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Risk Factors - EVA

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Item 1A. “Risk Factors.” Readers are cautioned not to place undue reliance on forward-looking statements and we undertake no obligation to update or revise any such statements after the date they are made, whether as a result of new information, future events or otherwise.

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GLOSSARY OF TERMS

biomass: any organic biological material derived from living organisms that stores energy from the sun.

co-fire: the combustion of two different types of materials at the same time. For example, biomass is sometimes fired in combination with coal in existing coal plants.

cost pass-through mechanism: a provision in commercial contracts that passes costs through to the purchaser.

dry-bulk: describes dry-bulk commodities that are shipped in large, unpackaged amounts.

metric ton: one metric ton, which is equivalent to 1,000 kilograms and 1.1023 short tons.

net calorific value: the amount of usable heat energy released when a fuel is burned completely and the heat contained in the water vapor generated by the combustion process is not recovered. The European power industry typically uses net calorific value as the means of expressing fuel energy.

off-take contract: an agreement concerning the purchase and sale of a certain volume of future production of a given resource such as wood pellets.

stumpage: the price paid to the underlying timber resource owner for the raw material.

utility-grade wood pellets: wood pellets meeting minimum requirements generally specified by industrial consumers and produced and sold in sufficient quantities to satisfy industrial‑scale consumption.

wood fiber: cellulosic elements that are extracted from trees and used to make various materials, including paper. In North America, wood fiber is primarily extracted from hardwood (deciduous) trees and softwood (coniferous) trees.

wood pellets: energy-dense, low-moisture, and uniformly sized units of wood fuel produced from processing various wood resources or byproducts.

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PART I

ITEM 1. BUSINESS

This Annual Report on Form 10-K presents information for Enviva Inc., a Delaware corporation. References to “Enviva,” the “Company,” “we,” “us,” or “our,” or similar expressions refer to Enviva Inc. and its subsidiaries. Please read Cautionary Statement Regarding Forward-Looking Statements beginning on page 1 and Item 1A. “Risk Factors” for information regarding certain risks inherent in our business.

Overview

Enviva was originally formed in 2013 as a limited partnership that converted to a corporation on December 31, 2021. We develop, construct, acquire, and own and operate, contracted wood pellet production plants where we aggregate a natural resource, wood fiber, and process it into dry, densified, uniform wood pellets that can be effectively stored and transported around the world.K.”), and the European Union (the “EU”), who use our wood pellets to generate power and heat.

We own and operate ten plants (collectively, “our plants”) strategically located in Virginia, North Carolina, South Carolina, Georgia, Florida, and Mississippi. We export our wood pellets to global markets through our deep-water marine terminal at the Port of Chesapeake, Virginia, terminal assets at the Port of Wilmington, North Carolina, and the Port of Pascagoula, Mississippi, and from third-party deep-water marine terminals in Savannah, Georgia, Mobile, Alabama, and Panama City, Florida. In 2022, we commenced construction of a wood pellet production plant in Epes, Alabama (the “Epes plant”) which is designed and permitted to produce more than one million metric tons per year (“MTPY”) of wood pellets. For 2023, our production capacity from our wood pellet production plants was contracted under our long-term, take-or-pay off-take contracts.

In connection with our ongoing restructuring through Chapter 11 of the Bankruptcy Code, we renegotiated many of our long-term contracts, and are continuing to negotiate certain other contracts, with the goal of improving profitability and to better protect against future inflation and other cost risks. We prioritized high-quality, long-term contracted relationships with the intention of returning to a business model of primary cash flow generation from predictable, profitable take-or-pay contracts.

Our largest customers use our wood pellets as a substitute fuel for coal in dedicated biomass or co-fired coal power plants. Wood pellets serve as a suitable “drop-in” alternative to coal because of their comparable heat content, density, and form. Due to the uninterruptible nature of our customers’ fuel consumption, our customers require a reliable supply of wood pellets that meet stringent product specifications. In addition to our customers’ focus on the reliability of supply, they are concerned about the combustion efficiency of the wood pellets and their safe handling. Because combustion efficiency is a function of energy density, particle size distribution, ash/inert content, and moisture, our customers require that we supply wood pellets meeting minimum criteria for a variety of specifications and, in some cases, provide incentives for exceeding our contract specifications.

Chapter 11 Cases

On March 12, 2024 (the “Petition Date”), the Company and certain subsidiaries of the Company (collectively, the “Debtors”) filed voluntary petitions (“the Bankruptcy Petitions”) for reorganization under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Virginia (“Bankruptcy Court”). On March 14, 2024, the Bankruptcy Court granted motions filed by the Company seeking joint administration of the Chapter 11 Cases under the caption In re: Enviva Inc., et al., Case No. 24-10453 (the “Chapter 11 Cases”). The Company is continuing to operate in the ordinary course throughout the Chapter 11 Cases as “debtors in possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

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The filing of the Bankruptcy Petitions described above constitutes an event of default and acceleration under each of the following debt instruments (the “Debt Instruments”):

•Indenture, dated as of December 9, 2019, by and among the Company (as successor to Enviva Partners, LP), Enviva Partners Finance Corp., each of the guarantors party thereto, and Wilmington Savings Fund Society, FSB (as successor to Wilmington Trust, N.A.), as trustee.

•Amended and Restated Credit Agreement, dated as of October 18, 2018 (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time), by and among the Company, Enviva, LP, each of the guarantors party thereto, the lenders party thereto, and Ankura Trust Company, LLC, as Administrative Agent and as Collateral Agent, and the other parties thereto;

•Indenture of Trust (as amended, restated, modified, supplemented, or replaced from time to time), dated as of July 1, 2022, by and between The Industrial Development Authority of Sumter County and Wilmington Trust, N.A., as trustee;

•Loan and Guaranty Agreement, dated effective as of July 15, 2022, by and among The Industrial Development Authority of Sumter County, the Company, and certain of its subsidiaries;

•Indenture of Trust (as amended, restated, modified, supplemented, or replaced from time to time), dated as of November 1, 2022, by and between Mississippi Business Finance Corporation and Wilmington Trust, N.A., as trustee;

•Loan and Guaranty Agreement, dated effective as of November 22, 2022, by and among Mississippi Business Finance Corporation, the Company, and certain of its subsidiaries;

•Loan Agreement, dated as of June 27, 2022, by and among Enviva Pellets Epes, LLC, the lenders party thereto, and the Company; and

•Loan Agreement, dated as of June 27, 2022, by and between Enviva Pellets Epes Finance Company, LLC and United Bank.

The Debt Instruments provide that as a result of the Bankruptcy Petitions, the principal and interest due thereunder shall be immediately due and payable. However, any efforts to enforce such payment obligations under the Debt Instruments has been automatically stayed as a result of the Bankruptcy Petitions, and the creditors’ rights of enforcement in respect of the Debt Instruments is subject to the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

The Debtors have obtained requested relief from the Bankruptcy Court that enables the Debtors to maintain business-as-usual operations and uphold their respective commitments to their stakeholders, including employees, customers, and vendors during the restructuring process, subject to the jurisdiction of the Bankruptcy Court and in accordance with then applicable provisions of the Bankruptcy Code.

Restructuring Support Agreements

On the Petition Date, the Company entered into a Restructuring Support Agreement (including any schedules and exhibits attached thereto, the “RSA”) with (i) certain subsidiaries of the Company (together with the Company, the “Company RSA Parties”), (ii) certain participating holders or beneficial holders, investment advisors, sub-advisors, or managers of funds and/or accounts that are holders or beneficial holders of the Company’s outstanding 6.5% Senior Notes due 2026 (the “2026 Notes” and the holders thereof, the “2026 Noteholders”), (iii) certain participating holders or beneficial holders, investment advisors, sub-advisors, or managers of funds and/or accounts that are holders or beneficial holders, whether as record holders or participants, of loans or commitments under the Company’s senior secured credit facility (the “Senior Secured Credit Facility” and the lenders thereunder, the “Credit Facility Lenders”), (iv) certain participating holders or beneficial holders, investment advisors, sub-advisors, or managers of funds and/or accounts that are holders or beneficial holders of Exempt Facilities Revenue Bonds (Enviva Inc. Project), Series 2022 (Green Bonds) issued by the Industrial Development Authority of Sumter County, Alabama (the “Epes Green Bonds” and the holders thereof, the “Epes Bondholders”), and (v) certain participating holders or beneficial holders, investment advisors, sub-advisors, or managers of funds and/or accounts that are holders or beneficial holders of Exempt Facilities Revenue Bonds (Enviva Inc. Project), Series 2022 (Green Bonds) issued by Mississippi Business Finance Corporation (the “Bond Green Bonds” and the holders thereof, the “Bond Bondholders,” and together with the 2026 Noteholders, the Credit Facility Lenders, and the Epes Bondholders, the “Restructuring Support Parties”).

Under the terms of the RSA, the Restructuring Support Parties have agreed to support a restructuring of the Company RSA Parties under a Chapter 11 plan of reorganization (the “Plan”) to be proposed in accordance with the terms set forth in the RSA.

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The Restructuring Support Parties and the Company RSA Partners and the Company RSA Parties have entered into certain amendments to the RSA, including to extend certain milestones and deadlines thereunder.

The Company RSA Parties also entered into a Restructuring Support Agreement (including any schedules and exhibits attached thereto, the “Bond MS RSA”) with certain Bond Bondholders comprising a majority of Bond Green Bonds outstanding and the Bond Green Bonds Trustee (as defined in the Bond MS RSA). Under the Bond MS RSA, the Company agreed, among other obligations described in the term sheet attached as Exhibit A thereto (the “Bond MS Term Sheet”), to promptly seek Bankruptcy Court approval of a settlement with the Bond Bondholders party thereto and the Bond Green Bonds Trustee, whereby the Company RSA Parties will consent to the partial redemption of the Bond Green Bonds via the release of certain funds currently held by the Bond Green Bonds Trustee (the “Construction Funds”). In exchange, the Bond Green Bondholders and the Bond Green Bonds Trustee both agree, among other obligations described in the Bond MS Term Sheet, and subject to any rights granted by the Bond MS RSA, to support the Plan. On May 8, 2024, the Bankruptcy Court entered an order approving the settlement in the Bond MS Term Sheet (the “Bond MS Settlement Order”). Pursuant to the Bond MS Settlement Order, the Bond Green Bonds Trustee transferred the Construction Funds to the Settlement Fund (as defined in the Bond MS RSA) for further distribution by the Bond Green Bonds Trustee to the Bond Bondholders.

DIP Facility

On March 15, 2024, the Company entered into a Debtor-in-Possession Credit and Note Purchase Agreement (the “DIP Credit Agreement”) by and among the Company, as borrower, and the other Debtors, as guarantors, the various lenders from time to time party thereto (the “Lenders”), and Acquiom Agency Services LLC (“Acquiom”) and Seaport Loan Products LLC, as co-administrative agents, and Acquiom, as collateral agent providing for a debtor-in-possession term loan and notes facility (the “DIP Financing”) in an amount not to exceed $500.0 million. On March 14, 2024, the Bankruptcy Court granted interim approval of the motion to approve the DIP Financing (the “Interim DIP Order”) and borrowing of up to $150.0 million of the loans and notes thereunder. Following the issuance of the Interim DIP Order, the Company offered certain eligible holders of the Company’s common stock (the “Common Stock”) the opportunity to subscribe to participate in the syndication of up to $100.0 million aggregate principal amount of DIP Financing (the “Syndication”) pursuant to certain procedures (the “Syndication Procedures”). On May 3, 2024, the Bankruptcy Court entered a final order approving the full amount of the DIP Financing and the Syndication (the “Final DIP Order”). As authorized by the Final DIP Order, participants in the Syndication became Lenders under the DIP Credit Agreement as of May 6, 2024. An appeal from the Final DIP Order seeking to strike the Syndication was filed by the Official Committee of Unsecured Creditors and remains pending in the U.S. District Court for the Eastern District of Virginia.

