy’s operating line of credit.
Liquidity and Capital Resources During the year ended December 31, 2025, we funded our operations primarily from cash on hand, cash generated from our operating activities, and proceeds from Kinergy’s operating line of credit.
The following table sets forth the fixed-charge coverage ratio financial covenant and the actual results for the periods presented: Years Ended December 31, 2024 2023 Fixed-Charge Coverage Ratio Requirement 1.10 1.10 Actual 3.53 5.22 Excess 2.43 4.12 Alto Ingredients, Inc. has guaranteed all of Kinergy’s obligations under the credit facility.
The following table sets forth the fixed-charge coverage ratio financial covenant and the actual results for the periods presented: Years Ended December 31, 2025 2024 Fixed-Charge Coverage Ratio Requirement 1.10 1.10 Actual 4.03 3.53 Excess 2.93 2.43 Alto Ingredients, Inc. has guaranteed all of Kinergy’s obligations under the credit facility.
We believe that our gross profit margins depend primarily on the following key factors: ● the prices of our specialty alcohols and the market price of fuel-grade ethanol, the latter of which is impacted by the price of gasoline and related petroleum products, and government regulation, including government ethanol mandates; ● the market prices of key production input commodities, such as corn (including corn basis) and natural gas; ● the market prices of our essential ingredients; ● key variable costs (other than production input commodities), such as production and other personnel staffing; ● our ability to anticipate trends in the market and contracted prices of our alcohols, essential ingredients, and costs of key input commodities, and our ability to implement appropriate risk management through hedging and other means, and opportunistic pricing strategies, as well as the financial results of those hedging activities; ● the proportion of our sales of specialty alcohols to our sales of fuel-grade ethanol produced at our facilities relative to their respective market and contracted prices; and ● the proportion of our sales of fuel-grade ethanol produced at our facilities to our sales of fuel-grade ethanol produced by unrelated third-parties relative to the market price of fuel-grade ethanol and marketing and distribution fees payable for third-party sales.
The average price of corn as reported by the CME increased 4% to $4.39 per bushel for 2025 from $4.24 per bushel for 2024. -38- We believe that our gross profit margins depend primarily on the following key factors: ● the prices of our specialty alcohols and the market price of fuel-grade ethanol, the latter of which is impacted by the price of gasoline and related petroleum products, and government regulations, including government ethanol mandates; ● the market prices of key production input commodities, such as corn (including corn basis) and natural gas; ● the market prices of our essential ingredients; ● key variable costs (other than production input commodities), such as production and other personnel staffing; ● our ability to anticipate trends in the market and contracted prices of our alcohols, essential ingredients, and costs of key input commodities, and our ability to implement appropriate risk management through hedging and other means, and opportunistic pricing strategies, as well as the financial results of those hedging activities; ● the proportion of our sales of specialty alcohols to our sales of fuel-grade ethanol produced at our facilities relative to their respective market and contracted prices; and ● the proportion of our sales of fuel-grade ethanol produced at our facilities to our sales of fuel-grade ethanol produced by unrelated third-parties relative to the market price of fuel-grade ethanol and marketing and distribution fees payable for third-party sales.
Products for Food & Beverage markets include grain neutral spirits used in alcoholic beverages and vinegar and corn germ used for corn oils. Products for Industry & Agriculture markets include alcohols and other products for paint applications and fertilizers.
Products for Food & Beverage markets include grain neutral spirits used in alcoholic beverages and vinegar, as well as corn germ used for corn oils. Products for Industry & Agriculture markets include alcohols and other products for paint applications, inks, vehicle fluids and fertilizers.
We performed our annual review of impairment and recognized asset impairments of $3.4 million and $6.0 million against our intangible assets and goodwill for the years ended December 31, 2024 and 2023, respectively. We did not recognize any asset impairments for the year ended December 31, 2022.
We performed our annual review of impairment and recognized asset impairments of $3.4 million and $6.0 million against our intangible assets and goodwill for the years ended December 31, 2024 and 2023, respectively.
Of this decrease, $0.4 million is attributable to lower margins from sales of third-party renewable fuel, partially offset by an increase of $0.2 million attributable to higher marketing volumes of third-party renewable fuel sold reported gross in 2024 as compared to 2023.
Of this increase, $5.2 million is attributable to higher margins from sales of third-party renewable fuel, partially offset by a decrease of $0.1 million attributable to lower marketing volumes of third-party renewable fuel sold reported gross in 2025 as compared to 2024.
Our profitability is highly dependent on various commodity prices, including the market prices of corn, natural gas and fuel-grade ethanol. Our consolidated average alcohol sales price declined by 21% to $1.95 per gallon for 2024 compared to $2.47 per gallon for 2023.
Our profitability is highly dependent on various commodity prices, including the market prices of corn, natural gas and fuel-grade ethanol. Our consolidated average alcohol sales price improved by 4% to $2.02 per gallon for 2025 compared to $1.95 per gallon for 2024.
The 2024 impairments reflect $21.4 million for our Magic Valley asset group, as we cold-idled the plant at the end of the year, and $3.4 million for intangible assets of Eagle Alcohol. The 2023 impairments relate to the goodwill associated with our acquisition of Eagle Alcohol.
The 2024 impairments reflect $21.4 million for our Magic Valley asset group, as we cold-idled the plant at the end of the year, and $3.4 million for intangible assets of Eagle Alcohol.
Increases in regional corn basis and declining market prices for protein and corn oil resulted in overall margin compression, outweighing the economic benefits of our plant improvements. As a consequence, we cold-idled our Magic Valley facility on December 31, 2024 to minimize financial losses.
