ff20230630_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________ to ___________
	Commission file number: 0-52577

(Exact Name of Registrant as Specified in Its Charter)

Delaware		20-3340900
(State or Other Jurisdiction of		(IRS Employer Identification No.)
Incorporation or Organization)

8235 Forsyth Blvd., Suite 400, St Louis, Missouri		63105
(Address of Principal Executive Offices)		(Zip Code)

	(314) 854-8352
	(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	FF	NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐	Accelerated filer	☑
Non-accelerated filer ☐	Smaller reporting company	☐
	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of August 9, 2023: 43,763,243

PART I FINANCIAL INFORMATION

Item 1. Financial Statements.

FutureFuel Corp.

Consolidated Balance Sheets

(Dollars in thousands)

	June 30, 2023		December 31, 2022
Assets
Cash and cash equivalents	$	166,690	$	175,640
Accounts receivable, inclusive of the blenders’ tax credit of $9,807 and $8,970, and net of allowances for bad debt of $80 and $48, respectively		28,567		26,198
Accounts receivable – related parties		7		6
Inventory		67,362		26,761
Income tax receivable		1,940		1,959
Prepaid expenses		1,988		3,694
Prepaid expenses – related parties		12		12
Marketable securities		-		37,126
Other current assets		7,707		2,380
Total current assets		274,273		273,776
Property, plant and equipment, net		75,689		76,941
Other assets		4,497		5,252
Total noncurrent assets		80,186		82,193
Total Assets	$	354,459	$	355,969
Liabilities and Stockholders’ Equity
Accounts payable, inclusive of the blenders’ tax credit rebates due customers of $890 and $890, respectively	$	22,313	$	28,546
Accounts payable – related parties		7,823		7,799
Deferred revenue – current		3,602		3,772
Dividends payable		5,252		10,503
Accrued expenses and other current liabilities		5,798		5,477
Accrued expenses and other current liabilities – related parties		-		1
Total current liabilities		44,788		56,098
Deferred revenue – non-current		13,212		15,079
Other noncurrent liabilities		2,236		1,792
Total noncurrent liabilities		15,448		16,871
Total liabilities		60,236		72,969
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding		-		-
Common stock, $0.0001 par value, 75,000,000 shares authorized, 43,763,243 and 43,763,243 issued and outstanding as of June 30, 2023 and December 31, 2022		4		4
Accumulated other comprehensive loss		-		(1	)
Additional paid in capital		282,489		282,489
Retained earnings		11,730		508
Total stockholders’ equity		294,223		283,000
Total Liabilities and Stockholders’ Equity	$	354,459	$	355,969

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

FutureFuel Corp.

Consolidated Statements of Operations and Comprehensive Income

(Dollars in thousands, except per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenue	$	85,308		$	117,640		$	159,469		$	159,714
Revenue – related parties		-			156			20			343
Cost of goods sold		92,626			113,798			144,562			161,017
Cost of goods sold – related parties		18			1,956			28			3,216
Distribution		1,216			1,024			1,774			1,908
Distribution – related parties		40			41			94			94
Gross (loss) profit		(8,592	)		977			13,031			(6,178	)
Selling, general, and administrative expenses
Compensation expense		954			701			2,092			1,357
Other expense		874			886			1,883			1,849
Related party expense		156			150			309			304
Research and development expenses		1,007			755			2,079			1,434
Total operating expenses		2,991			2,492			6,363			4,944
(Loss) income from operations		(11,583	)		(1,515	)		6,668			(11,122	)
Interest and dividend income		1,732			747			4,068			1,411
Interest expense		(34	)		(33	)		(67	)		(65	)
Gain (loss) on marketable securities		42			(3,239	)		575			(7,366	)
Other expense		(1	)		(2	)		-			(2	)
Other income (expense)		1,739			(2,527	)		4,576			(6,022	)
(Loss) income before taxes		(9,844	)		(4,042	)		11,244			(17,144	)
Income tax provision (benefit)		15			(938	)		22			(1,642	)
Net (loss) income	$	(9,859	)	$	(3,104	)	$	11,222		$	(15,502	)

(Loss) earnings per common share
Basic	$	(0.23	)	$	(0.07	)	$	0.26		$	(0.35	)
Diluted	$	(0.23	)	$	(0.07	)	$	0.26		$	(0.35	)
Weighted average shares outstanding
Basic		43,763,243			43,763,243			43,763,243			43,763,243
Diluted		43,763,243			43,763,243			43,764,890			43,763,243

Comprehensive (loss) income
Net (loss) income	$	(9,859	)	$	(3,104	)	$	11,222		$	(15,502	)
Other comprehensive (loss) income from unrealized net (losses) gains on available-for-sale debt securities		(20	)		(86	)		2			(148	)
Income tax effect		4			18			(1	)		31
Total other comprehensive (loss) income, net of tax		(16	)		(68	)		1			(117	)
Comprehensive (loss) income	$	(9,875	)	$	(3,172	)	$	11,223		$	(15,619	)

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

FutureFuel Corp.