The proceeds of the loans and notes under the DIP Credit Agreement are designated to pay the Company’s operating expenses, help fund the completion of the Epes plant, and pay other fees, expenses, and other expenditures of the Company set forth in rolling budgets prepared in connection with the Chapter 11 Cases, which are subject to approval by the DIP Creditors. The Lenders and the Company together have entered into several technical amendments to the DIP Credit Agreement, either to clarify defined terms or extend deadlines related to reporting by the Company.

Stock Procedures

On March 13, 2024, the Company filed a motion (“NOL Motion”) seeking entry of an interim and final order establishing certain procedures and restrictions with respect to the direct or indirect purchase, disposition, or other transfer of the Common Stock (and declarations of worthlessness with respect to such Common Stock) (such procedures, “Stock Procedures”), and seeking related relief, in order to preserve and protect the potential value of the Company’s net operating losses (“NOLs”) and certain other tax attributes of the Company (together with the NOLs, “Tax Attributes”). On March 14, 2024, the Bankruptcy Court entered an order granting the NOL Motion and approving the Stock Procedures on an interim basis. On April 12, 2024, the Bankruptcy Court entered an order granting the NOL Motion and approving the Stock Procedures on a final basis.

Chapter 11 Plan and Equity Rights Offering

On August 30, 2024, the Company filed a proposed Joint Chapter 11 Plan of Reorganization of Enviva Inc. and its Debtor Affiliates (the “Proposed Plan”) and a related proposed form of Disclosure Statement (the “Proposed Disclosure Statement”) with the Bankruptcy Court. Capitalized terms used but not otherwise defined in this section have the meanings set forth in the Proposed Plan. The Proposed Plan and the related Proposed Disclosure Statement describe, among other things, the Proposed Plan; the restructuring of the Company set forth therein; the events leading to the Chapter 11 Cases; and certain events that have occurred or are anticipated to occur during the Chapter 11 Cases, including the anticipated solicitation of votes to approve the Proposed Plan from certain of the Company’s creditors and existing equity holders, as well as the risks related to, among other things, the Chapter 11 Cases. The Proposed Plan provides for, among other things:

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•The sale of our interests following a reorganization (the “Reorganized Enviva Inc. Interests”) pursuant to a rights offering (the “Equity Rights Offering”) to raise proceeds in an aggregate amount equal to (i) $250 million plus (ii) the principal amount of any DIP Tranche A Loans under the DIP Facility to the extent the Holders of such Loans do not elect to participate in the DIP Tranche A Equity Participation, which Rights Offering is expected to be fully backstopped;

•Entry into a $1 billion first lien senior secured exit facility, which certain commitment parties are expected to backstop; provided that the Company may seek proposals for alternative debt financing for all or part of the Company’s debt capital structure in consultation with an ad hoc group of the Company’s previous creditors;

•The DIP Tranche A Equity Participation, subject to certain conditions in the DIP Credit Agreement;

•Repayment of the DIP Tranche A Loans (to the extent the Holders of which do not elect to participate in the DIP Tranche A Equity Participation) and the DIP Tranche B Loans under the DIP Facility in cash;

•Repayment of our senior secured credit facility in cash;

•Distribution of Reorganized Enviva Inc. Interests and rights to participate in the Equity Rights Offering to holders of certain unsecured claims;

•Distribution of cash in an aggregate amount equal to either $18 million or $13 million, depending on whether certain conditions are met, to holders of certain unsecured claims;

•Subject to certain conditions, outside of the Company’s control, including classes of certain unsecured claims voting to accept the Proposed Plan, distribution to each holder of an Existing Equity Interest of its pro rata share of either (i) cash in an amount equal to $1 million or (ii) the Reorganized Enviva Inc. Interests Existing Equity Interests Equity Pool and the New Warrants, and with respect to (ii), solely to the extent a holder of an Existing Equity Interest affirmatively elects to receive such treatment in lieu of cash on a timely and properly submitted ballot and the value of the Reorganized Enviva Inc. Interests Existing Equity Interests Equity Pool and the New Warrants is greater than 0% following dilution by the transactions contemplated by the Proposed Plan; and

•An overbid process, consistent with the terms of the Final DIP Order and certain overbid procedures, to solicit bids for a value-maximizing alternative transaction.

In addition, the Company filed motions (i) for entry of an order approving the adequacy of the Proposed Disclosure Statement, approving the solicitation of votes in favor of the Plan, and establishing procedures from the proposed Equity Rights Offering, described in the Proposed Plan and the Proposed Disclosure Statement and (ii) for entry of an order authorizing the Company entry into a backstop agreement related to the proposed equity rights offering (the “Disclosure Statement Motions”).

Backstop Agreement

On August 30, 2024, the Debtors entered into a Backstop Commitment Agreement (as amended, the “Backstop Agreement”) with certain Equity Commitment Parties pursuant to which each of the Equity Commitment Parties has agreed to backstop, severally and not jointly and subject to the terms and conditions in the Backstop Agreement, the Equity Rights Offering. The Debtors’ obligations under the Backstop Agreement, including the payment of certain premiums set forth therein, remain subject to approval by the Bankruptcy Court.

Exit Facilities Commitment Letter

On August 30, 2024, the Debtors entered into a commitment letter (as amended, the “Commitment Letter”) with the certain commitment parties pursuant to which the commitment parties have committed to provide to the Debtors a first lien senior secured facility in an aggregate principal amount of $1 billion upon emergence from Chapter 11 Cases. The Debtors’ obligations under the Commitment Letter, including the payment of certain premiums set forth therein, remain subject to approval by the Bankruptcy Court.

Our Production Plants, Logistics, and Storage Capabilities

We procure wood fiber and process it into utility-grade wood pellets and load the finished wood pellets into railcars, trucks, and barges for transportation to deep-water marine terminals, where we receive, store, and ultimately load our wood pellets onto dry-bulk cargo oceangoing vessels for delivery to our customers.

We own and operate ten industrial-scale wood pellet production plants strategically located in the Mid-Atlantic and Gulf Coast regions of the United States, geographic areas in which wood fiber resources are plentiful and readily available. Our

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multi-plant profile and scale provide us with flexibility under our portfolio of off-take contracts that enhances the reliability of our deliveries.

Our facilities are designed to operate 24 hours per day, 365 days per year, although we schedule up to 15 days of planned maintenance for our wood pellet production plants during each calendar year. There are no regularly required major turnarounds or overhauls.

During 2023, we produced approximately 5.0 million metric tons (“MT”) of wood pellets. The following table describes our wood pellet production plants:

Wood Fiber Procurement and Sustainability

We and our customers are subject to stringent requirements regarding the sustainability of the fuels we procure. Our fiber supply chains are routinely audited by independent third parties, and we maintain the traceability of information concerning the primary wood that is delivered to us directly from forests via our proprietary Track & Trace® system.

As a result of the fragmented nature of tract ownership in our sourcing areas, we procure raw materials from hundreds of landowners, loggers, and timber industry participants, with no individual landowner representing a material fraction of any of our plants’ needs.

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Port Operations

The following table describes our owned and leased ports. Wood pellets are exported from our owned or leased deep-water, marine terminals and are stored in domes, barges, and warehouses at the ports. Our terminals operate 24 hours per day, seven days per week.

(1) Wood pellets are exported from a third-party, privately owned and maintained deep-water, multi-berth terminal that operates 24 hours per day, seven days per week.

Our Contracts and Marketing Activities

We refer to the structure of our long-term sales contracts as “take-or-pay” because they include a firm obligation of the customer to take a fixed quantity of product at a stated price and provides for us to be compensated in the event of the customer’s failure to accept all or a part of the contracted volumes or for termination of a contract by the customer.

We also have entered into several other contracts that have smaller off-take quantities than the contracts described above. In 2023, we had contracts with 16 customers in jurisdictions ranging from Japan, U.K., Denmark, the Netherlands, Belgium, and Poland. Beginning in fall 2023, a subset of the Company and the Advisors (the “RTB Team”) set out to re-negotiate, or “raise the bridge” (“RTB”) on, the terms of the existing long-term contracts to make the profitability metrics sufficiently sustainable for the Company. Since the Petition Date, and in accordance with the Company’s RTB efforts, the Company has worked with their advisors to evaluate and renegotiate the terms of the Company’s existing, long-term take-or-pay off-take contracts with customers in the United Kingdom, the European Union, and Japan to make the profitability metrics sufficiently sustainable for the Debtors. Certain of these negotiations have been completed and others remain ongoing.

In some cases, we may purchase shipments of product from third-party suppliers and resell them in back-to-back transactions.

Industry Overview

Our product, utility-grade wood pellets, is used in an increasing variety of applications around the world by our customers in energy and heat generation and industrial processes.

For many of our customers, our wood pellets are used as a substitute for coal in both dedicated and co-fired power generation and combined heat and power plants.

Wood pellet fueled power plants are capable of meeting baseload electricity demand and are dispatchable (that is, power output can be switched on or off or adjusted based on demand). As a result, utilities and major generators in Europe, Asia, and other areas have made and continue to make long-term, profitable investments in power plant conversions and new builds of generating assets that either co-fire wood pellets with coal or are fully dedicated wood pellet fueled power plants.

Additionally, the European

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Union’s Emissions Trading System continues to demonstrate a durable, constructive market for carbon, which frequently assists biomass in being more cost effective for energy generation than other feedstocks such as coal and natural gas, even in markets where there are no direct incentives or subsidies for renewable energy generation.

There also continues to be significant demand growth in Europe and Asia for wood pellets as a preferred fuel source and renewable alternative to fossil fuels for district heating loops, residential and commercial heating, and the production of heat for industrial sites.

In addition to the customer applications outlined above, we are in discussion with a number of potential customers who are interested in negotiating long-term, take-or-pay off-take contracts with the intention of using our wood pellets as a raw material input in the refinement of bio-liquids like biodiesel and sustainably produced aviation fuel as well as to generate process steam and heat in heavy industrial manufacturing like lime, sugar, etc.

Competition

We compete with other utility-grade wood pellet producers for long-term, take-or-pay off-take contracts with major power and heat generation customers, trading houses, and increasingly with customers in heavy industrial manufacturing sectors.

Most of the world’s current wood pellet production plants are owned by small, private companies, with few companies owning or operating multiple plants. Few companies have the scale, production, technical expertise, access to sustainable fiber baskets, or commercial infrastructure necessary to supply utility-grade wood pellets under large, long-term off-take contracts to creditworthy counterparties., AS Graanul Invest, Fram Renewable Fuels, LLC, Phu Tai Bio-Energy Corporation, and Highland Pellets LLC.

Governmental Regulations

Our operations are subject to stringent and comprehensive federal, state, and local laws and regulations governing matters including protection of the environment and natural resources, occupational health and safety, and the release or discharge of materials into the environment, including air emissions. Such laws and regulations may require us to obtain permits, limit or avoid certain operational practices, and incur costs for compliance or remediation. Failure to comply with such laws may also result in substantial liabilities, including possible fines and penalties for unpermitted emissions or discharges from our operations. Failure to comply with these laws and regulations may result in the assessment of administrative, civil, and criminal penalties, the imposition of investigatory and remedial obligations, and the issuance of orders enjoining some or all of our operations in affected areas.

Moreover, the global trend in environmental regulation is towards increasingly broad and stringent requirements for activities that may affect the environment. Any changes in environmental laws and regulations or re‑interpretation of enforcement policies that result in more stringent and costly requirements could have a material adverse effect on our operations and financial position. Although we monitor environmental requirements closely and budget for the expected costs, actual future expenditures may be different from the amounts we currently anticipate spending. Moreover, certain environmental laws impose strict joint and several liability for costs to clean up and restore sites where pollutants have been disposed or otherwise spilled or released, potentially resulting in significant costs and liabilities for remediation of resulting damage to property, natural resources, or persons. Although we believe that our competitors face similar environmental requirements, market factors may prevent us from passing on any increased costs to our customers. Additionally, although we believe that continued compliance with existing requirements will not materially adversely affect us, there is no assurance that the current levels of regulation will continue in the future.