Increases in regional corn basis and declining market prices for protein and corn oil resulted in overall margin compression, outweighing the economic benefits of our plant improvements. As a consequence, we cold-idled our Magic Valley facility for all of 2025 and through the filing of this report to minimize financial losses.
Our products for the Renewable Fuels markets include fuel-grade ethanol and distillers corn oil used as a feedstock for renewable diesel and biodiesel fuels. Our specialty alcohols for the Industry & Agriculture, Food & Beverage and Health, Home & Beauty markets represented approximately 12%, 7% and 3%, respectively, of our sales in 2024 from these three markets.
Our products for the Renewable Fuels markets include fuel-grade ethanol and distillers corn oil used as a feedstock for renewable diesel and biodiesel fuels. Our specialty alcohols for the Industry & Agriculture, Food & Beverage and Health, Home & Beauty markets represented approximately 11%, 6% and 2%, respectively, of our sales in 2025 to customers in these three markets.
In addition, we break bulk distribute specialty alcohols, produced by us and third parties, through our Eagle Alcohol business. - 32 - We report our financial and operating performance in three distinct segments: ● Pekin production , which includes the production and sale of alcohols and essential ingredients produced at our three production facilities located in Pekin, Illinois, which we refer to as our Pekin Campus; ● Marketing and distribution , which includes marketing and merchant trading for company-produced alcohols and essential ingredients on an aggregated basis, and sales of fuel-grade ethanol sourced from third parties; and ● Western production , which includes the production and sale of renewable fuels and essential ingredients and, beginning in 2025, liquid CO 2 produced at our western production facilities, including our liquid CO 2 plant, on an aggregated basis, none of which are individually so significant as to be considered a separately reportable segment.
We report our financial and operating performance in three distinct segments: ● Pekin production , which includes the production and sale of alcohols and other products we refer to as “essential ingredients” described below, produced at our three production facilities located in Pekin, Illinois, which we refer to as our Pekin Campus; ● Marketing and distribution , which includes marketing and merchant trading for company-produced alcohols and essential ingredients on an aggregated basis, and sales of fuel-grade ethanol sourced from third parties; and -33- ● Western production , which includes the production and sale of renewable fuels and essential ingredients produced at our Western production facilities, including our liquid CO 2 plant, on an aggregated basis, none of which are individually so significant as to be considered a separately reportable segment.
Our net sales decline of $0.3 billion was due to a decline in our average sales price per gallon and fewer tons of essential ingredients sold, partially offset by an increase in total alcohol gallons sold. o Our average sales price per gallon declined by $0.52, or 21%, to $1.95 for 2024 from $2.47 for 2023.
Our net sales decline of $47.3 million was due to a decline in total gallons of alcohol sold and fewer tons of essential ingredients sold, partially offset by an increase in our average sales price per gallon. ○ Our average sales price per gallon increased by $0.07, or 4%, to $2.02 for 2025 from $1.95 for 2024.
Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.
These commitments are scheduled to be satisfied through 2026. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.
We market and distribute all of the alcohols produced at our facilities as well as alcohols produced by third parties. In 2024, we marketed and distributed approximately 386 million gallons combined of our own produced alcohols as well as fuel-grade ethanol produced by third parties, and over 1.4 million tons of essential ingredients on a dry matter basis.
We market and distribute all of the alcohols produced at our facilities as well as alcohols produced by third parties. In 2025, we marketed and distributed approximately 350 million gallons combined of our own produced alcohols as well as fuel-grade ethanol produced by third parties, and over 1.2 million tons of essential ingredients.
At the segment’s average sales price of $1.91 per gallon for 2024, net sales were $12.4 million lower as a result of the 6.5 million fewer gallons sold in 2024 as compared to 2023.
At the segment’s average sales price per gallon of $2.07 for 2025, net sales were $2.9 million lower as a result of the 1.4 million fewer gallons sold in 2025 as compared to 2024.
Our net loss attributable to common stockholders increased by $31.0 million to a net loss of $60.3 million for 2024 from a net loss of $29.3 million for 2023. Factors that contributed to these results of operations for 2024 include: ● Net sales .
Our net income (loss) attributable to common stockholders increased by $72.4 million to $12.1 million for 2025 from a net loss of $60.3 million for 2024. Factors that contributed to these results of operations for 2025 include: ● Net sales .
The average price of fuel-grade ethanol as reported by the Chicago Mercantile Exchange, or CME, declined by 24% to $1.69 per gallon for 2024 compared to $2.22 per gallon for 2023. Our average cost of corn declined by 28% to $4.72 per bushel for 2024 from $6.58 per bushel for 2023.
The average price of fuel-grade ethanol as reported by the Chicago Mercantile Exchange, or CME, also improved by 4% to $1.76 per gallon for 2025 compared to $1.69 per gallon for 2024. Our consolidated average cost of corn declined by 1% to $4.68 per bushel for 2025 from $4.72 per bushel for 2024.
We also own and operate a liquid CO 2 production facility adjacent to our plant in Oregon for the offtake of CO 2 gas from the plant for conversion to liquid CO 2 and subsequent sale.
We also own and operate a liquid CO 2 production facility adjacent to our plant in Oregon for the offtake of CO 2 gas from the plant for conversion to liquid CO 2 and subsequent sale. In addition, we break bulk and distribute specialty alcohols, produced by us and third parties.
Marketing and Distribution Segment Our marketing and distribution segment’s gross profit declined by $0.2 million to a gross profit of $4.0 million for 2024 from $4.2 million for 2023.
