##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
      (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    September 30, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Transition Period
    from          to   Commission File
    No. 0-19260
      RENTECH, INC.
 (Exact name of registrant as
    specified in its charter)
  Colorado(State or other jurisdiction
    of
    incorporation or organization)

84-0957421(I.R.S. Employer
    Identification No.)   10877 Wilshire Boulevard, Suite 710
 Los Angeles, California 90024
 (Address of principal executive
    offices, including zip code)
  Telephone number:
    (310) 571-9800
      Securities registered pursuant to Section 12(b) of the
    Act:
 Common Stock (and associated Preferred Stock Purchase
    Rights)
 Name of Each Exchange on Which Registered: The American Stock
    Exchange
 Securities registered pursuant to Section 12(g) of the
    Act:
 None
      o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 o þ o
  Rule 12b-2  o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K




---



##### 





TABLE OF
    CONTENTS
   
 PagePART IITEM 1.


Business


2ITEM 1A.


Risk Factors


15ITEM 1B.


Unresolved Staff Comments


27ITEM 2.


Properties


27ITEM 3.


Legal Proceedings


28ITEM 4.


Submission of Matters to a Vote of Security
    Holders


28PART IIITEM 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


28ITEM 6.


Selected Financial Data


30ITEM 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


30ITEM 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


59ITEM 8.


Financial Statements and Supplementary Data


61ITEM 9.


Changes in and Disagreements With Accountants On
    Accounting and Financial Disclosure


62ITEM 9A.


Controls and Procedures


62ITEM 9B.


Other Information


62PART IIIITEM 10.


Directors and Executive Officers of the
    Registrant


63ITEM 11.


Executive Compensation


63ITEM 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


63ITEM 13.


Certain Relationships and Related Transactions


63ITEM 14.


Principal Accountant Fees and Services


63PART IVITEM 15.


Exhibits and Financial Statement Schedules


63EXHIBIT 10.24EXHIBIT 12.1EXHIBIT 21EXHIBIT 23EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2




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##### Table of Contents



FORWARD-LOOKING
    STATEMENTS
        Form 10-K,
 1




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##### Table of Contents



PART I
  ITEM 1.
    BUSINESS    An
    Overview of our Company
      Form 10-K Form 8-K
   2




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##### Table of Contents



(310) 571-9800.
  The
    Natchez Project
         3




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Other
    Potential Projects Utilizing the Rentech Process
          Financial
    Information About Our Business Segments
    Business
    Strategy
    Commercialize the Rentech Process in the most economical,
    efficient and environmentally sound manner.
 4




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Strategically build projects in the United States utilizing
    the Rentech Process. scale-up
  Continue investment in our research and development
    program.
      Extend the reach of Rentech technology through
    licensing.
   5




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##### Table of Contents



Our
    Proprietary Rentech Process
    Rentech
    Technology
    
    In the first stage, commercially available technologies, such as
    gasification or steam methane reforming, convert carbon-bearing
    material into syngas, which is a mixture of hydrogen and carbon
    monoxide. Oxygen is usually added for the efficient conversion
    of any solid or liquid feedstock. The addition of oxygen may
    also be necessary in processes that use gaseous feedstocks,
    depending on the technology selected, to reform the gaseous
    feedstocks into the desired composition of syngas.
    In the second stage, the syngas created in stage one is fed
    through a Fischer-Tropsch reactor and chemically altered in the
    presence of a catalyst to form synthetic liquid hydrocarbon
    products. The catalyst may be iron-based, as is the case in the
    Rentech Process, or cobalt based. This is the stage where the
    Rentech Process is applied.
    In the third stage, the synthetic hydrocarbon products are
    upgraded on site with a commercially available refining
    technology by distillation or other conventional processing
    steps to the specifications required for the target market.    Development
    of the Rentech Process
     6




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Competition
    in Fischer-Tropsch Technology
      Sources
    of Feedstocks for the Rentech Process
       7




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##### Table of Contents



Products
    and Markets for Liquid Hydrocarbon Products
      
    clean burning, premium grade diesel fuel that is valuable as
    both a stand-alone product and a blending component;
    clean burning, jet fuels;
    naphthas useful as a feedstock for chemical processing;
    specialty products such as waxes useful in hot-melt adhesives,
    inks and coatings;
    normal paraffins;
    other wax-based products; and
    a variety of other chemical intermediaries.    Clean Air
    Regulations
    Government
    Incentives
     8




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Acquisition
    of REMC
  and/or
  Business
    of Rentech Energy Midwest Corporation
    Production
    Facility
     9




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CapacityPlant

(Tons per Day)Anhydrous Ammonia


830UAN Blending


1,100Ammonium nitrate


600Urea synthesis


400Urea granulation


140Nitric acid (2 plants)


380Carbon Dioxide


650   Products
    Anhydrous Ammonia.
    UAN.
    Urea.
 10




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##### Table of Contents



Nitric Acid.
  Carbon Dioxide. 2 2 2 2 2 2 2 2
  Marketing
    and Distribution
  2
  Seasonality
    and Volatility
    2002-2003,
 11




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Raw
    Materials
      Transportation
    Competition
    Intellectual
    Property and Patents of the Company
     12




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Regulation
  on-site
     13




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Implementation
    of Carbon Dioxide Emissions Reduction Strategy
        Petroleum
    Mud Logging, LLC Divestiture
    Employees
    and Labor Relations
   14




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Available
    Information
  Form 10-K, Form 10-Q, Form 8-K
  ITEM 1A 
    RISK
    FACTORS    Risks
    Related to Our Liquidity, Financial Condition, and Results of
    Operations
  Our
    liquidity and capital resources are limited and we must raise
    substantial additional capital to execute our business plan and
    to fund our operations.
    We
    have never operated at a profit. If we do not achieve
    significant amounts of additional revenues and become
    profitable, we may be unable to continue our
    operations.
    REMCs
    operations may not be profitable and may require substantial
    working capital financing.
   15




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We do
    not expect our historical operating results to be indicative of
    future performance.
    We
    most likely will continue to record higher compensation expense
    as a result of the implementation of Statement of Financial
    Accounting Standards 123(R).
    Failure
    to maintain effective internal control over financial reporting
    in accordance with Section 404 of the Sarbanes-Oxley Act
    could have a material adverse effect on the markets
    perception of our business and our ability to raise
    capital.
   16




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Risks
    Related to the Rentech Process
  We and
    our licensees may be unable to successfully implement use of the
    Rentech Process at commercial scale synthetic fuels plants,
    including the proposed Natchez Project.
    
    reaction activity different than that demonstrated in laboratory
    and pilot plant operations, which could increase the amount of
    catalyst or number of reactors required to convert synthesis gas
    into liquid hydrocarbons;
    shorter than anticipated catalyst life, which would require more
    frequent catalyst replacement or addition, catalyst purchases,
    or both;
    insufficient catalyst separation from the crude wax product
    stream could impair the operation of the product upgrading unit;
    product upgrading catalyst sensitivities to impurities in the
    crude synthetic fuel products, which would impair the efficiency
    and economics of the product upgrade unit and require design
    revisions;
    higher than anticipated capital and operating costs to design,
    construct or reconfigure and operate a plant using the Rentech
    Process; and
    higher than anticipated costs for the catalyst and other
    materials used to operate a plant using the Rentech Process.    Our
    receipt of revenues from licensees is dependent on their ability
    to successfully develop, construct and operate synthetic fuels
    plants using the Rentech Process.
     17




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Plants
    that would use the Rentech Process rely upon complex gas process
    systems. This creates risks of fire and explosions, which could
    cause severe damage and injuries, create liabilities for us, and
    materially and adversely affect our business.
    We
    could have potential indemnification liabilities to licensees
    relating to the operation of Fischer-Tropsch plants based on the
    Rentech Process and to intellectual property
    disputes.
    
    use of patent rights and technical information relating to the
    Rentech Process; and
    acts or omissions by us in connection with our preparation of
    preliminary and final design packages for the licensees
    plant and approval of the licensees construction plans.    Industry
    rejection of the Rentech Process would adversely affect our
    ability to receive future license fees.
  and/or
    If our
    competitors introduce new technology, new legislation or
    regulations are adopted, or new industry standards emerge, our
    technologies and products could become obsolete and
    unmarketable.
    Our
    success depends in part on the successful and timely completion
    of our PDU and its subsequent operation.
   18




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##### Table of Contents



and/or
  Our
    success depends on the performance of our management team,
    project development team and technology group. The loss of key
    individuals within these groups would disrupt our business
    operations.
    We may
    not be able to successfully manage our growing
    business.
    Our
    success depends in part on our ability to protect our
    intellectual property rights, which involves complexities and
    uncertainties.
     19




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The
    Rentech Process may not compete successfully against
    Fischer-Tropsch technology developed by our competitors, many of
    whom have significantly more resources.
    Our
    processes (including the Rentech Process) incorporate
    technologies and processes developed by third parties the
    failure of which could harm our prospects for
    success.
    If we
    have foreign operations, our business there would be subject to
    various risks due to unstable conditions.
    Risks
    Related to Possible Inability to Complete Project Developments
    and the Financing Required for Construction and Subsequent
    Operation
  We are
    pursuing alternative fuels projects, including at the Natchez
    Project that will involve substantial expense and
    risk.
   20




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The
    construction of the Natchez Project and the development of other
    alternative fuel projects will require several years and
    substantial financing, and may not be successful.
    We may
    not be able to successfully negotiate and execute the
    engineering, procurement and construction contracts with
    construction and other vendors necessary for the conversion and
    financing of the Natchez Project or other alternative fuel
    projects.
    If we
    do not receive funds from additional financing or other sources
    of working capital for our business activities and future
    transactions, we will not be able to execute our business
    plan.
     21




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The
    level of indebtedness we expect to incur could adversely affect
    our ability to raise additional capital to fund our operations,
    limit our ability to react to changes in the economy or our
    industry and prevent us from meeting our
    obligations.
      
    increasing our vulnerability to general economic and industry
    conditions;
    requiring a substantial portion of our cash flow from operations
    to be dedicated to the payment of principal and interest on our
    indebtedness, therefore reducing our ability to use our cash
    flow to fund our operations, capital expenditures and future
    business opportunities;
    limiting our ability to obtain additional financing for working
    capital, capital expenditures, debt service requirements,
    acquisitions and general corporate or other purposes; and
    limiting our ability to adjust to changing market conditions and
    placing us at a competitive disadvantage compared to our
    competitors who have greater capital resources.    The
    issuance of shares of our common stock could result in the loss
    of our ability to use our net operating losses.
      Risks
    Related to Our Operations of Plants
  A
    reduction in government incentives for FT fuels, or the
    relaxation of clean air requirements, could materially reduce
    the demand for FT fuels or the Rentech Process.
   22




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Changes
    in existing laws and regulations, or their interpretation, or
    the imposition of new restrictions relating to emissions of
    carbon dioxide may give rise to additional compliance costs or
    liabilities and could materially reduce the demand for FT fuels
    or the Rentech Process which could, in turn, have a material
    adverse effect on our business, financial condition, results of
    operations or prospects.
  2 2 2
  Changes
    in United States government regulations and agricultural policy
    that affect the demand for products made at the East Dubuque
    Plant could materially and adversely affect its
    operations.
    The
    price for coal or other feedstock in the open market is subject
    to volatility which could adversely affect us.
   23




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We
    could be subject to claims and liabilities under environmental,
    health and safety laws and regulations arising from the
    production and distribution of nitrogen fertilizers and
    alternative fuel products at our facilities.
    The
    market for natural gas has been volatile. If prices for natural
    gas increase significantly, we may not be able to economically
    operate the East Dubuque Plant.
    Lower
    prices for nitrogen fertilizers or downturns in market demands
    could reduce the revenues and profitability of the East Dubuque
    Plants nitrogen fertilizer business.
    The
    Revolving Credit Facility includes restrictive covenants that
    will limit our ability to operate our business.
   24




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##### Table of Contents



Weather
    conditions may materially impact the demand for REMC
    products.
    The
    business of the East Dubuque Plant is highly
    seasonal.
    The
    operations of the East Dubuque Plant are subject to risks and
    hazards that may result in monetary losses and
    liabilities.
    Acts
    of terrorism and continued conflict and instability in the
    Middle East could affect both the supply and price of various
    fertilizer materials that we sell.
   25




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##### Table of Contents



The
    nitrogen fertilizer industry is very competitive and the actions
    of our competitors could materially affect the results of
    operations and financial position of the Company.
    We
    rely on Agrium as distributor of the nitrogen fertilizer
    products we produce at the East Dubuque Plant.
    The
    price for coal or other feedstock in the open market is subject
    to volatility which could adversely affect us.
    Risks
    Related to the Market for Rentech Common Stock
  We
    have a very substantial overhang of common stock and future
    sales of our common stock will cause substantial dilution and
    may negatively affect the market price of our
    shares.
         26