The following summarizes some of the more significant existing environmental, health, and safety laws and regulations applicable to our operations, the failure to comply with which could have a material adverse impact on our capital expenditures, results of operations and financial position.

Air Emissions

The federal Clean Air Act, as amended (the “CAA”), and state and local laws and regulations that implement and add to CAA requirements, regulate the emission of air pollutants from our facilities. The CAA and state and local laws and regulations impose significant monitoring, testing, recordkeeping, and reporting requirements for these emissions. These laws and regulations require us to obtain pre-approval for the construction or modification of certain projects or facilities expected to

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produce or significantly increase air emissions, obtain, and strictly comply with stringent air permit emission limits, and in certain cases utilize specific equipment or technologies to control and measure emissions. Failure to comply with these laws, regulations and permit requirements may cause us to face fines, penalties, or injunctive orders in connection with air pollutant emissions from our operations.

The CAA requires that we obtain various construction and operating permits, including, in some cases, Title V air permits. In certain cases, the CAA requires us to incur capital expenditures to install air pollution control devices at our facilities. We are also required to control fugitive emissions from our operations and may face fines, penalties, or injunctive orders in connection with fugitive emissions. We have incurred, and expect to continue to incur, substantial administrative, operating and capital expenditures to maintain compliance with CAA requirements that have been promulgated or may be promulgated or revised in the future.

Climate Change and Greenhouse Gases

Our operations are subject to limited direct regulation with respect to greenhouse gas (“GHG”) emissions. For example, at this time, the U.S. Environmental Protection Agency (the “EPA”) requires certain large facilities to undergo CAA pre-construction review and obtain operating permits for their GHG emissions. Our operations are also indirectly affected by regulations regarding the carbon treatment of biomass. Several jurisdictions to which we ship our product have imposed regulations on the characterization of biomass as a carbon-neutral fuel, and any change that imposes more stringent regulations on the characterization of biomass as carbon-neutral could negatively impact demand for our products or require us to incur additional costs to achieve such characterization of our products. For more information, see our risk factor titled “Changes in the treatment of biomass could adversely impact our business.” Additionally, in March 2024, the U.S. Securities and Exchange Commission (“SEC”) released its final rule establishing a framework for the reporting of climate risks, targets, and metrics. However, shortly thereafter, the final rule was challenged. Litigation remains pending in the Eighth Circuit, and the final rule is currently stayed. It is not yet known whether the final rule will survive the legal challenges it faces and, if so, what form and substance it will take, which could ultimately result in additional compliance costs. Finally, increasing concentrations of GHGs in the earth’s atmosphere may produce climate changes that have significant physical effects, such as sea-level rise, increased frequency and severity of storms, floods, and other climatic events, including forest fires. If any such effects were to occur, they could have an adverse effect on our operations.

Safety and Maintenance

We are subject to a number of federal and state laws and regulations, including the federal Occupational Safety and Health Act, as amended (“OSHA”), and comparable state statutes, which are intended to protect the health and safety of employees and contractors. OSHA imposes various requirements, including safety-related training, policies, and programs. National Fire Protection Association (NFPA) standards require affected facilities to develop and implement plans and controls to minimize combustible dust. EPA regulations mandate the utilization of pollution control equipment such as cyclones, baghouses, and electronic precipitators to minimize regulated air emissions at affected facilities. Additionally, we hold ourselves accountable to applicable air, solid waste, and wastewater regulations as required by EPA regulations, state and local laws and ordinances. Our deep-water marine terminals are required to adhere to Homeland Security/U.S. Coast Guard regulations regarding physical security and emergency response plans.

Seasonality

Our business is affected by seasonal fluctuations. During the first half of the year, the cost of producing wood pellets tends to be higher because during the winter months, the cost of delivered raw materials are higher, primarily due to a reduction in accessibility during cold and wet weather conditions, which results in our need to extend the procurement radius around our plants. Our operating costs are primarily fixed, resulting in low fixed cost absorption or higher operating cost per MT. Additionally, our customer contract price mix is typically higher during the second half of the year as we increase the sales volumes delivered to customers using wood pellets for heating.

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Human Resources

Our employees are our greatest resource and keeping them safe is considered a moral obligation for all of us. We are deeply committed to our health and safety standards and processes. As a company, we value keeping promises, acting with integrity, the determination to make a difference, and the qualities of openness, humility, and respect.

In addition, we apply a talent framework to support our human resources objectives of recruiting and nurturing top talent, strengthening our succession planning to develop a pipeline of future leaders for key roles and driving a culture of accountability through a robust performance management process.

We had 1,234 employees as of December 31, 2023 of which 1,218 were based in the United States and 16 based outside of the United States. Plant operations roles typically have a stable number of full-time equivalents throughout the year. None of our employees are represented by a labor union. We have not experienced any employment-related work stoppages, and we consider relations with our employees to be positive. As a result of the Chapter 11 Cases, we have experienced employee attrition, and our employees have faced considerable distraction and uncertainty. A loss of key personnel or material erosion of employee morale could adversely affect our business and results of operations.

To further our business objectives, we seek to bring Enviva’s best minds, systems, processes, and team back-up culture, together. Enviva finished 2023 with a Total Recordable Incident Rate of 1.57 compared to a wood product manufacturing and an industry average incident rate of 5.3 and 3.0, respectively, based on Bureau of Labor statistics regarding injuries and illnesses per 100 full-time workers based on Bureau of Labor statistics.

We focus on attracting, developing, and retaining a team of highly talented and motivated employees. Additionally, we look to support our employees both on and off the job site by offering benefits such as paid parental leave, a wellness reimbursement program, FSA dependent care, paid disability (short term/long term), and educational assistance. We evaluate these programs annually to ensure our employees are compensated fairly and competitively.

We believe in a workplace that promotes equality, transparency, and accountability.

Principal Executive Offices

Our principal executive offices are located at 7272 Wisconsin Avenue, Suite 1800, Bethesda, Maryland 20814.

Available Information

We file annual, quarterly, and current reports and other documents with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The SEC maintains a website at www.sec.gov that contains reports and other information regarding issuers that file electronically with the SEC.

We also make available free of charge our Annual Reports on Form 10‑K, Quarterly Reports on Form 10-Q, Current Reports on Form 8‑K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, simultaneously with or as soon as reasonably practicable after filing such materials with, or furnishing such materials to, the SEC and on or through our website, www.envivabiomass.com. The information on our website, or information about us on any other website, is not incorporated by reference into this Annual Report.

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ITEM 1A. RISK FACTORS

There are many factors that could have a material adverse effect on our business, financial condition, and results of operations. New risks may emerge at any time, and we cannot predict those risks or estimate the extent to which they may affect financial performance. Each of the risks described below could adversely impact the value of our common stock.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties, including those described in this Item 1A “Risk Factors.” These risks include the following:

•The Chapter 11 Cases may have a material adverse impact on our business, financial condition and results of operations.

•Delays in the Chapter 11 Cases may increase the risks of our being unable to reorganize our business and emerge from bankruptcy and increase our costs associated with the bankruptcy process.

•We may be subject to the risks and uncertainties associated with our exclusive right to file a plan of reorganization.

•Adverse publicity in connection with the Chapter 11 Cases or otherwise could negatively affect our business.

•Trading in our common stock during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks and the Chapter 11 Cases may render the common stock worthless.

•There can be no assurance that we will be able to regain compliance or comply with the continued listing standards of the NYSE, which could result in the delisting of our securities, limit investors’ ability to make transactions in our securities, and subject us to additional trading restrictions.

•Upon emergence from bankruptcy, the equity interests in the reorganized company may not be listed on the NYSE or any other stock exchange and we may no longer be a SEC reporting company.

•The RSA is subject to significant conditions and milestones that may be difficult for us to satisfy, which—if the Company fails to satisfy them—could lead to termination of the RSA and a default or accelerated maturity under the DIP Credit Agreement.

•The Plan may not become effective.

•Even if the Plan or another Chapter 11 plan of reorganization is consummated, we may not be able to achieve our stated goals.

•Our long-term liquidity requirements and the adequacy of our capital resources are difficult to predict at this time.

•In certain limited instances, a Chapter 11 case may be converted to a case under Chapter 7 of the Bankruptcy Code or a third-party trustee may be appointed under Chapter 11 of the Bankruptcy Code, preventing the Company from continuing to act as debtors in possession.

•As a result of the Chapter 11 Cases, our historical financial information may not be indicative of our future performance, which may be volatile.

•The actual results achieved during the periods covered by our recently issued projections will vary from those set forth in those projections, and such variations may be material.

•We may be subject to claims that will not be discharged in the Chapter 11 Cases, which could have a material adverse effect on our business, cash flows, liquidity, financial condition, and results of operations.

•The Chapter 11 Cases limit the flexibility of our management team in running our business.

•Upon emergence from bankruptcy, the composition of our board of directors may change significantly.

•As a result of the implementation of the Plan, our ability to utilize our net operating loss carryforwards and certain other tax attributes to reduce our income tax obligations may be subject to limitations under Section 382 of the Internal Revenue Code.

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•We expect to derive substantially all our revenues from four customers in 2024, three of which are located in Europe.

•Changes in laws or government policies, incentives and taxes related to low-carbon and renewable energy may affect customer demand for our products.

•Challenges to or delays in the issuance of air permits, or our failure to comply with our permits, could impair our operations and ability to expand our production.

•Federal, state, and local legislative and regulatory initiatives relating to forestry products and the potential for related litigation could result in increased costs, and additional operating restrictions and delays, which could cause a decline in the demand for our products and negatively impact our business, financial condition, and results of operations.

•Increasing attention to environmental, social, and governance (“ESG”) matters could adversely affect our business.

•We may be unable to complete our construction projects on time, and our construction costs could increase to levels that make the return on our investment less than expected.

•The satisfactory delivery of substantially all of our production is dependent on continuous access to infrastructure at our owned, leased, and third-party-operated terminals. Loss of access to our ports of shipment and destination, including through failure of terminal equipment and port closures, could adversely affect our financial results and cash flows.

•Failure to maintain effective quality control systems at our production plants and deep-water marine terminals could have a material adverse effect on our business and operations.

•Our business is subject to operating hazards and other operational risks, which may have a material adverse effect on our business and results of operations. We may also not be adequately insured against such events.

•Significant increases in the cost, or decreases in the availability, of raw materials or sourced wood pellets could result in lower revenue, operating profits, and cash flows, or impede our ability to meet commitments to our customers.

•We are exposed to the credit risk of our contract counterparties, including the customers for our products, and any material nonpayment or nonperformance by our customers could adversely affect our business and results of operations.

Risks Related to the Chapter 11 Cases

The Chapter 11 Cases may have a material adverse impact on our business, financial condition, and results of operations.

As previously disclosed, we engaged legal and financial advisors to assist us in evaluating potential strategic alternatives available to us to reduce or restructure our outstanding indebtedness. These efforts led to the execution of the RSAs and the commencement of the Chapter 11 Cases on March 12, 2024. The Chapter 11 Cases are ongoing.

The Chapter 11 Cases could have a material adverse effect on our business, financial condition, and results of operations. So long as the Chapter 11 Cases continue, our management will be required to spend a significant amount of time and effort focused on the restructuring, which may limit their ability to focus on our ongoing business operations. Bankruptcy Court protection and operating as debtors-in-possession also may make it more difficult to retain management and the key personnel necessary to the success of the business. In addition, during the pendency of the Chapter 11 Cases, our customers and suppliers may lose confidence in our ability to reorganize our business successfully and may seek to establish alternative commercial relationships, renegotiate the terms of our agreements, terminate their relationships with us, or require financial assurances from us. Customers may lose confidence in our ability to provide them the quality of product and level of service they expect, resulting in a significant decline in our revenues, profitability, and cash flow.

