FutureFuel Corp. 10-K

Item 8. Financial Statements and Supplementary Data. Financials. The following sets forth our consolidated balance sheets as at December 31, 2024 and 2023 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, 2024, together with Grant Thornton LLP’s report on the year ended December 31, 2024 and RSM US LLP's report on the year ended December 31, 2023 and 2022. Item Page Report of Independent Registered Public Accounting Firm (Grant Thornton LLP: PCAOB ID 248 ) 47 Report of Independent Registered Public Accounting Firm (RSM US LLP: PCAOB ID 49) 48 Consolidated Balance Sheets 49 Consolidated Statements of Income and Comprehensive Income 50 Consolidated Statements of Cash Flows 51 Consolidated Statements of Changes in Stockholders' Equity 52 Notes to Consolidated Financial Statements of FutureFuel Corp. 53 Note 1. Description of business and operations 53 Note 2. Significant accounting policies and basis of presentation 53 Note 3. Government tax credits 59 Note 4. Revenue Recognition 60 Note 5. Inventory 62 Note 6. Derivative instruments 62 Note 7. Marketable securities 63 Note 8. Fair value measurements 63 Note 9. Property, plant, and equipment 64 Note 10. Other assets 64 Note 11. Accrued expenses and other current liabilities 64 Note 12. Borrowings 65 Note 13. Asset retirement obligations and environmental reserves 65 Note 14. Lease commitments and purchase obligations 66 Note 15. Income tax benefit 67 Note 16. Earnings per share 69 Note 17. Stock-based compensation 70 Note 18. Stockholders' equity 72 Note 19. Employee benefit plans 73 Note 20. Related party transactions 73 Note 21. Segment information 75 Note 22. Legal proceedings 76 Note 23. Subsequent events 76 46 Table of Contents Report of Independent Registered Public Accounting Firm Board of Directors and Stockholders FutureFuel Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of FutureFuel Corp. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024, the related consolidated statements of income and comprehensive income, changes in stockholders’ equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “consolidated 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, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We also have 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, 2024, based on criteria established in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 31, 2025 expressed an unqualified opinion. Change in Accounting Principle As discussed in Note 2 to the consolidated financial statements, the Company has elected to change its method of accounting for the presentation of supplies and parts in 2024. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. 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 audit in accordance with the standards of the 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 audit 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 audit 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 audit provides a reasonable basis for our opinion. 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 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 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. Revenue recognition – Recognition of material rights consideration As described further in Note 4 to the consolidated financial statements, certain of the Company’s long-term custom chemical contracts have a material right as defined by Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , which provides the customer an option to purchase future goods or services at a discounted price as a result of upfront non-refundable payments provided by the customers. For each of these contracts, the Company applies the renewal option approach in allocating the transaction price to the material right and transfer of the product. The Company estimates the expected life of the contract, the expected contractual volumes to be sold over that life and the most likely expected sales price in order to allocate the transaction price to the material right and transfer of the product. We identified the recognition of material rights consideration as a critical audit matter. The principal consideration for our determination that recognition of material rights consideration is a critical audit matter is the judgment required in applying the renewal option approach, which includes estimating the significant assumptions which include: the contract length to which the material rights will be amortized and the expected contractual volumes which are used to recognize revenue from the material right consideration in the current period. Our audit procedures related to the recognition of material rights consideration included the following, among others : ● We tested of the design and operating effectiveness of internal controls relating to the recognition of material rights consideration, including those related to the development of the significant assumptions. ● We obtained the contracts with customers containing material rights and evaluated for the proper accounting treatment. ● We evaluated the reasonableness of the selected methodology used in determining the period of time, including expected contract renewals, over which to defer and recognize the consideration allocated to the material rights. ● We evaluated the appropriateness of expected contractual volumes to be sold over the remaining contract life which included comparing the estimated volumes to customer forecasts. ● We tested the mathematical accuracy of management’s calculations and the amounts recorded for the material rights in the consolidated financial statements. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2024. Tulsa, Oklahoma March 31, 2025 47 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders and the Board of Directors FutureFuel Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of FutureFuel Corp. and its subsidiaries (the Company) as of December 31, 2023, the related consolidated statements of income and comprehensive income, cash flows and changes in stockholders’ equity for each of the two years in the period ended December 31, 2023, 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, 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. 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 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 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. /s/RSM US LLP We served as the Company’s auditor from 2019 to 2024. St Louis, Missouri March 14, 2024 (May 10, 2024, as to the effects of the restatement discussed in Note 25 of the consolidated financial statements filed on Form 10-K/A on May 10, 2024) 48 Table of Contents FutureFuel Corp. Consolidated Balance Sheets As of December 31, 2024 and 2023 (Dollars in thousands) 2024 2023 Assets Cash and cash equivalents $ 109,541 $ 219,444 Accounts receivable, inclusive of the blenders’ tax credit of $ 6,683 and $ 11,381 , and net of allowances for credit losses of $ 29 and $ 55 , respectively 21,896 28,406 Accounts receivable – related parties - 1 Inventory, net 20,643 25,383 Income tax receivable 53 1,940 Prepaid expenses 3,978 4,346 Prepaid expenses – related parties - 12 Other current assets 8,675 11,014 Total current assets 164,786 290,546 Property, plant and equipment, net 78,538 72,711 Other assets 4,367 3,824 Total noncurrent assets 82,905 76,535 Total Assets $ 247,691 $ 367,081 Liabilities and Stockholders’ Equity Accounts payable, inclusive of the blenders’ tax credit rebates due to customers of $ 890 and $ 890 , respectively $ 10,483 $ 22,178 Accounts payable – related parties 139 42 Deferred revenue – current 904 3,863 Dividends payable 10,699 10,503 Accrued expenses and other current liabilities 11,082 4,758 Total current liabilities 33,307 41,344 Deferred revenue – noncurrent 6,324 12,570 Noncurrent deferred income taxes 773 - Other noncurrent liabilities 1,466 3,287 Total noncurrent liabilities 8,563 15,857 Total liabilities 41,870 57,201 Commitments and contingencies 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, 43,803,243 and 43,763,243 issued and outstanding as of December 31, 2024 and 2023, respectively 4 4 Additional paid in capital 205,434 282,489 Retained earnings 383 27,387 Total stockholders’ equity 205,821 309,880 Total Liabilities and Stockholders’ Equity $ 247,691 $ 367,081 The accompanying notes are an integral part of these consolidated financial statements. 