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Protection
    provisions in our Amended and Restated Articles of Incorporation
    and our shareholder rights plan may deter a third party from
    seeking to acquire control of us, which may reduce the market
    price of our stock.
  2 3 2 3
  The
    market price of the Companys common stock may
    decline.
    
    the construction of the Natchez Project or other process plants
    is not completed in a timely, economical and efficient manner;
    the construction of the Natchez Project or other process plants
    does not yield the expected benefits to our revenues as rapidly
    or to the extent that may be anticipated by financial or
    industry analysts, stockholders or other investors;
    the effect of the construction of the Natchez Project or other
    process plants on our consolidated financial statements is not
    consistent with the expectations of financial or industry
    analysts, stockholders or other investors;
    significant shareholders of the Company decide to dispose of
    their shares of common stock because of any of the above or
    other reasons; or    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES  Office
    Leases
      Development
    and Testing Laboratories
   27




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##### Table of Contents



Product
    Demonstration Unit Properties
      1 2
  Rentech
    Energy Midwest Corporation Properties
    Land
    Option for the Natchez Project
    ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    PART II
  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES   28




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##### Table of Contents



mark-ups,
  Fiscal Year Ended September 30, 2007

High


LowFirst Quarter, ended Dec. 31, 2006

$
4.53


$
3.56Second Quarter, ended Mar. 31, 2007

$
3.95


$
2.00Third Quarter, ended Jun. 30, 2007

$
3.20


$
2.20Fourth Quarter, ended Sep. 30, 2007

$
2.64


$
1.90   Fiscal Year Ended September 30, 2006

High


LowFirst Quarter, ended Dec. 31, 2005

$
4.16


$
2.33Second Quarter, ended Mar. 31, 2006

$
5.32


$
3.72Third Quarter, ended Jun. 30, 2006

$
5.07


$
3.35Fourth Quarter, ended Sep. 30, 2006

$
5.24


$
4.12   Fiscal Year Ended September 30, 2005

High


LowFirst Quarter, ended Dec. 31, 2004

$
2.59


$
0.88Second Quarter, ended Mar. 31, 2005

$
2.51


$
1.19Third Quarter, ended Jun. 30, 2005

$
1.62


$
1.25Fourth Quarter, ended Sep. 30, 2005

$
3.00


$
1.21       Company
    Purchases of Equity Securities
   29




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA    Rentech,
    Inc. and Subsidiaries
  Years Ended September 302007


2006


2005


2004


2003(Thousands, except per share data)CONSOLIDATED STATEMENT OF OPERATIONS DATARevenues

$
132,320


$
44,517


$
589


$
984


$
916Cost of Sales

$
116,567


$
44,077


$
617


$
679


$
316Gross Profit

$
15,753


$
440


$
(28
)

$
305


$
600Loss from Continuing Operations

$
(94,867
)

$
(39,912
)

$
(15,615
)

$
(7,087
)

$
(9,026
)Net Loss(1)

$
(91,717
)

$
(38,647
)

$
(14,359
)

$
(7,211
)

$
(9,535
)Loss Applicable to Common Stockholders(2)

$
(91,717
)

$
(38,722
)

$
(23,700
)

$
(7,211
)

$
(9,535
)BASIC AND DILUTED LOSS PER SHARE(3)Loss from Continuing Operations Per Common Share(1)

$
(.627
)

$
(.314
)

$
(.269
)

$
(.083
)

$
(.122
)Loss Per Common Share(2)

$
(.606
)

$
(.304
)

$
(.255
)

$
(.084
)

$
(.129
)CONSOLIDATED BALANCE SHEET DATAWorking Capital

$
37,961


$
65,316


$
32,031


$
(1,267
)

$
(1,572
)Total Assets

$
183,063


$
150,686


$
43,492


$
9,379


$
11,187Total Long-Term Liabilities

$
65,728


$
58,135


$
2,850


$
3,019


$
3,224Total Liabilities

$
140,351


$
74,101


$
9,221


$
6,341


$
8,006Accumulated Deficit(4)

$
(192,373
)

$
(100,658
)

$
(62,009
)

$
(47,650
)

$
(40,439
)     (1)
    
    Excludes dividends of $0, $75, $9,341, $0 and $0 for years ended
    September 30, 2007, 2006, 2005, 2004 and 2003, respectively.(2)
    
    Includes dividends of $0, $75, $9,341, $0 and $0 for years ended
    September 30, 2007, 2006, 2005, 2004 and 2003, respectively.(3)
    
    The weighted average number of basic and dilutive shares of
    common stock outstanding during the years ended
    September 30, 2007, 2006, 2005, 2004 and 2003 were
    approximately 151,356,000, 127,174,000, 92,919,000, 85,933,000
    and 73,907,000, respectively.(4)
    
    Includes other comprehensive loss of $2 for year ended
    September 30, 2006.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS     30




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OVERVIEW
    OF OUR FINANCIAL CONDITION, LIQUIDITY, AND RESULTS OF
    OPERATIONS
        CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
    Inventories. first-in
  Valuation of Long-Lived Assets and Intangible
    Assets.
  Stock Based Compensation. Black-Scholes
 31




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Deferred Income Taxes.
  Accounting for Fixed Price Contracts.
  RESULTS
    OF OPERATIONS
    Selected
    Business Segment Information
   32




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##### Table of Contents



For the Years Ended September 30,2007


2006


2005(Thousands)Revenues:Nitrogen products manufacturing

$
131,816


$
44,398


$
Alternative fuels


504



119



589Total revenues

$
132,320


$
44,517


$
589Operating income (loss):Nitrogen products manufacturing

$
13,222


$
(1,320
)

$
Alternative fuels


(107,685
)


(38,099
)


(11,880
)Total operating loss

$
(94,463
)

$
(39,419
)

$
(11,880
)Net income (loss) applicable to common stockholders:Nitrogen products manufacturing

$
11,869


$
(1,482
)

$
Alternative fuels


(106,736
)


(38,430
)


(15,615
)Deemed dividends to preferred stockholders










(9,000
)Cash dividends paid to preferred stockholders






(75
)


(341
)Net income (loss) from discontinued operations, net of tax


225



1,265



800Gain on sale of discontinued operations, net of tax


2,925







456Total net loss applicable to common stockholders

$
(91,717
)

$
(38,722
)

$
(23,700
)  33




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##### Table of Contents



Comparison
    of Changes Between Periods
    Years Ended September 30,2007


2006


2005Net Sales by CategoryNitrogen products manufacturing


99.6
%


99.7
%


Technical services


0.3
%






79.0
%Rental income


0.1
%


0.3
%


21.0
%Total Sales


100.0
%


100.0
%


100.0
%Income Statement Components as a Percentage of Consolidated
    Net Sales from Continuing OperationsGross ProfitNitrogen products manufacturing


12.1
%


0.7
%


Technical services


(72.7
)%






(32.6
)%Rental income


100.0
%


100.0
%


100.0
%Total Gross Profit


11.9
%


1.0
%


(4.8
)%Operating expensesGeneral and administrative expense


21.2
%


61.2
%


1860.4
%Depreciation and amortization


0.6
%


1.2
%


68.7
%Research and development


32.6
%


27.1
%


84.2
%Loss on impairment


(28.9
)%






Total Operating Expenses


83.3
%


89.5
%


2013.3
%Loss from operations


(71.4
)%


(88.5
)%


(2018.1
)%Other income (expenses)Interest and dividend income


2.1
%


4.6
%


13.9
%Interest expense


(1.8
)%


(5.4
)%


(488.3
)%Loss on disposal of fixed assets


(0.6
)%


(0.5
)%


0.1
%Loss on investment










(35.1
)%Equity in loss of investee










(125.0
)%Other income



%


0.2
%


Total Other Income (Expenses)


(0.3
)%


(1.1
)%


(634.4
)%Net loss from continuing operations before taxes


(71.7
)%


(89.7
)%


(2652.5
)%Income tax expense










Net loss from continuing operations


(71.7
)%


(89.7
)%


(2652.5
)%Dividends on preferred stock






(0.1
)%


(1586.8
)%Loss applicable to common stock


(71.7
)%


(89.8
)%


(4239.3
)%  34




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##### Table of Contents



FISCAL
    YEAR 2007 COMPARED TO FISCAL YEAR 2006
  Continuing
    Operations:
  Revenues
  For the Years EndedSeptember 30,2007


2006(Thousands)Revenues:Nitrogen products manufacturing

$
131,816


$
44,398Total product revenues

$
131,816


$
44,398Technical services

$
382


$
Rental income


122



119Total services revenues

$
504


$
119Total revenues

$
132,320


$
44,517   Nitrogen products manufacturing.
    Technical Services.
  Rental Income.
  Cost of
    Sales
  For the Years EndedSeptember 30,2007


2006(Thousands)Cost of sales:Nitrogen products manufacturing

$
115,906


$
44,077Technical services


661



Total cost of sales

$
116,567


$
44,077  35




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##### Table of Contents



Nitrogen Products Manufacturing.
  Technical Services.
  Gross
    Profit
  For the Years Ended September 30,2007


2006(Thousands)Gross profit (loss):Nitrogen products manufacturing

$
15,909


$
321Technical services


(278
)


Rental income


122



119Total gross profit

$
15,753


$
440     Nitrogen Products Manufacturing.
  Technical Services.
 36




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##### Table of Contents



Operating
    Expenses
  For the Years EndedSeptember 30,2007


2006(Thousands)Operating expenses:Selling, general and administrative

$
28,093


$
27,273Depreciation and amortization


799



532Research and development


43,127



12,054Loss on impairment


38,197



Total operating expenses

$
110,216


$
39,859     Selling, General and Administrative
    Expenses.
      break-up
   37




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##### Table of Contents




    Salaries and benefits increased by $2,010,000. This increase was
    a result of hiring new employees in various professional
    capacities related to the PDU, the East Dubuque Plant conversion
    project, and other project development activities, as well as
    corporate management.
    Recruitment expenses increased by $1,147,000 as a result of
    hiring these additional personnel.
    Travel costs increased by $318,000 consistent with the
    Companys growth and expanded geographic presence.
    Consulting expenses increased by $651,000 as the Company
    augmented its resources with expertise in various technical
    disciplines.
    Information technology expense increased by $2,157,000 as the
    Company enhanced its data and communication infrastructure.
    Professional fees including legal services and accounting fees
    for audit and tax services increased by $326,000.
    Rent expense increased by $251,000 due to additional space
    required by the increased headcount.
    Insurance expenses increased by $331,000 for the twelve months
    ended September 30, 2007 compared to the same period in
    2006 primarily as a result of acquiring REMC and constructing
    the PDU.
    Expenses associated with complying with our public company
    requirements decreased by $394,000 due to reductions in the use
    of external resources previously utilized for compliance.
    Project development expenses unrelated to REMC increased by
    $192,000 primarily due to activity associated with the Natchez.    Depreciation and Amortization.
  Research and Development.
  Loss on Impairment.
 38




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##### Table of Contents



Income
    (Loss) from Operations
  For the Years EndedSeptember 30,2007


2006(Thousands)Income (loss) from operations:Nitrogen products manufacturing

$
13,222


$
(1,320
)Technical services


(107,807
)


(38,218
)Rental income


122



119Total loss from operations

$
(94,463
)

$
(39,419
)     Nitrogen Products Manufacturing.
  Technical Services.
  Other
    Income (Expense)
  For the Years EndedSeptember 30,2007


2006(Thousands)Other income (expense):Interest and dividend income

$
2,800


$
2,027Interest expense


(2,430
)


(2,402
)Loss on investment






(305
)(Loss) gain on disposal of fixed assets


(826
)


100Other income


52



87Total other expense

$
(404
)

$
(493
)   Interest and Dividend Income.
 39




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##### Table of Contents



Interest Expense.
  Loss on Investment.
  (Loss) Gain on Disposal of Fixed
    Assets.
  Net
    Income (Loss) from Continuing Operations
  For the Years EndedSeptember 30,2007


2006(Thousands)Net income (loss) from continuing operations:Nitrogen products manufacturing

$
11,869


$
(1,482
)Technical services


(106,858
)


(38,549
)Rental income


122



119Net loss from continuing operations before taxes

$
(94,867
)

$
(39,912
)Income tax benefit/(expense)






Total net loss from continuing operations

$
(94,867
)

$
(39,912
)   Nitrogen Products Manufacturing.
  Technical Services.
  Total Net Loss from Continuing Operations.
 40




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##### Table of Contents



Discontinued
    Operations:
  Revenues
    and Net Income from Discontinued Operations
  For the Years EndedSeptember 30,2007


