1A. RISK FACTORS.
deciding to purchase, hold or sell our common stock, you should carefully consider the risks described below in addition to the other
information contained in this Report and in our other filings with the Securities and Exchange Commission, including subsequent reports
on Forms 10-Q and 8-K. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently deem immaterial may also affect our business. If any of these known or unknown risks or
uncertainties actually occurs with material adverse effects on Alto Ingredients, our business, financial condition, results of operations
and/or liquidity could be seriously harmed. In that event, the market price for our common stock will likely decline, and you may lose
all or part of your investment.
Related to our Business
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
results of operations are highly impacted by commodity prices, including the cost of corn, natural gas and other production inputs that
we must purchase, and the prices of alcohols and essential ingredients that we sell. Prices and supplies are subject to and determined
by market and other forces over which we have no control, such as weather, domestic and global demand, supply shortages, export prices
and various governmental policies in the United States and throughout the world.
volatility of corn, natural gas and other production inputs, and alcohols and essential ingredients, may cause our results of operations
to fluctuate substantially. We may fail to generate expected levels of net sales and profits even under fixed-price and other contracts
for the sale of specialty alcohols used in consumer products. Our customers may not pay us timely or at all, even under longer-term,
fixed-price contracts for our specialty alcohols, and may seek to renegotiate prices under those contracts during periods of falling
prices or high price volatility.
the past several years, for example, the spread between corn and fuel-grade ethanol prices has fluctuated significantly. Fluctuations
are likely to continue to occur. A sustained narrow spread, whether as a result of sustained high or increased corn prices or sustained
low or decreased alcohol or essential ingredient prices, would adversely affect our results of operations and financial condition. Revenues
from sales of alcohols, particularly fuel-grade ethanol, and essential ingredients could decline below the marginal cost of production,
which may force us to suspend production, particularly fuel-grade ethanol production, at some or all of our facilities.
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. For example, to satisfy customer demands, we maintain certain quantities of
fuel-grade ethanol inventory for subsequent resale. Moreover, we procure much of our fuel-grade ethanol inventory outside of
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. 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.
can provide no assurance that corn, natural gas or other production inputs can be purchased at or near current or any particular prices,
or that our alcohols or essential ingredients will sell at or near current or any particular prices. Consequently, our results of operations
and financial condition may be adversely affected by increases in the prices of corn, natural gas and other production inputs or decreases
in the prices of our alcohols and essential ingredients.
including as a result of commodity price inflation or supply chain constraints due to the war in Ukraine, may adversely impact our results
have experienced inflationary impacts on key production inputs, wages and other costs of labor, equipment, services, and other business
expenses. Commodity prices in particular have risen significantly over the past year. Inflation and its negative impacts could escalate
in future periods.
is the third largest exporter of grain in the world. Russia is one of the largest producers of natural gas and oil and is the
largest exporter of fertilizers. The commodity price impact of the war in Ukraine has been a sharp and sustained rise in grain and
energy prices, including corn and natural gas, two of our primary production input commodities. In addition, the war in Ukraine has
adversely affected and may continue to adversely affect global supply chains resulting in further commodity price inflation for our
production inputs. Lower fertilizer supplies may also impact future growing seasons, further impacting grain supplies and prices.
Also, given high global grain prices, U.S. farmers may prefer to lock in prices and export additional volumes, reducing domestic
grain supplies and resulting in further inflationary pressures.
may not be able to include these additional costs in the prices of the products we sell. As a result, inflation may have a material adverse
effect on our results of operations and financial condition.
alcohol or essential ingredient production or higher inventory levels may cause a decline in prices for those products, and may have
other negative effects, adversely impacting our results of operations, cash flows and financial condition.
