Canola Oil Food Grade Regulations

10-Q: INCOMING, INC.

10-Q: INCOMING, INC.

(EDGAR Online via COMTEX) -- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION OF THE RESULTS OF OUR OPERATIONS AND FINANCIAL CONDITION SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.

This section of the report includes a number of forward-looking statements that reflect the Company's current views with respect to future events and financial performance. Forward-looking statements are often identified by words like:

The following discussion provides an analysis of the results of our operations, an overview of our liquidity and capital resources and other items related to our business. The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and our audited financial statements and notes included in our Annual Report on Form 10-K as of and for the year ended November 30, 2010 and our transition period report included with our Quarterly Report on Form 10-Q for the period ended March 31, 2011.

Overview

Successor company references herein are referring to consolidated information pertaining to the Company, the registrant.

Predecessor company references herein are referring to North American Bio-Energies, LLC ("NABE"), the former owner and manager of the biodiesel production facility in Lenoir, NC, and their operations at the facility.

The following discussion is an overview of the important factors that management focuses on in evaluating our businesses, financial condition and operating performance and should be read in conjunction with the financial statements included in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward looking statements as a result of any number of factors, including those set forth in this Quarterly Report and elsewhere in the Company's Annual Report on Form 10-K and other public filings.

Growing 'good fats' demand prompts Minnesota canola plant proposal

PICO said that demand for canola oil – which is high in monounsaturated fat – is outstripping supply in the United States, particularly amid heightened concern about trans fat s.

The company said that the new plant will process up to 365,000 tons of canola seed annually and produce about 280 million pounds of high value, food grade RBD (refined, bleached and deodorized) canola oil, as well as 195,000 tons of canola meal. It is expected to be operational by the fourth quarter of 2012, PICO said. And pending additional environmental permits, the company hopes to eventually process 570,000 tons of canola seed annually at the new plant.

Trans fats in the form of partially hydrogenated oils are attractive to food manufacturers because they have a long shelf life and good flavor stability, but evidence has mounted over the past decade showing that artificial trans fats clog arteries and cause heart disease. On the back of growing concern, the Food and Drug Administration (FDA) issued a regulation that was implemented in 2006 requiring manufacturers to list trans fatty acids on the nutrition panel of foods, providing further motivation for manufacturers to cut trans fats from their products.

In addition, trans fat bans are now in place in many parts of the United States, in areas that encompass about 20 percent of the population, and manufacturers have increasingly looked to alternative oils, including canola, to meet requirements as well as consumer preference for trans-fat-free products.

Trans fat is considered to be the most harmful form of fat because it raises levels of LDL (low-density lipoprotein, or so-called ‘bad’) cholesterol, while lowering levels of HDL (high-density lipoprotein, or ‘good’) cholesterol.

PICO estimates that the total cost of the new facility, including the planned expansion, at $168 million. PICO Holdings will contribute about $60 million of equity for an 88 percent ownership interest, it said.

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