10-K 1 v370378_10k.htm FORM 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013

¨	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: 001-33530

BIOFUEL ENERGY CORP.

(Exact name of registrant as specified in its charter)

Delaware		20-5952523
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1600 Broadway, Suite 1740		80202
Denver, Colorado
(Address of principal executive offices)		(Zip Code)

(303) 640-6500

(Registrant’s telephone number, including area code)

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

Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share		Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company x
		(Do not check if a smaller
		reporting company)

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

The aggregate market value of voting and non-voting stock held by non-affiliates of the Registrant as of June 30, 2013 was $9,082,000.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Class		As of March 14, 2014
Common Stock, par value $0.01 per share		5,442,104 shares, net of 40,481 shares held in treasury
Class B Common Stock, par value $0.01 per share		795,479 shares

DOCUMENTS INCORPORATED BY REFERENCE

The Registrant’s definitive Proxy Statement for its 2014 Annual Meeting of Stockholders is incorporated by reference into Part III of this Form 10-K.

FORWARD LOOKING STATEMENTS

Certain information included in this report or other materials filed or to be filed by BioFuel Energy Corp. (the “Company”, “we”, “our”, or “us”) with the Securities and Exchange Commission (“SEC”), as well as information included in oral statements or other written statements made or to be made by the Company, contain or incorporate by reference certain statements (other than statements of historical or present fact) that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

All statements other than statements of historical fact are “forward-looking statements”, including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management’s beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. Words such as “may”, “will”, “should”, “could”, “would”, “predicts”, “potential”, “continue”, “expects”, “anticipates”, “future”, “intends”, “plans”, “believes”, “estimates” and similar expressions, as well as statements in the future tense, identify forward-looking statements.

These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements to differ materially from any future results, performance or achievements described in or implied by such statements. Actual results may differ materially from expected results described in our forward-looking statements, including with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy and completeness of the publicly available information with respect to the factors upon which our business strategy is based or the success of our business

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the times by which, our performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and management’s belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to, those factors discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K.

Should one or more of the risks or uncertainties described above or elsewhere in this Form 10-K occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. We specifically disclaim all responsibility to publicly update any information contained in a forward-looking statement or any forward-looking statement in its entirety and therefore disclaim any resulting liability for potentially related damages.

All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.

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PART I

ITEM 1. BUSINESS

Overview

BioFuel Energy Corp. (“we” or “the Company”) was incorporated as a Delaware corporation on April 11, 2006 to invest solely in BioFuel Energy, LLC (the “LLC”), a limited liability company organized on January 25, 2006 to build and operate ethanol production facilities in the Midwestern United States. The Company’s headquarters are located in Denver, Colorado. We are a shell company under federal securities laws and a holding company with no operations of our own. We are the sole managing member of the LLC, which is itself a holding company and indirectly owned all of our former operating assets. As the sole managing member of the LLC, the Company operates and controls all of the business and affairs of the LLC and its subsidiaries. The Company operated two dry-mill ethanol production facilities located in Wood River, Nebraska and Fairmont, Minnesota from June 2008 through November 2013, which produced and sold ethanol and its related co-products, primarily distillers grain and corn oil.

The Company’s ethanol plants were owned and operated by the operating subsidiaries of the LLC (the “Operating Subsidiaries”). Those Operating Subsidiaries were party to a Credit Agreement (the “Senior Debt Facility”) with a group of lenders, for which First National Bank of Omaha acted as Administrative Agent and Collateral Agent, and substantially all of the assets of the Operating Subsidiaries were pledged as collateral under the Senior Debt Facility. Neither the Company nor the LLC was a party, either as borrower or guarantor, under the Senior Debt Facility, and none of their respective assets, other than the LLC interests in the Operating Subsidiaries themselves, were pledged as collateral under the Senior Debt Facility.

In the third quarter of 2012, due to our limited and declining liquidity, our Board of Directors determined that, in order to preserve cash at the LLC, the Operating Subsidiaries would not make the regularly-scheduled payments of principal and interest that were due under the outstanding Senior Debt Facility on September 28, 2012. As a result, the Operating Subsidiaries received a Notice of Default from the Administrative Agent on behalf of the lenders under the Senior Debt Facility. On April 11, 2013, the Operating Subsidiaries entered into a Deed in Lieu of Foreclosure Agreement and Joint Escrow Instructions (the “Deed in Lieu Agreement”), pursuant to which, among other things, the Operating Subsidiaries would transfer ownership of their respective ethanol plants, including the underlying real property, personal property and all material contracts used to operate the plants, to certain designees of the Administrative Agent and the lenders (“Newco”), in full satisfaction of all outstanding obligations under the Senior Debt Facility and in lieu of the Administrative Agent and the lenders exercising their rights and remedies under the Senior Debt Facility.

On November 22, 2013, the Administrative Agent delivered written notice to the Escrow Agent directing the Escrow Agent to consummate the transfers under the Deed in Lieu Agreement, and the Company’s ethanol plants and all related assets were transferred to Newco, which simultaneously sold them to Green Plains Renewable Energy, Inc. (“Green Plains”). On November 25, 2013, the Company and certain of its subsidiaries entered into an Undertaking and Release Agreement dated as of November 22, 2013 (the “Release Agreement”) with the Administrative Agent and Collateral Agent under the Senior Debt Facility. Under the terms of the Release Agreement, the lenders paid to the Company an aggregate amount of $3,330,000 in full satisfaction of any obligations of the lenders to the Company under the Deed in Lieu Agreement.

At December 31, 2013, the Company retained approximately $10.8 million in net cash on its balance sheet, net of certain accrued obligations, including severance obligations to certain corporate employees under the Company’s Change of Control Plan. As of December 31, 2013, the Company also retained federal net operating loss (“NOL”) carryforwards in the amount of $178.2 million which have been fully reserved against. The Company has not yet determined whether, or how, it might utilize its NOL’s or whether, or how, it might reinvest its remaining cash in another enterprise or return such cash to its shareholders in a dissolution and liquidation or other transaction. In the meantime, the Company is providing engineering and/or business consulting services to a variety of next generation biofuel and bio-chemical companies with a view towards assisting them in overcoming the challenges of scaling their technologies from demonstration to commercial scale. These services are expected to provide a negligible amount of revenue in 2014.

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Employees

As of March 1, 2014, we retained 7 full-time employees at our corporate offices in Denver, Colorado. None of these employees are subject to a collective bargaining agreement.

Organizational structure

Company history

BioFuel Energy Corp. was incorporated as a Delaware corporation in April 2006. BioFuel Energy Corp. has not engaged in any business or other activities except in connection with its formation and its holding of interests in BioFuel Energy, LLC. Between January 2005 and its incorporation, various predecessor companies were engaged in the financing, development and construction of our two ethanol plants, which were disposed of in November 2013.

The certificate of incorporation of BioFuel Energy Corp.:

authorizes two classes of common stock, common stock and Class B common stock, and also authorizes preferred stock. The Class B common stock, shares of which are held only by the holders of membership interests in the LLC (other than BioFuel Energy Corp.), provides its holders with no economic rights but entitles each holder to one vote with respect to all matters voted upon by holders of our common stock for each share of Class B common stock held; and

entitles the holders of membership interests in the LLC (other than BioFuel Energy Corp.) to exchange their Class B common stock along with their LLC membership units for shares of common stock on a one-for-one basis, subject to customary rate adjustments for stock splits, stock dividends and reclassifications. If a holder of Class B common stock exchanges any LLC membership units for shares of common stock, the shares of Class B common stock held by such holder and attributable to the exchanged LLC membership units will automatically be transferred to BioFuel Energy Corp. and be retired.

On June 15, 2012, the Company conducted a reverse stock split with respect to all outstanding shares of common stock and Class B common stock at a ratio of one-for-twenty. The Company also split the number of authorized shares of common stock at a ratio of one-for-fourteen, thereby reducing the aggregate number of authorized common stock shares to 10,000,000, and also split the number of authorized shares of Class B common stock at a ratio of one-for-twenty, thereby reducing the aggregate number of authorized Class B common stock shares to 3,750,000.

At December 31, 2013, we owned 87.3% of the LLC membership units with the remaining 12.7% owned by an individual and by certain investment funds affiliated with one of the original equity investors of the LLC. There were 5,482,585 shares of our common stock and 795,479 shares of our Class B common stock issued and outstanding as of December 31, 2013. The Class B common shares are held by the same individual and investment funds who held 795,479 membership units in the LLC as of December 31, 2013.

Holding company structure

BioFuel Energy Corp. is a holding company and its sole asset is its equity interest in the LLC. As the sole managing member of the LLC, BioFuel Energy Corp. operates and controls all of the business and affairs of the LLC and its subsidiaries. BioFuel Energy Corp. consolidates the financial results of the LLC and its subsidiaries. The ownership interest of the holders of membership interests in the LLC is reflected as a noncontrolling interest in BioFuel Energy Corp.’s consolidated financial statements.

Pursuant to the amended limited liability company agreement of the LLC, BioFuel Energy Corp. has the right to determine when distributions will be made to the members of the LLC and the amounts of any such distributions. If BioFuel Energy Corp. authorizes a distribution, such distribution will be made to the members of the LLC (1) in the case of a tax distribution (as described below), to the holders of membership units in proportion to the amount of taxable income of the LLC allocated to such holder and (2) in the case of other distributions, pro rata in accordance with the percentages of their respective membership units.

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The holders of membership units in the LLC, including BioFuel Energy Corp., will incur U.S. federal, state and local income taxes on their proportionate shares of any net taxable income of the LLC. Net profits and net losses of the LLC will generally be allocated to its members, including BioFuel Energy Corp., the managing member, pro rata in accordance with the percentages of their respective membership units. Because BioFuel Energy Corp. owned approximately 87.3% of the total membership units in the LLC at December 31, 2013, BioFuel Energy Corp. was allocated approximately 87.3% of the net losses of the LLC. The remaining net losses were allocated to the other holders of membership interests in the LLC. These percentages are subject to change, including upon an exchange of membership units for shares of our common stock and upon issuance of additional shares to the public. The amended limited liability company agreement provides for cash distributions to the holders of membership units of the LLC if BioFuel Energy Corp. determines that the taxable income of the LLC will give rise to taxable income for its members. In accordance with the amended limited liability company agreement, we will generally intend to cause the LLC to make cash distributions to the holders of its membership units for purposes of funding their tax obligations in respect of the income of the LLC that is allocated to them. Generally, these tax distributions will be computed based on our estimate of the net taxable income of the LLC allocable to such holders of membership units multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate prescribed for an individual or corporate resident in New York, New York (taking into account the nondeductibility of certain expenses and the character of our income).

BioFuel Energy Corp. does not intend to pay any dividends on its common stock. If, however, BioFuel Energy Corp. declares dividends on its common stock, the LLC will make distributions to BioFuel Energy Corp. in order to fund any dividends. If BioFuel Energy Corp. declares dividends, the other holders of membership interests in the LLC will be entitled to receive equivalent distributions pro rata based on their membership units in the LLC.

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ITEM 1A. RISK FACTORS

You should carefully consider the following risks, as well as other information contained in this Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The risks described below are those that we believe are the material risks we face. Any of these risks could significantly and adversely affect our business, prospects, financial condition and results of operations.

Risks relating to the ownership of our common stock

We are a “shell company” under the federal securities laws, which will subject us to additional costs and disclosure requirements.

Under Rule 405 of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) any company with nominal operations and assets consisting of cash and nominal other assets is a shell company. We are a shell company under the federal securities laws.

As a shell company, applicable securities rules prohibit us from using (i) a Form S-8 registration statement to register securities pursuant to employee compensation plans for so long as we are a shell company and for a period of 60 days thereafter and (ii) Form S-3 for the registration of a primary offering of securities for so long as we are a shell company and for 12 months thereafter. The inability to utilize registration statements on Forms S-8 and S-3 would likely increase our cost to register securities in the future. Additionally, the loss of the use of Forms S-3 and S-8 may make the offering and sale of our securities to employees, directors and others under compensatory arrangements more expensive and less attractive to recipients, and our status as a shell company may make investments in our securities less attractive to investors.