prices of our alcohols and essential ingredients are impacted by competing third-party supplies of those products. For example, we believe
that the most significant factor influencing the price of fuel-grade ethanol has been the substantial increase in production. According
to the Renewable Fuels Association, domestic fuel-grade ethanol production capacity increased from an annualized rate of 1.5 billion
gallons per year in January 1999 to a record 16.1 billion gallons in 2018. In addition, if fuel-grade ethanol production margins improve,
we anticipate that owners of production facilities operating at below capacity, or owners of idled production facilities, will increase
production levels, thereby resulting in more abundant fuel-grade ethanol supplies and inventories. Increases in the supply of alcohols
and essential ingredients may not be commensurate with increases in demand for alcohols and essential ingredients, thus leading to lower
prices. Any of these outcomes could have a material adverse effect on our results
of operations, cash flows and financial condition.
prices of our products are volatile and subject to large fluctuations, which may cause our results of operations to fluctuate significantly.
prices of our products are volatile and subject to large fluctuations. For example, the market price of fuel-grade ethanol is dependent
upon many factors, including the supply of ethanol and the price of gasoline, which is in turn dependent upon the price of petroleum
which itself is highly volatile and difficult to forecast. 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 CBOT, ranged from $2.00 to $2.58 per gallon in the
three months ended March 31, 2022, $1.48 to $3.75 per gallon in 2021, from $0.81 to $1.62 per gallon in 2020 and from $1.25 to $1.70
per gallon in 2019. In addition, even under longer-term, fixed-price contracts for our specialty alcohols, our customers may seek to
renegotiate prices under those contracts during periods of falling prices or high price volatility. Fluctuations in the prices of our
products may cause our results of operations to fluctuate significantly.
in our production or distribution may adversely affect our business, results of operations and financial condition.
business depends on the continuing availability of rail, road, port, storage and distribution infrastructure. In particular, due to limited
storage capacity at our production facilities and other considerations related to production efficiencies, our facilities depend on just-in-time
delivery of corn. The production of alcohols also requires a significant and uninterrupted supply of other raw materials and energy,
primarily water, electricity and natural gas. Local water, electricity and gas utilities may fail to reliably supply the water, electricity
and natural gas that our production facilities need or may fail to supply those resources on acceptable terms. In the past, poor weather
has caused disruptions in rail transportation, which slowed the delivery of fuel-grade ethanol by rail, the principal manner by which
fuel-grade ethanol from our facilities located in the Midwest is transported to market. In addition, in 2020, we experienced closure
of the Illinois River for lock repairs which required greater use of less cost-effective modes of product transport such as via rail
and truck, which resulted in higher costs and negatively affected our results of operations.
in production or distribution, whether caused by labor difficulties, unscheduled downtimes and other operational hazards inherent in
the alcohol production industry, including equipment failures, fires, explosions, abnormal pressures, blowouts, pipeline ruptures, transportation
accidents and natural disasters such as earthquakes, floods and storms, or human error or malfeasance or other reasons, could prevent
timely deliveries of corn or other raw materials and energy, and could delay transport of our products to market, and may require us
to halt production at one or more production facilities, any of which could have a material adverse effect on our business, results of
operations and financial condition.
of these operational hazards may also cause personal injury or loss of life, severe damage to or destruction of property and equipment
or environmental damage, and may result in suspension of operations and the imposition of civil or criminal penalties. Our insurance
may not fully cover the potential hazards described above or we may be unable to renew our insurance on commercially reasonable terms
or at all.
effects of the coronavirus pandemic may materially and adversely affect our business, results of operations and liquidity.
coronavirus pandemic has resulted in businesses suspending or substantially curtailing operations and travel, quarantines, and an overall
substantial slowdown of economic activity. Federal, state and foreign governments have implemented measures to contain the virus, including
social distancing requirements, travel restrictions, border closures, limitations on public gatherings, work-from-home orders, and closure
of non-essential businesses. Many of these measures remain or have been curtailed only partially. Transportation fuels in particular,
including fuel-grade ethanol, experienced significant price declines and reduced demand. A further or extended ongoing downturn in global
economic activity, or recessionary conditions in general, would likely lead to poor demand for, and negatively affect the prices of,
fuel-grade ethanol, materially and adversely affecting our business, results of operations and liquidity.
may engage in hedging transactions and other risk mitigation strategies that could harm our results of operations and financial condition.
