What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-03-15 compared with 2021-03-16 · 240 added, 350 removed, 1015 unchanged (37% of the section changed)

Financial Statements and Supplementary Data.

Financial Statements.

The following sets forth our consolidated balance sheets as at December 31, 2020 and 2019 and our consolidated statements of income and comprehensive income, statements of cash flows, and statements of changes in stockholders’

equity for each of the three years in the period ended December 31, 2020, together with RSM US LLP’s report on the year ended December 31, 2020 and December 31, 2019 and RubinBrown LLP’s report on the year ended December 31, 2018.

Report of Independent Registered Public Accounting Firm (PCAOB ID 49 )

Consolidated Balance Sheets

Consolidated Statements of Income and Comprehensive Income

Consolidated Statements of Cash Flows

Consolidated Statements of Changes in Stockholders' Equity

Notes to Consolidated Financial Statements of FutureFuel Corp.

Note 1. 

Description of business and operations

Note 2. 

Significant accounting policies and basis of presentation

Note 3. 

Government tax credits

Note 4. 

Revenue Recognition

Note 5. 

Note 6. 

Derivative instruments

Note 7. 

Marketable securities

Note 8. 

Fair value measurements

Note 9. 

Property, plant, and equipment

Note 10. 

Intangible assets

Note 11. 

Note 12. 

Accrued expenses and other current liabilities

Note 13. 

Note 14. 

Asset retirement obligations and environmental reserves

Note 15. 

Lease commitments and purchase obligations

Note 16. 

Income tax (benefit) provision

Note 17. 

Earnings per share

Note 18. 

Stock-based compensation

Note 19. 

Stockholders' equity

Note 20. 

Employee benefit plans

Note 21. 

Related party transactions

Note 22. 

Segment information

Note 23. 

Quarterly financial information (unaudited)

Note 24. 

Legal proceedings

Report of Independent Registered Public Accounting Firm

2 unchanged sentences

We have audited the accompanying consolidated balance sheets of FutureFuel Corp.

and its subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of income and comprehensive income, cash flows, and change in stockholders’

equity for each of the two years in the period ended December 31, 2020, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

and its subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of income and comprehensive income, cash flows, and change in stockholders’

equity for each of the three years in the period ended December 31, 2021, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control —

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 16, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 15, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

10 unchanged sentences

Critical Audit Matters

The critical audit matter described below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Other income –

Legal Resolution of Contractual Matter

As described in Note 24 to the consolidated financial statements, the Company recorded other income of $8.35 million related to the legal resolution of a contractual matter.

The Company consulted legal counsel to support the legal resolution.

The application of the legal resolution to certain contracts required management judgment.

We identified the resolution of this contractual matter as a critical audit matter because auditing management’s conclusion and resultant recognition of other income involved significant auditor effort and judgment due to the legal nature of the matter.

Our audit procedures related to the Company’s accounting for the legal resolution of this contractual matter included the following, among others:

We obtained an understanding of the relevant controls over management’s accounting, and related financial reporting disclosure for the legal resolution of contractual matters and tested such controls for design and operating effectiveness.

We obtained and evaluated legal counsel’s correspondence provided to the Company on the matter, verbally discussed the facts with management and legal counsel to verify our understanding of the legal resolution.

We obtained a sample of contracts related to the legal matter and performed the following procedures:

Read contracts for each selection

Agreed key terms and inputs to supporting schedules

Tested the mathematical accuracy of the calculations

We involved a subject matter professional to assist in analyzing the accounting treatment and adherence to applicable disclosure requirements.

We determined that there were no critical audit matters.

/s/ RSM US LLP

2 unchanged sentences

March 15, 2022

Report Of Independent Registered Public Accounting Firm

To the shareholders and the Board of Directors of FutureFuel Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of FutureFuel Corp.

and subsidiaries (collectively, the Company) as of December 31, 2018, and the related consolidated statements of income, comprehensive income, changes in stockholders’

equity, and cash flows for each of the year then ended, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control —

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 15, 2019 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

Adoption of New Accounting Pronouncements

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for revenue in 2018 due to the adoption of ASC Topic 606, Revenue from Contracts with Customers .

As discussed in Note 2 to the consolidated financial statements, the Company changed how changes in the fair value of equity security investments are recognized in 2018 due to the adoption of ASU 2016-01, Financial Instruments –

Overall (Subtopic 825-10):

Recognition and Measurement of Financial Assets and Liabilities.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB).

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We served as the Company’s auditor from 2007 to 2018.

/s/RubinBrown LLP

Denver, Colorado

March 15, 2019

FutureFuel Corp.

Consolidated Balance Sheets

As of December 31, 2020 and 2019

As of December 31, 2021 and 2020

(Dollars in thousands)

2 unchanged sentences

$ 198,122  

Accounts receivable, inclusive of the blenders' tax credit of $ 8,300 and $ 97,295 , and net of allowances for bad debt of $ 63 and $ 0 , respectively

Accounts receivable, inclusive of the blenders' tax credit of $8,232  and $8,300 , and net of allowances for bad debt of $67  and $63 , respectively

29,316  

26 unchanged sentences

Liabilities and Stockholders ’

Accounts payable, inclusive of the blenders' tax credit rebates due customers of $ 1,116 and $ 39,423 , respectively

Accounts payable, inclusive of the blenders' tax credit rebates due customers of $890  and $1,116 , respectively

$ 14,912  

5 unchanged sentences

10,498  

Accrued expenses and other current liabilities

9 unchanged sentences

12,332  

12,965  

Other noncurrent liabilities

7 unchanged sentences

Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding

Common stock, $ 0.0001 par value, 75,000,000 shares authorized, 43,743,243 issued and outstanding as of December 31, 2020 and 2019

Common stock, $0.0001 par value, 75,000,000 shares authorized, 43,763,243 and 43,743,243 issued and outstanding as of December 31, 2021 and 2020

Accumulated other comprehensive income

4 unchanged sentences

89,456  

184,632  

Total stockholders’

33 unchanged sentences

Total operating expenses

10,639  

Income from operations

6 unchanged sentences

( 131 )  

( 173 )  

(Loss) gain on marketable securities

2 unchanged sentences

14,486  

Other income (expense)

14,486  

Income before income taxes

2 unchanged sentences

79,795  

Income tax (benefit) provision

( 14,786 )  

Income tax benefit

( 10,325 )  

23 unchanged sentences

Income tax effect

( 84 )  

Total unrealized (losses) gains, net of tax

3 unchanged sentences

$ 88,497  

$ 52,978  

The accompanying notes are an integral part of these financial statements.

FutureFuel Corp.

