FF 10-K & 10-Q changes, risk factors and insider trading

We are subject to various U.S. and global economic conditions, including our sourcing of certain raw materials for our chemicals segment internationally. Accordingly, adverse changes in these conditions, including supply chain disruptions and price inflation for those raw materials, which can adversely impact our business. The impacts include, but are not limited to:

Historically, the most significant tax incentive program in the biomass-based diesel industry hashad been the BTC. Under the BTC, the first market participant to blend pure biomass-based diesel with petroleum-based diesel fuel receivesreceived a one dollar per gallon refundable tax credit. From time to time, the BTC has expired and been retroactively reinstated. Most recently, the Inflation Reduction Act, adopted in August 2022, extended the BTC through December 31, 2024, but provided for its replacement by the CFPC on January 1, 2025. The CFPC is 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 prevailing wage and registered apprenticeship requirements, the maximum credit is $1.00 per gallon of biodiesel. However, the maximum credit would require zero GHG emissions which is unrealistic for almost every biodiesel producer, including the Company. Guidance surrounding this credit haswas yetproposed toon beFebruary finalized3, despite2026, theand effectiveis dateawaiting ofpublic the CFPC.comment. Given our relative position to other biodiesel producers and the importance of such incentives to our operations, a reduction or elimination of these governmental incentives could have a material adverse effect on us and on the biodiesel industry in general. Specifically, if biodiesel prices decrease as a result of the expiration or significant reduction in these governmental incentives and biodiesel feedstock costs do not decrease proportionately, we could realize a negative gross margin on biodiesel. As a result, we could be forced to cease production of biodiesel, which would have an adverse effect on our financial condition.

With respect to our biofuels platform, the United States Congress could repeal, curtail or otherwise change the RFS2 program in a manner adverse to us. Similarly, the USEPA could curtail or otherwise change its administration of the RFS2 program in a manner adverse to us, including by not increasing or even decreasing the required renewable fuel volumes, by waiving compliance with the required renewable fuel volumes or otherwise. In addition, while Congress specified RFS2 renewable fuel volume requirements through 2022 (subject to adjustment in the rulemaking process), beginning in 2023 required volumes of renewable fuel will beare largely at the discretion of the USEPA (in coordination with the Secretary of Energy and Secretary of Agriculture). We cannot predict what changes, if any, will be instituted or the impact of any changes on our business, although adverse changes could seriously harm our revenues, earnings and financial condition.

We have historically derived a significant portion of our revenues from sales of our biofuels in the State of California primarily as a result of California’s Low Carbon Fuel Standard (“LCFS”); adverse changes in this law or reductions in the value of LCFS credits would harm our revenues and profits.

The biodiesel and specialty chemical industries are highly competitive. There is competition within these industries and also with other industries in supplying the energy, fuel, and chemical needs of industry and individual customers. We compete with other firms in the sale or purchase of various goods or services in many national and international markets. We compete with large national and multi-national companies that have longer operating histories, greater financial, technical, and other resources, and greater name recognition than we do. In addition, we compete with several smaller companies capable of competing effectively on a regional or local basis. Our competitors may be able to respond more quickly to new or emerging technologies and services and changes in customer requirements. As a result of competition, we may lose market share or be unable to maintain or increase prices for our products and/or services or to acquire additional business opportunities, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Although we will employ all methods of competition that arewe lawful anddeem appropriate for such purposes, no assurances can be made that they will be successful. A key component of our competitive position, particularly given the commodity-based nature of many of our products, will be our ability to manage expenses successfully, which requires continuous management focus on reducing unit costs and improving efficiency. No assurances can be given that we will be able to successfully manage such expenses.

The total current U.S. production capacity for biodiesel iswas in excess of the current RFS2 mandate for 20232024 and 2024.2025. Excess production capacity over the annual mandates could result in a decline in biodiesel prices and profitability, negatively impacting our ability to maintain the profitability of our biofuels segment and recover capital expenditures in this business segment.