an attempt to partially offset the effects of volatility of our product prices, in particular fuel-grade ethanol, corn and natural gas
costs, we may enter into contracts to fix the price of a portion of our production or purchase a portion of our corn or natural gas requirements
on a forward basis. 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. Hedging arrangements also expose us to the risk of financial loss in situations where the other party to the hedging
contract defaults on its contract or, in the case of exchange-traded contracts, where there is a change in the expected differential
between the underlying price in the hedging agreement and the actual prices paid or received by us. In addition, our open contract positions
may require cash deposits to cover margin calls, negatively impacting our liquidity. As a result, our hedging activities and fluctuations
in the price of corn, natural gas, fuel-grade ethanol and unleaded gasoline may adversely affect our results of operations, financial
condition and liquidity.
Related to our Finances
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.
have incurred significant losses and negative operating cash flow in the past. For example, for the three months ended March 31, 2022
and year ended December 31, 2020, we incurred consolidated net losses of approximately $2.6 million and $17.3 million, respectively.
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.
incur significant expenses to maintain and upgrade our production facilities and operating equipment, and any interruption in our operations
would harm our operating performance.
regularly incur significant expenses to maintain and upgrade our production facilities and operating equipment. The machines and equipment
we use to produce our alcohols and manufacture our 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. In addition, our production facilities require periodic shutdowns to perform major maintenance and upgrades. These
scheduled shutdowns result in lower sales and increased costs in the periods during which a shutdown occurs and could result in unexpected
operational issues in future periods as a result of changes to equipment and operational and mechanical processes made during shutdown.
ability to utilize net operating loss carryforwards and certain other tax attributes may be limited.
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. 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. The annual base limitation under Section 382
of the Code is calculated by multiplying the corporation’s value at the time of the ownership change by the greater of the long-term
tax-exempt rate determined by the Internal Revenue Service in the month of the ownership change or the two preceding months. 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.
Related to Legal and Regulatory Matters
may be adversely affected by environmental, health and safety laws, regulations and liabilities.
are subject to various federal, state and local environmental laws and regulations, including those relating to the discharge of materials
into the air, water and ground; the generation, storage, handling, use, transportation and disposal of hazardous materials and wastes;
and the health and safety of our employees. In addition, some of these laws and regulations require us to operate under permits that
are subject to renewal or modification. These laws, regulations and permits often require expensive pollution control equipment or operational
changes to limit actual or potential impacts to the environment. A violation of these laws and regulations or permit conditions can result
in substantial fines, natural resource damages, criminal sanctions, permit revocations and/or production facility shutdowns. In addition,
we have made, and expect to make, significant capital expenditures on an ongoing basis to comply with increasingly stringent environmental
laws, regulations and permits.
may be liable for the investigation and cleanup of environmental contamination at each of our production facilities and at off-site locations
where we arrange for the disposal of hazardous substances or wastes. If these substances or wastes have been or are disposed of or released
at sites that undergo investigation and/or remediation by regulatory agencies, we may be responsible under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, or other environmental laws for all or part of the costs of investigation and/or remediation,
and for damages to natural resources. We 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.
addition, new laws, new interpretations of existing laws, increased governmental enforcement of environmental laws or other developments
could require us to make significant additional expenditures. Continued government and public emphasis on environmental issues will likely
result in increased future investments for environmental controls at our production 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.
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. 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. 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.
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
many trade groups, academics and governmental agencies have supported fuel-grade ethanol as a fuel additive that promotes a cleaner environment,
others have criticized fuel-grade ethanol production as consuming considerably more energy and emitting more greenhouse gases than other
biofuels and potentially depleting water resources. Some studies have suggested that corn-based ethanol is less efficient than ethanol
produced from other feedstock and that it negatively impacts consumers by causing increased prices for dairy, meat and other food generated
from livestock that consume corn. Additionally, critics of fuel-grade ethanol contend that corn supplies are redirected from international
food markets to domestic fuel markets. If negative views of corn-based ethanol production gain acceptance, support for existing measures
promoting use and domestic production of corn-based ethanol as a fuel additive could decline, leading to a reduction or repeal of federal
ethanol usage mandates, which would materially and adversely affect the demand for fuel-grade ethanol. These views could also negatively
impact public perception of the fuel-grade ethanol industry and acceptance of ethanol as an alternative fuel.