Other significant risks include or relate to the following:

•the effects of the filing of the Chapter 11 Cases on our business and the interests of various constituents, including our stockholders;

•Bankruptcy Court rulings in the Chapter 11 Cases, including with respect to our motions and applications and third-party motions, as well as the outcome of other pending litigation;

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•our ability to operate within the restrictions and the liquidity limitations of the DIP Credit Agreement and any related orders entered by the Bankruptcy Court in connection with the Chapter 11 Cases;

•our ability to maintain strategic control as debtor-in-possession during the pendency of the Chapter 11 Cases;

•the length of time that we will operate with Chapter 11 protection and the continued availability of operating capital during the pendency of the Chapter 11 Cases;

•increased advisory costs during the pendency of the Chapter 11 Cases;

•the risks associated with restrictions on our ability to pursue some of our business strategies during the pendency of the Chapter 11 Cases;

•our ability to complete the financing and to satisfy all other conditions to consummation of the Plan;

•the potential adverse effects of the Chapter 11 Cases on our business, cash flows, liquidity, financial condition, and results of operations;

•the ultimate outcome of the Chapter 11 Cases in general;

•the ultimate treatment of our existing equity in the Chapter 11 Cases;

•the potential material adverse effects of claims, if any, that are not discharged in the Chapter 11 Cases;

•uncertainties regarding the reactions of our customers, prospective customers, suppliers, and service providers to the Chapter 11 Cases;

•uncertainties regarding our ability to retain and motivate key personnel;

•uncertainties and continuing risks associated with our ability to achieve our stated goals and continue as a going concern;

•employee attrition and our ability to retain senior management and other key personnel due to distractions and uncertainties associated with the Chapter 11 Cases, including our ability to provide adequate compensation and benefits during the Chapter 11 Cases; and

•we may experience employee attrition as a result of the Chapter 11 Cases.

Further, under Chapter 11, transactions outside the ordinary course of business are subject to the prior approval of the Bankruptcy Court, which may limit our ability to respond in a timely manner to certain events or take advantage of certain opportunities or to adapt to changing market or industry conditions.

Because of the risks and uncertainties associated with the Chapter 11 Cases, we cannot predict or quantify the ultimate impact that events occurring during the Chapter 11 Cases may have on our business, cash flows, liquidity, financial condition, and results of operations, nor can we provide any assurance as to our ability to continue as a going concern.

As a result of the Chapter 11 Cases, realization of assets and liabilities are subject to uncertainty. While operating under the protection of the Bankruptcy Code, and subject to Bankruptcy Court approval or otherwise as permitted in the normal course of business, we may sell or otherwise dispose of assets or liquidate or settle liabilities for amounts other than those reflected in our consolidated financial statements.

As a result of the Chapter 11 Cases, we may experience employee attrition, and our employees may face considerable distraction and uncertainty. Our ability to engage, motivate, and retain key employees or take other measures intended to motivate and incentivize key employees to remain with us through the pendency of the Chapter 11 Cases is limited by restrictions on the implementation of incentive programs under the Bankruptcy Code.

While we have maintained our operations as “debtor in possession” since the Chapter 11 Cases were filed, the filing of the

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Chapter 11 Cases and related changes have been disruptive to our employees. In addition, we have undertaken, and may undertake in the future, restructuring, reorganization, or other strategic initiatives and business transformation plans. As a result of these restructuring initiatives, we may experience a loss of continuity, loss of accumulated knowledge and proficiency, loss of key employees, and/or other retention issues during transitional periods. Further, reorganization and restructuring can impact a significant amount of management and other employees’ time and focus, which may divert attention from operating and growing our business.

Delays in the Chapter 11 Cases may increase the risks of our being unable to reorganize our business and emerge from bankruptcy and increase our costs associated with the bankruptcy process.

There can be no assurance that the Plan will become effective in accordance with its terms on the timeline we anticipate or at all. Prolonged Chapter 11 proceedings could adversely affect our relationships with customers, subcontractors, suppliers, and employees, among other parties, which in turn could adversely affect our business, competitive position, financial condition, liquidity, and results of operations and our ability to continue as a going concern. A weakening of our financial condition, liquidity, and results of operations could adversely affect our ability to implement the Plan (or any other Chapter 11 plan of reorganization). If we are unable to consummate the Plan (or any other Chapter 11 plan of reorganization), we may be forced to liquidate our assets.

Adverse publicity in connection with the Chapter 11 Cases or otherwise could negatively affect our business.

Adverse publicity or news coverage relating to us or our business, including, but not limited to, publicity or news coverage in connection with the Chapter 11 Cases, may negatively impact our efforts to establish and promote a positive image after emergence from the Chapter 11 Cases, including with respect to our current and future employees, existing customers, prospective customers, suppliers, and service providers.

Trading in our common stock during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks and the Chapter 11 Cases may render the common stock worthless.

All of our indebtedness is senior in priority to the existing common stock in our capital structure. The Proposed Plan, the currently expected valuation, contemplates that the holders of equity interests, including the holders of common stock would be entitled to only a de minimis recovery. The recovery would be significantly less than the previous trading value of such existing equity interests. We expect that potential revisions to the Plan will result in equity receiving no recovery. The amount and nature of any potential recovery is subject to approval by the Bankruptcy Court and there can be no certainty that holders of equity interests will receive any recovery in the Chapter 11 Cases. Accordingly, any trading in our common stock during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risk to purchasers of our common stock.

There can be no assurance that we will be able to regain compliance or comply with the continued listing standards of the New York Stock Exchange, which could result in the delisting of our securities, limit investors’ ability to make transactions in our securities, and subject us to additional trading restrictions.

Our common stock is listed on the NYSE under the symbol “EVA.” On January 23, 2024 we received a written notice from the NYSE that because the average closing price for our common stock had fallen below $1.00 per share for 30 consecutive trading days, we no longer comply with the minimum share price criteria of Section 802.01C of the NYSE Listed Company Manual (the “NYSE Manual”) for continued listing on the NYSE. On April 2, 2024 we received a second written notice from the NYSE that due to the delay in filing this Annual Report on Form 10-K for the year ended December 31, 2023 with the SEC, we were no longer in compliance with Section 802.01E of the NYSE Manual. If we fail to regain compliance with Section 802.01C and Section 802.010E of the NYSE Manual during a 6-month cure period, the NYSE may commence suspension and delisting procedures.

In addition, if our total market capitalization falls below an average of $50 million for 30 consecutive trading days and we are unable to regain compliance during an 18-month cure period, the NYSE may commence suspension and delisting procedures pursuant to Section 802.01B of the NYSE Manual. As of August 30, 2024, our 30 day average market capitalization was approximately $36.0 million. Lastly, if (i) the price per share of our common stock falls to an “abnormally low price,” (ii) our market capitalization falls below an average of $15 million for 30 consecutive trading days, or (iii) we choose to liquidate the Company, the NYSE may immediately commence suspension and delisting procedures pursuant to Section 802.01D, 802.01B, and 802.01D, respectively.

If the NYSE delists our common stock from trading on its exchange for failure to meet the continued listing standards, we and our stockholders could face significant material adverse consequences, including: a limited availability of market quotations for our securities; reduced liquidity for our securities; a determination that our common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rules and regulations, possibly resulting in a

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reduced level of trading activity in the secondary trading market for shares of our common stock; a limited amount of analyst coverage; a decreased ability to issue additional securities or obtain additional financing in the future; and a negative impact to, or termination of, our critical business relationships.

Upon emergence from bankruptcy, the equity interests in the reorganized company may not be listed on the NYSE or any other stock exchange and we may no longer be a SEC reporting company.

Based on the terms of the Proposed Plan, Enviva may emerge from the Chapter 11 Cases as a private company not subject to reporting requirements under Sections 12 or 15 of the Exchange Act. As a nonpublic company, the equity interests in the reorganized company and the New Warrants would not be listed on the NYSE or any other stock exchange and there can be no assurance as to the development of or liquidity of any market for such equity interests or warrants. Further, the reorganized company may enter into a stockholders agreement, which may significantly restrict trading in the equity interests. Our listing and SEC registration status upon emergence from bankruptcy are subject to negotiation with creditors, approval of the Bankruptcy Court and affirmative vote of certain parties and may change materially from the terms set forth in the Proposed Plan.

The RSA is subject to significant conditions and milestones that may be difficult for us to satisfy.

There are certain material conditions we must satisfy under the RSA, including the timely satisfaction of milestones in the Chapter 11 Cases, which include the consummation of the financing contemplated by the DIP Facility and other transactions contemplated by the Plan. Our ability to timely satisfy such milestones is subject to risks and uncertainties, many of which are beyond our control, and it is possible that the failure to timely complete such milestones or comply with other conditions of the RSA may give rise to termination events thereunder.

The Plan may not become effective.

Even if the Plan is confirmed by the Bankruptcy Court, it may differ materially from the Plan filed by the Company and may not become effective because it is subject to the satisfaction of certain conditions precedent (some of which are beyond our control). There can be no assurance that such conditions will be satisfied and, therefore, that the Plan will become effective, and that the Debtors will emerge from the Chapter 11 Cases as contemplated by the Plan. If the Effective Date is delayed, the Debtors may not have sufficient cash available to operate their businesses. In that case, the Debtors may need new or additional post-petition financing, which may increase the cost of consummating the Plan. There can be no assurance of the terms on which such financing may be available or if such financing will be available. If the transactions contemplated by the Plan are not completed, it may become necessary to amend the Plan. The terms of any such amendment are uncertain and could result in material additional expense and result in material delays to the Chapter 11 Cases.

Even if the Plan or another Chapter 11 plan of reorganization is consummated, we may not be able to achieve our stated goals.

Even if the Plan or any other Chapter 11 plan of reorganization is consummated, we may continue to face a number of risks, such as changes in economic conditions, changes in our industry, changes in demand for our services, and increasing expenses. Some of these risks become more acute when a case under the Bankruptcy Code continues for a protracted period without indication of how or when the transactions under the Plan or any other Chapter 11 plan of reorganization will actually close. As a result of these and other risks, we cannot guarantee that the Plan or any other Chapter 11 plan of reorganization will achieve our stated goals. Furthermore, even if our debts are reduced or discharged through the Plan or any other Chapter 11 plan of reorganization, we may need to raise additional funds through public or private debt or equity financing or other various means to fund our business after the completion of the Chapter 11 Cases. Our access to additional financing may be limited, if it is available at all. Therefore, adequate funds may not be available when needed or may not be available on favorable terms, which could have a material impact on our operations and financial results, including our ability to continue as a going concern.

Our long-term liquidity requirements and the adequacy of our capital resources are difficult to predict at this time.

We face uncertainty regarding the adequacy of our liquidity and capital resources and have extremely limited, if any, access to additional financing. In addition to the cash requirements necessary to fund our ongoing operations, we have incurred significant professional fees and other costs in connection with preparation for the Chapter 11 Cases and expect that we will continue to incur significant professional fees and costs throughout the Chapter 11 Cases. We cannot assure you that cash on hand and cash flow from operations will be sufficient to continue to fund our operations and allow us to satisfy our obligations related to the Chapter 11 Cases. Although we entered into the DIP Credit Agreement providing for an aggregate principal amount of up to $500 million pursuant to the DIP Facility in connection with the Chapter 11 Cases, we cannot assure you that such financing sources will be sufficient, that we will be able to secure additional interim financing, or adequate exit financing sufficient to meet our liquidity needs (or if sufficient funds are available, that they will be offered to us on acceptable terms).

