FutureFuel Corp. 10-Q

Item 1. Financial Statements. FutureFuel Corp. Consolidated Balance Sheets (Dollars in thousands) (Unaudited) June 30, 2025 December 31, 2024 Assets Cash and cash equivalents $ 95,152 $ 109,541 Accounts receivable, inclusive of the blenders' tax credit of $ 0 and $ 6,683 , respectively, and net of allowances for expected credit losses of $ 44 and $ 29 , respectively 10,946 21,896 Inventory, net 9,620 20,643 Income tax receivable 50 53 Prepaid expenses 2,096 3,978 Prepaid expenses – related parties 12 - Other current assets 10,875 8,675 Total current assets 128,751 164,786 Property, plant and equipment, net 84,610 78,538 Other assets 4,851 4,367 Total noncurrent assets 89,461 82,905 Total Assets $ 218,212 $ 247,691 Liabilities and Stockholders’ Equity Accounts payable, inclusive of the blenders’ tax credit rebates due customers of $ 890 and $ 890 , respectively $ 9,449 $ 10,483 Accounts payable – related parties 43 139 Deferred revenue – current 1,136 904 Dividends payable 5,443 10,699 Accrued expenses and other current liabilities 14,868 11,082 Total current liabilities 30,939 33,307 Deferred revenue – noncurrent 5,996 6,324 Noncurrent deferred income taxes 801 773 Other noncurrent liabilities 2,252 1,466 Total noncurrent liabilities 9,049 8,563 Total liabilities 39,988 41,870 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 shares issued and outstanding as of June 30, 2025 and December 31, 2024 4 4 Additional paid in capital 205,898 205,434 Retained earnings (accumulated deficit) ( 27,678 ) 383 Total stockholders’ equity 178,224 205,821 Total Liabilities and Stockholders’ Equity $ 218,212 $ 247,691 The accompanying notes are an integral part of these consolidated financial statements. 1 FutureFuel Corp. Consolidated Statements of Operations and Net (Loss) Income (Dollars in thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Revenue $ 35,673 $ 72,409 $ 53,211 $ 130,690 Cost of goods sold 43,761 62,788 75,321 115,492 Cost of goods sold – related parties 1 12 3 27 Distribution 641 910 1,131 1,407 Distribution – related parties 37 42 86 100 Gross (loss) profit ( 8,767 ) 8,657 ( 23,330 ) 13,664 Selling, general, and administrative expenses Compensation expense 1,191 1,061 3,131 2,048 Other expense 868 1,076 1,651 1,839 Related party expense 169 153 330 306 Research and development expenses 933 916 2,324 1,822 Total operating expenses 3,161 3,206 7,436 6,015 (Loss) income from operations ( 11,928 ) 5,451 ( 30,766 ) 7,649 Interest and dividend income 1,068 1,521 2,305 4,321 Interest expense ( 26 ) ( 34 ) ( 62 ) ( 69 ) Other income 505 2,639 505 2,638 Other income, net 1,547 4,126 2,748 6,890 (Loss) income before taxes ( 10,381 ) 9,577 ( 28,018 ) 14,539 Income tax provision 35 6 41 638 Net (loss) income $ ( 10,416 ) $ 9,571 $ ( 28,059 ) $ 13,901 (Loss) earnings per common share Basic $ ( 0.24 ) $ 0.22 $ ( 0.64 ) $ 0.32 Diluted $ ( 0.24 ) $ 0.22 $ ( 0.64 ) $ 0.32 Weighted average shares outstanding Basic 43,803,243 43,763,243 43,803,243 43,763,243 Diluted 43,803,243 43,763,243 43,803,243 43,763,243 The accompanying notes are an integral part of these consolidated financial statements. 2 FutureFuel Corp. Consolidated Statements of Stockholders’ Equity (Dollars in thousands) (Unaudited) For the Six Months Ended June 30, 2025 Retained Additional Earnings Total Common Stock paid in (Accumulated Stockholders’ Shares Amount Capital Deficit) Equity Balance - December 31, 2024 43,803,243 $ 4 $ 205,434 $ 383 $ 205,821 Stock based compensation - - 227 ( 1 ) 226 Net loss - - - ( 17,643 ) ( 17,643 ) Balance - March 31, 2025 43,803,243 $ 4 $ 205,661 $ ( 17,261 ) $ 188,404 Stock based compensation - - 237 ( 1 ) 236 Net loss - - - ( 10,416 ) ( 10,416 ) Balance - June 30, 2025 43,803,243 $ 4 $ 205,898 $ ( 27,678 ) $ 178,224 For the Six Months Ended June 30, 2024 Additional Total Common Stock paid in Retained Stockholders’ Shares Amount Capital Earnings Equity Balance - December 31, 2023 43,763,243 $ 4 $ 282,489 $ 27,387 $ 309,880 Cash dividends declared, $ 2.50 per common share - - ( 77,691 ) ( 31,717 ) ( 109,408 ) Stock based compensation - - 22 - 22 Net income - - - 4,330 4,330 Balance - March 31, 2024 43,763,243 $ 4 $ 204,820 $ - $ 204,824 Net income - - - 9,571 9,571 Balance - June 30, 2024 43,763,243 $ 4 $ 204,820 $ 9,571 $ 214,395 The accompanying notes are an integral part of these consolidated financial statements. 