What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-14 compared with 2022-03-15 · 206 added, 355 removed, 900 unchanged (38% of the section changed)

6 unchanged sentences

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

 Description of business and operations

 Significant accounting policies and basis of presentation

 Government tax credits

 Revenue Recognition

Note 5.  Inventory

Note 6.  Derivative instruments

Note 7.  Marketable securities

Note 8.  Fair value measurements

Note 9.  Property, plant, and equipment

Note 10.  Other assets

Note 11.  Accrued expenses and other current liabilities

Note 12.  Borrowings

Note 13.  Asset retirement obligations and environmental reserves

Note 14.  Lease commitments and purchase obligations

Note 15.  Income tax benefit

Note 16.  Earnings per share

Note 17.  Stock-based compensation

Note 18.  Stockholders' equity

Note 19.  Employee benefit plans

Note 20.  Related party transactions

Note 21.  Segment information

Note 22.  Quarterly financial information (unaudited)

Note 23.  Legal proceedings

Report of Independent Registered Public Accounting Firm

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

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).

and its subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income and comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

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

Critical Audit Matters

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:

Critical Audit Matter

The critical audit matter communicated 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:

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

We determined that there were no critical audit matters.

The communication of this critical audit matter does not alter in any way our opinion on the 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.

Deferred income tax asset valuation allowance relating to the account balances Noncurrent deferred income tax liability and Income tax benefit - see also Note 1 and Note 15 to the consolidated financial statements

As described in Note 1 and Note 15 to the consolidated financial statements, the Company records deferred taxes which result from differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Additionally, valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

Determining the required valuation allowance requires management’s judgment regarding projected future taxable income.

We identified the income tax valuation allowance as a critical audit matter because auditing the valuation allowance involved significant auditor effort and judgement due to the subjective and complex nature of income tax projections and determining whether management can appropriately rely on such projections for purposes of calculating the valuation allowance.

Our audit procedures related to the Company’s income tax valuation allowance included the following, among others:

We obtained an understanding of the relevant controls over management’s accounting for the income tax valuation allowance, and their related financial reporting disclosures and tested such controls for design and operating effectiveness as of December 31, 2022

We obtained management’s calculation of the income tax valuation allowance, including the sources of projected taxable income

We tested the mathematical accuracy of management’s calculations

With the assistance of our income tax subject matter specialists, we performed the following procedures:

We evaluated the appropriateness of management’s decision to not rely on projections of future taxable income due to the three year history of cumulative income tax losses and the Company’s related income tax policy

We evaluated management’s considerations of both positive and negative evidence regarding other sources of taxable income, including any relevant tax planning strategies and reversal patterns of deferred tax liabilities into taxable income

o We considered relevant tax laws and regulations in evaluating the appropriateness of management’s estimates of future sources of taxable income

We evaluated management’s conclusion that the valuation allowance sufficiently reduces the amount of the deferred tax assets to an amount that is more likely than not to be realized

/s/ RSM US LLP

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Consolidated Balance Sheets

As of December 31, 2021 and 2020

As of December 31, 2022  

(Dollars in thousands)

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$ 137,521  

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

Accounts receivable, inclusive of the blenders’

tax credit of $ 8,970 and $ 8,232 , and net of allowances for bad debt of $ 48 and $ 67 , respectively

26,198  

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Income tax receivable

17,668  

Prepaid expenses

11 unchanged sentences

82,901  

Intangible assets

Total noncurrent assets

4 unchanged sentences

Liabilities and Stockholders ’

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

Accounts payable, inclusive of the blenders’

tax credit rebates due customers of $890 and $890, respectively

$ 28,546  

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Noncurrent deferred income tax liability

12,332  

Other noncurrent liabilities

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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, 43,763,243 and 43,743,243 issued and outstanding as of December 31, 2021 and 2020

Common stock, $ 0.0001 par value, 75,000,000 shares authorized, 43,763,243 and 43,763,243 issued and outstanding as of December 31, 2022 and 2021

Accumulated other comprehensive income

3 unchanged sentences

Retained earnings

89,456  

Total stockholders’

9 unchanged sentences

(Dollars in thousands, except per share amounts)

$ 320,125  

$ 202,529  

$ 202,048  

Revenue –

1 unchanged sentence

Cost of goods sold

274,293  

158,730  

107,028  

Cost of goods sold –

related parties

16,593  

16,945  

Distribution –

related parties

23,537  

31,307  

74,139  

Selling, general, and administrative expenses

4 unchanged sentences

Total operating expenses

10,639  

Income from operations

12,898  

22,339  

65,309  

Interest and dividend income

10,050  

Interest expense

( 131 )  