Consolidated Statements of Cash Flows

12 unchanged sentences

( 10,454 )  

( 5,145 )  

Change in fair value of equity securities

( 6,281 )  

13,238  

Change in fair value of derivative instruments

( 390 )  

(Gain) loss on the sale of investments

( 834 )  

Loss (gain) on the sale of investments

Stock based compensation

(Gain) loss on disposal of property and equipment

( 11 )  

Loss (gain) on disposal of property and equipment

Impairment of intangible asset  

Noncash interest expense

5 unchanged sentences

related parties

( 2,758 )  

Income tax receivable

( 9,606 )  

( 1,204 )  

Prepaid expenses

( 2,035 )  

( 165 )  

Prepaid expenses –

2 unchanged sentences

41,453  

Accounts payable –

related parties

( 271 )  

( 434 )  

Accrued expenses and other current liabilities

1 unchanged sentence

related parties

( 64 )  

Deferred revenue

2 unchanged sentences

( 686 )  

( 3,649 )  

Net cash provided by operating activities

7 unchanged sentences

( 23,546 )  

( 20,131 )  

Proceeds from the sale of marketable securities

2 unchanged sentences

Proceeds from the sale of property and equipment

Proceeds from the sale of intangible assets  

Capital expenditures

( 1,456 )  

( 6,971 )  

Net cash provided by investing activities

3 unchanged sentences

Payment on loan

( 8,180 )  

Minimum tax withholding on stock options exercised and awards vested

Minimum tax withholding on stock options exercised

Deferred financing costs

( 477 )  

Proceeds from the issuance of stock  

Equipment financing proceeds

1 unchanged sentence

( 119,906 )  

( 10,498 )  

Net cash used in financing activities

( 119,678 )  

( 10,498 )  

Net change in cash and cash equivalents

1 unchanged sentence

28,359  

100,345  

Cash and cash equivalents at beginning of period

9 unchanged sentences

$ 2,372  

$ 9,182  

Noncash investing and financing activities:

4 unchanged sentences

$ 10,498  

The accompanying notes are an integral part of these financial statements.

FutureFuel Corp.

Consolidated Statements of Changes in Stockholders ’

3 unchanged sentences

Stockholders ’

Balance - December 31, 2017 - As previously reported

43,741,670  

$ 8,433  

$ 281,964  

Balance - December 31, 2018

43,743,243  

$ ( 20 )  

Prior period adjustment:

Change in accounting principles

$ 282,145  

Balance - January 1, 2018 - As adjusted

$ 106,949  

1 unchanged sentence

( 10,498 )  

Stock based compensation

Other comprehensive income

88,181  

Stock based compensation

Minimum tax withholdings on options and awards

Balance - December 31, 2019

43,743,243  

Other comprehensive loss

$ 282,166  

1 unchanged sentence

$ 467,098  

Balance - December 31, 2018

Prior period adjustment:

Change in accounting principles

( 12 )  

Balance - January 1, 2020 - As adjusted

43,743,243  

7 unchanged sentences

46,564  

Balance - December 31, 2019

46,564  

$ 282,166  

$ 184,632  

$ 467,098  

Prior period adjustment:

Change in accounting principles

Balance - December 31, 2020

43,743,243  

Balance - January 1, 2020 - As adjusted

$ 282,215  

1 unchanged sentence

$ 371,883  

Dividends  

( 109,408 )  

Proceeds from the issuance of stock  

20,000  

Stock based compensation

Other comprehensive income

Minimum tax withholding  

Other comprehensive income  

( 30 )  

Net Income  

26,255  

Balance - December 31, 2020

Balance - December 31, 2021  

43,763,243  

17 unchanged sentences

Intercompany transactions and balances are eliminated in consolidation.

Certain reclassifications were made to prior year amounts to conform to the 2020 presentation.

Certain reclassifications were made to prior year amounts to conform to the 2021  presentation.

Cash and cash equivalents

8 unchanged sentences

Write-offs are recorded at the time a customer receivable is deemed uncollectible.

Accounts receivable at December 31, 2019 also includes amounts from the retroactive reinstatement of the biodiesel blenders’

tax credit (“BTC”) passed in law in December 2019.

See Note 3 for details.

The Company adopted ASU 2016 - 13, Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments on January 1, 2020 on a modified retrospective approach.

This methodology reflects expected credit losses based on a broader range of reasonable and supportable information to inform credit loss estimates.

The adoption did not have a material impact on the company’s consolidated financials

Customer concentrations

For the twelve months ended December 31, 2020, 2019, and 2018, significant portions of the Company’s sales were made to a relatively small number of customers.

Sales to one biodiesel customer totaled $ 25,460 ( 12 % of total revenue) in 2020, $ 22,351 ( 11 % of total revenue) in 2019, and sales to two customers in 2018 totaled $ 57,198  ( 20 % of total revenue).

Receivables for the customer at December 31, 2020 and 2019, was 2 % and 0%, respectively.

No chemical customers represented a greater than 10% of total sales revenue in 2020.

In 2019 and 2018, one customer and its affiliates, represented approximately 22 %, and 27 % of chemicals revenue ( 11 %, and 11 % of total revenues), respectively.

We sell multiple products to various affiliates of this customer under both long-term and short-term contracts.

One product contract was not renewed at December 31, 2020 representing 17 %, 10 %, and 12 % of chemical revenue ( 7 %, 5 %, and 5 % of total revenue) for 2020, 2019, and 2018, respectively.

Another product contract was not renewed at December 31, 2019 representing 15 % of chemical revenue in 2019 ( 7 % of total revenue), and 14 % of chemical revenue in 2018 ( 6 % of total revenue).

For the twelve months ended December 31, 2021, 2020, and 2019, significant portions of the Company’s sales were made to a relatively small number of customers.

Sales to three biodiesel customers totaled $ 133,231 ( 41 % of total revenue) in 2021, sales to one customer totaled $ 25,460 ( 12 % of revenue) and $ 22,351 ( 11 % of total revenue) in 2020 and 2019, respectively.

Receivables for the significant customers at December 31, 2021 and 2020, was 28 % and 2 % of total receivables, respectively.

No chemical customers represented a greater than 10% of total sales revenue in 2021 or 2020.

In 2019, one customer and its affiliates, represented approximately 22 % of chemicals revenue ( 11 % of total revenues).

We sell multiple products to various affiliates of this 2019 significant customer under both long-term and short-term contracts.

One product contract was not renewed at December 31, 2020 representing 17 % and 

10 % of chemical revenue ( 7 % and 5 % of total revenue) for 2020  and 2019, respectively.

Another product contract was not renewed at December 31, 2019 representing 15 % of chemical revenue in 2019 ( 7 % of total revenue).

Notes to Consolidated Financial Statements of FutureFuel Corp.

9 unchanged sentences

To qualify for designation as an accounting hedging relationship, specific criteria must be met and appropriate documentation maintained.

The Company had no derivative instruments that qualified under these rules as designated accounting hedges in 2020 or 2019.

The Company had no derivative instruments that qualified under these rules as designated accounting hedges in 2021  or 2020.

The Company has elected the normal purchase and normal sales exception for certain feedstock purchase contracts and supply agreements.

44 unchanged sentences

Otherwise, the Company will apply the quantitative impairment test method.

In performing the Company's qualitative analysis, the Company determined that it was more likely than not that the indefinite-lived intangible asset's fair value was greater than the carrying value.

