Alto Ingredients, Inc.

Previous wording

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. In addition, we may engage in other hedging transactions involving exchange-traded futures contracts for corn, natural gas and unleaded gasoline from time to time. The financial statement impact of these activities is dependent upon, among other things, the prices involved and our ability to sell sufficient products to use all of the corn and natural gas for which forward commitments have been made. We have recognized losses in the past, and may suffer losses in the future, from our hedging arrangements. 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.

Current wording

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. In addition, we may engage in other hedging transactions involving exchange-traded futures contracts for corn, natural gas and unleaded gasoline from time to time. The financial statement impact of these activities is dependent upon, among other things, the prices involved and our ability to sell sufficient products to use all of the corn and natural gas for which forward commitments have been made. We have recognized losses in the past, and may suffer losses in the future, from our hedging arrangements. 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.

Previous wording

We have incurred significant losses and negative operating cash flow in the past. For example, for the three and six months ended June 30, 2025, we incurred consolidated net losses of approximately $11.3 million and $23.3 million, respectively, and for the six months ended June 30, 2025, we incurred negative operating cash flow of approximately $19.1 million. 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 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. Additional losses and negative operating cash flow may hamper our operations and impede us from expanding our business.

Current wording

We have incurred significant losses and negative operating cash flow in the past. For example, for the nine months ended September 30, 2025, we incurred consolidated net losses of approximately $8.5 million. 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 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. Additional losses and negative operating cash flow may hamper our operations and impede us from expanding our business.

Previous wording

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. We may therefore be unable to timely achieve, or achieve at all, the results we expect.

Current wording

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. We may therefore be unable to timely achieve, or achieve at all, the results we expect.

Previous wording

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, including regulatory risks. In addition, we must raise significant additional capital to complete some of our projects, including our CCS project. 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. 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. These tax and other benefits may change, including as a result of new or repealed laws, new administrations and the implementation or interpretation of existing laws, or the exhaustion of funds or benefits available under a particular program. For example, in January 2025, the new administration suspended all Inflation Reduction Act spending for 90 days. 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. 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.

Current wording

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 must raise significant additional capital to complete some of our initiatives and projects, including our CCS initiative. 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. For example, our assumptions around the anticipated results of our CCS initiative 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. These tax and other benefits may change, including as a result of new or repealed laws, new administrations and the implementation or interpretation of existing laws, or the exhaustion of funds or benefits available under a particular program. For example, in January 2025, the new administration suspended all Inflation Reduction Act spending for 90 days. 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 initiative. We can provide no assurances that any particular benefit will be available to us upon completion of our CCS initiative, or thereafter, or any other capital improvement initiative or project.

Previous wording

Capital improvement projects require significant outlays of capital and are often subject to material execution risks and delays. Our CCS project in particular requires EPA approval but the EPA’s own projected timeline for approval has lengthened and may lengthen further. Moreover, our Class VI permit application with the EPA for our CCS project contemplates CO 2 sequestration directly through the Mahomet aquifer in Illinois; however, Illinois Senate Bill 1723, which was signed into law on August 1, 2025, prohibits CO 2 sequestration directly through that aquifer. This legislation impacts our current CCS project plans and may necessitate a more costly, or less profitable, carbon capture and storage solution, such as carbon transportation via barge instead of through pipelines.

Current wording

Capital improvement projects require significant outlays of capital and are often subject to material execution risks and delays. Our CCS initiative in particular requires EPAapproval but the EPA’s own projected timeline for approval has lengthened and may lengthen further. Moreover, our Class VI permit application with the EPA for our CCS initiative contemplates CO 2 sequestration directly through the Mahomet aquifer in Illinois; however, Illinois Senate Bill 1723, which was signed into law on August 1, 2025, prohibits CO 2 sequestration directly through that aquifer. This legislation impacts our current CCS initiative plans and may necessitate a more costly, or less profitable, carbon capture and storage solution, such as carbon transportation via barge instead of through pipelines.

Previous wording

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 any of them. If we continue with a pipeline solution for our CCS project, the timing and economics of the project may also be adversely affected by new rules proposed by the U.S. 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.

Current wording

In addition, our CCS initiative 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 any of them. If we continue with a pipeline solution for our CCS initiative, the timing and economics of the potential project may also be adversely affected by new rules proposed by the U.S. 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 potential project.

