Attached files
file | filename |
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10-K - FORM 10-K - Sooner Holdings, Inc. | c14091e10vk.htm |
EX-23 - EXHIBIT 23 - Sooner Holdings, Inc. | c14091exv23.htm |
EX-21 - EXHIBIT 21 - Sooner Holdings, Inc. | c14091exv21.htm |
EX-31.2 - EXHIBIT 31.2 - Sooner Holdings, Inc. | c14091exv31w2.htm |
EX-31.1 - EXHIBIT 31.1 - Sooner Holdings, Inc. | c14091exv31w1.htm |
EX-32.1 - EXHIBIT 32.1 - Sooner Holdings, Inc. | c14091exv32w1.htm |
EX-32.2 - EXHIBIT 32.2 - Sooner Holdings, Inc. | c14091exv32w2.htm |
Ex. 99.3
DYNAMIC FUELS, LLC
(A Development Stage Company)
(A Development Stage Company)
FINANCIAL STATEMENTS
SEPTEMBER 30, 2010 and 2009
WITH
INDEPENDENT AUDITORS REPORT
CONTENTS
Independent Auditors Report |
1 | |||
Balance Sheets |
2 | |||
Statements of Operations |
3 | |||
Statements of Members Equity |
4 | |||
Statements of Cash Flows |
5 | |||
Notes to Financial Statements |
6 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Members of
Dynamic Fuels, LLC
Dynamic Fuels, LLC
We have audited the accompanying balance sheets of Dynamic Fuels, LLC (a development stage company)
as of September 30, 2010 and 2009, and the related statements of operations, members equity and
cash flows for the years then ended and for the period from June 22, 2007 (date of inception)
through September 30, 2010. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Companys internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of Dynamic Fuels, LLC, as of September 30, 2010 and 2009, and the
results of its operations and its cash flows for the years then ended, and for the period from June
22, 2007 (date of inception) through September 30, 2010, in conformity with accounting principles
generally accepted in the United States of America.
November 17, 2010
1
DYNAMIC FUELS, LLC
(A Development Stage Company)
(A Development Stage Company)
BALANCE SHEETS
September 30, 2010 and 2009
2010 | 2009 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash |
$ | 2,004,738 | $ | 32,321,714 | ||||
Restricted cash |
115,829 | 42,775,005 | ||||||
Other receivables |
701,422 | | ||||||
Inventory |
7,086,677 | | ||||||
Prepaid expenses and other current assets |
164,961 | 1,916,918 | ||||||
Total current assets |
10,073,627 | 77,013,637 | ||||||
Property, plant and equipment, net |
144,401,235 | 76,432,295 | ||||||
Other |
3,402,478 | 1,192,133 | ||||||
Total assets |
$ | 157,877,340 | $ | 154,638,065 | ||||
Liabilities and Members Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued liabilities |
$ | 5,716,527 | $ | 13,020,431 | ||||
Due to related parties |
4,611,335 | 2,946,556 | ||||||
Total current liabilities |
10,327,862 | 15,966,987 | ||||||
Asset retirement obligation |
34,720 | 16,434 | ||||||
Notes payable |
100,000,000 | 100,000,000 | ||||||
Total liabilities |
110,362,582 | 115,983,421 | ||||||
Commitments and contingencies |
||||||||
Members equity: |
||||||||
Syntroleum Corporation capital contributions |
34,250,000 | 24,250,000 | ||||||
Tyson Foods, Inc. capital contributions |
34,250,000 | 24,250,000 | ||||||
Deficit accumulated during the development stage |
(20,985,242 | ) | (9,845,356 | ) | ||||
Total members equity |
47,514,758 | 38,654,644 | ||||||
Total liabilities and members equity |
$ | 157,877,340 | $ | 154,638,065 | ||||
See notes to financial statements.