(Loss) gain on marketable securities

( 70 )  

Other income (expense)

14,486  

Loss on marketable securities

Other (expense) income

Income before income taxes

15,930  

31,778  

79,795  

Income tax benefit

( 10,325 )  

$ 26,255  

$ 46,564  

$ 88,181  

Earnings per common share

$ 0.60  

$ 1.06  

$ 2.02  

$ 0.60  

$ 1.06  

$ 2.02  

Weighted average shares outstanding

43,756,065  

43,743,243  

43,756,113  

43,744,150  

43,744,676  

Comprehensive income

$ 26,255  

$ 46,564  

$ 88,181  

Other comprehensive (loss) income from unrealized net (losses) gains on available-for- sale debt securities

( 38 )  

Other comprehensive loss from unrealized net losses on available-for- sale debt securities

Income tax effect

Total unrealized (losses) gains, net of tax

( 30 )  

Total unrealized losses, net of tax

Comprehensive income

$ 46,476  

$ 88,497  

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

13 unchanged sentences

Benefit for deferred income taxes

( 10,454 )  

Change in fair value of equity securities

Change in fair value of derivative instruments

(Gain) loss on the sale of investments

( 834 )  

Loss (gain) on the sale of investments

Stock based compensation

Loss (gain) on disposal of property and equipment

Impairment of intangible asset  

Loss on disposal of property and equipment

Impairment of intangible asset

Noncash interest expense

2 unchanged sentences

88,865  

Accounts receivable –

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Deferred revenue

( 2,931 )  

Other noncurrent liabilities

( 686 )  

Net cash provided by operating activities

4 unchanged sentences

Collateralization of derivative instruments

( 750 )  

Purchase of marketable securities

( 23,546 )  

Proceeds from the sale of marketable securities

40,652  

31,419  

Proceeds from the sale of property and equipment

Proceeds from the sale of intangible assets  

Capital expenditures

( 1,456 )  

Net cash provided by investing activities

Net cash (used in) provided by investing activities

14,993  

4 unchanged sentences

Deferred financing costs

Proceeds from the issuance of stock  

Equipment financing proceeds

Payment of dividends

( 119,906 )  

Net cash used in financing activities

( 119,678 )  

Net change in cash and cash equivalents

38,119  

28,359  

Cash and cash equivalents at beginning of period

8 unchanged sentences

Cash paid for income taxes

$ 2,372  

Noncash investing and financing activities:

1 unchanged sentence

Noncash operating leases

Noncash items incurred for dividends

Dividends payable

$ 10,503  

8 unchanged sentences

Balance - December 31, 2019

43,743,243  

$ ( 20 )  

$ 282,145  

$ 106,949  

$ 389,078  

( 10,498 )  

Stock based compensation

Other comprehensive income

88,181  

Balance - December 31, 2019

43,743,243  

$ 282,166  

$ 184,632  

$ 467,098  

Prior period adjustment:

Change in accounting principles

( 12 )  

Balance - January 1, 2020 - As adjusted

43,743,243  

282,166  

$ 184,620  

$ 467,086  

( 141,728 )  

Cash dividends declared

Stock based compensation

Other comprehensive income

( 88 )  

46,564  

Other comprehensive loss

Balance - December 31, 2020

43,743,243  

$ 282,215  

$ 89,456  

$ 371,883  

Dividends  

( 109,408 )  

Proceeds from the issuance of stock  

20,000  

Minimum tax withholding  

Other comprehensive income  

( 30 )  

Net Income  

26,255  

Balance - December 31, 2021  

43,763,243  

$ 282,443  

$ 6,303  

$ 288,928  

Cash dividends declared

Proceeds from the issuance of stock

Minimum tax withholding

Other comprehensive loss

Balance - December 31, 2021

Cash dividends declared

Stock based compensation

Other comprehensive loss

Balance - December 31, 2022

The accompanying notes are an integral part of these financial statements

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The consolidated financial statements of FutureFuel Corp.

and subsidiaries are prepared in conformity with accounting principles generally accepted ("GAAP") in the United States and include amounts that are based upon management estimates and judgments which could differ from actual future results. 

and subsidiaries are prepared in conformity with accounting principles generally accepted (“GAAP”) in the United States and include amounts that are based upon management estimates and judgments which could differ from actual future results. 