Form 8-K requires that we provide detailed disclosure upon completion of a transaction that causes us to cease being a shell company. To the extent that we acquire a business in the future, we must file a current report on Form 8-K containing the financial and other information required in a registration statement on Form 10 within four business days following the completion of such transaction. To the extent that we are required to comply with additional disclosure because of our shell company status, we may be delayed in executing a merger or acquiring assets that would cause us to cease being a shell company.

The existing market for our common stock is illiquid, and we do not know whether a liquid trading market will develop.

Although our common stock is listed on the Nasdaq Capital Market, the trading market is relatively illiquid. As of December 31, 2013, there were approximately 5.4 million shares of our common stock, excluding treasury shares, and 0.8 million shares of our Class B common stock issued and outstanding, of which approximately 52.8% were held by certain of our “affiliates”. As a result, there are relatively few shares in publicly traded hands, there are few institutional stockholders other than those controlled by certain of our affiliates and we do not receive a significant amount of analyst coverage. An illiquid market will limit your ability to resell shares of our common stock.

Our common stock could be delisted from the Nasdaq Stock Market, which could negatively impact the price of our common stock and our ability to access the capital markets.

Our common stock is currently listed on the Nasdaq Capital Market under the symbol “BIOF.” The listing standards of Nasdaq provide, among other things, that Nasdaq has broad discretionary authority over the initial and continued listing of securities in Nasdaq. Under Nasdaq Listing Rule 5101, Nasdaq may use such discretion to suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for continued listing on Nasdaq.

The Nasdaq listing staff has informed us that our suitability for continued listing on the Nasdaq Capital Market is under review pursuant to Nasdaq Listing Rule 5101. If Nasdaq were to determine that listing of our common stock on the Nasdaq Capital Market is inadvisable or unwarranted due to our status as a shell company under the federal securities laws, our common stock could be delisted and traded on the over-the-counter bulletin board network. Moving our listing to the over-the-counter bulletin board network could adversely affect the liquidity of our common stock. The delisting of our common stock would significantly affect the ability of investors to trade our securities and could significantly negatively affect the value and liquidity of our common stock. In addition, the delisting of our common stock could materially adversely affect our ability to raise capital on terms acceptable to us or at all. Delisting from Nasdaq could also have other negative results, including the loss of potential investor interest and fewer business development opportunities.

The price of our common stock may continue to be volatile.

The trading price of our common stock is highly volatile and could be subject to future fluctuations in response to a number of factors beyond our control. In recent years the stock market has experienced significant price and volume fluctuations. These fluctuations may be unrelated to the operating performance of particular companies. These broad market fluctuations may cause declines in the market price of our common stock. The price of our common stock could fluctuate based upon factors that have little or nothing to do with our company or its performance, and those fluctuations could materially reduce our common stock price.

Certain large stockholders own a significant percentage of our shares and exert significant influence over us. Their interests may not coincide with yours and they may make decisions with which you may disagree.

Our certificate of incorporation provides that the holders of shares of our Class B common stock will be entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. As of December 31, 2013, certain affiliates of Greenlight Capital, Inc., with respect to the Class B common stock and common stock held by them, and certain affiliates of Third Point LLC, with respect to the common stock held by them, respectively, controlled approximately 35.4% and 17.4% of the voting power of BioFuel Energy Corp. These large stockholders, acting together, could determine substantially all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, this concentration of ownership may delay or prevent a change in control of our company and make some transactions more difficult or impossible without the support of these stockholders. The interests of these stockholders may not always coincide with our interests as a company or the interests of other stockholders. Accordingly, these stockholders could cause us to enter into transactions or agreements that you would not approve or make decisions with which you may disagree.

We do not intend to pay dividends on our common stock.

We have not paid any dividends since our inception and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently anticipate that we will retain all of our available cash for general corporate purposes. Any payment of future dividends will be at the discretion of our Board of Directors and will depend upon, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that the Board of Directors deems relevant. Investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize a return on their investment. Investors seeking cash dividends should not purchase our common stock.

Risks relating to our organizational structure

Our only material asset is our interest in BioFuel Energy, LLC, and we are accordingly dependent upon distributions from BioFuel Energy, LLC to pay dividends, taxes and other expenses.

BioFuel Energy Corp. is a holding company and has no material assets other than its ownership of membership units in the LLC. BioFuel Energy Corp. has no independent means of generating revenue. To the extent that BioFuel Energy Corp. needs funds, and the LLC is restricted from making such distributions under applicable law or regulations, or is otherwise unable to provide such funds, our liquidity and financial condition could be materially harmed.

Our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal income tax purposes may be limited as a result of prior or future acquisitions of our common stock.

As of December 31, 2013 we reported federal net operating loss (“NOL”) carryforwards of approximately $178.2 million, which will begin to expire if not used by December 31, 2028. For accounting purposes, a valuation allowance is required to reduce our potential deferred tax assets if it is determined that it is more likely than not that all or some portion of such assets will not be realized for any reason. Our financial statements currently provide a valuation allowance against our NOL carryforwards.

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Our ability to utilize our tax attributes, such as NOL carryforwards and tax credits (“Tax Attributes”), during future periods will depend in part on whether we have undergone an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). For this purpose, an ownership change generally occurs if, as of any “testing date” (as defined under Section 382 of the Code), our “5-percent shareholders” have collectively increased their ownership in our common stock by more than 50 percentage points over their lowest percentage ownership at any time during the relevant testing period, which generally begins three years before each “testing date” transaction. In general, our 5-percent shareholders would include (i) any individual who owns 5% or more of our common stock and (ii) any “public group” that owns our common stock, in each case whether such shareholders own our common stock directly or indirectly through one or more higher tier entities that directly or indirectly own 5% or more of our common stock. A “public group” generally consists of any group of individuals each of whom directly or indirectly owns less than 5% of our common stock. An ownership change may therefore occur following substantial changes in the direct or indirect ownership of our outstanding stock by one or more 5-percent shareholders over this period.

After an ownership change, Section 382 of the Code imposes an annual limitation on the amount of our post-change taxable income that may be offset by our pre-change Tax Attributes. The limitation imposed by Section 382 for any post-change year is generally determined by multiplying the value of our common stock immediately before the ownership change by the applicable long-term tax-exempt rate. Any unused annual limitation may, subject to certain limits, be carried over to later years. In addition, the limitation may be increased under certain circumstances by any “built-in gain” in our assets at the time of the ownership change. It is unclear whether all or a portion of our Tax Attributes are or will be subject to a limitation under Section 382 of the Code as a result of prior or future acquisitions of our common stock by 5-percent shareholders.

If our Tax Attributes are not currently subject to limitation under Section 382 of the Code, our Board of Directors may take actions to impose transfer restrictions or other protective mechanisms, including the adoption of a “tax benefit preservation plan,” to reduce the likelihood of a future ownership change. Any such plan, if adopted, would be adopted on terms and conditions approved by our Board of Directors.

Our ability to use our Tax Attributes will also depend on the amount of taxable income we generate in future periods. Even without regard to Section 382 of the Code, therefore, all or a portion of our Tax Attributes may expire before we generate sufficient taxable income to utilize them.

Provisions in our charter documents and our organizational structure may delay or prevent our acquisition by a third party or may reduce the value of your investment.

Some provisions in our certificate of incorporation and bylaws may be deemed to have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a stockholder may deem to be in his or her best interest. For example, our Board of Directors may determine the rights, preferences, privileges and restrictions of unissued series of preferred stock without any vote or action by our stockholders. In addition, stockholders must provide advance notice to nominate Directors or to propose business to be considered at a meeting of stockholders and may not take action by written consent. Our corporate structure, which provides our historical LLC equity investors, through the shares of Class B common stock they will hold, a number of votes equal to the number of shares of common stock issuable upon exchange of their membership units in the LLC, may also have the effect of delaying, deferring or preventing a future takeover or change in control of our company. The existence of these provisions and this structure could also limit the price that investors may be willing to pay in the future for shares of our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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ITEM 2. PROPERTIES

Facilities

Our corporate offices are located at 1600 Broadway, Suite 1740, Denver, Colorado, where we currently lease approximately 9,000 square feet of office space.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

We completed an initial public offering, or “IPO”, of shares of our common stock in June 2007. Our common stock trades on the Nasdaq Capital Market under the symbol “BIOF.” On June 15, 2012, the Company effected a reverse stock split with respect to all outstanding shares of common stock and Class B common stock at a ratio of one-for-twenty. The Company also split the number of authorized shares of common stock at a ratio of one-for-fourteen, thereby reducing the aggregate number of authorized common stock shares to 10,000,000, and also split the number of authorized shares of Class B common stock at a ratio of one-for-twenty, thereby reducing the aggregate number of authorized Class B common stock shares to 3,750,000. The following table sets forth the high and low closing prices for the common stock, as adjusted for the reverse stock split, as reported on the Nasdaq Capital Market for the quarterly periods indicated. These prices do not include retail markups, markdowns or commissions.

Year ended December 31, 2012	High		Low
First Quarter	$	17.00	$	12.00
Second Quarter	$	12.60	$	3.56
Third Quarter	$	10.21	$	2.24
Fourth Quarter	$	7.31	$	3.68

Year ended December 31, 2013	High		Low
First Quarter	$	6.73	$	4.15
Second Quarter	$	5.15	$	3.08
Third Quarter	$	4.23	$	3.35
Fourth Quarter	$	3.65	$	1.45

On March 14, 2014, the closing price of our common stock was $3.32. On March 14, 2014, there were approximately 17 stockholders of record of our common stock and 4 stockholders of record of our Class B common stock. We believe the number of beneficial owners is substantially greater than the number of record holders because a large portion of our outstanding common stock is held of record in broker “street names” for the benefit of individual investors. As of March 14, 2014, there were 5,442,104 common shares outstanding, net of 40,481 shares held in treasury, and 795,479 Class B common shares outstanding.

Dividend Policy

We have not paid any dividends since our inception and do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future. We currently anticipate that we will retain all of our available cash for general corporate purposes. Payment of future dividends, if any, will be at the discretion of our Board of Directors and will depend on many factors, including general economic and business conditions, our strategic plans, our financial results and condition, legal requirements and other factors as our Board of Directors deems relevant.

BioFuel Energy Corp. is a holding company and has no material assets other than its ownership of membership units in the LLC. We intend to cause the LLC to make distributions to BioFuel Energy Corp. in an amount sufficient to cover dividends, if any, declared by us. If the LLC makes such distributions, the historical LLC equity investors will be entitled to receive equivalent distributions from the LLC on their membership units. To ensure that our public stockholders are treated fairly with the historical LLC equity investors, our charter requires that all distributions received from the LLC, other than distributions to cover tax obligations and other corporate expenses, will be dividended to holders of our common stock.

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Equity Compensation Plans

For the information required by this item concerning equity compensation plans, see “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K.

ITEM 6. SELECTED FINANCIAL DATA

The selected financial data of BioFuel Energy Corp. as of December 31, 2013 and 2012 and for the years then ended has been derived from the audited consolidated financial statements of BioFuel Energy Corp. included elsewhere in this Form 10-K.

You should read the selected historical financial data in conjunction with the information included under the heading “Management’s discussion and analysis of financial condition and results of operations” and the consolidated financial statements and accompanying notes included in this Form 10-K.