2
DYNAMIC FUELS, LLC
(A Development Stage Company)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Period from | ||||||||||||
June 22, 2007, | ||||||||||||
Date of | ||||||||||||
Year ended | Year ended | Inception, to | ||||||||||
September 30, | September 30, | September 30, | ||||||||||
2010 | 2009 | 2010 | ||||||||||
Expenses: |
||||||||||||
General and administrative |
$ | 11,822,945 | $ | 5,203,283 | $ | 18,808,387 | ||||||
Depreciation and amortization |
219,338 | 57,424 | 277,195 | |||||||||
Total expenses |
12,042,283 | 5,260,707 | 19,085,582 | |||||||||
Loss from operations |
(12,042,283 | ) | (5,260,707 | ) | (19,085,582 | ) | ||||||
Interest income (expense) |
(8,233 | ) | 604,415 | 850,487 | ||||||||
Interest rate swap valuation adjustment |
753,480 | (3,678,663 | ) | (2,925,184 | ) | |||||||
Other income (expense) |
157,150 | 17,887 | 175,037 | |||||||||
Net loss |
$ | (11,139,886 | ) | $ | (8,317,068 | ) | $ | (20,985,242 | ) | |||
Allocation of net loss to members: |
||||||||||||
Syntroleum Corporation |
$ | (5,569,943 | ) | $ | (4,158,534 | ) | $ | (10,492,621 | ) | |||
Tyson Foods, Inc. |
(5,569,943 | ) | (4,158,534 | ) | (10,492,621 | ) | ||||||
$ | (11,139,886 | ) | $ | (8,317,068 | ) | $ | (20,985,242 | ) | ||||
See notes to financial statements.
3
DYNAMIC FUELS, LLC
(A Development Stage Company)
(A Development Stage Company)
STATEMENTS OF MEMBERS EQUITY
Period June 22, 2007 (Date of Inception) to September 30, 2010
Deficit | ||||||||||||||||
Accumulated | ||||||||||||||||
Capital Contributions | During the | |||||||||||||||
Syntroleum | Tyson | Development | ||||||||||||||
Corporation | Foods, Inc. | Stage | Total | |||||||||||||
Balance, June 22, 2007
(date of inception) |
$ | | $ | | $ | | $ | | ||||||||
Cash contributions |
4,250,000 | 4,250,000 | | 8,500,000 | ||||||||||||
Net loss |
| | (234,734 | ) | (234,734 | ) | ||||||||||
Balance, September 30, 2007 |
4,250,000 | 4,250,000 | (234,734 | ) | 8,265,266 | |||||||||||
Cash contributions |
14,000,000 | 14,000,000 | | 28,000,000 | ||||||||||||
Net loss |
| | (1,293,554 | ) | (1,293,554 | ) | ||||||||||
Balance, September 30, 2008 |
18,250,000 | 18,250,000 | (1,528,288 | ) | 34,971,712 | |||||||||||
Cash contributions |
6,000,000 | 6,000,000 | | 12,000,000 | ||||||||||||
Net loss |
| | (8,317,068 | ) | (8,317,068 | ) | ||||||||||
Balance, September 30, 2009 |
24,250,000 | 24,250,000 | (9,845,356 | ) | 38,654,644 | |||||||||||
Cash contributions |
10,000,000 | 10,000,000 | | 20,000,000 | ||||||||||||
Net loss |
| | (11,139,886 | ) | (11,139,886 | ) | ||||||||||
Balance, September 30, 2010 |
$ | 34,250,000 | $ | 34,250,000 | $ | (20,985,242 | ) | $ | 47,514,758 | |||||||
See notes to financial statements.