49 Table of Contents FutureFuel Corp. Consolidated Statements of Income and Comprehensive Income For the Years Ended December 31, 2024, 2023 and 2022 (Dollars in thousands, except per share amounts) 2024 2023 2022 Revenue $ 243,339 $ 368,228 $ 395,555 Revenue – related parties - 22 459 Cost of goods sold 220,860 324,311 357,182 Cost of goods sold – related parties 66 ( 315 ) 5,425 Distribution 2,590 3,099 4,240 Distribution – related parties 179 176 174 Gross profit 19,644 40,979 28,993 Selling, general, and administrative expenses Compensation expense 4,838 4,545 3,540 Other expense 3,809 4,052 3,881 Related party expense 632 616 611 Research and development expenses 3,993 4,398 3,415 Total operating expenses 13,272 13,611 11,447 Income from operations 6,372 27,368 17,546 Interest and dividend income 7,656 9,577 4,870 Interest expense ( 138 ) ( 138 ) ( 128 ) Gain (loss) on marketable securities - 575 ( 8,546 ) Other income (expense), net 2,405 1 ( 4 ) Other income (expense) 9,923 10,015 ( 3,808 ) Income before income taxes 16,295 37,383 13,738 Income tax provision (benefit) 792 1 ( 1,473 ) Net income $ 15,503 $ 37,382 $ 15,211 Earnings per common share Basic $ 0.35 $ 0.85 $ 0.35 Diluted $ 0.35 $ 0.85 $ 0.35 Weighted average shares outstanding Basic 43,765,757 43,763,243 43,763,243 Diluted 43,765,757 43,764,683 43,763,489 2024 2023 2022 Comprehensive income Net income $ 15,503 $ 37,382 $ 15,211 Other comprehensive income (loss) from unrealized net losses on available-for- sale debt securities - 2 ( 227 ) Income tax effect - ( 1 ) 48 Total unrealized gain (loss), net of tax - 1 ( 179 ) Comprehensive income $ 15,503 $ 37,383 $ 15,032 The accompanying notes are an integral part of these consolidated financial statements. 50 Table of Contents FutureFuel Corp. Consolidated Statements of Cash Flows For the Years Ended December 31, 2024, 2023 and 2022 (Dollars in thousands) 2024 2023 2022 Cash flows from operating activities Net income $ 15,503 $ 37,382 $ 15,211 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 9,208 10,348 10,454 Amortization of deferred financing costs 103 101 95 Provision (benefit) for deferred income taxes 773 - ( 1,822 ) Change in fair value of equity securities - ( 3,117 ) 8,297 Change in fair value of derivative instruments 1,971 ( 1,878 ) ( 343 ) Loss on the sale of investments - 2,543 248 Stock based compensation 359 - 46 Loss on disposal of property, plant, and equipment 30 29 64 Noncash interest expense 35 34 33 Changes in operating assets and liabilities: Accounts receivable 6,510 ( 2,208 ) 3,118 Accounts receivable – related parties 1 5 52 Inventory 4,740 ( 4,445 ) 1,105 Income tax receivable 1,887 19 7,801 Prepaid expenses 368 ( 652 ) ( 106 ) Prepaid expenses – related party 12 - ( 8 ) Other assets ( 146 ) ( 935 ) ( 144 ) Accounts payable ( 12,098 ) ( 6,493 ) 13,790 Accounts payable – related parties 97 ( 7,757 ) ( 112 ) Dividends payable 186 - - Accrued expenses and other current liabilities 6,324 ( 719 ) ( 948 ) Accrued expenses and other current liabilities – related parties - ( 1 ) - Deferred revenue ( 9,205 ) ( 2,418 ) ( 4,055 ) Other noncurrent liabilities ( 1,856 ) 1,461 ( 325 ) Net cash provided by operating activities 24,802 21,299 52,451 Cash flows from investing activities Collateralization of derivative instruments ( 132 ) 1,343 ( 404 ) Proceeds from the sale of marketable securities - 37,701 1,292 Proceeds from the sale of property, plant, and equipment 6 - 61 Capital expenditures ( 14,668 ) ( 6,022 ) ( 4,778 ) Net cash (used in) provided by investing activities ( 14,794 ) 33,022 ( 3,829 ) Cash flows from financing activities Deferred financing costs - ( 14 ) - Payment of dividends ( 119,911 ) ( 10,503 ) ( 10,503 ) Net cash used in financing activities ( 119,911 ) ( 10,517 ) ( 10,503 ) Net change in cash and cash equivalents ( 109,903 ) 43,804 38,119 Cash and cash equivalents at beginning of period 219,444 175,640 137,521 Cash and cash equivalents at end of period $ 109,541 $ 219,444 $ 175,640 Cash paid for interest $ - $ - $ 3 Cash paid for income taxes $ 457 $ 20 $ 69 Noncash investing and financing activities: Noncash capital expenditures included in accounts payable $ 403 $ 333 $ 208 Noncash operating leases $ - $ - $ 707 Dividends payable $ 10,699 $ 10,503 $ 10,503 The accompanying notes are an integral part of these consolidated financial statements. 51 Table of Contents FutureFuel Corp. Consolidated Statements of Changes in Stockholders ’ Equity For the Years Ended December 31, 2024, 2023 and 2022 (Dollars in thousands) Accumulated Other Additional Total Common Stock Comprehensive paid-in Retained Stockholders’ Shares Amount Income Capital Earnings Equity Balance - December 31, 2021 43,763,243 $ 4 $ 178 $ 282,443 $ 6,303 $ 288,928 Cash dividends declared - - - - ( 21,006 ) ( 21,006 ) Stock based compensation - - - 46 - 46 Other comprehensive loss - - ( 179 ) - - ( 179 ) Net Income - - - - 15,211 15,211 Balance - December 31, 2022 43,763,243 $ 4 $ ( 1 ) $ 282,489 $ 508 $ 283,000 Cash dividends declared - - - - ( 10,503 ) ( 10,503 ) Other comprehensive loss - - 1 - - 1 Net Income - - - - 37,382 37,382 Balance - December 31, 2023 43,763,243 $ 4 $ - $ 282,489 $ 27,387 $ 309,880 Cash dividends declared - - - ( 77,691 ) ( 42,230 ) ( 119,921 ) Stock based compensation 40,000 - - 636 ( 277 ) 359 Net Income - - - - 15,503 15,503 Balance - December 31, 2024 43,803,243 $ 4 $ - $ 205,434 $ 383 $ 205,821 The accompanying notes are an integral part of these consolidated financial statements. 52 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 1. DESCRIPTION OF BUSINESS AND OPERATIONS FutureFuel Corp. (the “Company”) is a Delaware corporation with its wholly owned subsidiaries, FutureFuel Chemical Company; FutureFuel Warehouse Company, L.L.C.; and Legacy Regional Transport, L.L.C. The Company’s sole operating facility is FutureFuel Chemical Company located in Batesville, Arkansas, a manufacturer of specialty and performance chemicals and biofuels. 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION Financial Presentation The consolidated financial statements of FutureFuel Corp. and subsidiaries are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) 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. Certain reclassifications were made to prior year amounts to conform to the 2024 presentation. Change in Accounting Principle As of December 31, 2024, we changed the accounting principle related to the presentation for supplies and parts held in support of maintenance and repair of plant equipment from Inventory to Other current assets. As the investment in these supplies and parts has increased given our focus on plant reliability and efficiency as well as the fact that these parts are not revenue generating assets similar to the Company’s raw materials, work in process, and finished goods inventories but are instead held to support the maintenance and repair of the Company’s plant equipment, we determined it preferable to present these supplies and parts held within other current assets rather than inventory, which is composed of assets that may be sold or turned into assets to be sold as part of the Company’s primary business activities. The change in accounting principle was a reduction in inventory and an increase in other current assets of $ 7,733 and $ 7,595 at December 31, 2024 and 2023, respectively. There was no impact on any financial statement totals or key benchmarks (working capital, total assets, equity, gross profit, net income, or operating cash flows). Cash and cash equivalents Cash equivalents consist of highly liquid investments with original maturities of three months or less and are carried at cost, which approximates fair value. The Company places its temporary cash investments with high credit quality financial institutions. At times, bank deposits may be in excess of the Federal Deposit Insurance Corporation insurance limit, however, no loss has occurred. Accounts receivable and allowance for credit losses Accounts receivable are recorded at the invoiced amount and only bear interest if outstanding beyond the agreed upon payment terms. The Company has established procedures to monitor credit risk and has not experienced significant credit losses in prior years. Accounts receivable have been reduced by an allowance for amounts that may be uncollectible in the future. This estimated allowance is based upon management’s evaluation of historical collection experience, current and future economic and market conditions, and a review of the status of individual accounts receivable. Write-offs are recorded at the time a customer receivable is deemed uncollectible. Customer concentrations For the years ended December 31, 2024, 2023 and 2022 , significant portions of the Company’s sales were made to a relatively small number of customers. Sales to two biodiesel customers totaled 25 %, 35 %, and 27 % of revenue in 2024, 2023, and 2022, respectively. Receivables for the significant customers at December 31, 2024 and 2023 , were 13 % an d 0.2 % o f total receivables, respectively. For the years ended December 31, 2024, 2023, and 2022, no chemical customer represented a greater than 10% of total sales revenue. However, one chemical customer had a receivable that was 20 % of total receivables as of December 31, 2024. 