Intercompany transactions and balances are eliminated in consolidation.

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

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 Company adopted Accounting Standards Update (“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

The adoption did not have a material impact on the Company’s consolidated financial statements.

Customer concentrations

For the twelve months ended December 31, 2022, 2021, and 2020, 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.

Sales to two biodiesel customers totaled $ 107,898  ( 27 % of revenue) in 2022.

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

Receivables for the significant customers at December 31, 2022 and 2021, were 2 % and 28 % of total receivables, respectively.

No chemical customers represented a greater than 10% of total sales revenue in 2022, 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.

(Dollars in thousands, except per share amounts)

Inventories are valued at the lower of cost or market. The Company determines the cost of raw materials, work in process, and finished goods inventories by the last-in, first -out ("LIFO") method. The cost of all other inventories is determined by the average cost method, which approximates the first -in, first -out ("FIFO") method. The Company writes-down its inventories for estimated obsolescence or unmarketable inventory equal to the difference between the carrying value of inventory and the estimated market value based upon assumptions about future demand and market conditions.

Inventories are valued at the lower of cost or market. The Company determines the cost of raw materials, work in process, and finished goods inventories by the last-in, first -out (“LIFO”) method. The cost of all other inventories is determined by the average cost method, which approximates the first -in, first -out (“FIFO”) method. The Company writes-down its inventories for estimated obsolescence or unmarketable inventory equal to the difference between the carrying value of inventory and the estimated market value based upon assumptions about future demand and market conditions.

Derivative instruments

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In order to manage commodity price risk caused by market fluctuations in biofuel prices, future purchases of feedstock used in biodiesel production, physical feedstock, finished product inventories attributed to the process, and other petroleum products purchased or sold, the Company may enter into exchange-traded commodity futures and options contracts.

The Company accounts for these derivative instruments in accordance with ASC 815 - 20 - 25, Derivatives and Hedging .

The Company accounts for these derivative instruments in accordance with Accounting Standards Codification (“ASC”) 815 - 20 - 25, Derivatives and Hedging .

Under this standard, the accounting for changes in the fair value of a derivative instrument depends upon whether it has been designated as an accounting hedging relationship and, further, on the type of hedging relationship.

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Changes in the fair value of debt securities are recognized in “accumulated other comprehensive income”

on the consolidated balance sheets, unless the Company determines that an unrealized loss is other-than-temporary.

If the Company determines that an unrealized loss is other-than-temporary, the Company recognizes the loss as a component of other income (expense).

on the consolidated balance sheets, unless the Company determines that an unrealized loss will not be recovered before it is sold, in which case, the Company will recognize the loss as a component of other income (expense).

See Notes 7 and 

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Fair value measurements

The Company records recurring and non-recurring financial assets and liabilities as well as all non-financial assets and liabilities subject to fair value measurement at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. These fair value principles prioritize valuation inputs across three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company's assumptions used to measure assets and liabilities at fair value. An asset or liability's classification within the various levels is determined based on the lowest level input that is significant to the fair value measurement.

The Company records recurring and non-recurring financial assets and liabilities as well as all non-financial assets and liabilities subject to fair value measurement at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. These fair value principles prioritize valuation inputs across three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. An asset or liability's classification within the various levels is determined based on the lowest level input that is significant to the fair value measurement.

Property, plant , and equipment

6 unchanged sentences

Building & building equipment (years)

20 – 

Machinery and equipment (years)

1 unchanged sentence

Other (years)

Intangible assets

Intangible assets are carried at cost.

Amortization expense for definite-lived intangible assets is generally determined using a straight-line method over the estimated useful life of the asset.

Impairment of assets

Long-lived tangible assets

The Company evaluates the carrying value of long-lived tangible assets when events or changes in circumstances indicate that the carrying value may not be recoverable.

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Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

Indefinite-lived intangible assets

Intangible assets with indefinite lives are not amortized but are reviewed for impairment at least annually or whenever events or circumstances indicate the carrying value of the asset may not be recoverable.

The Company performs annual impairment tests of the intangible assets during the fourth quarter of each fiscal year and assesses qualitative factors to determine the likelihood of impairment.

The Company’s qualitative analysis includes, but is not limited to, assessing the changes in macroeconomic conditions, legal and regulatory environment, industry and market conditions, financial performance, and any other relevant events or circumstances specific to the intangible asset.

If it is more likely than not that the fair value of the intangible asset is greater than the carrying value, no further testing is required.