	Years Ended December 31,
	2013		2012
	(in thousands, except
	per share amounts)
Statement of Operations Data
General and administrative expenses:
Compensation expense	$	(8,107)	$	(4,283)
Other		(1,636)		(1,807)
Operating loss		(9,743)		(6,090)
Other expense		(3)		—
Loss from continuing operations before income taxes		(9,746)		(6,090)
Income tax provision (benefit)		—		—
Loss from continuing operations		(9,746)		(6,090)
Discontinued operations:
Loss from discontinued operations		(11,885)		(40,232)
Loss on disposal of plants		(24,019)		—
Income tax provision (benefit)		—		—
Loss from discontinued operations		(35,904)		(40,232)
Net loss		(45,650)		(46,322)
Less: Net loss from continuing operations attributable to noncontrolling interest		1,375		852
Less: Net loss from discontinued operations attributable to the noncontrolling interest		5,067		5,627
Net loss attributable to BioFuel Energy Corp. common stockholders	$	(39,208)	$	(39,843)

Amounts attributable to BioFuel Energy Corp.:
Loss from continuing operations	$	(8,371)	$	(5,238)
Loss from discontinued operations		(30,837)		(34,605)
Net loss attributable to BioFuel Energy Corp.	$	(39,208)	$	(39,843)

Basic and fully diluted loss per share attributable to BioFuel Energy Corp.:
Continuing operations	$	(1.57)	$	(1.01)
Discontinued operations		(5.77)		(6.64)
	$	(7.34)	$	(7.65)

Weighted average shares outstanding-basic and fully diluted		5,345		5,208

	December 31,
	2013		2012
	(in thousands)
Balance Sheet Data
Cash and cash equivalents	$	12,605	$	8,554
Current assets		15,129		11,754
Non-current assets		93		2,301
Assets held for sale		432		236,368
Total assets		15,654		250,423
Current liabilities		4,312		163
Non-current assets		—		6
Liabilities held for sale		289		195,144
Total liabilities		4,601		195,313
Noncontrolling interest		(7,562)		(1,120)
BioFuel Energy Corp. stockholders’ equity		18,615		56,230
Total liabilities and equity		15,654		250,423

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with the audited consolidated financial statements and the accompanying notes included in this Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Specifically, forward-looking statements may be preceded by, followed by or may include such words as “estimate”, “plan”, “project”, “forecast”, “intend”, “expect”, “is to be”, “anticipate”, “goal”, “believe”, “seek”, “target” or other similar expressions. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Form 10-K, or in the case of a document incorporated by reference, as of the date of that document. Except as required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this Form 10-K or to reflect the occurrence of unanticipated events. Our actual results may differ materially from those discussed in or implied by any of the forward-looking statements as a result of various factors, including but not limited to those listed elsewhere in this Form 10-K and those listed in other documents we have filed with the Securities and Exchange Commission.

Overview

	12

On April 11, 2013, the Operating Subsidiaries entered into a definitive agreement (the “Lender Agreement”) with First National Bank of Omaha, as Escrow Agent under the Lender Agreement, and as Administrative Agent and Collateral Agent for the lenders under the Senior Debt Facility. Under the terms of the Lender Agreement, the Administrative Agent and the lenders agreed to provide the Operating Subsidiaries with a period of time to allow the Company to pursue one or more strategic alternatives, including but not limited to a potential sale of one or both of the Company’s ethanol plants. Simultaneously with the execution of the Lender Agreement, the Operating Subsidiaries, the Administrative Agent and the lenders under the Senior Debt Facility also entered into a Deed in Lieu of Foreclosure Agreement and Joint Escrow Instructions (the “Deed in Lieu Agreement”), pursuant to which, among other things, the Operating Subsidiaries would transfer ownership of their respective ethanol plants, including the underlying real property, personal property and all material contracts used to operate the plants, to certain designees of the Administrative Agent and the lenders (“Newco”), in full satisfaction of all outstanding obligations under the Senior Debt Facility and in lieu of the Administrative Agent and the lenders exercising their rights and remedies under the Senior Debt Facility.

On November 5, 2013, the Company was notified by the lenders under the Senior Debt Facility and Green Plains Renewable Energy, Inc. (“Green Plains”) that a definitive agreement has been entered into for the lenders to sell the Company’s ethanol plants plus working capital to Green Plains. On November 22, 2013, the Administrative Agent delivered written notice to the Escrow Agent directing the Escrow Agent to consummate the transfers under the Deed in Lieu Agreement, resulting in the Company’s ethanol plants and all related assets being transferred to Newco in full satisfaction of all outstanding obligations under the Senior Debt Facility. Newco simultaneously sold the ethanol plants to Green Plains. On November 25, 2013, the Company and certain of its subsidiaries entered into an Undertaking and Release Agreement dated as of November 22, 2013 (the “Release Agreement”) with First National Bank of Omaha, as Administrative Agent and Collateral Agent under the Senior Debt Facility. Under the terms of the Release Agreement, the lenders paid to the Company an aggregate amount of $3,330,000 in full satisfaction of any obligations of the lenders to the Company under the Deed in Lieu Agreement. Of the $3,330,000 the Company received from the lenders under the Release Agreement, $938,000 was accounted for as a return of a deposit previously posted with the lenders and $650,000 was accounted for as past accrued management fees paid, thereby resulting in net cash consideration received of $1,742,000.

Revenues

During the time that the Company owned and operated its ethanol facilities, which was through November 22, 2013, our primary source of revenue was the sale of ethanol. The selling prices we realized for our ethanol were largely determined by a variety of factors over which we had little control, and were extremely volatile. Ethanol revenues were recorded net of transportation and storage charges, and net of marketing commissions we paid to Cargill Inc. (“Cargill”).

We also received revenue from the sale of distillers grain, which was a residual co-product of the processed corn used in the production of ethanol and was sold as animal feed. The selling prices we realized for our distillers grain were largely determined by the market supply and demand, primarily from livestock operators and marketing companies in the U.S. and internationally. Distillers grain was sold by the ton and, based upon the amount of moisture retained in the product, was either sold “wet” or “dry”.

The Company had installed corn oil extraction systems at each of the plants, which was completed in Wood River in December 2011 and in Fairmont in January 2012. Both Operating Subsidiaries began generating revenues from corn oil sales in the first quarter of 2012. The corn oil produced at our plants was non-food grade and was used primarily as a feedstock for the production of biodiesel and as an animal feed ingredient. We marketed the corn oil produced in Wood River ourselves, although a portion was often sold to the same third party marketer that purchased our dried distillers grain from that facility. Most of the corn oil produced in Fairmont was being sold to a biodiesel producer under an off-take agreement.

	13

Cost of goods sold and gross profit (loss)

During the time that the Company owned and operated its ethanol facilities, which was through November 22, 2013, our gross profit (loss) was derived from our revenues less our cost of goods sold. Our cost of goods sold was affected primarily by the cost of corn and natural gas, with corn being our most significant raw material cost. Rising corn prices usually resulted in lower profit margins because changes in ethanol prices were not necessarily correlated with changes in corn prices and therefore producers were not always able to pass along increased corn costs to customers. We also purchased natural gas to power steam generation in our ethanol production process and as fuel for our dryers to dry our distillers grain. Natural gas represented our second largest operating cost after corn, and natural gas prices were volatile. Corn procurement fees paid to Cargill were included in our cost of goods sold. Other cost of goods sold primarily consisted of our cost of chemicals and enzymes, electricity, depreciation, manufacturing overhead and rail car lease expense.

General and administrative expenses

General and administrative expenses consist of salaries and benefits paid to our management and administrative employees, expenses relating to third party services, travel, office rent, marketing and other expenses, including expenses associated with being a public company, such as fees paid to our independent auditors associated with our annual audit and quarterly reviews, directors’ fees, and listing and transfer agent fees.

Results of operations

The following discussion summarizes the significant factors affecting the consolidated operating results of the Company for the years ended December 31, 2013 and 2012. The discontinued operations relates to the operations associated with our two ethanol plants that were disposed of on November 22, 2013. This discussion should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements contained in this Annual Report on Form 10-K.

At December 31, 2013, the Company owned 87.3% of the LLC membership units with the remaining 12.7% owned by an individual and by certain investment funds affiliated with one of the original equity investors of the LLC. As a result, the Company consolidates the results of the LLC. The amount of income or loss allocable to the 12.7% holders is reported as noncontrolling interest in our consolidated statements of operations.

The following table sets forth general and administrative expenses, loss from continuing operations, and loss from discontinued operations (in thousands):

	Years Ended December 31,
	2013		2012
General and administrative expenses:
Compensation expense	$	(8,107)	$	(4,283)
Other		(1,636)		(1,807)
Operating loss		(9,743)		(6,090)
Other expense		(3)		—
Loss from continuing operations		(9,746)		(6,090)
Discontinued operations:
Loss from discontinued operations		(11,885)		(40,232)
Loss on disposal of plants		(24,019)		—
Loss from discontinued operations		(35,904)		(40,232)
Net loss		(45,650)		(46,322)
Less: Net loss from continuing operations attributable to noncontrolling interest		1,375		852
Less: Net loss from discontinued operations attributable to the noncontrolling interest		5,057		5,627
Net loss attributable to BioFuel Energy Corp. common stockholders	$	(39,208)	$	(39,843)

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

General and administrative expenses: General and administrative expenses increased $3.6 million or 59.0%, to $9.7 million for the year ended December 31, 2013, as compared to $6.1 million for the year ended December 31, 2012. The increase was primarily attributable to an increase in compensation expense resulting from the accrual of severance payments totaling $4.2 million at the end of 2013, due to the disposition of the Company’s ethanol plants.

Loss from discontinued operations: Loss from discontinued operations was $11.9 million for the year ended December 31, 2013 compared to $40.2 million for the year ended December 31, 2012, a decrease of $28.3 million or 70.4%. The decrease from 2012 to 2013 was primarily attributable to a decrease in the gross loss of $24.0 million, resulting from an improved “crush spread”, which is the difference between the price received for ethanol versus the price paid for corn. From 2012 to 2013 revenues decreased $164.9 million while cost of goods sold decreased $188.9 million, thereby resulting in a $24.0 million decrease in the gross loss. Revenues decreased primarily due to lower sales volumes, as the Fairmont plant was idle for all of 2013, which were partially offset by an increase in per unit prices received for both our ethanol and co-products. Cost of goods sold decreased primarily due to a decrease in the price paid for corn, which was the primary cost input.

Loss on disposal of plants: Loss on disposal of plants for the year ended December 31, 2013 of $24.0 million related to the write-off of the Operating Subsidiaries’ assets and liabilities resulting from the disposition of the ethanol plants in November 2013.

Liquidity and capital resources

Our cash flows from operating, investing and financing activities during the years ended December 31, 2013 and 2012 are summarized below (in thousands):

	Years Ended December 31,
	2013		2012
Cash provided by (used in):
Operating activities	$	13,220	$	1,453
Investing activities		(9,512)		(843)
Financing activities		(159)		(6,426)
Net increase (decrease) in cash and cash equivalents	$	3,549	$	(5,816)

Cash provided by operating activities. Net cash provided by operating activities was $13.2 million for the year ended December 31, 2013, compared to $1.5 million for the year ended December 31, 2012. For the year ended December 31, 2013, the amount was primarily comprised of a net loss of $45.7 million that was offset by working capital sources of $7.9 million and non-cash charges of $51.0 million, which was primarily depreciation and amortization of $25.3 million and loss on disposal of plants of $24.0 million. Working capital sources primarily related to an increase in other current liabilities of $10.2 million. For the year ended December 31, 2012, the amount was primarily comprised of a net loss of $46.3 million that was offset by working capital sources of $18.0 million and non-cash charges of $29.8 million, which was primarily depreciation and amortization.

Cash used in investing activities. Net cash used in investing activities was $9.5 million for the year ended December 31, 2013, compared to $0.8 million for the year ended December 31, 2012. For the year ended December 31, 2013, the amount was comprised of $2.4 million for capital expenditures for various plant improvement projects and $8.8 million given to the lenders related to the disposition of the plants, which was offset by $1.7 million of proceeds related to the payment made by the lenders to the Company under the terms of the Release Agreement. For the year ended December 31, 2012, the amount was for capital expenditures related to various plant improvement projects.