53 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) Inventory Inventories are valued at the lower of cost or market or net realizable value. 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 The Company records all derivative instruments at fair value. Fair value is determined by using the closing prices of the derivative instruments on the New York Mercantile Exchange at the end of an accounting period. Changes in the fair value of derivative instruments are recognized at the end of each accounting period and recorded in the consolidated statements of income and comprehensive income as a component of cost of goods sold. 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 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. 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 2024, 2023, or 2022. See Note 6 - Derivative Instruments. The Company has elected the normal purchase and normal sales exception for certain feedstock purchase contracts and supply agreements and for certain biodiesel sales contracts. Marketable securities Investments consist of marketable equity and debt securities stated at fair value. The debt securities are designated as available-for-sale securities at the time of purchase based upon the intended holding period. Gains and losses from the sale of marketable securities and the changes in the fair value of equity securities are recognized as gain (loss) on marketable securities as a component of other income (expense) in the consolidated statements of income and comprehensive income. The cost basis used for all marketable securities is specific identification. 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 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 8 for further information on marketable securities and fair value measurements. 54 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 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. Supplies and parts Supplies and parts are carried at cost in Other current assets and Other assets. The Company writes-down its supplies and parts for estimated obsolescence and amounts determined to be in excess of expected needs. Property, plant, and equipment, net Property, plant, and equipment, net is carried at cost less accumulated depreciation. Maintenance and repairs are charged to earnings; replacements and betterments are capitalized. When the Company retires or otherwise disposes of an asset, it removes the cost of such asset and related accumulated depreciation from the accounts. The Company records any profit and loss on retirement or other disposition in earnings. Depreciation expense is calculated based on historical cost and the estimated useful lives of the assets, generally using the straight-line method with the following useful lives: Building & building equipment (years) 20 – 39 Machinery and equipment (years) 3 – 33 Transportation equipment (years) 5 – 33 Other (years) 5 – 33 Impairment of 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. Such events and circumstances include, but are not limited to, significant decreases in the market value of the asset, adverse changes in the extent or manner in which the asset is being used, significant changes in business climate, or current or projected cash flow losses associated with the use of the assets. The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows from such assets are separately identifiable and are less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. For long-lived assets to be held for use in future operations, fair value is determined primarily using either the projected cash flows discounted at a rate commensurate with the risk involved or an appraisal. For long-lived assets to be disposed of by sale or other than sale, fair value is determined in a similar manner, except those fair values are reduced for disposal costs. 55 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) Asset retirement obligations and environmental costs The Company establishes reserves for closure/post-closure costs associated with the environmental and other assets it maintains, which include, but are not limited to, waste management units, such as a chemical waste destructor, storage tanks, and boilers. When these types of assets are constructed or installed, a liability is established with a corresponding asset for the future costs anticipated to be associated with the closure of the site based on an expected life of the environmental assets, the applicable regulatory closure requirements, and the Company’s environmental policies and practices. These expenses are charged into earnings over the estimated useful life of the assets. Currently, the Company estimates the useful life of each individual asset up to 27 years. Changes made in estimates of the asset retirement obligation costs or the estimate of the useful lives of these assets are reflected in earnings as an increase or decrease in the period such changes are made. Environmental costs are capitalized if they extend the life of the related property, increase its capacity, and/or mitigate or prevent future contamination. The cost of operating and maintaining environmental control facilities is charged to expense. Leases Leases with an initial expected term of twelve months or less are considered short-term and are not recorded on our consolidated balance sheets. The Company recognizes operating lease expense on a straight-line basis over the lease term. Litigation The Company and its operations from time to time may be parties to or targets of lawsuits, claims, investigations, and proceedings including product liability, personal injury, patent and intellectual property, commercial, contract, environmental, health and safety, and environmental matters, which are handled and defended in the ordinary course of business. The Company accrues a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When a single amount cannot be reasonably estimated but the cost can be estimated within a range, the Company accrues the minimum amount. 56 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) Revenue recognition 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. The majority of the Company’s 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 is satisfied. Accordingly, the Company recognizes revenue when control is transferred to the customer, which is when products are considered to meet customer specification per the customer contract and title and risk of loss are transferred. This typically occurs at the time of shipment or delivery; or for certain contracts, this occurs upon delivery of the material to a Company storage location, ready for customer pickup and separated from other Company inventory. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products and is generally based upon a negotiated price. The Company sells its products directly to customers generally under agreements with payment terms of 30 to 75 days for chemical segment customers and 2 to 10 days for biofuels segment customers. The Company applies the practical expedient and excludes the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less; 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 revenue from biodiesel RINs. RINs are renewable identification numbers under the Renewable Fuel Standard ( “RFS2” ) used to incent the use of renewable fuels domestically. RINs are generated at 1.5 RINs per gallon of biodiesel produced and sold. Revenue is recognized from RINs when transferred to the buyer in the government provided tracking system. No cost is incurred in the generation of a RIN. 