3 FutureFuel Corp. Consolidated Statements of Cash Flows (Dollars in thousands) (Unaudited) Six Months Ended June 30, 2025 2024 Cash flows from operating activities Net (loss) income $ ( 28,059 ) $ 13,901 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation 4,739 4,760 Amortization of deferred financing costs 44 51 Provision for deferred income taxes 28 626 Change in fair value of derivative instruments ( 281 ) 1,696 Stock based compensation 462 22 Gain on disposal of property and equipment ( 34 ) - Noncash interest expense 18 18 Changes in operating assets and liabilities: Accounts receivable 10,950 ( 4,980 ) Accounts receivable – related parties - ( 7 ) Inventory 11,023 3,802 Income tax receivable 3 ( 20 ) Prepaid expenses 1,882 2,156 Prepaid expenses – related parties ( 12 ) - Other assets ( 2,941 ) 215 Accounts payable ( 2,367 ) ( 11,649 ) Accounts payable – related parties ( 96 ) - Accrued expenses and other current liabilities 3,786 6,710 Deferred revenue ( 96 ) ( 1,713 ) Other noncurrent liabilities 768 - Net cash (used in) provided by operating activities ( 183 ) 15,588 Cash flows from investing activities Collateralization of derivative instruments 859 ( 42 ) Proceeds from the sale of property and equipment 34 - Capital expenditures ( 9,478 ) ( 5,270 ) Net cash used in investing activities ( 8,585 ) ( 5,312 ) Cash flows from financing activities Payment of dividends ( 5,256 ) ( 114,660 ) Deferred financing costs ( 365 ) - Net cash used in financing activities ( 5,621 ) ( 114,660 ) Net change in cash and cash equivalents ( 14,389 ) ( 104,384 ) Cash and cash equivalents at beginning of period 109,541 219,444 Cash and cash equivalents at end of period $ 95,152 $ 115,060 Cash paid for income taxes $ 10 $ - Noncash investing and financing activities: Noncash capital expenditures $ 1,333 $ 1,182 The accompanying notes are an integral part of these consolidated financial statements. 4 Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share and per gallon amounts) (Unaudited) 1 ) SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by FutureFuel Corp. (“FutureFuel” or “the Company”) in accordance and consistent with the accounting policies stated in the Company's 2024 Annual Report on Form 10 -K, inclusive of the audited consolidated financial statements, and should be read in conjunction with these consolidated financial statements. Certain reclassifications were made to prior year amounts to conform to the 2025 presentation. In the opinion of FutureFuel, all normal recurring adjustments necessary for a fair presentation have been included in the unaudited consolidated financial statements. The unaudited consolidated financial statements have been prepared in compliance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with instructions to Form 10 -Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, the unaudited consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements and do include amounts that are based upon management estimates and judgments. Future actual results could differ from such current estimates. The unaudited consolidated financial statements include assets, liabilities, revenues, and expenses of FutureFuel and its direct and indirect wholly owned subsidiaries; namely, FutureFuel Chemical Company; FutureFuel Warehouse Company, L.L.C.; and Legacy Regional Transport, L.L.C. Intercompany transactions and balances have been eliminated in consolidation. Some of the Company's manufacturing equipment requires periodic, planned shutdowns of significant parts of our facility in order to perform necessary inspections, cleanings, and maintenance activities, referred to as turnarounds. The cost of turnarounds incurred for routine repairs and maintenance or unplanned outages at our facility are expensed as incurred. Recently Adopted Accounting Standards Accounting standards updates (“ASU”) No. 2023 - 09 Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures: The FASB issued this ASU 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 has adopted the new standard effective for the year ended December 31, 2025; however, the required disclosures are effective for our 2025 annual report. The adoption will have an immaterial impact on the Company's financial statements but additional disclosures will be included in the notes to the financial statements for the year ended December 31, 2025. Accounting Standards Issued Not Yet Adopted as of June 30, 2025 ASU No. 2024 - 03 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses: The FASB issued this ASU 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 currently does not expect the adoption to have a material impact on its financial statements and disclosures. 