8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 6, 2014

Renewable Energy Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-35397	26-4785427
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

416 South Bell Avenue

Ames, Iowa 50010

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (515) 239-8000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

This amendment to the Current Report on Form 8-K originally dated June 6, 2014 is being filed to include the historical financial statements of Dynamic Fuels, LLC (“Dynamic Fuels”) and Syntroleum Corporation (“Syntroleum”) required to be filed under Item 9.01.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The following financial statement of Dynamic Fuels and Syntroleum are included in this report:

The audited financial statements of Dynamic Fuels and Syntroleum for the year ended September 30, 2013 and December 31, 2013, respectively, and the unaudited condensed financial statements of Dynamic Fuels for the six months ended March 31, 2014 and the unaudited financial statements of Syntroleum for the three months ended March 31, 2014 are attached as Exhibits 99.2, 99.1, 99.4 and 99.3, respectively, and incorporated by reference herein.

(b) Pro Forma Financial Information.

The unaudited pro forma consolidated statements of operations after giving effect to the acquisition of Dynamic Fuels and Syntroleum for the six months ended June 30, 2014 and the year ended December 31, 2013 are attached hereto as Exhibit 99.5 and incorporated by reference herein. An unaudited pro forma condensed consolidated balance sheet as of June 30, 2014 has not been presented given Renewable Energy Group Inc.’s reported balance sheet as of June 30, 2014 includes the balance sheet results of the transactions with Dynamic Fuels and Syntroleum.

(d) Exhibits

23.1	Consent of Independent Registered Public Accounting Firm for Syntroleum Corporation, HoganTaylor LLP
23.2	Consent of Independent Registered Public Accounting Firm for Dynamic Fuels, LLC, HoganTaylor LLP
99.1	Audited consolidated financial statements of Syntroleum Corporation for the year ended December 31, 2013
99.2	Audited financial statements of Dynamic Fuels, LLC for the year ended September 30, 2013
99.3	Unaudited condensed consolidated financial statements of Syntroleum Corporation for the three months ended March 31, 2014
99.4	Unaudited condensed financial statements of Dynamic Fuels, LLC for the six months ended March 31, 2014
99.5	Unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2014 and for the year ended December 31, 2013

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 22, 2014

RENEWABLE ENERGY GROUP, INC.
By:	/s/ Chad Stone
	Chad Stone Chief Financial Officer

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement (No. 333-168374) on Form S-8 and Registration Statement (No. 333-186822 and 333-196341) on Form S-3 of Renewable Energy Group, Inc. and subsidiaries of our report dated March 13, 2014, relating to our audit of the consolidated financial statements of Syntroleum Corporation as of and for the year ended December 31, 2013, included in this Current Report on Form 8-K/A.

/s/ HoganTaylor LLP

Tulsa, Oklahoma

August 22, 2014

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement (No. 333-168374) on Form S-8 and Registration Statement (No. 333-186822 and 333-196341) on Form S-3 of Renewable Energy Group, Inc. and subsidiaries of our report dated March 12, 2014, relating to our audit of the financial statements of Dynamic Fuels, LLC as of and for the year ended September 30, 2013, included in this Current Report on Form 8-K/A.

/s/ HoganTaylor LLP

Tulsa, Oklahoma

August 22, 2014

EX-99.1

Exhibit 99.1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Syntroleum Corporation

We have audited the accompanying consolidated balance sheet of Syntroleum Corporation (a Delaware corporation) and subsidiaries as of December 31, 2013, and the related consolidated statement of operations, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit 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 Syntroleum Corporation and subsidiaries as of December 31, 2013, and the results of their operations and their cash flows for the year ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses, negative cash flows from operations and an accumulated deficit of $362.7 million. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters also are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ HOGANTAYLOR LLP

Tulsa, Oklahoma

March 13, 2014

SYNTROLEUM CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in thousands)

	December 31,
	2013
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	11,400
Accounts receivable		109
Taxes receivable		988
Other current assets		280
Total current assets		12,777
PROPERTY AND EQUIPMENT – at cost, net		77
INVESTMENT IN AND LOANS TO DYNAMIC FUELS, LLC		37,848
OTHER ASSETS, net		1,113
	$	51,815
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	783
Accrued employee costs		23
Total current liabilities		806
DEFERRED REVENUE		13,365
COMMITMENTS AND CONTINGENCIES		—
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.01 par value, 5,000 shares authorized, no shares issued		—
Common stock, $0.01 par value, 150,000 shares authorized, 9,943 shares issued and outstanding at December 31, 2013		99
Additional paid-in capital		400,262
Accumulated deficit		(362,717	)
Total stockholders’ equity		37,644
	$	51,815

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

F-2

SYNTROLEUM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

	For the Year Ended December 31, 2013
REVENUES:
Technology	$	100
Technical services		1,388
Technical services from Dynamic Fuels, LLC		469
Total revenues		1,957
COSTS AND EXPENSES:
Engineering		2,280
Depreciation and amortization		180
General, administrative and other (including non-cash equity compensation of $475 for the year ended December 31, 2013.)		8,835
OPERATING LOSS		(9,338	)
INTEREST INCOME		8
OTHER INCOME		8
EQUITY IN LOSS OF DYNAMIC FUELS, LLC		(1,569	)
FOREIGN CURRENCY EXCHANGE		2,247
LOSS FROM CONTINUING OPERATIONS		(8,644	)
INCOME FROM DISCONTINUED OPERATIONS		6,391
NET LOSS	$	(2,253	)
BASIC AND DILUTED NET INCOME(LOSS) PER SHARE:
Net loss from continuing operations	$	(0.87	)
Income from discontinued operations		0.64
Net loss	$	(0.23	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		9,932
Diluted		9,932

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

F-3

SYNTROLEUM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

	Common Stock
	Number of Shares		Amount		Additional Paid-In Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance, January 1, 2013		9,829	$	98	$	399,788	$	(360,464	)	$	39,422
Vesting of awards granted		88		1		349		—			350
Match to 401(k) Plan & repurchased shares		26		—		125		—			125
Net loss		—		—		—		(2,253	)		(2,253	)
Balance, December 31, 2013		9,943	$	99	$	400,262	$	(362,717	)	$	37,644

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

F-4

SYNTROLEUM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands)

	For the Year Ended December 31,
	2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,253	)
Income from discontinued operations		6,391
Loss from continuing operations		(8,644	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		180
Foreign currency exchange		(2,247	)
Non-cash compensation expense		475
Non-cash loss in equity method investee		1,569
Changes in assets and liabilities:
Accounts receivable		25
Accounts receivable from Dynamic Fuels, LLC		252
Other assets		(278	)
Accounts payable		471
Accrued liabilites and other		(48	)
Net cash used in continuing operations		(8,245	)
Net cash used in discontinued operations		(10	)
Net cash used in operating activities		(8,255	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(54	)
Investment in and loans to Dynamic Fuels, LLC		(10,985	)
Taxes receivable reduction in Dynamic Fuels, LLC working capital loans		8,987
Net cash used in continuing operations		(2,052	)
Net cash provided by discontinued operations		5,798
Net cash provided by investing activities		3,746
NET CHANGE IN CASH AND CASH EQUIVALENTS:		(4,509	)
CASH AND CASH EQUIVALENTS, beginning of period		15,909
CASH AND CASH EQUIVALENTS, end of period	$	11,400
NON-CASH INVESTING ACTIVITIES:
Taxes receivable reduction in Dynamic Fuels LLC working capital loan	$	988

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

F-5

SYNTROLEUM CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

Nature of Operations

The focus of Syntroleum Corporation and subsidiaries (the “Company”, “Syntroleum”, or “we”) is the commercialization of our technologies to produce synthetic liquid hydrocarbons. Operations to date have consisted of activities related to the commercialization of a proprietary process (the “Syntroleum^® Process”) and previously consisted of research and development of the Syntroleum^® Process designed to convert carbonaceous material (biomass, coal, natural gas and petroleum coke) into synthetic liquid hydrocarbons. Synthetic hydrocarbons produced by the Syntroleum^® Process can be further processed using the Syntroleum Synfining^® Process into high quality liquid fuels, such as diesel, jet fuel (HRJ), kerosene, naphtha, propane and other renewable chemical products.

Our Bio-Synfining^® Technology is a renewable fuels application of our Synfining^® Technology. This technology is applied commercially via our Dynamic Fuels, LLC (“Dynamic Fuels”) joint venture with Tyson Foods, Inc. (“Tyson”). The technology processes renewable feedstocks such as triglycerides and/or fatty acids to make renewable synthetic products.

In the past we have sustained recurring losses and negative cash flows from operations. As of December 31, 2013, we had approximately $11.4 million of cash and cash equivalents available to fund operations and investing activities and have limited income from operations. Additionally, the Dynamic Fuels plant (the “Geismar Facility”) was placed in stand-by mode in December 2012, and remains in stand-by mode as the Company and Tyson have not agreed upon the conditions necessary for start-up. See Going Concern discussion in Note 2.

Asset Purchase Agreement with Renewable Energy Group

On December 17, 2013, we entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Renewable Energy Group, Inc. (“REG”) and REG Synthetic Fuels, LLC, (“REG Synthetic”), a wholly-owned subsidiary of REG, pursuant to which we have agreed to sell substantially all of our assets to REG Synthetic, including all of our intellectual property and our 50% equity interest Dynamic Fuels (the “Asset Sale”). As consideration for the Asset Sale, REG will assume substantially all of our material liabilities and we will receive 3,796,000 shares of REG common stock, subject to downward adjustment (based on the value of REG common stock at closing, as calculated under the Asset Purchase Agreement) to the extent that our cash on hand at closing is less than $3.2 million; provided, that, if the per share value of REG’s common stock at closing (as calculated under the Asset Purchase Agreement) is equal to or greater than $12.91, then the number of shares of REG common stock will be equal to (A) $49,000,000, divided by (B) the REG common stock value at closing (as calculated under the Asset Purchase Agreement). The closing of the transactions contemplated by Asset Purchase Agreement is conditioned upon the approval of our stockholders and other specified closing conditions. REG has filed a Registration Statement on Form S-4 in connection with the transactions contemplated by the Asset Purchase Agreement, which includes our proxy statement for a special meeting of stockholders to be held in order to approve the transactions. If our stockholders approve the transaction and the other closing conditions are satisfied or waived, it is expected that the Asset Sale will close in the second quarter of 2014.

Following the closing of the Asset Sale and subject to the approval of our stockholders, we intend to liquidate and dissolve in compliance with the applicable provisions of the Delaware General Corporation Law.

F-6

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

The consolidated financial statements include the accounts of Syntroleum Corporation and our majority-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. Companies in which we own a 20 percent to 50 percent interest, but in which we do not have a controlling interest are accounted for by the equity method. We own 50 percent and have a non-controlling interest in Dynamic Fuels. The entity is accounted for under the equity method and is not required to be consolidated in our financial statements; however, our share of the Dynamic Fuels results of operations activities is reflected in the Consolidated Statements of Operations and the subsidiary’s summarized financial information is reported in Note 4, “Investment in and Loans to Dynamic Fuels, LLC”. The carrying value of our investment in Dynamic Fuels is reflected in “Investment in and Loans to Dynamic Fuels, LLC” in our Consolidated Balance Sheets.

The consolidated financial statements for all prior periods have been retroactively adjusted to reflect the April 11, 2013 10-for-1 reverse stock split of the Company’s common stock, which allowed the Company to regain compliance with Nasdaq’s minimum price rule as of April 26, 2013. As a result of the reverse split, each ten (10) outstanding shares of pre-split common stock were automatically combined into one (1) share of post-split common stock. Fractional shares received cash and proportional adjustments were made to the Company’s outstanding stock options and other equity awards and to the Company’s equity compensation plans to reflect the reverse stock split. The consolidated financial statements for all prior periods have been retroactively adjusted to reflect this stock split for both common stock issued and options outstanding.

Revenue Recognition

We recognize revenues from technical services provided as such services are rendered. We recognize revenue for royalty fees upon production of finished product by the licensee.

We recognized revenues from the transfer of technology documentation to customers or through licensing structures. Any deposits or advance payments for the technology documentation is recorded as deferred revenue in the consolidated balance sheets until recognized as revenue in the consolidated statement of operations. The Company recognizes revenue on the transfer of technology documentation upon the physical transfer of the technology documentation by the Company to the customer pursuant to the terms of the specific agreement.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less, primarily in the form of money market instruments. The Company places its temporary cash investments with high credit quality financial institutions. At times such investments may be in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limit.

Accounts Receivable

The majority of our accounts receivable is due from technical service agreements. These accounts are typically due within 30 days and are stated as amounts due from customers. Accounts outstanding longer than the contractual payment terms are considered past due. We write off accounts receivable when they become uncollectible. Management determines accounts to be uncollectible when we have used all reasonable means of collection and settlement. Management believes that all amounts included in accounts receivable at December 31, 2013 will be collected and therefore no allowance for uncollectible accounts has been recorded.

F-7

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. Maintenance, repairs and replacement of minor items are expensed as incurred and major additions, expansions and betterments to physical properties are capitalized. When assets are sold or retired, the cost and accumulated depreciation related to those assets are removed from the accounts and any gain or loss is recognized. Depreciation of property and equipment is computed on the straight-line method over the estimated useful lives of three to seven years. Property and equipment consists of the following (in thousands):

	December 31,
	2013
Furniture and office equipment	$	495
Leasehold improvements		5
		500
Less - accumulated depreciation		(423	)
	$	77

Income Taxes

Income taxes are accounted for using the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and on net operating loss carry-forwards. Deferred tax assets and liabilities are measured using the enacted tax rates and laws in effect or that will be in effect when the differences are expected to reverse. The Company records a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Asset Retirement Obligations

We follow FASB ASC Topic 410, Asset Retirement and Environmental Obligations, which requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset. The standard requires that we record the discounted fair value of the retirement obligation as a liability at the time the plants are constructed. The asset retirement obligations consisted primarily of costs associated with the future plant dismantlement of our pilot plant. As the pilot plant was directly related to research and development activities and had been expensed accordingly, no corresponding amount was capitalized as part of the related property’s carrying amount. The liability accretes over time with a charge to accretion expense. Based on a change in expected life of the pilot plant, no accretion expense was incurred in 2013. See Footnote 3 for additional information.

Other Assets

Other assets include costs associated with patents and are amortized using the straight-line method over their estimated period of benefit, ranging from fifteen to seventeen years. All costs are capitalized, and amortization begins upon initial costs incurred. Amortization expense for the year ended December 31, 2013 was $145,000. We periodically evaluate the recoverability of intangible assets and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. Future amortization expense for patents as of December 31, 2013 is estimated to be $145,000 per year through 2020. Patent costs consist of the following (in thousands):

	December 31,
	2013
Patents	$	2,416
Less - accumulated amortization		(1,303	)
	$	1,113

F-8

Impairment of Assets

We follow the provisions of FASB ASC Topic 360, Property, Plant and Equipment, for assets. Management reviews assets for impairment when certain events have occurred or changes in circumstances indicate that the asset may be impaired. An asset is considered to be impaired when the estimated undiscounted future cash flows are less than the carrying value of the asset. The impairment provision is based on the excess of carrying value over fair value.