Marketing and Distribution Segment Our marketing and distribution segment’s gross profit improved by $5.1 million to a gross profit of $9.1 million for 2025 from $4.0 million for 2024.
Pekin Campus Production Segment Our Pekin Campus production segment’s gross profit improved by $12.7 million to a gross profit of $25.9 million from $13.3 million. Of this increase, $12.1 million is attributable to higher commodity crush margins and $0.6 million is attributable to increased sales volumes in 2024 as compared to 2023.
Pekin Campus Production Segment Our Pekin Campus production segment’s gross profit declined by $3.8 million to a gross profit of $22.1 million from $25.9 million. Of this decrease, $3.2 million is attributable to lower commodity crush margins and $0.6 million is attributable to decreased sales volumes in 2025 as compared to 2024.
December 31, 2024 December 31, 2023 Change Cash, cash equivalents and restricted cash $ 36,211 $ 45,480 (20 )% Current assets $ 153,118 $ 168,770 (9 )% Property and equipment, net $ 214,742 $ 248,748 (14 )% Current liabilities $ 57,804 $ 65,288 (11 )% Long-term debt, noncurrent portion $ 92,904 $ 82,097 13 % Working capital $ 95,314 $ 103,482 (8 )% Working capital ratio 2.65 2.59 2 % Restricted Net Assets At December 31, 2024, we had approximately $54.1 million of net assets at our subsidiaries that were not available to be transferred to Alto Ingredients, Inc. in the form of dividends, distributions, loans or advances due to restrictions contained in our subsidiaries’ credit facilities.
December 31, 2025 December 31, 2024 Change Cash, cash equivalents and restricted cash $ 25,673 $ 36,211 (29 )% Current assets $ 155,917 $ 153,118 2 % Property and equipment, net $ 198,501 $ 214,742 (8 )% Current liabilities $ 59,071 $ 57,804 2 % Long-term debt, noncurrent portion $ 63,027 $ 92,904 (32 )% Working capital $ 96,846 $ 95,314 2 % Working capital ratio 2.64 2.65 (0 )% Restricted Net Assets At December 31, 2025, we had approximately $68.4 million of net assets at our subsidiaries that were not available to be transferred to Alto Ingredients, Inc. in the form of dividends, distributions, loans or advances due to restrictions contained in our subsidiaries’ credit facilities.
Cash used in our Operating Activities We used $3.5 million in cash in our operating activities during 2024, as compared to $22.0 million in cash generated from our operating activities in 2023.
Cash provided by (used in) our Operating Activities We generated $13.2 million in cash from our operating activities during 2025, as compared to using $3.5 million in cash from our operating activities in 2024.
At the segment’s average sales price per gallon of $1.95 for 2024, we generated $9.1 million in additional net sales from the 4.7 million additional gallons of alcohol sold in 2024 as compared to 2023.
At the segment’s average sales price per gallon of $2.00 for 2025, we generated $10.4 million less in net sales from the 5.2 million fewer gallons of alcohol sold in 2025 as compared to 2024.
Western Production Segment Our Western production segment’s gross loss worsened by $13.8 million to a gross loss of $19.3 million for 2024 as compared to a gross loss of $5.5 million for 2023.
Western Production Segment Our Western production segment’s gross profit improved by $22.3 million to a gross profit of $3.0 million for 2025 as compared to a gross loss of $19.3 million for 2024.
As of December 31, 2024, Kinergy had an outstanding balance of $39.7 million and $23.1 million of unused borrowing availability under the credit facility.
As of December 31, 2025, Kinergy had an outstanding balance of $29.6 million and $37.4 million of unused borrowing availability under the credit facility.
In addition, we have up to an additional $65.0 million that may be available for capital improvement projects under our Orion term loan discussed below, subject to certain conditions.
As of December 31, 2025, we had $23.4 million in cash and cash equivalents and $37.4 million available for borrowing under Kinergy’s operating line of credit. In addition, we have up to an additional $65.0 million that may be available for capital improvement projects under our Orion term loan discussed below, subject to certain conditions.
Management provides EBITDA and Adjusted EBITDA as non-GAAP financial measures so that investors will have the same financial information that management uses, which may assist investors in properly assessing our performance on a period-over-period basis. We define EBITDA as unaudited consolidated net income (loss) before interest expense, interest income, provision for income taxes and depreciation and amortization expense.
Management provides Adjusted EBITDA as a non-GAAP financial measure so that investors will have the same financial information that management uses, which may assist investors in properly assessing our performance on a period-over-period basis.
Impairment of Long-Lived Assets Our long-lived assets have been primarily associated with our production facilities, reflecting their original cost, adjusted for depreciation and amortization and any subsequent impairment. - 48 - We assess the impairment of long-lived assets, including property and equipment, when events or changes in circumstances indicate that the fair value of an asset group could be less than the net book value of the asset group.
We assess the impairment of long-lived assets, including property and equipment, when events or changes in circumstances indicate that the fair value of an asset group could be less than the net book value of the asset group.
As a result, we recorded asset impairments of $21.4 million and $0.6 million with respect to our Magic Valley facility and right of use assets associated with our operating leases for the years ended December 31, 2024 and 2023, respectively. We review our intangible assets, including goodwill, with indefinite lives at least annually or more frequently if impairment indicators arise.
As a result, we recorded asset impairments of $0.8 million, $21.4 million and $0.6 million with respect to various abandoned projects, the cold-idling of our Magic Valley facility and our right of use assets associated with our operating leases for the years ended December 31, 2025, 2024 and 2023, respectively.