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

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.

(Dollars in thousands,

except per share amounts)

Asset retirement obligations and environmental costs

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and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed.

Revenue within the biofuel segment includes a reduction for customer rebate amounts from the retroactive reinstatement of the BTC passed in law in December 2019.

See Note 3 for details.

Also included is the revenue from biodiesel RINs upon the transfer of the RIN to the buyer.

Revenue within the biofuel segment includes revenue from biodiesel RINs.

RINs are renewable identification numbers under the Renewable Fuel Standard ( “RFS2”

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No cost is incurred in the generation of a RIN.

Taxes collected from customers remitted to governmental authorities were excluded from revenue.

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

Taxes collected from customers remitted to governmental authorities are excluded from revenue.

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

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. In December 2019, the tax credit was retroactively reinstated for all of 2018 and 2019, through December 31, 2022.

Biodiesel cost of goods sold also includes a credit for the one dollar per gallon Blenders’

Tax Credit (“BTC”) for blending biodiesel with petroleum diesel when in law. The BTC was in law during 2021 and 2022 and is in effect until December 31, 2024.

See Note 3 for further discussion.

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Unrealized gains and losses are determined using the specific identification method and are classified in OCI.

The income tax (benefit) provision is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for (benefit from) income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax bases of the Company's assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

The Company recognizes income tax positions that meet the more likely than not threshold and accrues interest related to unrecognized income tax positions, which is recorded as a component of the income tax provision.

The income tax (benefit) provision is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for (benefit from) income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. 

A tax valuation allowance is recognized if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

In assessing the recoverability of its deferred tax assets, the Company evaluates available positive and negative evidence to estimate whether it is more likely than not that sufficient future taxable income will be generated to permit use of the existing deferred tax assets in each taxpaying jurisdiction.

In making this determination, the Company considers positive evidence in the form of projections of future taxable income, reversing temporary differences, and tax planning strategies. 

In years in which the Company has experienced objective negative evidence in the form of three cumulative years of tax losses, the Company no longer uses taxable income projections to overcome the presumption of losses and deferred tax asset valuations are computed using only the reversing net deferred tax liability as a source of income.

Recently adopted accounting standards

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.

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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 .

In March 2020, the Financial Accounting Standards Board (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 was effective for all entities from January 1, 2020 through December 31, 2022.

The FASB extended the amendment to December 2024.

The Company is in the process of evaluating and adopting a replacement.

Government tax credits

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

The BTC provides a one dollar per gallon tax credit to the blender of biomass-based diesel with at least 0.1% petroleum-based diesel fuel. 

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.

BTC and Small Agri-Biodiesel Producer Tax Credit

The BTC provides a 

one  dollar per gallon tax credit to the blender of biomass-based diesel with at least 

0.1%  petroleum-based diesel fuel. 

The Company recorded this credit as a reduction to cost of goods sold as applicable sales were made.

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. 

As this act was passed into law in 2019, the Company recognized its impact in 2019 for both periods within the Company’s 2019 financial results.

The Company recorded a gross profit from the BTC of $ 57,872 , that was comprised of $ 26,571 and $ 31,301 for 

2019 and 2018, respectively.

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.

With the passage of the Inflation Reduction Act (“IRA”) in August 2022, 

the BTC was extended through December 31, 2024.

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 2022, 2021, and 2020  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.

CARES ACT – EMPLOYEE RETENTION TAX CREDIT

The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), was enacted on 

March 27, 2020, 

to encourage eligible employers to retain employees on their payroll. 

The Consolidated Appropriations Act, effective 

January 1, 2021, 

broadened the eligibility of the credit. 

The Company applied for this credit and will recognize the benefit of the credit once reasonable assurance can be made as to the retention of the credit. 

Notes to Consolidated Financial Statements of FutureFuel Corp.

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The majority of revenue is from short term contracts with revenue recognized when a single performance obligation to transfer product under the terms of a contract with a customer are satisfied.

Certain of the Company’s custom chemical contracts within the chemical segment contain a material right, as defined by Topic 606, from the provision of a customer option to purchase future goods or services at a discounted price as a result of upfront payments provided by customers.

Certain of the Company’s custom chemical contracts within the chemical segment contain a material right, as defined by ASC Topic 606, from the provision of a customer option to purchase future goods or services at a discounted price as a result of upfront payments provided by customers.

Each contract also has a performance obligation to transfer products with 30 -day payment terms.