2006(Thousands)Total revenues

$
1,179


$
8,292Net income from discontinued operations, net of tax

$
225


$
1,265       Gain on
    Sale of Discontinued Operations
  For the Years Ended September 30,2007


2006(Thousands)(Net of tax)Gain on sale of PML

$
2,721


$
Earn-out on sale of REN


129



Reversal of accrued liability for OKON


75



Total gain on sale of discontinued operations

$
2,925


$
   Gain on sale of discontinued operations.
  Sales price

$
5,398Less transaction costs


(49
)Net sales price to Rentech, after transaction costs

$
5,349Book value of Rentechs ownership in PML


2,628Rentechs gain on sale of PML

$
2,721   Earn-out on Sale of REN.
 41




---



##### Table of Contents



Total Gain on Sale of Discontinued
    Operations.
  Net Loss
    Applicable to Common Stockholders
  For the Years EndedSeptember 30,2007


2006(Thousands)Net loss

$
(91,717
)

$
(38,647
)Cash dividends paid on preferred stock






(75
)Net loss applicable to common stockholders

$
(91,717
)

$
(38,722
)     FISCAL
    YEAR 2006 COMPARED TO FISCAL YEAR 2005
  Continuing
    Operations:
  Revenues
  For the Years EndedSeptember 30,2006


2005(Thousands)Revenues:Nitrogen products manufacturing

$
44,398


$
Total product revenues

$
44,398


$
Technical services

$



$
465Rental income


119



124Total services revenues

$
119


$
589Total revenues

$
44,517


$
589   Nitrogen Products Manufacturing.
  Technical Services.
 42




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##### Table of Contents



Rental Income.
  Cost of
    Sales
  For the Years EndedSeptember 30,2006


2005(Thousands)Cost of sales:Nitrogen products manufacturing

$
44,077


$
Technical services






617Total cost of sales

$
44,077


$
617     Nitrogen Products Manufacturing.
  Technical Services.
  Gross
    Profit (Loss)
  For the Years EndedSeptember 30,2006


2005(Thousands)Gross profit (loss):Nitrogen products manufacturing

$
321


$
Technical services






(152
)Rental income


119



124Total gross profit (loss)

$
440


$
(28
)     Nitrogen Products Manufacturing.
 43




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##### Table of Contents



Technical Services.
  Operating
    Expenses
  For the Years EndedSeptember 30,2006


2005(Thousands)Operating expenses:Selling, general and administrative

$
27,273


$
10,952Depreciation and amortization


532



404Research and development


12,054



496Total operating expenses

$
39,859


$
11,852     Selling, General and Administrative
    Expenses.
   44




---



##### Table of Contents




    Salaries and benefits, contract salaries and consulting expenses
    increased $3,611,000 as a result of hiring new employees to
    prepare the Company for the construction of the PDU, the
    acquisition and integration of REMC and other project
    development efforts, as well as for increases in executive
    compensation and bonus accruals.
    Legal expenses increased by $806,000 during fiscal 2006 as we
    incurred significant external legal costs related to an equity
    offering, the preparation of our
    Form 10-K
    and Proxy as well as project development activities and other
    general corporate matters compared with fiscal 2005 related to
    costs arising from a cancelled acquisition.
    Travel and entertainment costs increased by $514,000 during
    fiscal 2006 due to travel relating to the REMC acquisition and
    the Natchez Project and other potential projects.
    Public relations charges increased by $748,000 during fiscal
    2006 due to increased costs for shareholder reporting, and board
    expenses.
    None of the remaining changes within general and administrative
    expenses were individually significant.  Depreciation and Amortization.
  Research and Development.
  Loss from
    Operations
  For the Years EndedSeptember 30,2006


2005(Thousands)Loss from operations:Nitrogen products manufacturing

$
(1,320
)

$
Technical services


(38,218
)


(12,003
)Rental income


119



123Total loss from operations

$
(39,419
)

$
(11,880
)     Nitrogen Products Manufacturing.
  Technical Services.
 45




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##### Table of Contents



Other
    (Expense) Income
  For the Years EndedSeptember 30,2006


2005(Thousands)Other (expense) income:Loss on investment

$
(305
)

$
(206
)Equity in loss of investee






(736
)Interest and dividend income


2,027



81Interest expense


(2,402
)


(2,875
)Gain/(loss) on disposal of fixed assets


100



1Other income


87



Total other expense

$
(493
)

$
(3,735
)     Loss on Investment.
  Equity in Loss of Investee.
    Interest and Dividend Income.
  Interest Expense.
  (Loss) Gain on Disposal of Fixed
    Assets.
 46




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##### Table of Contents



Other income.
  Net Loss
    from Continuing Operations
  For the Years EndedSeptember 30,2006


2005(Thousands)Net loss from continuing operations:Nitrogen products manufacturing

$
(1,482
)

$
Technical services


(38,549
)


(15,738
)Rental income


119



123Net loss from continuing operations before taxes

$
(39,912
)

$
(15,615
)Income tax benefit/(expense)






Total net loss from continuing operations

$
(39,912
)

$
(15,615
)     Nitrogen Products Manufacturing.
  Technical Services.
  Rental Income.
  Discontinued
    Operations:
  Revenues
    from Discontinued Operations
  For the Years EndedSeptember 30,2006


2005(Thousands)Revenues:Product sales

$



$
846Industrial automation systems






364Oil and gas field services


8,292



6,597Total revenues from discontinued operations

$
8,292


$
7,807   Product Sales.
 47




---



##### Table of Contents



Industrial Automation Systems.
  Oil and Gas Field Services.
  Cost of
    Sales from Discontinued Operations
  For the Years EndedSeptember 30,2006


2005(Thousands)Cost of sales from discontinued operations:Product sales

$



$
441Industrial automation systems






278Oil and gas field services


6,005



4,596Total cost of sales from discontinued operations

$
6,005


$
5,315     Product Sales.
  Industrial Automation Systems.
  Oil and Gas Field Services.
 48




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##### Table of Contents



Gross
    Profit from Discontinued Operations
  For the Years EndedSeptember 30,2006


2005(Thousands)Gross profit from discontinued operations:Product sales

$



$
405Industrial automation systems






86Oil and gas field services


2,287



2,001Total gross profit from discontinued operations

$
2,287


$
2,492   Product Sales.
  Industrial Automation Systems.
  Oil and Gas Field Services.
  Operating
    Expenses from Discontinued Operations
  For the Years EndedSeptember 30,2006


2005(Thousands)Operating expenses from discontinued operations:General and administrative

$
883


$
1,528Depreciation and amortization


51



48Research and development






11Total operating expenses from discontinued operations

$
934


$
1,587   General and Administrative Expenses.
  Depreciation and Amortization.
  Research and Development.
  Operating
    Gain (Loss) from Discontinued Operations
  For the Years EndedSeptember 30,2006


2005(Thousands)Gain (loss) from discontinued operations:Product sales

$



$
(165
)Industrial automation systems






(250
)Oil and gas field services


1,353



1,320Total gain from discontinued operations

$
1,353


$
905  49




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##### Table of Contents



Product Sales.
  Industrial Automation Systems.
  Oil and Gas Field Services.
  Other
    (Expense) Income from Discontinued Operations
  For the Years EndedSeptember 30,2006


2005(Thousands)Other (expense) income:Interest expense

$
(40
)

$
(45
)Gain on disposal of fixed assets






1Total other expense

$
(40
)

$
(44
)   Total Other Expense.
  Net Gain
    (Loss) on Sale of Discontinued Operations
  For the Years EndedSeptember 30,2006


2005(Thousands)Gain (Loss) on sale of discontinued operations:Net loss from product sales

$



$
(165
)Net loss from industrial automation






(281
)Net gain from oil and gas field services, net of tax of $49
    (2006) and $61 (2005)


1,265



1,246Net gain from discontinued operations, net of tax of $49
    (2006) and $61 (2005)

$
1,265


$
800Gain on sale of OKON, net of tax of $0

$



$
699Loss on sale of REN, net of tax of $6






(243
)Net gain on sale of discontinued operations, net of tax of $0
    (2006) and $6 (2005)






456Total gain on sale of discontinued operations, net of tax of $49
    (2006) and $67 (2005)

$
1,265


$
1,256     Product Sales.
  Industrial Automation Systems.
 50




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##### Table of Contents



Oil and Gas Field Services.
  Gain on Sale of Discontinued Operations.
    Net Loss
    Applicable to Common Stockholders
  For the Years EndedSeptember 30,2006


2005(Thousands)Net loss

$
(38,647
)

$
(14,359
)Deemed dividend on preferred stock






(9,000
)Cash dividends paid on preferred stock


(75
)


(341
)Net loss applicable to common stockholders

$
(38,722
)

$
(23,700
)     INFLATION
    ANALYSIS
    OF CASH FLOWS
    For the Years EndedSeptember 30,2007


2006(Thousands)Net Cash (Used in) Provided by:Operating activities

$
(23,612
)

$
(15,612
)Investing activities


(31,892
)


(107,526
)Financing activities


62,630



124,983Net Increase in Cash

$
7,126


$
1,845   Cash
    Flows From Operating Activities
  Net Loss.
  Depreciation.
 51




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##### Table of Contents



Amortization.
  Impairment of Assets.
  Utilization of Spare Parts.
  Loss on Disposal of Fixed Assets.
  Amortization of Debt Issuance Costs.
  Write-off of Acquisition Costs, Debt Issue Costs and Offering
    Costs.
  Write-down of Inventory to Market.
  Accrued Interest Expense.
  Options for Common Stock Issued for
    Services.
  Warrants for Common Stock Issued for
    Services.
  Restricted Stock Units Issued for
    Services.
  Gain on Sale of Subsidiaries.
 52




---



##### Table of Contents



Loss of Investments.
  Changes in Operating Assets and
    Liabilities.
  Accounts Receivable.
  Other Receivables and Receivable from Related
    Party.
  Inventories.
  Prepaid Expenses and Other Current
    Assets.
  Accounts Payable.
  Accrued Retirement Payable.
  Deferred Revenue.
  Accrued Liabilities, Accrued Payroll and
    Other.
  Net Cash (Used) in Operating Activities.
  Cash
    Flows From Investing Activities
  Marketable Securities, Held for
    Sale.
 53




---



##### Table of Contents



Purchases of Property, Plant and
    Equipment.
  Purchases for Construction in Progress.
  Proceed from Sale of Investments.
  Proceeds from Earn-out Receivables.
  Change in Restricted Cash.
  Proceeds from Sale of Subsidiary.
  Acquisitions, Net of Cash Received.
  Deposits and Other Assets.
  Net Cash (Used) in Investing Activities.
  Cash
    Flows From Financing Activities
  Proceeds from Issuance of Common Stock and Warrants and
    Payment of Offering Costs.
 54




---



##### Table of Contents



Proceeds from Grants.
  Proceeds from Advance for Equity
    Investment.
  Payment of Financial Advisory Fees.
  Proceeds from Options and Warrants
    Exercised.
  Payment of Dividends on Preferred
    Stock.
  Proceeds from Subscription Receivable.
  Proceeds from Convertible Debt.
  Payment of Debt Issuance Costs.
  Payments on Line of Credit, Net.
  Payments on Long-Term Debt and Long-Term Convertible
    Debt.
  Net Cash Provided by Financing Activities.
  Increase
    in Cash and Cash Equivalents
    LIQUIDITY
    AND CAPITAL RESOURCES
   55




---



##### Table of Contents



56




---



##### Table of Contents



57




---



##### Table of Contents



CONTRACTUAL
    OBLIGATIONS
    Less than








More thanContractual Obligations

Total


1 Year


1-3 Years


3-5 Years


5 Years(Thousands)Continuing OperationsNotes payable to related parties

$
181


$
181


$



$



$
Line of credit(1)


















Long-term debt


972



23



47



51



851Long-term convertible debt(2)


57,500















57,500Natural gas(3)


8,156



8,156











Operating leases(4)


1,765



691



1,070



4



Interest payments on debt


14,650



2,364



4,722



4,716



2,848Purchase obligations(5)


7,872



7,872











Retirement payables


125



125











$
83,065


$
11,256


$
5,839


$
4,771


$
61,199     (1)
    