Consolidated Statements of Stockholders’ Equity

(Dollars in thousands)

(Unaudited)

	For the Six Months Ended June 30, 2023
					Accumulated
					Other			Additional					Total
	Common Stock				Comprehensive			paid-in		Retained			Stockholders’
	Shares		Amount		(Loss) Income			Capital		Earnings			Equity
Balance - December 31, 2022		43,763,243	$	4	$	(1	)	$	282,489	$	508		$	283,000
Other comprehensive gain		-		-		17			-		-			17
Net income		-		-		-			-		21,081			21,081
Balance - March 31, 2023		43,763,243	$	4	$	16		$	282,489	$	21,589		$	304,098
Other comprehensive loss		-		-		(16	)		-		-			(16	)
Net loss		-		-		-			-		(9,859	)		(9,859	)
Balance - June 30, 2023		43,763,243	$	4	$	-		$	282,489	$	11,730		$	294,223

	For the Six Months Ended June 30, 2022
					Accumulated
					Other			Additional					Total
	Common Stock				Comprehensive			paid-in		Retained			Stockholders’
	Shares		Amount		Income (Loss)			Capital		Earnings			Equity
Balance - December 31, 2021		43,763,243	$	4	$	178		$	282,443	$	6,303		$	288,928
Cash dividends declared, $0.24 per common share		-		-		-			-		(10,503	)		(10,503	)
Other comprehensive loss		-		-		(49	)		-		-			(49	)
Net loss		-		-		-			-		(12,398	)		(12,398	)
Balance - March 31, 2022		43,763,243	$	4	$	129		$	282,443	$	(16,598	)	$	265,978
Other comprehensive loss		-		-		(68	)		-		-			(68	)
Net loss		-		-		-			-		(3,104	)		(3,104	)
Balance - June 30, 2022		43,763,243	$	4	$	61		$	282,443	$	(19,702	)	$	262,806

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

FutureFuel Corp.

Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

	Six Months Ended June 30,
	2023			2022
Cash flows from operating activities
Net income (loss)	$	11,222		$	(15,502	)
Adjustments to reconcile net income to net cash from operating activities:
Depreciation		5,155			5,276
Amortization of deferred financing costs		49			48
Benefit for deferred income taxes		-			(1,672	)
Change in fair value of equity securities		(3,117	)		7,339
Change in fair value of derivative instruments		(3,259	)		(2,388	)
Loss on the sale of investments		2,543			27
Loss on disposal of property and equipment		8			50
Noncash interest expense		17			17
Changes in operating assets and liabilities:
Accounts receivable		(2,369	)		(8,172	)
Accounts receivable – related parties		(1	)		(20	)
Inventory		(40,601	)		(4,664	)
Income tax receivable		19			(20	)
Prepaid expenses		1,706			1,773
Prepaid expenses - related parties		-			(8	)
Other assets		1,806			125
Accounts payable		(6,269	)		19,171
Accounts payable – related parties		24			326
Accrued expenses and other current liabilities		321			(659	)
Accrued expenses and other current liabilities – related parties		(1	)		(1	)
Deferred revenue		(2,037	)		(2,769	)
Other noncurrent liabilities		427			(187	)
Net cash used in operating activities		(34,357	)		(1,910	)
Cash flows from investing activities
Collateralization of derivative instruments		(3,154	)		383
Proceeds from the sale of marketable securities		37,701			250
Proceeds from the sale of property and equipment		-			56
Capital expenditures		(3,875	)		(1,895	)
Net cash provided by (used in) investing activities		30,672			(1,206	)
Cash flows from financing activities
Payment of dividends		(5,251	)		(5,251	)
Deferred financing costs		(14	)		-
Net cash used in financing activities		(5,265	)		(5,251	)
Net change in cash and cash equivalents		(8,950	)		(8,367	)
Cash and cash equivalents at beginning of period		175,640			137,521
Cash and cash equivalents at end of period	$	166,690		$	129,154

Cash paid for income taxes	$	20		$	276
Noncash investing and financing activities:
Noncash capital expenditures	$	244		$	95

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

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share 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 2022 Annual Report on Form 10-K, inclusive of the audited consolidated financial statements and should be read in conjunction with these consolidated financial statements.