Accounting for Guarantees

We follow the provisions of FASB ASC Topic 460, Guarantees for any guarantees entered into after December 2002. Under ASC Topic 460, we are required to record a liability for the fair value of the obligation undertaken in issuing the guarantees.

Stock-Based Compensation

Employee Stock-Based Compensation. We account for stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Based. Under the fair value recognition provisions of this statement, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the applicable vesting period of the stock award (generally three years) using the straight line method.

Non-Employee Stock-Based Compensation. We also grant stock-based incentives to certain non-employees. These stock based incentives are accounted for in accordance with FASB ASC Topic 505 – Equity-Based Payments to Non-Employees. Stock awards that are tied to performance criteria are expensed at the time the performance goals are met.

Earnings Per Share

Basic earnings (losses) per common share were computed by dividing net loss by the weighted average number of shares of common stock outstanding during the reporting period. Diluted earnings per common share for the year ended December 31 is calculated by dividing net loss by weighted-average common shares outstanding during the period plus dilutive potential common shares, which is determined as follows:

	Year ended December 31, 2013
	(in thousands)
Basic weighted-average shares		9,932
Effect of dilutive securities:
Stock options		—
Dilutive weighted-average shares		9,932

The table below includes information related to stock options, warrants and restricted stock that were outstanding at December 31, 2013, but have been excluded from the computation of weighted-average stock options due to (i) the option exercise price exceeding the twelve-month weighted-average market price of our common shares or (ii) their inclusion would have been anti-dilutive to our loss per share.

Options and warrants (in thousands)		2,360
Weighted-average exercise price of options and warrants	$	25.69
Average market price of common shares	$	4.90

F-9

Defined Contribution Plan - 401(k)

We sponsor a defined contribution plan, named the Syntroleum 401(k) Plan (the “401(k) Plan”), covering virtually all of our employees who have met the eligibility requirements. Our employees may participate in the 401(k) Plan upon employment. Participants become eligible for matching and profit sharing contributions upon employment on the last day of the 401(k) Plan quarter.

We contribute a matching contribution equal to 50 percent of employees’ contributions quarterly in the form of shares of our common stock. No employee purchase of our stock is permitted. We recorded expense of $125,000 from issuing 27,498 shares of Syntroleum Stock for the year ended December 31, 2013, of which 10,197 shares were issued in January 2014.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates made by management include, but are not limited to, the valuation of stock-based compensation, estimates for accrued liabilities and estimates for asset retirement obligations. Actual results could differ from these estimates.

Going Concern

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. As a result of the factors described in Note 1, and in connection with our accumulated deficit of $362.7 million, and our expectation of future cash requirements exceeding our capital availability there is substantial doubt about our ability to continue as a going concern.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. If the consolidated financial statements were prepared on a liquidation basis, the carrying value of our assets and liabilities would be adjusted to the net realizable amounts. In addition, the classification of the assets and liabilities would be adjusted to reflect the liquidation basis of accounting.

Foreign Currency Transactions

All of our subsidiaries use the U.S. dollar for their functional currency. Assets and liabilities denominated in other currencies are translated into U.S. dollars at the rate of exchange in effect at the balance sheet date. Transaction gains and losses that arise from exchange rate fluctuations applicable to transactions denominated in a currency other than the U.S. dollar are included in the consolidated results of operations as incurred.

New Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) periodically issues new accounting standards in a continuing effort to improve standards of financial accounting and reporting. We have reviewed the recently issued pronouncements and concluded that there are no recently issued accounting standards applicable to us.

3. DISCONTINUED OPERATIONS

Research and Development

We have completed the necessary testing and demonstration associated with our previously owned pilot plants as well as completion of catalyst formulation and deactivation studies. All revenues and costs associated with these activities such as; facilities, dismantlement of facilities, overhead associated with the facilities, personnel, equipment and outside testing and analytical work have been reported in “Income (Loss) from Discontinued Operations” in the Consolidated Statement of Operations. The total income or (loss) of research and development activities totaled $6,391,000 for the year ended December 31, 2013.

F-10

During the year ended December 31, 2013, we sold our pilot plant for $5,798,000. The Company had no carrying value for the pilot plant since all costs incurred had been expensed as research and development expenses. As such, the total amount of the proceeds was recognized as a gain. In connection with this sale, the buyer assumed all dismantlement and retirement costs, as such, the previously recognized asset retirement obligation of $603,000, reported in “Noncurrent Liabilities of Discontinued Operations” in the Consolidated Balance Sheet, was also recognized as a gain in connection with the sale of the pilot plant.

4. INVESTMENT IN AND LOANS TO DYNAMIC FUELS

On June 22, 2007, we entered into definitive agreements with Tyson to form Dynamic Fuels, to construct and operate facilities in the United States using our Bio-Synfining^® Technology. Dynamic Fuels is organized and operated pursuant to the provisions of its Limited Liability Company Agreement between the Company and Tyson (the “LLC Agreement”). Other agreements entered into included a technology license agreement whereby we would provide for the transfer of our Bio-Synfining^® Technology, provide technology support services to Dynamic Fuels, and receive payment of royalties for plant production. These agreements also included a sales agreement whereby Tyson would be paid a sourcing fee to procure feedstock.

The LLC Agreement provides for management and control of Dynamic Fuels to be exercised jointly by representatives of the Company and Tyson equally with no LLC member exercising control. This entity is accounted for under the equity method and is not required to be consolidated in our financial statements; however, our share of the Dynamic Fuels net income or loss is reflected in the Consolidated Statements of Operations. Dynamic Fuels has a different fiscal year than us. The Dynamic Fuels fiscal year ends on September 30 and we report our share of Dynamic Fuels results of operations on a three month lag basis. Our carrying value in Dynamic Fuels is reflected in “Investment in and Loans to Dynamic Fuels LLC” in our Consolidated Balance Sheet. As of December 31, 2013, Syntroleum’s total estimate of maximum exposure to loss as a result of its relationships with this entity was approximately $37.85 million, which represents our equity investment in and loans to this entity, net of recognized losses and other equity accounting adjustments. The carrying value of our investment in Dynamic Fuels exceeds the amount of underlying equity in net assets and loans to Dynamic Fuels by approximately $7.6 million, related to warrants issued to Tyson. The warrants are being amortized over the remaining life of the Dynamic Fuels bonds which expire in 2033.

During the year ended December 31, 2013, each partner made additional equity contributions of $3.45 million resulting in total cash and non-cash equity contributions by Syntroleum of $53.56 million and $56.74 million by Tyson. Also during the twelve month period, each partner made additional working capital loans of $7.54 million. Syntroleum will likely be required to fund future working capital of Dynamic Fuels.

In prior years, Dynamic Fuels was engaged in the development and construction of the Geismar Facility. Dynamic Fuels began commercial operations in November of 2010. The Geismar Facility sold 66.8 million gallons of renewable products such as diesel, naphtha, and LPG from December 2010 to September 30, 2013. Nameplate capacity for the plant is 75 million gallons per year.

Since inception of commercial operations, the plant has experienced mechanical issues, hydrogen supply disruptions and feedstock adulterants which have contributed to plant down time, higher than expected operational costs and operating losses. In order to help resolve differences between us and Tyson regarding plant operational and other issues, on June 27, 2012, we entered into a Settlement Agreement whereby the obligations to us and Tyson for sourcing fees, running royalty fees, line of credit or interest fees and services and expenses under the technical service agreement in the amount of $6,597,000 each were contributed to Dynamic Fuels’ equity. Contemporaneous with the execution of the Settlement Agreement, we entered into a revised site license agreement, rights and obligations under the master license agreement were amended, warrants to purchase our common stock that had been issued to Tyson were vested, and the sales agreement under which Tyson procures feedstock was amended to pay Tyson an additional $.01 per pound, up to 1.1 billion pounds, to procure certain low cost feedstock.

F-11

Upgrades to the feedstock pre-treatment area were installed during 2012. After completion of the maintenance turnaround on December 10, 2012, the plant was placed in stand-by mode primarily because of economic conditions, including without limitation, falling RIN prices, uncertainty regarding the extension and retroactive application of federal tax credits, and the high price of feedstocks. The economic outlook improved when, on January 3, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which reinstated tax credits of $1.00 per gallon for the production of renewable diesel and $.50 per gallon for the production of qualified alternative fuels. The Act applies to 2013 production, but also retroactively reinstated the credits for 2012. Dynamic Fuels or its owners will receive approximately $23 million for 2012 production of diesel plus $.50 per gallon for a portion of the renewable naphtha produced during 2012.

In conjunction with specific provisions of the retroactive reinstatement of the tax credits, each partner will receive $10 million of their total portion of the 2012 tax credits as a refund directly from the IRS. Through December 31, 2013 we have collected approximately $9 million of such credits with the remaining balance included in taxes receivable on the consolidated balance sheet. The refunds were recorded by Dynamic Fuels as repayment of working capital loans. Each partner has remaining outstanding working capital loans to Dynamic Fuels of $11.6 million. The remaining loans are non-interest bearing and do not have a stated term but will be repaid to each partner upon Dynamic Fuels generating sufficient operating cash flow.

On February 25, 2013 the Dynamic Fuels management committee approved a resolution to replace the HI catalyst at a total cost of $7.3 million. Installation of the new catalyst was completed by June 28, 2013. The plant has remained in standby mode pending agreement by Syntroleum and Tyson as to the appropriate conditions under which to resume production. While the plant is ready for commercial operation, the Dynamic Fuels management committee has not determined a re-start date. As of the date these consolidated financial statements were issued, the plant continues to be in stand-by mode.

Accounting standards for equity method investments require us to consider all factors that may indicate that the value of our investment in Dynamic Fuels is less than the amount resulting from the application of the equity method reported in our consolidated balance sheet. If such a value deficiency has occurred and is other than temporary, it must be recognized currently. Our management has considered Dynamic Fuel’s financial condition, current status and outlook and has concluded that should a current valuation deficiency exist, it does not meet the “other than temporary” criteria of the accounting standards. When the Company and Tyson reach an agreement to resume production, for which there is no assurance, should the plant upgrades and improvements fail to improve operational performance or industry economics make the plant uneconomic to operate, should the Asset Purchase Agreement not be approved, or should we be required to seek protection under the U.S. Bankruptcy Code or similar relief, we may be required to assess the recoverability of our investment in and loans to Dynamic Fuels.

During the year ended September 30, 2013, we recognized revenue associated with our technical services agreement between us and Dynamic Fuels in the amount of $469,000. This revenue is reported in “Technical services from Dynamic Fuels, LLC” and “Royalties from Dynamic Fuels, LLC Plant Production” in the Consolidated Statement of Operations.

Dynamic Fuels, LLC 2013 Audited Financials (in thousands):

Balance Sheet	September 30, 2013
Cash and Current Assets	$	9,727
Inventory		3,297
Property, Plant and Equipment and Other Assets		150,843
Total Assets	$	163,867
Accounts Payable	$	2,254
Notes and Accounts Payable to Related Parties		21,057
Long-Term Liabilities		100,060
Total Liabilities		123,371
Total Members’ Equity		40,496
Total Liabilities and Members’ Equity	$	163,867

F-12

	For the Year Ended September 30, 2013
Revenue	$	46,340
Cost of Goods Sold and Operating Expenses		47,454
General and Administrative Expenses		956
Loss from Operations		(2,070	)
Other Income (Expense)		(1,170	)
Net Loss	$	(3,240	)

5. DEFERRED REVENUE

License fees received for which the criteria for revenue recognition have not been met totaled $13,365,000 at December 31, 2013. We entered into these license agreements granting parties the right to use certain of our patent rights and technical information to design, construct, operate, and maintain licensed facilities. In accordance with ASC 605, Revenue Recognition, we recorded a portion of the license fees paid to us pursuant to license agreements as deferred income because the earning process was not complete with respect to the license fees so deferred. The portion of the license recorded as deferred income were subject to offset and/or indemnity obligations in the event that the licenses completed construction of facilities prior to the expiration of the license agreements.

In August 2000, we signed a non-exclusive license agreement with the Commonwealth of Australia, granting the Commonwealth the right to utilize the Syntroleum^® Process. As of December 31, 2013, we had a remaining license agreement with the Commonwealth of Australia that includes credits against future license fees earned in Australia in the amount of AUD $15,000,000. This license has been recorded as deferred revenue of US $13,310,000 as of December 31, 2013. This license expires in 2019. The license agreement is denominated in Australian dollars and is subject to changes in foreign currency. During the years ended December 31, 2013, the foreign currency effect on our deferred revenues was a change of $2,247,000 as a result of changes in the exchange rate between the United States and Australian dollars.

6. STOCK AND WARRANT SALE AND COMMON STOCK PURCHASE AGREEMENTS

Common Stock Offering. On July 6, 2011, the Company closed the issuance and sale of 1,590,000 shares of its common stock and accompanying warrants to purchase a total of 795,000 shares of common stock. A combination of one share of common stock and a five year warrant to purchase five shares of common stock was sold in the offering for a combined public offering price of $15.80 per share, less underwriting discounts and commissions payable by the Company. The black-scholes valuation of the warrants granted was $11,614,000. The underwriter, JMP Securities LLC, purchased the common stock and warrants at a discounted price of $14.90 per combination, representing a 5.7% discount to the public offering price. Cash proceeds received by the Company, after the payment of underwriter commission and expenses and offering expenses, were approximately $23,538,000.

7. STOCKHOLDERS’ EQUITY

Tyson. As an incentive to Tyson for entering into the Dynamic Fuels joint venture, Tyson received warrants to buy the Company’s common stock. The warrants are allocated in three tranches. The first tranche of 425,000 shares was awarded upon signing of the LLC Agreement, Feedstock and Master License Agreements in June 2007. The Warrant Agreement provides that the second tranche of 250,000 shares will be issued upon sanctioning of the second plant and the third tranche of 150,000 shares will be issued upon sanctioning of the third plant, provided that Tyson has at least a 10% interest in Dynamic Fuels. The exercise price of the first tranche of 425,000 warrants is $28.70 per share, which was the ten-day average closing price prior to the signing of the above referenced agreements on June 22, 2007. The exercise price of the second and third tranches of warrants will be the ten-day average closing price prior to the sanctioning of plants 2 or 3. Vesting requires that if on the anniversary of the first plant commercial operations date, Tyson remains at least a 10% equity owner in Dynamic Fuels (in the case of the first tranche) and in the applicable plant (in the case of the second and third tranches), and that each plant has commenced commercial operation. Commercial operation is defined as the date on which the Plant achieves operations for commercial purposes after the completion of commissioning and satisfaction of performance tests. For purposes of the Warrant Agreement dated June 22, 2007, the First Plant Commercial Operations Date as defined in the Warrant Agreement was deemed to be June 27, 2012. The warrants will expire if not exercised by June 27, 2014. If 25% or more of the project cost for the third plant is debt financed, then the third warrant tranche will not vest. In the event that Tyson owns a 90% or greater interest in Dynamic Fuels the number of shares subject to the second and third warrant tranche doubles subject to a limitation that Tyson will not receive pursuant to all tranches warrants for stock equal to or more than 20% of the outstanding shares of Syntroleum common stock. In the event Tyson defaults by not paying its capital contributions to the plant, Tyson loses the warrants for such plant. These warrants are accounted for in accordance with FASB ASC Topic 505 Equity-Based Payments to Non-Employees. Warrants granted to non-employees that are tied to performance criteria are expensed at the time the performance goals are met.