However, a decrease of $0.45, or 19%, in the segment’s average sales price per gallon in 2024 as compared to 2023 resulted in a $95.6 million decline in net sales as compared to 2023. Net sales of essential ingredients declined by $48.4 million, or 22%, to $169.3 million for 2024 as compared to $217.7 million for 2023.
However, an increase of $0.05, or 3%, in the segment’s average sales price per gallon in 2025 as compared to 2024 resulted in a $10.4 million increase in net sales in 2025 as compared to 2024. Net sales of essential ingredients increased by $5.3 million, or 3%, to $174.6 million for 2025 as compared to $169.3 million for 2024.
Reconciliation of Adjusted EBITDA to Consolidated Net Loss Three Months Ended December 31, Years Ended December 31, (in thousands) (unaudited) 2024 2023 2024 2023 Consolidated net loss $ (41,712 ) $ (18,945 ) $ (58,984 ) $ (28,005 ) Adjustments: Interest expense, net 2,474 2,126 7,644 7,425 Interest income (112 ) (265 ) (689 ) (854 ) Unrealized derivative (gains) losses (5,495 ) 8,162 (13,574 ) 9,679 Acquisition-related expense 5,676 700 7,701 2,800 Asset impairments 24,790 5,970 24,790 6,544 Provision for income taxes 173 97 173 97 Depreciation and amortization expense 6,548 5,698 24,408 23,080 Total adjustments 34,054 22,488 50,453 48,771 Adjusted EBITDA $ (7,658 ) $ 3,543 $ (8,531 ) $ 20,766 - 37 - 2024 Financial Performance Summary Our consolidated net sales declined by $0.3 billion to $1.0 billion for 2024 from $1.2 billion for 2023.
Reconciliation of Adjusted EBITDA to Consolidated Net Income (Loss) Three Months Ended December 31, Years Ended December 31, (in thousands) (unaudited) 2025 2024 2025 2024 Consolidated net income (loss) $ 21,806 $ (41,712 ) $ 13,338 $ (58,984 ) Adjustments: Interest expense, net 2,425 2,474 10,765 7,644 Interest income (175 ) (112 ) (381 ) (689 ) Unrealized derivative (gains) losses 4,036 (5,495 ) 2,679 (13,574 ) Excess insurance proceeds (6,688 ) — (6,688 ) — Acquisition-related expense (recoveries) — 5,676 (460 ) 7,701 Asset impairments 803 24,790 803 24,790 Provision (benefit) for income taxes (621 ) 173 (621 ) 173 Depreciation and amortization expense 6,328 6,548 25,216 24,408 Total adjustments 6,108 34,054 31,313 50,453 Adjusted EBITDA $ 27,914 $ (7,658 ) $ 44,651 $ (8,531 ) 2025 Financial Performance Summary Our consolidated net sales declined by $47.3 million to $0.9 billion for 2025 from $1.0 billion for 2024.
Our total volume of essential ingredients sold increased by 27,900 tons, or 3%, to 906,300 tons for 2024 from 878,400 tons for 2023. Sales volumes of essential ingredients from our Pekin Campus were higher in 2024 due to higher production rates for the year.
Our total volume of essential ingredients sold increased by 13,300 tons, or 1%, to 919,600 tons for 2025 from 906,300 tons for 2024. Sales volumes of essential ingredients from our Pekin Campus were higher in 2025 due to timing of shipments.
Pekin Campus Production Segment Net sales of alcohol from our Pekin Campus production segment declined by $86.5 million, or 17%, to $415.7 million for 2024 as compared to $502.2 million for 2023.
Pekin Campus Production Segment Net sales of alcohol from our Pekin Campus production segment increased by less than $0.1 million, or 0%, to $415.8 million for 2025 as compared to $415.7 million for 2024.
Interest Expense, net Interest expense, net, increased by $0.2 million to $7.6 million for 2024 from $7.4 million for 2023. The increase in interest expense, net, is primarily due to higher debt balances, as well as higher interest rates under Kinergy’s line of credit.
The increase in interest expense, net, is primarily due to higher debt balances, as well as higher interest rates under Kinergy’s line of credit and our term debt.
Selling, General and Administrative Expenses Our selling, general and administrative, or SG&A, expenses decreased by $0.1 million to $29.7 million for 2024 as compared to $29.8 million for 2023. SG&A expenses decreased primarily due to lower professional fees. Acquisition-related Expenses Our acquisition-related expenses increased by $4.9 million to $7.7 million for 2024 as compared to $2.8 million for 2023.
Selling, General and Administrative Expenses Our selling, general and administrative, or SG&A, expenses decreased by $2.5 million to $27.2 million for 2025 as compared to $29.7 million for 2024. SG&A expenses decreased primarily due to lower operating costs, including reduced staff levels, and professional fees.
The following represents a summary of our critical accounting policies and related estimates, defined as those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. - 47 - Accounting for Business Combinations Determining the fair value of assets acquired and liabilities assumed in a business combination is considered a critical accounting estimate because the allocation of the purchase price to assets acquired and liabilities assumed based upon fair values requires significant management judgment and the use of subjective measurements.
The following represents a summary of our critical accounting estimates, defined as those estimates that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.
Information reconciling forward-looking EBITDA or Adjusted EBITDA to forward-looking consolidated net income (loss) would require a forward-looking statement of consolidated net income (loss) prepared in accordance with GAAP, which is unavailable to us without unreasonable effort.