In 2021, the Company made the strategic decision regarding the intangible asset which involved a sale in part and an impairment of the intangible asset's remaining value.

See Note 10 for further details.

Asset retirement obligations and environmental costs

13 unchanged sentences

Revenue recognition  

As of January 1, 2018, the Company adopted ASU 2014 - 09, Revenue from Contracts with Customers , and related subsequently issued ASUs (“Topic 606”

) using the modified retrospective approach, which resulted in a $ 6,900 adjustment recognized through equity upon adoption. 

In accordance with Topic 606, the Company recognizes revenue when performance obligations of the customer contract are satisfied.

In accordance with ASC Topic 606, Revenue from Contracts with Customers , the Company recognizes revenue when performance obligations of the customer contract are satisfied.

The Company sells to customers through master sales agreements or standalone purchase orders.

17 unchanged sentences

Shipping and handling fees related to sales transactions were billed to customers and recorded as sales revenue.

The accounting policies for taxes collected from customers and shipping and handling fees did not change with the adoption of Topic 606.

Cost of goods sold and distribution

Cost of goods sold consists of raw and packaging materials, direct manufacturing costs, depreciation, analytical lab costs, inbound freight, purchasing, and other indirect costs necessary to manufacture products.

Biodiesel cost of goods sold also includes a credit for the one dollar per gallon BTC for blending biodiesel with petroleum diesel when in law.

This tax credit was not in law during 2017.

In February 2018, the tax credit was retroactively reinstated for 2017.

In December 2019, the tax credit was retroactively reinstated for all of 2018 and 2019.

Biodiesel cost of goods sold also includes a credit for the one dollar per gallon BTC for blending biodiesel with petroleum diesel when in law. In December 2019, the tax credit was retroactively reinstated for all of 2018 and 2019, through December 31, 2022.

See Note 3 for further discussion.

20 unchanged sentences

Recently adopted accounting standards

The Company adopted ASU 2016 - 13, Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments on January 1, 2020 on a modified retrospective approach.

The amendments replace the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The Company recorded a $ 12 reduction to opening retained earnings and an allowance for bad debt of $ 12 on our consolidated financial statements.

In December 2019 ,  the FASB issued ASU 

2019 - 12,  "Income Taxes (Topic 

Simplifying the Accounting for Income Taxes." The amendments simplify the accounting for income taxes by removing certain exceptions for investments, intra-period allocations and interim calculations and adding guidance to reduce complexity in accounting for income taxes. 

The new standard was adopted on January 1, 2021 on a prospective basis and had an immaterial effect on the financials.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

Recently issued accounting standards not yet adopted

In December 2019 the FASB issued ASU 2019 - 12,  

Income Taxes (Topic 740 ): 

Simplifying the Accounting for Income Taxes .

The amendments simplify the accounting for income taxes by removing certain exceptions to the general principles of Topic 740,”Income Taxes”

and improve consistent application by clarifying and amending existing guidance.

The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

Early adoption is permitted, with the amendments to be applied on a retrospective, modified retrospective or prospective basis, depending on the specific amendment.

The Company plans to adopt the new guidance effective January 1, 2021, with minimal impact.

2020 - 04,  

Reference Rate Reform  (Topic 

Facilitation of the Effects of Reference Rate Reform on Financial  

Effective 

March 12, 2020,  the guidance in the update is in response to concerns about structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR). Regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation.

This guidance will ease the accounting burden associated with transitioning away from reference rates that are expected to be discontinued within our credit facility as described in Note 

Recently issued accounting pronouncements

Reference Rate Reform (ASU No.

In March 2020, the FASB issued an accounting standard update to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform, if certain criteria are met.

The amendments in this update are effective for all entities from January 1, 2020 through December 31, 2022.

The Company is in the process of evaluating the adoption of this optional accounting standards update as certain exceptions provided under this guidance may be applicable to future reference rate reform related transitions .

Government tax credits

Reinstatement of the Biodiesel Blenders' Tax Credit and Small Agri-Biodiesel Producer Tax Credit

1 unchanged sentence

When the tax credit is enacted and in effect, the Company is the blender of record and recognizes the credit as a reduction to cost of goods sold.

The Bipartisan Budget Act of 2018 was passed by Congress and signed into law on February 9, 2018, retroactively reinstating the BTC for 2017.

As this act was passed into law in 2018, the Company recognized the 2017 impact within the Company’s 2018 financial statements, which resulted in a gross profit of $ 28,865 .

The Further Consolidated Appropriations Act of 2020 was passed by Congress and signed into law on December 20, 2019, retroactively reinstating the BTC for 2018 and 2019 and extending it through December 31, 2022. 

2 unchanged sentences

2019 and 2018, respectively.

The BTC was in law throughout 2020.

Its impact was recognized as a component of gross profit in 2020 as applicable sales were made.

The BTC was in law throughout 2021  and 2020.

Its impact was recognized as a component of gross profit in 2021  and 2020  as applicable sales were made.

As part of each law from which the BTC mentioned above was reinstated, small agri-biodiesel producers with production capacity not in excess of 60 million gallons were eligible for an additional income tax credit of $0.10 per gallon on the first 15 million gallons of agri-biodiesel sold (the “Small Agri-biodiesel Producer Tax Credit”).

The Company was eligible for this credit and recognized $ 1,500 for 2020, 2019, and 2018 in the same accounting period as the benefit from the BTC as described above.  The benefit of this credit is recognized as a component of income tax (benefit) provision.

The Company was eligible for this credit and recognized $ 1,500 for 2021, 2020, and 2019  in the same accounting period as the benefit from the BTC as described above.  The benefit of this credit is recognized as a component of income tax (benefit) provision.

Notes to Consolidated Financial Statements of FutureFuel Corp.

11 unchanged sentences

Contract assets consist of unbilled amounts resulting from revenue recognized through bill-and-hold arrangements.

The contract assets for 2020 and 2019 consist of unbilled revenue from only one customer and are recorded as accounts receivable in the consolidated balance sheets.

The contract assets for 2021  and 2020  consist of unbilled revenue from only one customer and are recorded as accounts receivable in the consolidated balance sheets.

Contract liabilities consist of advance payments related to material rights recorded as deferred revenue in the consolidated balance sheets.

Increases to contract liabilities from cash received for a performance obligation of chemical segment plant expansions were $ 4,051 and $ 5,926 in 2020 and 2019, respectively.

Increases to contract liabilities from cash received for a performance obligation of chemical segment plant expansions were $ 1,114  and $ 4,051  in 2021  and 2020, respectively.

Contract liabilities are reduced as the Company transfers product to the customer under the renewal option approach.

Revenue recognized in the chemical segment from the contract liability reductions were $ 4,520 and $ 4,077 in 2020 and 2019, respectively.

Revenue recognized in the chemical segment from the contract liability reductions were $ 3,824  and $ 4,520  in 2021  and 2020, respectively.

These contract asset and liability balances are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period.