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. Discretionary blending is often determined
by the price of fuel-grade ethanol versus the price of gasoline. In periods when discretionary blending is financially unattractive,
the demand for fuel-grade ethanol may decline. Also, the demand for fuel-grade ethanol is affected by the overall demand for transportation
fuel. Demand for transportation fuel is affected by the number of miles traveled by consumers and vehicle fuel economy. Lower demand
for fuel-grade ethanol and co-products would reduce the value of our ethanol and related products, erode our overall margins and diminish
our ability to generate revenue or to operate profitably. In addition, we believe that 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.
United States fuel-grade ethanol industry is highly dependent upon various federal and state laws and any changes in those laws could
have a material adverse effect on our results of operations, cash flows and financial condition.
Environmental Protection Agency, or EPA, has implemented the Renewable Fuel Standard, or RFS, under the Energy Policy Act of 2005 and
the Energy Independence and Security Act of 2007. The RFS program sets annual quotas for the quantity of renewable fuels (such as fuel-grade
ethanol) that must be blended into motor fuels consumed in the United States. The domestic market for fuel-grade ethanol is significantly
impacted by federal mandates under the RFS program for volumes of renewable fuels (such as ethanol) required to be blended with gasoline.
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 in the ability of vehicles to use higher ethanol
blends, the RFS, and other applicable environmental requirements.
the provisions of the Clean Air Act, as amended by the Energy Independence and Security Act of 2007, the EPA has limited authority to
waive or reduce the mandated RFS requirements, which authority is subject to consultation with the Secretaries of Agriculture and Energy,
and based on a determination that there is inadequate domestic renewable fuel supply or implementation of the applicable requirements
would severely harm the economy or environment of a state, region or the United States in general. Our results of operations, cash flows
and financial condition could be adversely impacted if the EPA reduces the RFS requirements from the statutory levels specified in the
bills in Congress introduced from time to time are also directed at altering existing renewable fuels energy legislation, but none has
passed in recent years. Some legislative bills are directed at halting or reversing expansion of, or even eliminating, the renewable
fuel program, while other bills are directed at bolstering the program or enacting further mandates or grants that would support the
renewable fuels industry. Our results of operations, cash flows and financial condition could be adversely impacted if any legislation
is enacted that reduces the RFS volume requirements.
Related to Ownership of our Common Stock
stock price is highly volatile, which could result in substantial losses for investors purchasing shares of our common stock and in litigation
market price of our common stock has fluctuated significantly in the past and may continue to fluctuate significantly in the future.
The market price of our common stock may continue to fluctuate in response to one or more of the following factors, many of which are
beyond our control:
||fluctuations in the market
prices of our products;|
||fluctuations in the costs
of key production input commodities such as corn and natural gas;|
||the volume and timing of the
receipt of orders for our products from major customers;|
||the coronavirus pandemic,
including governmental and public responses to the pandemic;|
||competitive pricing pressures;|
||anticipated trends in our
financial condition and results of operations;|
||changes in market valuations
of companies similar to us;|
||stock market price and volume
||regulatory developments or
||fluctuations in our quarterly
or annual operating results;|
||additions or departures of
||our ability to obtain any
||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.|
price at which you purchase shares of our common stock may not be indicative of the price that will prevail in the trading market. You
may be unable to sell your shares of common stock at or above your purchase price, which may result in substantial losses to you and
which may include the complete loss of your investment. In the past, securities class action litigation has often been brought against
a company following periods of high stock price volatility. We may be the target of similar litigation in the future. Securities litigation
could result in substantial costs and divert management’s attention and our resources away from our business.
of the risks described above could have a material adverse effect on our results of operations, the price of our common stock, or both.
we do not intend to pay any cash dividends on our shares of common stock in the near future, our stockholders will not be able to receive
a return on their shares unless and until they sell them.
intend to retain a significant portion of any future earnings to finance the development, operation and expansion of our business.