4
DYNAMIC FUELS, LLC
(A Development Stage Company)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Period from | ||||||||||||
June 22, 2007, | ||||||||||||
Year ended | Year ended | Date of Inception, | ||||||||||
September 30, | September 30, | to September 30, | ||||||||||
2010 | 2009 | 2010 | ||||||||||
Cash Flows from Operating Activities |
||||||||||||
Net loss |
$ | (11,139,886 | ) | $ | (8,317,068 | ) | $ | (20,985,242 | ) | |||
Adjustments to reconcile net loss to net cash used in
operating activities: |
||||||||||||
Depreciation and amortization |
219,338 | 57,426 | 277,195 | |||||||||
Accretion of asset retirement obligation |
4,297 | | 4,297 | |||||||||
Loss on disposition of property, plant and
equipment |
29,673 | | 29,673 | |||||||||
Mark-to-market interest rate swap in excess
of cash collateral |
(753,480 | ) | 2,088,663 | 1,335,183 | ||||||||
Changes in: |
||||||||||||
Other receivables |
(701,422 | ) | 16,523 | (701,422 | ) | |||||||
Inventory |
(7,086,677 | ) | | (7,086,677 | ) | |||||||
Prepaid expenses and other |
(508,060 | ) | (367,319 | ) | (2,418,037 | ) | ||||||
Accounts payable and accrued liabilities |
(9,988,887 | ) | (10,158,255 | ) | 2,124,300 | |||||||
Due to related parties |
2,418,259 | 309,315 | 3,276,152 | |||||||||
Net cash used in operating activities |
(27,506,845 | ) | (16,370,715 | ) | (24,144,578 | ) | ||||||
Cash Flows from Investing Activities |
||||||||||||
Payments for the purchase of property, plant and
equipment |
(64,832,181 | ) | (45,680,626 | ) | (141,256,229 | ) | ||||||
Proceeds from asset sale |
270,118 | | 270,118 | |||||||||
Change in restricted cash |
42,659,176 | (42,775,005 | ) | (115,829 | ) | |||||||
Net cash used in investing activities |
(21,902,887 | ) | (88,455,631 | ) | (141,101,940 | ) | ||||||
Cash Flows from Financing Activities |
||||||||||||
Proceeds from sale of tax-exempt bonds |
| 100,000,000 | 100,000,000 | |||||||||
Proceeds from capital contributions |
20,000,000 | 12,000,000 | 68,500,000 | |||||||||
Debt issuance costs |
(907,244 | ) | (341,500 | ) | (1,248,744 | ) | ||||||
Net cash provided by financing activities |
19,092,756 | 111,658,500 | 167,251,256 | |||||||||
Net change in cash |
(30,316,976 | ) | 6,832,154 | 2,004,738 | ||||||||
Cash, beginning of year |
32,321,714 | 25,489,560 | | |||||||||
Cash, end of year |
$ | 2,004,738 | $ | 32,321,714 | $ | 2,004,738 | ||||||
Supplemental Disclosure of Cash Flow Information |
||||||||||||
Noncash investing and financing activities: |
||||||||||||
Purchase of property, plant and equipment on
account |
$ | 3,592,227 | $ | 10,850,165 | $ | 3,592,227 | ||||||
See notes to financial statements.
5
DYNAMIC FUELS, LLC
(A Development Stage Company)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2010 and 2009
Note 1 Summary of Significant Accounting Policies
Nature of operations
Dynamic Fuels, LLC, a Delaware limited liability company (the Company), was formed on June 22,
2007, as a joint venture between Syntroleum Corporation (Syntroleum), and Tyson Foods, Inc.,
(Tyson) (collectively, the Members). The Limited Liability Company Agreement between the Members
provides for management and control of the Company to be exercised jointly by representatives of
the Members equally, with no Member exercising control. The Company is in the development stage
and was organized to engage in the development, production, marketing and sale of Bio-Synfined
renewable fuels produced using Syntroleums Bio-Synfining technology in the United States
including, the development, construction, financing, testing, ownership, operation and maintenance
of one or more Bio-Synfining renewable fuels production plants. The Bio-Synfining technology
converts triglycerides and/or fatty acids from fats and vegetable oils with heat, hydrogen and
proprietary catalysts to make renewable synthetic fuels, such as diesel, jet fuel (subject to
certification), kerosene, naphtha and LPG. The fats and vegetable oil feedstock will be procured
by Tyson.
As a limited liability company, the Members are not personally liable for any debts, liabilities,
or obligations of the Company beyond the Members equity accounts, except to the extent that they
have obligated themselves (see Note 4). Income and losses are allocated to the Members on the
basis of their ownership.