Adjusted EBITDA has limitations as an analytical tool and you should not consider this measure in isolation or as a substitute for analysis of our results as reported under GAAP. -36- Information reconciling forward-looking Adjusted EBITDA to forward-looking consolidated net income (loss) would require a forward-looking statement of consolidated net income (loss) prepared in accordance with GAAP, which is unavailable to us without unreasonable effort.
Changes in Working Capital and Cash Flows Working capital declined to $95.3 million at December 31, 2024 from $103.5 million at December 31, 2023 as a result of a $15.7 million decrease in current assets, partially offset by a $7.5 million decrease in current liabilities. Current assets declined primarily due to decreases in restricted cash, inventories and other current assets.
Changes in Working Capital and Cash Flows Working capital increased to $96.8 million at December 31, 2025 from $95.3 million at December 31, 2024 as a result of a $2.8 million increase in current assets, partially offset by a $1.3 million increase in current liabilities.
Specific factors that contributed significantly to the change in cash generated by our operating activities include: ● an increase of $31.0 million in net loss primarily due to lower commodity crush margins and increased asset impairments; ● a decrease of $19.1 million related to changes in the fair value of our derivative instruments due to changes in commodity prices at period-end 2024 as compared to 2023; ● a decrease of $8.9 million related to accounts receivable balances primarily due to the timing of sales and collections; and ● a decrease of $7.3 million in inventories due to lower period-end commodity prices. - 45 - These amounts were partially offset by: ● an increase of $22.5 million related to accounts payable and accrued expenses due to the timing of payments; and ● an increase of $18.2 million in asset impairments primarily related to the cold-idling of our Magic Valley facility.
Specific factors that contributed significantly to the change in cash generated by our operating activities include: ● an increase of $72.3 million in net income primarily due to higher commodity crush margins; ● an increase of $3.0 million related to changes in the fair value of our derivative instruments due to changes in commodity prices at December 31, 2025 as compared to December 31, 2024; and ● an increase of $2.8 million related to accounts receivable balances primarily due to the timing of sales and collections.
The decrease of $0.56, or 22%, in our average sales price per gallon in 2024 as compared to 2023 resulted in a $57.9 million decline in net sales from our third-party renewable fuel sold by the segment compared to 2023. - 42 - Western Production Segment Net sales of alcohol from our Western production segment declined by $51.6 million, or 31%, to $115.4 million for 2024 as compared to $167.0 million for 2023.
The increase of $0.07, or 4%, in our average sales price per gallon in 2025 as compared to 2024 resulted in a $7.7 million increase in net sales in 2025 from our third-party renewable fuel sold by the segment compared to 2024.
Use of Non-GAAP Financial Measures Management believes that certain financial measures not in accordance with generally accepted accounting principles, or GAAP, are useful measures of operations.
Taken together, we believe the trajectory for E15 remains clearly positive and supportive of incremental ethanol demand over time. Use of Non-GAAP Financial Measures Management believes that certain financial measures not in accordance with generally accepted accounting principles, or GAAP, are useful measures of operations.
In addition, our sales price declined by $17.35 per ton for 2024. The decline of $17.35, or 19%, in our average sales price per ton in 2024 as compared to 2023 resulted in a decrease of $11.1 million in net sales of essential ingredients from the segment compared to 2023.
The increase of $33.50, or 47%, in our average sales price per ton in 2025 as compared to 2024 resulted in an increase of $17.2 million in net sales of essential ingredients from the segment compared to 2024.
A decrease of $61.03, or 25%, in our average sales price per ton in 2024 as compared to 2023 resulted in a $53.6 million decline in net sales as compared to 2023.
An increase of $3.05, or 2%, in our average sales price per ton in 2025 as compared to 2024 resulted in a $2.8 million increase in net sales as compared to 2024.
We had pre-tax consolidated net losses of $58.8 million, $27.9 million and $39.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. Based on our current and prior results, we do not have sufficient evidence to support a conclusion that we will more likely than not be able to benefit from our remaining deferred tax assets.
Based on our current and prior results, we do not have sufficient evidence to support a conclusion that we will more likely than not be able to benefit from our remaining deferred tax assets. As such, we have recorded a valuation allowance against our net deferred tax assets. -47-
In addition to funding our operations, we used our capital resources to continue our capital improvement projects, make an annual cash payment related to our acquisition of Eagle Alcohol and pay preferred stock dividends. As of December 31, 2024, we had $35.5 million in cash and cash equivalents and $23.1 million available for borrowing under Kinergy’s operating line of credit.
In addition to funding our operations, we used our capital resources to continue our capital improvement projects, purchase Kodiak Carbonic, make our final cash payment related to our acquisition of Eagle Alcohol and pay preferred stock dividends.
Our consolidated gross profit declined due to lower overall commodity crush margins, particularly for renewable fuel, primarily due to lower sales prices as well as lower margins on essential ingredients sold due to lower corn prices. We spent a total of $34.6 million for repairs and maintenance, in-line with our 2024 estimate.
Our consolidated gross profit improved due to higher overall commodity crush margins, increased export sales at premium prices to domestic renewable fuel and overall cost savings. In 2025, we spent a total of $30.1 million for repairs and maintenance, in line with our annual estimate.
At our average sales price per ton of $186.81 for 2024, we generated $5.2 million in additional net sales from the 27,900 additional tons of essential ingredients sold in 2024 as compared to 2023.
At our average sales price per ton of $189.86 for 2025, we generated $2.5 million in additional net sales from the 13,300 additional tons of essential ingredients sold in 2025 as compared to 2024. -41- Marketing and Distribution Segment Net sales of renewable fuel from our marketing and distribution segment, excluding intersegment sales, increased by $4.8 million, or 2%, to $221.3 million for 2025 as compared to $216.5 million for 2024.
