Alto Ingredients (ALTO) risk factors, FY2025 10-K

Risks Related to our Business

1. 01Our results of operations and our ability to operate at a profit are largely dependent on our ability to manage the costs of corn, natural gas and other production inputs, with the prices of our alcohols and essential ingredients, all of which are subject to volatility and uncertainty
2. 02The prices of our products are volatile and subject to large fluctuations, which may cause our results of operations to fluctuate significantly
3. 03We may engage in hedging transactions and other risk mitigation strategies that could harm our results of operations and financial condition
4. 04Disruptions in our production or distribution, including from climate change and other weather effects, may adversely affect our business, results of operations and financial condition21% rewritten
5. 05Increased alcohol or essential ingredient production or higher inventory levels may cause a decline in prices for those products, and may have other negative effects, materially and adversely impacting our results of operations, cash flows and financial condition
6. 06We may suffer impairments in the value of our long-lived assets which may materially and adversely affect our results of operations
7. 07Our 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
8. 08Inflation and sustained higher prices may adversely impact our results of operations and financial condition
9. 09Climate 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

Risks Related to our Finances

1. 10We 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 business44% rewritten
2. 11We 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
3. 12We may be unable to qualify for and receive anticipated Section 45Z tax credit benefits available to low carbon fuel producersNew
4. 13Our indebtedness may expose us to risks that could negatively impact our business, prospects, liquidity, cash flows and results of operations
5. 14Our ability to utilize net operating loss carryforwards and certain other tax attributes may be limited36% rewritten

Risks Related to Legal and Regulatory Matters

1. 15We 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 67% rewritten
2. 16We may also be subject to related claims by private parties alleging property damage and personal injury due to exposure to hazardous or other materials at or from those properties. Some of these matters may require us to expend significant amounts for investigation, cleanup or other costs not covered by insuranceNew
3. 17We may be adversely affected by food and drug laws and regulations, as well as related liabilities that may not be adequately covered by insurance
4. 18The 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 condition46% rewritten
5. 19Future demand for fuel-grade ethanol is uncertain and may be affected by changes to federal mandates, public perception, consumer acceptance and overall consumer demand for transportation fuel, any of which could negatively affect demand for fuel-grade ethanol and our results of operations30% rewritten

Risks Related to Ownership of our Common Stock

1. 20Our stock price is highly volatile, which could result in substantial losses for investors purchasing shares of our common stock and in litigation against us
2. 21Because we do not plan to pay any cash dividends on our shares of common stock, our stockholders will not be able to receive a return on their shares unless and until they sell them
3. 22Our 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
4. 23Cyberattacks through security vulnerabilities could lead to disruption of our business, reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position