The Company recognizes revenue when the customer takes control of the inventory, either upon shipment or when the material is made available for pick up.

If the customer is deemed to take control of the inventory prior to pick up, the Company recognizes the revenue as a bill-and-hold transaction in accordance with Topic 606.

If the customer is deemed to take control of the inventory prior to pick up, the Company recognizes the revenue as a bill-and-hold transaction in accordance with ASC Topic 606.

The Company applies the renewal option approach in allocating the transaction price to these material rights and transfer of product.

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13,059  

* 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.

* Exclusive of the BTC of $ 8,970  

and $ 8,232 , respectively, and net of allowances for bad debt of $ 48  

and $ 67 , respectively, as of the dates noted.

Notes to Consolidated Financial Statements of FutureFuel Corp.

2 unchanged sentences

As of December 31, 2022, approximately $ 15,170  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.

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 one  to five  years.

Approximately 24 % of this revenue is expected to be recognized over the next 12 months, and 76 % is expected to be recognized between one and four  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.

23 unchanged sentences

$ 321,386  

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.

Bill-and-hold transactions consisted of four  specialty chemical customers in each of 2022, 2021, and 2020 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.

27 unchanged sentences

42,711  

( 19,734 )  

Total inventory

1 unchanged sentence

$ 26,920  

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.

In 2022 and 2021, a LIFO liquidation resulted in a decrease of $ 2,124 and $ 3,836 , respectively to “Cost of goods sold”. 

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 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.

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 net loss of $ 24,360 , net loss of $ 10,377 , and a net gain of $ 4,379  for the years ended December 31, 2022, 2021, and 2020, respectively.

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

8 unchanged sentences

At December 31, 2022 

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.

and 2021, the Company had investments in certain marketable equity and debt securities which had a fair market value of $ 37,126 and $ 47,190 , respectively.

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

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. 

Accordingly, these securities were recorded at fair value of $ 3,675 and $ 3,902 at December 31, 2022 and 2021, respectively, with the unrealized loss of $ 1 and an unrealized gain of $ 226 , net of taxes, as a component of stockholders’

As of December 31, 2022, the contractual maturities of these debt securities were greater than 10 years.

For the years ended December 31, 2022, 2021, and 2020, in accordance with ASC 321, the change in the fair value of equity securities (preferred and other equity instruments) was reported as a loss on marketable securities as a component of net income in the amount of $ 8,297 , $ 904 , and $ 246 , respectively. 

In 2022, 2021, and 2020, the Company recategorized a net gain of $ 0 , $ 0 , and $ 99 , 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, 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

29 unchanged sentences

Depreciation expense totaled $ 10,454 , $ 10,452 , and $ 11,150  for the years ended December 31, 2022, 2021, and 2020, respectively. 

Intangible assets

In April 2015, the Company acquired additional historical line space on a pipeline for $ 1,408 .

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.

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.

12 unchanged sentences

(Dollars in thousands, except per share amounts)

On March 30, 2020, FutureFuel, with FutureFuel Chemical as the borrower and certain of FutureFuel’s other subsidiaries as guarantors, amended and restated its credit agreement (the “Credit Agreement”) originally entered into on April 16, 2015 ( as amended, the “Prior Credit Agreement”) with the lenders party thereto, Regions Bank as administrative agent and collateral agent, and PNC Bank, N.A., as syndication agent.

On March 30, 2020, the Company, with FutureFuel Chemical Company as the borrower and certain of the Company’s other subsidiaries as guarantors, amended and restated its credit agreement (the “Credit Agreement”) originally entered into on April 16, 2015 ( as amended, the “Prior Credit Agreement”) with the lenders party, Regions Bank as administrative agent and collateral agent, and PNC Bank, N.A., as syndication agent.

The Credit Agreement consists of a five -year revolving credit facility in a dollar amount of up to $100,000, which includes a sublimit of $ 30,000 for letters of credit and $ 15,000 for swingline loans (collectively, the “Credit Facility”).

The Credit Facility expires on March 30, 2025.

The primary amendments from the Prior Credit Agreement were a reduction in the facility by $ 65,000 , a reduction in the facility’s applicable interest rate by 0.25 %, a reduction in the commitment fee, and elimination of the minimum consolidated fixed charge coverage ratio. 

The interest rate floats at the following margins over LIBOR or base rate based upon the leverage ratio from time to time:

On March 1, 2023, the Company entered into a First Amendment to the Credit Agreement (the “First Amendment”).