Disruptions could also occur due to internal factors such as computer or equipment malfunction (accidental or intentional), operator error, or process failures; or external factors such as computer or equipment malfunction at third-party service providers, natural disasters, pandemic illness, changes in laws or regulations, war or other outbreak of hostilities or terrorism, cyber-incidents, or breakdown or degradation of transportation infrastructure used for delivery of supplies to the Company or for delivery of products to customers. We have recently suffered increasingly frequent, unscheduled and extended service utility downtime as a result of supplier delays and quality issues beyond our control.control which may be exacerbated by cyber-incidents affecting those third-party providers. Furthermore, many of our manufacturing control systems rely on legacy hardware and software that may no longer be supported by original equipment manufacturers. This creates risks related to the availability of replacement parts, specialized repair expertise, and the inability to apply modern security patches. Because many of these systems operate on single-processor architectures without redundancy, any maintenance or repair requires total system downtime, which may be difficult to schedule without impacting production commitments. No assurances can be provided that any future disruptions due to these, or other, circumstances will not have a material effect on operations. Such disruptions could result in an unplanned event that could be significant in scale and could negatively impact operations, neighbors, and the environment, and could have a negative impact on our results of operations.

Our chemical business is concentrated with fourthree large customers covering multiple products representing greater than 84%81% of our chemicals segment product sales, or 28%50% of total revenues. Although this business is contracted in longer-term production agreements, the loss of any of these strategic customers could have a material adverse effect on our chemicals business.

Sales to these biodiesel customers totaled approximately 25%38% of total revenue (or $59,867,000$36,178) in 2024.2025. No biofuel customer in 2025 was greater than 10% of total revenue. Sales in 20232024 to our two largest customers represented 35%25% of total revenues (or $127,763,000$59,867). Sales to our two largest biodiesel customers totaled 27%35% of total revenues in 20222023 (or $107,898,000$127,763). We do not have a contractcontracts with these customerscustomers, but rather sell based on monthly or short-term, multi-month purchase orders placed with us by the customers at prices based upon then-prevailing market rates.

We holdhave entered into a $75$35 million revolving credit facility with a commercial bank. This credit facility expires in February 2030. Although as of the date of this report we have no outstanding borrowings under the existing facility, if and when we do borrow, the restrictions governing this type of indebtedness (such as limitations on the ratio of our total debt to EBITDA limitations) could reduce our ability to incur additional indebtedness, engage in certain transactions, or capitalize on acquisition or other business opportunities.

The Company has information and information processing assets, including intellectual property, trade secrets, and other sensitive, business critical information as well as on-premises and cloud-based business applications critical to conducting business. In addition, our chemical manufacturing facilities are highly automated using a mix of legacy and modern computercomputerized systems.Industrial Control Systems (“ICS”). These legacy systems, while functional for production, often lack modern security features and may be more susceptible to vulnerabilities that cannot be mitigated through standard IT security protocols. Cyber-incidents affecting the Company, its supply chainchain, utility providers or customers could compromise confidential, business critical information, cause a sustained disruption in the Company’s operations, harm the Company's reputation, or lead to a loss of control of physical processes that could endanger the environment if the Company, its suppliers or customers do not effectively prevent, detect and recover from these or other security breaches. The Company, like many companies today, is the target of industrial espionage, including cyber-attacks. TheWhile the Company hascontinuously determinedmonitors thatfor unauthorized activity, these cyber-attacksincreasingly have resulted,sophisticated and couldautomated threats may result in the future, in unauthorized parties gaining access to certain confidential business information.information Whenor seeking to gain lateral access to manufacturing control networks. In instances where potential unauthorized access is discovered,identified, the Company reportsinitiates suchits situationsincident response plan to investigate, mitigate, and, where appropriate, report to governmental authorities for investigation, as appropriate, and takes measures to mitigate any potential impact.authorities.

Although management does not believe that the Company has experienced any material losses to date related to these cyber security incidents, there can be no assurance that such losses will not be suffered in the future. The Company seeks to actively manage the risks within its control that could lead to business disruptions and cyber security incidents through a comprehensive cyber security program and structured management of change processes that isare continuously reviewed (through internal and third-party auditing), maintained, and upgraded. As these threats continue to evolve, particularly around cybersecurity, the Company may be required to expend significant resources to enhance its control environment, processes, practices, and other protective measures. Despite these efforts, such events could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows.

The market price of our common stock is highly volatile, and our shares are thinly traded. Our stock price may change dramatically as the result of: (i) announcements of new products or innovations by us or our competitors; (ii) uncertainty regarding the viability of any of our product initiatives; (iii) significant customer contracts; (iv) significant litigation; (v) uncertainty with respect to changing laws and regulations that impact our business and our ability to take advantage of tax credits such as the BTC and CFPC; or (vi) unscheduled and extended downtime at our facility; or (vii) events that would be expected to affect our business, financial condition, results of operations, and future prospects.