Cash used in financing activities. Net cash used in financing activities was $0.2 million for the year ended December 31, 2013, compared to $6.4 million for the year ended December 31, 2012. For the year ended December 31, 2013, the amount was comprised of $0.2 million in principal payments of notes payable and capital leases. For the year ended December 31, 2012, the amount was comprised of $6.3 million in principal payments under our Senior Debt Facility and $0.1 million in payments of notes payable and capital leases.

	15

The LLC’s principal source of liquidity at December 31, 2013 was its cash and cash equivalents of $12.9 million. Due to the disposition of our plants, our principal liquidity needs are expected to be funding general corporate expenses.

Summary of critical accounting policies and significant estimates

The consolidated financial statements of BioFuel Energy Corp. included in this Form 10-K have been prepared in conformity with accounting principles generally accepted in the United States. Note 3 to these consolidated financial statements contains a summary of our significant accounting policies, certain of which require the use of estimates and assumptions. Accounting estimates are an integral part of the preparation of financial statements and are based on judgments by management using its knowledge and experience about the past and current events and assumptions regarding future events, all of which we consider to be reasonable. These judgments and estimates reflect the effects of matters that are inherently uncertain and that affect the carrying value of our assets and liabilities, the disclosure of contingent liabilities and reported amounts of expenses during the reporting period.

The accounting estimates and assumptions discussed in this section are those that we believe involve significant judgments and the most uncertainty. Changes in these estimates or assumptions could materially affect our financial position and results of operations and are therefore important to an understanding of our consolidated financial statements.

Income Taxes

The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company regularly reviews historical and anticipated future pre-tax results of operations to determine whether the Company will be able to realize the benefit of its deferred tax assets. A valuation allowance is required to reduce the potential deferred tax asset when it is more likely than not that all or some portion of the potential deferred tax asset will not be realized due to the lack of sufficient taxable income. The Company establishes reserves for uncertain tax positions that reflect its best estimate of deductions and credits that may not be sustained on a more likely than not basis. As the Company has incurred tax losses since its inception and expects to continue to incur tax losses for the foreseeable future, we will continue to provide a valuation allowance against deferred tax assets until the Company believes that such assets will be realized.

Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by standards setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, our management believes that the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial statements upon adoption.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At December 31, 2013, we had $12.9 million of cash and cash equivalents invested in standard cash accounts held at two financial institutions, which is in excess of FDIC insurance limits.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

Financial Statements of BioFuel Energy Corp.

		Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets, December 31, 2013 and 2012		F-3
Consolidated Statements of Operations for the years ended December 31, 2013 and 2012		F-4
Consolidated Statement of Changes in Equity for the years ended December 31, 2013 and 2012		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012		F-6
Notes to Consolidated Financial Statements		F-7
Schedule I		F-27

	F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders of

BioFuel Energy Corp.

We have audited the accompanying consolidated balance sheets of BioFuel Energy Corp. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of operations, changes in equity, and cash flows for each of the two years in the period ended December 31, 2013. Our audits of the basic consolidated financial statements included the financial statement schedule listed in the index appearing under Item 8. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of BioFuel Energy Corp. and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ GRANT THORNTON LLP

Denver, Colorado

March 26, 2014

	F-2

BioFuel Energy Corp.

Consolidated Balance Sheets

(in thousands, except share data)

	December 31,
	2013		2012
Assets
Current assets:
Cash and cash equivalents	$	12,605	$	8,554
Prepaid expenses		124		126
Deposits		2,361		3,074
Other current assets		39		—
Total current assets		15,129		11,754
Non-current assets:
Property, plant and equipment, net		71		106
Other assets		22		2,195
Total non-current assets		93		2,301
Assets held for sale		432		236,368
Total assets	$	15,654	$	250,423
Liabilities and equity
Current liabilities:
Accounts payable	$	50	$	27
Current portion of long-term debt		—		4
Other current liabilities		4,262		132
Total current liabilities		4,312		163
Non-current liabilities:
Long-term debt, net of current portion		—		6
Total non-current liabilities		—		6
Liabilities held for sale		289		195,144
Total liabilities		4,601		195,313
Commitments and contingencies
Equity
BioFuel Energy Corp. stockholders’ equity
Preferred stock, $0.01 par value; 5,000,000 shares authorized and no shares outstanding at December 31, 2013 and December 31, 2012		—		—
Common stock, $0.01 par value; 10,000,000 shares authorized and 5,482,585 shares outstanding at December 31, 2013 and 5,483,773 shares outstanding at December 31, 2012		54		54
Class B common stock, $0.01 par value; 3,750,000 shares authorized and 795,479 shares outstanding at December 31, 2013 and December 31, 2012		8		8
Less common stock held in treasury, at cost, 40,481 shares at December 31, 2013 and December 31, 2012		(4,316)		(4,316)
Additional paid-in capital		191,197		189,604
Accumulated deficit		(168,328)		(129,120)
Total BioFuel Energy Corp. stockholders’ equity		18,615		56,230
Noncontrolling interest		(7,562)		(1,120)
Total equity		11,053		55,110
Total liabilities and equity	$	15,654	$	250,423

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

	F-3

BioFuel Energy Corp.

Consolidated Statements of Operations

(in thousands, except per share data)

	Years Ended December 31,
	2013		2012
General and administrative expenses:
Compensation expense	$	(8,107)	$	(4,283)
Other		(1,636)		(1,807)
Operating loss		(9,743)		(6,090)
Other expense		(3)		—
Loss from continuing operations before income taxes		(9,746)		(6,090)
Income tax provision (benefit)		—		—
Loss from continuing operations		(9,746)		(6,090)
Discontinued operations:
Loss from discontinued operations		(11,885)		(40,232)
Loss on disposal of plants		(24,019)		—
Income tax provision (benefit)		—		—
Loss from discontinued operations		(35,904)		(40,232)
Net loss		(45,650)		(46,322)
Less: Net loss from continuing operations attributable to noncontrolling interest		1,375		852
Less: Net loss from discontinued operations attributable to the noncontrolling interest		5,067		5,627
Net loss attributable to BioFuel Energy Corp. common stockholders	$	(39,208)	$	(39,843)

Amounts attributable to BioFuel Energy Corp.:
Loss from continuing operations	$	(8,371)	$	(5,238)
Loss from discontinued operations		(30,837)		(34,605)
Net loss attributable to BioFuel Energy Corp.	$	(39,208)	$	(39,843)

Basic and fully diluted loss per share attributable to BioFuel Energy Corp.:
Continuing operations	$	(1.57)	$	(1.01)
Discontinued operations		(5.77)		(6.64)
	$	(7.34)	$	(7.65)

Weighted average shares outstanding-basic and fully diluted		5,345		5,208

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

	F-4

BioFuel Energy Corp.

Consolidated Statements of Changes in Equity

Years Ended December 31, 2013 and December 31, 2012

(in thousands, except share data)

	Common Stock			Class B Common Stock			Treasury Stock		Additional Paid-in Capital		Accumulated Deficit		Total BioFuel Energy Corp. Stockholders’ Equity		Noncontrolling Interest		Total Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2011	5,270,848	$	53	931,154	$	9	$	(4,316)	$	187,841	$	(89,277)	$	94,310	$	5,632	$	99,942
Stock-based compensation	—		—	—		—		—		1,490		—		1,490		—		1,490
Exchange of Class B shares to common	135,675		1	(135,675)		(1)		—		273		—		273		(273)		—
Issuance of restricted stock, (net of forfeitures)	77,250		—	—		—		—		—		—		—		—		—
Net loss	—		—	—		—		—		—		(39,843)		(39,843)		(6,479)		(46,322)
Balance at December 31, 2012	5,483,773	$	54	795,479	$	8	$	(4,316)	$	189,604	$	(129,120)	$	56,230	$	(1,120)	$	55,110
Stock-based compensation	—		—	—		—		—		1,593		—		1,593		—		1,593
Issuance of restricted stock, (net of forfeitures)	(1,188)		—	—		—		—		—		—		—		—		—
Net loss	—		—	—		—		—		—		(39,208)		(39,208)		(6,442)		(45,650)
Balance at December 31, 2013	5,482,585	$	54	795,479	$	8	$	(4,316)	$	191,197	$	(168,328)	$	18,615	$	(7,562)	$	11,053

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

	F-5

BioFuel Energy Corp.

Consolidated Statements of Cash Flows

(in thousands)

	Years Ended December 31,
	2013		2012
Cash flows from operating activities
Net loss	$	(45,650)	$	(46,322)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on disposal of plants		24,019		—
Depreciation and amortization		25,337		28,300
Stock-based compensation expense		1,593		1,490
Changes in operating assets and liabilities:
Accounts receivable		1,481		4,335
Inventories		1,764		12,745
Prepaid expenses		474		1,266
Accounts payable		(8,468)		2,276
Other current liabilities		10,800		508
Other assets and liabilities		1,870		(3,145)
Net cash provided by operating activities		13,220		1,453
Cash flows from investing activities
Purchases of property, plant and equipment		(2,412)		(843)
Proceeds from disposition of plants		1,742		—
Payment on disposition of plants		(8,842)		—
Net cash used in investing activities		(9,512)		(843)
Cash flows from financing activities
Repayment of debt		—		(6,300)
Repayment of notes payable and capital leases		(159)		(126)
Net cash used in financing activities		(159)		(6,426)
Net increase (decrease) in cash and cash equivalents		3,549		(5,816)
Cash and cash equivalents, beginning of period		9,323		15,139
Cash and cash equivalents, end of period	$	12,872	$	9,323
Cash paid for income taxes	$	7	$	6
Cash paid for interest	$	384	$	4,283
Non-cash investing and financing activities:
Additions to property, plant and equipment unpaid during period	$	—	$	4

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

	F-6

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

Organization, Nature of Business, and Basis of Presentation

Organization, Nature of Business, and Basis of Presentation

BioFuel Energy Corp. (“we” or “the Company”) was incorporated as a Delaware corporation on April 11, 2006 to invest solely in BioFuel Energy, LLC (the “LLC”), a limited liability company organized on January 25, 2006 to build and operate ethanol production facilities in the Midwestern United States. The Company’s headquarters are located in Denver, Colorado. We are a shell company under federal securities laws a holding company with no operations of our own. We are the sole managing member of the LLC, which is itself a holding company and indirectly owned all of our former operating assets. As the sole managing member of the LLC, the Company operates and controls all of the business and affairs of the LLC and its subsidiaries. The Company operated two dry-mill ethanol production facilities located in Wood River, Nebraska and Fairmont, Minnesota from June 2008 through November 2013, which produced and sold ethanol and its related co-products, primarily distillers grain and corn oil. Each of these plants had an undenatured nameplate production capacity of approximately 110 million gallons per year (“Mmgy”).

	F-7

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

Organization, Nature of Business, and Basis of Presentation – (continued)

The Company has not yet determined whether, or how, it might reinvest its remaining cash in another enterprise or return such cash to its shareholders in a liquidation or other transaction. The accompanying consolidated financial statements have accounted for the disposition of the ethanol plants as discontinued operations. Prior year amounts have been reclassified to reflect the disposition of the ethanol plants being accounted for as discontinued operations.

At December 31, 2013, the Company owned 87.3% of the LLC membership units with the remaining 12.7% owned by an individual and by certain investment funds affiliated with one of the original equity investors of the LLC. The Class B common shares of the Company are held by the same individual and investment funds who held 795,479 membership units in the LLC as of December 31, 2013 that, together with the corresponding Class B shares, can be exchanged for newly issued shares of common stock of the Company on a one-for-one basis. The proportionate value of the LLC membership units held by the individual or investment funds other than the Company are recorded as noncontrolling interest on the consolidated balance sheets. Holders of shares of Class B common stock have no economic rights but are entitled to one vote for each share held. Shares of Class B common stock are retired upon exchange of the related membership units in the LLC.