10 unchanged sentences

17,943  

* Exclusive of the BTC of $ 8,300 and $ 97,295 , respectively, and net of allowances for bad debt of $ 63 and $ 0 , respectively, as of the dates noted.

* Exclusive of the BTC of $ 8,232  and $ 8,300 , respectively, and net of allowances for bad debt of $ 67  and $ 63 , respectively, as of the dates noted.

Notes to Consolidated Financial Statements of FutureFuel Corp.

1 unchanged sentence

Transaction price allocated to the remaining performance obligations

As of December 31, 2020, approximately $ 21,712 of revenue is expected to be recognized in the future from remaining performance obligations.

The Company expects to recognize this revenue ratably based upon the expected sales over the expected term of its long-term contracts which range from three to six  years.

Approximately 17 % of this revenue is expected to be recognized over the next 12 months, and 83 % is expected to be recognized between one and six years.

As of December 31, 2021, approximately $ 19,003  of revenue is expected to be recognized in the future from remaining performance obligations.

The Company expects to recognize this revenue ratably based upon the expected sales over the expected term of its long-term contracts which range from two  to five  years.

Approximately 31 % of this revenue is expected to be recognized over the next 12 months, and 69 % is expected to be recognized between one and five  years.

These amounts are subject to change based upon changes in the estimated contract life, estimated quantities, and most-likely expected sales price over the contract life.

1 unchanged sentence

Disaggregation of revenue - contractual and non-contractual

Twelve months ended  

Contract revenue from customers with > 1 year arrangements

Twelve months ended

Contract revenue from customers with > 1-year arrangement

$ 25,918  

7 unchanged sentences

$ 204,505  

Timing of revenue  

  Twelve months ended  

Timing of revenue

Twelve months ended

Bill-and-hold revenue

7 unchanged sentences

$ 204,505  

Bill-and-hold transactions consisted of two  specialty chemical customers in 2020, and three in 2019 and 2018 whereby revenue was recognized in accordance with contractual agreements based on product produced, readied for use and loaded into customer provided containers.

Bill-and-hold transactions consisted of four  specialty chemical customers in 2021, two in 

2020, and three in 2019  whereby revenue was recognized in accordance with contractual agreements based on product produced, readied for use and loaded into customer provided containers.

These sales were subject to written monthly purchase orders with revenue recognized upon production and loading into customer provided containers.

1 unchanged sentence

Credit and payment terms for bill-and-hold transactions are similar to other specialty chemical customers.

Sales revenue under bill-and-hold arrangements totaled $ 32,779 , $ 51,700 , and $ 44,924 for the years ended December 31, 2020, 2019, and 2018, respectively. For the years ended 

December 31, 2020 and 2019, $ 2,628 and $ 3,255 , respectively, was included as revenue for products that had not been shipped. These balances do not include contract assets that have not been billed or shipped as described above.

The Company’s revenues for the years ended December 31, 2020, 2019, and 2018 attributable to the United States and foreign countries (based upon the billing addresses of its customers) were as follows.

Sales revenue under bill-and-hold arrangements totaled $ 34,695 , $ 32,779 , and $ 51,700 , for the years ended December 31, 2021, 2020, and 2019, respectively.

Of the bill and hold sales revenue recognized, $ 3,154  and $ 2,628 had not been shipped for the years ended December 31, 2021 and 2020, respectively. These balances do not include contract assets that have not been billed or shipped as described above.

The Company’s revenues for the years ended December 31, 2021, 2020, and 2019  attributable to the United States and foreign countries (based upon the billing addresses of its customers) were as follows.

Twelve months ended December 31:

21 unchanged sentences

39,758  

( 5,869 )  

Total inventory

1 unchanged sentence

$ 33,889  

In the years ended December 31, 2020 and 2019, a liquidation of inventory reduced cost of goods sold $ 2,012 and $ 2,491 , respectively.

There was no lower or cost of market adjustment for the years ended December 31, 2020 and 2019.

In 2021, a LIFO liquidation resulted in a decrease of $ 3,836 to "Cost of goods sold". 

In 2020, a LIFO liquidation resulted in a $ 424 increase to "Cost of goods sold" as the liquidation of prior year costs were higher as compared to 2020 costs.

Derivative instruments

Realized and unrealized gains and losses on derivative instruments and changes in fair value of the derivative instruments are recorded in the consolidated statements of income as a component of cost of goods sold and amounted to a gain of $ 4,379 , a loss of $ 1,301 , and a gain of $ 633 for the years ended December 31, 2020, 2019, and 2018, respectively.

Realized and unrealized gains and losses on derivative instruments and changes in fair value of the derivative instruments are recorded in the consolidated statements of income as a component of cost of goods sold and amounted to a loss of $ 10,377 , gain of $ 4,379 , and a loss of $ 1,301  for the years ended December 31, 2021, 2020, and 2019, respectively.

The volumes and carrying values of the Company’s derivative instruments were as follows at December 31:

Asset/ (Liability)

Contract Quantity

Regulated fixed price future commitments, included in other current assets

The margin account maintained with a broker to collateralize these derivative instruments carried an account balance of $ 933 and $ 1,091 at December 31, 2020 and 2019, respectively, and is classified as other current assets in the consolidated balance sheet. 

Regulated fixed price future commitments, included in other current assets (in thousand barrels)

$ ( 485 )  

The margin account maintained with a broker to collateralize these derivative instruments carried an account balance of $ 1,684  and $ 933  at December 31, 2021 

and 2020, respectively, and is classified as other current assets in the consolidated balance sheet. 

Notes to Consolidated Financial Statements of FutureFuel Corp.

1 unchanged sentence

Marketable securities

At December 31, 2020 and 2019, the Company had investments in certain debt securities (trust preferred securities and exchange traded debt instruments as shown in the table below) and in preferred stock and other equity instruments which totaled $ 64,404 and $ 73,620 , respectively.

At December 31, 2021 

and 2020, the Company had investments in certain marketable equity and debt securities which had a fair market value of $ 47,190  and $ 64,404 , respectively.

These investments are classified as current assets in the consolidated balance sheets.

The Company has designated the debt securities as being available-for-sale.

Accordingly, debt securities were recorded at fair value with the unrealized gains and losses, net of taxes, reported as a component of stockholders’

For the years ended December 31, 2020 and 2019, in accordance with ASC 321, the change in the fair value of equity securities (preferred and other equity instruments) was reported as (loss) gain on marketable securities as a component of net income in the amount of $( 246 ) and $ 6,281 , respectively.

FutureFuel’s available-for-sale debt securities were comprised of the following at December 31, 2020 and 2019:

December 31, 2020

Trust preferred securities

$ 3,676  

$ 3,940  

$ 3,676  

$ 3,940  

December 31, 2019

Trust preferred securities

$ 3,676  

$ 3,926  

Exchange traded debt instruments

$ 5,104  

$ ( 3 )  

$ 5,479  

The aggregate fair value of debt securities with unrealized losses totaled $ 0 and $ 151 at December 31, 2020 and 2019, respectively.

