868725--12/14/2006--RENTECH_INC

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{property, intellectual, protect}

{operation, natural, condition}

{acquisition, growth, future}

{cost, regulation, environmental}

{stock, price, share}

{control, financial, internal}

{condition, economic, financial}

{operation, international, foreign}

{gas, price, oil}

{debt, indebtedness, cash}

{tax, income, asset}

{product, market, service}

{personnel, key, retain}

{product, candidate, development}

{provision, law, control}

{cost, contract, operation}

{regulation, change, law}

Risks Related to Our Liquidity, Financial Condition, and Results of Operations Our liquidity and capital resources are limited and we must raise substantial additional capital to execute our business plan and to fund our operations. We have never operated at a profit. If we do not achieve significant amounts of additional revenues and become profitable, we may be unable to continue our operations. REMC s operations have not been profitable and require substantial working capital financing. We do not expect our historical operating results to be indicative of future performance. We most likely will have to record higher compensation expense as a result of the implementation of SFAS 123(R). Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on the market s perception of our business and our ability to raise capital. We need to incur significant costs and other resources to modify REMC s financial reporting systems and to integrate it with our financial reporting systems. Risks Related to the Rentech Process We and our licensees may be unable to successfully implement use of the Rentech Process at commercial scale Fischer-Tropsch plants, including the East Dubuque Plant. Our receipt of revenues from licensees is dependent on their ability to successfully develop, construct and operate Fischer-Tropsch plants using the Rentech Process. Plants that would use the Rentech Process rely upon complex gas process systems. This creates risks of fire and explosions, which could cause severe damage and injuries, create liabilities for us, and materially and adversely affect our business. We could have potential indemnification liabilities to licensees relating to the operation of Fischer-Tropsch plants based on the Rentech Process and to intellectual property disputes. Industry rejection of our Fischer-Tropsch technology would adversely affect our ability to receive future license fees. If our competitors introduce new technology, new legislation or regulations are adopted, or new industry standards emerge, our technologies and products could become obsolete and unmarketable. Our success depends in part on the successful and timely completion of our product development unit ( PDU ) and its subsequent operation. Our success depends on the performance of our management team, project development team and technology group. The loss of key individuals within these groups would disrupt our business operations. Our success depends in part on our ability to protect our intellectual property rights, which involves complexities and uncertainties. The Rentech Process may not compete successfully against Fischer-Tropsch technology developed by our competitors, many of whom have significantly more resources. Our processes (including the Rentech Process) incorporate technologies and processes developed by third parties the failure of which could harm our prospects for success. If we have foreign operations, our business there would be subject to various risks due to unstable conditions. Risks Related to Possible Inability to Complete Project Developments and the Financing Required for Construction and Subsequent Operation We are pursing alternative fuels projects, including one at Natchez, Mississippi, that will involve substantial expense and risk. The conversion of the East Dubuque Plant and the development of other alternative fuel projects will require several years and very substantial further financing, and may not be successful. If we do not receive funds from additional financing or other sources of working capital for our business activities and future transactions, we will not be able to execute our business plan. The level of indebtedness we expect to incur could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our obligations. The Revolving Credit Facility includes restrictive covenants that will limit our ability to operate our business. The issuance of shares of our common stock could result in the loss of our ability to use our net operating losses. Risks Related to Our Operations of Plants Miscalculations in our assessment of operating the East Dubuque Plant may lead to us not having adequately evaluated the operating results and risks associated with the plant and could have a material adverse effect on our business, results of operations and financial condition. Construction of Fischer-Tropsch plants incorporating the Rentech Process, including conversion of the East Dubuque Plant to use coal and our Rentech Process, will be subject to risks of delay and cost overruns. The market for natural gas has been volatile. If prices for natural gas increase significantly, we may not be able to economically operate the East Dubuque Plant during the conversion phase while we continue to use natural gas as the feedstock. Further, once the East Dubuque Plant is converted to using coal, volatility in the price of coal could adversely affect us. Lower prices for nitrogen fertilizers or downturns in market demands could reduce the revenues and profitability of the East Dubuque Plant s nitrogen fertilizer business. Weather conditions may materially impact the demand for REMC products. The business of the East Dubuque Plant is highly seasonal. The operations of the East Dubuque Plant are subject to risks and hazards that may result in monetary losses and liabilities. A reduction in government incentives for FT fuels, or the relaxation of clean air requirements, could materially reduce the demand for FT fuels or the Rentech Process. Changes in existing laws and regulations, or their interpretation, or the imposition of new restrictions relating to emissions of carbon dioxide may give rise to additional compliance costs or liabilities and could materially reduce the demand for FT fuels or the Rentech Process which could, in turn, have a material adverse effect on our business, financial condition or results of operations. Changes in United States government regulations and agricultural policy that affect the demand for products made at the East Dubuque Plant could materially and adversely affect its operations. We could be subject to claims and liabilities under environmental, health and safety laws and regulations arising from the production and distribution of nitrogen fertilizers and alternative fuel products at our facilities. Acts of terrorism and continued conflict and instability in the Middle East could affect both the supply and price of various fertilizer materials that we sell. The nitrogen fertilizer industry is very competitive and the actions of our competitors could materially affect the results of operations and financial position of the Company. We need to rely on Royster-Clark as exclusive distributor of the nitrogen fertilizer products we would produce at the East Dubuque Plant. We may not be able to successfully manage our growing business. Risks Related to the Market for Rentech Common Stock We have a very substantial overhang of common stock and future sales of our common stock will cause substantial dilution and may negatively affect the market price of our shares. Protection provisions in our Amended and Restated Articles of Incorporation and our shareholder rights plan may deter a third party from seeking to acquire control of us, which may reduce the market price of our stock. The market price of Rentech common stock may decline.

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868725--12/14/2006--RENTECH_INC_/CO/