Discontinued Operations – Disposal of Ethanol Plants

As described in Note 1, on November 22, 2013, the Company disposed of its ownership in its two ethanol plants. The operating loss until the date of disposal and the loss from disposal of assets and liabilities classified as held for sale is summarized as follows (in thousands):

	Years Ended December 31,
	2013		2012
Net sales	$	298,429	$	463,280
Cost of goods sold		304,957		493,901
Gross loss		(6,528)		(30,621)
General and administrative expenses		6,150		3,778
Operating loss		(12,678)		(34,399)
Other income (expense):
Other income		7,850		1,442
Interest expense		(7,057)		(7,275)
Loss before loss on disposal of plants and income taxes		(11,885)		(40,232)
Loss on disposal of plants		(24,019)		—
Income tax provision (benefit)		—		—
Loss from discontinued operations	$	(35,904)	$	(40,232)

The carrying amounts of the assets and liabilities of the ethanol plants is summarized as follows (in thousands):

	December 31,
	2013		2012
Current assets:
Cash and cash equivalents	$	267	$	769
Accounts receivable		—		9,256
Inventories		—		13,443
Prepaid expenses		1		756
Other current assets		164		78
Total current assets		432		24,302
Non-current assets:
Property, plant and equipment, net		—		209,539
Debt issuance costs, net		—		1,739
Other assets		—		788
Total non-current assets		—		212,066
Assets held for sale	$	432	$	236,368

Current liabilities:
Accounts payable	$	289	$	11,611
Current portion of long-term debt		—		170,630
Current portion of tax increment financing		—		399
Other current liabilities		—		2,368
Total current liabilities		289		185,008
Non-current liabilities:
Long-term debt, net of current portion		—		2,789
Tax increment financing, net of current portion		—		4,275
Other non-current liabilities		—		3,072
Total non-current liabilities		—		10,136
Liabilities held for sale	$	289	$	195,144

	F-8

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

The carrying amount of the net assets of the ethanol plants recognized at the date of disposal, November, 22, 2013, were as follows (in thousands):

Current assets:
Accounts receivable	$	7,775
Inventories		11,679
Prepaid expenses		283
Deposits		1,288
Total current assets		21,025
Non-current assets:
Property, plant and equipment, net		187,519
Debt issuance costs, net		862
Total non-current assets		188,381
Current liabilities:
Accounts payable		(2,831)
Current portion of long-term debt		(170,630)
Current portion of tax increment financing		(301)
Other current liabilities		(9,038)
Total current liabilities		(182,800)
Non-current liabilities:
Long-term debt, net of current portion		(2,640)
Tax increment financing, net of current portion		(4,129)
Other non-current liabilities		(2,918)
Total non-current liabilities		(9,687)
Total net liabilities		(16,919)
Cash consideration received		1,742
Cash disposed of		(8,842)
Loss on disposal of plants	$	24,019

Of the $3,330,000 the Company received from the lenders under the Release Agreement, $938,000 was accounted for as a return of a deposit previously posted with the lenders and $650,000 was accounted for as past accrued management fees paid, thereby resulting in net cash consideration received of $1,742,000.

3.	Summary of Significant Accounting Policies

Principles of Consolidation and Noncontrolling Interest

The accompanying consolidated financial statements include the Company, the LLC and its wholly-owned subsidiaries: BFE Holdings, LLC; BFE Operating Company, LLC; Buffalo Lake Energy, LLC; and Pioneer Trail Energy, LLC. All inter-company balances and transactions have been eliminated in consolidation. The Company treats all exchanges of LLC membership units for Company common stock as equity transactions, with any difference between the fair value of the Company’s common stock and the amount by which the noncontrolling interest is adjusted being recognized in equity.

Use of Estimates

Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosures in the accompanying notes at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

	F-9

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

3.	Summary of Significant Accounting Policies – (continued)

Revenue Recognition

During the time that the Company owned and operated its ethanol facilities, which was through November 22, 2013, the Company sold its ethanol, distillers grain and corn oil products under the terms of marketing agreements. Revenue was recognized when risk of loss and title transferred upon shipment of ethanol, distillers grain or corn oil. In accordance with the marketing agreements, the Company recorded its revenues based on the amounts payable to us at the time of our sales of ethanol, distillers grain or corn oil. For our ethanol that was sold within the United States, the amount payable was equal to the average delivered price per gallon received by the marketing pool from Cargill Inc.’s (“Cargill”) customers, less average transportation and storage charges incurred by Cargill, and less a commission. We also sold a portion of our ethanol production to Cargill for export, which sales were shipped undenatured and were excluded from the marketing pool. For exported ethanol sales, the amount payable was equal to the contracted delivered price per gallon, less transportation and storage charges, and less a commission. The amount payable for distillers grain and corn oil was generally equal to the market price at the time of sale less a commission.

Cost of goods sold

During the time that the Company owned and operated its ethanol facilities, which was through November 22, 2013, cost of goods sold primarily included costs of materials (primarily corn, natural gas, chemicals and denaturant), electricity, purchasing and receiving costs, inspection costs, shipping costs, lease costs, plant management, certain compensation costs and general facility overhead charges, including depreciation expense.

General and administrative expenses

General and administrative expenses consist of salaries and benefits paid to our management and administrative employees, expenses relating to third party services, travel, office rent, marketing and other expenses, including certain expenses associated with being a public company, such as fees paid to our independent auditors associated with our annual audit and quarterly reviews, directors’ fees, and listing and transfer agent fees.

Cash and Cash Equivalents

Cash and cash equivalents include highly-liquid investments with an original maturity of three months or less. At December 31, 2013, we had $12.9 million of cash and cash equivalents invested in standard cash accounts held at two financial institutions, which is in excess of FDIC insurance limits.

Accounts Receivable

During the time that the Company owned and operated its ethanol facilities, which was through November 22, 2013, accounts receivable were carried at original invoice amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determined the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. The Company did not charge interest for any past due accounts receivable. As of December 31, 2012 no allowance was considered necessary. As of December 31, 2012 accounts receivable are included as part of assets held for sale on the consolidated balance sheets.

	F-10

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

3.	Summary of Significant Accounting Policies – (continued)

Concentrations of Credit Risk

During the time that the Company owned and operated its ethanol facilities, which was through November 22, 2013, credit risk represented the accounting loss that would be recognized at the reporting date if counterparties failed completely to perform as contracted. Concentrations of credit risk, whether on- or off-balance sheet, that arose from financial instruments existed for groups of customers or counterparties when they had similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions described below.

During the years ended December 31, 2013 and 2012, the Operating Subsidiaries recorded sales to Cargill representing 76% and 75%, respectively, of total net sales. As of December 31, 2012, the Operating Subsidiaries had receivables from Cargill of $7.5 million, representing 81% of total accounts receivable. As of December 31, 2013, the Operating Subsidiaries had no receivables from Cargill.

The Operating Subsidiaries purchased corn, its largest cost component in producing ethanol, from Cargill. During the years ended December 31, 2013 and 2012, corn purchases from Cargill totaled $230.7 million and $384.6 million, respectively. As of December 31, 2012, the Operating Subsidiaries had payables to Cargill of $9.0 million related to corn purchases. As of December 31, 2012 payables to Cargill are included as part of liabilities held for sale on the consolidated balance sheet. As of December 31, 2013, the Operating Subsidiaries had no payables to Cargill related to corn purchases.

Inventories

During the time that the Company owned and operated its ethanol facilities, which was through November 22, 2013, raw materials inventories, which consisted primarily of corn, denaturant, supplies and chemicals, and work in process inventories were valued at the lower-of-cost-or-market, with cost determined on a first-in, first-out basis. Finished goods inventories consisted of ethanol and distillers grain and were stated at lower of average cost or market.

As of December 31, 2012 inventories are included as part of assets held for sale on the consolidated balance sheets. A summary of inventories as of December 31, 2012 is as follows (in thousands):


Raw materials	$	8,198
Work in process		2,831
Finished goods		2,414
	$	13,443

F-11

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

3.	Summary of Significant Accounting Policies – (continued)

Derivative Instruments and Hedging Activities

During the time that the Company owned and operated its ethanol facilities, which was through November 22, 2013, derivatives were recognized on the balance sheet at their fair value and were included in the accompanying balance sheets as “derivative financial instruments”. On the date the derivative contract was entered into, the Company would designate the derivative either as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow” hedge). Changes in the fair value of a derivative that was highly effective and that was designated and qualified as a cash flow hedge were recorded in other comprehensive income, net of tax effect, until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable rate asset or liability are recorded in earnings). Changes in the fair value of undesignated derivative instruments or derivatives that did not qualify for hedge accounting were recognized in current period operations.

Accounting guidance for derivatives requires a company to evaluate contracts to determine whether the contracts are derivatives. Certain contracts that meet the definition of a derivative may be exempted as normal purchases or normal sales. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. The Company’s contracts for corn and natural gas purchases and ethanol sales that met those requirements and were designated as either normal purchase or normal sale contracts were exempted from the derivative accounting and reporting requirements.

Property, Plant and Equipment

Property, plant and equipment at December 31, 2013 is comprised of office furniture and equipment at the Company’s headquarters and is recorded at cost. Depreciation on office furniture and equipment is computed by the straight line method over a range of three to ten years, depending on the asset. During the time that the Company owned and operated its ethanol facilities, which was through November 22, 2013, property, plant and equipment at the plants was also recorded at cost and was depreciated by the straight line method over a range of three to forty years, depending on the asset. As of December 31, 2012 property, plant and equipment at the plants is included as part of assets held for sale on the consolidated balance sheets.

Debt Issuance Costs

During the time that the Company owned and operated its ethanol facilities, which was through November 22, 2013, debt issuance costs were stated at cost, less accumulated amortization. Debt issuance costs at December 31, 2012 represented costs incurred related to the Operating Subsidiaries Senior Debt Facility and tax increment financing agreements and are included as part of assets held for sale on the consolidated balance sheet. These costs were being amortized, using an effective interest method, through interest expense over the term of the related debt. Any remaining debt issuance costs were written off in November 2013 as a result of the sale of the plants.

Stock-Based Compensation

Expense associated with stock-based awards and other forms of equity compensation is based on fair value at grant and recognized on a straight line basis in the financial statements over the requisite service period for those awards that are expected to vest.

	F-12

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

3.	Summary of Significant Accounting Policies – (continued)

Asset Retirement Obligations

During the time that the Company owned and operated its ethanol plants, which was through November 22, 2013, asset retirement obligations were recognized when a contractual or legal obligation existed and a reasonable estimate of the amount could be made. Changes to the asset retirement obligation resulting from revisions to the timing or the amount of the original undiscounted cash flow estimates were recognized as an increase or decrease to both the carrying amount of the asset retirement obligation and the related asset retirement cost capitalized as part of the related property, plant and equipment. At December 31, 2012, the Operating Subsidiaries had accrued asset retirement obligation liabilities of $149,000 and $188,000 for its plants at Wood River and Fairmont, respectively.

The asset retirement obligations accrued at December 31, 2012 for Wood River related to the obligations in our contracts with Cargill and Union Pacific Railroad (“Union Pacific”). According to the grain elevator lease with Cargill, the equipment that is adjacent to the grain elevator may be required at Cargill’s discretion to be removed at the end of the lease. In addition, according to the contract with Union Pacific, the buildings that are built near their land in Wood River may be required at Union Pacific’s request to be removed at the end of our contract with them. The asset retirement obligations accrued at December 31, 2012 for Fairmont related to the obligations in our contracts with Cargill and in our water permit issued by the state of Minnesota. According to the grain elevator lease with Cargill, the equipment that is adjacent to the grain elevator being leased may be required at Cargill’s discretion to be removed at the end of the lease. In addition, the water permit in Fairmont required that we secure all above ground storage tanks whenever we discontinue the use of our equipment for an extended period of time in Fairmont. The estimated costs of these obligations were accrued at the current net present value of these obligations at the end of an estimated 20 year life for each of the plants. These liabilities had corresponding assets recorded in property, plant and equipment, which were being depreciated over 20 years.