    On April 26, 2006, REMC entered into a Revolving Credit
    Facility with CIT to support the working capital needs of
    REMCs nitrogen fertilizer plant. The Revolving Credit
    Facility has a maximum availability of $30.0 million,
    subject to borrowing base limitations, and the facility provides
    that CIT may also issue letters of credit for REMC and the face
    amounts of such letters of credit (if any) would be deducted
    from the $30.0 million maximum availability for borrowing.
    Borrowings under the Revolving Credit Facility bear interest at
    the Chase Bank Rate plus a margin of 0.25% for Chase Bank Rate
    Loans or LIBOR plus a margin of 2.50% for LIBOR Loans. Subject
    to the conditions and limitations stipulated in the agreement,
    we may elect that borrowings under the Revolving Credit Facility
    be comprised of Chase Bank Rate Loans, LIBOR Loans, or a
    combination of both. As of September 30, 2007 and
    September 30, 2006, REMC had neither aggregate borrowings
    nor letters of credit issued under the facility. Had there been
    borrowings under this facility at September 30, 2007, the
    applicable interest rate would have been 8.00%. The Revolving
    Credit Facility is guaranteed by Rentech Development Corporation
    (RDC), and is secured by a first priority security
    interest in all of REMCs current assets. The Revolving
    Credit Facility imposes various restrictions and covenants on
    REMC.(2)
    
    On April 18, 2006, the Company closed a public offering
    that included $50,000,000 principal amount of Convertible Senior
    Notes Due 2013. The Notes bear interest at the rate of 4.00% per
    year on the principal amount of the Notes, payable in cash
    semi-annually in arrears on April 15 and October 15 of each
    year, beginning October 15, 2006. Holders may convert their
    Notes into shares of the Companys common stock (or cash or
    a combination of cash and shares of common stock, if we so
    elect) at an initial conversion rate of 249.2522 shares of
    the Companys common stock per $1,000 principal amount of
    Notes (which represents a conversion price of approximately
    $4.0120 per share of common stock), under the circumstances
    described in the Notes. On April 24, 2006, the
    Companys underwriters exercised their over-allotment
    option and purchased an additional $7,500,000 of convertible
    senior notes. Including the over-allotment, the Company offered
    a total of $57,500,000 in convertible senior notes. On the
    balance sheet these notes are shown net of deferred financing
    charges related to the beneficial conversion feature for a total
    of $56,804,000 and $56,679,000 on September 30, 2007 and
    2006, respectively.(3)
    
    As of September 30, 2007 we have entered into multiple
    natural gas supply contracts for various delivery dates through
    November 30, 2007. Subsequent to September 30, 2007,
    we entered into additional contracts of $18.2 million with
    delivery dates through March 31, 2008.(4)
    
    We have leased office space under two non-cancelable operating
    leases, one of which expires October 31, 2009, the other
    expires in June 2010. The first lease has a renewal option for
    an additional five years. We also lease an industrial site used
    for the storage and maintenance of construction equipment under
    a non-cancelable 58




---



##### Table of Contents



operating lease which expires September 2009. In addition we
    have entered into various other operating leases, which expire
    through March 2012.(5)
    
    The amount presented represents certain open purchases orders
    with our vendors. Not all of our open purchase orders are
    purchase obligations, since some of the orders are not
    enforceable or legally binding on the Company until the goods
    are received or the services are provided.    Amount of Commitment Expiration per PeriodAfterOther Commercial Commitments

Total

Less than 1 Year

1-3 Years

3-5 Years

5 Years(Thousands)Employment agreements(1)

$
2,738,000


$
1,604,000


$
1,134,000


$



$
$
2,738,000


$
1,604,000


$
1,134,000


$



$
     (1)
    
    We have entered into various employment agreements with officers
    of the Company which extend to January 15, 2010. These
    agreements describe annual compensation as well as the
    compensation that we must pay upon termination of employment.
    The information provided in the table assumes that the officers
    remained employed for the full term of employment specified in
    their agreements.          OFF-BALANCE
    SHEET ARRANGEMENTS
    Recent
    Accounting Pronouncements From Financial Statement
    Disclosures
  Form 10-K,
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Interest Rate Risk.
 59




---



##### Table of Contents



Commodity Price Risk.
 60




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Quarterly Results.
  First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(Thousands)Fiscal Year 2007Revenues

$
35,430


$
16,905


$
50,399


$
29,586Gross profit

$
3,747


$
820


$
9,231


$
1,955Loss from operations

$
(11,483
)

$
(17,296
)

$
(6,941
)

$
(58,743
)Net loss from continuing operations

$
(11,639
)

$
(17,178
)

$
(6,989
)

$
(59,061
)Net income from discontinued operations, net of tax(1)

$
225


$



$



$
Net loss

$
(8,692
)

$
(17,178
)

$
(6,898
)

$
(58,949
)Dividends

$



$



$



$
Loss applicable to common stock

$
(8,692
)

$
(17,178
)

$
(6,898
)

$
(58,949
)Loss from continuing operations per share

$
(.082
)

$
(.121
)

$
(.044
)

$
(.361
)Loss from discontinued operations per share

$
.021


$



$



$
.001Loss per common share

$
(.061
)

$
(.121
)

$
(.044
)

$
(.360
)Fiscal Year 2006Revenues

$
41


$
26


$
17,672


$
26,778Gross profit/(loss)

$
41


$
26


$
(805
)

$
1,178Loss from operations

$
(5,948
)

$
(12,796
)

$
(11,949
)

$
(8,726
)Net loss from continuing operations

$
(5,955
)

$
(12,820
)

$
(12,266
)

$
(8,871
)Net income from discontinued operations, net of tax(1)

$
327


$
283


$
235


$
420Net loss

$
(5,628
)

$
(12,536
)

$
(12,032
)

$
(8,451
)Dividends

$
(75
)

$



$



$
Loss applicable to common Stock

$
(5,703
)

$
(12,536
)

$
(12,032
)

$
(8,451
)Loss from continuing operations per share

$
(.053
)

$
(.108
)

$
(.091
)

$
(.063
)Loss from discontinued operations per share

$
.003


$
.002


$
.002


$
.003Loss per common share

$
(.050
)

$
(.106
)

$
(.089
)

$
(.060
)     (1)
    
    For the fiscal year ended September 30, 2006 the Company
    deemed its subsidiary PML to be a discontinued operation, and
    PMLs results of operations were segregated from continuing
    operations for all years presented. In addition, the PML assets
    and liabilities were segregated as current and non-current held
    for sale assets and liabilities on our balance sheet for all
    periods presented. On March 8, 2005, the Company sold all
    of its interest in OKON and on August 1, 2005 the Company
    disposed of its remaining interest in REN Testing Corporation.
    The Company considered these two entities to be discontinued
    operations for the fiscal year ended September 30, 2005,
    and their results of operations were segregated from continuing
    operation for all periods presented. Since the Company had
    completed the sale of these two entities before
    September 30, 2005, these entities assets and
    liabilities are not shown on our balance sheets as of
    September 30, 2006 and 2005.   61




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##### Table of Contents



Form 10-K.
  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Disclosure Controls and Procedures. Rule 13a-15(e) 15d-15(e)
  Managements Report on Internal Control Over Financial
    Reporting. Rule 13a-15(f) Internal Control 
    Integrated Framework
    Changes in Internal Control over Financial
    Reporting.
  ITEM 9B.
    OTHER
    INFORMATION   62




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##### Table of Contents



PART III
  ITEM 10.
    DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT    Code of
    Ethics
    Form 8-K
  ITEM 11.
    EXECUTIVE
    COMPENSATION  Form 10-K
  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    PART IV
  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  page F-1.
  Regulation S-K.
  page F-1.
 63




---



##### Table of Contents



SIGNATURES
    Rentech, Inc.
  
   Chief Executive Officer and President
       
  Chief Executive Officer, President and Director
    (principal executive officer)
    
  Executive Vice President and Chief Financial Officer
    (principal financial officer)
    
  Chief Accounting Officer
 (principal accounting officer)
    
  Chairman and Director
 64




---



##### Table of Contents



Director
    
  Director
    
  Director
    
  Director
    
  Director
   65




---



##### 



RENTECH,
    INC. AND SUBSIDIARIES
  Table of
    Contents
   
 PageReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Financial Statements:Consolidated Balance Sheets


F-3Consolidated Statements of Operations


F-5Consolidated Statements of Stockholders
    Equity and Comprehensive Loss


F-6Consolidated Statements of Cash Flows


F-9Notes to Consolidated Financial Statements


F-12   F-1




---



##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                Ehrhardt Keefe
    Steiner & Hottman
    F-2




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Consolidated Balance Sheets
  As of September 30,2007


2006(Stated in thousands, except per share data)ASSETSCurrent assetsCash and cash equivalents

$
33,692


$
26,566Restricted cash, short-term


104



Marketable securities (Note 5)


22,259



30,283Accounts receivable, net of $126 (2007 and 2006) allowance
    for doubtful accounts (Notes 6 and 18)


36,213



5,208Inventories (Note 7)


13,611



14,843Prepaid expenses and other current assets


4,197



2,747Other receivables, net


2,508



111Assets held for sale, current (Note 4)






1,524Total current assets


112,584



81,282Property, plant and equipment,net of accumulated depreciation of $12,227 (2007) and
    $4,853 (2006) (Note 8)


59,002



57,489Construction in progress,net of impairment of $36,916 (2007) and $0 (2006)
    (Note 8)


4,192



3,916Other assetsLicensed technology and technology rights
    net of accumulated amortization of $3,509 (2007) and $3,252
    (2006) (Note 2)


210



467Deposits and other assets (Note 11),
    net of impairment of $1,281 (2007) and $0 (2006) (Note 8)


6,923



5,647Restricted cash, long-term


152



205Assets held for sale, non-current (Note 4)






1,680Total other assets


7,285



7,999Total assets

$
183,063


$
150,686 F-3




---



##### Table of Contents



As of September 30,2007


2006(Stated in thousands, except per share data)LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
11,299


$
4,687Accrued payroll and benefits


4,478



3,020Accrued liabilities


10,476



1,709Deferred revenue (Note 2)


46,982



4,440Accrued interest


1,061



1,053Accrued retirement payable (Note 13)


125



531Convertible notes payable to related parties (Note 19)


181



Current portion of long-term debt (Note 10)


21



20Liabilities held for sale, current (Note 4)






506Total current liabilities


74,623



15,966Long-term liabilitiesLong-term debt, net of current portion (Note 10)


951



973Long-term convertible debt to stockholders (Note 11)


56,804



56,679Convertible notes payable to related parties (Note 19)






169Advance for equity investment (Note 13)


7,892



Accrued retirement payable (Note 13)






125Other long-term liabilities


81



71Liabilities held for sale, non-current (Note 4)






118Total long-term liabilities


65,728



58,135Total liabilities


140,351



74,101Commitments and contingencies(Notes 2, 12 and 13)Stockholders equity(Note 14)Preferred stock  $10 par value;
    1,000 shares authorized; 90 series A convertible
    preferred shares authorized and issued; no shares outstanding
    and $0 liquidation preference (2007 and 2006)






Series C participating cumulative preferred
    stock  $10 par value; 500 shares
    authorized; no shares issued and outstanding






Common stock  $.01 par value;
    250,000 shares authorized; 163,805 (2007) and 141,775
    (2006) shares issued and outstanding


1,638



1,418Additional paid-in capital


233,447



175,825Accumulated deficit


(192,373
)


(100,656
)Accumulated other comprehensive loss






(2
)Total stockholders equity


42,712



76,585Total liabilities and stockholders equity

$
183,063


$
150,686    F-4




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Consolidated Statements of Operations
  For the Years Ended September 30,2007


2006


2005(Stated in thousands, except per share data)Revenues(Note 17)Product sales

$
131,816


$
44,398


$
Service revenues


504



119



589Total revenues


132,320



44,517



589Cost of salesProduct sales


115,906



44,077



Service revenues


661







617Total cost of sales


116,567



44,077



617Gross profit (loss)


15,753



440



(28
)Operating expensesGeneral and administrative expense


28,093



27,273



10,952Depreciation and amortization


799



532



404Research and development


43,127



12,054



496Loss on impairment (Note 8)


38,197







Total operating expenses


110,216



39,859



11,852Operating Loss


(94,463
)


(39,419
)


(11,880
)Other income (expenses)Interest and dividend income


2,800



2,027



81Interest expense


(2,430
)


(2,402
)


(2,875
)(Loss)/gain
    on disposal of assets


(826
)


100



1Loss on investment (Note 9)






(305
)


(206
)Equity in loss of investee (Note 13)










(736
)Other income


52



87



Total other expense


(404
)


(493
)


(3,735
)Net loss from continuing operations before income taxes


(94,867
)


(39,912
)


(15,615
)Income tax benefit (expense) (Note 16)










Net loss from continuing operations


(94,867
)


(39,912
)


(15,615
)Discontinued operations (Note 4):Net income from discontinued operations net of tax of $11
    (2007), $49 (2006) and $61 (2005)


225



1,265



800Gain on sale of discontinued operations, net of tax of $0
    (2007), $0 (2006) and $6 (2005)