As of December 31, 2020, the Company had no debt securities that were in an unrealized loss position for greater than a 12 -month period.

The Company has designated the trust preferred securities as being available-for-sale.

Accordingly, these securities were recorded at fair value of $ 3,902 and $ 3,940 at December 31, 2021 and 2020, respectively, with the unrealized gains of $ 226 and $ 264 , net of taxes, as a component of stockholders’

For the years ended December 31, 2021, 2020, and 2019, in accordance with ASC 321, the change in the fair value of equity securities (preferred and other equity instruments) was reported as (loss) gain o n marketable securities as a component of net income in the amount of $( 904 ), $( 246 ), and $ 6,281 , respectively. 

In 2021, 2020, and 2019, the Company recategorized a net gain of $ 0 , $ 99 , and $ 0 , respectively, from accumulated other comprehensive income to a component of net income as a result of sales of available-for-sale securities.

As of December 31, 2020, the contractual maturities of debt securities with an adjusted cost basis of $ 3,676 and fair value of $ 3,940 were greater than 10 years.

As of December 31, 2021, the contractual maturities of debt securities with an adjusted cost basis of $ 3,676 and fair value of $ 3,902  were greater than 10 years.

Fair value measurements

15 unchanged sentences

Land and land improvements

$ 5,924  

Buildings and building equipment

27,229  

27,187  

Machinery and equipment

180,498  

179,923  

Construction in progress

Accumulated depreciation

( 131,774 )  

$ 82,901  

$ 91,544  

Depreciation expense totaled $ 10,452 , $ 11,150 , and $ 12,087  for the years ended December 31, 2021, 2020, and 2019, respectively. 

2 unchanged sentences

The acquired line space was recorded as an intangible asset with an indefinite life as there was no foreseeable limit on the time period over which it is expected to contribute to cash flows.

The carrying value of the asset was $ 1,408 as of December 30, 2020 and 2019.

The Company tested the intangible asset for impairment in accordance with Topic 350,  

Intangibles - Goodwill and Other , and no impairment was necessary for either period.

In April of 2021, FutureFuel made the strategic decision to reduce its status as a regular shipper on the pipeline and sold a portion of its line space reducing the intangible asset value by $ 93 . At that time it was also determined that the value of the remaining line space had declined. As a result, an impairment charge was recorded in Other Expense for $ 1,315 to further reduce the intangible asset carrying value to $0.

The carrying value of the intangible asset was $ 0 and $ 1,408 as of December 31, 2021 

and 2020, respectively. 

Other assets primarily comprise supplies and parts which are not expected to be used in the twelve -month period subsequent to the consolidated balance sheet date.

The balance related to these items totaled $ 4,127  and $ 4,054 at December 31, 2020 and 2019, respectively.

The balance related to these items totaled $ 4,425  and $ 4,127  at December 31, 2021 

and 2020, respectively.

Accrued expenses and other current liabilities

44 unchanged sentences

no  borrowings under the Credit Agreement at December 31, 2021 

or under the Prior Credit Agreement at 

December 31, 2019.

March 27, 2020, 

6 unchanged sentences

May 5, 2020 .

At December 31, 2020, the Company had $ 119 outstanding with a domestic financing company for computer technology under a 3 -year financing agreement.

No such outstanding balances existed at December 31, 2019.

At December 31, 2019, the Company had $ 5,000 outstanding with an international bank for a standby letter of credit under a six -month agreement.

At December 31, 2020, no such agreement existed.

At December 31, 2021 and 2020, the Company had $ 86 and $ 119 outstanding with a domestic financing company for computer technology under a 3 -year financing agreement.

Asset retirement obligations and environmental reserves

1 unchanged sentence

In addition, the Batesville plant may be required to incur costs for environmental and closure and post-closure costs under the Resource Conservation and Recovery Act.

The Company’s liability for asset retirement obligations and environmental contingencies was $ 1,331 and $ 1,288 as of December 31, 2020 and 2019, respectively.

The Company’s liability for asset retirement obligations and environmental contingencies was $ 1,363  and $ 1,331  as of December 31, 2021 

and 2020, respectively.

These amounts are recorded in other noncurrent liabilities in the accompanying consolidated balance sheet.

The accretion expense for 2020 and 2019 was $ 43 and $ 28 , respectively.

The periodic review of the asset retirement obligation calculations resulted in an addition to the reserve of $ 0 and $ 356 in 2020 and 2019, respectively.

The accretion expense for 2021  and 2020  was $ 32  and $ 43 , respectively.

The periodic review of the asset retirement obligation calculations resulted in an addition to the reserve of $0  in 2021  and 2020.

Notes to Consolidated Financial Statements of FutureFuel Corp.

5 unchanged sentences

The Company determines lease existence and classification at inception when an agreement conveys the right to control the identified property for a period of time in exchange for consideration.

These leases have remaining terms from two  to three  years with a weighted average remaining term of 2.7  years.

These leases have remaining terms from one  to two  years with a weighted average remaining term of 1.7  years.

As operating leases do not provide a readily determinable implicit interest rate, the Company uses an incremental borrowing rate based on information available at the commencement date in determining present value of the lease payments.

Following are supplemental income statement and cash flow information related to leases at December 31, 2020.

Following are supplemental income statement and cash flow information related to leases.

Twelve Months Ended

4 unchanged sentences

Weighted average discount rate, per annum

On December 31, 2020, an ROU asset and a lease liability were reported as other noncurrent assets of $ 1,311 and other current liabilities and other noncurrent liabilities of $ 491 and $ 820 , respectively.

On December 31, 2021 and 2020, a ROU asset was reported as other noncurrent assets of $ 956  and $ 1,311 , other current liabilities of $ 644 and $ 491 , and other noncurrent liabilities of $ 312  and $ 820 , respectively.

Following are maturities of lease liabilities at December 31, 2021.

1 unchanged sentence

Present value of lease liabilities

$ 1,311  

Purchase obligations

The Company has entered into contracts for the purchase of goods and services including contracts for feedstocks for biodiesel, expansion of the Company’s specialty chemicals segment, and related infrastructure with less than one year terms.

The Company holds one non-cancelable obligation for software maintenance with payment obligations for each year presented as follows.

2022 - 2024  

The Company holds one non-cancelable obligation for software maintenance with payment obligations presented as follows.

2023 - 2026  

2027 and later

Notes to Consolidated Financial Statements of FutureFuel Corp.

1 unchanged sentence

Income tax (benefit) provision

The following table summarizes the income tax provision (benefit):

The following table summarizes the income tax (benefit) provision for the years ended:

Income before taxes - U.S.

4 unchanged sentences

( 10,417 )  

( 2,811 )  

( 4,006 )  

State and other

1 unchanged sentence

$ ( 10,325 )  

( 1,139 )  

$ ( 14,786 )  

$ ( 8,386 )  

$ 7,019  

Differences between the income tax (benefit) provision computed using the U.S.