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Our liquidity, including our ability to meet our ongoing operational obligations, depends on, among other things: (i) our ability to comply with the terms and conditions of any order governing the use of cash collateral that may be entered by the Bankruptcy Court in connection with the Chapter 11 Cases, (ii) our ability to access credit under the DIP Facility, (iii) our ability to maintain adequate cash on hand, (iv) our ability to generate cash flow from operations, (v) our ability to consummate the Plan or other alternative restructuring transaction, and (vi) the cost, duration and outcome of the Chapter 11 Cases.

In certain limited instances, a Chapter 11 case may be converted to a case under Chapter 7 of the Bankruptcy Code.

Upon a showing of cause, the Bankruptcy Court may convert the Chapter 11 Cases to cases under Chapter 7 of the Bankruptcy Code. In such event, a Chapter 7 trustee would be appointed or elected to liquidate our assets for distribution to our creditors in accordance with the priorities established by the Bankruptcy Code. We believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to our creditors than those provided for in the Plan because of: (i) the likelihood that the assets would have to be sold or otherwise disposed of in a distressed fashion over a short period of time rather than in a controlled manner and as a going concern; (ii) additional administrative expenses involved in the appointment of a Chapter 7 trustee; and (iii) additional expenses and claims, some of which would be entitled to priority, that would be generated during the liquidation and from the rejection of executory contracts in connection with a cessation of operations.

As a result of the Chapter 11 Cases, our historical financial information may not be indicative of our future performance, which may be volatile.

During the Chapter 11 Cases, we expect our financial results to continue to be volatile as restructuring activities and expenses impact our consolidated financial statements. As a result, our historical financial performance is likely not indicative of our financial performance after the date of the filing of the Chapter 11 Cases. In addition, if we emerge from Chapter 11, the amounts reported in subsequent consolidated financial statements may materially change relative to our historical consolidated financial statements. We also will be required to adopt fresh start accounting, in which case our assets and liabilities will be recorded at fair value as of the fresh start reporting date, which may differ materially from the recorded values of assets and liabilities on our historical consolidated balance sheets. Our financial results after the application of fresh start accounting may be different from historical trends.

The actual results achieved during the periods covered by the projections included as an exhibit to the Disclosure Statement will vary from those set forth in those projections, and such variations may be material.

In connection with the filing of the Plan, we filed a Disclosure Statement that included projections for the annual periods ending December 31, 2024 (fiscal year 2024) through December 31, 2028 (fiscal year 2028) the (“Financial Projections”). Unanticipated events and circumstances occurring after the date hereof may affect the actual financial results of our operations. These variations may be material and may adversely affect our ability to, among other things, consummate our business plan to make payments with respect to our indebtedness. Because the actual results achieved may vary from projected results, perhaps significantly, the Financial Projections should not be relied upon as a guarantee or other assurance of the actual results that will occur.

Further, during the Chapter 11 Cases, we expect that our financial results will continue to be volatile as restructuring activities and expenses, contract terminations and rejections, and claims assessments significantly impact our consolidated financial statements. As a result, our historical financial performance likely will not be indicative of our financial performance after the emergence. We also may be required to adopt fresh start accounting, in which case their assets and liabilities will be recorded at fair value as of the fresh start reporting date, which may differ materially from the recorded values of assets and liabilities on our consolidated balance sheets. Our financial results after the application of fresh start accounting also may be different from historical trends.

Finally, our business plan was developed with the assistance of our advisors. There can be no assurances that our business plan will not change, perhaps materially, as a result of decisions that the board of directors may make after fully evaluating our strategic direction and our business plan. Any deviations from the Debtors’ existing business plan would necessarily cause a deviation in the Financial Projections.

We may be subject to claims that will not be discharged in the Chapter 11 Cases, which could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

The Bankruptcy Code provides, subject to certain limited exceptions, that the confirmation of a plan of reorganization pursuant to Chapter 11 may discharge a debtor from, among other things, substantially all debts arising prior to consummation of a plan of reorganization. Except where otherwise contemplated by the Plan, it is expected that claims against the Debtors that

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arose prior to March 12, 2024 or before consummation of the Plan would be subject to discharge pursuant to confirmation of the Plan. It is possible, however, that certain claims may not be subject to discharge or that parties in subsequent litigation could argue that they were not ultimately discharged. Such claims could be asserted against the reorganized entities and may have an adverse effect on our business, cash flows, liquidity, financial condition, and results of operations on a post-reorganization basis.

The Chapter 11 Cases limit the flexibility of our management team in running our business.

While we operate our businesses as debtor-in-possession under supervision by the Bankruptcy Court, we are required to obtain the approval of the Bankruptcy Court, and in some cases certain lenders, prior to engaging in activities or transactions outside the ordinary course of business. Bankruptcy Court approval of non-ordinary course activities entails preparation and filing of appropriate motions with the Bankruptcy Court, negotiation with the various creditors’ committees and other parties-in-interest, and one or more hearings. The creditors’ committees and other parties-in-interest may be heard at any Bankruptcy Court hearing and may raise objections with respect to these motions. This process may delay major transactions and limit our ability to respond quickly to opportunities and events. Furthermore, in the event the Bankruptcy Court does not approve a proposed activity or transaction, we would be prevented from engaging in activities and transactions that we believe are beneficial to us.

Upon emergence from bankruptcy, the composition of our board of directors may change significantly.

The composition of our board of directors may change significantly following the Chapter 11 Cases. Any new directors may have different backgrounds, experiences, and perspectives from those individuals who previously served on our board of directors and, thus, may have different views on the issues that will determine the future of our company. As a result, our future strategy and plans may differ materially from those of the past.

As a result of the implementation of the Plan, our ability to utilize our net operating loss carryforwards and certain other tax attributes to reduce our income tax obligations may be subject to limitation under Section 382 of the Internal Revenue Code.

Under U.S. federal income tax law, a corporation is generally permitted to offset all or a portion of its net taxable income in a given year with net operating losses carried forward from prior years. As of December 31, 2023, we had U.S. federal net operating loss carryforwards of approximately $407.1 million. Our ability to utilize our net operating loss carryforwards and certain other tax attributes to offset future taxable income and reduce U.S. federal income tax liability is subject to certain requirements and restrictions. In particular, if we experience an “ownership change,” as defined in section 382 of the U.S. Internal Revenue Code (generally, a cumulative change of ownership of greater than 50% of our capital stock over a three-year testing period), then our ability to use our net operating loss carryforwards and certain other tax attributes may be substantially limited, which could have a negative impact on our financial position and results of operations.

We expect that we may undergo an ownership change under Section 382 of the U.S. Internal Revenue Code in connection with the consummation of the Plan. On April 12, 2024, the Bankruptcy Court entered an order that sets forth procedures (including notice requirements) with which certain existing and potential shareholders must comply regarding transfers of, or declarations of worthlessness with respect to, our common stock, as well as certain obligations with respect to notifying us of current share ownership (the “Stock Procedures”). The Stock Procedures are designed to protect our net operating loss carryforwards (and other tax attributes) from the effect of a premature ownership change and to preserve our ability to rely on certain favorable rules that can apply to ownership changes occurring in connection with the implementation of the Plan. However, there is no assurance that the Stock Procedures will prevent all transfers or declarations of worthlessness that could result in such an ownership change.

In addition, our net operating losses (and certain other tax attributes) will be reduced by the amount of any cancellation of indebtedness income we recognize as a result of the implementation of the Plan. As such, at this time, there can be no assurance regarding the amount of net operating loss carryforwards and other tax attributes that will be available to offset future taxable income.

Risks Related to Our Business

Goodwill and other long-lived assets are subject to impairment risk.

During the fourth quarter of 2023, the Company performed an interim goodwill impairment test, which indicated that the carrying value of its sole reporting unit was above its fair value. On December 4, 2023, the Board concluded that a material charge for impairment to goodwill would be required for the fourth quarter of 2023. As a result, the Company recorded a material non-cash pretax impairment charge related to goodwill of $103.9 million in the fourth quarter of 2023.

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The assessment for potential impairment of other long-lived assets requires management to make judgments on a number of significant estimates and assumptions, including projected cash flows, discount rates, and projected long-term growth rates.

We expect to derive the majority of our revenues from four customers in 2024, three of which are located in Europe.

In particular, in 2023 and 2024, certain of our counterparties experienced significant operational shutdowns of their facilities that impacted their ability to accept contracted volumes. In addition, in depressed market conditions, our customers may no longer need the amount of our products they have contracted for or may be able to obtain comparable products at a lower price. Should any counterparty fail to honor its obligations under a contract with us, we could sustain losses, which could have a material adverse effect on our business, financial condition, and results of operations.

Upon the expiration of our off-take contracts, our customers may decide not to recontract on terms as favorable to us as our current contracts, or at all. For example, our current customers may acquire wood pellets from other providers that offer more competitive pricing or logistics or develop their own sources of wood pellets. Some of our customers could also exit their current business or be acquired by other companies that purchase wood pellets from other providers. The demand for wood pellets or their prevailing prices at the times at which our current off‑take contracts expire may also render entry into new long-term-off-take contracts difficult or impossible.

Any reduction in the amount of wood pellets purchased by our customers or our inability to renegotiate or replace our existing contracts on economically acceptable terms, or our failure to successfully penetrate new markets within and outside of Europe in the future, could have a material adverse effect on our results of operations, business and financial position.

Termination penalties within our off-take contracts may not fully compensate us for our total economic losses.

Certain of our off-take contracts provide the customer with a right of termination for various events of convenience or changes in law or policy. Although some of these contracts are subject to certain protective termination payments, the termination payments made by our customers may not fully compensate us for losses.

We may be unable to renegotiate our long-term contracts with our existing customers on favorable terms or at all.

In connection with our ongoing restructuring through Chapter 11, we are renegotiating many of our long-term contracts with the goal of improving profitability and to better protect against future inflation and other cost risks. We may be unable to complete these negotiations on the proposed terms, or at all. The Plan makes certain assumptions regarding the outcome of these negotiations. If we are unable to finalize these contracts on favorable terms, or at all, our results of operations, business and financial position, may be materially adversely affected and we may be unable to achieve the results anticipated by the projections set forth in the Plan.

Our long-term off-take contracts with our customers may only partially offset certain increases in our costs or preclude us from taking advantage of relatively high wood pellet prices in the broader markets.

However, such cost pass-through mechanisms are typically adjusted based on changes to consumer price index,

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which may not reflect actual changes to our costs. Continued and increased inflation could decrease the profitability of our long-term off-take contracts.

In addition, our current and future competitors may be in a better position than we are to take advantage of relatively high prices during such periods.

Regulatory and Litigation Risks

Our business is subject to risks related to legal proceedings and governmental inquiries.

Our business is subject to litigation, regulatory investigations, and claims arising in the normal course of operations. The risks associated with these matters often may be difficult to assess or quantify and the existence and magnitude of potential claims often remain unknown for substantial periods of time. Our involvement in any investigations and lawsuits would cause us to incur additional legal and other costs and, if we were found to have violated any laws, we could be required to pay fines, damages, and other costs, perhaps in material amounts.

Changes in laws or government policies, incentives, and taxes related to low-carbon and renewable energy may affect customer demand for our products.

Consumers of utility-grade wood pellets currently use our products either as part of a binding obligation to generate a certain percentage of renewable energy or because they receive direct or indirect financial support or incentives to do so. Financial support is often necessary to cover the generally higher costs of wood pellets compared to conventional fossil fuels like coal. In most countries, once the government implements a tax (e.g., the U.K.’s carbon price floor tax) or a preferable tariff or specific renewable energy policy either supporting a renewable energy generator or the energy generating sector as a whole, such tax, tariff, or policy is guaranteed for a specified period of time, sometimes for the investment lifetime of a generator’s project. Demand for wood pellets could be substantially lower than expected if government support is removed, reduced, or delayed or, in the future, is insufficient to enable successful deployment of biomass power at the levels currently projected.