While biodiesel is the principal component of the biofuels segment, we also generate revenue from the sale of petrodiesel both in blends with our biodiesel and, from time to time, with no biodiesel added. PetrodieselWe have both truck and biodieselrail blends are available to customers at our leased storage facility in North Little Rock, Arkansas andaccess at our Batesville plant.facility. In addition, we deliver blended product to a small group of customers within our region.region, Weand alsofrom time to time, sell D4 and D6 RINs from time to time.RINs. At December 31, 20242025, we held 3.10.4 million RINs with a market value of $1,831$379 and at December 31, 2023,2024, we held 4.33.1 million RINs in inventory with a market value of $6,567.$1,831.

The majority of our expenses are cost of goods sold. Cost of goods sold includes raw material costs as well as both fixed and variable conversion costs, such conversion costs being those expenses that are directly or indirectly related to the operation of our plant. Significant conversion costs include labor, benefits, energy, supplies, depreciation, and maintenance and repair. In addition to raw material and conversion costs, cost of goods sold includes environmental reserves and costs related to idle capacity. Finally, cost of goods sold includes hedging gains and losses recognized by us related to our biofuels segment. Cost of goods sold is allocated to the chemicalsChemicals and biofuels businessBiofuels segments based on equipment and resource usage for most conversion costs and based on revenue for most other costs.

Operating expenses increased $2,164$293 in 20232025 compared to 2022.2024. This increase was primarily the result of increased executive compensation expense.

The Company’smost effective tax rates for the years 2023 and 2022 reflect the positivenotable effect of certain tax credits and incentives,incentives to the most2024 significanteffective tax rate was from the BTC, which expired December 31, 2024. The BTC was also recorded as a reduction in cost of whichgoods aresold thefollowing BTCIAS and the Small Agri-biodiesel Producer Tax Credit.20. Based on technical guidance from the Internal Revenue Service, the Company excludesexcluded the portion of the BTC not used to satisfy excise tax liabilities from income.its Seetaxable Noteincome, 3 to our consolidated financial statements for a discussion ofimpacting the pretaxeffective earningstax impact of the BTC.rate.

The Company’s effective tax rate for 20232025 and 20222024 includes an expense of $6,821$11,558 or 18.2%23.5% and $7,392$8,169 or 53.8%,50.1%, respectively, from the recording of a valuation allowance against its deferred tax assets. The Company evaluates its deferred tax assets and records a valuation allowance to reduce these assets to the amount that is more likely than not to be realized. As of December 31, 2023,2025, based on all available and allowable evidence, the Company determined that its deferred tax assets of $53,400 are more likely than not realizable only to the extent of $19,484, resulting in a net deferred tax liability of $910. As of December 31, 2024, based on all available and allowable evidence, the Company determined that its deferred tax liabilitiesassets andwere recordedmore likely than not realizable only to the extent of $18,691, resulting valuationin allowance.a net deferred tax liability of $773.

BiofuelBiofuels Segment

The biodiesel segment was supported by the United States Environmental Protection Agency (“EPA”) Renewable Fuel Standard (“RFS”). We generate 1.5 Renewable Identification Numbers (“RINs”) for each gallon of biodiesel sold in the United States with a classification of a D4 or D6 RIN. RINs are used to monitor the level of renewable fuel traded in a given year in accordance with RFS within the EPA moderated transaction system. We do not assign cost of goods sold to the generation of RINs as the physical fuel generates the full cost. As of MarchJune 31,30, 2026, we held 0.20.1 million D4 RINs with a fair market value of $298.$210. Comparatively, as of MarchJune 31,30, 2025, we held 2.30.5 million D4 RINs with a fair market value of $2,077.$604.

On February 4, 2026, the Treasury Department and the Internal Revenue Service issued proposed regulations providing expanded guidance on the clean fuel production credit (“CFPC”) integrating changes from the Budget Reconciliation Act of 2025, which made modifications to the CFPC. The proposed rule is expected to help level the competitive environment for biodiesel by: (i) reducing the tax credit for sustainable aviation fuel from $1.75 per gallon to $1.00 per gallon effective January 1, 2026, and (ii) requiring that all feedstock be sourced from North America, as required for biomass-based diesel. On June 12, 2026, the Department of Energy released the updated 45ZCF-GREET model to help biofuel producers calculate carbon intensity for the CFPC.

The following table reconciles net income (loss) income,, the most directly comparable GAAP performance financial measure, with adjusted EBITDA.