5 Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share and per gallon amounts) (Unaudited) 2 ) GOVERNMENT TAX CREDITS BIODIESEL BLENDERS' TAX CREDIT The biodiesel Blenders’ Tax Credit (“BTC”) 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 in the cost of goods sold as applicable sales were made. The BTC expired December 31, 2024. SMALL AGRI-BIODIESEL PRODUCER TAX CREDIT The Small Agri-Biodiesel Producer Tax Credit also expired December 31, 2024. This tax credit was available to producers with production capacity not in excess of 60 million gallons and provided a $0.10 per gallon income tax credit on the first 15 million gallons of agri-biodiesel sold. The Company was eligible for this credit and recognized the credit in the same accounting period as the benefit from the BTC. The benefit of this credit was recognized as a component of income tax provision. CLEAN FUEL PRODUCTION TAX CREDIT The Inflation Reduction Act of 2022 (“IRA”) created the clean fuel production credit (“CFPC”) in August 2022 for qualifying transportation fuel produced and sold in the years 2025 through 2027. The CFPC is a nonrefundable and transferable income tax credit structured on a sliding scale so that producers become eligible for larger credits as the greenhouse gas (“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 non-aviation fuel. For producers not meeting the prevailing wage and registered apprenticeship requirements, the maximum credit is $0.20 per non-aviation fuel gallon. The Company is a registered producer that meets the wage and apprenticeship requirements to receive the credit applicable to the level of GHG emissions for the fuel the Company produces. Due to the lack of a specific generally accepted accounting principle for the CFPC—a transferable, nonrefundable credit—the company has elected to follow the principles of International Accounting Standard 20 (IAS 20 ), "Accounting for Government Grants and Disclosure of Government Assistance." Accordingly, the credit has been recognized as a reduction in the cost of goods sold, net of estimated selling expenses, which management believes estimates fair value when generated. In the three and six months ended June 30, 2025, the CFPC was $ 2.5 million. See Note 13 Subsequent Events, regarding additional information related to the Small Agri-Biodiesel Tax Credit and the CFPC. 6 Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share and per gallon amounts) (Unaudited) 3 ) REVENUE RECOGNITION 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 is satisfied. Certain of the Company's custom chemical contracts within the chemical segment contain a material right as defined by ASC Topic 606, Revenue from Contracts with Customers, 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 $ 170 and $ 170 for the three months and $ 340 and $ 329 for the six months ended June 30, 2025 and 2024, respectively. Contract Assets and Liabilities: Contract assets consist of unbilled amounts typically resulting from revenue recognized through bill-and-hold arrangements. The contract assets at June 30, 2025 and December 31, 2024 consist of unbilled revenue from one customer and unbilled capital reimbursement from another customer and are recorded as accounts receivable in the consolidated balance sheets. Contract liabilities consist of advance payment arrangements 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 $ 125 and $ 0 for the three months and $ 125 and $ 0 for the six months ended June 30, 2025 and 2024, 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 was $ 80 and $ 797 for the three months and $ 110 and $ 1,603 for the six months ended June 30, 2025 and 2024 , respectively. These contract asset and liability balances are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. The following table provides the balance of receivables, contract assets, and contract liabilities from contracts with customers. Contract Assets and Liability Balances June 30, 2025 December 31, 2024 December 31, 2023 Trade receivables, included in accounts receivable* $ 10,724 $ 14,991 $ 15,897 Contract assets, included in accounts receivable 222 222 1,128 Contract liabilities, included in deferred revenue - short-term 929 697 3,656 Contract liabilities, included in deferred revenue - long-term 3,076 3,293 9,318 * Exclusive of the BTC of $ 0 , $ 6,683 , and $ 11,381 , respectively, and net of allowances for expected credit losses of $ 44 , $ 29 , and $ 55 , respectively, as of the dates noted. Transaction price allocated to the remaining performance obligations: At June 30, 2025 , approximately $ 4,005 of revenue is expected to be recognized from the remaining performance obligations. The Company expects to recognize this revenue ratably over the expected sales over the expected term of its long-term contracts ranging from two to six years. Approximately 23 % of this revenue is expected to be recognized over the next 12 months, and 77 % is expected to be recognized over the subsequent 54 months. These amounts are subject to change based upon changes in the estimated contract life and estimated quantities to be sold over the contract life. The Company applies the practical expedient in ASC 606 - 10 - 50 - 14 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 it has the right to invoice for services performed. 