Commitments – The following is a description of significant commitments at December 31, 2020:

Sales Commitments – The Company had open fuel-grade ethanol indexed-price contracts for 84,722,000 gallons as of December 31, 2020 and open fixed-price fuel-grade ethanol and specialty alcohol sales contracts totaling $257,310,000 as of December 31, 2020. The Company had open fixed-price essential ingredient contracts totaling $16,722,000 as of December 31, 2020 and open indexed-price essential ingredient sales contracts for 161,000 tons as of December 31, 2020. These sales contracts are scheduled to be completed throughout 2021.

Purchase Commitments – At December 31, 2020, the Company had indexed-price purchase contracts to purchase 5,814,000 gallons of fuel-grade ethanol and fixed-price purchase contracts to purchase $4,043,000 of fuel-grade ethanol from its suppliers. The Company had fixed-price purchase contracts to purchase $22,809,000 of corn from its suppliers. These purchase commitments are scheduled to be satisfied throughout 2021. 

Assessment Financing – In September 2016, the Company signed an agreement to finance and construct a 5-megawatt solar project at its Madera, California production facility. The amount financed is for up to $10.0 million, to be amortized over twenty years as part of the facility’s property tax assessments. As of December 31, 2020 and 2019, the Company had outstanding $9,108,000 and $9,342,000, respectively, in the accompanying consolidated balance sheets attributable to this financing, reflected in liabilities held-for-sale. To the extent the Company retains this financing, it expects to pay approximately $0.9 million per year in connection with its property tax payments, which includes an interest component based upon a 5.6% interest rate on the outstanding balance of the assessment.

Contingencies – The following is a description of significant contingencies at December 31, 2020:

Litigation – The Company is subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business transactions, employee-related matters, and others. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the claim if the likelihood of a potential loss is reasonably possible and the amount involved could be material. While there can be no assurances, the Company does not expect that any of its pending legal proceedings will have a material financial impact on the Company’s operating results.

The Company has evaluated its pending cases and has not recorded a litigation contingency liability with respect to the cases.