1 unchanged sentence

Amount computed using the statutory rate of 21% for 2021, 2020, and 2019

Agri-biodiesel production credit

21.0 %  

Agri-biodiesel production credit

( 7.4 )  

1 unchanged sentence

( 75.2 )  

( 23.4 )  

State BTC benefit

( 8.9 )  

( 5.8 )  

Credit for increasing research activities

( 0.7 )  

( 0.2 )  

Dividends received deduction

( 1.6 )  

( 0.4 )  

State income taxes, net

( 0.5 )  

State research credits

( 1.0 )  

( 0.9 )  

State rate change impact

( 1.6 )  

Tax expense recorded as an increase in unrecognized tax benefit

( 17.4 )  

Deferred state rate change

( 0.5 )  

Income tax (benefit) provision

( 64.8 )%  

Income tax provision (benefit)

The income tax benefit in 2020 was $ 14,786 or an effective tax rate of ( 46.5 %) as compared to an income tax benefit of $ 8,386 or an effective tax rate of ( 10.5 %) in 2019 and an income tax provision of $ 7,019 or an effective tax rate of 11.7 % in 2018.

The income tax benefit in 2021  is $ 10,325  or an effective tax rate of ( 64.8 %) as compared to an income tax benefit of $ 14,786 or an effective tax rate of ( 46.5 %) in 2020 and an income tax benefit of $ 8,386 or an effective tax rate of ( 10.5 %) in 2019.

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (Pub.L.

1 unchanged sentence

The CARES Act, among other things, provides that Net Operating Losses (“NOLs”) arising in a taxable year beginning after December 31, 2017 and before January 1, 2021 shall be treated as a carryback available to offset 100% of taxable income in each of the 5 preceding taxable years unless the taxpayer elects to forego the carryback.

The Company’s effective tax rate for the year 2020 is positively impacted by its ability to carry back both its 2019 and 2020 federal NOLs in full to tax years with 35% marginal tax rates, rather than forward to years with anticipated 21% tax rates.

The Company’s effective tax rate for the year 2020 was positively impacted by its ability to carry back both its 2019 and 2020 federal NOLs in full to tax years with 35% marginal tax rates, rather than forward to years with anticipated 21% tax rates.

In the fourth quarter of 2020, the Company filed a refund claim of $ 7,695 and accrued an additional refund claim of $ 1,211 , subsequently filed in January 2021, relating to the carryback of its NOL generated in 2019.

No refunds have been received as of December 31, 2020.

The Company also anticipates filing a refund claim before the end of 2021 relating to the carryback of the NOL anticipated to be generated in 2020.

 Refunds in the amount of $ 7,695 were subsequently received in 2021;

the $ 1,211 remains outstanding as of December 31, 2021.

In the fourth quarter of 2021, the Company filed a refund claim of $ 8,463 relating to the carryback of its NOL generated in 2020.

None of these refunds have been received as of December 31, 2021.

States in which the Company conducts the majority of its business have not conformed to the CARES Act’s enhanced NOL carryback provisions, and the anticipated benefits of these state NOL carryforwards are accordingly classified as deferred tax assets.

The Company’s effective tax rate for the year 2020 reflects the positive effect of certain tax credits and incentives, the most significant of which were the BTC and the Small Agri-biodiesel Producer Tax Credit.

Based on technical guidance from Internal Revenue Service, the Company excludes the portion of the BTC not used to satisfy excise tax liabilities from income.

The Company’s effective tax rate for the year 2019 reflected the positive effect of the reinstatement of certain tax credits and incentives for 2018 and 2019, the most significant of which was the BTC and Small Agri-biodiesel Producer Tax Credit.

The BTC and the Small Agri-biodiesel Producer Tax Credit were retroactively extended for 2018 and 2019 on December 20, 2019 and further extended through December 31, 2022.

This tax benefit was recorded in the Company’s fourth quarter 2019 results.

On December 20, 2019 certain tax credits and incentives were reinstated and retroactively extended for 2018 and 2019 and further extended through December 31, 2022, the most significant of which were the BTC and Small Agri-biodiesel Producer Tax Credit.

Based on technical guidance from the Internal Revenue Service, the Company excludes the portion of the BTC not used to satisfy excise tax liabilities from income.

The Company’s effective tax rates for the years 2021 and 2020 reflect the positive effect of the BTC and Small Agri-biodiesel Producer Tax Credit.

The Company’s effective tax rate for the year 2019 reflected the positive effect of the reinstatement of these credits for both 2018 and 2019.

See Note 3 for a discussion of the impact of the BTC for the years ended December 31, 2021, 2020, and 2019.

The 2019 effective tax rate was also favorably impacted by the Company being granted a retroactive research and development credit for a prior year in the state of Arkansas.

Additionally, the Company’s 2019 effective tax rate reflected a one -time benefit from state legislation enacted during the year which applies a lower tax rate to future reversals of deferred tax liabilities.

The Company’s effective tax rate for the year 2018 reflected an uncertain tax position on prior year income of $ 2,728 , net ($ 2,804 , gross) plus interest of $ 448 in the fourth quarter of 2018.

Partially reducing provision for income taxes was the benefit of the reinstatement of certain tax credits and incentives for 2018, the most significant of which were the BTC and the Small Agri-biodiesel Producer Tax Credit.

The BTC and the Small Agri-biodiesel Producer Tax Credit were retroactively extended for 2017 (but, not beyond December 31, 2017) on February 9, 2018.

The Company’s 

2021 and 2019 effective tax rates reflect one -time benefits from state legislation enacted during each year which apply a lower tax rate to future reversals of deferred tax liabilities. Additionally, the 2021 effective tax rate reflects the negative impact to the Company’s overall state income tax position of its 2021 decision to phase out its shipments on the petroleum products common carrier pipelines as discussed at Note 10.

This operational change shifts the Company’s business among various states such that its net deferred tax liabilities will be realized at higher rates.

Notes to Consolidated Financial Statements of FutureFuel Corp.

14 unchanged sentences

Capital loss carryforwards

Intangible asset impairment 

Total deferred tax assets

9 unchanged sentences

( 1,090 )  

Accrued expenses

Prepaid expenses

( 839 )  

Derivative instruments

( 26 )  

( 60 )  

Total deferred tax liabilities

2 unchanged sentences

$ ( 1,870 )  

Net operating loss carryforwards reflect losses generated in 2020, 2019, and 2016 for state income tax purposes.

The state loss carryforward of $ 1,891 have varying lives, with the majority expiring in 2024 and 2025.

Federal tax credit carryforwards include primarily the Small Agri-biodiesel Producer Credit generated in 2020 and expiring in 2040.

The federal net operating loss carryforward as of December 31, 2021 represents the loss generated in 2021 and is available to reduce federal taxable income over an indefinite period. Utilization of this carryforward is limited to 80 % of taxable income in any given year. State net operating loss carryforwards reflect losses generated in 2016 and 2019 through 2021 for state income tax purposes and have varying lives, with the majority expiring in 2024 and 2028.

Federal tax credit carryforwards include primarily the Small Agri-biodiesel Producer Credit generated in 2020 and 2021 and expiring in 2040 and 2041.