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; FFC Grain, L.L.C.; FutureFuel Warehouse Company, L.L.C.; and Legacy Regional Transport, L.L.C. Intercompany transactions and balances have been eliminated in consolidation.

Recent Accounting Standards

No new accounting standards have been adopted recently.

Proposed Accounting Standards

In March 2023, the Financial Accounting Standards Board (the "FASB") issued Proposed Accounting Standards Update (ASU) No. 2023-ED100 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, 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 Proposed ASU, if adopted, would address the investor requests for more transparency of income tax information and would apply to all entities that are subject to income taxes. The Company is in the process of evaluating this proposed accounting standard.

2)	GOVERNMENT TAX CREDITS

BIODIESEL BLENDERS’ TAX CREDIT AND SMALL AGRI-BIODIESEL PRODUCER TAX CREDIT

The biodiesel Blenders’ Tax Credit (“BTC”) provides a one dollar per gallon tax credit to the blender of biomass-based diesel with at least 0.1% petroleum-based diesel fuel. The BTC will expire December 31, 2024 based on current law. The Company records this credit as a reduction to cost of goods sold.

Within the law of the BTC, small agri-biodiesel producers with production capacity not in excess of 60 million gallons are eligible for an additional 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 as part of the tax provision.

CARES ACT – EMPLOYEE RETENTION TAX CREDIT

The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), was enacted on March 27, 2020, to encourage eligible employers to retain employees on their payroll 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 retention of the credit.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share 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 are 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.

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, 2023 and December 31, 2022 consist of unbilled revenue from one 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 for a performance obligation of chemical segment plant expansions were $32 and $0 for the three months and $32 and $0 for the six months ended June 30, 2023 and 2022, 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 $739 and $961 for the three months and $1,958 and $3,173 for the six months ended June 30, 2023 and 2022, 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 balances of receivables, contract assets, and contract liabilities from contracts with customers.

Contract Assets and Liability Balances	June 30, 2023		December 31, 2022
Trade receivables, included in accounts receivable*	$	17,670	$	16,459
Contract assets, included in accounts receivable	$	1,097	$	775
Contract liabilities, included in deferred revenue - short-term	$	3,395	$	3,565
Contract liabilities, included in deferred revenue - long-term	$	9,849	$	11,605

*Exclusive of the BTC of $9,807 and $8,970, respectively, and net of allowances for bad debt of $80 and $48, respectively, as of the dates noted.

Transaction price allocated to the remaining performance obligations:

At June 30, 2023, approximately $13,244 of revenue is expected to be recognized from remaining performance obligations. FutureFuel expects to recognize this revenue ratably over expected sales over the expected term of its long-term contracts which range from three to five years. Approximately 26% of this revenue is expected to be recognized over the next 12 months, and 74% is expected to be recognized over the subsequent 48 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.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share 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,
	2023		2022		2023		2022
Contract revenue from customers with > 1-year arrangements	$	9,562	$	6,148	$	20,027	$	16,290
Contract revenue from customers with < 1-year arrangements		75,690		111,592		139,351		143,656
Revenue from non-contractual arrangements		56		56		111		111
Total revenue	$	85,308	$	117,796	$	159,489	$	160,057

Timing of revenue:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Bill-and-hold revenue	$	10,765	$	7,971	$	21,355	$	17,247
Non-bill-and-hold revenue		74,543		109,825		138,134		142,810
Total revenue	$	85,308	$	117,796	$	159,489	$	160,057

As of June 30, 2023 and December 31, 2022, $4,302 and $4,473 of bill-and-hold revenue had not shipped, respectively.

4)	INVENTORY

The carrying values of inventory were as follows as of:

	June 30, 2023			December 31, 2022
At average cost (approximates current cost)
Finished goods	$	30,632		$	11,719
Work in process		1,574			879
Raw materials and supplies		51,395			33,897
		83,600			46,495
LIFO reserve		(16,238	)		(19,734	)
Total inventory	$	67,362		$	26,761

No liquidation of last in first out ("LIFO") layers occurred in the six months ended June 30, 2023 and 2022.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share 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 statement of 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 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 2023 or 2022. The Company has elected the normal purchase and normal sales exception for certain feedstock purchase contracts and supply agreements.