F-13

On June 30, 2008, the Company and Tyson entered into a Warrant Agreement providing for the issuance of warrants to Tyson to purchase shares of the Company’s common stock in exchange for credit support relating to the obligations of Dynamic Fuels. Dynamic Fuels received approval from the Louisiana State Bond Commission to issue up to $100 million of certain Gulf Opportunity Tax Exempt Bonds originated by the Louisiana Public Facilities Authority (the “Bonds”). On October 21, 2008 the issuance of the Bonds occurred and required a letter of credit in the amount of $100 million as collateral for Dynamic Fuels’ obligations under the Bonds. Tyson agreed under the terms of the Warrant Agreement to provide credit support for the entire $100 million Bond issue for which we issued Tyson warrants to purchase 800,000 shares of our common stock for $0.10 per share. The warrants were exercised on April 16, 2009. These warrants are accounted for in accordance with FASB ASC Topic 505 Equity-Based Payments to Non-Employees. The measurement date is the date of issuance, October 21, 2008. We valued the warrants at $8.6 million and have recorded them as an additional cost of our Investment in and Loans to Dynamic Fuels on our Consolidated Balance Sheets. This additional cost in our investment results in a difference between our cost and our share of the underlying equity of Dynamic Fuels. We amortize the basis difference to Earnings or Loss from Dynamic Investment in our Consolidated Statement of Operations over the life of the Bonds, 25 years.

Pursuant to two registration rights agreements, we have granted Tyson demand and piggyback registration rights with respect to the shares of common stock issuable pursuant to the warrants.

8. STOCK-BASED COMPENSATION

Our share-based incentive plans permit us to grant restricted stock units, restricted stock, incentive or non-qualified stock options, and certain other instruments to employees, directors, consultants and advisors of the Company. Certain stock options and restricted stock units vest in accordance with the achievement of specific company objectives. The exercise price of options granted under the plan must be at least equal to the fair value of our common stock on the date of grant. All options granted vest at a rate determined by the Nominating and Compensation Committee of our board of directors and are exercisable for varying periods, not to exceed ten years. Shares issued under the plans upon option exercise or stock unit conversion are generally issued from authorized, but previously unissued shares.

As of December 31, 2013, 560,997 shares of common stock were available for grant under our current plan. We are authorized to issue up to 1,133,637, plan equivalent shares of common stock in relation to stock options or restricted shares outstanding or available for grant under the plans.

Stock Options

The number and weighted average exercise price of stock options outstanding are as follows:

	Shares Under Stock Options			Weighted Average Price Per Share
OUTSTANDING AT DECEMBER 31, 2012		640,454		$	18.70
Granted at market price		—			—
Exercised		—			—
Expired, forfeited, cancelled or repurchased		(67,814	)		15.58
OUTSTANDING AT DECEMBER 31, 2013		572,640		$	19.08

F-14

The following table summarizes information about stock options outstanding at December 31, 2013:

Options Outstanding							Options Exercisable
Range of Exercise Price	Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Options Exercisable		Weighted Average Exercise Price Per Share
$ 6.60      –     $6.60		429,423	$	6.60		4.61		429,423	$	6.60
$ 14.10      –     $14.10		5,000		14.10		7.58		5,000		14.10
$ 28.90      –     $28.90		50,625		28.90		2.94		50,625		28.90
$ 31.90      –     $68.80		62,523		66.66		0.90		62,523		66.66
$ 80.30      –     $96.70		22,569		94.29		1.88		22,569		94.29
$ 105.10      –     $105.10		2,500		105.10		1.59		2,500		105.10
		572,640	$	19.08				572,640	$	19.08

A total of 572,640 stock options with a weighted average exercise price of $19.08 were outstanding and fully vested at December 31, 2013.

There were no stock options granted for the year ended December 31, 2013.

Non-cash compensation cost related to stock and stock options and restricted stock recognized during the year ended December 31, 2013 was $475,000.

As of December 31, 2013 there was no aggregate intrinsic value of stock options that were fully vested. The remaining weighted average contractual term for options exercisable is approximately 4.2 years. As of December 31, 2013, all stock options have vested and all related compensation costs has been recognized.

Restricted Stock

We also grant common stock and restricted common stock units to employees and directors. These awards are recorded at their fair values on the date of grant and compensation cost is recorded using graded vesting over the expected term. The weighted average grant date fair value of common stock and restricted stock units granted during the year ended December 31, 2013 was $4.00 per share (total grant date fair value of $350,000). As of December 31, 2013, all restricted stock units had vested. The total fair value of restricted stock units vested during December 31, 2013 was $350,000. The following summary reflects restricted stock unit activity and related information.

	Shares / Units			Weighted-Average Grant Date Fair Value
NONVESTED AT DECEMBER 31, 2012		—		$	—
Granted		87,500			4.00
Vested or Exercised		(87,500	)		4.00
Expired or forfeited		—			—
NONVESTED AT DECEMBER 31, 2013		—		$	—

F-15

9. INCOME TAXES

We had federal income tax net operating loss (“NOL”) carry-forwards of approximately $380 million at December 31, 2013. Our NOLs generally begin to expire in 2018.

We recognize the tax benefit of NOL carry-forwards as assets to the extent that management concludes that the realization of the NOL carry-forwards is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate taxable income within the carry-forward period. The Company’s management has concluded that, based on the historical results of the Company, a valuation allowance should be provided for the entire balance of the net deferred tax asset.

We have not recorded an income tax provision for the year ended December 31, 2013. This differs from the amount of income tax benefit that would result from applying the 35 percent statutory federal income tax rate to the pretax loss due to the increase in the valuation allowance in each period. The valuation allowance increased by approximately $5,587,000 for the year ended December 31, 2013. Deferred taxes arise primarily from NOL carry-forwards and the recognition of revenues and expenses in different periods for financial and tax purposes.

Deferred taxes consist of the following (in thousands):

	December 31, 2013
Deferred tax assets:
NOL carry-forwards	$	144,526
Research and development credit		8,085
Deferred revenue		3,808
Stock-based compensation		2,831
Other		1,276
		160,526
Deferred tax liabilities:
Investments		(4,889	)
Other		(423	)
Net deferred tax asset before valuation allowance		155,214
Valuation allowance		(155,214	)
Net deferred tax assets	$	—

Open tax years are December 31, 2011 forward for both federal and state jurisdictions, except for years in which net operating losses originated and are subsequently utilized.

10. COMMITMENTS AND CONTINGENCIES

We have entered into a non-cancelable operating lease for office space that expires in 2014. Rental expense was $94,000 in 2013. Total future minimum lease payments under this agreement as of December 31, 2013 are approximately $23,000.

F-16

We have entered into employment agreements, which provide severance benefits to several key employees. Commitments under these agreements totaled approximately $2,121,000 at December 31, 2013. Expense is not recognized until an employee is severed.

During the quarter ending March 31, 2014, the Company agreed to accept effective responsibility for 50%, or up to $50 million, of any liability incurred by Tyson in connection with its guarantee of $100 million of Bonds issued by Dynamic Fuels. Tyson’s guarantee is secured by its letter of credit as described in Note 7. The holders of the Bonds are entitled to draw upon the letter of credit in the event of a default under the Bonds. Dynamic Fuels is not currently in default under the Bonds. The Company’s obligation will continue until the Bonds, which are due in 2033, are repaid. The Company had previously issued warrants to Tyson in exchange for Tyson’s agreement to provide the letter of credit, as described in Note 7.

The Company agreed to accept this obligation in order to help resolve disagreements between the Company and Tyson regarding the guarantee described above which had delayed the financial reporting for Dynamic Fuels, and to avoid the possibility that an ongoing dispute with Tyson could delay or prevent the Company from completing the proposed Asset Sale to REG Synthetic. Pursuant to the proposed asset sale, REG Synthetic has agreed to assume this obligation. Management has not yet determined the fair value associated with the guarantee.

Three lawsuits challenging the Asset Sale have been filed. First, on December 26, 2013, Daniel Baxter, on behalf of himself and the public stockholders of Syntroleum, filed a putative class action complaint in the District Court of Tulsa County, State of Oklahoma. Second, on December 30, 2013, Philip Crawley, on behalf of himself and the public stockholders of Syntroleum, filed a putative class action complaint in the District Court of Tulsa County, State of Oklahoma. Third, on January 10, 2014, George Kashouh and Thomas Victor, on behalf of themselves and the public stockholders of Syntroleum, filed a putative class action complaint in the District Court of Tulsa, State of Oklahoma. All of the lawsuits name as defendants Syntroleum, each member of Syntroleum’s board of directors, REG, and REG Synthetic; the Baxter lawsuit also names Syntroleum’s Principal Financial Officer as a defendant. On January 14, 2014, the court issued an order consolidating the first two suits, and on February 12, 2014, the third suit was consolidated. On January 22, 2014, the plaintiffs filed an amended consolidated petition alleging that (1) Syntroleum’s directors breached their fiduciary duties in connection with entering into the Asset Purchase Agreement, as publicly disclosed on December 17, 2013, by failing to maximize stockholder value, agreeing to onerous and unreasonable deal protection devices and failing to act in accordance with their duties of care, loyalty, and good faith, (2) Syntroleum, REG and REG Synthetic aided and abetted those alleged breaches of fiduciary duties, and (3) the combined proxy statement/prospectus omits material information regarding the proposed transaction and is otherwise misleading. Based on these allegations, the amended petition seeks to enjoin the Asset Sale, to obtain other related declaratory and injunctive relief (including rescission), and to recover the costs of the action, including reasonable attorneys’ fees. The Baxter plaintiffs filed an Emergency Motion and Memorandum in Support to Expedite Discovery and Shorten Prescribed Time Period for Defendants to Respond to Discovery together with their original complaint, which motion was heard on January 6, 2014 and not granted. On January 24, 2014, the original judge assigned to the consolidated matter recused herself and the matter was re-assigned to another judge. No further hearing dates have been set in connection with the consolidated lawsuits.

The Company is involved in certain claims and legal proceedings arising in the ordinary course of business. Management believes there will not be any liability from the resolution of these proceedings and any liability will not have a material adverse effect on the Company’s financial condition, future results of operations or liquidity.

11. SIGNIFICANT CUSTOMERS

The Company’s revenue is derived from significant customers. Three customers, Dynamic Fuels, Sasol Technology (Pty) Ltd. (“Sasol”) and Sasol (USA) Corporation (“Sasol USA”), made up 97% of revenue in 2013. See Note 4, “Investment in and Loans to Dynamic Fuels” for further information regarding revenue transactions with Dynamic Fuels.

F-17

12. FAIR VALUE DISCLOSURES

The Company’s short-term financial instruments consist of cash, accounts receivable, accounts payable, and accrued expenses. The carrying amounts of these financial instruments approximate fair value because of their short-term maturities. The Company does not hold or issue financial instruments for trading purposes nor does it hold or issue interest rate or leveraged derivative financial instruments.

13. SEGMENT INFORMATION

We apply FASB ASC Topic 280, Segment Reporting. Previously, our reportable business segments have been identified based on the differences in products or services provided. As discussed in Note 4, we classified the research and development component as discontinued operations for the year ended December 31, 2013. We now operate only one reportable segment.

14. QUARTERLY DATA (UNAUDITED)

	Quarter Ended
	March 31,			June 30,			September 30,			December 31,
	(in thousands, except per share data)
2013
Revenues	$	899		$	408		$	373		$	277
Operating income (loss)		(2,009	)		(1,719	)		(2,483	)		(3,127	)
Income (loss) from Dynamic Fuels investment		6,707			(1,498	)		(3,252	)		(3,526	)
Net income (loss) from continuing operations		4,634			(1,286	)		(5,999	)		(5,993	)
Net income (loss) from discontinued operations		6,391			—			—			—
Net income (loss)		11,025			(1,286	)		(5,999	)		(5,993	)
Basic and diluted EPS
Continuing operations	$	0.48		$	(0.13	)	$	(0.60	)	$	(0.60	)
Discontinued operations	$	0.67		$	0.00		$	0.00		$	0.00

F-18

Our revenues and costs are the result of projects described in these financial statements and are not from a mature, more predictable business. These projects may affect the comparability of the periods presented.

F-19

EX-99.2

Exhibit 99.2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Members of

Dynamic Fuels, LLC

We have audited the accompanying balance sheet of Dynamic Fuels, LLC (the Company) as of September 30, 2013, and the related statements of operations, members’ equity and cash flows for the year ended September 30, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit 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. The Company is not required to have, nor were we engaged to perform, an audit of its 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 audit provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Dynamic Fuels, LLC, as of September 30, 2013, and the results of its operations and its cash flows for the year ended September 30, 2013, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a working capital deficiency as of September 30, 2013. The plant has been idled since October 2012 and there are currently no definitive plans to commence operations. Additionally, the Company does not have any assurances from Tyson Foods, Inc. or Syntroleum Corporation, the joint venture members to which the Company is dependent, that they will fund future cash flow needs of the Company. This raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ HOGANTAYLOR LLP

March 12, 2014

1

DYNAMIC FUELS, LLC

BALANCE SHEET

September 30, 2013

	Amount
Assets
Current assets:
Cash	$	1,031,342
Restricted cash		40,241
Receivables		7,328,585
Inventory		3,296,672
Prepaid expenses and other		1,327,284
Total current assets		13,024,124
Property, plant and equipment, net		140,068,430
Other		10,774,113
Total assets	$	163,866,667
Liabilities and Members’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	2,253,857
Notes payable – related parties		20,520,378
Due to related parties		536,966
Total current liabilities		23,311,201
Asset retirement obligation		59,671
Notes payable		100,000,000
Total liabilities		123,370,872
Commitments and contingencies
Members’ equity:
Syntroleum Corporation capital contributions		53,560,424
Tyson Foods, Inc. capital contributions		56,741,495
Accumulated deficit		(69,806,124	)
Total members’ equity		40,495,795
Total liabilities and members’ equity	$	163,866,667

See notes to financial statements.

2

DYNAMIC FUELS, LLC

STATEMENT OF OPERATIONS

Year ended September 30, 2013

	Amount
Revenues:
Sales	$	19,294,400
Government incentives		26,820,902
Other		224,646
Total revenues		46,339,948
Operating costs and expenses:
Cost of goods sold and operating expenses		48,590,429
Gain on sale of asset		(1,136,772	)
General and administrative		956,460
Total expenses		48,410,117
Loss from operations		(2,070,169	)
Interest expense		(1,398,149	)
Interest rate swap valuation adjustment		(51,284	)
Other income		279,564
Net loss	$	(3,240,038	)
Allocation of net loss to members:
Syntroleum Corporation	$	(1,620,019	)
Tyson Foods, Inc.		(1,620,019	)
	$	(3,240,038	)

See notes to financial statements.