The First Amendment primarily amends the Credit Agreement to transition the Credit Facility from LIBOR to the Secured overnight financing rate (“SOFR”) and other conforming changes, in each case as more specifically set forth in the First Amendment.

The First Amendment does not modify the aggregate amount, or expiration date, of the Credit Facility.

We do not expect the transition from LIBOR to have a material impact on the Credit Facility.

Pursuant to the First Amendment, the interest rate floats at the following margins over SOFR or base rate based upon our leverage ratio.

Consolidated Leverage Ratio

Adjusted LIBOR Rate Loans

Adjusted SOFR

and Letter of Credit Fee

Base Rate Loans

Commitment Fee

1.00 %  

1 unchanged sentence

0.15 %  

≥ 1.00:1.0

And < 1.50:1.0  

1.25 %  

1 unchanged sentence

0.15 %  

≥ 1.50:1.0

And < 1.50:1.0  

1.50 %  

1 unchanged sentence

0.20 %  

≥ 2.00:1.0

And < 1.50:1.0  

1.75 %  

1 unchanged sentence

0.20 %  

≥ 2.50:1.0

2.00 %  

5 unchanged sentences

March 27, 2020, 

the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic. Under the CARES Act, certain subsidiaries of FutureFuel entered into a loan with Saint Louis Bank pursuant to the Paycheck Protection Program (“PPP”) totaling $ 8,180  on 

the CARES Act was enacted to provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic. Under the CARES Act, certain subsidiaries of the Company entered into a loan with Saint Louis Bank pursuant to the Paycheck Protection Program (“PPP”) totaling $ 8,180  on 

April 10, 2020 .

 At the time that FutureFuel applied for the PPP loan, it qualified to receive the funds pursuant to the then published eligibility requirements.

 At the time that the Company applied for the PPP loan, it qualified to receive the funds pursuant to the then published eligibility requirements.

Receipt of the PPP loan ensured continued operation as part of the nation’s critical infrastructure.

However, the Small Business Administration and Treasury Department subsequently issued new guidance that cast doubt on the ability of public companies to qualify for a PPP loan.

As a result, FutureFuel repaid the full amount of the PPP loan on 

As a result, the Company repaid the full amount of the PPP loan on 

May 5, 2020 .

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.

At December 31, 2022 and 2021, the Company had $ 46 and $ 86 outstanding with a domestic financing company for computer technology under a three -year financing agreement.

Asset retirement obligations and environmental reserves

4 unchanged sentences

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

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.

The accretion expense for 2022, 2021, and 2020 was $ 32 , $ 32 , and $ 43 , respectively.

The periodic review of the asset retirement obligation calculations resulted in an addition to the reserve of $ 0  in 2022, 2021, and 2020.

Notes to Consolidated Financial Statements of FutureFuel Corp.

14 unchanged sentences

Weighted average discount rate, per annum

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.

On December 31, 2022 and 2021, a right of use asset was reported as other noncurrent assets of $ 1,109 and $ 956 , other current liabilities of $ 630 and $ 644 , and other noncurrent liabilities of $ 389 and $ 312 , respectively.

Following are maturities of lease liabilities at December 31, 2022.

1 unchanged sentence

Present value of lease liabilities

$ 1,019  

Purchase obligations

1 unchanged sentence

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

2023 - 2026  

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

Income tax (benefit) provision

Income tax benefit

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

7 unchanged sentences

$ ( 1,473 )  

$ ( 10,325 )  

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

1 unchanged sentence

Amount computed using the statutory rate of 21% for 2022, 2021, and 2020

21.0 %  

Agri-biodiesel production credit

( 7.4 )  

Federal BTC benefit

( 75.2 )  

State BTC benefit

( 8.9 )  

Credit for increasing research activities

( 0.7 )  

Dividends received deduction

( 1.6 )  

State income taxes, net

State research credits

Deferred state rate change

( 0.5 )  

Income tax (benefit) provision

( 64.8 )%  

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.

116 - 136 ) (“CARES Act”).

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.

State rate change and other deferred adjustments

Valuation allowance for deferred tax assets

Income tax benefit

The income tax benefit in 2022 is $ 1,473 or an effective rate of ( 10.7 %) as compared to an income tax benefit of $ 10,325  or an effective tax rate of ( 64.8 %) in 2021 and an income tax benefit of $ 14,786 or an effective tax rate of ( 46.5 %) in 2020.

On March 27, 2020, President Trump signed into law the CARES Act.