This may also affect demand for our products in addition to increasing our operational costs. Regulatory directives may require certain biomass standards to be satisfied in order for our customers to capture any available direct or indirect regulatory incentives from the use of our products. This typically is implemented through biomass sustainability criteria, which either are a mandatory element of eligibility for financial subsidies to biomass energy generators or may be expected to become mandatory in the future. For more information, see our risk factor titled “Changes in the treatment of biomass could adversely impact our business.” As a biomass fuel supplier, the viability of our business is therefore dependent on our ability to comply with such requirements.

Currently, some criteria with which we must comply, including rules relating to certain customer regulatory requirements, forestry best management practices, future adaption of climate smart forestry techniques and carbon accounting, are under revision.

Challenges to or delays in the issuance of air permits, or our failure to comply with our permits, could impair our operations and ability to expand our production.

Our plants are subject to the requirements of the Clean Air Act and must either receive minor source permits from the states in which they are located or a major source permit, which the U.S. EPA has the right to object to if it determines any proposed permit is not in compliance with applicable requirements. In general, our facilities are eligible for minor source

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permits following the application of pollution control technologies. Such new permits could also impede our ability to satisfy emission limitations and/or stringent testing requirements to demonstrate compliance therewith.

Federal, state, and local legislative and regulatory initiatives relating to forestry products and the potential for related litigation could result in increased costs and additional operating restrictions and delays, which could cause a decline in the demand for our products and negatively impact our business, financial condition, and results of operations.

Commercial forestry is regulated by complex regulatory frameworks at the federal, state, and local levels. Among other federal laws, the Clean Water Act and the Endangered Species Act have been applied to commercial forestry operations through agency regulations and court decisions, as well as through the delegation to states to implement and monitor compliance with such laws. Any new or modified laws or regulations at any of these levels could have the effect of reducing forestry operations in areas where we procure our raw materials and consequently may prevent us from purchasing raw materials in an economic manner, or at all. In addition, future regulation of, or litigation concerning, the use of timberlands, the protection of endangered species, the promotion of forest biodiversity and the response to and prevention of wildfires, as well as litigation, campaigns or other measures advanced by special interest groups, could also reduce the availability of the raw materials required for our operations.

Changes in the treatment of biomass could adversely impact our business.

Various rules have been issued or may be issued in the future by government agencies, including in the jurisdictions where we sell our products, to regulate the sustainability criteria associated with the use of biomass, which in turn may require us to adopt certain practices in our operations.

On October 18, 2023, the Council of the EU and Presidents of the Parliament signed the final text of RED III, which entered into force on November 20, 2023, although there is an 18-month period for member states to transpose the directives into law. Under RED III, wood biomass continues to be recognized as a renewable energy source in the EU and, therefore, can be used in meeting the EU’s climate targets. The EU’s directives establish, among other things, targets for renewable energy supply and certain sustainability requirements for biomass, including requirements related to carbon stocks and land use. If the wood pellets we produce do not conform to these or future requirements, our customers would not be able to count energy generated therefrom towards these renewable energy goals, which could decrease demand for our products. RED III also implements additional changes relating to subsidies of biomass—for example, no new subsidies for power biomass plants, no direct subsidies for industrial grade roundwood, and required application of the cascading principle to subsidy design. These provisions may impact our future operations and financial condition.

Additionally, the European Union’s Deforestation Regulation (“EUDR”) becomes effective from December 30, 2024. Because wood pellet production for different markets is not segregated, all raw material sourcing for all mills must be EUDR compliant. Providing compliance will be challenging, due to the need to provide geolocation data for all fiber sources. The way to do this is still being worked on with customers and the European Commission. For EUDR, we are making improvements to our proprietary Track & Trace® system data collection process to ensure more accurate and timely capture of tract level and geolocation data required under the regulation.

Updates made to the sustainability requirements of RED under RED III have mostly been incorporated during the implementation of RED II. Any additional requirements from Member State transposition of RED III will not become apparent until we get closer to the transposition deadline of May 2025.

Relatedly, biomass has been under additional regulatory scrutiny in recent years to develop standards to safeguard against adverse environmental effects from its use, and certain special interest groups that focus on environmental issues have expressed their opposition to the use of biomass, both publicly and directly, to domestic and foreign regulators, policy makers, power, heat or combined heat, and generators and other industrial users of biomass. These groups are also actively lobbying, litigating, and undertaking other actions domestically and abroad in an effort to increase the regulation of, reduce or eliminate the incentives and support for, or otherwise delay, interfere with, or impede the production and use of biomass for or by

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generators.

Notwithstanding the above, we cannot guarantee that our products will continue to be considered renewable in all jurisdictions where our customers consume them or meet future standards or the expectations of third parties, governmental authorities, and stakeholders, related to the same, especially with respect to potential regulatory changes. This may adversely impact our business, harming our reputation, restricting or limiting access to and the cost of capital, and subjecting us to potential litigation risk.

Our operations are subject to stringent environmental and occupational health and safety laws and regulations that may expose us to significant costs and liabilities.

Our operations are subject to stringent federal, regional, state, and local environmental, health, and safety laws and regulations. These laws and regulations govern environmental protection, occupational health and safety, the release or discharge of materials into the environment, air emissions, wastewater discharges, the investigation and remediation of contaminated sites, and allocation of liability for cleanup of such sites. These laws and regulations may restrict or impact our business in many ways, including by requiring us to acquire permits or other approvals to conduct regulated activities, limiting our air emissions or wastewater discharges or requiring us to install costly equipment to control, reduce, or treat such emissions or discharges and impacting our ability to modify or expand our operations. We may be required to make significant capital and operating expenditures to comply with these laws and regulations. Failure to comply with these laws and regulations may result in the assessment of administrative, civil, and criminal penalties, imposition of investigatory or remedial obligations, suspension or revocation of permits, and the issuance of orders limiting or prohibiting some or all of our operations. Adoption of new or modified environmental laws and regulations may impair the operation of our business, delay or prevent expansion of existing facilities or construction of new facilities, and otherwise result in increased costs and liabilities, which may be material.

The actions of certain special interest groups could adversely impact our business.

Certain special interest groups that focus on environmental issues have expressed their opposition to the use of biomass, both publicly and directly to domestic and foreign regulators, policy makers, power, heat or combined heat and power generators, and other industrial users of biomass.

Increasing attention to ESG matters could adversely affect our business.

Increasing social and political attention to climate change and other environmental and social impacts may result in increased costs, changes in demand for certain types of products or means of production, enhanced compliance obligations, or other negative impacts to our business or our financial condition. Although we may participate in various voluntary frameworks and certification programs to improve the ESG profile of our operations and product, we cannot guarantee that such participation or certification will have the intended results on our ESG profile.

Such expectations and assumptions are also complicated by the lack of an established framework for identifying, measuring, and reporting on many ESG matters. Our estimates concerning the timing and cost of implementing our goals are subject to risks and uncertainties, some of which are outside of our control. We cannot guarantee that such risks and uncertainties may not give rise to the need to restate or revise our goals, cause us to miss them altogether, or limit the impact of success of achieving our goals.

Such ratings are used by some investors to inform their investment and voting decisions. Unfavorable ESG ratings could lead to increased negative investor sentiment toward us, our customers, or our industry, which could negatively impact our share price as well as our access to and cost of capital. Finally, to the extent ESG matters negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely affect our operations.

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Further, public statements with respect to ESG matters, such as emissions reduction goals, other environmental targets, or other commitments addressing certain social issues, are becoming increasingly subject to heightened scrutiny from public and governmental authorities related to the risk of potential “greenwashing,” i.e., misleading information or false claims overstating potential ESG benefits. For example, in March 2021, the SEC established the Climate and ESG Task Force in the Division of Enforcement to identify and address potential ESG-related misconduct, including greenwashing. Certain non-governmental organizations and other private actors have also filed lawsuits under various securities and consumer protection laws alleging that certain ESG-related statements, goals, or standards were misleading, false, or otherwise deceptive. As a result, we may face increased litigation risks from private parties and governmental authorities related to our ESG efforts. We could also face increasing costs as we attempt to comply with and navigate further regulatory focus and scrutiny.

Finally, any alleged claims of greenwashing against us or others in our industry may lead to further negative sentiment and diversion of investments. For example, on November 3, 2022, a putative securities class action lawsuit was filed in federal district court in the District of Maryland against Enviva, John Keppler, and Shai Even. The lawsuit asserted claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 thereunder based on allegations that the Company made materially false and misleading statements regarding the Company’s business, operations, and compliance policies, particularly relating to its ESG practices. Specifically, the lawsuit alleged that the Company’s statements were misleading as to the environmental sustainability of the Company’s wood pellet production and procurement and the impact such statements would have on the Company’s financials and growth potential. The lawsuit sought unspecified damages, equitable relief, interest and costs, and attorneys’ fees. Lead plaintiff and lead counsel were appointed on January 31, 2023, and their amended complaint was filed on April 4, 2023. The parties completed briefing on the Company’s motion to dismiss on August 1, 2023, and the court granted the Company’s motion to dismiss on July 3, 2024. The plaintiffs voluntarily dismissed the lawsuit with prejudice on July 25, 2024.

Operational Risks

We may be unable to complete our construction projects on time, and our construction costs could increase to levels that make the return on our investment less than expected.

These circumstances could prevent our construction projects from commencing operations or from meeting our original expectations concerning timing, operational performance, the capital expenditures necessary for their completion, and the returns they will achieve. In particular, the DIP Facility and the Plan contemplate include financing to complete the Epes facility. However, the amount and allocation of those funds are subject to the progress and timing of the Chapter 11 Cases and ultimate confirmation of the Plan by the Bankruptcy Court. Any material delay in the timing of the Chapter 11 Cases or material change in the proposed funding could have a material effect on the costs and timing of the completion of the Epes facility, and such delays may result in increased costs associated with the project.

This mis-match in timing could reduce our available liquidity. For example, we had incurred construction expenses related to the construction of the Bond facility, which development was ceased in connection with the filing of the Chapter 11 Cases.

The satisfactory delivery of substantially all of our production is dependent on continuous access to infrastructure at our owned, leased, and third-party-operated terminals. Loss of access to our ports of shipment and destination, including through failure of terminal equipment and port closures, could adversely affect our financial results and cash available for dividends.

Substantially all of our production is dependent on infrastructure at our owned, leased, and third-party-operated terminals. Moreover, we rely on various ports of destination, as well as third parties who provide stevedoring or other services at our ports of shipment and destination or from whom we charter oceangoing vessels and crews, to transport our product to our customers. Loss of access to these ports for any reason, or failure of such third-party service providers to uphold their contractual obligations, may impact our ability to fulfill our obligations under our off-take contracts, cause interruptions to our shipping schedule and cause us to incur substantial additional

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transportation or other costs, all of which could have a material adverse effect on our business, financial condition, and results of operations.

Failure to maintain effective quality control systems at our production plants and deep-water marine terminals could have a material adverse effect on our business and operations.

Our customers require a reliable supply of wood pellets that meet stringent product specifications. Moreover, any significant failure or deterioration of our quality control systems could impact our ability to deliver product that meets our customers’ specifications and, in turn, could lead to rejection of our product by our customers, which could have a material adverse effect on our business, financial condition, and results of operations.

Our business is subject to operating hazards and other operational risks, which may have a material adverse effect on our business and results of operations. We may also not be adequately insured against such events.

Our business could be materially adversely affected by operating hazards and other risks to our operations. Any such fire or explosion could cause injury, damage production plants or disrupt production or transportation, which could adversely impact our financial results or our ability to satisfy our obligations under our customer contracts. Floods, hurricanes, and wet conditions can damage production plants in the short term and forests in the long term, and result in increased costs associated with drying our product. Such events may also adversely affect the ability of our suppliers or service providers to provide us with the raw materials or services we require or the ability to load, transport, and unload our product.