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 Blenders’ Tax Credit (“BTC”) for blending biodiesel with petroleum diesel when in law. The BTC was in effect during 2024, 2023, and 2022. See Note 3 for further discussion. Distribution expense includes outbound freight costs, depreciation of distribution equipment, and other indirect costs necessary to distribute product. Selling, general, and administrative expenses Selling, general, and administrative expenses include personnel costs associated with sales, marketing, and administration; legal and related costs; consulting and professional service fees; advertising expenses; and other similar costs. 57 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) Research and development expenses Research and development expenses include direct salaries, depreciation of equipment, material expenditures, contractor fees, and other indirect costs. All costs identified as research and development costs are charged to expense when incurred. Comprehensive income Comprehensive income is comprised of net income and other comprehensive income (loss) (“OCI”). Comprehensive income comprises all changes in stockholders’ equity from transactions and other events and circumstances from non-owner sources. The Company’s OCI comprises unrealized gains and losses resulting from its investments in marketable debt securities classified as available-for-sale (see Note 7 ). Unrealized gains and losses were determined using the specific identification method and are classified in OCI. Income taxes 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 represent 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 from temporary differences as a source of income. Issued accounting standards not yet adopted Accounting Standards Update (“ASU”) No. 2023 - 09 Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures: The Financial Accounting Standards Board (“FASB”) issued this update in December 2023 which aims to address requests for improved income tax disclosures from investors that use the financial statements to make capital allocation decisions. The amendments in this ASU address the investor requests for more transparency of income tax information and apply to all entities that are subject to income taxes. The ASU is effective for years beginning after December 15, 2024, but early adoption is permitted. This ASU should be applied on a prospective basis, although retrospective application is permitted. The Company will adopt the new standard effective for the year ended December 31, 2025, and does not expect the adoption to have a material impact on its financial statements and disclosures. ASU No. 2024 - 03 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses: The FASB issued this update in November 2024 which aims to provide investors with more useful information about an entity’s expenses by improving disclosures on income statement expenses. The amendments in this ASU require all public business entities to disclose disaggregated information about specific categories underlying certain income statement expense line items. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating this accounting standard and does not expect the adoption to have a material impact on its financial statements and disclosures. 58 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) Recently adopted accounting standards ASU No. 2023 - 07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures: The FASB issued this update in November 2023 which aims to improve disclosures about a public entity’s reportable segments. These changes affect the Company’s segment reporting beginning with the Annual Report for the year ended December 31, 2024, and are applied retrospectively to all prior periods presented. The amendments in this ASU require public business entities to disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker and are included within each reported measure of segment profit or loss. This update does not change how an entity identifies or aggregates its reportable segments or how it applies the quantitative thresholds to determine them. The adoption of this ASU had a minimal impact on the Company’s financial statements and related disclosures. 3. GOVERNMENT TAX CREDITS The Company received the BTC which provided 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. 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 2024 , 2023 , and 2022 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 provision (benefit). The IRA created the clean fuel production credit (“CFPC”) for qualifying transportation fuel produced after 2024 and sold on or before December 31, 2027. The CFPC consolidates and replaces several fuel related credits which expired December 31, 2024 including the BTC and the Small Agri-biodiesel Producer Tax Credit. The CFPC is an income tax credit structured on a sliding scale so that producers become eligible for larger credits as the GHG emissions of the fuels they produce approach zero. For producers meeting the prevailing wage and registered apprenticeship requirements, the maximum credit is $1.00 per gallon of nonaviation fuel. For producers not meeting the prevailing wage and registered apprenticeship requirements, the maximum credit is 20 cents per nonaviation fuel gallon. The Company registered for the program in June 2024 when the registration rules were issued and received approval in December 2024 as a clean fuel producer under the program. On January 10, 2025, the IRS issued Notice 2025 - 10 with the purpose of providing initial guidance and solicited comment from the public with a deadline of April 10, 2025, and was to serve as an announcement of forthcoming proposed regulations and solicited public input by April 10, 2025. It did not include any reliance language and did not constitute final or binding guidance. On January 15, 2025, the IRS issued Notice 2025 - 11 which provided emission rate guidance in support of Notice 2025 - 10. 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. 59 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 4. REVENUE RECOGNITION The majority of revenue is from contracts with less than one -year arrangements with revenue recognized when a single performance obligation to transfer product under the terms of a contract with a customer is satisfied. 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 ASC Topic 606. The Company applies the renewal option approach in allocating the transaction price to these material rights and transfer of product. As a basis for allocating the transaction price to the material right and transfer of product, the Company estimates the expected life of the contract, the expected contractual volumes to be sold over that life, and the most likely expected sales price. Each estimate is updated quarterly on a prospective basis. The Company leases warehouse space under a short-term lease agreement with a term of twelve months. Lease revenue recognized under this agreement was $ 669 for the year ended December 31, 2024. Contract Assets and Liabilities: Contract assets consist of unbilled amounts resulting from revenue recognized through bill-and-hold arrangements. The contract assets for 2024 and 2023 consist of unbilled revenue from one customer and unbilled capital reimbursements from another 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 or due for a performance obligation of chemical segment plant expansions were $ 0 and $ 538 in 2024 and 2023 , 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 $ 8,984 and $ 2,734 in 2024 and 2023 , respectively. One contract liability ended in 2024 with additional revenue recognition of $ 5,492 in 2024. This contract was expected to be negotiated before the end of the year based on a letter of intent and was not renewed. The customer continues to purchase material from the Company on a short-term purchased order basis. 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. The following table provides the opening and closing balances of receivables, contract assets, and contract liabilities from contracts with customers. Contract balances Contract Assets and Liabilities December 31, 2024 2023 2022 Trade receivables, included in accounts receivable* $ 14,991 $ 15,897 $ 16,459 Contract assets, included in accounts receivable 222 1,128 775 Contract liabilities, included in Deferred revenue - short-term 697 3,656 3,565 Contract liabilities, included in Deferred revenue - long-term 3,293 9,318 11,605 * Exclusive of the BTC of $ 6,683 , $ 11,381 , and $ 8,970 , respectively, and net of allowances for bad debt of $ 29 , $ 55 , and $ 48 , respectively, as of the dates noted. 