Reclassifications
Certain reclassifications have been made to the September 30, 2009 financial statements to conform
to the September 30, 2010 presentation. These reclassifications had no impact on net income.
Cash
The Company maintains bank accounts which are insured by the Federal Deposit Insurance Corporation
(FDIC). At times, cash balances may be in excess of the FDIC insurance limit.
Restricted cash
Restricted cash consists of cash held in an escrow account for the payment of qualified invoices
and/or interest during construction of the plant in Geismar, Louisiana and cash held as collateral
against corporate credit cards.
Other receivables
Other receivables relate to Louisiana Quality Jobs sales tax and payroll rebates, as well as
wastewater treatment sales tax rebates. The Company has received preliminary approval, and must
submit final documentation within 90 days of substantial project completion. Such rebates are
expected to be received during fiscal year 2011.
6
Inventory
Inventories consist of raw materials, such as fats, oil and greases. Raw materials also include
certain chemicals used in the manufacturing process and spare parts maintained for the purpose of
minimizing the duration of interruptions in plant operations. At September 30, 2010, there were no
finished goods in inventory.
Inventories are stated at the lower of cost or estimated net realizable value. The cost of
inventories is determined using the first-in first-out method. The estimated net realizable value
is based on replacement cost adjusted if necessary, in recognition of market for fuels that will be
produced.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is
computed on the straight-line method over the estimated useful lives of the related assets.
Initial construction costs and plant engineering costs associated with the construction of the
synthetic fuels plant are capitalized and included in plant construction in progress. These
capitalized costs will be depreciated when the plant is placed in service. Expenditures for
repairs and maintenance are charged to expense as incurred, whereas major improvements are
capitalized.
Interest
The Company capitalized approximately $7,395,000 and $4,615,000 in interest expense during
construction for the year ended September 30, 2010 and 2009, respectively. The amount capitalized
will begin to be amortized over the life of the plant upon plant start up.
Other assets
At September 30, 2010, other assets included approximately $2,260,000 in long-term security
deposits with vendors, and approximately $1,249,000 of debt issuance costs that were incurred by
the Company in connection with the issuance of the $100 million tax exempt bonds (see Note 4.) The
debt issuance costs are being amortized over the bond 25-year term. The Company recognized
approximately $50,000 of amortization expense for the years ended September 30, 2010 and 2009.
Asset retirement obligation
The Company records the fair value of a liability for an asset retirement obligation in the period
in which is it incurred and a corresponding increase in the carrying amount of the related
long-lived asset. The Company records the discounted fair value of the retirement obligation as a
liability at the time the plant is constructed. The asset retirement obligation represents the
present value of the estimated costs associated with the future dismantlement of the Companys
Geismar plant, discounted at 15% per annum. The liability accretes over time with a charge to
accretion expense. Accretion expense for the year ended September 30, 2010, was approximately
$4,000. There was no accretion expense for the year ended September 30, 2009.
Income taxes
As a limited liability company, the Companys taxable income or loss is allocated to members in
accordance with their respective percentage ownership. Accordingly, no provision or liability for
income taxes has been recorded in the financial statements.
7
The Financial Accounting Standards Board issued new guidance on accounting for uncertainty in
income taxes. The Company adopted this new guidance for the year ended September 30, 2010.
Management evaluated the Companys tax position and concluded that the Company had taken no
uncertain tax positions that require adjustment to the financial statements to comply with the
provisions of this guidance.
Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires the Company to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities,
and the reported amounts of revenues and expenses. Actual results could differ from those
estimates.
Fair value of financial instruments
The carrying amounts of financial instruments, including cash, accounts payable and accrued
liabilities approximates fair value due to the short maturity of these instruments. The carrying
amount of long-term debt is estimated by management to approximate fair value based on the
obligation characteristics, including floating interest rate, credit rating, and maturity.