In addition, the scientific community has concluded that severe weather will increase in frequency and intensity as result of increasing concentrations of GHGs in the Earth’s atmosphere, and that climate change will have significant physical effects, including sea-level rise, increased frequency and severity of hurricanes and other storms, flooding, drought, and forest fires. We and our suppliers operate in coastal and wooded areas in geographic regions that are susceptible to such climate impacts.

We maintain insurance policies to mitigate against certain risks related to our business, in types and amounts that we believe are reasonable depending on the circumstances surrounding each identified risk; however, we may not be fully insured against all operating hazards and other operational risks incident to our business. Furthermore, we may be unable to maintain or obtain insurance of the type and amount we desire at reasonable rates, if at all. As a result of market conditions and certain claims we may make under our insurance policies, premiums and deductibles for certain of our insurance policies could escalate. In some instances, insurance could become unavailable or available only for reduced amounts of coverage or at unreasonable rates. If we were to incur a significant liability for which we are not fully insured, it could have a material adverse effect on our financial condition, results of operations, and cash available for dividends to our stockholders.

We may be required to make substantial capital expenditures to maintain and improve our facilities.

Although we currently use a portion of our cash generated from our operations to maintain, develop, and improve our assets and facilities, such investment may, over time, be insufficient to preserve the operating profile required for us to meet our planned profitability or meet the evolving quality and product specifications demanded by our customers. Moreover, our current and future construction and other capital projects may be capital-intensive or suffer cost overruns. Our future success depends on our ability to continuously improve and upgrade our existing plants to meet customer demands while at the same time maintaining the reliability and integrity of our existing plants. We may not be able to maintain or replace key technology and infrastructure at our existing plants as quickly as we would like or in a cost-effective manner. The profitability of our business is dependent on the continuous improvement of both our supply and maintenance costs. We may not be able to continuously reduce costs as effectively as we need to increase profitability.

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Our business and operating results are subject to seasonal fluctuations.

Our business is affected by seasonal fluctuations. The cost of producing wood pellets tends to be higher in the winter months because of increases in the cost of delivered raw materials, primarily due to a reduction in accessibility during cold and wet weather conditions. Our raw materials typically have higher moisture content during this period, resulting in a lower product yield; moreover, the cost of drying wood fiber increases during periods of lower ambient temperatures.

The increase in demand for power and heat during the winter months drives greater customer demand for wood pellets. As some of our wood pellet supply to our customers are sourced from third-party purchases, we may experience higher wood pellet costs and a reduction in our gross margin during the winter months. These seasonal fluctuations could have an adverse effect on our business, financial condition, and results of operations and cause comparisons of operating measures between consecutive quarters to not be as meaningful as comparisons between longer reporting periods.

Market and Credit Risks

Significant increases in the cost, or decreases in the availability, of raw materials or sourced wood pellets could result in lower revenue, operating profits, and cash flows, or impede our ability to meet commitments to our customers.

We purchase wood fiber from third-party landowners and other suppliers for use at our plants. Our reliance on third parties to secure wood fiber exposes us to potential price volatility and unavailability of such raw materials, and the associated costs may exceed our ability to pass through such price increases under our contracts with our customers. Further, delays or disruptions in obtaining wood fiber may result from a number of factors affecting our suppliers, including extreme weather, production or delivery disruptions, inadequate logging capacity, labor disputes, impaired financial condition of a particular supplier, the inability of suppliers to comply with regulatory or sustainability requirements, or decreased availability of raw materials. In addition, other companies, whether or not in our industry, could procure wood fiber within our procurement areas and adversely change regional market dynamics, resulting in insufficient quantities of raw material or higher prices.

In addition to our production, we purchase wood pellets produced by other suppliers to fulfill our obligations under our portfolio of long-term off-take contracts or take advantage of market dislocations on an opportunistic basis. Any reliance on other wood pellet producers exposes us to the risk that such suppliers will fail to satisfy their obligations to us pursuant to the associated off-take contracts, including by failing to timely meet quality specifications and volume requirements. Any such failure could increase our costs or prevent us from meeting our commitments to our customers.

The materialization of any of the foregoing risks could have an adverse effect on our results of operations, business, and financial position, and cash generated from our operations.

We are exposed to the credit risk of our contract counterparties, including the customers for our products, and any material nonpayment or nonperformance by our customers could adversely affect our financial results and cash generated from our operations.

We are subject to the risk of loss resulting from nonpayment or nonperformance by our contract counterparties, including our long-term off-take customers and suppliers. If we fail to adequately assess the creditworthiness of existing or future customers or suppliers, or if their creditworthiness deteriorates unexpectedly, any resulting nonpayment or nonperformance by them could have an adverse impact on our results of operations, business and financial position, and cash generated from our operations.

In addition, persistent disruptions in our access to infrastructure may force us to halt production as we reach storage capacity at our facilities. Accordingly, if the primary transportation services we use to transport our products are disrupted, and

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we are unable to find alternative transportation providers, it could have a material adverse effect on our results of operations, business and financial position, and cash generated from our operations.

We compete with other wood pellet producers and, if growth in domestic and global demand for wood pellets meets or exceeds management’s expectations, the competition within our industry may grow significantly.

We compete with other wood pellet production companies for the customers to whom we sell our products., AS Graanul Invest, Fram Renewable Fuels, LLC, Phu Tai Bio-Energy and Highland Pellets LLC. Competition in our industry is based on price, consistency and quality of product, site location, distribution and logistics capabilities, customer service, creditworthiness and reliability of supply. Some of our competitors may have greater financial and other resources than we do, may develop technology superior to ours, or may have production plants sited in more advantageous locations from a logistics, procurement, or other cost perspective.

Significant price decreases or reduced demand could have a material adverse effect on our results of operations, business, and financial position, and cash generated from our operations.

Financial Risks

The DIP Facility is only available if we satisfy certain conditions and imposes significant restrictions on our operations

Proceeds of the DIP Facility may be used only in connection with an approved budget (adjusted for agreed variances). The DIP Facility will be made available in up to five draws, with the first draw occurring substantially contemporaneously with entry of the Interim DIP Order and the up to four additional draws subject to entry of the Final DIP Order. Each draw is subject to the satisfaction of certain conditions under the DIP Credit Agreement, including compliance with meeting the milestones required by the RSA. Borrowings under the DIP Facility bear interest at a rate equal to, at the Company’s option, (i) the alternate base rate plus 7% per annum or (ii) the adjusted SOFR rate plus 8% per annum. The Debtors are required to pay certain other agreed fees to the DIP Creditors and the agents under the DIP Credit Agreement. The DIP Credit Agreement contains usual and customary affirmative and negative covenants and events of default for transactions of this type. In addition, the Debtors are required to maintain a minimum liquidity of $30.0 million. There can be no assurance that funding sources will continue to be available, as our ability to generate cash flows from operations and our ability to continue to access the DIP Facility may be impacted by a variety of business, economic, legislative, financial, and other factors, which may be outside of our control.

As of December 31, 2023, our total debt was $1.8 billion, which primarily consisted of $750.0 million aggregate principal amount outstanding under our 6.5% senior unsecured notes due 2026, $672.5 million aggregate principal outstanding under our senior secured credit facility (consisting of $568.5 million in revolving loans and $104.0 million in term loans), and $350.0 million aggregate principal amount of municipal notes issued in July and November 2022 to fund the construction of our plant near Epes, Alabama and our plant near Bond, Mississippi. All of this debt was stayed upon filing of the Chapter 11 Cases on March 12, 2024, and treatment of each of these claims will be addressed as part of the Plan. Our level of indebtedness could affect our operations in several ways, including the following:

•a significant portion of our cash flows could be used to service our indebtedness;

•the covenants contained in the agreements governing our outstanding indebtedness may limit our ability to borrow additional funds, dispose of assets, pay dividends, and make certain investments;

•our debt covenants may also affect our flexibility in planning for, and reacting to, changes in the economy and in our industry;

•a high level of debt would increase our vulnerability to general adverse economic and industry conditions, including increasing interest rates and inflationary pressures;

•a high level of debt may place us at a competitive disadvantage compared to our competitors that may be less leveraged and therefore may be able to take advantage of opportunities that our indebtedness would prevent us from pursuing; and

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•a high level of debt may impair our ability to obtain additional financing in the future for working capital, capital expenditures, debt service requirements, acquisitions, or general corporate or other purposes.

In addition, borrowings under our credit facilities we or our subsidiaries may enter into in the future may bear, interest at variable rates. Additionally, higher market interest rates can also increase borrowing costs on fixed rate debt instruments to be issued in the future, or the refinancing of existing fixed-rate debt. As such higher interest rates could adversely affect our cash flow and reduce funds available for organic growth or to return capital to investors.

In addition to our debt service obligations, our operations require substantial expenditures on a continuing basis. General economic conditions and financial, business, and other factors affect our operations and our future performance. Many of these factors are beyond our control. We may not be able to generate sufficient cash flows to pay the interest on our debt, and future working capital borrowings or debt or equity financing may not be available to pay or refinance such debt.

Our exposure to risks associated with foreign currency and interest rate fluctuations, as well as any hedging arrangements we may enter into to mitigate those risks, could have an adverse effect on our financial condition and results of operations.

We may experience foreign currency exchange and interest rate volatility in our business.

In addition, there may be instances in which costs and revenue will not be matched with respect to currency denomination. As a result, to the extent that existing and future off-take contracts are not denominated in U.S. Dollars, it is possible that increasing portions of our revenue, costs, assets, and liabilities will be subject to fluctuations in foreign currency valuations.

Such hedging transactions involve cost and risk and may not be effective at mitigating our exposure to fluctuations in foreign currency exchange and interest rates. Risks inherent in our hedging transactions include the risk that counterparties to hedging contracts may be unable to perform their obligations and the risk that the terms of such contracts will not be legally enforceable. Likewise, our hedging activities may be ineffective or may not fully offset the financial impact of foreign currency exchange or interest rates fluctuations, which could have an adverse impact on our results of operations, business and financial position.

General Risk Factors

Our business may suffer if we lose, or are unable to attract and retain, key personnel, or if we are unable to successfully adapt to the new leadership team.

We depend to a large extent on the services of our senior management team and other key personnel. Members of our senior management and other key employees collectively have extensive expertise in designing, building, and operating wood pellet production plants or marine terminals, negotiating long‑term off-take contracts and managing businesses such as ours. Competition for management and key personnel is intense, and the pool of qualified candidates is limited. The loss of any of these individuals or the failure to attract additional personnel, as needed, could have a material adverse effect on our operations and could lead to higher labor costs or reliance on less qualified personnel. In addition, if any of our executives or other key employees were to join a competitor or form a competing company, we could lose customers, suppliers, know-how, and key personnel. Our success is dependent on our ability to continue to attract, employ, and retain highly skilled personnel.

Since late 2022, we have experienced a number of significant leadership transitions including key roles of Chief Executive Officer, President, Chief Financial Officer and General Counsel. In addition, certain members of management have departed or changed roles in connection with the Chapter 11 Cases and further changes may be implemented in connection with the Plan. These leadership transitions have resulted, and may result in the future, in changes to our management style, operations, and strategies. Any significant leadership change or senior management transition involves inherent risk and could hinder our strategic planning, business execution and future performance. In particular, this or any future leadership transition may result in a loss of personnel with deep institutional or technical knowledge and changes in business strategy or objectives, and has the potential to disrupt our operations and relationships with employees and customers due to added costs, operational inefficiencies, changes in strategy, decreased employee morale and productivity, and increased turnover.