3

DYNAMIC FUELS, LLC

STATEMENT OF MEMBERS’ EQUITY

Year ended September 30, 2013

	Capital Contributions				Accumulated Deficit			Total
	Syntroleum Corporation		Tyson Foods, Inc.
Balance, September 30, 2012	$	50,110,424	$	53,291,495	$	(66,566,086	)	$	36,835,833
Cash contributions		3,450,000		3,450,000		—			6,900,000
Net loss		—		—		(3,240,038	)		(3,240,038	)
Balance, September 30, 2013	$	53,560,424	$	56,741,495	$	(69,806,124	)	$	40,495,795

See notes to financial statements.

4

DYNAMIC FUELS, LLC

STATEMENT OF CASH FLOWS

Years ended September 30, 2013

	Amount
Cash Flows from Operating Activities
Net loss	$	(3,240,038	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		7,339,824
Asset retirement obligation accretion		8,264
Mark-to-market interest rate swap in excess of cash collateral		(505,446	)
Tax incentives collected directly by Members		(19,949,622	)
Changes in assets and liabilities:
Receivables		(811,816	)
Inventory		14,212,218
Prepaid expenses and other		(5,141,984	)
Accounts payable and accrued liabilities		(8,271,690	)
Due to related parties		(933,303	)
Net cash used in operating activities		(17,293,593	)
Cash Flows from Investing Activities
Payments for the purchase of property, plant and equipment		(2,468,729	)
Change in restricted cash		(81	)
Net cash used in investing activities		(2,468,810	)
Cash Flows from Financing Activities
Proceeds from capital contributions		6,900,000
Notes payable – related party		12,470,000
Net cash provided by financing activities		19,370,000
Net change in cash		(392,403	)
Cash and cash equivalents at beginning of year		1,423,745
Cash and cash equivalents at end of year	$	1,031,342

See notes to financial statements.

5

DYNAMIC FUELS, LLC

NOTES TO FINANCIAL STATEMENTS

September 30, 2013

Note 1 – Summary of Significant Accounting Policies

Organization and operations

Dynamic Fuels, LLC, a Delaware limited liability company (the Company), was formed on June 22, 2007, as a joint venture between Syntroleum Corporation (Syntroleum), and Tyson Foods, Inc., (Tyson) (collectively, the Members). The Limited Liability Company Agreement between the Members provides for management and control of the Company to be exercised jointly by representatives of the Members equally, with no Member exercising control. The Company was organized to engage in the development, production, marketing and sale of Bio-Synfined^® renewable fuels produced using Syntroleum’s Bio-Synfining^® technology in the United States including the development, construction, financing, testing, ownership, operation and maintenance of one or more Bio-Synfining^® renewable fuels production plants. The Bio-Synfining^® technology converts triglycerides and/or fatty acids from fats and vegetable oils with heat, hydrogen and proprietary catalysts to make renewable synthetic fuels, such as diesel, jet fuel, kerosene, naphtha and liquefied petroleum gas (LPG). The fats and vegetable oil feedstock are procured by Tyson. The Company began making sales during November 2010, and became operational during the year ended September 30, 2011.

A variety of factors impact overall plant cash flows and profitability, including, but not limited to, mechanical reliability, product pricing, governmental legislation, negotiations of sales agreements, and raw material values. Each of these factors individually or combination thereof could significantly impact plant operations, reducing cash flow and profitability. As such, the Members closely monitor performance and infuse funds as needed to pay company expenses on a timely basis and procure the necessary services and equipment to maintain or improve operations.

As a limited liability company, the Members are not personally liable for any debts, liabilities, or obligations of the Company beyond the Members’ equity accounts, except to the extent that they have obligated themselves (see Note 4). However, the Company is dependent on the Members for the reasons noted above and those disclosed in the remainder of the notes to the financial statements.

The financial statements of the Company have been prepared assuming it is a going concern. The Company has experienced net losses since it began operations and has an accumulated deficit of $69.8 million as of September 30, 2013. Additionally, it has a working capital deficiency of $10.3 million, including the notes payable to related parties of $20.5 million. The plant was idled in October 2012 for scheduled maintenance which was completed in December 2012. Since then, the plant has remained idle and there are currently no definitive plans as to when the plant will commence operations. The Company has $100.0 million of long-term notes payable that are due October 1, 2033 (see Note 4). Since its inception, the Company has relied on funds from its Members to meet its cash flow obligations. The Company does not have any assurances from the Members that they will fund future cash flow needs of the Company.

6

Cash

The Company maintains bank accounts which are insured by the Federal Deposit Insurance Corporation (FDIC). At times, cash balances may be in excess of the FDIC insurance limit.

Restricted cash

At September 30, 2013, restricted cash consisted of cash held as collateral against corporate credit cards.

Receivables

As of September 30, 2013, the Company had approximately $40,000 in trade receivables for sales of diesel, naphtha, and LPG.

As of September 30, 2013, the Company had other receivables of approximately $710,000 related to Louisiana Quality Jobs rebates and wastewater treatment sales tax rebates. As of September 30, 2013, the company had an additional other receivable of approximately $3,431,000 for the sale of residual metals recovered during a catalyst change out. As of September 30, 2013, there was also an additional $3,148,000 due from the Internal Revenue Service (IRS) for governmental programs associated with a $1.00 per gallon tax credit (Tax Credit) designed to cultivate the biofuels industry. The tax credit was reinstated retroactively during calendar year 2013 for the calendar years 2012 and 2013.

Trade receivables are reported at the amount management expects to collect from outstanding balances. A difference between the amount due and the amount management expects to collect is reported in the statement of operations for the year in which those differences are determined, with an offsetting entry to allowance for doubtful accounts. Balances still outstanding after management has used reasonable collection efforts are written off to the allowance. As of September 30, 2013, the Company considers accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts has been established.

A trade receivable is considered to be past due if any portion of the receivable balance is not paid according to terms. All accounts are reviewed on a weekly basis to identify and resolve any delinquent accounts. The Company does not charge interest on trade accounts receivable.

Inventory

Inventories consist of raw materials (fats, oil and greases), catalysts, production supplies, maintenance, repair and operating supplies (MRO) inventories, and finished goods. Inventories are stated at the lower of cost or estimated net realizable value. The cost of inventories is determined using the weighted average method. There was no lower of cost or market adjustment recognized as of September 30, 2013.

7

Revenue recognition

The Company recognizes revenue from product sales and government incentives. Product sales are recognized when title and risk of loss are transferred to the customer, which is generally when the product is shipped.

Revenues from government incentives are driven by various federal programs and legislation. One of these programs enabled producers of renewable fuels to receive the Tax Credit for each gallon of production. The Tax Credit program was suspended on December 31, 2011. During January 2013, the program was reinstated retroactively back to January 1, 2012. The program again expired unrenewed on December 31, 2013. The Company recognized approximately $25.3 million in revenue from the reinstatement, of which $25.2 million was a result of prior year activity. Of the $25.3 million, approximately $9.3 million was collected directly by each Member. These amounts were recognized as a reduction in the notes payable to the Members. Of the remaining approximately $6.7 million, approximately $3.6 million was received by the Company. The remaining $3.1 million resides in current receivables.

The Company also filed for approximately an additional $1.4 million in tax credits related to 2011 production. Forms for these credits had not been previously filed. These amounts were collected directly by the Members, resulting in a reduction in notes payable to the Members of approximately $700,000 each.

Another program enables the producer to generate a Renewable Identification Number (RIN) credit for each gallon of production. These RIN credits can be used by obligated parties to satisfy their legally mandated purchases of renewable fuels. To qualify for the Tax Credit and create a RIN credit, a producer must meet criteria set forth by the Environmental Protection Agency (EPA) as to what constitutes a renewable fuel. The Company has met the EPA’s eligibility requirements. The recognition and ownership of the RIN credits are determined by the structure, terms, and conditions of customer contracts. Generally RIN values are a component of the underlying price of the product sale.

In addition, the Company collects Federal and Louisiana excise tax on the sale of renewable diesel as part of its normal billing procedures. These amounts are remitted to the appropriate governmental authority according to the appropriate submission deadlines. Excise taxes collected from customers are not reported as revenue.

Customer concentration

The Company is subject to concentrations of credit risk and regulatory risk. For the year ended September 30, 2013, sales to one customer accounted for approximately 82% of total sales revenue and 95% of trade receivables.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed on the straight-line method over the estimated useful lives of the related assets. During 2013 the Company reviewed the estimated depreciable lives used for financial depreciation purposes. The Company considered both the estimated useful lives of the assets as well as its current assessment of the

8

assurance of a renewal of the lease on which the assets are located. As a result, the original depreciable life of the plant was reduced from 30 years to 23 years. The effect of this change to a 21 year remaining depreciable life as of the beginning of 2013, was approximately $1.6 million of increased depreciation expense. The three to five year range of useful lives for all other property and equipment remained unchanged. Expenditures for repairs and maintenance are charged to expense as incurred, whereas major improvements are capitalized. During 2013 while the plant was idle, the plant was maintained in a ready state allowing for immediate startup. As a result, the Company continued to depreciate the assets.

Long-lived assets

The Company reviews its long-lived assets for impairment at each balance sheet date when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable. For assets held and used, recoverability is assessed using undiscounted cash flows based on historical results and current projections of earnings before interest and taxes. If, based on this assessment, an impairment of the carrying value has occurred, the amount of the impairment in the financial statements is determined by estimating the fair value of the assets and recording a loss for the amount the carrying value exceeds the estimated fair value. For assets taken out of service, an impairment is recorded for the amount the carrying value exceeds the estimated fair value. No impairment was recognized in 2013.

The plant has experienced mechanical difficulties, pre-treatment system performance issues and hydrogen supply disruptions, which have contributed to plant down time and higher than expected operational costs. Upgrades to the feedstock pre-treatment systems and improvements to the mechanical reliability of the plant were completed during 2013. However, the plant has remained idle since the plant was ready for restart in December 2012. Consequently, the Company assessed the recoverability of its long-lived assets as of September 30, 2013. Since the estimated undiscounted cash flows exceeded the carrying value, no impairment was necessary. If the plant remains idle, or if the plant upgrades and improvements fail to improve operational performance, or should industry economics make the plant uneconomical to operate, or structural integrity concerns are discovered that adversely impact the plant operations, the Company may be required to assess the recoverability of the long-lived assets in future periods to determine whether an impairment exists.

Interest

Cash paid for interest was approximately $1,993,000 for the year ended September 30, 2013.

Other assets

At September 30, 2013, other assets included approximately $2,280,000 in long-term security deposits with vendors, approximately $6,501,000 of long-term catalyst, $1,000,000 in certificates of deposit, and approximately $993,000 of debt issuance costs, net of amortization, that were incurred by the Company in connection with the issuance of the $100.0 million tax exempt bonds (see Note 4). The debt issuance costs are being amortized over the bonds 25-year term. The Company recognized approximately $50,000 of amortization expense for the year ended September 30, 2013. The certificates of deposit are associated with the Lion lease (see Note 6).

9

The plant has two reactors in the manufacturing process which contain catalyst. The first, the hydrodeoxygenation (HDO) reactor, contains catalyst with a useful life of less than one year. The cost of the catalyst in the unit is held in prepaid expenses and other on the balance sheet. The second, the hydroisomerizaton (HI) reactor, contains catalyst with an expected useful life of three years. The cost associated with this catalyst is held in other and reflected as a long-term asset on the balance sheet. Both catalysts are amortized over their expected useful life.

During 2013, the long-term catalyst was changed. The metals in the spent HI catalyst were sold at a gain of approximately $1.1 million. The gain is reflected as a gain of sale of assets on the statements of operations.

Asset retirement obligation

The Company records the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset. The Company recorded the discounted fair value of the retirement obligation as a liability at the time the plant was constructed. The asset retirement obligation represents the present value of the estimated costs associated with the future dismantlement of the Company’s plant, discounted at 15% per annum. The liability accretes over time with a charge to accretion expense. Accretion expense for the year ended September 30, 2013 was approximately $8,000.

Income taxes

As a limited liability company, the Company’s taxable income or loss is allocated to Members in accordance with their respective percentage ownership. Accordingly, no provision or liability for income taxes has been recorded in the financial statements. Generally, the Company is no longer subject to income tax examination by the federal, state, or local authorizes for the years before 2010.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from those estimates.

Fair value of financial instruments

The carrying amounts of financial instruments, including cash, certificates of deposit, accounts receivable, and accounts payable approximates fair value due to the short maturity of these instruments. The carrying amount of long-term debt is estimated by management to approximate fair value based on the obligation characteristics, including floating interest rate, credit rating, and maturity.

Note 2 – Inventories

A summary of inventories at September 30, 2013 is as follows:

	Amount
Raw materials	$	1,010,916
Production supplies, and MRO inventory		1,468,767
Finished goods		816,989
	$	3,296,672

10

Note 3 – Property, Plant and Equipment

Property, plant and equipment consist of the following at September 30, 2013:

	Amount
Plant and equipment	$	154,348,078
Computer hardware and software		1,139,731
Furniture and automobiles		1,168,200
Plant construction in progress		1,226,452
		157,882,461
Accumulated depreciation		(17,814,031	)
Property, plant and equipment, net	$	140,068,430

Depreciation expense for the year ended September 30, 2013 was $7,290,151.

Note 4 – Long-Term Notes Payable

In October 2008, the Company received $100.0 million in proceeds from the issuance of Gulf Opportunity Zone tax-exempt bonds made available by Louisiana Public Facilities Authority. These floating rate (0.07% at September 30, 2013) bonds are due October 1, 2033.

As a condition of the Company obtaining the funding from the bonds, it was required to provide a letter of credit to effectively guarantee the repayment of the bonds. Pursuant to a warrant agreement dated as of June 30, 2008, between Syntroluem and Tyson, Tyson agreed to issue a letter of credit for $100.0 million to guarantee the Company’s obligation under the bonds (the Guarantee). The two members agreed that each member has effective responsibility for one-half of the Guarantee, and that each member is obligated for one-half of any and all amounts disbursed arising out of the Guarantee, up to $50.0 million each. Tyson agreed to maintain the Guarantee until the bonds mature or until the Company is able to provide the Guarantee and does so. In consideration for Tyson providing the Guarantee, Syntroleum issued and delivered warrants to purchase shares of Syntroleum stock. As of September 30, 2013, Tyson has provided an irrevocable letter of credit which expires in August 2014, and the Company was in compliance with all terms of the bonds.

Monthly fees for this letter of credit are paid by Tyson, and the Company reimburses Tyson for these monthly fees and records the expenses accordingly. In November 2008, Tyson entered into interest rate swap, fixed at 2.19%, related to these bonds on the Company’s behalf to mitigate interest rate risk on a portion of the bonds for five years (see Note 8). The Company records an expense from Tyson for all monthly settlements.

Note 5 – Related Party Transactions

The accompanying financial statements include transactions with Members of the Company, including raw materials, production royalties, sourcing fees, engineering support, accounting services, travel

11

expenses, letter of credit fees, and collateral for interest rate swap associated with plant construction and financing of plant construction.