60 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) Transaction price allocated to the remaining performance obligations As of December 31, 2024 , approximately $ 3,990 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 six y ears. 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 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. See Note 2 for further information. Disaggregation of revenue - contractual and non-contractual Year ended December 31, 2024 2023 2022 Contract revenue from customers with > 1-year arrangements $ 21,887 $ 37,055 $ 33,686 Contract revenue from customer with < 1-year arrangements 221,230 330,973 362,106 Revenue from non-contractual arrangements 222 222 222 Total revenue $ 243,339 $ 368,250 $ 396,014 Timing of revenue Year ended December 31, 2024 2023 2022 Bill-and-hold revenue $ 43,959 $ 43,766 $ 36,805 Non-bill-and-hold revenue 199,380 324,484 359,209 Total revenue $ 243,339 $ 368,250 $ 396,014 Bill-and-hold transactions consisted of five specialty chemical customers in 2024 and 2023, and four in 2022, 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. The inventory was segregated from other Company inventory as it was custom manufactured and stored at the customer’s request and could not be sold to another buyer. Credit and payment terms for bill-and-hold transactions are similar to other specialty chemical customers. Sales revenue under bill-and-hold arrangements totaled $ 43,959 , $ 43,766 , and $ 36,805 , for the years ended December 31, 2024, 2023, and 2022, respectively. Of the bill-and-hold sales revenue recognized, $7,301, $ 4,317 , and $ 4,473 had not been shipped for the years ended December 31, 2024, 2023, and 2022, 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, 2024, 2023 and 2022 attributable to the United States and foreign countries (based upon the billing addresses of its customers) were as follows. Year ended December 31, 2024 2023 2022 United States $ 242,685 $ 367,368 $ 394,671 All Foreign Countries 654 882 1,343 Total $ 243,339 $ 368,250 $ 396,014 For the years ended December 31, 2024, 2023 and 2022 , no revenues from a single foreign country were greater than 1% of total revenues. 61 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 5. INVENTORY The carrying values of inventory were as follows as of December 31: 2024 2023 At average cost (approximates current cost) Finished goods $ 10,809 $ 16,235 Work in process 872 611 Raw materials 15,335 17,937 27,016 34,783 LIFO reserve ( 6,373 ) ( 9,400 ) Total inventory $ 20,643 $ 25,383 A LIFO liquidation of $ 435 and $ 2,124 occurred in the years ended December 31, 2024 and 2022, respectively. There was no liquidation in the year ended December 31, 2023 . 6. 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 and comprehensive income as a component of cost of goods sold and amounted to a net loss of $ 499 for the year ended December 31, 2024, a net gain of $ 2,571 for the year ended December 31, 2023, and a net loss of $ 24,360 for the year ended December 31, 2022. The volumes and carrying values of the Company’s derivative instruments were as follows at December 31: Asset/ (Liability) 2024 2023 Contract Fair Contract Fair Quantity Value Quantity Value Regulated fixed price future commitments, included in other current assets (in thousand barrels) 100 $ ( 235 ) 354 $ 1,736 The margin account maintained with a broker to collateralize these derivative instruments carried an account balance of $ 877 and $ 745 at December 31, 2024 and 2023 , respectively, and is classified as other current assets in the consolidated balance sheets. 62 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 7. MARKETABLE SECURITIES At December 31, 2024 and 2023, the Company held no marketable equity or trust preferred (debt) securities. The previous sale of these securities was recorded as a component of net income with a gain of $ 575 in the year ended December 31, 2023. For the year ended December 31, 2022, 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 . In 2023 and 2022, the Company had no recategorized net gain or loss to report from accumulated other comprehensive income. 8. FAIR VALUE MEASUREMENTS Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants as of the measurement date. Fair value accounting pronouncements also include a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. Derivative instruments were fair value measurements using inputs considered as Level 1 holdings in the year ended December 31, 2024, as disclosed in Note 6. The Company had no Level 2 or Level 3 securities. 63 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 9. PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment consisted of the following at December 31: 2024 2023 Land and land improvements $ 5,967 $ 6,044 Buildings and building equipment 29,031 27,182 Machinery and equipment 191,868 188,794 Construction in progress 9,625 1,809 Accumulated depreciation ( 157,953 ) ( 151,118 ) Total $ 78,538 $ 72,711 Depreciation expense totaled $ 9,208 , $ 10,348 , and $ 10,454 for the years ended December 31, 2024, 2023 and 2022 , respectively. 10. OTHER ASSETS Other current assets primarily comprise supplies and parts which are held in support of maintenance and repair of plant equipment. The balance related to these items totaled $ 7,733 and $ 7,595 at December 31, 2024 and 2023, 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 $ 4,376 and $ 3,409 at December 31, 2024 and 2023 , respectively. 11. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following at December 31: 2024 2023 Refundable deposit $ 6,500 $ - Employment tax credit 1,856 - Accrued employee liabilities 1,743 2,179 Accrued property, franchise, motor fuel and other taxes 881 1,346 Lease liability, current - 389 Other current liabilities 102 844 Total $ 11,082 $ 4,758 64 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 12. BORROWINGS On February 21, 2025, 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 and amended March 30, 2020 ( as amended, the “Prior Credit Agreement”) and further amended on February 21, 2025 with the lender party thereto, Regions Bank as administrative agent, collateral agent, and syndication agent. The Credit Agreement consists of a five -year revolving credit facility in a dollar amount of up to $ 75,000 , 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 February 21, 2030. The primary amendment from the Prior Credit Agreement was a reduction in the facility’s credit limit by $ 25,000 and the removal of PNC Bank, N.A., as the syndication agent. The interest rate floats at the following margins over SOFR or base rate based upon our leverage ratio. Adjusted SOFR Rate Loans Consolidated Leverage Ratio and Letter of Credit Fee Base Rate Loans Commitment Fee < 1.00:1.0 1.00 % 0.00 % 0.15 % ≥ 1.00:1.0 And < 1.50:1.0 1.25 % 0.25 % 0.15 % ≥ 1.50:1.0 And < 2.00:1.0 1.50 % 0.50 % 0.20 % ≥ 2.00:1.0 And < 2.50:1.0 1.75 % 0.75 % 0.20 % ≥ 2.50:1.0 2.00 % 1.00 % 0.25 % The terms of the Credit Facility contain certain negative covenants and conditions including a maximum consolidated leverage ratio and a minimum consolidated interest coverage ratio. There were no borrowings under the Prior Credit Agreement at December 31, 2024 or 2023. At December 31, 2023, the Company had $ 7 outstanding with a domestic financing company for computer technology under a three -year financing agreement. No balance remained at December 31, 2024. 13. Asset retirement obligations and environmental reserves The Batesville plant generates hazardous and non-hazardous wastes, the treatment, storage, transportation, and disposal of which are regulated by various governmental agencies. 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 $ 1,466 and $ 1,431 as of December 31, 2024 and 2023 , respectively. These amounts are recorded in other noncurrent liabilities in the accompanying consolidated balance sheets. The accretion expense for 2024 , 2023 , and 2022 was $ 35 , $ 35 , and $ 32 , respectively. The periodic review of the asset retirement obligation calculations resulted in an addition to the reserve of $0 in 2024 , 2023 , and 2022 . 