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 five preceding taxable years unless the taxpayer elects to forego the carryback.

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.

 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.

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.

 All refunds from these filings have been received as of December 31, 2022.

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 of which, $ 2,299 remains outstanding as of December 31, 2022.

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 losses are carryforwards are accordingly classified as deferred tax assets.

The Company’s effective tax rates for the years 2022, 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.

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.

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.

Both incentives are currently due to expire in December 2024.

The Company’s 2022 and 2021 effective tax rate provisions reflect 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 and the termination of these operations in 2022.

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

2021 state deferred tax provision reflects a one -time benefit from state legislation enacted during the year which applies a lower tax rate to future reversals of deferred tax liabilities.

As further discussed below, in 2022 the Company determined that its deferred tax assets are realizable only to the extent of its deferred tax liabilities and recorded a valuation allowance that reduces its net deferred tax asset to $0.

Notes to Consolidated Financial Statements of FutureFuel Corp.

12 unchanged sentences

State credit carryforwards

Research & development costs

Derivative instruments

Capital loss carryforwards

Intangible asset impairment 

Trading securities

Intangible asset impairment

Subtotal deferred tax assets

28,056  

20,961  

Valuation Allowance

Total deferred tax assets

3 unchanged sentences

Available for sale securities

( 47 )  

LIFO inventory

( 2,589 )  

( 18,266 )  

Trading securities

( 1,090 )  

Prepaid expenses

( 839 )  

Derivative instruments

Total deferred tax liabilities

( 22,831 )  

Net deferred tax liabilities

$ ( 1,870 )  

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. 

Balance at January 1

$ 2,804  

Increases to tax positions taken in the current year

Increases to tax positions taken in a prior year

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

Balance at December 31

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

The Company’s federal net operating loss carryforwards at December 31, 2022 do not expire and can be carried forward indefinitely. Utilization of these carryforwards is limited to 80 % of taxable income in any given year. State net operating loss carryforwards at December 31, 2022 reflect losses generated in 2019 through 2022 and, if unused, will expire in years 2024 through 2032.

Federal and state tax losses are primarily a function of the nontaxable nature of the BTC.

Federal tax credit carryforwards at December 31, 2022 include the Small Agri-biodiesel Producer Credit and Credit for Increasing Research generated in years 2019 through 2022 and expiring in 2039 through 2042.

State credit carryforwards comprise Arkansas In-house Research Credits generated in 2019 through 2022 and expiring in 2028 through 2031.

Capital loss carryforwards were generated in 2019 through 2022 and will expire in 2024 through 2027.

A tax valuation allowance is recognized if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

In making this determination, the Company considers positive evidence in the form of projections of future taxable income, reversing temporary differences, and tax planning strategies.

In years in which the Company has experienced objective negative evidence in the form of three cumulative years of tax losses, the Company no longer uses taxable income projections to overcome the presumption of losses and deferred tax asset valuations are computed taking into account tax planning strategies and the reversing net deferred tax liability as a source of income.

As of December 31, 2022, the Company recorded a valuation allowance of $ 7,392 after determining that its total deferred tax assets are more likely than not realizable only to the extent of its deferred tax liabilities.

There are no unrecognized tax positions as of December 31, 2022, 2021, or 2020, and the Company does not anticipate any change over the next twelve months.

The Company records interest expense (income) and penalties, net, as a component of income tax (benefit) provision and had accrued interest and penalties of ($ 95 ), ($ 60 ), and $ 27 for December 31, 2022, 2021, and 2020, respectively.

4 unchanged sentences

In general, the Company is subject to U.S., state, and local examinations by tax authorities from 2019  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.

2 unchanged sentences

In the year ended December 31, 2022, 2021  and 2020, 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.

There were no outstanding restricted stock units for the year ended December 31, 2022, 2021 or 2020.

Basic and diluted earnings per common share were computed as follows:  

26 unchanged sentences

Stock-based compensation

The Board of Directors of the Company adopted an omnibus incentive plan which was approved by the shareholders of the Company at its 2017 annual shareholder meeting on September 7, 2017 ( the “Incentive Plan”).

The Board of Directors of the Company adopted an omnibus incentive plan which was approved by the shareholders of the Company at its 2017 annual shareholder meeting (the “Incentive Plan”).

The purpose of the plan is to:

2 unchanged sentences

Provide incentives to persons who are not the Company employees to promote the Company’s success.

The Incentive Plan authorizes the Company to issue stock options (including incentive stock options and nonqualified stock options), stock awards, and stock appreciation rights.