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The international nature of our business subjects us to a number of risks, including foreign exchange risk and unfavorable political, regulatory, and tax conditions in foreign countries.

Substantially all of our current product sales are to customers that operate outside of the United States. As a result, we face certain risks inherent in maintaining international operations that include foreign exchange movements, restrictions on foreign trade and investment, including currency exchange controls imposed by or in other countries and trade barriers such as export requirements, tariffs, taxes, and other restrictions and expenses, which could increase the prices of our products and make our products less competitive in some countries.

We are subject to various complex and evolving U.S. federal, state, and local and non-U.S. taxes. U.S. federal, state, and local and non-U.S. tax laws, policies, statutes, rules, regulations, or ordinances could be interpreted, changed, modified, or applied adversely to us, in each case, possibly with retroactive effect, and may have an adverse effect on our business, cash flows, and future profitability.

Labor strikes or work stoppages by our employees could harm our business.

As of December 31, 2023, none of our employees were represented by a labor union. However, unionization activities could occur among our employees.

Our business is subject to cybersecurity risks.

As is typical of modern businesses, we are reliant on the continuous and uninterrupted operation of our information technology (“IT”) systems. The energy industry has become increasingly dependent on digital technologies to conduct day-to-day operations, and the use of mobile communication devices has rapidly increased. Industrial control systems such as supervisory control and data acquisition (“SCADA”) systems now control large-scale processes that can include multiple sites across long distances. In addition, cybersecurity attacks are also becoming more sophisticated and include, but are not limited to, ransomware, credential stuffing, spear phishing, social engineering, use of deepfakes (e.g., highly realistic synthetic media generated by artificial intelligence) and other attempts to gain unauthorized access to data for purposes of extortion or other malfeasance. The Company’s technologies, systems, networks, including its SCADA system, and those of its business partners may become the target of cybersecurity attacks or security breaches.

We have experienced attempted cybersecurity attacks, but have not suffered any material adverse impacts to our business and operations as a result of such attempts. We have implemented security measures that are designed to detect and protect against cyberattacks. No security measure is infallible. Despite these measures and any additional measures, we may implement or adopt in the future, our facilities and systems, and those of our third-party service providers, have been and are vulnerable to security breaches, computer viruses, lost or misplaced data, programming errors, scams, burglary, human errors, misdirected wire transfers, and other adverse events. Our efforts to improve security and protect data may also identify previously undiscovered instances of security breaches or bad actors with present access to our systems.

Potential risks to our IT systems could include unauthorized attempts to extract business-sensitive, proprietary, confidential, or personal information, unauthorized attempts to perpetrate denial of service attacks, extortion, corruption of information, or disruption of business processes.

Our business is subject to privacy and data protection legislation compliance risks.

We are subject to a variety of federal, state and local laws, directives, rules, and policies relating to privacy and the collection, protection, use, retention, security, disclosure, transfer, and other processing of personal data and other data. The regulatory framework for data privacy and security worldwide is continuously evolving and developing and, as a result,

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interpretation, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. The European Union, e.g., has enacted the General Data Protection Regulation (EU 2016/679) (the “EU GDPR”). The United Kingdom has implemented the Data Protection Act 2018 and the EU GDPR as it forms part of the laws of England and Wales, Scotland, and Northern Ireland by virtue of section 3 of the European Union (Withdrawal) Act 2018 (the “UK GDPR”), each of which (to the extent such laws apply) broadly impacts businesses that handle various types of personal data, including employee personal data.

The corporate opportunity provisions in our certificate of incorporation could enable affiliates of ours to benefit from corporate opportunities that might otherwise be available to us.

Subject to the limitations of applicable law, our certificate of incorporation, among other things; permits us to enter into transactions with entities in which one or more of our officers or directors are financially or otherwise interested; permits any of our stockholders, officers or directors to conduct business that competes with us and to make investments in any kind of property in which we may make investments; and provides that if any director or officer of one of our affiliates who is also one of our officers or directors becomes aware of a potential business opportunity, transaction, or other matter (other than one expressly offered to that director or officer in writing solely in his or her capacity as our director or officer), that director or officer will have no duty to communicate or offer that opportunity to us, and will be permitted to communicate or offer that opportunity to such affiliates and that director or officer will not be deemed to have (i) acted in a manner inconsistent with his or her fiduciary or other duties to us regarding the opportunity or (ii) acted in bad faith or in a manner inconsistent with our best interests.

These provisions create the possibility that a corporate opportunity that would otherwise be available to us may be used for the benefit of one of our affiliates.

We identified material weaknesses in our internal control over financial reporting for the fiscal years ended December 31, 2023 and 2022. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner.

In connection with the preparation of the Company’s audited financial statements for the years ended December 31, 2023 and 2022, management identified multiple material weaknesses in our internal control over financial reporting whereby the Company did not design and execute controls in accordance with U.S. generally accepted accounting principles. These material weaknesses and the Company’s plans to remediate those material weaknesses are described in Item 9A. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis. Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.

We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. Even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Description of Processes for Assessing, Identifying, and Managing Cybersecurity Risks

We may collect and store certain sensitive Company information, including proprietary and confidential business information, trade secrets, intellectual property, sensitive third-party information, and employee information. Our ability to manage our business functions efficiently and effectively depends significantly on the availability and security of this information. We seek to assess, identify, and manage cybersecurity risks through the processes described below:

Risk Assessment

A multi-layered approach and methodology designed to protect and monitor data and manage cybersecurity risk has been implemented. Regular assessments of our cybersecurity safeguards are conducted by independent cybersecurity vendors who specialize in application and network penetration testing, threat emulation, social engineering, and best practice gap assessments. Our IT Risk and Cyber Security department conducts regular audits and assessments to identify, evaluate, and manage cybersecurity risks. As a result of these assessments and audits, we endeavor to update IT infrastructure, technical controls, procedures, policies, and education programs to improve resilience to cybersecurity threats.

Additionally, we assess third-party cybersecurity controls through a cybersecurity questionnaire and include security and privacy addenda to our contracts where applicable.

Incident Identification and Response

A cyber incident detection system has been implemented to help promptly identify cybersecurity incidents. In the event of any cybersecurity incident, we have a cross-functional incident response plan that is designed to provide for escalating actions to identify the cause, contain the incident, mitigate the impact, and efficiently restore normal operations. The incident response plan is reviewed annually, and a tabletop exercise testing the incident response plan is periodically conducted.

Cybersecurity Training and Awareness

We require all employees with access to our systems to complete an annual information and cyber security training and conduct simulated phishing campaigns to measure the effectiveness of the training program.

Access Controls

Users are provided with access consistent with the principle of least privilege, which requires that users be given no more access than necessary to complete their job functions. A multi-factor authentication requirement has been implemented for employees and third parties accessing sensitive company information.

Encryption and Data Protection

Encryption methods are used to protect sensitive data in transit and at rest. This includes the encryption of customer data, financial information, and other confidential data.

We engage third-party vendors, such as independent service auditors, consultants, regulatory auditors, law firms, forensic specialists, and other third-party service providers in connection with the above processes. We recognize that third-party service providers introduce cybersecurity risks. Additionally, we endeavor to include cybersecurity requirements in our contracts with service and solution providers and to require them to adhere to security standards and protocols. Further, we request that third-party service providers with access to personally identifiable information enter into data processing services agreements and adhere to our policies and standards.

The above cybersecurity risk management processes are integrated into the Company’s overall enterprise risk management processes. Cybersecurity risks are understood to be significant business risks, and as such, are considered an important component of our enterprise-wide risk management processes.

Impact of Risks from Cybersecurity Threats

We have experienced attempted cybersecurity attacks, but have not suffered any material adverse impacts to our business and operations as a result of such unsuccessful attempts. However, we acknowledge that cybersecurity attacks are continually evolving, and the possibility of future cybersecurity incidents remains. Despite the implementation of our cybersecurity

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processes, our security measures cannot guarantee that a significant cyberattack will not occur. A successful attack on our IT systems could have significant consequences to the business. While we devote resources to our security measures to protect our systems and information, these measures cannot provide absolute security. No security measure is infallible. See Item 1A – “Risk Factors” for additional information about the risks to our business associated with a breach or compromise to our IT systems.

Board of Directors’ Oversight and Management’s Role

Our Vice President, Information Technology oversees the Company’s cybersecurity initiatives. The head of the IT Risk & Cyber Security delivers quarterly updates to senior leaders, discussing the effectiveness of our cybersecurity strategy and to communicate our program, health, performance, metrics, and roadmap. In addition, our Vice President, Information Technology is responsible for upward reporting of emerging cybersecurity incidents.

Recognizing the importance of cybersecurity to the success and resilience of our business, the Board considers cybersecurity to be a vital aspect of corporate governance. To facilitate effective oversight, our Cyber Security team holds discussions on cybersecurity risks, incident trends, and the effectiveness of cybersecurity measures as necessitated by emerging material cyber risks.

Our Cyber Security team is made up of highly experienced professionals with an extensive background in information security and risk management, including disciplines such as security architecture, system security, identity and access management, communication and network security, security operations and software development security. This background includes experience across a variety of industries and various relevant degrees and certifications. The Cyber Security team is supported by managed service providers who bring diverse expertise in areas such as network security, data protection, and threat intelligence.

Recently Filed

Click on a ticker to see risk factors

Ticker *	File Date
MU	1 day, 6 hours ago
AVNW	1 day, 6 hours ago
UPOW	1 day, 7 hours ago
MIMO	1 day, 15 hours ago
KFFB	2 days, 5 hours ago
EVA	2 days, 5 hours ago
VHLD	2 days, 8 hours ago
XNDA	3 days, 11 hours ago
UNFI	4 days, 5 hours ago
INTG	5 days, 5 hours ago
LRDC	5 days, 5 hours ago
HWKE	5 days, 5 hours ago
AMST	5 days, 5 hours ago
UNXP	5 days, 5 hours ago
PCYG	5 days, 5 hours ago
VISM	5 days, 5 hours ago
BIVI	5 days, 5 hours ago
SISI	5 days, 5 hours ago
PPCB	5 days, 5 hours ago
CVAT	5 days, 5 hours ago
BNET	5 days, 6 hours ago
TGL	5 days, 6 hours ago
PTN	5 days, 6 hours ago
HYSR	5 days, 6 hours ago
PEYE	5 days, 6 hours ago
VRAR	5 days, 6 hours ago
INTV	5 days, 6 hours ago
HFBL	5 days, 6 hours ago
ESMC	5 days, 6 hours ago
PRSI	5 days, 6 hours ago
FKWL	5 days, 6 hours ago
MARPS	5 days, 7 hours ago
LUVU	5 days, 7 hours ago
RNLX	5 days, 7 hours ago
SSY	5 days, 8 hours ago
FSTJ	5 days, 8 hours ago
NTWK	5 days, 8 hours ago
SGLA	5 days, 13 hours ago
IXHL	5 days, 15 hours ago
BNOX	5 days, 16 hours ago
CPRT	1 week, 1 day ago
INM	1 week, 1 day ago
NAII	1 week, 1 day ago
WBQNL	1 week, 1 day ago
WWAC	1 week, 1 day ago
FONR	1 week, 1 day ago
NEOV	1 week, 1 day ago
GURE	1 week, 1 day ago
NNVC	1 week, 1 day ago
ESP	1 week, 1 day ago

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Risk Factors - EVA

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Recently Filed

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House Trading

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TRADE SMARTER

TRADE SMARTER

Strategies

Alerts

Browse Data

Risk Factors Dashboard

View risk factors by ticker

Search filings by term

Risk Factors - EVA

-New additions in green-Changes in blue-Hover to see similar sentence in last filing

Recently Filed

OTHER DATASETS

House Trading

Corporate Flights

App Ratings

TRADE SMARTER

TRADE SMARTER

-New additions in green
-Changes in blue
-Hover to see similar sentence in last filing