Realized 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 gain of $4,389 and $12,695 (realized gains of $6,032 and $9,437) for the three and six months ended June 30, 2023, respectively, and a loss of $17,476 and $26,605 (realized losses of $18,327 and $28,992) for the three and six months ended June 30, 2022, respectively.

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

	Asset (Liability)
	June 30, 2023				December 31, 2022
	Contract Quantity		Fair Value		Contract Quantity		Fair Value
Regulated fixed price future commitments, included in other current assets (in thousand barrels)		476	$	3,117		305	$	(142	)

The margin account maintained with a broker to collateralize these derivative instruments carried an account balance of ($1,066) and $2,088 at June 30, 2023 and December 31, 2022, 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.

6)	MARKETABLE SECURITIES

During the three months ended June 30, 2023, FutureFuel exited its position in marketable equity and trust preferred (debt) securities. The sale of these securities was recorded as a component of net income with gains of $42 and $575 in the three and six months ended June 30, 2023, respectively.

At December 31, 2022, FutureFuel had investments in certain marketable equity and trust preferred (debt) securities which had a fair market value of $37,126. These investments were classified as current assets in the consolidated balance sheet. The trust preferred securities held at December 31, 2022 were designated as being available-for-sale. Accordingly, these securities were recorded at fair value of $3,675.

In accordance with ASC 321, the change in the fair value of marketable equity securities (preferred and other equity instruments) for the three months ended June 30, 2022 was reported as a component of net income as a loss of $3,239. The change in the fair value of marketable equity securities (preferred and other equity instruments) for the six months ended June 30, 2022 was a loss of $7,339.

The aggregate fair value of debt securities with unrealized losses totaled $2,627 at December 31, 2022. Sales of debt securities were $0 in the six months ended June 30, 2022.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

7)	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 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.

The following tables provide information by level for assets and liabilities that are measured at fair value, on a recurring basis, at June 30, 2023 and December 31, 2022.

	Asset (Liability)
			Fair Value Measurements Using
	Fair Value at		Inputs Considered as:
Description	June 30, 2023		Level 1		Level 2		Level 3
Derivative instruments	$	3,117	$	3,117	$	-	$	-

	Asset (Liability)
				Fair Value Measurements Using
	Fair Value at			Inputs Considered as:
Description	December 31, 2022			Level 1			Level 2		Level 3
Derivative instruments	$	(142	)	$	(142	)	$	-	$	-
Preferred stock and other equity instruments	$	33,450		$	33,450		$	-	$	-
Trust preferred stock	$	3,676		$	3,676		$	-	$	-

8)	ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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

	June 30, 2023		December 31, 2022
Accrued employee liabilities	$	3,871	$	3,287
Accrued property, franchise, motor fuel and other taxes		1,281		1,165
Lease liability, current		498		630
Other		148		395
Total	$	5,798	$	5,477

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

9)	BORROWINGS

On March 30, 2020, the Company, with FutureFuel Chemical Company as the borrower and certain of the Company’s other subsidiaries as guarantors, amended and restated its credit agreement (the “Credit Agreement”) originally entered into on April 16, 2015 (as amended, the “Prior Credit Agreement”) with the lenders party, Regions Bank as administrative agent and collateral agent, and PNC Bank, N.A., as syndication agent. The Credit Agreement consists of a five-year revolving credit facility in a dollar amount of up to $100,000, which includes a sublimit of $30,000 for letters of credit and $15,000 for swingline loans (collectively, the “Credit Facility”). The Credit Facility expires on March 30, 2025.

On March 1, 2023, the Company entered into a First Amendment to the Credit Agreement (the “First Amendment”). The First Amendment primarily amends the Credit Agreement to transition the Credit Facility from LIBOR to the Secured Overnight Financing Rate (“SOFR”) and other conforming changes, in each case as more specifically set forth in the First Amendment. The First Amendment does not modify the aggregate amount, or expiration date, of the Credit Facility. We do not expect the transition from LIBOR to have a material impact on the Credit Facility. Pursuant to the First Amendment, the interest rate floats at the following margins over SOFR or base rate based upon our leverage ratio.

Consolidated Leverage Ratio

Adjusted SOFR Rate Loans 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%

SEC Form 10-Q filed by FutureFuel Corp.