2,925







4563,150



1,265



1,256Net loss

$
(91,717
)

$
(38,647
)

$
(14,359
)Cash dividends paid to preferred stockholders






(75
)


(341
)Deemed dividend related to beneficial conversion feature and
    warrants (Note 14)










(9,000
)Net loss applicable to common stockholders

$
(91,717
)

$
(38,722
)

$
(23,700
)Basic and diluted loss per common share:Continuing operations, including dividends

$
(.627
)

$
(.314
)

$
(.270
)Discontinued operations


.021



.010



.015Basic and diluted loss per common share

$
(.606
)

$
(.304
)

$
(.255
)Basic and diluted weighted-average number of common shares
    outstanding


151,356



127,174



92,919    F-5




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES Consolidated Statements of
    Stockholders Equity and Comprehensive Loss
  Convertible Preferred Stock








Additional





TotalSeries A


Series C


Common Stock


Paid-in


Accumulated


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Deficit


Equity(Stated in thousands)Balance, September 30, 2004





$







$




89,709


$
897


$
49,791


$
(47,650
)

$
3,038Common stock issued for cash and subscription receivable, net of
    offering costs of $40 (Note 14)


















13,436



134



30,728







30,862Common stock issued for options and warrants exercised
    (Note 14)


















2,475



25



2,482







2,507Common stock issued for conversion of convertible notes
    (Notes 11 and 14)


















2,256



23



1,105







1,128Stock options and warrants granted for services (Note 14)


























593







593Stock options granted for stand-still agreement (Note 14)


























179







179Warrants issued in conjunction with
    break-up
    fees (Note 14)


























502







502Warrants issued in conjunction with bridge loans (Notes 11
    and 14)


























1,141







1,141Common stock issued for services (Note 14)


















7







9







9Preferred stock issued, net of offering costs (Note 14)


90



900



















7,415







8,315Cash dividend paid on preferred stock (Note 14)


























(341
)






(341
)Preferred stock converted into common stock (Note 14)


(31
)


(310
)










2,238



22



288







Offering costs of convertible notes (Note 14)


























697







697Comprehensive loss:Net loss






























(14,359
)


(14,359
)Balance, September 30, 2005


59


$
590






$




110,121


$
1,101


$
94,589


$
(62,009
)

$
34,271  F-6




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Consolidated
    Statements of Stockholders Equity and Comprehensive
    Loss  (Continued)
   AccumulatedConvertible Preferred Stock








Additional





Other


TotalSeries A


Series C


Common Stock


Paid-in


Accumulated


Comprehensive


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Deficit


Income


Equity(Stated in thousands)Common stock issued for cash net of offering costs of $4,372
    (Note 14)


















18,400



184



58,004











58,188Common stock issued for cash on options and warrants exercised
    (Note 14)


















5,394



54



6,967











7,021Common stock issued for conversion of convertible notes
    (Notes 11 and 14)


















3,157



32



2,944











2,976Beneficial conversion feature of convertible notes (Note 14)


























875











875Common stock issued for options exercised using deferred
    compensation and retirement payable (Note 14)


















426



4



389











393Stock based compensation issued for services (Note 14)


























10,015











9,982Restricted stock units issued for services (Note 14)


























1,570











1,603Restricted stock units settled in shares (Note 14)


















18



















Preferred stock converted into common stock (Note 14)


(59
)


(590
)










4,259



43



547











Cash dividends paid on preferred stock (Note 14)


























(75
)










(75
)Comprehensive loss:Net loss






























(38,647
)






(38,647
)Other comprehensive income:Unrealized loss on marketable securities, net of tax


































(2
)


(2
)Balance, September 30, 2006





$







$




141,775


$
1,418


$
175,825


$
(100,656
)

$
(2
)

$
76,585 F-7




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Consolidated
    Statements of Stockholders Equity and Comprehensive
    Loss  (Continued)
  AccumulatedConvertible Preferred Stock








Additional





Other


TotalSeries A


Series C


Common Stock


Paid-in


Accumulated


Comprehensive


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Deficit


Income


Equity(Stated in thousands)Common stock issued for cash net of offering costs of $3,202
    (Note 14)


















20,092



201



51,448











51,649Common stock issued for cash on options and warrants exercised
    (Note 14)


















1,526



15



1,892











1,907Stock based compensation issued for services (Note 14)


























1,834











1,834Restricted stock units issued for services (Note 14)


























3,132











3,132Restricted stock units settled in cash (Note 14)


























(680
)










(680
)Restricted stock units settled in shares (Note 14)


















412



4



(4
)










Comprehensive loss:Net loss






























(91,717
)






(91,717
)Other comprehensive income:Unrealized gain on marketable securities, net of tax


































2



2Balance, September 30, 2007





$







$




163,805


$
1,638


$
233,447


$
(192,373
)

$



$
42,712    F-8




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Consolidated Statements of Cash Flows
  For the Years Ended September 30,2007


2006


2005(Stated in thousands)Cash flows from operating activitiesNet loss

$
(91,717
)

$
(38,647
)

$
(14,359
)Adjustments to reconcile net loss to net cash used in operating
    activitiesDepreciation


8,051



3,711



411Amortization


258



258



258Impairment of assets (Note 8)


38,197







Utilization of spare parts


1,120







Loss/(Gain) on disposal of fixed assets


826



84



(1
)Amortization of debt issue costs


748



937



2,387Equity in loss of investee










736Write-off of acquisition costs, debt issue costs and offering
    costs






355



2,893Write-down of inventory to market


644







Accrued interest expense


8



1,062



148Options for common stock issued for services


1,834



1,569



9Warrants for common stock issued for services






8,413



874Restricted stock units issued for services


3,132



1,603



Gain on sale of subsidiaries


(2,793
)






(463
)Loss on investment






305



206Changes in operating assets and liabilitiesAccounts receivable


(6,712
)


(5,075
)


(101
)Other receivables and receivable from related party


(54
)


254



(107
)Inventories


(1,839
)


789



(65
)Prepaid expenses and other current assets


(1,440
)


(700
)


587Accounts payable


1,278



3,726



206Accrued retirement payable


(531
)


(906
)


1,562Deferred revenue


18,436



4,440



Accrued liabilities, accrued payroll and other


6,942



2,210



522Net cash used in operating activities


(23,612
)


(15,612
)


(4,297
) F-9




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Consolidated
    Statements of Cash Flows  (Continued)
  For the Years Ended September 30,2007


2006


2005(Stated in thousands)Cash flows from investing activitiesPurchases of marketable securities

$
(36,486
)

$
(30,285
)

$
Proceeds from sales of marketable securities, held available for
    sale


44,512







Purchases of property, plant and equipment


(10,212
)


(1,271
)


(215
)Purchases for construction in progress


(32,912
)


(3,927
)


Proceeds from disposal of fixed assets










8Proceeds from sale of investment






100



Proceeds from earn-out receivables


234



180



Increase in restricted cash


(51
)


(205
)


Proceeds from sale of subsidiary, net


5,398







1,645Acquisition of REMC, net of cash received (Note 3)






(70,773
)


Acquisition of RETC, net of cash received (Note 3)






(1,345
)


Payment of acquisition costs










(1,150
)Deposits and other assets


(2,375
)






(15
)Purchase of investments










(806
)Net cash used in investing activities


(31,892
)


(107,526
)


(533
)Cash flows from financing activitiesProceeds from issuance of common stock and warrants


54,851



62,560



18,607Payments of offering costs


(3,202
)


(4,372
)


(170
)Proceeds from grant and interest earned on grant proceeds


2,265







Proceeds from advance for equity investment, net


7,892







Payments of financial advisory fees


(1,044
)


(1,750
)


Proceeds from options and warrants exercised


1,907



7,021



2,507Proceeds from issuance of convertible preferred stock, net










8,315Payment of dividends on preferred stock






(75
)


(341
)Receipt of stock subscription receivable






12,255



Proceeds from issuance of convertible debt






57,500



Proceeds from long-term debt and notes payable


1







2,850Payment of debt issuance costs






(4,371
)


(991
)(Payments on) / proceeds from line of credit, net






(499
)


(643
)Payments on long-term debt and notes payable


(40
)


(3,286
)


(838
)Net cash provided by financing activities


62,630



124,983



29,296Increase in cash


7,126



1,845



24,466Cash and cash equivalents, beginning of year


26,566



24,721



255Cash and cash equivalents, end of year

$
33,692


$
26,566


$
24,721  F-10




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Consolidated
    Statements of Cash Flows  (Continued)
    For the Years Ended September 30,2007


2006


2005(Stated in thousands)Continuing operations, net of capitalized interest of $698
    (2007), $30 (2006) and $0 (2005)

$
1,660


$
596


$
340Discontinued operations


2



39



45Total cash payments of interest

$
1,662


$
635


$
385     For the Years Ended September 30,2007


2006


2005(Stated in thousands)Product prepayment contract receivable

$
24,106


$
417


$
Asset purchases included in accounts payable and accrued
    liabilities


7,930







Inventory transfers under Product Exchange Agreement, net


2,427







Restricted stock units surrendered for withholding taxes payable


680







Receivable on disposal of fixed asset


81







Vesting of restricted stock units


4







Mark marketable securities to market, available for sale


2



(2
)


Issuance of common stock from conversion of preferred stock






5,900



3,100Issuance of common stock for conversion of convertible notes
    payable






2,976



1,128Purchase of annual insurance financed with a note payable






1,928



588Beneficial conversion feature






875



Issuance of common stock for option exercised using deferred
    compensation and retirement payable






393



Purchase of property, plant and equipment financed with a note
    payable






52



206Issuance of common stock for stock subscription receivable










12,255Deemed dividend related to beneficial conversion feature and
    warrants










9,000Warrants issued in conjunction with preferred stock










3,513Warrants issued in conjunction with bridge loans










1,141Reclassification of line of credit to long-term debt










500Warrants issued in conjunction with convertible notes










381Deferred financing charges for convertible promissory notes










316Stock options and warrants issued as acquisition costs










305Acquisition costs written off that were included in accounts
    payable










4    F-11




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes
    to Consolidated Financial Statements
  Note 1 
    Description
    of Business  Description
    of Business
           F-12




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Principles
    of Consolidation
    Reclassifications
    and Presentation
    Seasonality
        Note 2 
    Summary
    of Certain Significant Accounting Policies  Use of
    Estimates
    Market
    Risk
   F-13




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Significant
    Customers
    Unionized
    Employees
    Fair
    Value of Financial Instruments
      Cash
    and Cash Equivalents
    Restricted
    Cash
   F-14




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  Marketable
    Securities
    Accounts
    Receivable
    Allowance
    for Doubtful Accounts
    Inventories
    first-in
 F-15




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  Assets
    Held for Sale
      Property,
    Plant and Equipment
    Type of Asset

Length of Depreciation PeriodBuilding and building improvements

15-40 yearsMachinery and equipment

5-10 yearsFurniture, fixtures and office equipment

7-10 yearsComputer equipment and software

3-7 yearsVehicles

3-5 yearsSpare parts

Useful life of the spare parts or the related equipmentLeasehold improvements

Useful life or remaining lease term whichever is shorterAmmonia catalyst

3-10 yearsPlatinum catalyst

Based on units of production     Construction
    in Progress
    Long-Lived
    Assets
   F-16




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  Spare
    Parts
    Software
    Capitalization
  98-1,
  Grants
    Licensed
    Technology and Technology Rights
       F-17




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  Accrued
    Liabilities
    Deferred
    Revenue
    Advance
    for Equity Investment
      Natural
    Gas
    Revenue
    Recognition
   F-18




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
          Cost
    of Sales
    Stock
    Based Compensation
    Advertising
    Costs
    Research
    and Development Expenses
     F-19




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Income
    Taxes
    Comprehensive
    Loss
    Net
    Loss Per Common Share
      As of September 30,2007


2006


2005(Shares, in millions)Stock options


3.9



4.4



4.7Stock warrants


14.5



11.2



12.1Restricted stock units


1.6



1.6



0.0Convertible debt


14.7



14.7



3.534.7



31.9



20.3   Recent
    Accounting Pronouncements
   F-20




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
            Note 3 
    Business
    Acquisitions  Rentech
    Energy Midwest Corporation formerly named Royster-Clark
    Nitrogen, Inc.
   F-21




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
      Current assets, including $1 in cash

$
16,348Property, plant and equipment


54,510Other assets


1,703Current liabilities


(1,788
)$
70,773     For the Years Ended September 30,2006


2005(Unaudited)


(Unaudited)Total revenue

$
111,939


$
120,124Net income (loss) from continuing operations

$
(53,043
)

$
(5,636
)Net income (loss)

$
(47,248
)

$
(4,380
)Basic and diluted income (loss) per common share

$
(0.372
)

$
(0.161
)         Rentech
    Energy Technology Center, LLC formerly named Sand Creek Energy,
    LLC
   F-22




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  17-acre
    Note 4 
    Discontinued
    Operations  OKON,
    Inc
     F-23




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Sales price

$
2,000Less transaction costs


(135
)Net sales price to Rentech, Inc., after transaction costs

$
1,865Consisting of:Cash

$
1,700Earn-Out receivable


300Accrued liabilities


(135
)Net sales price to Rentech., after transaction costs

$
1,865Less other transaction costs, non-cashExtension of employee options

$
7420,000 options issued to employees


21Book value of Rentechs ownership in OKON

$
1,071Rentechs gain on sale of OKON.