Note 2 Related-Party Transactions
The accompanying financial statements include transactions with Members of the Company, including
engineering, accounting, travel expenses, letter of credit fees, and collateral for interest rate
swaps associated with plant construction and financing of plant construction. Expenditures made by
the Company during the year ended September 30, 2010, to Syntroleum and Tyson were approximately
$1,836,000 and $19,118,000, respectively, and for the year ended September 30, 2009, were
$2,822,000 and $6,420,000, respectively, and since inception were approximately $8,320,000 and
$26,381,000, respectively. Due to related parties at September 30, 2010 and 2009, included amounts
owed to Syntroleum and Tyson of approximately $198,000 and $4,413,000, respectively and $223,000
and $2,724,000, respectively.
Note 3 Property, Plant and Equipment
Property, plant and equipment consist of the following at September 30:
2010 | 2009 | |||||||
Plant construction in progress |
$ | 142,636,089 | $ | 76,038,984 | ||||
Computer hardware and software |
1,013,203 | 314,237 | ||||||
Furniture and automobile |
929,794 | 87,259 | ||||||
144,579,086 | 76,440,480 | |||||||
Accumulated depreciation |
177,851 | 8,185 | ||||||
Property, plant and equipment, net |
$ | 144,401,235 | $ | 76,432,295 | ||||
Depreciation expense for the years ended September 30, 2010 and 2009, was $169,666 and $7,754,
respectively.
8
The Company is currently negotiating the final billings associated with the construction of its
production facilities.
Note 4 Notes Payable
In October 2008, Dynamic Fuels received $100 million in proceeds from the issuance of Gulf
Opportunity Zone tax-exempt bonds made available by Louisiana Public Facilities Authority. These
floating rate (0.29% at September 30, 2010) bonds are due October 1, 2033. In November 2008, Tyson
entered into an interest rate swap related to these bonds on the Companys behalf to mitigate
interest rate risk on a portion of the bonds for five years. Interest on the swap is fixed at
2.19%. The Company reimburses Tyson for all monthly settlements and any margin calls related to
the swap. Tyson also provided a letter of credit as a guarantee for the entire bond issuance. The
guarantee is for the life of the bonds, 25 years. Monthly fees for this letter of credit are paid
by Tyson. The Company reimburses Tyson for these monthly fees and expenses the monthly fees
accordingly. The unexpended proceeds from the bond issuance are held in trust and can only be used
for the construction of the Dynamic Fuels facility. Accordingly, the unused proceeds are recorded
as restricted cash.
Note 5 Commitments and Contingencies
Effective October 1, 2008, the Company entered into a land and office lease agreement associated
with its plant in Geismar, Louisiana, expiring September 30, 2033. Annual lease payments for the
land are $2 million, payable in four quarterly installments of $500,000. In addition,
infrastructure maintenance fees totaling $101,800 are due quarterly. The Company expects to pay at
least $2 million per year in lease payments over the next five years. The lease payments will be
adjusted by the consumer price index in 2013.
The Company has entered into contracts for supplies of hydrogen, nitrogen, and utilities. The
following table outlines the minimum take or pay requirement related to the purchase of hydrogen,
nitrogen, and utilities:
Year | Amount | |||
2011 |
$ | 2,580,000 | ||
2012 |
3,510,000 | |||
2013 |
3,510,000 | |||
2014 |
3,510,000 | |||
2015 |
3,510,000 | |||
Thereafter |
32,250,000 | |||
Total |
$ | 48,870,000 | ||
The Company is involved in litigation arising from the normal course of operations. In
managements opinion, the litigation is not expected to materially impact the Companys results of
operations or financial condition.
9
Note 6 Members Equity
The Company was initially capitalized on July 13, 2007, with $4.25 million in capital contributions
from Tyson and $4.25 million in capital contributions from Syntroleum. Each member has contributed
an additional $30 million in capital contributions through September 30, 2010, and funded an
additional contribution of $5 million each in October 2010. Additional capital contribution, if
any, will be based on the Companys cash requirements.
