868725--12/14/2010--RENTECH_INC

related topics

{property, intellectual, protect}

{operation, natural, condition}

{cost, regulation, environmental}

{condition, economic, financial}

{acquisition, growth, future}

{cost, contract, operation}

{gas, price, oil}

{control, financial, internal}

{product, candidate, development}

{personnel, key, retain}

{debt, indebtedness, cash}

Risks Related to Our Liquidity, Financial Condition, and Results of Operations Our liquidity and capital resources are limited. We must raise substantial additional capital to execute our business plan and, in the event that currently expected sources of funding are not available, to fund working capital and to continue our operations. Competitors with superior access to capital may have a substantial advantage over us. We have never operated at a profit. If we do not achieve significant amounts of additional revenues and become profitable on an ongoing basis, we may be unable to continue our operations. REMC s operations may become unprofitable and may require substantial working capital financing. Our level of indebtedness 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. Continued recessionary conditions and the relative unavailability of credit have made it more difficult for companies to secure financing. If we are unable to access financing on terms and at a time acceptable to us for any reason, it could have a material adverse effect on our operations, financial condition and liquidity. The issuance of shares of our common stock could result in the loss of our ability to use our net operating losses. We may not be able to successfully manage our growing business. Although ClearFuels has been consolidated with us for financial reporting purposes, we have not evaluated ClearFuels internal controls and the conclusion of our management regarding the effectiveness of our internal control over financial reporting included in this report does not extend to ClearFuels internal controls. Risks Related to the Rentech Process and the Rentech-SilvaGas Technology We and our potential licensees may be unable to successfully or economically implement the Rentech Process or the Rentech-SilvaGas Technology at commercial-scale synthetic fuels or power plants. We could have indemnification liabilities to potential licensees of our technology. Our success substantially 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. Our technologies may not compete successfully against technologies developed by our competitors, many of whom have significantly more resources. A reduction in government incentives for FT fuels or energy from biomass, or the relaxation of clean air and renewable energy requirements, could materially reduce the demand for FT fuels or energy from biomass and the economic feasibility of projects using our technologies. Industry rejection of the Rentech Process or the Rentech-SilvaGas Technology would adversely affect our ability to receive future license fees. Changes in existing laws and regulations, or their interpretation, or the imposition of new restrictions relating to emissions of greenhouse gases or 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, results of operations, cash flows or prospects. Risks Related to Possible Inability to Complete Project Developments and the Financing Required for Construction and Subsequent Operation We are pursuing alternative energy projects, including the Rialto and Natchez Projects, that will involve substantial expense and risk. The construction of commercial scale projects that utilize our technology will require several years and substantial financing, and may not be successful. We may not be able to successfully negotiate and execute engineering, procurement and construction contracts with construction and other vendors necessary for our development projects. The volatility in the price for certain commodities that we may purchase in the open market to use as feedstock; the price for oil and natural gas used to create fuels that compete with our fuels; and prices for electricity could adversely affect our ability to develop, build and operate commercial scale synthetic fuels and power plants or our ability to license our technology. Risks Related to the East Dubuque Plant 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. 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. A reduction in demand for corn or other crops could reduce demand for the nitrogen fertilizer produced by REMC. Weather conditions may materially impact the demand for REMC products. The East Dubuque Plant is an aging facility with aging equipment that could fail. Any operational disruption at the plant could result in a reduction of sales volumes and could cause us to incur substantial expenditures. A prolonged disruption could materially affect the cash flow we expect from the plant, or lead to a default of the 2010 Credit Agreement. The business of the East Dubuque Plant is highly seasonal. The nitrogen fertilizer industry is very competitive and the actions of our competitors could materially affect the business, results of operations, cash flows and financial position of the Company. We rely on Agrium as distributor of the nitrogen fertilizer products we produce at the East Dubuque Plant. 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 energy products at our facilities. We may be required to install additional pollution control equipment at the East Dubuque Plant in order to maintain compliance with applicable environmental requirements. The imposition of new restrictions relating to emissions of carbon dioxide may give rise to material additional compliance costs, capital expenditures or liabilities at the East Dubuque Plant.

Full 10-K form ▸

868725--12/14/2010--RENTECH_INC_/CO/