Consolidated revenue in the three months ended MarchJune 31,30, 2026, increased 82%121% or $14,414$43,053 compared to the three months ended MarchJune 31,30, 2025, primarily driven by two factors:

Gross profit (loss) in the three and six months ended MarchJune 31,30, 2026, increasedimproved $670$27,416 and $26,746, respectively, as compared to the same periodperiods of 2025. This variance was primarily driven by twogrowth factors:in the chemical segment, energy regulatory clarity in the biofuel segment, and energy market performance in both segments.

Operating expenses increased $710$611 in the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The net increase was primarily from winteradditional stormexpenditures related to Winter Storm Fern freezeof $260 and $281 for expenses incurred from a fire which was safely and quickly contained. Operating expenses increased $1,321 in the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The net increase was primarily from extraordinary maintenance and repair expenses of $1,357,$1,898, partially offset by reduced compensation and research and development expenses.

Other income, net decreased $932$1,359 in the three months ended MarchJune 31,30, 2026, as compared to the same period of 2025, primarily from the reduction in interest income. In the current three-month period interest income was $209 as compared to $1,068 in the prior period. Other income, net decreased $2,291 in the six months ended June 30, 2026, as compared to the same period of 2025 primarily from the reduction ofin interest income. In the current three-monthsix-month period interest income was $298$507 as compared to $1,237$2,305 in the prior period.

The Company’s income tax provision for the three and six months ended MarchJune 31,30, 2026,2026 isand 2025, was comprised primarily of an increase in the valuation allowance against net deferred assets, plus immaterial state taxes and miscellaneous items. The income tax benefit for the three months ended March 31, 2025, was comprised of immaterial state taxes and miscellaneous items.

Chemical revenue in the three months ended MarchJune 31,30, 2026, increased 110%56% or $10,267$9,230 compared to the three months ended MarchJune 31,30, 2025. Revenue from custom chemicals for the three months ended MarchJune 31,30, 2026 totaled $13,872,$18,519, a net increase of $5,463$4,269 from the same period in 2025, primarily resulting from higher sales volumes of products sold in the energy market of $4,405.$4,103. Performance chemicals revenue was $5,760,$7,330, an increase of $4,804$4,961 from the three months ended MarchJune 31,30, 2025 from sales of a new energy market product brought online in the fourth quarter of 2025.

Gross lossprofit for the chemical segment was $2,519$4,937 and $2,418 for the three and six months ended MarchJune 31,30, 2026, respectively, an improvement of $3,496$3,823 and $7,319, respectively, compared to the same periodperiods of 2025. The improvement was primarily driven by newincreased productsales revenuevolumes sold intoin the energy market asincluding notedthe above.new product revenue brought online in the fourth quarter of 2025.

Biofuels revenue in the three and six months ended MarchJune 31,30, 2026, increased by$ $4,14733,823 and $37,970, respectively, compared to the prior-year period.periods. The upward trend was primarily attributed to enhanced clarity surrounding the CFPC and record-high final renewable volume obligation (“RVO”) levels. However, these gains were partially offset by lower sales volumes, which were adversely impacted by severe winter weatherlevels, and geopoliticalto instabilitya lesser degree, increased equipment utilization following an extended turnaround in the fuelprior marketsyear, duesix-month to the war with Iran.period.

A significant portion of our biodiesel sold was to onetwo major customercustomers in both the three and six months ended MarchJune 31,30, 2026, as compared to nothree and two major customers in the three and six months ended MarchJune 31,30, 2025.2025, respectively. No assurances can be given that we will continue to sell to any such major refiner, or, if we do sell, the volume we will sell or the profit margin we will realize. We do not believe that the loss of these customers would have a material adverse effect on our biofuels segment or on us as a whole because: (i) we believe that we could readily sell our biodiesel to other customers on equivalent terms as potential demand from other customers for biodiesel exceeds our production capacity; (ii) our sales to these customers are not under fixed terms and the customers have no fixed obligation to purchase any minimum quantities except as stipulated by short-term purchase orders; and (iii) the prices we receive from these customers are based upon then-market rates, as would be the case with sales of this commodity to other customers.