65 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 14. Lease commitments and purchase obligations The Company leased railcars under multi-year arrangements primarily for delivery of feedstock and biodiesel within its biofuels segment. The lease fees were fixed with no option to purchase and no upfront fees or residual value guarantees. All railcar leases were direct, and no subleases existed. The Company determined lease existence and classification at inception when an agreement conveyed the right to control the identified property for a period of time in exchange for consideration. These leases expired December 31, 2024. As operating leases do not provide a readily determinable implicit interest rate, the Company used 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. Year ended December 31, 2024 2023 2022 Operating lease expense $ 534 $ 881 $ 862 Short-term lease expense $ 6 $ 8 $ 31 Cash paid for operating leases $ 534 $ 881 $ 862 Right of use assets obtained in exchange for lease obligations $ - $ - $ 707 Weighted average discount rate, per annum n/a 5.5 % 5.2 % On December 31, 2024 and 2023, a right of use asset was reported as other noncurrent assets of $ 0 and $ 389 , other current liabilities of $ 0 and $ 389 , and other noncurrent liabilities of $ 0 and $ 0 , respectively. 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 two non-cancelable obligations for enterprise resource planning and software maintenance with p ayment obligations as of December 31, 2024 presented as follows. Less than 1 year $ 869 1-3 years 418 4-5 years 137 Total $ 1,424 66 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 15. Income tax Provision The following table summarizes the income tax provision (benefit) for the years ended: 2024 2023 2022 Income before taxes - U.S. $ 16,295 $ 37,383 $ 13,738 Income tax provision: Federal Current - - 290 Deferred 477 - ( 1,998 ) State and other Current 19 1 60 Deferred 296 - 175 Total $ 792 $ 1 $ ( 1,473 ) Differences between the income tax provision (benefit) computed using the U.S. federal statutory income tax rate were as follows: 2024 2023 2022 Amount computed using the statutory rate of 21% for 2024, 2023, and 2022 21.0 % 21.0 % 21.0 % Agri-biodiesel production credit ( 7.3 ) ( 3.2 ) ( 8.6 ) Federal BTC benefit ( 58.2 ) ( 32.3 ) ( 76.2 ) State BTC benefit ( 8.2 ) ( 4.4 ) ( 7.0 ) Credit for increasing research activities ( 1.3 ) ( 0.5 ) ( 1.0 ) Dividends received deduction - ( 0.1 ) ( 1.6 ) Capital loss carryforward expirations 1.9 - - State income taxes, net 2.4 2.3 5.1 State rate change and other deferred adjustments 1.2 ( 1.0 ) 3.6 State loss carryforward expirations 2.6 - - Valuation allowance for deferred tax assets 50.1 18.2 53.8 Other 0.7 - 0.2 Income tax provision (benefit) 4.9 % 0.0 % ( 10.7 )% The income tax provision in 2024 was $ 792 or an effective tax rate of 4.9 % as compared to an income tax provision of $ 1 or an effective tax rate of 0.0 % in 2023 and an income tax benefit of $ 1,473 or an effective tax rate of ( 10.7 %) in 2022 . The Company’s effective tax rates for the years 2024 , 2023 , and 2022 reflect the positive effect of 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. Both incentives expired in December 2024. The Company’s 2022 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 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 2024 and 2023 state deferred tax provision reflects one -time benefits from state legislation enacted during these years which apply lower tax rates to future reversals of deferred tax liabilities. In 2024, the Company determined that its future reversing net deferred tax liabilities would not support full realization of its existing net deferred tax asset and recorded a net deferred tax liability of $ 773 . In 2023 and 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. 67 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) The significant components of deferred tax assets and liabilities were as follows as of December 31: 2024 2023 Deferred tax assets Compensation $ 50 $ 43 Inventory reserves 607 618 Self-insurance 78 65 Asset retirement obligation 331 316 Deferred revenue 1,631 3,693 Federal net operating loss carryforwards 21,099 15,240 State net operating loss carryforwards 3,359 2,765 Accrued expenses 767 742 Stock based compensation 129 24 Federal credit carryforwards 8,581 6,915 State credit carryforwards 676 676 Research & development costs 2,000 1,451 Derivative instruments 56 - Capital loss and charitable contribution carryforwards 1,703 1,975 Other 9 12 Subtotal deferred tax assets 41,076 34,535 Valuation Allowance ( 22,385 ) ( 14,216 ) Total deferred tax assets 18,691 20,319 Deferred tax liabilities Derivative instruments - ( 403 ) LIFO inventory ( 4,185 ) ( 3,957 ) Depreciation ( 14,377 ) ( 14,978 ) Prepaid expenses ( 902 ) ( 981 ) Total deferred tax liabilities ( 19,464 ) ( 20,319 ) Net deferred tax liabilities $ ( 773 ) $ - The Company’s federal net operating loss carryforwards at December 31, 2024 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, 2024 reflect losses generated in 2020 through 2024 and, if unused, will expire in years 2028 through 2044. Federal and state tax losses are primarily a function of the nontaxable nature of the BTC. Federal tax credit carryforwards at December 31, 2024 include the Small Agri-biodiesel Producer Credit and Credit for Increasing Research generated in years 2019 through 2024 and expiring in 2039 through 2044. State credit carryforwards comprise Arkansas In-house Research Credits generated in 2019 through 2020 and expiring in 2028 through 2029. Capital loss and charitable contribution carryforwards were generated in 2020 through 2024 and will expire in 2025 through 2029. A 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 taxing 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 taking into account tax planning strategies and the reversing net deferred tax liability from temporary differences as sources of income. As of December 31, 2024, the Company determined that its deferred tax liabilities would not be sufficient to support its deferred tax assets and recorded a valuation allowance of $ 22,385 , resulting in a net deferred tax liability of $ 773 . As of December 31, 2023 and 2022, the Company recorded valuation allowances of $ 14,216 and $ 7,392 , respectively, 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, 2024 , 2023 , or 2022 , 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 $ 0 , $ 0 , and ($ 95 ) for December 31, 2024, 2023 and 2022 , respectively. Liabilities for accrued interest and tax penalties on unrecognized tax benefits were $ 0 at December 31, 2024 and 2023 , 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 2021 forward. 68 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 16. Earnings per share In the years ended December 31, 2024, 2023 and 2022 , the Company used the treasury method in computing earnings per share as all shares with participating security holders had vested. There were 750,000 outstanding restricted stock units (“RSUs”) issued during the year ended December 31, 2024 per the employment agreement with Roeland Polet and the Company. These RSUs, and related dividends, vest in five equal installments on each anniversary of the award date, September 3, 2024. There were no other outstanding RSUs for the year ended December 31, 2024, 2023 and 2022 . Basic and diluted earnings per common share were computed as follows: Years ended December 31: 2024 2023 2022 Numerator: Net income $ 15,503 $ 37,382 $ 15,211 Denominator: Weighted average shares outstanding – basic 43,765,757 43,763,243 43,763,243 Effect of dilutive securities: Stock options - 1,440 246 Weighted average shares outstanding – diluted 43,765,757 43,764,683 43,763,489 Basic earnings per share $ 0.35 $ 0.85 $ 0.35 Diluted earnings per share $ 0.35 $ 0.85 $ 0.35 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, 2024 , 2023 , and 2022 because they were anti-dilutive in the period. The weighted number of options excluded on this basis was 44,000 , 40,060 , and 33,754 , respectively. 69 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 17. 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 (the “Incentive Plan”). The purpose of the plan is to: ● Encourage ownership in the Company by key personnel whose long-term employment with or engagement by the Company or its subsidiaries is considered essential to its continued progress and, thereby, encourage recipients to act in the Company’s shareholders’ interests and share in its success; ● Encourage such persons to remain in the Company’s employ or in the employ of its subsidiaries; and ● 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), common stock awards, and stock appreciation rights. Eligible participants in the plan include: (i) members of the Company’s board of directors and its executive officers; (ii) regular, active employees of the Company and any of its subsidiaries; and (iii) persons engaged by the Company or any of its subsidiaries to render services to the Company or its subsidiaries as an advisor or consultant. Awards under the Incentive Plan are limited to shares of the Company’s common stock, which may be shares acquired by the Company, including shares purchased in the open market, or authorized but un-issued shares. Awards are limited to 10 % of the issued and outstanding shares of the Company’s common stock in the aggregate. 