Income Taxes

Fair Value of Financial Instruments

The Company’s financial instruments, including cash and cash equivalents, accounts receivable, deposits, accounts payable, and severance payable are carried at cost, which approximates their fair value because of the short-term maturity of these instruments.

	F-13

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

3.	Summary of Significant Accounting Policies – (continued)

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standards setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, our management believes that the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial statements upon adoption.

4.	Property, Plant and Equipment

Property, plant and equipment, stated at cost, consist of the following at December 31, 2013 and 2012 (in thousands):

	December 31,
	2013		2012
Office furniture and equipment	$	788	$	797
Accumulated depreciation		(717)		(691)
Property, plant and equipment, net	$	71	$	106

Depreciation expense related to property, plant and equipment was $34,000 and $53,000 for the years ended December 31, 2013 and 2012, respectively, and is included in loss from continuing operations on the consolidated statements of operations. Depreciation expense related to the property, plant and equipment at the ethanol plants was $24,427,000 and $27,236,000 for the years ended December 31, 2013 and 2012, respectively, and is included in loss from discontinued operations on the consolidated statements of operations.

5.	Earnings Per Share

Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding during each period. Diluted earnings per share are calculated using the treasury stock method and includes the effect of all dilutive securities, including stock options, restricted stock and Class B common shares. For those periods in which the Company incurred a net loss, the inclusion of the potentially dilutive shares in the computation of diluted weighted average shares outstanding would have been anti-dilutive to the Company’s loss per share, and, accordingly, all potentially dilutive shares have been excluded from the computation of diluted weighted average shares outstanding in those periods.

On June 15, 2012, the Company effected a reverse stock split with respect to all outstanding shares of common stock and Class B common stock at a ratio of one-for-twenty. All share and per share information in these financial statements has been retroactively restated to reflect the effect of this reverse stock split.

For the years ended December 31, 2013 and 2012, 65,481 shares and 71,237 shares, respectively, issuable upon the exercise of stock options were excluded from the computation of diluted earnings per share as their effect would have been anti-dilutive.

	F-14

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

Earnings Per Share – (continued)

A summary of the reconciliation of basic weighted average shares outstanding to diluted weighted average shares outstanding follows:

	Years Ended December 31,
	2013	2012
Weighted average common shares outstanding – basic	5,344,938	5,208,408
Potentially dilutive common stock equivalents:
Class B common shares	795,479	880,443
Restricted stock	98,214	135,162
	893,693	1,015,605
	6,238,631	6,224,013
Less anti-dilutive common stock equivalents	(893,693)	(1,015,605)
Weighted average common shares outstanding – diluted	5,344,938	5,208,408

6.

Long-Term Debt

The Company had no long-term debt as of December 31, 2013. As of December 31, 2012 long-term debt related to the ethanol plants is included as part of liabilities held for sale on the consolidated balance sheets. The following table summarizes long-term debt related to the ethanol plants as of December 31, 2012 (in thousands):

Term loans	$	170,480
Capital lease		2,465
Notes payable		474
		173,419
Less current portion		(170,630)
Long-term portion	$	2,789

Senior Debt Facility

In September 2006, the Operating Subsidiaries entered into the Senior Debt Facility to finance the construction of and provide working capital to operate our ethanol plants. Neither the Company nor the LLC was a party, either as borrower or guarantor, under the Senior Debt Facility, and none of their respective assets, other than the LLC interests in the Operating Subsidiaries themselves, were pledged as collateral under the Senior Debt Facility. Principal payments under the Senior Debt Facility were payable quarterly at a minimum amount of $ 3,150,000, with additional pre-payments to be made out of available cash flow. These term loans were scheduled to mature in September 2014.

The Operating Subsidiaries did not make the regularly-scheduled payments of principal and interest that were due under the outstanding Senior Debt Facility on September 28, 2012. As a result, the Operating Subsidiaries received a Notice of Default from First National Bank of Omaha, as Administrative Agent for the lenders under the Senior Debt Facility. Following this initial default, the Operating Subsidiaries did not made any of the subsequent regularly-scheduled quarterly principal and interest payments. The regularly-scheduled principal and interest payments that were not paid totaled $8.2 million through December 31, 2012 and $23.4 million through November 22, 2013.

	F-15

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

Long-Term Debt – (continued)

Simultaneously with the execution of the Lender Agreement, the Operating Subsidiaries, the Administrative Agent and the lenders under the Senior Debt Facility also entered into a Deed in Lieu of Foreclosure Agreement and Joint Escrow Instructions (the “Deed in Lieu Agreement”), pursuant to which, among other things, the Operating Subsidiaries would transfer ownership of their respective ethanol plants, including the underlying real property, personal property and all material contracts used to operate the plants, to certain designees of the Administrative Agent and the lenders (“Newco”), in full satisfaction of all outstanding obligations under the Senior Debt Facility and in lieu of the Administrative Agent and the lenders exercising their rights and remedies under the Senior Debt Facility.

Capital Lease

The operating subsidiary that constructed the Fairmont plant had entered into an agreement with the local utility pursuant to which the utility had built owned a substation and distribution facility in order to supply electricity to the plant. The operating subsidiary was paying a fixed facilities charge based on the cost of the substation and distribution facility of $34,000 per month, over the 30-year term of the agreement. This fixed facilities charge was being accounted for as a capital lease in the accompanying financial statements. This capital lease was assigned to Newco, and subsequently to Green Plains, as part of the disposition of the ethanol plants.

	F-16

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

Long-Term Debt – (continued)

Notes Payable

Notes payable related to certain financing agreements in place at our Wood River facility. The operating subsidiary entered into a note payable for $419,000 with the City of Wood River for special assessments related to street, water, and sanitary improvements at our Wood River facility. This note required ten annual payments of $52,000, including interest at 4.0% per annum, and was scheduled to mature in 2018. In addition, the operating subsidiary for the Wood River facility entered into a financing agreement in the fourth quarter of 2012 for the purchase of certain rolling stock equipment to be used at the facility for $208,000. This note required 24 monthly payments of $9,000, including interest at 6.0% per annum, and was scheduled to mature in 2014. These notes payable were assigned to Newco, and subsequently to Green Plains, as part of the disposition of the ethanol plants.

7.	Tax Increment Financing

In February 2007, the operating subsidiary that constructed the Wood River plant received $ 6.0 million from the proceeds of a tax increment revenue note issued by the City of Wood River, Nebraska. The proceeds funded improvements to property owned by the operating subsidiary. The City of Wood River paid the principal and interest of the note from the incremental increase in the property taxes related to the improvements made to the property. The interest rate on the note was 7.85 %. The proceeds were recorded as a liability which was reduced as the operating subsidiary remited property taxes to the City of Wood River, which began in 2008 and was to continue through 2021. The LLC had guaranteed the principal and interest of the tax increment revenue note if, for any reason, the City of Wood River failed to make the required payments to the holder of the note or the operating subsidiary failed to make the required payments to the City of Wood River. This tax increment revenue note was assigned to Newco, and subsequently to Green Plains, as part of the disposition of the ethanol plants.

8.	Stockholders’ Equity

Reverse Stock Split

On June 15, 2012, the Company effected a reverse stock split with respect to all outstanding shares of common stock and Class B common stock at a ratio of one-for-twenty. The Company also split the number of authorized shares of common stock at a ratio of one-for-fourteen, thereby reducing the aggregate number of authorized common stock shares to 10,000,000, and also split the number of authorized shares of Class B common stock at a ratio of one-for-twenty, thereby reducing the aggregate number of authorized Class B common stock shares to 3,750,000. All share and per share information and all necessary par value adjustments have been retroactively restated in the financial statements to reflect the effect of this reverse stock split.

Stock Repurchase Plan

On October 15, 2007, the Company announced the adoption of a stock repurchase plan authorizing the repurchase of up to $ 7.5 million of the Company’s common stock. Purchases will be funded out of cash on hand and made from time to time in the open market. From the inception of the buyback program through December 31, 2013, the Company had repurchased 40,481 shares at an average price of $ 106.62 per share, leaving $ 3,184,000 available under the repurchase plan. The shares repurchased are being held as treasury stock. As of December 31, 2013, there were no plans to repurchase any additional shares.

	F-17

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

Stockholders’ Equity – (continued)

Dividends

The Company has not declared any dividends on its common stock and does not anticipate paying dividends in the foreseeable future.

9.	Derivative Financial Instruments

The Company offsets amounts of cash collateral deposited with counterparties arising from certain derivative instruments executed with the same counterparty against the fair value amounts reported for those derivative instruments. The Company had no derivative instruments as of December 31, 2013 and 2012. The effects of derivative instruments on our consolidated financial statements, which were included in loss from discontinued operations, were as follows for the years ended December 31, 2013 and 2012 (in thousands) (amounts presented exclude any income tax effects).

Effects of Derivative Instruments on Income

		Years Ended December 31,
	Consolidated Statements of Operations Location	2013		2012
		gain (loss)		gain (loss)
Derivative not designated as hedging instrument:
Commodity contract	Net Sales	$	—	$	(1,498)
Commodity contract	Cost of Goods Sold		—		(1,886)
	Net amount recognized in earnings	$	—	$	(3,384)

In accordance with these provisions, we have categorized our financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below. If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Financial assets and liabilities recorded on the Company’s consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1 — Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access at the measurement date.

	F-18

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

Derivative Financial Instruments – (continued)

Level 2 — Financial assets and liabilities whose values are based on quoted prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. Level 2 inputs include the following:

⋅

Quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds which trade infrequently);

⋅

Inputs other than quoted prices that are observable for substantially the full term of the asset or liability (examples include interest rate and currency swaps); and

⋅

Inputs that are derived principally from or corroborated by observable market data for substantially the full term of the asset or liability (examples include certain securities and derivatives).

As of December 31, 2013, we do not have any level 2 financial assets and liabilities.

Level 3 — Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability. As of December 31, 2013, we do not have any Level 3 financial assets or liabilities.

There were no transfers between the various financial asset and liability levels during the year ended December 31, 2013.

10.

Stock-Based Compensation

The following table summarizes the stock-based compensation expense incurred by the Company (in thousands):

	Years Ended December 31,
	2013		2012
Stock options	$	90	$	922
Restricted stock		1,503		568
Total	$	1,593	$	1,490

2007 Equity Incentive Compensation Plan

Immediately prior to the Company’s initial public offering, the Company adopted the 2007 Equity Incentive Compensation Plan (“2007 Plan”). The 2007 Plan provides for the grant of options intended to qualify as incentive stock options, non-qualified stock options, stock appreciation rights or restricted stock awards and any other equity-based or equity-related awards. The 2007 Plan is administered by the Compensation Committee of the Board of Directors. Subject to adjustment for changes in capitalization, the aggregate number of shares that may be delivered pursuant to awards under the 2007 Plan is currently 355,000. The term of the 2007 Plan is ten years, expiring in June 2017.

	F-19

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

10.

Stock-Based Compensation – (continued)

Stock Options — Except as otherwise directed by the Compensation Committee, the exercise price for options cannot be less than the fair market value of our common stock on the grant date. Other than the stock options issued to Directors, the options will generally vest and become exercisable with respect to 30%, 30% and 40% of the shares of our common stock subject to such options on each of the first three anniversaries of the grant date. Compensation expense related to these options is expensed on a straight line basis over the three year service period. Options issued to Directors generally vest and become exercisable on the first anniversary of the grant date. All stock options have a five year term from the date of grant. During the years ended December 31, 2013 and 2012, the Company did not issue any stock options under the 2007 Plan.