Biofuel gross lossprofit wasincreased $13,339$23,594 and $19,428 in the three and six months ended MarchJune 31,30, 2026, representing an increase of $4,166respectively, compared to the same periodperiods in 2025. ThisThese increasedincreases losswere primarily due to regulatory clarity which improved the segment on both volume and margin inclusive of clarified guidelines on the CFPC. During the quarter, this increase was primarilyalso partially driven by unfavorablefavorable shifts in derivative instruments activity. DuringIn the quarter,three months ended June 30, 2026, we recognized a realized loss of $9,141$1,383 and an unrealized lossgain of $2,488,$3,223 compared to a realized gain of $93$77 and an unrealized lossgain of $259$540 in the prior-year period. While the $9,141$1,383 in derivative settlements significantly impacted the current quarter’speriod’s gross loss,profit, these costs are generally intended to be recovered once the underlying physical product is sold. This timing difference often creates a temporary disconnect between realized derivative losses and the eventual revenue recognition of the physical inventory. During the six-month period ended June 30, 2026, gross profit increases were partially offset by unfavorable shifts in derivative activity. In the six months ended June 30, 2026, we recognized a realized loss of $10,523 and an unrealized gain of $735, compared to a realized gain of $170 and an unrealized gain of $281 in the prior year period.

Revenue from bill-and-hold transactions in which a performance obligation exists is recognized when the total performance obligation has been met and control of the product has transferred. Bill-and-hold transactions for the three and six months ended MarchJune 31,30, 2026 and 2025 were related to custom chemicals customers whereby revenue was recognized in accordance with contractual agreements based upon product being produced and ready for use by the customer. These sales were subject to written monthly purchase orders. The product 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 customers are similar to other custom chemicals customers. Revenues under bill-and-hold arrangements were $10,378$13,027 and $23,405 for the three and six months ended MarchJune 31,30, 2026. As of MarchJune 31,30, 2026 and December 31, 2025, $5,486$4,357 and $5,106 of bill-and-hold revenue had not shipped, respectively.

Our net cash from operating activities, investing activities, and financing activities for the threesix months ended MarchJune 31,30, 2026 and 2025 is set forth in the following table.

Cash used in operating activities was $19,996$1,227 in the threesix months ended MarchJune 31,30, 2026, as compared to $5,395$183 in the same period of 2025. This increase in cash used was primarily attributable to the change in inventory of $26,609 and the change in accounts receivable, including accounts receivable - related parties resulting in a cash outflow of $17,891.$21,643. Also contributing to the current period's increase in cash used was the change in deferred revenue of $3,666, the change in accrued expenses and other current liabilities of $2,842.$2,429, and the change in other assets of $1,698. Partially offsetting these cash outflows was the change in net income of $23,072, the change in accounts payable, including accounts payable - related parties, resulting in a cash inflow of $4,432,$16,564, and the change in inventoryother noncurrent liabilities of $3,359.$14,970.

Cash used in investing activities was $6,321$12,652 in the threesix months ended MarchJune 31,30, 2026, as compared to $4,082$8,585 in the threesix months ended MarchJune 31,30, 2025. This $2,239$4,067 increase in cash used was primarily due to an increase in capital expenditure of $1,384.$3,900.

Cash used in financing activities was $2,632$3,071 and $2,993$5,621 in the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, primarily for payments of dividends on our common stock.

Regular cash dividends of $0.06 per share were paid on our common stock in each quarter of 2025. The declaration of these regular quarterly cash dividends was made in the three months ended December 31, 2024. During the three months ended DecemberMarch 31, 2025,2026, a declaration for cash dividends of $0.06$0.01 per share was made for the firstsecond quarter of 2026. The cash dividenddividends in the three months ended MarchJune 31,30, 2026 and 2025, amounted to $2,628$439 and $2,632,$2,628, respectively. During the three months ended MarchJune 31,30, 2026, a cash dividend of $0.01 per share was declared for the secondthird quarter of 2026.

We engage in two types of transactions to mitigate the impacts of changes in prices for both commodity sales and purchases. First, for our biofuel sales, we enter into the purchase and sale of futures contracts and options on futures contracts of energy commodities. This activity was captured in our consolidated balance sheets at MarchJune 31,30, 2026, and December 31, 2025 as derivative instruments recorded in accordance with ASC 815. Second, for our biofuel feedstocks, we execute purchase contracts and supply agreements with certain vendors that meet the normal purchase and normal sales exception of ASC 815. These transactions are recognized in earnings and were not recorded in our consolidated balance sheets at MarchJune 31,30, 2026, or December 31, 2025 to the extent that we are able to apply the normal purchase and normal sales exception of ASC 815. The purchase of biofuels feedstock generally involves two risk components: basis and price. Basis covers any refining or processing required as well as transportation. Price covers the purchases of the actual agricultural commodity. Both basis and price fluctuate over time. A supply agreement with a vendor constitutes a hedge when we have committed to a certain volume of feedstock in a future period and have fixed the basis for that volume.