In our review, we determine the fair value of these assets using market multiples and discounted cash flow modeling and compare it to the net book value of the reporting unit. Any assessed impairments will be recorded permanently and expensed in the period in which the impairment is determined.
We review our intangible assets, including goodwill, with indefinite lives at least annually or more frequently if impairment indicators arise. In our review, we determine the fair value of these assets using market multiples and discounted cash flow modeling and compare it to the net book value of the reporting unit.
At the segment’s average sales price per gallon of $2.00 for 2024, net sales were $11.4 million higher as a result of the 5.7 million additional gallons sold in 2024 as compared to 2023. This increase was partially offset by the $0.56 decrease in our average sales price per gallon for 2024.
This decrease was partially offset by an increase of $0.15, or 8%, in our average sales price per gallon in 2025 as compared to 2024 resulting in a $9.4 million increase in net sales of alcohol from the segment compared to 2024.
Our volume of third-party renewable fuel sold reported gross by the segment increased by 5.7 million gallons, or 6%, to 108.3 million gallons for 2024 as compared to 102.6 million gallons for 2023. This increase resulted from a shift in the source of renewable fuel from our Magic Valley facility to third-party suppliers.
Our volume of third-party renewable fuel sold reported gross by the segment decreased by 1.4 million gallons, or 1%, to 106.9 million gallons for 2025 as compared to 108.3 million gallons for 2024.
Our gross profit and margins were further impacted by production challenges at our Magic Valley plant as we continued to incur costs to implement our high-protein and corn oil system at the facility coupled with higher repairs and maintenance costs due to our scheduled downtime at our Pekin Campus. - 38 - Sales and Margins We generate sales by marketing all of the alcohols produced by our three production facilities in Illinois, all of the fuel-grade ethanol produced by our production facilities in Oregon and Idaho, and fuel-grade ethanol purchased from third-party suppliers throughout the United States.
Sales and Margins We generate sales by marketing all of the alcohols produced by our three production facilities in Illinois, all of the fuel-grade ethanol produced by our production facilities in Oregon and Idaho, and fuel-grade ethanol purchased from third-party suppliers throughout the United States.
Our cash, cash equivalents and restricted cash declined by $9.3 million due to $3.5 million of cash used in our operating activities and $13.5 million of cash used in our investing activities primarily for our capital improvement projects, partially offset by $7.7 million in cash provided by our financing activities, primarily due to proceeds from our operating line of credit.
Our cash, cash equivalents and restricted cash declined by $10.5 million due to cash used in our financing activities of $16.4 million for payments on Kinergy’s line of credit to reduce interest expense, a principal payment on our term debt and preferred stock dividends, and cash used in our investing activities of $7.4 million for our capital improvement projects, the purchase of Kodiak Carbonic and our final payment to the owners of Eagle Alcohol, partially offset by cash provided by our operating activities of $13.2 million.
Our total volume of production gallons sold, however, increased by 4.7 million gallons, or 2%, to 213.6 million gallons for 2024 as compared to 208.9 million gallons for 2023, due to production benefits realized in second half of the year from our biennial maintenance performed in Spring 2024 resulting in higher production rates.
Our total volume of production gallons sold, decreased by 5.2 million gallons, or 2%, to 208.4 million gallons for 2025 as compared to 213.6 million gallons for 2024, due to the timing of shipments at year-end.
Cost of Goods Sold and Gross Profit Our consolidated gross profit declined to a gross profit of $9.7 million, representing a gross margin of 1.0% for 2024, from $15.7 million, representing a gross margin of 1.3%, for 2023.
Corporate and Other Segment Net sales from our Corporate and other segment, which is comprised of our Eagle Alcohol business, declined by $4.0 million, or 35%, to $7.4 million for 2025 as compared to $11.4 million for 2024. -42- Cost of Goods Sold and Gross Profit Our consolidated gross profit improved to $34.9 million, representing a gross margin of 3.8% for 2025, from $9.7 million, representing a gross margin of 1.0%, for 2024.
Of this decline, $15.8 million is attributable to significantly lower margins for renewable fuel, partially offset by $2.0 million attributable to lower sales volumes at negative margins in 2024 as compared to 2023. - 43 - Corporate and Other Segment Gross profit and loss from our Corporate and other segment was a gross loss of $0.9 million for 2024 and a gross profit of $3.7 million for 2023, primarily from Eagle Alcohol’s business.
Of this improvement, $24.9 million is attributable to significantly higher margins for renewable fuel, partially offset by $2.6 million attributable to lower sales volumes at negative margins in 2025 as compared to 2024.