The Incentive Plan authorizes the Company to issue stock options (including incentive stock options and nonqualified stock options), common stock awards, and stock appreciation rights.

Eligible participants in the plan include:

5 unchanged sentences

The Incentive Plan became effective upon its approval by the Company’s shareholders on September 7, 2017 and continues in effect for a term of ten years thereafter unless amended and extended by the Company or unless otherwise terminated.

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 2021, 2020  or 2019.

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

No common stock awards were issued in 2022, 2021  or 2020.

In August 2022 and January 2020, the Company granted a total of 20,000 and 24,000 stock options, respectively, to two new members of the Board of Directors and to the Chief Operating Officer, also respectively.

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.

All options awarded in 2022 vested immediately and expire in August 2027.

All options awarded in 2020 vested immediately upon grant and expire in January 2025.

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

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.

3 unchanged sentences

(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 2022 or 2020.

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

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

September 2019

Expected volatility rate

3 unchanged sentences

Risk-free interest rate

3.20 %  

Expected forfeiture rate

20 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

2 unchanged sentences

20,000  

$ 7.18  

Canceled, forfeited, or expired

4 unchanged sentences

(Dollars in thousands, except per share amounts)

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.

There were 4,310,167 options available for grant under the Incentive Plan.

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, 2022.

20 unchanged sentences

20,000  

$ 7.18  

44,000  

$ 10.74  

44,000  

$ 10.74  

The aggregate intrinsic values of total options outstanding and exercisable at December 31, 2022 

3 unchanged sentences

Stockholders’ equity

Novelly, executive chairman of the board, or his affiliates are entitled to demand that the Company register under the Securities Act of 1933, as amended (or the “Securities Act”), the resale of certain shares of the Company’s common stock beneficially owned by Mr.

Novelly or his affiliates (including St.

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.

Albans Global Management, LLC (“St.

Albans”), an entity affiliated with Mr.

Novelly II, a member of the board, is entitled to demand that the Company register under the Securities Act of 1933, as amended (the “Securities Act”), the resale of all shares of the Company’s common stock beneficially owned by it.

Albans exercises its registration rights with respect to all 17,085,100 shares of the Company’s common stock currently owned by it, there will be an additional 6,637,600 registered shares of common stock available for trading in the public market. 

Notes to Consolidated Financial Statements of FutureFuel Corp.

13 unchanged sentences

Biodiesel, petrodiesel, blends and other petroleum products

$ 1,426  

Total accounts receivable

$ 1,426  

Prepaid expenses

4 unchanged sentences

$ 7,788  

$ 7,900  

Travel and administrative services

1 unchanged sentence

$ 7,799  

$ 7,911  

Accrued liabilities

6 unchanged sentences

$ 1,976  

$ 3,178  

Total revenues

1 unchanged sentence

$ 1,976  

$ 3,178  

Cost of goods sold

29 unchanged sentences

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

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.

transportation charges are paid to an independent third party. The natural gas matter as discussed in Note 23, Legal proceedings, is in reference to the natural gas supplier, not the related party.

Distribution and related services

Distribution and related services comprise barge transportation and related unloading charges for petrodiesel that were arranged and paid for by an affiliate and subsequently rebilled to the Company.

Additionally, the Company leases oil storage capacity from an affiliate under a storage and throughput agreement.

The Company leases oil storage capacity from an affiliate under a storage and throughput agreement.

This agreement provides for the storage of biodiesel, diesel or biodiesel/petrodiesel blends, methanol, and biodiesel feedstocks in above-ground storage tankage at designated facilities of the affiliate.

50 unchanged sentences

$ 25,518  

44,216  

Total gross profit

14 unchanged sentences

$ 15,186  

$ 8,192  

$ 26,124  

Net (loss) income

1 unchanged sentence

$ 14,933  

$ 9,202  

Net income per common share:

7 unchanged sentences

$ 107,070  

$ 53,082  

$ 47,422  

$ 54,138  

$ 49,863  

$ 16,399  

$ 6,446  

Gross (loss) profit

$ 8,192  

$ 26,124  

Net (loss) income

$ 3,481  

8 unchanged sentences

$ 0.51  

$ 0.16  

$ 0.13  

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

6 unchanged sentences

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 

At this time the Company is disputing its 

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

2 unchanged sentences

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.

21,  Related Party Transactions, the “ultimate”

natural gas supplier is 

not  a related party of the Company.

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 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