7 Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share and per gallon amounts) (Unaudited) The following tables provide revenue from customers disaggregated by the type of arrangement and by the timing of the recognized revenue. Disaggregation of revenue - contractual and non-contractual: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Contract revenue from customers with > one-year arrangements $ 3,129 $ 8,735 $ 5,098 $ 17,975 Contract revenue from customers with < one-year arrangements 32,488 63,618 48,002 112,604 Revenue from non-contractual arrangements 56 56 111 111 Total revenue $ 35,673 $ 72,409 $ 53,211 $ 130,690 Timing of revenue : Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Bill-and-hold revenue $ 9,845 $ 11,020 $ 14,435 $ 22,664 Non-bill-and-hold revenue 25,828 61,389 38,776 108,026 Total revenue $ 35,673 $ 72,409 $ 53,211 $ 130,690 As of June 30, 2025 and December 31, 2024 , $ 6,309 and $ 7,301 of bill-and-hold revenue had not shipped, respectively. 4 ) INVENTORY The carrying values of inventory were as follows as of: June 30, 2025 December 31, 2024 At average cost (approximates current cost) Finished goods $ 6,438 $ 10,809 Work in process 568 872 Raw materials 4,736 15,335 11,742 27,016 LIFO reserve ( 2,122 ) ( 6,373 ) Total inventory $ 9,620 $ 20,643 There was $ 2,934 liquidation in the six months ended June 30, 2025 primarily from biodiesel related inventories. A liquidation of $ 435 occurred in the twelve months ended December 31, 2024. 8 Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share and per gallon amounts) (Unaudited) 5 ) 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 statements of operations as a component of cost of goods sold. These instruments use inputs considered Level 1 holdings. Fair value accounting pronouncements 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 FutureFuel. Unobservable inputs are inputs that reflect FutureFuel’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. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. 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. 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 2025 or 2024 . The Company has elected the normal purchase and normal sales exception for certain feedstock purchase contracts and supply agreements. Total gains and losses on derivative instruments and changes in fair value of the derivative instruments are recorded in the consolidated statements of operations as a component of cost of goods sold and amounted to a net gain of $ 617 (including settlements of $ 77 ) and a net gain of $ 450 (including settlements of $ 169 ) for the three and six months ended June 30, 2025 , respectively, and a net gain of $ 1,414 (includin g settlements of $ 836 ) and a net loss of $ 2,050 (including settlements of $ 354 ) for the three and six months ended June 30, 2024 , respectively. The volumes and carrying values of FutureFuel’s derivative instruments were as follows at: Asset (Liability) June 30, 2025 December 31, 2024 Contract Quantity Fair Value Contract Quantity Fair Value Regulated fixed price future commitments, included in other current assets (in thousand barrels) 13 $ 46 100 $ ( 235 ) The margin account maintained with a broker to collateralize these derivative instruments carried an account balance of $ 18 and $ 877 at June 30, 2025 and December 31, 2024 , respectively, and was classified as other current assets in the consolidated balance sheets. The carrying values of the margin account and of the derivative instruments are included net in other current assets. 9 Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share and per gallon amounts) (Unaudited) 6 ) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following at: June 30, 2025 December 31, 2024 Refundable deposit $ 9,000 $ 6,500 Employment tax credit 1,351 1,856 Accrued employee liabilities 2,515 1,743 Accrued property, franchise, motor fuel and other taxes 1,761 881 Other 241 102 Total $ 14,868 $ 11,082 7 ) 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 with Regions Bank as administrative agent, collateral agent, and syndication agent (as amended, the "Credit Agreement"). 