(2) Essential ingredients revenues as a percentage of total corn costs consumed. - 40 - Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Years Ended December 31, Dollar Percentage Results as a Percentage of Net Sales for the Years Ended December 31, 2024 2023 Change Change 2024 2023 (dollars in thousands) Net sales $ 965,258 $ 1,222,940 $ (257,682 ) (21.1 )% 100.0 % 100.0 % Cost of goods sold 955,536 1,207,287 (251,751 ) (20.9 )% 99.0 % 98.7 % Gross profit 9,722 15,653 (5,931 ) (37.9 )% 1.0 % 1.3 % Selling, general and administrative expenses (29,736 ) (29,864 ) (128 ) (0.4 )% (3.1 )% (2.4 )% Acquisition-related expenses (7,701 ) (2,800 ) 4,901 175.0 % (0.8 )% (0.2 )% Gain (loss) on sale (disposal) of assets 830 (293 ) 1,123 * (0.0 )% (0.0 )% Asset impairments (24,790 ) (6,544 ) 18,246 278.8 % (2.6 )% (0.5 )% Loss from operations (51,675 ) (23,848 ) 27,827 116.7 % (5.4 )% (2.0 )% Income from cash grant — 2,812 (2,812 ) (100.0 )% 0.0 % 0.2 % Interest expense, net (7,644 ) (7,425 ) 219 2.9 % (0.8 )% (0.6 )% Other income, net 508 553 (45 ) (8.1 )% 0.1 % 0.0 % Loss before provision for income taxes (58,811 ) (27,908 ) 30,903 110.7 % (6.1 )% (2.3 )% Provision for income taxes 173 97 76 78.4 % 0.0 % 0.0 % Consolidated net loss $ (58,984 ) $ (28,005 ) $ 30,979 110.6 % (6.1 )% (2.3 )% Preferred stock dividends (1,269 ) (1,265 ) 4 0.3 % (0.1 )% (0.1 )% Loss attributable to common stockholders $ (60,253 ) $ (29,270 ) $ 30,983 105.9 % (6.2 )% (2.4 )% * Not meaningful. - 41 - Net Sales The decline in our consolidated net sales for 2024 as compared to 2023 was due to a decrease in our average sales price per gallon for our alcohols and lower volumes of essential ingredients sold at lower prices, partially offset by a higher volume of alcohol sold.
(2) Essential ingredients revenues as a percentage of total corn costs consumed. -40- Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Years Ended December 31, Dollar Percentage Results as a Percentage of Net Sales for the Years Ended December 31, 2025 2024 Change Change 2025 2024 (dollars in thousands) Net sales $ 917,927 $ 965,258 $ (47,331 ) (4.9 )% 100.0 % 100.0 % Cost of goods sold 883,014 955,536 (72,522 ) (7.6 )% 96.2 % 99.0 % Gross profit 34,913 9,722 25,191 259.1 % 3.8 % 1.0 % Selling, general and administrative expenses (27,208 ) (29,736 ) 2,528 8.5 % (3.0 )% (3.1 )% Acquisition-related recoveries (expenses) 460 (7,701 ) 8,161 * 0.1 % (0.8 )% Gain on sale of assets — 830 (830 ) (100.0 )% — % 0.1 % Asset impairments (803 ) (24,790 ) 23,987 (96.8 )% (0.1 )% (2.6 )% Income (loss) from operations 7,362 (51,675 ) 59,037 * 0.8 % (5.4 )% Transferable tax credits, net 7,500 — 7,500 * 0.8 % 0.0 % Excess insurance proceeds 6,688 — 6,688 * 0.7 % 0.0 % Interest expense, net (10,765 ) (7,644 ) (3,121 ) 40.8 % (1.2 )% (0.8 )% Other income, net 1,932 508 1,424 280.3 % 0.2 % 0.1 % Income (loss) before provision (benefit) for income taxes 12,717 (58,811 ) 71,528 * 1.4 % (6.1 )% Provision (benefit) for income taxes (621 ) 173 794 * 0.1 % 0.0 % Consolidated net income (loss) $ 13,338 $ (58,984 ) $ 72,322 * 1.5 % (6.1 )% Preferred stock dividends (1,265 ) (1,269 ) 4 0.3 % (0.1 )% (0.1 )% Income (loss) attributable to common stockholders $ 12,073 $ (60,253 ) $ 72,326 * 1.4 % (6.2 )% * Not meaningful.
Our total volume of gallons sold declined by 6.5 million gallons, or 10%, to 60.5 million gallons for 2024 as compared to 67.0 million gallons for 2023. This decline in sales volume primarily resulted from lower production from our Magic Valley facility.
Western Production Segment Net sales of alcohol from our Western production segment declined by $48.1 million, or 42%, to $67.3 million for 2025 as compared to $115.4 million for 2024. Our total volume of gallons sold declined by 27.9 million gallons, or 46%, to 32.6 million gallons for 2025 as compared to 60.5 million gallons for 2024.
As of December 31, 2024 and 2023, the principal amount outstanding under the Term Loan was $60.0 million. Other Cash Obligations As of December 31, 2024, we had future commitments for certain capital projects totaling $9.1 million. These commitments are scheduled to be satisfied through 2025.
As of December 31, 2025 and 2024, the principal amount outstanding under the Term Loan was $55.0 million and $60.0 million, respectively.
A decline of $0.58, or 23%, in our average sales price per gallon in 2024 as compared to 2023 resulted in a $39.2 million decrease in net sales of alcohol from the segment compared to 2023. Net sales of essential ingredients declined by $20.3 million, or 35%, to $37.0 million for 2024 as compared to $57.3 million for 2023.
Net Sales The decline in our consolidated net sales for 2025 as compared to 2024 was due to a decrease in our volume of alcohol sold and lower volumes of essential ingredients sold, partially offset by an increase in our average alcohol sales price per gallon.
Our gross profit declined by $5.9 million to a gross profit of $9.7 million for 2024 from $15.7 million for 2023 partially due to weakened commodity crush margins from lower ethanol sales prices as well as lower corn prices which reduced profits from our essential ingredients.
Our gross profit increased $25.2 million to a gross profit of $34.9 million for 2025 from $9.7 million for 2024 due to stronger commodity crush margins from higher ethanol sales prices as well as lower corn costs. Our gross profit and margins were further positively impacted by our acquisition of Kodiak Carbonic and the cold-idling of our Magic Valley facility.