We do not anticipate paying any cash dividends on our common stock in the near future. The declaration, payment, and amount of any
future dividends will be made at the discretion of our board of directors, and will depend upon, among other things, our results of
operations, cash flows, and financial condition, operating and capital requirements, and other factors as our board of directors
considers relevant. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with
respect to the amount of any such dividend. Unless our board of directors determines to pay dividends, our stockholders will be
required to look solely to appreciation in the value of our common stock to realize any gain on their investment. There can be no
assurance that any such appreciation will occur.
bylaws contain an exclusive forum provision, which could limit our stockholders’ ability to obtain a favorable judicial forum for
disputes with us or our directors, officers, employees or agents.
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.
the avoidance of doubt, the exclusive forum provision described above does not apply to any claims arising under the Securities Act of
1933, as amended, or the Securities Act, or the Securities Exchange Act of 1934, as amended, or the Exchange Act. Section 27 of the Exchange
Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the
rules and regulations thereunder, and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over
all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
choice of forum provision in our bylaws may limit our stockholders’ ability to bring a claim in a judicial forum that they find
favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and our
directors, officers, employees and agents even though an action, if successful, might benefit our stockholders. The applicable courts
may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may
be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders.
With respect to the provision making the Delaware Court of Chancery the sole and exclusive forum for certain types of actions, stockholders
who do bring a claim in the Delaware Court of Chancery could face additional litigation costs in pursuing any such claim, particularly
if they do not reside in or near Delaware. Finally, if a court were to find this provision of our bylaws inapplicable to, or unenforceable
in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving
such matters in other jurisdictions, which could have a material adverse effect on us.
through security vulnerabilities could lead to disruption of our business, reduced revenue, increased costs, liability claims, or
harm to our reputation or competitive position.
vulnerabilities may arise from our hardware, software, employees, contractors or policies we have deployed, which may result in
external parties gaining access to our networks, data centers, cloud data centers, corporate computers, manufacturing systems,
and/or access to accounts we have at our suppliers, vendors or customers. External parties may gain access to our data or our
customers’ data, or attack the networks causing denial of service or attempt to hold our data or systems in ransom. The
vulnerability could be caused by inadequate account security practices such as failure to timely remove employee access when
terminated. To mitigate these security issues, we have implemented measures throughout our organization, including firewalls,
backups, encryption, employee information technology policies and user account policies. However, there can be no assurance that
these measures will be sufficient to avoid cyberattacks. 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.
if we fail to adequately maintain our information technology infrastructure, we may have outages and data loss. Excessive outages may
affect our ability to timely and efficiently deliver products to customers or develop new products. Such disruptions and data loss may
adversely impact our ability to fulfill orders and interrupt other processes. Delayed sales or lost customers resulting from these disruptions
could adversely affect our financial results, stock price and reputation.
Our and our business partners’ or contractors’ failure to fully comply with applicable data privacy or similar laws
could lead to significant fines and require onerous corrective action. In addition, data security breaches experienced by us or our
business partners or contractors could result in the loss of trade secrets or other intellectual property, public disclosure of
sensitive commercial data, and the exposure of personally identifiable information (including sensitive personal information) of our
employees, customers, suppliers, contractors and others.
use or disclosure of, or access to, any personal information maintained by us or on our behalf, whether through breach of our systems,
breach of the systems of our suppliers or vendors by an unauthorized party, or through employee or contractor error, theft or misuse,
or otherwise, could harm our business. If any such unauthorized use or disclosure of, or access to, such personal information was to
occur, our operations could be seriously disrupted, and we could be subject to demands, claims and litigation by private parties, and
investigations, related actions, and penalties by regulatory authorities. In addition, we could incur significant costs in notifying
affected persons and entities and otherwise complying with the multitude of foreign, federal, state and local laws and regulations relating
to the unauthorized access to, or use or disclosure of, personal information. Finally, any perceived or actual unauthorized access to,
or use or disclosure of, such information could harm our reputation, substantially impair our ability to attract and retain customers
and have an adverse impact on our business, financial condition and results of operations.