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 common stock-based options, stock units, and stock awards based upon the grant-date fair value over the requisite service period. In 2024, the Company issued the following awards under the Incentive Plan: ● 750,000 restricted stock units (“RSUs”) were issued in September 2024 to Roeland Polet, the Company’s Chief Executive Officer, in connection with his employment agreement with the Company which vest in five equal installments on each anniversary of the award date, September 3, 2024. The RSUs were estimated at $ 4,519 and will be recognized as compensation expense over the vesting period. The compensation expense recorded in 2024 was $ 392 . The equivalent dividends earned on the RSUs are forfeitable and recorded as a reduction in retained earnings with an increase in additional paid in capital for the dividends paid and dividends payable for those declared. ● 5,000 shares of restricted stock were awarded in December 2024 to each of the eight members of the Board of Directors for a total of 40,000 shares. The awards vested immediately and had a compensation expense of $ 206 . ● A total of 20,000 stock options were issued in March 2024 and August 2024 with 10,000 stock options issued to each of two new members of the Board of Directors. The options awarded 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 2024 vested immediately and expire in 2029. 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 $ 6.64 per option in 2024. In 2023, the Company did not make any grants under the Incentive Plan. In January 2022, the Company granted 24,000 stock options to the former Chief Executive Officer, the Chief Operating Officer at that time. In August 2022, the Company granted a total of 20,000 stock options, respectively, to two new members of the Board of Directors. The January options awarded vested immediately and expire in January 2025 per the separation agreement with the officer. Options awarded in August 2022 vested immediately and expire in August 2027. The options 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. 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 $ 2.30 per option in 2022. 70 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) There were no stock options exercised in 2024, 2023 or 2022. The assumptions used in the determination of the fair value of the options granted are provided in the following table: 2024 2023 2022 Assumptions Options Options Options Expected volatility rate 49.06 % n/a 56.61 % Expected dividend yield 3.69 % n/a 3.34 % Risk-free interest rate 4.25 % n/a 3.20 % Expected forfeiture rate 0.00 % n/a 0.00 % Expected term in years 2.3 n/a 2.3 The volatility rate for the options granted in 2024 and 2022 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. The expected dividend yield is calculated using the Company’s expected dividend amount at the date of the option grant over the expected term divided by the fair market value of the Company’s common stock. Forfeitures for RSU grants are recognized as they occur. For the years ended December 31, 2024, 2023 and 2022 , total share-based compensation totaled $ 636 , $0, and $ 46 , respectively. In the years ended December 31, 2024, and 2022, this balance was recorded as an element of selling, general, and administrative expenses. For the year ended December 31, 2024, $ 277 was recorded as reduction to retained earnings for the forfeitable dividends of the RSUs. As of December 31, 2024 and 2023 , there was no unrecognized compensation expense related to stock options. As of December 31, 2024 and 2023, there was unrecognized compensation expense related to restricted stock units of $ 4,218 and $0, respectively. A summary of the activity of the Company’s stock options f or the period beginning January 1, 2022, and ending December 31, 2024 is presented below. Weighted Average Options Exercise Price Outstanding at January 1, 2022 24,000 $ 13.71 Granted 20,000 7.18 Exercised - - Canceled, forfeited, or expired - - Outstanding at December 31, 2022 44,000 10.74 Granted - - Exercised - - Canceled, forfeited, or expired ( 10,000 ) 16.21 Outstanding at December 31, 2023 34,000 9.13 Granted 20,000 6.64 Exercised - - Canceled, forfeited, or expired ( 10,000 ) 12.07 Outstanding at December 31, 2024 44,000 7.33 71 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) There wer e 3,506,324 stock units (option s or awards) 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, 2024 . Options Outstanding Options Exercisable Weighted Number Average Weighted Number Weighted Outstanding at Remaining Average Exercisable at Average Exercise December 31, Contractual Exercise December 31, Exercise Price 2024 Life Price 2024 Price $ 11.56 4,000 0.06 $ 11.56 4,000 $ 11.56 7.18 20,000 2.61 7.18 20,000 7.18 7.55 10,000 4.21 7.55 10,000 7.55 5.73 10,000 4.62 5.73 10,000 5.73 44,000 3.20 7.33 44,000 7.33 The aggregate intrinsic value of total options outstanding and exercisable was $ 0 at December 31, 2024 and 2023 . Intrinsic value is the amount by which the last trade price of the common stock closest to December 31, 2024 and 2023 exceeded the exercise price of the options granted. 18. Stockholders’ equity St. Albans Global Management, LLC (“St. Albans”), an entity affiliated with Mr. P. A. Novelly II, a member of the board, is entitled to demand that the Company register under the Securities Act of 1933, as amended, the resale of all shares of the Company’s common stock beneficially owned by it. If St. 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. Dividends payable at December 31, 2024 was $ 0.06 per common share per quarter or $ 10,699 . 72 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 19. Employee benefit plans Defined contribution savings plan The Company currently offers its employees a company 401 (k) matching savings plan, which covers substantially all employees. Under this plan, the Company matches the amount of eligible employees’ contributions, subject to specified limits, up to 6 % of earnings. Company contributions totaled $ 2,080 , $ 1,923 , and $ 1,719 for the years ended December 31, 2024, 2023 and 2022 , respectively. 20. Related party transactions The Company enters into transactions with companies affiliated with or controlled by a director or significant stockholder. Revenues, expenses, accounts receivable, prepaid amounts, and unpaid amounts related to these transactions are captured on the consolidated financial statements as related party line items. These related party transactions are summarized in the following table and further described below. Related party balance sheet accounts 2024 2023 Accounts receivable Biodiesel, petrodiesel, blends and other petroleum products $ - $ 1 Total accounts receivable $ - $ 1 Prepaid expenses Administrative services and other $ - $ 12 Total prepaid expenses $ - $ 12 Accounts payable Fuel purchases $ - $ - Travel and administrative services and other 139 42 Total accounts payable $ 139 $ 42 Related party income statement accounts Years ended December 31: 2024 2023 2022 Revenues Biodiesel, petrodiesel, blends and other petroleum products $ - $ 22 $ 459 Total revenues $ - $ 22 $ 459 Cost of goods sold Biodiesel, petrodiesel, blends, and other petroleum products $ 66 $ - $ 5,425 Natural gas purchases ( 315 ) - Total cost of goods sold $ 66 $ ( 315 ) $ 5,425 Distribution Distribution and related services $ 179 $ 176 $ 174 Total distribution $ 179 $ 176 $ 174 Selling, general and administrative expenses Commodity trading advisory fees $ 316 $ 308 $ 307 Travel and administrative services 196 188 184 Income tax, consulting services and other 120 120 120 Total selling, general, and administrative expenses $ 632 $ 616 $ 611 73 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) Biodiesel, petrodiesel, blends, and other petroleum products The Company