If a Member fails to make a required capital contribution, it is in default under the Membership
Agreement, and its Member interest in the Company will be diluted by $1.50 per $1.00 not
contributed. At its option, the other Member may fund the portion of the default, which is
considered a loan to the defaulting member at a rate of LIBOR +10% with a 40-day cure period. The
defaulting Member may make a full or partial loan repayment and a pro rata portion of lost interest
will be restored. If the loan is not repaid, it will be converted into ownership interest for the
member making the loan, diluting the defaulting member by $1.00 per $1.00 of the loan. No Member
is in default at this time.
Note 7 Derivative Financial Instruments
The Companys business operations give rise to certain market risk exposures mostly due to changes
in interest rates. The Company manages this risk through the use of a derivative financial
instrument, to reduce the exposure to interest rate risk associated with a variable-rate borrowing.
The interest rate swap was entered into by Tyson for the Company.
Risk management programs are reviewed and monitored by the Companys Management Committee. These
programs will be revised as market conditions dictate. The current risk management programs
utilize industry-standard models that take into account the implicit cost of hedging. Risks
associated with market risks and those created by derivative instruments and the mark-to-market
valuations are strictly monitored at all times, using value-at-risk and stress tests.
The objective of the undesignated interest rate swap is to manage interest rate risk exposure on a
floating-rate bond. The interest rate swap agreement effectively modifies the Companys exposure
to interest rate risk by converting a portion of the floating-rate bond to a fixed rate for the
next five years, thus reducing the impact of the interest-rate changes on future interest expense.
This interest rate swap does not qualify for hedge treatment due to differences in the underlying
bond and swap contract interest-rate indices. The Company does not apply hedge accounting to its
interest rate derivative instrument. The Company marks this position to fair value through
earnings at each reporting date. During the years ended September 30, 2010 and 2009, the Company
recognized $753,480 in mark-to-market swap valuation income and $3,678,663 million in
mark-to-market swap valuation expense, respectively, on an approximate average notional debt of $53
million and $64 million, respectively.
Note 8 Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a
liability (an exit price) in the principal or most advantageous market for the asset or liability
in an orderly transaction between market participants on the measurement date. The fair value
hierarchy contains three levels as follows:
Level 1
|
Unadjusted quoted prices available in active markets for the identical assets or liabilities at the measurement date. |
10
Level 2
|
Other significant observable inputs available at the
measurement date, including quoted prices for similar
securities. |
|
Level 3
|
Unobservable inputs that cannot be corroborated by observable
market data and reflect the use of significant management
judgment. These values are generally determined using pricing
models for which the assumptions utilize managements estimates
of market participant assumptions. |
The interest rate swap is recorded at its estimated fair value, based on a discounted cash flow
model. This model uses quoted LIBOR swap rates adjusted for credit and nonperformance risk.
The preceding method may produce a fair value calculation that may not be indicative of net
realizable value or reflective of future fair values. Furthermore, although the Company believes
its valuation methods are appropriate and consistent with other market participants, the use of
different methodologies or assumptions to determine the fair value of certain financial instruments
could result in a different fair value measurement at the reporting date.
Derivative assets and liabilities are presented in the Companys balance sheets on a net basis.
The Company nets derivative assets and liabilities, including cash collateral, when a legally
enforceable master netting arrangement exists between the counterparty to a derivative contract and
the Company. At September 30, 2010, the Company had posted $900,000 of cash collateral. The net
derivative liability of approximately $1,495,000 and $2,089,000 is included in due to related
parties in the September 30, 2010 and 2009 balance sheets, respectively.
The following is a summary of the inputs used in valuing the interest rate swap:
September 30, | ||||||||
Valuation inputs | 2010 | 2009 | ||||||
Level 1 Quoted prices |
$ | | $ | | ||||
Level 2 Other significant observable inputs |
1,495,183 | 2,089,000 | ||||||
Level 3 Significant unobservable inputs |
| | ||||||
Total |
$ | 1,495,183 | $ | 2,089,000 | ||||
Note 9 Subsequent Events
On October 31, 2010, the Company, began production and delivery on certain contracts to deliver jet
fuel. In conjunction with plant operation, the Company ceased capitalizing interest.
11