A summary of related party activity as of September 30, 2013 is as follows:

	Amount
Interest on a swap agreement	$	557,000
Letter of credit fees		1,284,000
Raw material sourcing fees		159,000
Railcar leases		983,000
Total expenditures incurred with Tyson	$	2,983,000
Amounts due to Tyson	$	531,000
Engineering services	$	897,000
Production royalties		111,000
Total expenditures incurred with Syntroleum	$	1,008,000
Amounts due to Syntroleum	$	6,000

During 2013, the Members provided the Company $12,470,000 in the form of noninterest bearing demand loans. Under the terms of these notes, repayment to the Members shall be made in three months or less to the extent that the Company has sufficient cash flow to pay current accounts payable and minimum cash balance of $350,000.

Note 6 – Commitments and Contingencies

Leases

Effective October 1, 2008, the Company entered into a land and office lease agreement associated with its plant located in Geismar, Louisiana, expiring September 30, 2033. Annual lease payments for the land are $2.0 million, payable in four quarterly installments of $500,000. In addition, infrastructure maintenance fees totaling $101,800 are due in quarterly installments of $25,450. Adjustable by the consumer price index beginning in 2013, the Company expects to pay approximately $2.2 million per year in lease payments over the next five years. The lease may be terminated early for a fee.

As part of the lease, the Company is required to provide an evergreen letter of credit in the amount of $2,000,000. The letter of credit consists of four annual deposits of $500,000 beginning December 31, 2011. It must stay in place until combined equity of the Members is greater than $50.0 million. As of September 30, 2013, $1.0 million of certificates of deposit at JP Morgan Chase collateralize the letter of credit. This amount is captured in other and reflected as a long-term asset on the balance sheet.

Effective May 2012, the Company entered into a lease agreement with one of its Members to lease rail cars for feed stock transportation, expiring April 30, 2015. The Company pays lease payments based upon the number of cars leased times the number of days in the respective period. The Company expects to pay approximately $1,200,000 and $700,000 for the years ended 2014 and 2015, respectively.

12

Supplier contracts

The Company has entered into contracts for supplies of hydrogen, nitrogen, and utilities. The following table outlines the minimum take or pay requirement related to the purchase of hydrogen, nitrogen, and utilities:

Year	Amount
2014	$	3,437,000
2015		3,437,000
2016		3,437,000
2017		3,437,000
2018		3,437,000
Thereafter		21,578,000
Total	$	38,763,000

As a result of the minimum take or pay requirement, the Company incurred approximately $2,300,000 in expense incremental to actual usage during fiscal year 2013. As of September 30, 2013, the Company relies on one supplier, to provide the hydrogen necessary to execute the production process. Any disruptions to the hydrogen supply from this supplier will result in shutdown of plant operations. Termination fees are applicable should this agreement be terminated early.

Litigation

The Company along with Syntroleum and Tyson has been named in two patent infringement suits by Neste Oil Oyj (Neste) as referenced below. Pursuant to the terms of a June 27, 2012 Bio-Synfining^® Site License Agreement, Syntroleum has agreed to indemnify Tyson and the Company subject to certain limitations with respect to third party patent claims such as those advanced by Neste in the two U.S. litigations described below.

Regarding the proceedings before the U.S. Patent & Trademark Office (PTO), on June 26, 2013, the PTO issued an Office Action Closing Prosecution and rejecting all claims in the ongoing inter partes reexamination of Neste Oil’s U.S. Patent No. 8,187,344. The reexamination was initiated by Syntroleum in August 2012 after Neste filed suit against Syntroleum, Tyson and the Company on May 29, 2012, in the District of Delaware regarding alleged infringement of the ‘344 patent. On January 31, 2013, the District Court stayed the lawsuit pending the final outcome of the PTO’s reexamination of the ‘344 patent. Mirroring its prior office action (dated September 14, 2012), the PTO again rejected both the original claims of the ‘344 patent, as well as the amended and new claims submitted by Neste, as obvious in view of the prior art. The reexamination proceedings remain pending at the PTO under Reexam Control Number 95/002,084.

Another proceeding initiated by Syntroleum before the PTO is an inter partes review (IPR) of Neste Oil’s U.S. Patent No. 8,212,094. The ‘094 patent covers similar subject matter and shares a common inventor with Neste’s ‘344 patent, but adds nothing new to the field of diesel fuels or methods for making same. Neste filed a complaint against Syntroleum, Tyson and the Company in the District of Delaware on December 20, 2012, regarding alleged infringement of the ‘094 patent. On March 8, 2013, Syntroleum filed a petition with the PTO seeking inter partes review of the ‘094 patent. On July 2, 2013, the District

13

Court in Delaware stayed Neste’s second lawsuit there (filed on December 20, 2012) alleging infringement of the ‘094 patent. The District Court’s July 2nd decision was based on the pending request for inter partes review of the ‘094 patent.

On September 4, 2013, the U.S. Patent & Trademark Office Patent Trial and Appeal Board (Board) issued a decision instituting an IPR of all claims of the ‘094 patent. The PTO found that “there is a reasonable likelihood that Syntroleum would prevail with respect to claims 1-20 of the ‘094 patent” based on the information presented.

On November 11, 2013, Neste filed a motion to amend the claims of the ‘094 patent, which was accompanied by a request to cancel all 20 of the original claims. The parties are currently preparing for oral argument, now scheduled for April 1, 2014. The PTO will issue a final decision on the validity of the proposed amended claims by no later than September 4, 2014.

The most recent proceeding initiated by Syntroleum before the PTO is another IPR request covering Neste Oil’s U.S. Patent No, 8,278,492. Neste has not formally asserted an infringement claim against the Company or initiated litigation regarding the ‘492 Patent. The ‘492 patent covers similar subject matter and shares a common inventor with Neste’s ‘344 and ‘094 patents, but adds nothing new to the field of diesel fuels or methods for making same. Syntroleum’s IPR request on the ‘492 patent was filed on November 22, 2013. On March 7, 2014, Neste filed a paper with the PTO waiving its right to submit an optional preliminary response. It is expected that the Board will issue a decision to grant or deny the request to institute an IPR by June 7, 2014.

Management and legal counsel are currently unable to reasonably estimate the amount of liability which may be incurred if an adverse decision is rendered as the suits are still in relatively early stages.

Note 7 – Members’ Equity

Prior to 2012, each Member made capital contributions in the amount of $40,500,000. In 2012, Tyson contributed an additional $5.0 million and Syntroleum contributed an additional $3.0 million in cash. Tyson also contributed an additional $7.8 million and Syntroleum an additional $6.6 million to the Company’s capital in the form of forgiveness of amounts the Company owed to the respective Members. In 2013, each partner contributed an additional $3.45 million to the Company’s capital. Additional capital, if any, will be based on the Company’s cash requirements.

If a Member fails to make a required capital contribution, it is in default under the Membership Agreement, and its Member interest in the Company will be diluted by $1.50 per $1.00 not contributed. At its option, the other Member may fund the portion of the default, which is considered a loan to the defaulting Member at a rate of LIBOR plus 10% with a 40-day cure period. The defaulting Member may make a full or partial loan repayment and a pro rata portion of lost interest will be restored. If the loan is not repaid, it will be converted into ownership interest for the Member making the loan, diluting the defaulting Member by $1.00 per $1.00 of the loan. No Member is in default at this time.

Note 8 – Derivative Financial Instruments

The Company’s business operations give rise to certain market risk exposures due to changes in interest rates. The Company manages this risk through the use of a derivative financial instrument, to reduce the exposure to interest rate risk associated with a variable-rate borrowing. The interest rate swap was entered into by Tyson for the Company.

14

Risk management programs are reviewed and monitored by the Company’s Management Committee. These programs will be revised as market conditions dictate. The current risk management programs utilize industry-standard models that take into account the implicit cost of hedging. Risks associated with market risks and those created by derivative instruments and the mark-to-market valuations are strictly monitored at all times, using value-at-risk and stress tests.

The objective of the undesignated interest rate swap is to manage interest rate risk exposure on a floating-rate bond. The interest rate swap agreement effectively modifies the Company’s exposure to interest rate risk by converting a portion of the floating-rate bond to a fixed rate, thus reducing the impact of the interest-rate changes on future interest expense. Under this arrangement, notional values will decrease by approximately $25.0 million per year each November until 2013, when the swap expires.

This interest rate swap does not qualify for hedge treatment due to differences in the underlying bond and swap contract interest-rate indices. The Company marks this position to fair value through earnings at each reporting date. During the year ended September 30, 2013, the Company recognized approximately $505,000 in mark-to-market swap valuation income on an approximate average notional debt of $27.0 million.

Note 9 – Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels as follows:

Level 1	–	Unadjusted quoted prices available in active markets for the identical assets or liabilities at the measurement date.
Level 2	–	Other significant observable inputs available at the measurement date, including quoted prices for similar securities.
Level 3	–	Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

The interest rate swap is recorded at its estimated fair value, based on a discounted cash flow model. This model uses quoted LIBOR swap rates adjusted for credit and nonperformance risk.

The preceding method may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Certain events could occur that would require Tyson to pay the open mark to market value of transactions, which may in turn require the Company to reimburse Tyson for these amounts. The Company does not anticipate any such events will occur.

15

The net derivative liability of approximately $86,000 is included in due to related parties in the September 30, 2013 balance sheet. This net derivative liability is considered Level 2 measurements in the fair-value valuation hierarchy.

The Company has certificates of deposit of $1.0 million included in other and reflected as a long-term asset as of September 2013. These are valued at their fair value and are considered Level 2 measurements in the fair-value hierarchy.

Note 10 – Retirement Plan

The Company has a contributory defined contribution retirement plan covering all employees who meet eligibility requirements and who elect to participate. The Company began the plan during 2011. Contributions for 2013 equaled $52,000.

Note 11 – Subsequent Events

The Company’s management has evaluated subsequent events through March 12, 2014, the date the financial statements were available to be issued.

On December 17, 2013, Syntroleum entered into an asset purchase agreement with Renewable Energy Group, Inc. (REG) and REG Synthetic Fuels, LLC, a wholly owned subsidiary of REG (REG Synthetic), pursuant to which Syntroleum has agreed to sell substantially all of its assets to REG Synthetic, including its 50% equity interest in the Company (the Asset Sale). In the transaction, REG Synthetic has agreed to assume some, but not all, of the liabilities of Syntroleum. The closing of the transaction is conditioned upon the approval of Syntroleum’s stockholders and other specified closing conditions. If Syntroleum’s stockholders approve the transaction and the other closing conditions are satisfied or waived, it is expected that the Asset Sale will close in the second calendar quarter of 2014.

From October 2013 through February 2014, the Members provided $4,700,000 in the form of noninterest bearing demand notes.

16

EX-99.3

Exhibit 99.3

SYNTROLEUM CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

	March 31,			December 31,
	2014			2013
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7,783		$	11,400
Accounts receivable		66			109
Taxes receivable		988			988
Other current assets		197			280
Total current assets		9,034			12,777
PROPERTY AND EQUIPMENT – at cost, net		61			77
INVESTMENT IN AND LOANS TO DYNAMIC FUELS, LLC		36,526			37,848
OTHER ASSETS, net		1,124			1,113
	$	46,745		$	51,815
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	559		$	783
Accrued employee costs		41			23
Total current liabilities		600			806
GUARANTEE LIABILITY		1,000			—
DEFERRED REVENUE		13,926			13,365
COMMITMENTS AND CONTINGENCIES		—			—
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.01 par value, 5,000 shares authorized, no shares issued		—			—
Common stock, $0.01 par value, 150,000 shares authorized, 9,960 and 9,943 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively		100			99
Additional paid-in capital		400,314			400,262
Accumulated deficit		(369,195	)		(362,717	)
Total stockholders’ equity		31,219			37,644
	$	46,745		$	51,815

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

1

SYNTROLEUM CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	For the Quarter Ended March 31,
	2014			2013
REVENUES:
Technology	$	—		$	100
Technical services		261			382
Technical services from Dynamic Fuels, LLC		—			417
Total revenues		261			899
COSTS AND EXPENSES:
Engineering		394			586
Depreciation and amortization		45			43
General, administrative and other (including non-cash equity compensation of $53 and $384 for the quarter ended March 31, 2014 and 2013, respectively.)		2,362			2,279
OPERATING LOSS		(2,540	)		(2,009	)
INTEREST INCOME		1			2
OTHER INCOME (LOSS)		(6	)		2
EQUITY IN EARNINGS (LOSS) OF DYNAMIC FUELS, LLC		(3,372	)		6,707
FOREIGN CURRENCY EXCHANGE		(561	)		(68	)
INCOME (LOSS) FROM CONTINUING OPERATIONS		(6,478	)		4,634
INCOME FROM DISCONTINUED OPERATIONS		—			6,391
NET INCOME (LOSS)	$	(6,478	)	$	11,025
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE:
Net income (loss) from continuing operations	$	(0.65	)	$	0.48
Income from discontinued operations		—			0.67
Net income (loss)	$	(0.65	)	$	1.15
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		9,956			9,585
Diluted		9,956			9,585

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

2

SYNTROLEUM CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

	Common Stock
	Number of Shares		Amount		Additional Paid-In Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance, December 31, 2013		9,943	$	99	$	400,262	$	(362,717	)	$	37,644
Match to 401(k)		17		1		52		—			53
Net loss		—		—		—		(6,478	)		(6,478	)
Balance, March 31, 2014		9,960	$	100	$	400,314	$	(369,195	)	$	31,219

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

3

SYNTROLEUM CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	For the Quarter Ended March 31,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(6,478	)	$	11,025
Income from discontinued operations		—			6,391
Income (loss) from continuing operations		(6,478	)		4,634
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		45			43
Foreign currency exchange		561			68
Non-cash compensation expense		53			384
Net loss on abandonment of equipment		7			—
Non-cash (income) loss in equity method investee		3,372			(6,707	)
Changes in assets and liabilities:
Accounts receivable		43			11
Accounts receivable from Dynamic Fuels, LLC		—			167
Other assets		36			(21	)
Accounts payable		(224	)		217
Accrued employee costs		18			114
Net cash used in continuing operations		(2,567	)		(1,090	)
Net cash used in discontinued operations		—			(10	)
Net cash used in operating activities		(2,567	)		(1,100	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		—			(2	)
Investment in and loans to Dynamic Fuels, LLC		(1,050	)		(5,670	)
Net cash used in continuing operations		(1,050	)		(5,672	)
Net cash provided by discontinued operations		—			5,798
Net cash provided by (used in) investing activities		(1,050	)		126
NET CHANGE IN CASH AND CASH EQUIVALENTS:		(3,617	)		(974	)
CASH AND CASH EQUIVALENTS, beginning of period		11,400			15,909
CASH AND CASH EQUIVALENTS, end of period	$	7,783		$	14,935
NON-CASH INVESTING ACTIVITIES:
Guarantee liability	$	1,000		$	—
Accounts receivable reduction in Dynamic Fuels LLC, working capital loan	$	—		$	8,986

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

4

SYNTROLEUM CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2014

1. BUSINESS AND ORGANIZATION

Nature of Operations

The focus of Syntroleum Corporation and subsidiaries (the “Company”, “Syntroleum”, or “we”) is the commercialization of its technologies to produce synthetic liquid hydrocarbons. Operations to date have consisted of activities related to the commercialization of a proprietary process (the “Syntroleum^® Process”) and previously consisted of research and development of the Syntroleum^® Process designed to convert carbonaceous material (biomass, coal, natural gas and petroleum coke) into synthetic liquid hydrocarbons. Synthetic hydrocarbons produced by the Syntroleum^® Process can be further processed using the Syntroleum Synfining^® Process into high quality liquid fuels, such as diesel, jet fuel (HRJ), kerosene, naphtha, propane and other renewable chemical products.