A summary of stock option activity under the 2007 Plan as of December 31, 2013, and the changes during the year ended December 31, 2013 is as follows:

	Shares	Weighted Average Exercise Price		Weighted Average Remaining Life (years)	Aggregate Intrinsic Value
Options outstanding, January 1, 2013	71,237	$	61.72
Granted	—		—
Exercised	—		—
Forfeited	(5,756)		93.30
Options outstanding, December 31, 2013	65,481	$	58.94	1.0	$	0.00

Options exercisable, December 31, 2013	65,481	$	58.94	1.0	$	0.00

A summary of the status of our unvested stock options as of December 31, 2013, and the changes during the year ended December 31, 2013 is as follows:

	Shares	Weighted Average Grant Date Fair Value
Unvested, January 1, 2013	10,074	$	46.01
Granted	—		—
Vested	(10,074)		46.01
Forfeited	—		—
Unvested, December 31, 2013	—	$	—

F-20

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

10.

Stock-Based Compensation – (continued)

Restricted Stock — Other than restricted stock issued to Directors, the restricted stock issued will generally vest in equal increments of 25% on each of the first four anniversaries of the grant date. Compensation expense related to restricted stock issued is expensed on a straight line basis over the four year vesting period. Restricted stock issued to Directors generally vests on the first anniversary of the grant date with compensation expense being expensed on a straight line basis over the one year vesting period. During the years ended December 31, 2013 and 2012, the Company granted 0 and 78,850 restricted stock shares, respectively, under the 2007 Plan to certain of our employees and our non-employee Directors.

A summary of restricted stock activity under the 2007 Plan as of December 31, 2013, and the changes during the year ended December 31, 2013 is as follows:

	Shares	Weighted Average Grant Date Fair Value per Award		Aggregate Intrinsic Value
Restricted stock outstanding, January 1, 2013	143,026	$	13.82
Granted	—		—
Vested	(141,838)		13.84
Cancelled or expired	(1,188)		11.53
Restricted stock outstanding, December 31, 2013	—	$	—	$	—

Under the Company’s Change of Control Plan, 97,852 shares of unvested restricted stock automatically vested due to the disposition of the Company’s ethanol plants. Stock-based compensation expense related to the vesting of these shares, which was included in loss from continuing operations before income taxes, was $911,000 and was recorded in December 2013. After considering the stock option and restricted stock awards issued and outstanding, the Company had 114,553 shares of common stock available for future grant under our 2007 Plan at December 31, 2013.

11.

Income Taxes

The Company has not recognized any income tax provision (benefit) for the years ended December 31, 2013, and 2012 due to continuing losses from operations.

The U.S. statutory federal income tax rate is reconciled to the Company’s effective income tax rate as follows (in thousands):

	Years Ended December 31,
	2013		2012
Tax benefit at 35% federal statutory rate	$	16,587	$	16,213
State tax benefit, net of federal benefit		237		232
Noncontrolling interest		(2,365)		(2,300)
Valuation allowance		(13,567)		(14,273)
Other		(892)		128
Total	$	—	$	—

	F-21

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

11.

Income Taxes – (continued)

The effects of temporary differences and other items that give rise to deferred tax assets and liabilities are presented below (in thousands):

	December 31,
	2013		2012
Deferred tax assets:
Capitalized start up costs	$	24	$	3,253
Stock-based compensation		622		965
Net operating loss carryover		62,372		84,960
Other		18		266
Deferred tax assets		63,036		89,444
Valuation allowance		(61,111)		(47,544)

Deferred tax liabilities:
Property, plant and equipment		(11)		(41,900)
Investment in partnership		(1,914)		—
Deferred tax liabilities		(1,925)		(41,900)
Net deferred tax asset	$	—	$	—

The Company assesses the recoverability of deferred tax assets and the need for a valuation allowance on an ongoing basis. In making this assessment, management considers all available positive and negative evidence to determine whether it is more likely than not that some portion or all of the deferred tax assets will be realized in future periods. This assessment requires significant judgment and estimates involving current and deferred income taxes, tax attributes relating to the interpretation of various tax laws, historical bases of tax attributes associated with certain assets and limitations surrounding the realization of deferred tax assets.

As of December 31, 2013, the net operating loss carryforward was $178.2 million, which will begin to expire if not used by December 31, 2028. The U.S. federal statute of limitations remains open for our 2010 and subsequent tax years.

12.

Employee Benefits

401K Plan

The LLC sponsors a 401(k) profit sharing and savings plan for its employees. Employee participation in this plan is voluntary and the LLC matches 50% of eligible employee contributions, up to an amount equal to 3% of employee compensation, on a biweekly basis. For the years ended December 31, 2013 and 2012, contributions to the plan by the LLC totaled $155,000 and $244,000, respectively.

Severance

The LLC adopted a Change of Control Plan (the “COC Plan”) in November 2006. As a result of the disposition of the Company’s ethanol plants, a change of control under the COC Plan occurred, and therefore as of December 31, 2013 the Company accrued $4,180,000 in other current liabilities related to certain change of control severance payments owed to its corporate employees, which payments were made in the first quarter of 2014.

	F-22

Biofuel Energy Corp.

Notes to Consolidated Financial Statements

13.

Commitments and Contingencies

In October 2013, the LLC entered into a ten month lease that began November 1, 2013 for office space for its corporate headquarters. The monthly rent expense of $11,000 is being recognized on a straight line basis over the term of the lease.

Rent expense included in loss from continuing operations totaled $256,000 and $249,000 for the years ended December 31, 2013 and 2012 respectively. Rent expense included in loss from discontinued operations totaled $10,022,000 and $11,140,000 for the years ended December 31, 2013 and 2012, respectively.

The Company is not currently a party to any material legal, administrative or regulatory proceedings that have arisen in the ordinary course of business or otherwise that would result in loss contingencies.

14.

Noncontrolling Interest

Noncontrolling interest consists of equity issued to members of the LLC upon the Company’s initial public offering in June 2007. As provided in the LLC agreement, the exchange ratio of the various existing classes of equity of the LLC for the single class of equity at the time of the Company’s initial public offering was based on the Company’s initial public offering price of $ 210.00 per share and the resulting implied valuation of the Company. The exchange resulted in the issuance of 897,903 LLC membership units and Class B common shares. Each LLC membership unit combined with a share of Class B common stock is exchangeable at the holder’s option into one share of Company common stock. The LLC may make distributions to members as determined by the Company.

At the time of its initial public offering, the Company owned 28.9% of the LLC membership units of the LLC. At December 31, 2013, the Company owned 87.3% of the LLC membership units. The noncontrolling interest will continue to be reported until all Class B common shares and LLC membership units have been exchanged for the Company’s common stock.

The table below shows the effects of the changes in BioFuel Energy Corp.’s ownership interest in the LLC on the equity attributable to BioFuel Energy Corp.’s common stockholders for the years ended December 31, 2013 and 2012 (in thousands):

Net Loss Attributable to BioFuel Energy Corp.’s Common Stockholders and

Transfers from the Noncontrolling Interest

	Years Ended December 31,
	2013		2012
Net loss attributable to BioFuel Energy Corp.	$	(39,208)	$	(39,843)
Increase in BioFuel Energy Corp. stockholders equity from issuance of common shares in exchange for Class B common shares and units of BioFuel Energy, LLC		—		273
Change in equity from net loss attributable to BioFuel Energy Corp. and transfers from noncontrolling interest	$	(39,208)	$	(39,570)

F-23

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

14.

Noncontrolling Interest – (continued)

Tax Benefit Sharing Agreement

Membership units in the LLC combined with the related Class B common shares held by the historical equity investors may be exchanged in the future for shares of our common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. The LLC will make an election under Section 754 of the IRS Code effective for each taxable year in which an exchange of membership units and Class B shares for common shares occurs, which may result in an adjustment to the tax basis of the assets owned by the LLC at the time of the exchange. Increases in tax basis, if any, would reduce the amount of tax that the Company would otherwise be required to pay in the future, although the IRS may challenge all or part of the tax basis increases, and a court could sustain such a challenge. The Company has entered into tax benefit sharing agreements with its historical LLC investors that will provide for a sharing of these tax benefits, if any, between the Company and the historical LLC equity investors. Under these agreements, the Company will make a payment to an exchanging LLC member of 85% of the amount of cash savings, if any, in U.S. federal, state and local income taxes the Company actually realizes as a result of this increase in tax basis. The Company and its common stockholders will benefit from the remaining 15% of cash savings, if any, in income taxes realized. For purposes of the tax benefit sharing agreement, cash savings in income tax will be computed by comparing the Company’s actual income tax liability to the amount of such taxes the Company would have been required to pay had there been no increase in the tax basis in the assets of the LLC as a result of the exchanges. The term of the tax benefit sharing agreement commenced on the Company’s initial public offering in June 2007 and will continue until all such tax benefits have been utilized or expired, unless a change of control occurs and the Company exercises its resulting right to terminate the tax benefit sharing agreement for an amount based on agreed payments remaining to be made under the agreement.

Ownership “True-Up” Agreement

At the time of formation of the LLC, the founders agreed with certain of our principal stockholders as to the relative ownership interests in the Company of our management members and affiliates of Greenlight Capital, Inc. (“Greenlight”) and Third Point LLC (“Third Point”). Certain management members and affiliates of Greenlight and Third Point agreed to exchange LLC membership interests, shares of common stock or cash at a future date, referred to as the “true-up date”, depending on the Company’s performance. This provision functioned by providing management with additional value if the Company’s value improved and by reducing management’s interest in the Company if its value decreased, subject to a predetermined rate of return accruing to Greenlight and Third Point. In particular, if the value of the Company increased from the time of the initial public offering to the “true-up date”, the management members were entitled to receive LLC membership units, shares of common stock or cash from the affiliates of Greenlight and Third Point. On the other hand, if the value of the Company decreased from the time of the initial public offering to the “true-up date” or if a predetermined rate of return was not met, the affiliates of Greenlight and Third Point were entitled to receive LLC membership units or shares of common stock from the management members.

The “true-up date” occurred on June 19, 2012, which was five years from the date of the initial public offering. Since the value of the Company decreased from the time of the initial public offering to the “true-up date”, the affiliates of Greenlight and Third Point received 69,382 and 34,691 LLC membership units, respectively, from certain members or former members of our management group during the third quarter of 2012 as a result of the “true-up”. No new shares were issued as a result of the “true-up” but rather a redistribution of shares occurred among certain members or former members of our management group and our two largest investors, Greenlight and Third Point.

	F-24

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

15.

Quarterly Financial Data (unaudited)

The following table sets forth certain unaudited financial data for each of the quarters within fiscal 2013 and 2012. This information has been derived from our consolidated financial statements and in management’s opinion, reflects all adjustments necessary for a fair presentation of the information for the quarters presented. The operating results of any quarter are not necessarily indicative of results for any future period. The amounts have been reclassified to reflect the disposition of the ethanol plants being accounted for as discontinued operations.

Year Ended December 31, 2013	1 ^st Quarter		2 ^nd Quarter		3 ^rd Quarter		4 ^th Quarter

	(in thousands, except per share data)
General and administrative expenses:
Compensation expense	$	(978)	$	(786)	$	(737)	$	(5,606)
Other		(342)		(625)		(312)		(357)
Operating loss		(1,320)		(1,411)		(1,049)		(5,963)
Other income (expense)		1		—		—		(4)
Loss from continuing operations before income taxes		(1,319)		(1,411)		(1,049)		(5,967)
Income tax provision (benefit)		—		—		—		—
Loss from continuing operations		(1,319)		(1,411)		(1,049)		(5,967)
Discontinued operations:
Loss from discontinued operations		(4,009)		(3,326)		(4,080)		(470)
Loss on disposal of plants		—		—		—		(24,019)
Income tax provision (benefit)		—		—		—		—
Loss from discontinued operations		(4,009)		(3,326)		(4,080)		(24,489)
Net loss		(5,328)		(4,737)		(5,129)		(30,456)
Less: Net loss from continuing operations attributable to the noncontrolling interest		172		183		137		875
Less: Net loss from discontinued operations attributable to the noncontrolling interest		521		430		531		3,593
Net loss attributable to BioFuel Energy Corp. common stockholders	$	(4,635)	$	(4,124)	$	(4,461)	$	(25,988)
Amounts attributable to BioFuel Energy Corp.:
Loss from continuing operations	$	(1,147)	$	(1,228)	$	(912)	$	(5,092)
Loss from discontinued operations		(3,488)		(2,896)		(3,549)		(20,896)
Net loss attributable to BioFuel Energy Corp.	$	(4,635)	$	(4,124)	$	(4,461)	$	(25,988)

Basic and fully diluted loss per share attributable to BioFuel Energy Corp.:
Continuing operations	$	(0.21)	$	(0.23)	$	(0.17)	$	(0.95)
Discontinued operations		(0.66)		(0.54)		(0.67)		(3.88)
	$	(0.87)	$	(0.77)	$	(0.84)	$	(4.83)
Weighted average shares outstanding – basic and fully diluted		5,308		5,342		5,342		5,387

	F-25

BioFuel Energy Corp.