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 interest rate floats at the following margins over Secured Overnight Financing Rate ("SOFR") or base rate based upon our leverage ratio. Adjusted SOFR Rate Loans and Consolidated Leverage Ratio 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 Credit Agreement at June 30, 2025 or December 31, 2024 . 10 Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share and per gallon amounts) (Unaudited) 8 ) INCOME TAX PROVISION The following table summarizes the income tax provision. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Income tax provision $ 35 $ 6 $ 41 $ 638 Effective tax rate 0.3 % 0.1 % ( 0.1 )% 4.4 % The Company’s income tax provision for the three and six months ended June 30, 2025, is comprised of an increase in its net deferred tax liability plus immaterial state taxes and miscellaneous items. The provision for the three months ended June 30, 2024, consists of immaterial state taxes and miscellaneous items. The provision for the six months ended June 30, 2024 includes immaterial state taxes and, primarily, the initial establishment of the net deferred tax liability reflecting the Company’s determination that its future reversing net deferred tax liabilities would not support full realization of its existing deferred tax assets. 9 ) EARNINGS PER SHARE In the three and six months ended June 30, 2025 and 2024 , FutureFuel used the treasury method in computing earnings per share. Basic and diluted earnings per common share were computed as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Numerator: Net (loss) income $ ( 10,416 ) $ 9,571 $ ( 28,059 ) $ 13,901 Denominator: Weighted average shares outstanding – basic 43,803,243 43,763,243 43,803,243 43,763,243 Effect of dilutive securities: Stock options and other awards - - - - Weighted average shares outstanding – diluted 43,803,243 43,763,243 43,803,243 43,763,243 Basic (loss) earnings per share $ ( 0.24 ) $ 0.22 $ ( 0.64 ) $ 0.32 Diluted (loss) earnings per share $ ( 0.24 ) $ 0.22 $ ( 0.64 ) $ 0.32 For the three and six months ended June 30, 2025, 50,000 and 45,000 options to purchase FutureFuel’s common stock were excluded, respectively, in the computation of diluted earnings per share as all options were anti-dilutive. In the three and six months ended June 30, 2024, 22,000 and 44,000 options, respectively, were excluded as all were anti-dilutive. In addition, 750,000 restricted stock units (“RSUs”) were issued during the year ended December 31, 2024. These RSUs, and related dividends, vest in five equal installments on each anniversary of the award date, September 3, 2024. All of the prorated RSUs were excluded in the computation of diluted earnings per share for the three and six months ended June 30, 2025, as all were anti-dilutive. There were no RSUs in the comparative periods. 10 ) RELATED PARTY TRANSACTIONS FutureFuel enters into transactions with companies affiliated with or controlled by a director and significant shareholder. Expenses, prepaid amounts, and unpaid amounts related to these transactions are captured in the accompanying consolidated financial statements as related party line items. Related party cost of goods sold and distribution are the result of net sales and purchases of blended biodiesel with these related parties along with the associated expense from storage and terminalling services provided by these related parties. 11 Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share and per gallon amounts) (Unaudited) 11 ) SEGMENT INFORMATION FutureFuel has two reportable segments organized along similar product groups – chemicals and biofuels. The chief operating decision maker ("CODM”) is Roeland Polet, our 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 FutureFuel’s chemical segment manufactures diversified chemical products that are sold externally to third party customers. This segment is composed of two components: “custom manufacturing” (manufacturing chemicals for specific customers) and “performance chemicals” (multi-customer specialty chemicals). Biofuels FutureFuel’s biofuel segment primarily manufactures and markets biodiesel. Biodiesel revenues are generated through the sale of biodiesel to customers through FutureFuel’s distribution network at its Batesville Plant, through distribution facilities available at leased oil storage facilities, and through a network of remotely located tanks. Biofuel revenues also include the sale of biodiesel blends with petrodiesel; petrodiesel with no biodiesel added; internally generated, separated Renewable