$
699     For the Years Ended September 30,2007


2006


2005(Thousands)Revenue

$



$



$
846Net loss from discontinued operations

$



$



$
(90
)Income (loss) due to product liability accrual


75







(75
)Net income (loss) from discontinued operations

$
75


$



$
(165
)   REN
    Testing Corporation
   F-24




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
      Sales price

$
1,175Less transaction costs

$
(6
)Net sales price to Rentech, after transaction costs

$
1,169Consisting of:Earn-Out receivable

$
1,175Legal fees

$
(6
)Net sales price to Rentech, after transaction costs

$
1,169Less reserve on Earn-Out

$
(1,000
)Net sales price after transaction costs and reserve

$
169Book value of Rentechs ownership in REN

$
406Rentechs loss on sale of REN (prior to taxes of $6)

$
(237
)     For the Years Ended September 30,2007


2006


2005(Thousands)Revenue

$



$



$
364Net gain (loss) from discontinued operations

$
129


$



$
(281
)   Petroleum
    Mud Logging, LLC
     F-25




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    As ofSeptember 30,2006(Thousands)Accounts receivable, net

$
1,453Other receivables


43Prepaid expenses


28Total current assets held for sale

$
1,524Property, plant and equipment, net


1,502Goodwill, net


167Deposits and other assets


11Total assets held for sale

$
3,204Accounts payable

$
64Accrued payroll and benefits


324Accrued liabilities


47Line of credit payable


Current portion of long-term debt


71Total current liabilities held for sale

$
506Long-term debt, net of current portion


118Total liabilities held for sale

$
624     For the Years Ended September 30,2007


2006


2005(Thousands)Revenue

$
1,179


$
8,292


$
6,597Net gain from discontinued operations

$
225


$
1,265


$
1,246    F-26




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Sales price

$
5,398Less transaction costs


(49
)Net sales price to Rentech, Inc., after transaction costs

$
5,349Book value of Rentechs ownership in PML


2,628Rentechs gain on sale of PML

$
2,721   Note 5 
    Marketable
    Securities    As of September 30,2007Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value(Thousands)Available for sale:Cash investments

$
5


$



$



$
5Money market investments


11,732











11,732Auction rate securities


10,522











10,522Debt securities of governments and agencies


(2
)


2







Corporate commercial paper














Total marketable securities

$
22,257


$
2


$



$
22,259   As of September 30,2006Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value(Thousands)Available for sale:Cash investments

$
2


$



$



$
2Money market investments


2,405











2,405Auction rate securities


24,882











24,882Debt securities of governments and agencies


1,496







2



1,494Corporate commercial paper


1,500











1,500Total marketable securities

$
30,285


$



$
2


$
30,283     F-27




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  As of


As ofSeptember 30,


September 30,2007


2006Amortized


Fair


Amortized


FairCosts


Value


Costs


Value(Thousands)


(Thousands)Due within one year

$
22,257


$
22,259


$
30,285


$
30,283One year through five years














After five years through ten years














Due after ten years














$
22,257


$
22,259


$
30,285


$
30,283         Note 6 
    Accounts
    Receivable    As of September 30,2007


2006(Thousands)Trade receivables from nitrogen products sold from our facility

$
11,168


$
4,785Trade receivables from nitrogen products sold from third party
    facility


183



Trade receivables from development of alternative fuels


340



611,691



4,791Receivables on prepaid contract sales for nitrogen products


24,522



417$
36,213


$
5,208Allowance for doubtful accounts on accounts receivable

$
126


$
126    F-28




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  Note 7 
    Inventories    As of September 30,2007


2006(Thousands)Finished goods

$
12,422


$
12,994Raw materials


1,189



1,849$
13,611


$
14,843     Note 8 
    Property,
    Plant and Equipment    As of September 30,2007


2006(Thousands)Land

$
1,853


$
1,830Buildings


9,746



6,670Machinery and equipment


57,124



52,233Office furniture and equipment


1,001



607Computer equipment and computer software


1,038



573Vehicles


24



24Leasehold improvements


443



40571,229



62,342Less accumulated depreciation


(12,227
)


(4,853
)Total depreciable property, plant and equipment, net

$
59,002


$
57,489Property and equipment held for sale

$



$
2,568Less accumulated depreciation on property and equipment held for
    sale


(
)


(1,066
)Total depreciable property, plant and equipment held for sale,
    net

$



$
1,502  F-29




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    As of September 30,2007


2006(Thousands)Construction in progress for projects under development

$
38,471


$
3,223Capitalized interest costs related to projects under development


698



30Construction in progress for machinery and equipment


823



663Construction in progress for information technology initiatives


1,116



41,108



3,916Less reserve for impairment on idle assets


(36,916
)


Total construction in progress, net

$
4,192


$
3,916Idle assets within construction in progress


36,916



Less reserve for impairment on idle assets


(36,916
)


Idle assets, net

$



$
Impairment on idle construction in progress assets


36,916



Impairment on land purchase option


1,281



Total impairment

$
38,197


$
       Note 9 
    Investment
    in Advanced Technology Company   F-30




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
          Note 10 
    Debt    Black-Scholes
 F-31




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
          As of September 302007


2006(Thousands)Mortgage dated February 8, 1999; monthly principal and
    interest payments of $7 with interest of 6.5%; unpaid principal
    and accrued interest due March 1, 2029; collateralized by
    land and building

$
972


$
993Less current portion


(21
)


(20
)Mortgage debt, long term portion

$
951


$
973Long-term debt held for sale(1)

$



$
189Less current maturities held for sale(1)






(71
)$



$
118     (1)
    
    Various promissory notes; monthly principal and interest
    payments of $7,000 at September 30, 2006, with interest of
    0% to 9.6%; unpaid principal and interest maturing from August
    2006 through August 2010; collateralized by certain fixed assets
    of the Company. These liabilities were either settled or assumed
    in connection with the sale of PML that occurred in the fiscal
    quarter ended December 31, 2006.    For the Years Ending September 30,2008

$
21,0002009


23,0002010


24,0002011


24,0002012


28,000Thereafter


852,000$
972,000   Note 11 
    Convertible
    Debt   F-32




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
      Black-Scholes
   F-33




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
         F-34




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
      As of September 30,2007


2006(Thousands)Convertible senior notes

$
57,500


$
57,500Less Unamortized deferred financing charges


(696
)


(821
)Long-term convertible debt to stockholders

$
56,804


$
56,679Prepaid debt issuance costs on convertible senior notes

$
2,970


$
3,504     Note 12 
    Lines of
    Credit     F-35




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  Note 13 
    Commitments
    and Contingencies  Employment
    Agreements
    Contractual
    Liability
    Natural
    Gas Agreements
    As ofSeptember 30,


September 30,2007


2006(Thousands)MMBTUs under fixed priced contracts


1,075



862MMBTUs under index priced contracts


211



124Total MMBTUs under contracts


1,286



986Commitments to purchase natural gas

$
8,156


$
4,981Weighted average rate per MMBTU based on the fixed rates and the
    indexes applicable to each contract

$
6.34


$
5.05     Development
    Cost Sharing and Equity Option Agreement
     F-36




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Land
    Purchase Option Agreement
    Operating
    Leases
           F-37




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
      For the Years Ending September 30,2008

$
6912009


7162010


3542011


32012


1Thereafter


$
1,765       For the Years Ending September 30,2008

$
882009


882010


522011


2012


Thereafter


$
228   Retirement
    Payable
     F-38




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
      Retirement
    Plans
    Litigation
    Note 14 
    Stockholders
    Equity  Rights
    Agreement
  Series 1998-C Series 1998-C
 F-39




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Series 1998-C Series 1998-C Series 1998-C
  Preferred
    Stock
     F-40




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Black-Scholes
    Common
    Stock
             F-41




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
        Note 15 
    Accounting
    for Stock Based Compensation  Stock
    Options
  modified-prospective
   F-42




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    For the Year EndedSeptember 30, 2005Net loss from continuing operationsAs reported

$
(15,615,000
)Deduct: Total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    related tax effects


(2,129,000
)Pro forma

$
(17,744,000
)Net loss per common share from continuing operationsAs reported

$
(.168
)Pro forma

$
(.191
)Net income (loss) from discontinued operationsAs reported

$
1,256,000Pro forma

$
1,256,000Net income (loss) per common share from discontinued operationsAs reported

$
.015Pro forma

$
.015Total net loss applicable to common stockholdersAs reported

$
(23,700,000
)Pro forma

$
(25,829,000
)Total net loss per common shareAs reported

$
(.255
)Pro forma

$
(.278
)     For the Years Ended September 30,2007

2006

2005Risk-free interest rate

3.97% - 5.08%

4.39% - 5.05%

2.60% - 4.18%Expected volatility

55.0% - 58.0%

58.0% - 61.0%

48.0% - 75.0%Expected life (in years)

0.50 - 6.5

2.50 - 4.50

0.06 - 5.00Dividend yield

0.0%

0.0%

0.0%      F-43




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
        SharesReserved


Shares


Shares AvailableAs of


Outstanding


for IssuanceSeptember 30


As of September 30,


As of September 30,Name of Plan

2007


2007


2006


2007


2006(Thousands of shares)1994 Stock Option Plan


300



20



20







1996 Stock Option Plan


500



69



101







1998 Stock Option Plan


500



66



66



28



282001 Stock Option Plan


500







177



2



22003 Stock Option Plan


500



85



263







2005 Stock Option Plan


1,000



351



671







2006 Incentive Award Plan Stock options


8,000



2,775



2,316



3,653



1,7772006 Incentive Award Plan Restricted stock units






1,177



889







11,300



4,543



4,503



3,683



1,807Restricted stock units not from a plan






466



700







Options authorized by the Board of Directors, for specific
    agreements


660



500



500







Options authorized by the Board of Directors, not from a plan


6,218







256







18,178



5,509



5,959



3,683



1,807  F-44




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Black-Fiscal










Number


ScholesYear


Grantee

Purpose

Vesting Period

Exercise Price

of Shares


Value(Thousands)2005


Royster-Clark, Inc.

Stand Still Agreement

Immediate

$1.50


250


$
1792005


Executives of former subsidiary

Executive retention incentive

Immediate

$1.88


20



212005


Executives of former subsidiary

Extension to term of previously
    issued options

Immediate

$0.55-$0.60


61
*


742005


Employees and directors

Annual employee grant and
    board compensation

Immediate

$1.06-$1.85


902



8612005


A consultant

Ongoing governmental affairs

Immediate

$1.14


60



682005


A consultant

Success fee on Energy Bill

Immediate

$0.98


50



682005


Former CEO and COO

Retirement package

Immediate

$2.53


965



9442,2472006


Certain employees

Employment inducement

Immediate

$3.35-$4.48


306


$
4562006


Employees

Annual employee grant

3 years

$4.15


1,075



2,6392006


A consultant

Project development support

2 years

$4.15


50



1212006


A director

Board service inducement

Immediate

$3.74


20



672006


Directors

Board compensation

1 years

$3.35


90



1342006


Former CEO and COO

Retirement package

Immediate

$2.53


775
*


8921,5412007


Employees

Annual employee grant

3 years

$2.22-$4.53


461


$
9582007


Two directors

Board service inducement

Immediate

$2.68-$3.76


40



642007


Former CEO and COO

Extension to term of
    previously issued options

Immediate

$2.53


830
*


2892007


Directors

Board compensation

1 year

$2.68


90



1002007


A consultant

Administrative support

Immediate

$4.30


40



642007


A consultant

Administrative support

1 year

$3.81


30



44661     *
    
    Approval for the transaction occurred in the year shown, but the
    shares for this transaction were granted in a prior year. F-45




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
     For the Years Ended September 30,2007


2006


2005(Thousands)Compensation expense

$
1,189


$
1,501


$

(1)Board compensation expense


186



97




(1)Consulting expense


459



5



68Deferred acquisition cost










179Reduction to gain on sale










94$
1,834


$
1,603


$
341     (1)
    