Our total volume of essential ingredients sold declined by 127,700 tons, or 20%, to 514,600 tons for 2024 from 642,300 tons for 2023. At our average sales price of $71.81 per ton for 2024, net sales were $9.2 million lower as a result of the 127,700 fewer tons sold in 2024 as compared to 2023.
This decline in sales volume primarily resulted from the cold-idling of our Magic Valley facility for all of 2025. At the segment’s average sales price of $2.06 per gallon for 2025, net sales were $57.5 million lower as a result of the 27.9 million fewer gallons sold in 2025 as compared to 2024.
Our average sales price for our essential ingredients also declined primarily due to lower corn prices. o Our total gallons sold increased by 3.5 million gallons, or 1%, to 386.0 million gallons for 2024 from 382.5 million gallons for 2023. ◾ Our specialty alcohol production sales volume increased by 14.8 million gallons, or 19%, to 91.5 million gallons for 2024 from 76.7 million gallons for 2023 primarily due to increased customer demand for specialty alcohols during the year. ◾ Our third-party sales volume increased by 5.7 million gallons, or 6%, to 108.3 million gallons for 2024 from 102.6 million gallons for 2023.
The improvement was primarily driven by higher renewable fuel prices in 2025 largely due to higher gasoline prices. -37- ○ Our volume of essential ingredients sold declined by 0.2 million tons, or 14%, to 1.2 million tons for 2025 from 1.4 million tons for 2024 primarily due to lower alcohol production volumes during 2025, as our Magic Valley facility was cold-idled for all of 2025. ○ Our total gallons of alcohol sold decreased by 35.9 million gallons, or 9%, to 350.1 million gallons for 2025 from 386.0 million gallons for 2024. ● Our renewable fuel production sales volume declined by 31.0 million gallons, or 17%, to 155.2 million gallons for 2025 from 186.2 million gallons for 2024, primarily due to the cold idling of our Magic Valley facility for all of 2025 resulting in no production from the facility. ● Our third-party sales volume decreased by 1.4 million gallons, or 1%, to 106.9 million gallons for 2025 from 108.3 million gallons for 2024 primarily due to less volume sold in the market around our Magic Valley facility. ● Our specialty alcohol production sales volume decreased by 3.5 million gallons, or 4%, to 88.0 million gallons for 2025 from 91.5 million gallons for 2024 primarily due to decreased customer demand for specialty alcohols during the year. ● Gross Profit .
We continue to provide terminal services at the plant and intend to resume operations at the facility when the economic environment in the region sustainably improves. We believe that the cold-idling of our Magic Valley facility will have a positive impact on our overall financial results in 2025 compared to 2024.
We continue to provide ethanol terminaling services at the plant and may resume operations at the facility if the economic environment in the region sustainably improves.
Cash provided by our Financing Activities Cash provided by our financing activities was $7.7 million for 2024, of which $9.0 million is attributable to net proceeds from Kinergy’s line of credit, partially offset by $1.3 million of preferred stock dividends.
Cash used in our Financing Activities Cash used in our financing activities was $16.4 million for 2025, of which we used $10.1 million to pay down Kinergy’s line of credit, $5.0 million to make a principal payment on our term debt and $1.3 million to pay preferred stock dividends.
These expenses relate to the acceleration of stock payments to the former owners of Eagle Alcohol. Asset Impairments We recorded asset impairment charges of $24.8 million for 2024 as compared $6.5 million for 2023.
We paid out a final amount in 2025 that was $0.5 million less than the amount we accrued in 2024. We have no further payment obligations for our acquisition of Eagle Alcohol. -43- Asset Impairments We recorded asset impairment charges of $0.8 million for 2025 as compared to $24.8 million for 2024. The 2025 impairments relate to certain abandoned projects.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+1 added−0 removed12 unchanged
Biggest changeUnder the fixed price arrangements, we assume the risk of a decrease in the market price of corn between the time the price is fixed and the time the corn is utilized. - 50 - Essential ingredients are sensitive to various demand factors such as numbers of livestock on feed, prices for feed alternatives and supply factors, primarily production of ethanol co-products by ethanol plants and other sources.
Biggest changeEssential ingredients are sensitive to various demand factors such as numbers of livestock on feed, prices for feed alternatives and supply factors, primarily production of ethanol co-products by ethanol plants and other sources.
We recognized net gains of $11.0 million, net losses of $8.0 million and net gains of $19.3 million related to the change in the fair values of these contracts for the years ended December 31, 2024, 2023 and 2022, respectively. We prepared a sensitivity analysis as of December 31, 2024 to estimate our exposure to ethanol and corn.
We recognized net gains of $8.1 million, net gains of $11.0 million and net losses of $8.0 million related to the change in the fair values of these contracts for the years ended December 31, 2025, 2024 and 2023, respectively. -48- We prepared a sensitivity analysis as of December 31, 2025 to estimate our exposure to ethanol and corn.
The results of this analysis for the year ended December 31, 2024, which may differ materially from actual results, are as follows (in millions): Commodity Volume Unit of Measure Approximate Adverse Change to Pre-Tax Income Ethanol 294.5 Gallons $ 31.6 Corn 66.5 Bushels $ 28.2
The results of this analysis for the year ended December 31, 2025, which may differ materially from actual results, are as follows (in millions): Commodity Volume Unit of Measure Approximate Adverse Change to Pre-Tax Income Ethanol 262.1 Gallons $ 27.4 Corn 55.4 Bushels $ 24.3
Added
Under the fixed price arrangements, we assume the risk of a decrease in the market price of corn between the time the price is fixed and the time the corn is utilized.

Other ALTO 10-K year-over-year comparisons