Our Bio-Synfining^® Technology is a renewable fuels application of our Synfining^® Technology. This technology is applied commercially via our Dynamic Fuels, LLC (“Dynamic Fuels”) joint venture with Tyson Foods, Inc. (“Tyson”). The technology processes renewable feedstocks such as triglycerides and/or fatty acids to make renewable synthetic products.

In the past we have sustained recurring losses and negative cash flows from operations. As of March 31, 2014, we had approximately $7.8 million of cash and cash equivalents available to fund operations and investing activities and have limited income from operations. Additionally, the Dynamic Fuels plant (the “Geismar Facility”) was placed in stand-by mode in December 2012, and remains in stand-by mode as the Company and Tyson have not agreed upon the conditions necessary for start-up.

Asset Purchase Agreement with Renewable Energy Group

On December 17, 2013, we entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Renewable Energy Group, Inc. (“REG”) and REG Synthetic Fuels, LLC, (“REG Synthetic”), a wholly-owned subsidiary of REG, pursuant to which we have agreed to sell substantially all of our assets to REG Synthetic, including all of our intellectual property and our 50% equity interest Dynamic Fuels (the “Asset Sale”). As consideration for the Asset Sale, REG will assume substantially all of our material liabilities and we will receive 3,796,000 shares of REG common stock, subject to downward adjustment (based on the value of REG common stock at closing, as calculated under the Asset Purchase Agreement) to the extent that our cash on hand at closing is less than $3.2 million; provided, that, if the per share value of REG’s common stock at closing (as calculated under the Asset Purchase Agreement) is equal to or greater than $12.91, then the number of shares of REG common stock will be equal to (A) $49,000,000, divided by (B) the REG common stock value at closing (as calculated under the Asset Purchase Agreement). The closing of the transactions contemplated by the Asset Purchase Agreement is conditioned upon the approval of our stockholders and other specified closing conditions. REG has filed a Registration Statement on Form S-4, Amendment No. 1 and Amendment No. 2 in connection with the transactions contemplated by the Asset Purchase Agreement, which includes our proxy statement for a special meeting of stockholders to be held in order to approve the transactions. If our stockholders approve the transaction and the other closing conditions are satisfied or waived, it is expected that the Asset Sale will close in the second quarter of 2014.

Following the closing of the Asset Sale and subject to the approval of our stockholders, we intend to liquidate and dissolve in compliance with the applicable provisions of the Delaware General Corporation Law.

2. BASIS OF REPORTING

The consolidated financial statements include the accounts of Syntroleum Corporation and our majority-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. Companies in which we own a 20 percent to 50 percent interest, but in which we do not have a controlling interest are accounted for by the equity method. We own 50 percent and have a non-controlling interest in Dynamic Fuels. The entity is accounted for under the equity method and is not required to be consolidated in our financial statements; however, our share of the Dynamic Fuels results of operating activities is reflected in the Consolidated Statements of Operations and the subsidiary’s summarized financial information is reported in Note 4, “Investment in and Loans to Dynamic Fuels, LLC”. The carrying value of our investment in Dynamic Fuels is reflected in “Investment in and Loans to Dynamic Fuels, LLC” in our Consolidated Balance Sheets.

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The consolidated financial statements included in this report have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, these statements reflect all adjustments (consisting of normal recurring entries), which are, in the opinion of management, necessary for a fair statement of the financial results for the interim periods presented. These consolidated financial statements should be read together with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC under the Securities Exchange Act of 1934, as amended.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our financial position and results of operations are materially affected by Dynamic Fuels’ financial position and results of operations as of and for the three months ended December 31, 2013.

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. As a result of the factors described in Note 1, and in connection with our accumulated deficit of $369 million, and our expectation of future cash requirements exceeding our capital availability there is substantial doubt about our ability to continue as a going concern.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. If the consolidated financial statements were prepared on a liquidation basis, the carrying value of our assets and liabilities would be adjusted to the net realizable amounts. In addition, the classification of the assets and liabilities would be adjusted to reflect the liquidation basis of accounting.

As of March 31, 2014, the Syntroleum 401K Plan was terminated.

3. DISCONTINUED OPERATIONS

Income from Discontinued Operations for the quarter ended March 31, 2013 included $5.8 million in proceeds from the sale of our nominal two b/d pilot plant. The Company had no carrying value for the pilot plant since all costs incurred had been expensed as research and development expenses. As such, the total amount of the proceeds was recognized as a gain. In connection with this sale, the buyer assumed all dismantlement and retirement costs, as such, the previously recognized asset retirement obligation of $603,000, was also recognized as a gain in connection with the sale of the pilot plant.

4. INVESTMENT IN AND LOANS TO DYNAMIC FUELS

On June 22, 2007, we entered into definitive agreements with Tyson to form Dynamic Fuels, to construct and operate facilities in the United States using our Bio-Synfining^® Technology. Dynamic Fuels is organized and operated pursuant to the provisions of its Limited Liability Company Agreement between the Company and Tyson (the “LLC Agreement”). Other agreements entered into included a technology license agreement whereby we would provide for the transfer of our Bio-Synfining^® Technology, provide technology support services to Dynamic Fuels, and receive payment of royalties for plant production. These agreements also included a sales agreement whereby Tyson would be paid a sourcing fee to procure feedstock.

The LLC Agreement provides for management and control of Dynamic Fuels to be exercised jointly by representatives of the Company and Tyson equally with no LLC member exercising control. Dynamic Fuels has a different fiscal year than us. The Dynamic Fuels fiscal year ends on September 30 and we report our share of Dynamic Fuels results of operations on a three month lag basis. Our carrying value in Dynamic Fuels is reflected in “Investment in and Loans to Dynamic Fuels, LLC” in our Consolidated Balance Sheets. As of March 31, 2014, Syntroleum’s exposure to loss as a result of its relationship with this entity was approximately $36.5 million, which represents our equity investment in and loans to this entity as well as the valuation of the guarantee liability, net of recognized losses and other equity accounting adjustments. Additionally, Syntroleum has responsibility for up to 50% of Tyson’s losses under the bond guarantee. The carrying value of our investment in Dynamic Fuels exceeds the amount of underlying equity in net assets and loans to Dynamic Fuels by approximately $8.5 million with $7.5 million related to warrants issued to Tyson and $1 million related to the bond guarantee. The warrants are being amortized over the remaining life of the Dynamic Fuels bonds which expire in 2033.

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Dynamic Fuels was initially capitalized on July 13, 2007 with $4.25 million in capital contributions from Tyson and $4.25 million in capital contributions from us. We contributed an additional $49.31 million and Tyson contributed an additional $52.49 million in cash and non-cash capital contributions by December 31, 2013. During the quarter ended March 31, 2014, each partner made additional working capital loans of $1.05 million. Each partner has remaining outstanding working capital loans to Dynamic Fuels of $12.6 million. The remaining loans are non-interest bearing and do not have a stated term but will be repaid to each partner upon Dynamic Fuels generating sufficient operating cash flow. Syntroleum will likely be required to fund future working capital of Dynamic Fuels.

In 2008, Dynamic Fuels received approval from the Louisiana State Bond Commission to issue up to $100 million of certain Gulf Opportunity Tax Exempt Bonds originated by the Louisiana Public Facilities Authority (the “Bonds”). On October 21, 2008, the issuance of the Bonds occurred and required a letter of credit in the amount of $100 million as collateral for Dynamic Fuels’ obligations under the Bonds. Under the terms of a warrant agreement, Tyson agreed to provide credit support for the entire $100 million Bond issue for which we issued Tyson a warrant to purchase 800,000 shares of our common stock for $0.10 per share, which was exercised in full on April 16, 2009. As described in Note 7, we have accepted responsibility for up to 50% of Tyson’s losses under the bond guarantee.

In prior years, Dynamic Fuels was engaged in the development and construction of the Geismar Facility. Dynamic Fuels began commercial operations in November of 2010. The Geismar Facility sold 66.9 million gallons of renewable products such as diesel, naphtha, and LPG from December 2010 to December 2013. Nameplate capacity for the Geismar Facility is 75 million gallons per year.

Since inception of commercial operations, the Geismar Facility has experienced mechanical issues, hydrogen supply disruptions and feedstock adulterants which have contributed to plant down time, higher than expected operational costs and operating losses. After completion of a maintenance turnaround on December 10, 2012, the plant was placed in stand-by mode primarily because of economic conditions, including without limitation, falling RIN prices, uncertainty regarding the extension and retroactive application of federal tax credits, and the high price of feedstocks. While the plant is ready for commercial operation, the Dynamic Fuels management committee has not determined a re-start date. As of the date of this Quarterly Report on Form 10-Q, the plant continues to be in stand-by mode and is non-operational as Syntroleum and Tyson have not agreed on the conditions necessary for plant start-up.

Accounting standards for equity method investments require us to consider all factors that may indicate that the value of our investment in Dynamic Fuels is less than the amount resulting from the application of the equity method reported in our consolidated balance sheet. If such a value deficiency has occurred and is other than temporary, it must be recognized currently. Our management has considered Dynamic Fuel’s financial condition, current status and outlook and has concluded that should a current valuation deficiency exist, it does not meet the “other than temporary” criteria of the accounting standards. When the Company and Tyson reach an agreement to resume production, for which there is no assurance, should the plant upgrades and improvements fail to improve operational performance or industry economics make the plant uneconomic to operate, should the Asset Purchase Agreement not be approved, or should we be required to seek protection under the U.S. Bankruptcy Code or similar relief, we may be required to assess the recoverability of our investment in and loans to Dynamic Fuels.

Dynamic Fuels, LLC Quarter Ended December 31, 2013 Unaudited Financials (in thousands):

Balance Sheet	December 31, 2013		September 30, 2013
Cash and Current Assets	$	7,303	$	9,727
Inventory		3,179		3,297
Property, Plant and Equipment and Other Assets		149,165		150,843
Total Assets	$	159,647	$	163,867
Accounts Payable	$	1,445	$	2,254
Notes and Accounts Payable to Related Parties		24,211		21,057
Long-Term Liabilities		100,062		100,060
Total Liabilities		125,718		123,371
Total Members’ Equity		33,929		40,496
Total Liabilities and Members’ Equity	$	159,647	$	163,867

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Statement of Operations	For the Quarter Ended December 31, 2013			For the Quarter Ended December 31, 2012
Revenue	$	150		$	19,826
Cost of Goods Sold and Operating Expenses		6,255			31,078
General and Administrative Expenses		221			152
Loss from Operations		(6,326	)		(11,404	)
Other Income (Expense)		(241	)		(388	)
Net Loss	$	(6,567	)	$	(11,792	)

During the quarters ended March 31, 2014 and 2013, we recognized revenue earned pursuant to our technical services agreement with Dynamic Fuels in the amount of $0 and $417,000, respectively. This revenue is reported in “Technical services from Dynamic Fuels, LLC” in the Consolidated Statement of Operations. No royalty revenue was recognized during the quarters ended March 31, 2014 and 2013 as the plant was in stand-by mode.

5. EARNINGS PER SHARE

	Three months ended March 31,
	2014			2013
	(Dollars in thousands, except per share amounts; shares in thousands)
Income (loss) from continuing operations available to common stockholders for basic and diluted earnings per share	$	(6,478	)	$	4,634
Basic weighted-average shares		9,956			9,585
Effect of dilutive securities:
Unvested restricted stock units		—			—
Stock options		—			—
Dilutive weighted-average shares		9,956			9,585
Earnings (loss) per common share from continuing operations:
Basic	$	(0.65	)	$	0.48
Diluted	$	(0.65	)	$	0.48

The table below includes information related to stock options, warrants and restricted stock that were outstanding at March 31 of each respective year but have been excluded from the computation of weighted-average stock options due to the option exercise price exceeding the first quarter weighted-average market price of our common shares as their inclusion would have been anti-dilutive to our income (loss) per share.

	March 31, 2014		March 31, 2013
Options, warrants and restricted stock excluded (in thousands)		2,281		1,937
Weighted-average exercise prices of options, warrants and restricted stock excluded	$	26.32	$	29.96
First quarter weighted-average market price	$	3.72	$	4.40

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6. STOCK-BASED COMPENSATION

Our stock-based incentive plans permit us to grant restricted stock units, restricted stock, incentive or non-qualified stock options, and certain other instruments to employees, directors, consultants and advisors of the Company. Certain stock options and restricted stock units vest in accordance with the achievement of specific company objectives. The exercise price of options granted under the plan must be at least equal to the fair value of our common stock on the date of grant. All options granted vest at a rate determined by the Nominating and Compensation Committee of our board of directors and are exercisable for varying periods, not to exceed ten years. Shares issued under the plans upon option exercise or stock unit conversion are generally issued from authorized, but previously unissued shares.

As of March 31, 2014, 640,750 shares of common stock were available for grant under our current plan. We are authorized to issue up to 1,133,641, plan equivalent shares of common stock in relation to stock options or restricted shares outstanding or available for grant under the plans.

Stock Options

The number and weighted average exercise price of stock options outstanding are as follows:

	Shares Under Stock Options			Weighted Average Price Per Share
OUTSTANDING AT DECEMBER 31, 2013		572,640		$	19.08
Granted at market price		—			—
Exercised		—			—
Expired, forfeited, cancelled or repurchased		(79,749	)		7.75
OUTSTANDING AT MARCH 31, 2014		492,891		$	20.91

The following table summarizes information about stock options outstanding at March 31, 2014:

Options Outstanding							Options Exercisable
Range of Exercise Price	Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Options Exercisable		Weighted Average Exercise Price Per Share
$6.60 - $6.60		352,173	$	6.60		4.32		352,173	$	6.60
$14.10 - $14.10		5,000		14.10		7.33		5,000		14.10
$28.90 - $28.90		50,625		28.90		2.69		50,625		28.90
$31.90 - $68.80		60,023		67.64		0.69		60,023		67.64
$80.30 - $96.70		22,569		94.29		1.63		22,569		94.29
$105.10 - $105.10		2,500		105.10		1.34		2,500		105.10
		492,891	$	20.91				492,891	$	20.91

A total of 492,891 stock options with a weighted average exercise price of $20.91 were outstanding and fully vested at March 31, 2014. There were no stock options granted during the three months ended March 31, 2014 or 2013.

Non-cash compensation cost related to stock and stock options and restricted stock recognized during the three months ended March 31, 2014 and 2013 was $53,000 and $384,000, respectively.

There were no stock options exercised during the three months ended March 31, 2014 and 2013. As of March 31, 2014, there was no aggregate intrinsic value of stock options that were fully vested. The remaining weighted average contractual term for options exercisable is approximately 3.83 years. As of March 31, 2014, all stock options have vested and all related compensation costs has been recognized.