State credit carryforwards comprise Arkansas In-house Research Credits generated in 2019 and 2020, expiring in 2028 and 2029.

Capital loss carryforwards were generated in 2019 and 2020 and will expire in 2024 and 2025.

 Amounts recorded are at their anticipated realizable values after application of an immaterial valuation allowance.

The following table summarizes the Company’s unrecognized tax positions. 

4 unchanged sentences

Decrease due to resolution of tax positions taken in a prior year

( 2,804 )  

Balance at December 31

$ 2,804  

The Company does not expect its unrecognized tax positions to change significantly over the next 12 months.

The Company records interest and penalties, net, as a component of income tax (benefit) provision and had accrued interest and penalties of $ 27  and ($ 557 ) for December 31, 2020 and 2019, respectively.

Liabilities for accrued interest and tax penalties on unrecognized tax benefits were $ 0 at both December 31, 2020 and 2019, respectively.

The Company and its subsidiaries file tax returns in the U.S.

The Company records interest expense (income) and penalties, net, as a component of income tax (benefit) provision and had accrued interest and penalties of ($ 60 ), $ 27 , and ($ 557 ) for December 31, 2021, 2020, and 2019, respectively.

Liabilities for accrued interest and tax penalties on unrecognized tax benefits were $ 0 at both December 31, 2021 

and 2020, respectively.

The Company and its subsidiaries file income tax returns in the U.S.

federal jurisdiction and with various state jurisdictions.

In general, the Company is subject to U.S., state, and local examinations by tax authorities from 2017 forward.

The Internal Revenue Service concluded its audit of the Company’s 2014 through 2016 income tax returns in the third quarter of 2019.

Any unrecognized tax benefits were realized at that time.

In general, the Company is subject to U.S., state, and local examinations by tax authorities from 2017  forward.

The Internal Revenue Service is currently auditing the Company’s 2018 federal return as part of the Joint Committee on Taxation's review of the Company's 2019 loss carryback claim.

Notes to Consolidated Financial Statements of FutureFuel Corp.

1 unchanged sentence

Earnings per share

In the year ended December 31, 2020 and 2019, the Company used the treasury method in computing earnings per share as all shares with participating security holders had vested, and, thus, the two -class method was unnecessary.

During 2018, the Company had unvested participating shares and computed earnings per share using the two -class method in accordance with ASC Topic 260,  

Earnings per Share .

The two -class method is an allocation of earnings between the holders of common stock and a company’s participating security holders.

Outstanding unvested shares of restricted stock contain non-forfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two -class method.

There were no other participating securities at December 31, 2019 or 2018.

The Company had shares contingently issuable of 12,500 associated with outstanding service-based restricted stock units for the year ended December 31, 2018.

These shares were not included in the earnings per share calculations as the vesting conditions had not been satisfied.

In the year ended December 31, 2021, 2020  and 2019, the Company used the treasury method in computing earnings per share as all shares with participating security holders had vested.

There were no outstanding service-based restricted stock units for the year ended December 31, 2021, 2020 or 2019.

4 unchanged sentences

$ 88,181  

distributed earnings allocated to non-vested stock

undistributed earnings allocated to non-vested restricted stock

Numerator for basic earnings per share

$ 46,564  

$ 88,181  

$ 53,142  

Effect of dilutive securities:

undistributed earnings allocated to non-vested restricted stock

undistributed earnings reallocated to non-vested restricted stock

Numerator for diluted earnings per share

$ 46,564  

$ 88,181  

$ 53,142  

Weighted average shares outstanding –

3 unchanged sentences

Effect of dilutive securities:

Stock options and awards

Stock options

Weighted average shares outstanding –

10 unchanged sentences

$ 2.02  

Certain options to purchase the Company’s common stock were not included in the computation of diluted earnings per share for the years ended December 31, 2020, 2019 and 2018 because they were anti-dilutive in the period.

Certain options to purchase the Company’s common stock were not included in the computation of diluted earnings per share for the years ended December 31, 2021, 2020  and 2019  because they were anti-dilutive in the period.

The weighted number of options excluded on this basis was 28,953 , 43,500 , and 35,000 , respectively.

16 unchanged sentences

The Company recognizes compensation expense in its financial statements for stock-based options based upon the grant-date fair value over the requisite service period.

No stock awards were issued in 2020, 2019 or 2018.

In January 2020, September 2019 and October 2018, under the Incentive Plan, the Company granted a total of 24,000 , 10,000 , and 10,000 stock options, respectively, to the Chief Operating Officer and two new members of the Board of Directors in each period, also respectively.

No stock awards were issued in 2021, 2020  or 2019.

No stock options were granted under the Incentive Plan in 2021.

In January 2020 and September 2019, the Company granted a total of 24,000  and 10,000 stock options, respectively, to the Chief Operating Officer and a new member of the Board of Directors in each period, also respectively.

The options awarded in each of the years have an exercise price equal to the mean between the highest and lowest quoted sales prices for the Company’s common stock as of the grant date as reported by the New York Stock Exchange.

1 unchanged sentence

All options awarded in 2019 vested immediately upon grant and expire in September 2024.

All options awarded in 2018 vested immediately upon grant and expire in October 2023.The Company has used the Black Scholes Merton option pricing model, which relies on certain assumptions, to estimate the fair value of the options it granted.

The weighted average fair value of options granted was $ 2.05 , $ 2.24 and $ 3.64 per option in 2020, 2019 and 2018, respectively.

The Company has used the Black Scholes Merton option pricing model, which relies on certain assumptions, to estimate the fair value of the options it granted.

The weighted average fair value of options granted was $ 2.05 and $ 2.24  per option in 2020 and 

2019, respectively.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

All of the options exercised in 2021  were exercised on a cash basis.

There were no stock options exercised in 2020 or 2019.

All of the options exercised in 2018 were exercised on a cashless basis and resulted in 30,896 shares of the Company’s common stock being returned to the Company by the stock option holder.

All of the stock awards that vested were issued on a cashless basis and resulted in 7,531 shares of the Company’s common stock being returned to the Company by the stock award holder.

Such shares were returned to satisfy payment of the exercise price along with minimum tax withholdings.

Such minimum tax withholdings totaled $ 111 for stock awards and $ 65 for stock options exercised on a cashless basis.

The assumptions used in the determination of the fair value of the options granted are provided in the following table: 

2 unchanged sentences

31.53 %  

31.28 %  

Expected dividend yield

2.08 %  

1.99 %  

Risk-free interest rate

1.61 %  

1.71 %  

Expected forfeiture rate

0.00 %  

Expected term in years

The volatility rate for the options granted in 2020, 2019 and 2018 were derived from the historical stock price volatility of the Company’s common stock over the same time period as the expected term of each stock option award.

The volatility rate for the options granted in 2020 and 

2019  were derived from the historical stock price volatility of the Company’s common stock over the same time period as the expected term of each stock option award.

The volatility rate is derived by a mathematical formula using the daily closing stock price data over the expected term.