Previous wording

Section 45Z of the Inflation Reduction Act of 2022 allows low carbon fuel producers to apply for and receive substantial tax credits based on the carbon intensity of the fuel they produce. We expect our Colombia plant and our Pekin Campus dry mill to participate in applying for Section 45Z tax credits. Our ability to qualify for and receive these tax credits will depend on our ability to produce low carbon fuel in anticipated amounts at current and expected carbon intensities. If we are unable to produce low carbon fuel in anticipated amounts, including as a result of plant outages or other reasons, or fail to achieve the required, or our expected, carbon intensities, we will be unable to qualify for and receive Section 45Z tax credits in projected amounts, which may materially and adversely harm our results of operations and financial condition.

Current wording

Section 45Z of the Inflation Reduction Act of 2022 allows low carbon fuel producers to apply for and receive substantial tax credits based on the carbon intensity of the fuel they produce. We expect our Colombia plant and our Pekin Campus dry mill to participate in applying for Section 45Z tax credits. Our ability to qualify for and receive these tax credits will depend on our ability to produce low carbon fuel in anticipated amounts at current and expected carbon intensities. Our ability to qualify for and receive these tax credits also will depend on our ability to meet prevailing wage and other requirements. If we are unable to produce low carbon fuel in anticipated amounts, including as a result of plant outages or other reasons, or fail to achieve the required, or our expected, carbon intensities or prevailing wage or other requirements, we will be unable to qualify for and receive Section 45Z tax credits in projected amounts, or at all, which may materially and adversely harm our results of operations and financial condition.

Previous wording

Our CCS project may be adversely affected by the SAFE CCS Act, Illinois Senate Bill 1723 and other Regulations.

Current wording

Our CCS initiative may be adversely affected by the SAFE CCS Act, Illinois Senate Bill 1723 and other Regulations.

Previous wording

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 long-term capital improvement initiative. 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. If we continue with a pipeline solution, 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 addition, in January 2025, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration proposed new rules 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 any CCS project using pipelines for CO 2 transportation and storage.

Current wording

The SAFE CCS Act was signed into law in Illinois in July 2024. We are considering for our Pekin Campus, located in Illinois, a CCS initiative that will require significant financial and personnel resources. Our CCS initiative would be our most important and costly long-term capital improvement project. 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. If we continue with a pipeline solution, the SAFE CCS Act will result in increased compliance and other requirements likely adding costs and potentially adding time to complete our CCS initiative. In addition, in January 2025, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration proposed new rules 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 any CCS project using pipelines for CO 2 transportation and storage.

Previous wording

On August 1, 2025, new legislation in Illinois (Senate Bill 1723), was signed into law that amends the Illinois Environmental Protection Act to provide that carbon storage activity shall not be conducted within a storage facility that overlies, underlies or passes through a sole-source aquifer. This legislation impacts our current CCS project plans and may necessitate a more costly, or less profitable, carbon capture and storage solution, such as carbon transportation via barge instead of through pipelines.

Current wording

On August 1, 2025, new legislation in Illinois (Senate Bill 1723), was signed into law that amends the Illinois Environmental Protection Act to provide that carbon storage activity shall not be conducted within a storage facility that overlies, underlies or passes through a sole-source aquifer. This legislation impacts our current CCS initiative plans and will likely necessitate a more costly, or less profitable, carbon capture and storage solution, such as carbon transportation via barge instead of through pipelines, or an entirely different carbon utilization strategy.

Previous wording

We can provide no assurance that our CCS project will not be adversely affected by the SAFE CCS Act, Senate Bill 1723 or other regulations or that it will be financially viable in light of any new requirements and potential delays.

Current wording

We can provide no assurance that our CCS initiative will not be adversely affected by the SAFE CCS Act, Senate Bill 1723 or other regulations or that it will be financially viable in light of any new requirements and potential delays.

Previous wording

For the three and six months ended June 30, 2025 and 2024, we accrued and paid in cash an aggregate of $0.3 million and $0.6 million, respectively, in dividends on our Series B Cumulative Convertible Preferred Stock, or Series B Preferred Stock.

Current wording

For the three and nine months ended September 30, 2025 and 2024, we accrued and paid in cash an aggregate of $0.3 million and $0.9 million, respectively, in dividends on our Series B Cumulative Convertible Preferred Stock, or Series B Preferred Stock.