FutureFuel Corp.

Consolidated Balance Sheets

FutureFuel Corp.

Consolidated Statements of Operations and Net Income

(Dollars in thousands, except per share amounts)

Consolidated Statements of** Stockholders’ Equity**

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share and per gallon amounts)

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's2024 Annual Report on Form10-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 the2025 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 Form10-Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, the unaudited consolidated financial statements donot 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 (Topic740): Improvements to Income Tax Disclosures: The FASB issued this ASU in* December 2023which 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 our2025 annual report. The adoption will have an immaterial impact on the Company's financial statements and disclosures.

Accounting Standards IssuedNot Yet Adopted as of March**31,* 2025***

ASUNo.* 2024-03 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses:* The FASB issued this ASU in* November 2024which 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 doesnot* expect the adoption to have a material impact on its financial statements and disclosures.

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BIODIESEL BLENDERS' TAX CREDIT, SMALL AGRI-BIODIESEL PRODUCER TAX CREDIT, and CLEAN FUEL PRODUCTION TAX CREDIT

The biodiesel Blenders’ Tax Credit (“BTC”) provided aone dollar per gallon tax credit to the blender of biomass-based diesel with at least0.1% petroleum-based diesel fuel. The Company recorded this credit as a reduction to cost of goods sold as applicable sales were made. The BTC expired* December 31, 2024.*

Small agri-biodiesel producers with production capacitynot in excess of60 million gallons were eligible for an additional income tax credit of*$0.10* per gallon on thefirst 15 million gallons of agri-biodiesel sold (the “Small Agri-biodiesel Producer Tax Credit”). 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 (benefit) provision. This credit expired* December 31, 2024.*

The Inflation Reduction Act created the clean fuel production credit (“CFPC”) in* August 2022for qualifying transportation fuel produced and sold in the years2025* through2027.

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 nonaviation fuel. For producersnot meeting the prevailing wage and registered apprenticeship requirements, the maximum credit is*$0.20* per nonaviation 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. However, there is a lack of clarity from the U.S. Treasury Department with respect to the CFPC with final rules yet to be issued. In addition, there has been a delay of the Renewable Fuel Obligation for2026. For thethree months ended* March 31, 2025,the Company had only sold inventory that was produced in2024* which wasnot eligible for the CFPC; therefore,no CFPC credits were recognized for thethree months ended* March 31, 2025.*As eligible inventory is produced and sold, the Company will account for the CFPC as a reduction to cost of goods sold when product is sold.

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 through, among other things, an available employee retention tax credit. The Consolidated Appropriations Act, effective January 1, 2021,*broadened the eligibility of the credit. FutureFuel has applied for this credit and will recognize the benefit of the credit once reasonable assurance can be made as to the receipt of the credit.

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

Certain of the Company's custom chemical contracts within the chemical segment contain a material right as defined by ASC Topic606, 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 with30-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 Topic606. 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 oftwelve months. Lease revenue recognized under this agreement was $170 for thethree months ended* March 31, 2025.*

Contract Assets and Liabilities:

Contract assets consist of unbilled amounts typically resulting from revenue recognized through bill-and-hold arrangements. The contract assets at* March 31, 2025* and* December 31, 2024* consist of unbilled revenue fromone 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 $0 for both thethree months ended* March**31,* 2025 and2024. 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 $30 and $806 for thethree months ended* March 31, 2025and2024*, 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.

Exclusive of the BTC of $0, $6,683, and $11,381, respectively, and net of allowances for expected credit losses of $27, $29, and $55, respectively, as of the dates noted.*

Transaction price allocated to the remaining performance obligations:

At* March 31, 2025*, approximately $3,959 of revenue is expected to be recognized from the remaining performance obligations. FutureFuel expects to recognize this revenue ratably over the expected sales over the expected term of its long-term contracts ranging fromtwo tosix years. Approximately 21% of this revenue is expected to be recognized over the next 12 months, and 79% is expected to be recognized over the subsequent 57 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 ASC606-10-50-14 and excludes the value of unsatisfied performance obligations for (i) contracts with an original expected length ofone 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.

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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:

Timing of revenue**:**

As of* March 31, 2025* and* December 31, 2024*, $5,628 and $7,301 of bill-and-hold revenue hadnot shipped, respectively.

The carrying values of inventory were as follows as of:

There wasno liquidation inthethree months ended* March 31, 2025* A liquidation of $435 occurred in thetwelve months ended* December 31, 2024.*

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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 and comprehensive income as a component of cost of goods sold. These instruments use inputs considered Level1 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 intothree levels. Level1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that arenot active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level3 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* mayenter into exchange-traded commodity futures and options contracts. The Company accounts for these derivative instruments in accordance with ASC815*-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 hadno derivative instruments that qualified under these rules as designated accounting hedges in2025 or2024. 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 loss of $166 (including settlement gains of $93) for thethree months ended* March 31, 2025*, and a net loss of $3,464 (including settlements of $1,190) for thethree months ended* March 31, 2024*.

The volumes and carrying values of FutureFuel’s derivative instruments were as follows at:

The margin account maintained with a broker to collateralize these derivative instruments carried an account balance of $987 and $877 at* March 31, 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.

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Accrued expenses and other current liabilities consisted of the following at:

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, 2015and amended on March 30, 2020 (as amended, the “Prior Credit Agreement”) and further amended on February 21, 2025with the lender party thereto, Regions Bank as administrative agent, collateral agent, and syndication agent. The Credit Agreement consists of afive-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.

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 wereno borrowings under the Credit Agreement at* March 31, 2025* or* December 31, 2024*.

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The following table summarizes the income tax provision.

The Company’s income tax provision for thethree months ended* March 31,2025, is comprised of immaterial state taxes and miscellaneous items. The provision for thethree months ended March 31, 2024,*was comprised primarily of an increase in the valuation allowance against net deferred assets, plus immaterial state taxes and miscellaneous items.

In thethree months ended* March 31, 2025and2024*, FutureFuel used the treasury method in computing earnings per share.

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

For thethree months ended* March 31, 2025and2024,* 40,000 and 44,000 options to purchase FutureFuel’s common stock were excluded, respectively, in the computation of diluted earnings per share as all options were anti-dilutive.

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.

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FutureFuel hastwo reportable segments organized along similar product groups – chemicals and biofuels. 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

FutureFuel’s chemical segment manufactures diversified chemical products that are sold externally tothird party customers. This segment is composed oftwo 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 withno 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 doesnot 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 isnot 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* March 31, 2025*, FutureFuel held 2.3 million RINs with a fair market value of $2,077 andno cost. Comparatively, at* March 31, 2024*, FutureFuel held 2.0 million RINs with a fair market value of $1,624 andno cost and at* December 31, 2024*,3.1 million RINs were held with a fair market value of $1,831 andno cost. These fair values are considered Level1 inputs.

Summary of business by segment

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Depreciation is allocated to segment cost of goods sold based on plant usage. The total assets and capital expenditures of FutureFuel havenot 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.

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 doesnot 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.

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.