Notes to Consolidated Financial Statements

15.

Quarterly Financial Data (unaudited) – (continued)

Year Ended December 31, 2012	1 ^st Quarter		2 ^nd Quarter		3 ^rd Quarter		4 ^th Quarter

	(in thousands, except per share data)
General and administrative expenses:
Compensation expense	$	(1,332)	$	(1,081)	$	(1,065)	$	(805)
Other		(510)		(569)		(367)		(361)
Operating loss		(1,842)		(1,650)		(1,432)		(1,166)
Other income (expense)		—		—		—		—
Loss from continuing operations before income taxes		(1,842)		(1,650)		(1,432)		(1,166)
Income tax provision (benefit)		—		—		—		—
Loss from continuing operations		(1,842)		(1,650)		(1,432)		(1,166)
Discontinued operations:
Loss from discontinued operations		(9,251)		(10,765)		(9,896)		(10,320)
Loss on disposal of plants		—		—		—		—
Income tax provision (benefit)		—		—		—		—
Loss from discontinued operations		(9,251)		(10,765)		(9,896)		(10,320)
Net loss		(11,093)		(12,415)		(11,328)		(11,486)
Less: Net loss from continuing operations attributable to the noncontrolling interest		280		244		189		149
Less: Net loss from discontinued operations attributable to the noncontrolling interest		1,405		1,589		1,309		1,314
Net loss attributable to BioFuel Energy Corp. common stockholders	$	(9,408)	$	(10,582)	$	(9,830)	$	(10,023)
Amounts attributable to BioFuel Energy Corp.:
Loss from continuing operations	$	(1,562)	$	(1,406)	$	(1,243)	$	(1,017)
Loss from discontinued operations		(7,846)		(9,176)		(8,587)		(9,006)
Net loss attributable to BioFuel Energy Corp.	$	(9,408)	$	(10,582)	$	(9,830)	$	(10,023)

Basic and fully diluted loss per share attributable to BioFuel Energy Corp.:
Continuing operations	$	(0.30)	$	(0.27)	$	(0.24)	$	(0.19)
Discontinued operations		(1.53)		(1.78)		(1.64)		(1.70)
	$	(1.83)	$	(2.05)	$	(1.88)	$	(1.89)
Weighted average shares outstanding – basic and fully diluted		5,140		5,167		5,224		5,300

F-26

Schedule I

BioFuel Energy Corp.

Condensed Financial Information of Registrant

(Parent company information — See notes to consolidated financial statements)

(in thousands, except share data)

Condensed Balance Sheets

	December 31,
	2013		2012
Assets
Investment in BioFuel Energy, LLC	$	18,615	$	56,230
Total assets	$	18,615	$	56,230
Stockholders' equity
Preferred stock, $0.01 par value; 5,000,000 shares authorized and no shares outstanding at December 31, 2013 and December 31, 2012	$	—	$	—
Common stock, $0.01 par value; 10,000,000 shares authorized and 5,482,585 shares outstanding at December 31, 2013 and 5,483,773 shares outstanding at December 31, 2012		54		54
Class B common stock, $0.01 par value; 3,750,000 shares authorized and 795,479 shares outstanding at December 31, 2013 and December 31, 2012		8		8
Less common stock held in treasury, at cost, 40,481 shares at December 31, 2013 and December 31, 2012		(4,316)		(4,316)
Additional paid-in capital		191,197		189,604
Accumulated deficit		(168,328)		(129,120)
Total stockholders' equity	$	18,615	$	56,230

Condensed Statements of Operations

	Years Ended December 31,
	2013		2012
Equity in loss of BioFuel Energy, LLC	$	(39,027)	$	(39,568)
Other expenses		(181)		(275)
Net loss	$	(39,208)	$	(39,843)

Condensed Statements of Cash Flows

	Years Ended December 31,
	2013		2012
Cash flow from operating activities:
Net loss	$	(39,208)	$	(39,843)
Adjustment to reconcile net loss to net cash used in operating activities:
Equity in loss of BioFuel Energy, LLC		39,027		39,568
Net cash used in operating activities		(181)		(275)
Cash flows from investing activities:
Advances from BioFuel Energy, LLC		181		275
Net cash provided by investing activities		181		275
Cash and equivalents at end of period	$	—	$	—

	F-27

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or furnishes to the Securities and Exchange Commission, or the SEC, under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Company’s principal executive officer and principal financial officer have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Annual Report on Form 10-K. Based upon their evaluation, they have concluded that the Company’s disclosure controls and procedures are effective.

In designing and evaluating the Company’s disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the control system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events and the application of judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of these and other inherent limitations of control systems, there is only reasonable assurance that the Company’s controls will succeed in achieving their goals under all potential future conditions.

Changes in Internal Control over Financial Reporting

No change in internal control over financial reporting occurred during the quarter ended December 31, 2013, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Section 404 Compliance

Our management is responsible for establishing and maintaining a system of internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our system of internal control is designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgments inherent in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and overriding of controls. Consequently, an effective internal control system can only provide reasonable, not absolute assurance, with respect to reporting financial information. Further, because of changes in conditions, effectiveness of internal control over financial reporting may vary over time.

A material weakness is a control deficiency or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2013 based on the framework in Internal Control — Integrated Framework (1992), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2013.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information with respect to directors of the Company is incorporated herein by reference to the section entitled “Election of Directors” in our proxy statement for our 2014 Annual Meeting of Stockholders (the “2014 Proxy Statement”), to be filed no later than 120 days after the end of the fiscal year ended December 31, 2013.

Information with respect to compliance with Section 16(a) of the Exchange Act is incorporated herein by reference to our 2014 Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

Information regarding Executive Compensation and our Compensation Committee are incorporated herein by reference to our 2014 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The sections of our 2014 Proxy Statement entitled “Security Ownership of Certain Beneficial Owners and Management” and “Executive Compensation — Equity Compensation Plan Information” are incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information with respect to certain relationships and related transactions and director independence is incorporated herein by reference to our 2014 Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Information with respect to principal accounting fees and services is incorporated herein by reference to our 2014 Proxy Statement.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) and (a) (2) Financial statements . The Financial Statements of the Company filed as part of this Annual Report on Form 10-K are included in Item 8 of this Annual Report on Form 10-K.

(a)(3) Exhibits

(b) The following are filed as Exhibits to this Annual Report on Form 10-K or incorporated herein by reference.

EXHIBIT INDEX

(a) Exhibits

Number		Description
3.1		Amended and Restated Certificate of Incorporation of BioFuel Energy Corp. (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed February 8, 2011).
3.2		Amended and Restated Bylaws of BioFuel Energy Corp dated March 20, 2009, (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed March 23, 2009).
4.1		Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Amendment #3 to Registration Statement to Form S-1 (file no. 333-139203) filed April 23, 2007).
10.1		Second Amended and Restated Limited Liability Company Agreement of BioFuel Energy, LLC dated June 19, 2007 (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed August 14, 2007).
10.2*		BioFuel Energy, LLC Change of Control Plan (incorporated by reference to Exhibit 10.23 to the Company’s Amendment #1 to Registration Statement to Form S-1 (file no. 333-139203) filed January 24, 2007).
10.3*		BioFuel Energy Corp 2007 Equity Incentive Compensation Plan (incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K filed March 12, 2008).
10.4*		BioFuel Energy, LLC 401(k) Profit Sharing Prototype Plan Document (incorporated by reference to Exhibit 10.25 to the Company’s Amendment #1 to Registration Statement to Form S-1 (file no. 333-139203) filed January 24, 2007).
10.4.1*		Amendment to BioFuel Energy, LLC 401(k) Profit Sharing Prototype Plan Document (incorporated by reference to Exhibit 10.25.1 to the Company’s Amendment #1 to Registration Statement to Form S-1 (file no. 333-139203) filed January 24, 2007).
10.4.2*		Amendment to BioFuel Energy, LLC 401(k) Profit Sharing Prototype Plan Document (incorporated by reference to Exhibit 10.25.2 to the Company’s Amendment #1 to Registration Statement to Form S-1 (file no. 333-139203) filed January 24, 2007).
10.4.3*		Addendum to BioFuel Energy, LLC 401(k) Profit Sharing Prototype Plan Document (incorporated by reference to Exhibit 10.25.3 to the Company’s Amendment #1 to Registration Statement to Form S-1 (file no. 333-139203) filed January 24, 2007).

	19

Number		Description
10.5*		BioFuel Energy, LLC 401(k) Profit Sharing Plan Adoption Agreement (incorporated by reference to Exhibit 10.26 to the Company’s Amendment #1 to Registration Statement to Form S-1 (file no. 333-139203) filed January 24, 2007).
10.5.1*		Addendum to BioFuel Energy, LLC 401(k) Profit Sharing Plan Adoption Agreement (incorporated by reference to Exhibit 10.26.1 to the Company’s Amendment #1 to Registration Statement to Form S-1 (file no. 333-139203) filed January 24, 2007).
10.6		Tax Benefit Sharing Agreement between BioFuel Energy Corp. and the parties listed on the signature page thereto dated June 19, 2007 (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed August 14, 2007).
10.7*		Executive Employment Agreement dated as of August 31, 2010 between BioFuel Energy, LLC and Scott H. Pearce (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 3, 2010).
10.8*		Executive Employment Agreement dated as of August 31, 2010 between BioFuel Energy, LLC and Kelly G. Maguire (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September 3, 2010).
10.9*		Offer of Continued Employment dated as of August 31, 2010 between BioFuel Energy, LLC and Mark Zoeller (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed September 3, 2010).
10.10*		Third Amended and Restated Limited Liability Company Agreement of Biofuel Energy, LLC dated February 4, 2011 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed February 4, 2011).
21.1		List of Subsidiaries of BioFuel Energy Corp.
23.1		Consent of Grant Thornton LLP, Independent Registered Public Accounting Firm
31.1		Certification of the Company’s Chief Executive Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241).
31.2		Certification of the Company’s Chief Financial Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241).
32.1		Certification of the Company’s Chief Executive Officer Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
32.2		Certification of the Company’s Chief Financial Officer Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).

Denotes Management Contract or Compensatory Plan or Arrangement

	20

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		BIOFUEL ENERGY CORP.
		(Registrant)
Date: March 26, 2014	By:
		/s/ Scott H. Pearce

		Scott H. Pearce
		President, Chief Executive Officer and Director

Date: March 26, 2014	By:
		/s/ Kelly G. Maguire

		Kelly G. Maguire
		Executive Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Capacity in which signed	Date
/s/ Mark Wong	Chairman of the Board	March 26, 2014
Mark Wong

/s/ Scott H. Pearce	Chief Executive Officer, President and	March 26, 2014
Scott H. Pearce	Director (Principal Executive Officer)

/s/ David Einhorn	Director	March 26, 2014
David Einhorn

/s/ Ernest J. Sampias	Director	March 26, 2014
Ernest J. Sampias

/s/ Elizabeth K. Blake	Director	March 26, 2014
Elizabeth K. Blake

/s/ John D. March	Director	March 26, 2014
John D. March

/s/ Richard Jaffee	Director	March 26, 2014
Richard Jaffee

	21