enters into agreements to buy and sell biofuels (biodiesel, petrodiesel, biodiesel/petrodiesel blends, RINs, and biodiesel production byproducts) with an affiliate from time to time. Such agreements are priced at the then-current market price of the product as determined from bids from other customers and/or market pricing services. Cost of goods sold related to these sales includes variable costs and allocated fixed costs. The revenue amounts presented in the table above result when the Company sells biodiesel, petrodiesel, blends, and other petroleum products to a related party regardless of who the material was purchased from. Likewise, cost of goods sold amounts result when biodiesel, petrodiesel, blends, and other petroleum products are purchased from a related party regardless of who the material was sold to. Natural gas purchases The Company uses natural gas to generate steam for its manufacturing process and to support certain of its air and waste treatment utilities. Distribution and related services 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. Expenses related to this agreement include monthly lease charges, generally on a per-barrel basis, and associated heating, throughput, and other customary terminalling charges. Commodity trading advisory fees The Company entered into a commodity trading advisory agreement with an affiliate. Pursuant to the terms of this agreement, the affiliate provides advice to the Company concerning the purchase, sale, exchange, conversion, and/or hedging of commodities as requested from time to time. Travel and administrative services The Company reimburses an affiliate for legal, trading, travel and other administrative services incurred on its behalf. Such reimbursement is performed at cost with the affiliate realizing no profit on the transaction. Income tax and consulting services An affiliate provides professional services to the Company, primarily in the area of income tax preparation and consulting. The Company also receives certain finance and accounting expertise from this affiliate as requested. Expenses related to these services comprise an agreed quarterly fee plus reimbursement of expense, at cost and are reported as selling, general, and administrative expenses. 74 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) 21. Segment information The Company has two reportable segments organized along similar product lines – chemicals and biofuels. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 2. The chief operating decision maker (“CODM”) is Roeland Polet, the chief executive officer. The CODM reviews the significant components for each of our segments. The CODM evaluates the performance of each reportable segment and decides how to allocate resources based on segment gross profit (loss) which includes the revenue and expenses that are directly attributable to management of each segment. The CODM uses segment gross profit (loss) to assess the income generated by each reportable segment and to decide which reportable segment to reinvest profits or pay dividends. Segment gross profit (loss) is also used to analyze performance against the budget and the Company’s competitors. Chemicals The Company’s chemicals segment manufactures diversified chemical products that are sold to third party customers. This segment comprises two product groups: “custom manufacturing” (manufacturing chemicals for specific customers) and “performance chemicals” (multi-customer specialty chemicals). Included in this segment is warehouse lease rental revenue from a warehouse that was originally acquired for chemical storage. Biofuels The Company’s biofuels segment manufactures and markets biodiesel. Biodiesel revenues are generated through the sale of biodiesel to customers through the Company’s distribution network at the Batesville plant, through distribution facilities available at leased oil storage facilities, and through a network of remotely located tanks. Results of the biofuels business segment also reflect the sale of biodiesel blends with petrodiesel, petrodiesel with no biodiesel added, RINs, biodiesel production byproducts, and revenue and profits from Legacy Regional Transport. Summary of business by segment For the Year Ended December 31, 2024 Chemical Biofuel Total Revenue $ 80,007 $ 163,332 $ 243,339 Less: Cost of goods sold 56,627 164,299 220,926 Distribution 748 2,021 2,769 Segment gross profit (loss) $ 22,632 $ ( 2,988 ) $ 19,644 Reconciliation of Segment gross profit (loss) to Net Income before income taxes: Selling, general, and administrative expenses $ 9,279 Research and development expenses 3,993 Other income, net ( 9,923 ) Net income before income taxes $ 16,295 For the Year Ended December 31, 2023 Chemical Biofuel Total Revenue $ 79,333 $ 288,917 $ 368,250 Less: Cost of goods sold 48,650 275,346 323,996 Distribution 747 2,528 3,275 Segment gross profit $ 29,936 $ 11,043 $ 40,979 Reconciliation of Segment gross profit (loss) to Net Income before income taxes: Selling, general, and administrative expenses $ 9,213 Research and development expenses 4,398 Other income, net ( 10,015 ) Net income before income taxes $ 37,383 75 Table of Contents Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share amounts) For the Year Ended December 31, 2022 Chemical Biofuel Total Revenue $ 80,893 $ 315,121 $ 396,014 Less: Cost of goods sold 54,244 308,363 362,607 Distribution 1,004 3,410 4,414 Segment gross profit $ 25,645 $ 3,348 $ 28,993 Reconciliation of Segment gross profit (loss) to Net Income before income taxes: Selling, general, and administrative expenses $ 8,032 Research and development expenses 3,415 Other expense, net 3,808 Net income before income taxes $ 13,738 Depreciation is allocated to segment cost of goods sold based on plant usage. Total assets and capital expenditures of the Company have not been allocated to individual segments as large portions of these assets are shared to varying degrees by each segment, causing such an allocation to be of little value. 22. Legal proceedings The Company is not a party to, nor is any of its property subject to, any material pending legal proceedings, other than ordinary routine litigation incidental to its business. However, from time to time, the Company may be a party to, or a target of, lawsuits, claims, investigations, and proceedings, including product liability, personal injury, asbestos, patent and intellectual property, commercial, contract, environmental, antitrust, health and safety, and employment matters, which the Company expects to be handled and defended in the ordinary course of business. While the Company is unable to predict the outcome of any matters currently pending, the Company does not believe that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial condition, results of operations, or cash flows. However, adverse developments could negatively impact earnings or cash flows in future periods. During the year ended December 31, 2024, the Company resolved a prior-year legal dispute which resulted in a cash payment of $ 2,750 to FutureFuel which is reflected in Other (expense) income in the Consolidated Statements of Income and Comprehensive Income in the twelve months ended December 31, 2024. 23. Subsequent event The Company evaluated subsequent events that would require an adjustment to the Company’s consolidated financial statements or require disclosure in the notes to the consolidated financial statements through the date of issuance of the consolidated financial statements. Where applicable, the notes to these consolidated financial statements have been updated to discuss significant subsequent events which have occurred, except as disclosed below. A vendor's late delivery of essential wastewater management infrastructure caused the Company in January 2025 to halt its biodiesel production to manage wastewater processing within our permit limits. Consequently, the Company decided to move up its planned turnaround, initially scheduled for later in the year, and began this process in early January 2025. Subsequently, in late February, severe inclement weather impacted the Company's ability to complete the turnaround and restart the various production processes it operates in Batesville. Biodiesel production will likely not restart until the end of March 2025 at the earliest. On February 21, 2025, the Company, amended and restated its credit agreement as detailed in Note 12. 76 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.