    No compensation expense was recorded in 2005 as the Company had
    not adopted SFAS 123(R).    WeightedAverage


AggregateNumber of


Exercise


IntrinsicShares


Price


ValueOutstanding at September 30, 2004


3,132,000


$
0.80Granted


2,247,000



2.00Exercised


(643,000
)


0.89Canceled/Expired


(75,000
)


1.59Outstanding at September 30, 2005


4,661,000



1.35Granted


1,541,000



4.09Exercised


(1,714,000
)


0.98Canceled/Expired


(118,000
)


0.90Outstanding at September 30, 2006


4,370,000



2.47Granted


661,000



3.53Exercised


(959,000
)


1.12Canceled/Expired


(206,000
)


4.02Outstanding at September 30, 2007


3,866,000



2.91


$
892,000Options exercisable at September 30, 2007


2,684,000


$
2.51


$
892,000Options exercisable at September 30, 2006


3,159,500


$
1.86Options exercisable at September 30, 2005


4,661,000


$
1.35Weighted average fair value of options granted during fiscal 2007





$
1.86Weighted average fair value of options granted during fiscal 2006





$
1.89Weighted average fair value of options granted during fiscal 2005





$
0.95    F-46




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Outstanding


ExercisableWeightedAverage


Weighted





WeightedRemaining


Average





AverageNumber


Contractual


Exercise


Number


ExerciseRange of Exercise Prices

Outstanding


Life in Years


Price


Exercisable


Price$0.70-$0.94


435,000



1.65


$
0.90



435,000


$
0.90$1.06-$1.14


95,000



2.05



1.11



95,000



1.11$1.44-$1.50


250,000



2.19



1.50



250,000



1.50$1.85


256,000



2.82



1.85



256,000



1.85$2.22-$2.68


1,050,000



1.46



2.52



850,000



2.53$3.35-$3.81


305,000



7.14



3.66



115,000



3.49$4.00-$4.53


1,475,000



7.74



4.16



683,000



4.14$0.70-$4.53


3,866,000



4.48


$
2.91



2,684,000


$
2.51   Warrants
           F-47




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
          stock-based
   F-48




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    WeightedNumber of


AverageShares


Exercise PriceOutstanding at September 30, 2004


3,875,000


$
1.14Granted


10,252,000



1.50Exercised


(1,832,000
)


1.06Canceled/Expired


(183,000
)


2.51Outstanding at September 30, 2005


12,112,000


$
1.44Granted


3,153,000
(1)


2.00Exercised


(4,106,000
)


1.39Canceled/Expired






Outstanding at September 30, 2006


11,159,000


$
1.61Granted


4,018,000



3.28Exercised


(625,000
)


1.55Canceled/Expired






Outstanding at September 30, 2007


14,552,000


$
2.08Warrants exercisable at September 30, 2007


14,552,000


$
2.08Warrants exercisable at September 30, 2006


11,159,000


$
1.61Warrants exercisable at September 30, 2005


12,112,000


$
1.44Weighted average fair value of warrants granted during fiscal
    2007





$
0.87Weighted average fair value of warrants granted during fiscal
    2006





$
2.69Weighted average fair value of warrants granted during fiscal
    2005





$
0.70     Outstanding


ExercisableWeightedAverage


Weighted





WeightedRemaining


Average





AverageNumber


Contractual Life


Exercise


Number


ExerciseRange of Exercise Prices

Outstanding


in Years


Price


Exercisable


Price$1.00 - $1.14


2,396,000



1.13


$
1.14



2,396,000


$
1.14$1.46 - $1.61


5,055,000



0.52



1.61



5,055,000



1.61$1.82


2,083,000
(1)


2.85



1.82



2,083,000



1.82$2.41


1,000,000



6.29



2.41



1,000,000



2.41$3.28


4,018,000



4.57



3.28



4,018,000



3.28$1.00 - $3.28


14,552,000



2.47


$
2.08



14,552,000


$
2.08     (1)
    
    Includes 2,083,000 shares underlying the warrants issued to
    East Cliff Advisors, LLC that were accounted for under
    SFAS 123(R). The aggregate intrinsic value of these shares
    was $708,000 for the year ended September 30, 2007.  Restricted
    Stock Units
   F-49




---



##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
        Fiscal








Number


FairYear


Grantee

Purpose

Vesting Period

of Shares


Value(Thousands)2006


D. Hunt Ramsbottom

Employment inducement

3 years


450


$
2,2282006


Douglas M Miller

Employment inducement

3 years


375



1,8562006


Kevin Smith

Employment inducement

3 years


325



2006


Richard Sheppard

Employment inducement

3 years


235



9402006


Directors

Board compensation package

1 year


72



2412006


I. Merrick Kerr

Employment inducement

3 years


325



1,4632006


Colin M. Morris

Employment inducement

3 years


150



6481,9322007


Richard Penning

Employment inducement

3 years


275


$
1,0292007


Tom Sayles

Employment inducement

3 years


150



3922007


Dr. Harold Wright

Employment inducement

3 years


150



3922007


Directors

Board compensation package

1 year


90



235665     For the Years Ended September 30,2007


2006(Thousands)Compensation expense

$
2,884


$
1,449Board compensation expense


248



121$
3,132


$
1,570  F-50




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##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Number ofSharesOutstanding at September 30, 2005


Granted


1,932,000Vested and Settled in Shares


(18,000
)Canceled/Expired


(325,000
)Outstanding at September 30, 2006


1,589,000Granted


665,000Vested and Settled in Shares


(412,000
)Vested and Settled in Cash


(199,000
)Canceled/Expired


Outstanding at September 30, 2007


1,643,000RSUs vested at September 30, 2007


448,000RSUs vested at September 30, 2006


18,000       Note 16 
    Income
    Taxes       F-51




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##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
        As of September 30,2007


2006(Thousands)Net operating loss carry forwards

$
38,125


$
28,667Capital loss carryforward


1,017



Accruals for financial statement purposes not allowed for income
    taxes  cash basis


3,220



1,144Basis difference in prepaid expenses


(96
)


(57
)Basis difference in investment in Dresser






681Basis difference in investment in Advanced Technologies






871Basis difference in other intangible assets






17Basis difference relating to licensed technology


734



678Basis difference in property, plant and equipment


(5,034
)


(2,054
)Basis difference in other assets






3Basis difference in goodwill






(24
)Basis difference in technology rights


36



32Basis difference in retirement payables


46



121Basis difference in reserve for REN earn-out


267



370Basis difference in product liabilities






28Basis difference in deferred rent liability


33



23Research and development credit


2,191



1,100PDU expenses


12,154



Stock option exercises FAS 123(R)


6,149



4,281Stock option exercises


(1,735
)


Beneficial conversions of debt


(258
)


107Basis difference in Sand Creek Energy


7



7Basis difference in Petroleum Mud Logging


(147
)


Impairment of land purchase option


476



Impairment of construction in progress


13,715



Other items


18



70,918



35,995Valuation allowance


(70,918
)


(35,995
)$



$
  F-52




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##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    For the Years Ended September 30,2007


2006


2005(Thousands)Federal income tax benefit computed at the Federal statutory rate

$
(32,180
)

$
(14,748
)

$
(4,865
)State income tax benefit net of Federal benefit


(2,913
)


(1,219
)


(421
)Permanent true ups, other


125



356



(184
)Research and development credit


1,073



840



260Change in valuation allowance


33,906



14,820



5,278Income tax expense

$
11


$
49


$
68     Note 17 
    Segment
    Information    
    Nitrogen products manufacturing  The Company
    manufactures a variety of upgraded nitrogen fertilizer products.
    Alternative fuels  The Company develops and markets
    processes for conversion of low-value, carbon-bearing solids or
    gases into valuable liquid hydrocarbons.      F-53




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##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  For the Years Ended September 30,2007


2006


2005(Thousands)RevenuesNitrogen products manufacturing

$
131,816


$
44,398


$
Alternative fuels


504



119



589Total Revenues

$
132,320


$
44,517


$
589Operating income (loss)Nitrogen products manufacturing

$
13,222


$
(1,320
)

$
Alternative fuels


(107,685
)


(38,099
)


(11,880
)Total Operating Loss

$
(94,463
)

$
(39,419
)

$
(11,880
)Depreciation and amortizationNitrogen products manufacturing

$
6,791


$
2,435


$
Alternative fuels


731



516



444Total Depreciation and Amortization

$
7,522


$
2,951


$
444Interest expenseNitrogen products manufacturing

$
93


$
249


$
Alternative fuels


2,337



2,153



2,875Total Interest Expense

$
2,430


$
2,402


$
2,875Equity in net loss of investeesAlternative fuels

$



$



$
736Expenditures for additions of long-lived assetsNitrogen products manufacturing

$
7,250


$
2,815


$
Alternative fuels


41,518



2,129



91Total Expenditures for Additions or Long Lived Assets

$
48,768


$
4,944


$
91Investment in equity method investeesAlternative fuels

$



$



$
(19
)Total assetsNitrogen products manufacturing

$
132,788


$
81,274


$
Alternative fuels


50,275



66,208



40,859Total Assets

$
183,063


$
147,482


$
40,859  F-54




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##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    For the Years Ended September 30,2007


2006


2005(Thousands)Revenues nitrogen products manufacturing

$
131,816


$
44,398


$
Technical services


382







466Rental income


122



119



123Total revenues nitrogen products manufacturing

$
132,320


$
44,517


$
589   Note 18 
    Valuation
    and Qualifying Accounts  Balance








Balanceat Beginning


Charged to


Deductions and


at Endof Period


Expense


Write-Offs


of Period(Thousands)Year Ended September 30, 2007Allowance for doubtful accounts, from continuing operations

$
126


$



$



$
126Allowance for doubtful accounts, from discontinued operations


10







(10
)


Allowance for doubtful accounts

$
136


$



$
10


$
126Deferred tax valuation account

$
35,995


$
70,918


$



$
106,913Reserve for impairment(1)

$



$
38,197


$



$
38,197Reserve for REN Earn-Out(2)(3)

$
1,000


$
(128
)

$
(152
)

$
720Year Ended September 30, 2006Allowance for doubtful accounts, from continuing operations

$
126


$



$



$
126Allowance for doubtful accounts, from discontinued operations


10











10Allowance for doubtful accounts

$
136


$



$



$
136Deferred tax valuation account

$
21,175


$
14,820


$



$
35,995Reserve for REN Earn-Out(2)

$
1,000


$



$



$
1,000Year Ended September 30, 2005Allowance for doubtful accounts, from continuing operations

$
126


$



$



$
126Allowance for doubtful accounts, from discontinued operations


17







(7
)


10Allowance for doubtful accounts

$
143


$



$
(7
)

$
136Deferred tax valuation account

$
15,897


$
5,278


$



$
21,175Reserve for REN Earn-Out(2)

$



$
1,000


$



$
1,000     (1)
    
    The Company recorded a reserve of $38,197,000 against the value
    of the construction in progress asset for the REMC conversion
    and a land purchase option due to suspension of the project and
    uncertainty surrounding the future value of the assets (See Note
    8).(2)
    
    The Company recorded a reserve of $1,000,000 against the
    earn-out receivable due to uncertainty surrounding the
    estimation of collections related to the Companys sale of
    REN (See Note 4). F-55




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##### Table of Contents



RENTECH,
    INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
   (3)
    
    During fiscal 2007, the Company received earn-out payments from
    REN which were recognized as miscellaneous income along with
    corresponding reductions to the earn-out receivable and the
    reserve for which the balance at the end of fiscal 2007 was
    $720,000.  Note 19 
    Related
    Party Transactions    Note 20 
    Subsequent
    Events        Name and Title

Bonus AwardD. Hunt Ramsbottom, Chief Executive Officer and President

$
470,150
(1)I. Merrick Kerr, Chief Financial Officer and Executive Vice
    President

$
162,900
(2)Douglas M. Miller, Chief Operating Officer and Executive Vice
    President

$
103,200
(2)Richard O. Sheppard, Senior Vice President, Project Development

$
74,150
(2)Colin M. Morris, Vice President and General Counsel

$
127,500       F-56




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##### Table of Contents



EXHIBIT INDEX
  2
.1

Stock Purchase Agreement, dated March 8, 2005, by and
    between Rentech, Inc. and Zinsser Co., Inc. (incorporated by
    reference to Exhibit 10.1 to Current Report on
    Form 8-K
    filed March 10, 2005).2
.2

Stock Purchase Agreement, dated November 5, 2005, by and
    between Rentech Development Corporation and Royster-Clark, Inc.
    (incorporated by reference to Exhibit 2.1 to Current Report
    on
    Form 8-K
    filed November 9, 2005).2
.3