Identification Numbers (“RINs”); biodiesel production byproducts; and revenue and profits from Legacy Regional Transport. Biodiesel selling prices and profitability can at times fluctuate based on the timing of unsold, internally generated RINs. FutureFuel does not allocate production costs to internally generated RINs, and from time to time, can enter into sales of biodiesel on a “RINs-free” basis, resulting in FutureFuel maintaining possession of the applicable RINs from the sale. The benefit derived from the eventual sale of the RINs is not reflected in results of operations until such time as the RINs sale has been completed, which may lead to variability in reported operating results. As of June 30, 2025 , FutureFuel held 0.5 million RINs with a fair market value of $ 604 . Comparatively, at June 30, 2024 , FutureFuel held 2.1 million RINs with a fair market value of $ 1,055 and at December 31, 2024 , 3.1 million RINs were held with a fair market value of $ 1,831 . The fair value of RINs is considered a Level 1 input and has no cost. Summary of business by segment Three months ended June 30, 2025 Six months ended June 30, 2025 Chemical Biofuel Total Chemical Biofuel Total Revenue $ 16,619 $ 19,054 $ 35,673 $ 25,984 $ 27,227 $ 53,211 Less: Cost of goods sold 14,658 29,104 43,762 29,512 45,812 75,324 Distribution 294 384 678 534 683 1,217 Segment gross profit (loss) $ 1,667 $ ( 10,434 ) $ ( 8,767 ) $ ( 4,062 ) $ ( 19,268 ) $ ( 23,330 ) Reconciliation of Segment gross profit (loss) to Net loss before income taxes: Selling, general, and administrative expenses $ 2,228 $ 5,112 Research and development expenses 933 2,324 Other income, net ( 1,547 ) ( 2,748 ) Net loss before income taxes $ ( 10,381 ) $ ( 28,018 ) 12 Notes to Consolidated Financial Statements of FutureFuel Corp. (Dollars in thousands, except per share and per gallon amounts) (Unaudited) Three months ended June 30, 2024 Six months ended June 30, 2024 Chemical Biofuel Total Chemical Biofuel Total Revenue $ 19,236 $ 53,173 $ 72,409 $ 37,295 $ 93,395 $ 130,690 Less: Cost of goods sold 14,357 48,443 62,800 28,192 87,327 115,519 Distribution 202 750 952 405 1,102 1,507 Segment gross profit $ 4,677 $ 3,980 $ 8,657 $ 8,698 $ 4,966 $ 13,664 Reconciliation of Segment gross profit to Net income before income taxes: Selling, general, and administrative expenses $ 2,290 $ 4,193 Research and development expenses 916 1,822 Other income, net ( 4,126 ) ( 6,890 ) Net income before income taxes $ 9,577 $ 14,539 Depreciation is allocated to segment cost of goods sold based on plant usage. The total assets and capital expenditures of FutureFuel 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. 12 ) LEGAL MATTERS From time to time, FutureFuel and its subsidiaries are parties to, or targets of, lawsuits, claims, investigations, regulatory matters, and proceedings, which are being handled and defended in the ordinary course of business. While FutureFuel is unable to predict the outcomes of these matters, it does not believe, based upon currently available facts, 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. 13 ) SUBSEQUENT EVENTS 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. On July 4, 2025, the Budget Reconciliation Act of 2025 was signed into law which made significant changes to federal tax law. The legislation did not affect the Company’s income tax balances as of June 30, 2025. The most significant provisions affecting the Company include modification to the CFPC, including an extension of the expiration date from December 31, 2027 to December 31, 2029, and rules on foreign based feedstocks as well as affirmation on the transferability of the credits. In addition, the tax law reinstated the extension of the Small Agri-Biodiesel Producers Tax Credit. This tax credit is $0.20 per gallon on the first 15 million gallons produced for facilities with up to 60 million gallons of capacity eligible for fuel sold after July 1, 2025 and before December 31, 2026. The Budget Reconciliation Act includes other changes which the Company is evaluating. The Company continues to experience extremely high feedstock prices resulting in negative profit margins for biodiesel. As a result, on July 9, 2025, the Company completed a reduction in force of 75 employees following the idling of biodiesel manufacturing given these unfavorable market conditions. The Company retained employees with expertise to facilitate the restart of biodiesel production upon the return of more favorable market conditions. The aggregate cost of separation agreements related to the reduction in force are estimated to be approximately $ 386 . 13