1 unchanged sentence

For the years ended December 31, 2021, 2020, and 2019, total share-based compensation expense (before tax) totaled $0, $ 49 , and $ 21 , respectively.

In the years ended December 31, 2020, 2019, and 2018, this balance was recorded as an element of selling, general, and administrative expenses.

As of December 31, 2020 and 2019, there was no unrecognized compensation expense related to stock options.

A summary of the activity of the Company’s stock options and awards for the period beginning January 1, 2018 and ending December 31, 2020 is presented below.

In the years ended December 31, 2020 

and 2019, this balance was recorded as an element of selling, general, and administrative expenses.

As of December 31, 2021 

and 2020, there was no unrecognized compensation expense related to stock options.

A summary of the activity of the Company’s stock options and awards for the period beginning January 1, 2019 

and ending December 31, 2021 

is presented below.

Exercise Price

4 unchanged sentences

$ 12.07  

$ 11.34  

Canceled, forfeited, or expired

5 unchanged sentences

Canceled, forfeited, or expired

Outstanding at December 31, 2019

$ 13.99  

Outstanding at December 31, 2020

44,000  

2 unchanged sentences

Canceled, forfeited, or expired

$ 13.99  

Outstanding at December 31, 2021

4 unchanged sentences

There were 4,330,167 options available for grant under the Incentive Plan and no further awards available under the Prior Plan at December 31, 2021.

The following table provides the remaining contractual term and weighted average exercise prices of stock options outstanding and exercisable from the Incentive Plan and Prior Plan at December 31, 2020.

The following table provides the remaining contractual term and weighted average exercise prices of stock options outstanding and exercisable from the Incentive Plan at December 31, 2021.

Options Outstanding

19 unchanged sentences

$ 13.71  

44,000  

$ 12.73  

The aggregate intrinsic values of total options outstanding and exercisable at December 31, 2020 and 2019 were $ 34  and $ 3 , respectively.

Intrinsic value is the amount by which the last trade price of the common stock closest to December 31, 2020 and 2019, respectively, exceeded the exercise price of the options granted.

The following summarizes unvested restricted stock activity under the Prior Plan:

Unvested as of January 1, 2018

25,000  

$ 17.09  

25,000  

$ 17.09  

Unvested as of December 31, 2018

Unvested as of December 31, 2019

Unvested as of December 31, 2020

In 2017, management adopted ASU No.

2016 - 09, Compensation-Stock Compensation (Topic 718 ).

With this adoption, the excess tax benefit attributable to restricted stock has been recorded as an increase in the benefit for income taxes in 2020, 2019, and 2018.

The Company realized a tax benefit of $ 0 , $ 0 , and $ 12 in the years ended December 31, 2020, 2019 and 2018, respectively, related to the vesting of restricted shares.

The aggregate intrinsic values of total options outstanding and exercisable at December 31, 2021 

and 2020  were $ 0  and $ 34 , respectively.

Intrinsic value is the amount by which the last trade price of the common stock closest to December 31, 2021 

and 2020, respectively, exceeded the exercise price of the options granted.

Stockholders’ equity

2 unchanged sentences

Albans Global Management, Limited Partnership, LLLP).

Novelly or his affiliates exercise their registration rights with respect to all of their shares of the Company’s common stock, there will be an additional 17,725,100 available for trading in the public market.

Notes to Consolidated Financial Statements of FutureFuel Corp.

5 unchanged sentences

contributions, subject to specified limits, up to 6 % of earnings.

Company contributions totaled $ 1,906 , $ 1,771 , and $ 1,801 for the years ended December 31, 2020, 2019, and 2018, respectively.

Company contributions totaled $ 1,770 , $ 1,906 , and $ 1,771  for the years ended December 31, 2021, 2020, and 2019, respectively.

Related party transactions

6 unchanged sentences

$ 1,426  

$ 4,602  

Total accounts receivable

$ 1,426  

$ 4,602  

Prepaid expenses

3 unchanged sentences

Natural gas and fuel purchases

$ 7,900  

Travel and administrative services

20 unchanged sentences

Natural gas purchases

11,360  

Total cost of goods sold

22 unchanged sentences

Expenses related to these purchases include the cost of the natural gas only;

transportation charges are paid to an independent third party.

transportation charges are paid to an independent third party. The natural gas matter as discussed in Note 24, Legal Matters, is in reference to the natural gas supplier, not the related party.

Distribution and related services

28 unchanged sentences

Summary of business by segment

Twelve months ended

Twelve months ended December 31,

Custom chemicals

18 unchanged sentences

$ 205,226  

Segment gross profit (loss)

$ 25,518  

Segment gross profit

$ 13,970  

15 unchanged sentences

$ 107,070  

Gross (loss) profit

$ ( 10,736 )  

2 unchanged sentences

$ 26,124  

Net (loss) income

$ ( 8,773 )  

21 unchanged sentences

$ 5,472  

$ 72,373  

Net income per common share:

7 unchanged sentences

$ 0.13  

*The fourth quarter of 2019 includes the retroactive reinstatement of the BTC in revenue and gross profit (see Note 3 for further information).

Earnings per share is computed independently for each of the quarters presented.

5 unchanged sentences

However, adverse developments could negatively impact earnings or cash flows in future periods.

As a result of the extraordinary increase in natural gas prices in February 2021, the Attorney General of Arkansas launched a civil investigative demand against several natural gas suppliers. 

At this time the Company is disputing the 

February 2021  natural gas bill and payment thereof is pending further investigation.

The natural gas expense was a component of Cost of goods sold-related parties in the Consolidated Statements of Operations and Comprehensive Income in the period ended 

December 31, 2021.  

However, as discussed in Note 

21,  Related Party Transactions, the "ultimate" natural gas supplier is 

not  a related party of FutureFuel.

During the twelve months ended December 31, 2020, the Company reached a legal resolution of a prior year contractual matter for which an accrual of $ 8,350 was relieved as other income.

Subsequent Event

The Company utilizes natural gas in the manufacture of its products. 

During February, 2021, a severe winter weather event impacted the local region creating shortages of natural gas which resulted in significant price increases. 

The Company curtailed usages in compliance with critical needs, however, it is unknown exactly what financial impact this event will have on the business as the price that is used for the monthly contractual settlement is yet to be determined.

 Depending on the ultimate price used by the supplier, the Company may contest the basis for the pricing.

 The impact of the event could be as high as $ 8,110 as compared to the February 2020 natural gas invoice of $ 246 .

 Regulatory investigations are currently taking place into the events that occurred.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

RSM US LLP was engaged as the principal accountant to audit our consolidated financial statements for 2020 and 2019, RubinBrown LLP was engaged as the principal accountant to audit our consolidated financial statements for 2018. No other independent accountant was so engaged.

There were no disagreements with RSM US LLP or RubinBrown LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

RSM US LLP was engaged as the principal accountant to audit our consolidated financial statements for 2021, 2020, and 2019. No other independent accountant was so engaged.

There were no disagreements with RSM US LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data