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Restricted Stock

We also grant common stock and restricted common stock units to employees and directors. These awards are recorded at their fair values on the date of grant and compensation cost is recorded using graded vesting over the expected term. There were no shares granted during 2014. The weighted average grant date fair value of common stock and restricted stock units granted during the three months ended March 31, 2013 was $4.00 per share (total grant date fair value of $350,000). As of March 31, 2014, all restricted stock units had vested.

7. COMMITMENTS AND CONTINGENCIES

We have entered into employment agreements, which provide severance benefits to several key employees. Commitments under these agreements totaled approximately $2.1million at March 31, 2014. Expense is not recognized until an employee is severed.

During the quarter ending March 31, 2014, the Company agreed to accept effective responsibility for 50%, or up to $50 million, of any liability incurred by Tyson in connection with its guarantee of $100 million of Bonds issued by Dynamic Fuels. Tyson’s guarantee is secured by its letter of credit as described in Note 4. The holders of the Bonds are entitled to draw upon the letter of credit in the event of a default under the Bonds. Dynamic Fuels is not currently in default under the Bonds. The Company’s obligation will continue until the Bonds, which are due in 2033, are repaid or assumed. The Company had previously issued warrants to Tyson in exchange for Tyson’s agreement to provide the letter of credit, as described in Note 4.

The Company agreed to accept this obligation in order to help resolve disagreements between the Company and Tyson regarding the guarantee described above which had delayed the financial reporting for Dynamic Fuels, and to avoid the possibility that an ongoing dispute with Tyson could delay or prevent the Company from completing the proposed Asset Sale to REG Synthetic. Pursuant to the proposed asset sale, REG Synthetic has agreed to assume this obligation. Management determined the fair value associated with the guarantee is $1 million by utilizing a Monte Carlo simulation model. The Company increased its carrying value of its Investment In and Loans To Dynamic Fuels, LLC by $1 million and recorded a noncurrent liability during the quarter ended March 31, 2014.

Three lawsuits challenging the Asset Sale have been filed. First, on December 26, 2013, Daniel Baxter, on behalf of himself and the public stockholders of Syntroleum, filed a putative class action petition in the District Court of Tulsa County, State of Oklahoma. Second, on December 30, 2013, Philip Crawley, on behalf of himself and the public stockholders of Syntroleum, filed a putative class action petition in the District Court of Tulsa County, State of Oklahoma. Third, on January 10, 2014, George Kashouh and Thomas Victor, on behalf of themselves and the public stockholders of Syntroleum, filed a putative class action petition in the District Court of Tulsa, State of Oklahoma. All of the lawsuits name as defendants Syntroleum, each member of Syntroleum’s board of directors, REG, and REG Synthetic; the Baxter lawsuit also names Syntroleum’s Principal Financial Officer as a defendant. On January 14, 2014, the court issued an order consolidating the first two suits, and on February 12, 2014, the third suit was consolidated. On January 22, 2014, the plaintiffs filed an amended consolidated petition alleging that (1) Syntroleum’s directors breached their fiduciary duties in connection with entering into the Asset Purchase Agreement, as publicly disclosed on December 17, 2013, by failing to maximize stockholder value, agreeing to onerous and unreasonable deal protection devices and failing to act in accordance with their duties of care, loyalty, and good faith, (2) Syntroleum, REG and REG Synthetic aided and abetted those alleged breaches of fiduciary duties, and (3) the combined proxy statement/prospectus omits material information regarding the proposed transaction and is otherwise misleading. Based on these allegations, the amended petition seeks to enjoin the Asset Sale, to obtain other related declaratory and injunctive relief (including rescission), and to recover the costs of the action, including reasonable attorneys’ fees. The Baxter plaintiffs filed an Emergency Motion and Memorandum in Support to Expedite Discovery and Shorten Prescribed Time Period for Defendants to Respond to Discovery together with their original petition, which motion was heard on January 6, 2014 and not granted. On January 24, 2014, the original judge assigned to the consolidated matter recused herself and the matter was re-assigned to another judge. No further hearing dates have been set in connection with the consolidated lawsuits. On March 7, 2014, Syntroleum agreed to certain supplemental disclosures in the proxy statement/prospectus relating to the Asset Sale in exchange for plaintiffs’ agreement not to seek to enjoin or otherwise delay a vote by Syntroleum’s stockholders on the Asset Sale on the basis of the disclosures contained in that proxy statement/prospectus. On April 16, 2014, plaintiffs filed a dismissal without prejudice of Syntroleum Corporation from the litigation.

The Company is involved in certain claims and legal proceedings arising in the ordinary course of business. Management believes there will not be any liability from the resolution of these proceedings and any liability will not have a material adverse effect on the Company’s financial condition, future results of operations or liquidity.

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EX-99.4

Exhibit 99.4

DYNAMIC FUELS, LLC

CONDENSED BALANCE SHEETS

As of March 31, 2014 and September 30, 2013

(unaudited)

	March 31, 2014			September 30, 2013
Assets
Current assets:
Cash	$	1,225,670		$	1,031,342
Restricted cash		40,281			40,241
Receivables		404,103			7,328,585
Inventory		3,077,160			3,296,672
Prepaid expenses and other		1,594,588			1,327,284
Total current assets		6,341,802			13,024,124
Property, plant and equipment, net		136,510,473			140,068,430
Other assets		11,249,279			10,774,113
Total assets	$	154,101,554		$	163,866,667
Liabilities and Members’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	1,011,606		$	2,253,857
Notes payable – related parties		25,220,378			20,520,378
Due to related parties		395,598			536,966
Total current liabilities		26,627,582			23,311,201
Asset retirement obligation		64,467			59,671
Notes payable		100,000,000			100,000,000
Total liabilities		126,692,049			123,370,872
Commitments and contingencies
Members’ equity:
Syntroleum Corporation capital contributions		53,560,424			53,560,424
Tyson Foods, Inc. capital contributions		56,741,495			56,741,495
Accumulated deficit		(82,892,414	)		(69,806,124	)
Total members’ equity		27,409,505			40,495,795
Total liabilities and members’ equity	$	154,101,554		$	163,866,667

See notes to condensed financial statements.

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DYNAMIC FUELS, LLC

CONDENSED STATEMENTS OF OPERATIONS

Six Months Ended March 31, 2014 and 2013

(unaudited)

	Six Months Ended March 31, 2014			Six Months Ended March 31, 2013
Revenues:
Sales	$	183,342		$	19,818,998
Government incentives		31,158			26,676,558
Other		16,056			222,899
Total revenues		230,556			46,718,455
Operating costs and expenses:
Cost of goods sold and operating expenses		12,282,130			36,471,660
General and administrative		641,030			512,807
Total expenses		12,923,160			36,984,467
Income (loss) from operations		(12,692,604	)		9,733,988
Interest expense, net		(537,643	)		(707,609	)
Interest rate swap valuation adjustment		42,543			(31,255	)
Other income		101,414			177,008
Net income (loss)	$	(13,086,290	)	$	9,172,132
Allocation of net income (loss) to members:
Syntroleum Corporation	$	(6,543,145	)	$	4,586,066
Tyson Foods, Inc.		(6,543,145	)		4,586,066
	$	(13,086,290	)	$	9,172,132

See notes to condensed financial statements.

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DYNAMIC FUELS, LLC

CONDENSED STATEMENTS OF CASH FLOWS

Six Months Ended March 31, 2014 and 2013

(unaudited)

	Six Months Ended March 31, 2014			Six Months Ended March 31, 2013
Cash Flows from Operating Activities	$	(4,572,778	)	$	(8,517,766	)
Cash Flows from Investing Activities
Proceeds (payments) for property, plant and equipment, net		67,146			(1,985,827	)
Change in restricted cash		(40	)		(81	)
Net cash provided by/(used in) investing activities		67,106			(1,985,908	)
Cash Flows from Financing Activities
Proceeds from capital contributions		—			3,440,000
Notes payable – related parties		4,700,000			7,900,000
Net cash provided by financing activities		4,700,000			11,340,000
Net change in cash		194,328			836,326
Cash and cash equivalents at beginning of year		1,031,342			1,423,745
Cash and cash equivalents at end of year	$	1,225,670		$	2,260,071

See notes to condensed financial statements.

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DYNAMIC FUELS, LLC

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 1 – Basis of Presentation

Dynamic Fuels, LLC, a Delaware limited liability company (the Company), was formed on June 22, 2007, as a joint venture between Syntroleum Corporation (Syntroleum), and Tyson Foods, Inc., (Tyson) (collectively, the Members). The Company was organized to engage in the development, production, marketing and sale of Bio-Synfined^® renewable fuels produced using Syntroleum’s Bio-Synfining^® technology in the United States including the development, construction, financing, testing, ownership, operation and maintenance of one or more Bio-Synfining^® renewable fuels production plants. The Company began making sales during November 2010, and became operational during the year ended September 30, 2011.

The Company has experienced net losses since it began operations and has an accumulated deficit of $82.9 million as of March 31, 2014. Additionally, it has a working capital deficiency of $20.3 million, including the notes payable to related parties of $25.2 million at March 31, 2014. The plant was idled in October 2012 for scheduled maintenance which was completed in December 2012. Since then, the plant has remained idle. The Company has $100.0 million of long-term notes payable that are due October 1, 2033 (see Note 4). Since its inception, the Company relied on funds from its Members to meet its cash flow obligations. On June 3, 2014, Syntroleum sold substantially all of their assets to Renewable Energy Group, Inc. (REG) located in Ames, IA. This included their 50% share in the Company. On June 6, 2014, Tyson sold their 50% share in the Company, to REG. Subsequent to the transactions with REG, Dynamic Fuels, LLC changed its name to REG Geismar, LLC.

The accompanying financial statements have been prepared without an audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States have been condensed or omitted pursuant to the rules and regulations. However, the Company believes that the disclosures made are adequate to make the information presented not misleading when read in conjunction with the audited financial statements and the notes for the fiscal year ended September 30, 2013. Management believes that the financial statements contain all adjustments necessary for a fair presentation of the results for the interim periods presented. All adjustments were of a normal, recurring nature. The results of operations for the interim period are not necessarily indicative of the results for the entire fiscal year.

Note 2 – Inventories

A summary of inventories follows:

	March 31, 2014		September 30, 2013
Raw materials	$	984,128	$	1,010,916
Production supplies, and MRO inventory		1,464,061		1,468,767
Finished goods		628,971		816,989
	$	3,077,160	$	3,296,672

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Note 3 – Property, Plant and Equipment

Property, plant and equipment consist of the following:

	March 31, 2014			September 30, 2013
Plant and equipment	$	154,277,521		$	154,348,078
Computer hardware and software		1,139,731			1,139,731
Other equipment		1,163,693			1,168,200
Plant construction in progress		1,229,862			1,226,452
		157,810,807			157,882,461
Accumulated depreciation		(21,300,334	)		(17,814,031	)
Property, plant and equipment, net	$	136,510,473		$	140,068,430

Depreciation expense for the six months ended March 31, 2014 and 2013 was $3,489,864 and $3,612,163, respectively.

Note 4 – Long-Term Notes Payable

In October 2008, the Company received $100.0 million in proceeds from the issuance of Gulf Opportunity Zone tax-exempt bonds (GOZone Bonds) made available by Louisiana Public Facilities Authority. These floating rate (0.07% at March 31, 2014 and September 30, 2013) bonds are due October 1, 2033.

As a condition of the Company obtaining the funding from the bonds, it was required to provide a letter of credit to effectively guarantee the repayment of the bonds. Pursuant to a warrant agreement dated as of June 30, 2008, between Syntroluem and Tyson, Tyson agreed to issue a letter of credit for $100.0 million to guarantee the Company’s obligation under the bonds (the Guarantee). The two members agreed that each member has effective responsibility for one-half of the Guarantee, and that each member is obligated for one-half of any and all amounts disbursed arising out of the Guarantee, up to $50.0 million each. Tyson agreed to maintain the Guarantee until the bonds mature or until the Company is able to provide the Guarantee and does so. In consideration for Tyson providing the Guarantee, Syntroleum issued and delivered warrants to purchase shares of Syntroleum stock. As of March 31, 2014, Tyson had provided an irrevocable letter of credit. In connection with the acquisition from Tyson, Renewable Energy Group, Inc. agreed to reimburse Tyson for any amounts payable by Tyson in the event of a draw on the letter of credit, to replace the letter of credit or redeem or discharge the GOZone Bonds and to secure these obligations by the deposit of $101.3 million into an escrow account for the benefit of Tyson, which represented the full amount of Tyson’s obligation under the letter of credit.

Monthly fees for this letter of credit were paid by Tyson, and the Company reimbursed Tyson for these monthly fees and recorded the expense accordingly. In November 2008, Tyson entered into an interest rate swap, fixed at 2.19%, related to these bonds on the Company’s behalf to mitigate interest rate risk on a portion of the bonds for five years (see Note 8). The Company recorded an expense from Tyson for all monthly settlements.

Cash paid for interest was approximately $692,000 and $1,286,000 for the six month period ended March 31, 2014 and 2013, respectively.

5

Note 5 – Related Party Transactions

The accompanying financial statements include transactions with Members of the Company, including raw materials, production royalties, sourcing fees, engineering support, accounting services, travel expenses, letter of credit fees, and collateral for interest rate swap associated with plant construction and financing of plant construction.

A summary of related party activity is as follows:

	Six Months Ended March 31, 2014		Six Months Ended March 31, 2013
Interest on a swap agreement	$	43,139	$	299,044
Letter of credit fees		641,455		640,255
Raw material sourcing fees		—		158,930
Railcar leases		520,800		511,252
Total expenditures incurred with Tyson	$	1,205,394	$	1,609,481
Amounts due to Tyson	$	395,598	$	792,685
Engineering services	$	6,018	$	841,849
Production royalties		—		111,512
Total expenditures incurred with Syntroleum	$	6,018	$	953,361
Amounts due to Syntroleum	$	—	$	28,209

During the six months ending March 31, 2014, and the year ending September 30, 2013, the Members provided the Company $4,700,000 and $12,470,000, respectively, in the form of noninterest bearing demand loans. Under the terms of these notes, repayment to the Members shall be made in three months or less to the extent that the Company has sufficient cash flow to pay current accounts payable and minimum cash balance of $350,000. Subsequent to March 31, 2014, the members provided an additional $1,900,000 to the Company in the form of noninterest bearing demand loans.

Note 6 – Commitments and Contingencies

Leases

Effective October 1, 2008, the Company entered into a land and office lease agreement associated with its plant located in Geismar, Louisiana, expiring September 30, 2033. Annual lease payments for the land are currently $2,184,304, payable in four quarterly installments of $546,076. In addition, infrastructure maintenance fees totaling $111,180 are due in quarterly installments of $27,795. The Company expects to pay approximately $2.2 million per year in lease payments over the next five years. The lease may be terminated early for a fee.

As part of the lease, the Company is required to provide an evergreen letter of credit in the amount of $2,000,000. The letter of credit consists of four annual deposits of $500,000 beginning December 31, 2011. It must stay in place until combined equity of the Members is greater than $50.0 million. As of March 31, 2014, $1.5 million of certificates of deposit at JP Morgan Chase collateralize the letter of credit. This amount is captured in other assets and reflected as a long-term asset on the balance sheet.

6

Effective May 2012, the Company entered into a lease agreement with one of its Members to lease rail cars for feed stock transportation, expiring April 30, 2015. The Company pays lease payments based upon the number of cars leased times the number of days in the respective period. The Company expects to pay approximately $200,000 and $250,000 for the remainder of fiscal year 2014 and 2015, respectively.

Supplier contracts

The Company has entered into contracts for supplies of hydrogen, nitrogen, and utilities. The following table outlines the minimum take or pay requirement related to the purchase of hydrogen, nitrogen, and utilities:

Year	Amount
2015		3,437,000
2016		3,437,000
2017		3,437,000
2018		3,437,000
2019		3,437,000
Thereafter		20,197,000
Total		37,382,000

As a result of the minimum take or pay requirement, the Company incurred approximately $1,381,000 and $932,000 for the six months ending March 31, 2014 and 2013, respectively, in expense incremental to actual usage. As of March 31, 2014, the Company relies on one supplier, to provide the hydrogen necessary to execute the production process. Any disruptions to the hydrogen supply from this supplier will result in shutdown of plant operations. Termination fees are applicable should this agreement be terminated early.

Litigation

The Company along with Syntroleum and Tyson has been named in two patent infringement suits by Neste Oil Oyj (Neste) as referenced below. Pursuant to the terms of a June 27, 2012 Bio-Synfining^® Site License Agreement, Syntroleum has agreed to indemnify Tyson and the Company subject to certain limitations with respect to third party patent claims such as those advanced by Neste in the two U.S. litigations described below. REG has assumed this indemnification obligation effective June 3, 2014 in connection with the transaction described in Note 1.

Regarding the proceedings before the U.S. Patent & Trademark Office (PTO), on June 26, 2013, the PTO issued an Office Action Closing Prosecution and rejecting all claims in the ongoing inter partes reexamination of Neste Oil’s U.S. Patent No. 8,187,344. The reexamination was initiated by Syntroleum in August 2012 after Neste filed suit against Syntroleum, Tyson and the Company on May 29, 2012, in the District of Delaware regarding alleged infringement of the ‘344 patent. On January 31, 2013, the District Court stayed the lawsuit pending the final outcome of the PTO’s reexamination of the ‘344 patent. Mirroring its prior office action (dated September 14, 2012), the PTO again rejected both the original claims of the ‘344 patent, as well as the amended and new claims submitted by Neste, as obvious in view of the prior art. The reexamination proceedings remain pending at the PTO under Reexam Control Number 95/002,084.

Another proceeding initiated by Syntroleum before the PTO is an inter partes review (IPR) of Neste Oil’s U.S. Patent No. 8,212,094. The ‘094 patent covers similar subject matter and shares a common inventor with Neste’s ‘344 patent, but adds nothing new to the field of diesel fuels or methods for making same. Neste filed a complaint against Syntroleum, Tyson and the Company in the District of Delaware on December 20, 2012, regarding alleged infringement of the ‘094 patent. On March 8, 2013, Syntroleum filed a petition with the PTO seeking inter partes review of the ‘094 patent. On July 2, 2013, the District Court in Delaware stayed Neste’s second lawsuit there (filed on December 20, 2012) alleging infringement of the ‘094 patent. The District Court’s July 2nd decision was based on the pending request for inter partes review of the ‘094 patent.

7

On September 4, 2013, the U.S. Patent & Trademark Office Patent Trial and Appeal Board (Board) issued a decision instituting an IPR of all claims of the ‘094 patent. The PTO found that “there is a reasonable likelihood that Syntroleum would prevail with respect to claims 1-20 of the ‘094 patent” based on the information presented.

On November 11, 2013, Neste filed a motion to amend the claims of the ‘094 patent, which was accompanied by a request to cancel all 20 of the original claims. The PTO will issue a final decision on the validity of the proposed amended claims by no later than September 4, 2014.

The most recent proceeding initiated by Syntroleum before the PTO is another IPR request covering Neste Oil’s U.S. Patent No, 8,278,492. Neste has not formally asserted an infringement claim against the Company or initiated litigation regarding the ‘492 Patent. The ‘492 patent covers similar subject matter and shares a common inventor with Neste’s ‘344 and ‘094 patents, but adds nothing new to the field of diesel fuels or methods for making same. Syntroleum’s IPR request on the ‘492 patent was filed on November 22, 2013. On March 7, 2014, Neste filed a paper with the PTO waiving its right to submit an optional preliminary response. It is expected that the Board will issue a decision to grant or deny the request to institute an IPR by June 7, 2014.

Management and legal counsel are currently unable to reasonably estimate the amount of liability which may be incurred if an adverse decision is rendered as the suits are still in relatively early stages.

Note 7 – Derivative Financial Instruments

The Company’s business operations give rise to certain market risk exposures due to changes in interest rates. The Company manages this risk through the use of a derivative financial instrument, to reduce the exposure to interest rate risk associated with a variable-rate borrowing. The interest rate swap was entered into by Tyson for the Company.

Risk management programs are reviewed and monitored by the Company’s Management Committee. These programs will be revised as market conditions dictate. The current risk management programs utilize industry-standard models that take into account the implicit cost of hedging. Risks associated with market risks and those created by derivative instruments and the mark-to-market valuations are strictly monitored at all times, using value-at-risk and stress tests.

The objective of the undesignated interest rate swap was to manage interest rate risk exposure on a floating-rate bond. The interest rate swap agreement effectively modified the Company’s exposure to interest rate risk by converting a portion of the floating-rate bond to a fixed rate, thus reducing the impact of the interest-rate changes on future interest expense. Under this arrangement, notional values decreased by approximately $25.0 million per year until which time the arrangement expired in November 2013.

This interest rate swap did not qualify for hedge treatment due to differences in the underlying bond and swap contract interest-rate indices. The Company marked this position to fair value through earnings at each reporting date. During the six month period ended March 31, 2014 and 2013, the Company recognized approximately $86,000 and $268,000, respectively, in mark-to-market swap valuation income, respectively, on an approximate average notional debt of $25.0 million and $27.0 million, respectively.

8

Note 8 – Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels as follows:

Level 1 – Unadjusted quoted prices available in active markets for the identical assets or liabilities at the measurement date.

Level 2 – Other significant observable inputs available at the measurement date, including quoted prices for similar securities.

Level 3 – Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

The interest rate swap was recorded at its estimated fair value, based on a discounted cash flow model. This model used quoted LIBOR swap rates adjusted for credit and nonperformance risk.

The preceding method may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The Company has certificates of deposit of $1.5 million and $1.0 million included in other and reflected as a long-term asset as of March 31, 2014, and September 30, 2013, respectively. These are valued at their fair value and are considered Level 2 measurements in the fair-value hierarchy.

The estimated fair value of the long-term debt is estimated by management to approximate the carrying value of $100.0 million at March 31, 2014 and September 30, 2013. Management’s estimates are based on the obligations characteristics, including the floating interest rate, maturity and collateral. Such valuation inputs are considered a Level 2 measurement in the fair value valuation hierarchy.

Note 9 – Customer Concentration

The Company is subject to concentrations of credit risk and regulatory risk. For the six months ended March 31, 2014, sales to one customer accounted for approximately 89% of total sales revenue and 79% of trade receivables. For the six months ended March 31, 2013, sales to two customers accounted for approximately 82% and 13%, respectively, of total sales revenues. As of September 30, 2013, one customer accounted for 95% of the trade receivables.

9

EX-99.5

Exhibit 99.5

Renewable Energy Group, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the Six Months Ended June 30, 2014

(In thousands, except share and per share amounts)

	Renewable Energy Group, Inc.			Syntroleum Corporation			Dynamic Fuels, LLC			Adjustments/ Eliminations					Total
		(a)
Revenues
Biodiesel	$	551,871		$	—		$	154		$	—				$	552,025
Services		87			365			3			—					455
Total revenues		551,958			365			157			—					552,480
Cost of goods sold
Biodiesel		525,196			—			10,368			(66	)	(b)			535,498
Services		47			732			—			—					779
Total cost of goods sold		525,243			732			10,368			(66	)				536,277
Gross profit (loss)		26,715			(367	)		(10,211	)		66					16,203
Selling, general and administrative		29,154			3,426			410			427		(c)			33,417
Income (loss) from operations		(2,439	)		(3,793	)		(10,621	)		(361	)				(17,214	)
Other income (expense), net:
Other income		816			(6,189	)		79			5,539		(d)			245
Interest expense		(1,755	)		—			(427	)		—					(2,182	)
		(939	)		(6,189	)		(348	)		5,539					(1,937	)
Income (loss) before taxes		(3,378	)		(9,982	)		(10,969	)		5,178					(19,151	)
Income tax benefit		12,026			—			—			—					12,026
Net income (loss)		8,648			(9,982	)		(10,969	)		5,178					(7,125	)
Less - Gain on redemption of preferred stock		378			—			—			—					378
Less - Effect of participating preferred stockholders		(40	)		—			—			—					(40	)
Less - Effect of participating share based awards		(128	)		—			—			128		(e	)		—
Net income (loss) attributable to the company’s common stockholders	$	8,858		$	(9,982	)	$	(10,969	)	$	5,306				$	(6,787	)
Net income (loss) per share attributable to common stockholders
Basic	$	0.23													$	(0.16	)
Diluted	$	0.22													$	(0.17	)
Weighted average shares used to compute net income (loss) per share attributable to common stockholders:
Basic		39,119,430														42,072,595
Diluted		39,129,136														42,494,587

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.

Renewable Energy Group, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the Year Ended December 31, 2013

(In thousands, except share and per share amounts)

	Renewable Energy Group, Inc.			Syntroleum Corporation			Dynamic Fuels, LLC			Adjustments/ Eliminations				Total
		(a)
Revenues
Biodiesel	$	1,498,011		$	—		$	46,340		$	—			$	1,544,351
Services		127			1,957			—			(469	)	(f)		1,615
Total revenues		1,498,138			1,957			46,340			(469	)			1,545,966
Cost of goods sold
Biodiesel		1,258,549			—			47,454			(1,139	)	(g)(b)		1,304,864
Services		156			2,460			—			—				2,616
Total cost of goods sold		1,258,705			2,460			47,454			(1,139	)			1,307,480
Gross profit (loss)		239,433			(503	)		(1,114	)		670				238,486
Selling, general and administrative		46,123			8,835			956			853		(c)		56,767
Income (loss) from operations		193,310			(9,338	)		(2,070	)		(183	)			181,719
Other income (expense), net:
Other income		388			7,085			280			(4,822	)	(d)(h)		2,931
Interest expense		(2,397	)		—			(1,450	)		—				(3,847	)
		(2,009	)		7,085			(1,170	)		(4,822	)			(916	)
Income (loss) before taxes		191,301			(2,253	)		(3,240	)		(5,005	)			180,803
Income tax expense		(4,935	)		—			—			—				(4,935	)
Net income (loss)		186,366			(2,253	)		(3,240	)		(5,005	)			175,868
Less - Distributed dividends to preferred stockholders		(2,055	)		—			—			—				(2,055	)
Less - Effect of participating preferred stock		(16,272	)		—			—			1,981		(i)		(14,291	)
Less - Effect of participating share- share based awards		(2,785	)		—			—			301		(i)		(2,484	)
Net income (loss) attributable to the company’s common stockholders	$	165,254		$	(2,253	)	$	(3,240	)	$	(2,723	)		$	157,038
Net income per share attributable to common stockholders
Basic	$	5.00												$	4.46
Diluted	$	5.00												$	4.46
Weighted average shares used to compute net income per share attributable to common stockholders:
Basic		33,045,164													35,208,541
Diluted		33,052,879													35,216,256

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.

NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

(Unaudited)

The unaudited pro forma condensed consolidated statements of operations include the six months ended June 30, 2014 and year ended December 31, 2013 financial information for Renewable Energy Group, Inc. (the “Company”), Syntroleum Corporation (“Syntroleum”) and Dynamic Fuels, LLC (“Dynamic Fuels”). As Dynamic Fuels’ fiscal year end is September 30, the Company included financial information for the periods from October 1, 2012 through September 30, 2013 for the year ended December 31, 2013 pro forma condensed consolidated statement of operations and from January 1, 2014 through June 30, 2014 for the six months ended June 30, 2014 pro forma condensed consolidated statement of operations. The Dynamic Fuels financial information for the three month period October 1, 2013 through December 31, 2013 was excluded from the statement. The revenues, gross margin loss, general and administrative expenses and net loss for that period were $150, $6,105, $221 and $6,567, respectively. An unaudited pro forma condensed consolidated balance sheet as of June 30, 2014 has not been presented given Renewable Energy Group, Inc.’s reported balance sheet as of June 30, 2014 includes the balance sheet results of the transaction. For information regarding the consideration transferred and purchase price allocation related to this transaction, see Note 3 of the Renewable Energy Group, Inc. Form 10Q as of June 30, 2014.

The following adjustments are included in the Company’s unaudited pro forma condensed consolidated statements of operations:

(a) The unaudited pro forma condensed consolidated statements of operations were prepared with the Company treated as the acquiring corporation for purposes of applying the acquisition method of accounting.

(b) Adjusted to reflect the change in carrying value of the fixed assets based upon the acquisition of Syntroleum and Dynamic Fuels. The carrying value of the depreciable fixed assets decreased $2,620 with an estimated weighted average useful life of 20 years. The amount of depreciation expense decreased $66 and $131 for the pro forma for the six months ended June 30, 2014 and the year ended December 31, 2013, respectively.

(c) The Company acquired $8,300 in renewable diesel technology with an estimated useful life of 20 years. The Company also acquired $600 in trademarks with an estimated useful life of two years. The total amount of amortization for these intangibles taken for the pro forma for the six months ended June 30, 2014 and the year ended December 31, 2013 was $427 and $853, respectively.

(d) Adjusted to reflect the elimination of the equity earnings (loss) allocated from Dynamic Fuels to Syntroleum as amounts represent intercompany transactions as follows:

For the six months ended June 30, 2014

Syntroleum	Dynamic Fuels	Total
$  5,539	$  —	$  5,539
For the year ended December 31, 2013
Syntroleum	Dynamic Fuels	Total
$  1,569	$  —	$  5,539

(e) Adjusted to eliminate the effect of participating share based awards as the Company’s net income was adjusted to a pro forma net loss.

(f) Adjusted to eliminate the technical services revenues between the acquired companies as amounts represent intercompany transactions as follows:

For the year ended December 31, 2013

Syntroleum	Dynamic Fuels	Total
$  (469)	$  —	$  (469)

(g) Adjusted to eliminate the engineering services and production royalties between the acquired companies as amounts represent intercompany transactions as follows:

For the year ended December 31, 2013

Syntroleum	Dynamic Fuels	Total
$  —	$  (1,008)	$  (1,008)

(h) Adjusted to eliminate the income from discontinued operations recognized by Syntroleum for a disposition occurring prior to this transaction:

For the year ended December 31, 2013

Syntroleum	Dynamic Fuels	Total
$  (6,391)	$  —	$  (6,391)

(i) Adjust the amount attributable to the effect of participating preferred stock and shared-based awards based upon the change in pro forma net income.