First Amendment to the Stock Purchase Agreement dated
    November 5, 2005, by and between Rentech Development
    Corporation and Royster-Clark, Inc. (incorporated by reference
    to Exhibit 2.2 to Registration Statement on
    Form S-3
    filed March 20, 2006).2
.4

Second Amendment to the Stock Purchase Agreement dated
    November 5, 2005, by and between Rentech Development
    Corporation and Royster-Clark Nitrogen, Inc. (incorporated by
    reference to Exhibit 2.1 to Current Report on
    Form 8-K
    filed March 14, 2006).2
.5

Third Amendment to the Stock Purchase Agreement dated
    November 5, 2005, by and between Rentech Development
    Corporation and Royster-Clark Nitrogen, Inc. (incorporated by
    reference to Exhibit 2.2 to Current Report on
    Form 8-K
    filed March 14, 2006).2
.6

Purchase and Sale Agreement, dated September 16, 2005, by
    and between Rentech Development Corporation and RFC-Sand Creek
    Development, LLC (incorporated by reference to Exhibit 10.1
    to Current Report on
    Form 8-K
    filed September 22, 2005).2
.7

Equity Purchase Agreement dated November 15, 2006 by and
    between Rentech, Inc. and PML Exploration Services, LLC
    (incorporated by reference to Exhibit 2.1 to Current Report
    on
    Form 8-K
    filed November 16, 2006).3
(i)

Amended and Restated Articles of Incorporation, dated
    April 29, 2005 (incorporated by reference to
    Exhibit 3(i) to Quarterly Report on
    Form 10-Q,
    for the quarterly period ended March 31, 2005, filed
    May 9, 2005).3
(ii)

Bylaws dated November 30, 2004 (incorporated by reference
    to Exhibit 3(ii) to Annual Report on
    Form 10-K
    for the year ended September 30, 2004 filed
    December 9, 2004).4
.1

Rights Agreement, dated January 18, 2005, by and between
    Rentech, Inc. and ComputerShare Trust (incorporated by reference
    to Exhibit 4.2 to Current Report on
    Form 8-K
    filed January 19, 2005).4
.2

Amendment to Amended Rights Agreement dated April 13, 2006
    (incorporated by reference to Exhibit 4.1 to Current Report
    on
    Form 8-K
    filed April 18, 2006).4
.3

Registration Rights Agreements for December 2004 Short-Term Loan
    with C. David Callaham (incorporated by reference to
    Exhibits 10.4 and 10.7 to Current Report on
    Form 8-K
    filed December 16, 2004).4
.4

Registration Rights Agreement for December 2004 Short-Term Loan
    by and between Rentech, Inc. and Geduld Revocable Trust,
    (incorporated by reference to Exhibit 10.3 to Current
    Report on
    Form 8-K
    filed December 7, 2004).4
.5

Registration Rights Agreement for December 2004 Short-Term Loan
    by and between Rentech, Inc. and Geduld Capital Management LLC
    (incorporated by reference to Exhibit 10.6 to Current
    Report on
    Form 8-K
    filed December 7, 2004).4
.6

Registration Rights Agreement for December 2004 Short-Term Loan
    by and between Rentech, Inc. and Daniel Kern (incorporated by
    reference to Exhibit 10.9 to Current Report on
    Form 8-K
    filed December 7, 2004).4
.7

Form of Registration Rights Agreement (incorporated by reference
    to Exhibit 4 to
    Form S-3/A
    Amendment Two to Registration Statement
    No. 333-85682
    filed October 28, 2002).4
.8

Form of Non-statutory Stock Option Agreement (incorporated by
    reference to Exhibit 4 to
    Form S-3/A
    Amendment Two to Registration Statement
    No. 333-85682
    filed October 28, 2002).4
.9

Stock Option Agreement, dated December 10, 2004, by and
    between Rentech, Inc. and Royster-Clark Inc. (incorporated by
    reference to Exhibit 10.8 to Current Report on
    Form 8-K
    filed December 16, 2004).4
.10

Stock Purchase Warrant, dated September 17, 2004, by and
    between Rentech, Inc. and Mitchell Technology Investments
    (incorporated by reference to Exhibit 10.2 to Current
    Report on
    Form 8-K
    filed September 23, 2004). F-57




---



##### Table of Contents



4
.11

Registration Rights Agreement, dated September 17, 2004, by
    and between Rentech, Inc. and Mitchell Technology Investments
    (incorporated by reference to Exhibit 10.3 to Current
    Report on
    Form 8-K
    filed September 23, 2004).4
.12

Subscription Agreement, dated April 8, 2005, by and among
    Rentech, Inc. and Mercator Momentum Fund, LP, Mercator Momentum
    Fund III, LP, Monarch Pointe Fund, Ltd., Pentagon Special
    Purpose Fund, Ltd. and M.A.G. CAPITAL, LLC, for Placement of
    Preferred Stock (incorporated by reference to Exhibit 10.1
    to Current Report on
    Form 8-K
    filed April 14, 2005).4
.13

Form of Stock Purchase Warrants, dated April 8, 2005, by
    and among Rentech, Inc. and Mercator Momentum Fund, LP, Mercator
    Momentum Fund III, LP, Monarch Pointe Fund, Ltd., Pentagon
    Special Purpose Fund, Ltd. and M.A.G. CAPITAL, LLC, for
    Placement of Preferred Stock (incorporated by reference to
    Exhibits 10.2, 10.3, 10.4, 10.5 and 10.6 to Current Report
    on
    Form 8-K
    filed April 14, 2005).4
.14

Registration Rights Agreement, dated April 8, 2005, by and
    among Rentech, Inc. and Mercator Momentum Fund, LP, Mercator
    Momentum Fund III, LP, Monarch Pointe Fund, Ltd., Pentagon
    Special Purpose Fund, Ltd. and M.A.G. CAPITAL, LLC, for
    Placement of Preferred Stock (incorporated by reference to
    Exhibit 10.7 to Current Report on
    Form 8-K
    filed April 14, 2005).4
.15

Warrant to Purchase 1,000,000 Shares of Common Stock by and
    between Rentech, Inc. and DKRW Advanced Fuels LLC, dated
    January 12, 2006 (incorporated by reference to
    Exhibit 2.1 to Current Report on
    Form 8-K
    filed January 19, 2006).4
.16

Stock Purchase Warrants (incorporated by reference to
    Exhibits 10.1 through 10.16 to Current Report on
    Form 8-K
    filed May 20, 2005).4
.17

Indenture dated April 18, 2006, by and between Rentech,
    Inc. and Wells Fargo Bank, National Association, as Trustee
    (incorporated by reference to Exhibit 4.2 to Current Report
    on
    Form 8-K
    filed April 18, 2006).4
.18

Officers Certificate to Indenture dated April 18,
    2006 to Indenture (incorporated by reference to Exhibit 4.3
    to Current Report on
    Form 8-K
    filed April 18, 2006).4
.19

Form of 4.00% Convertible Senior Note Due 2013
    (incorporated by reference to Exhibit 4.4 to Current Report
    on
    Form 8-K
    filed April 18, 2006).4
.20

Form of Subscription Agreement (incorporated by reference to
    exhibit 10.2 to Current Report on
    Form 8-K
    filed April 20, 2007).4
.21

Form of Warrant to purchase shares of Common Stock (incorporated
    by reference to exhibit 10.3 to Current Report on
    Form 8-K
    filed April 20, 2007).10
.1*

Term sheet for Dennis L. Yakobson retirement benefits
    (incorporated by reference to Exhibit 10.1 to Current
    Report on
    Form 8-K
    filed October 6, 2005).10
.2*

Term sheet for Ronald C. Butz retirement benefits (incorporated
    by reference to Exhibit 10.2 to Current Report on
    Form 8-K
    filed October 6, 2005).10
.3*

Management and Consulting Agreement, dated July 29, 2005,
    by and between Rentech, Inc. and Management Resource Center,
    Inc. (incorporated by reference to Exhibit 10.1 to Current
    Report on
    Form 8-K
    filed August, 11, 2005).10
.4*

1994 Stock Option Plan (incorporated by reference to the
    exhibits to
    Form S-18
    on
    Form SB-2,
    post-effective Amendment No. 5 to Registration Statement
    No. 33-37150-D).10
.5*

1996 Stock Option Plan (incorporated by reference to
    Exhibit 99.2 to Current Report on
    Form 8-K
    dated December 18, 1996).10
.6*

1998 Stock Option Plan (incorporated by reference to
    Exhibit 4.1 to
    Form S-8).
    Registration Statement
    No. 333-95537.10
.7*

2001 Stock Option Plan (incorporated by reference to
    Exhibit 10.5 to Annual Report on
    Form 10-K
    for the year ended September 30, 2002 filed
    December 24, 2002).10
.8*

2003 Stock Option Plan (incorporated by reference to
    Exhibit 10.6 to Annual Report on
    Form 10-K
    for the year ended September 30, 2002 filed
    December 24, 2002).10
.9

License Agreement, dated October 8, 1998, by and between
    Rentech, Inc. and Texaco Natural Gas, Inc. (incorporated by
    reference to Exhibit 10.10 to Annual Report on
    Form 10-KSB,
    No. 000-19260,
    for the year ended September 30, 1998, filed
    January 13, 1999). F-58




---



##### Table of Contents



10
.10

Convertible Promissory Note, dated May 20, 2005, to Michael
    Ray (incorporated by reference to Exhibit 10.17 to Current
    Report on
    Form 8-K
    filed May 20, 2005).10
.11

Convertible Promissory Note, dated May 20, 2005, to David
    Zimel (incorporated by reference to Exhibit 10.18 to
    Current Report on
    Form 8-K
    filed May 20, 2005).10
.12*

1990 Stock Option Plan (incorporated by reference to the
    exhibits to
    Form S-18
    Registration Statement
    No. 33-37150).10
.13*

2005 Stock Option Plan (incorporated by reference to
    Exhibit 10.34 to Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 31, 2004 filed
    February 9, 2005).10
.14

Termination Agreement for FT Solutions, LLC dated
    January 10, 2006, by and between Headwaters Technology
    Innovation Group, Inc. and Rentech, Inc. (incorporated by
    reference to Exhibit 10.1 to Current Report on
    Form 8-K
    filed January 17, 2006).10
.15**

Master License Agreement by and among Rentech, Inc. and DKRW
    Energy LLC and DKRW Advanced Fuels LLC, dated January 12,
    2006 (incorporated by reference to Exhibit 10.1 to Current
    Report on
    Form 8-K
    filed January 19, 2006).10
.16

License Agreement by and between Rentech, Inc. and Medicine Bow
    Fuel & Power, LLC, dated January 12, 2006
    (incorporated by reference to Exhibit 10.2 to Current
    Report on
    Form 8-K
    filed January 19, 2006).**10
.17

Amendment to Site License Agreement with Medicine Bow
    Fuel & Power, LLC, dated October 26, 2007
    (incorporated by reference to Exhibit 10.1 to Current
    Report on
    Form 8-K
    filed November 1, 2007).10
.18

Omnibus Amendment by and among Rentech, Inc. and Medicine Bow
    Fuel & Power, LLC and DKRW Advanced Fuels LLC, dated
    December 7, 2007 (incorporated by reference to
    Exhibit 10.1 to Current Report on
    Form 8-K
    filed December 13, 2007).10
.19

Project Development Participation Agreement by and between
    Rentech, Inc. and DKRW Advanced Fuels LLC, dated
    January 12, 2006 (incorporated by reference to
    Exhibit 10.3 to Current Report on
    Form 8-K
    filed January 19, 2006).10
.20*

Employment Agreement by and between Rentech, Inc. and D. Hunt
    Ramsbottom, Jr. dated January 20, 2006 (incorporated by
    reference to Exhibit 99.1 to Current Report on
    Form 8-K
    filed January 26, 2006).10
.21*

Employment Agreement by and between Rentech, Inc. and Douglas M.
    Miller dated January 20, 2006 (incorporated by reference to
    Exhibit 99.2 to Current Report on
    Form 8-K
    filed January 26, 2006).10
.22*

Employment Agreement by and between Rentech, Inc. and Richard O.
    Sheppard dated March 1, 2006 (incorporated by reference to
    Exhibit 99.1 to Current Report on
    Form 8-K
    filed March 14, 2006).10
.23*

Employment Agreement by and between Rentech, Inc. and Kevin M.
    Smith dated January 20, 2006 (incorporated by reference to
    Exhibit 99.3 to Current Report on
    Form 8-K
    filed January 26, 2006).10
.24*

Employment Agreement by and between Rentech, Inc. and Richard T.
    Penning, dated January 22, 2007.10
.25*

Compensation Plan for Outside Directors (incorporated by
    reference to Item 1.01 to Current Report on
    Form 8-K
    filed April 19, 2006).10
.26

Lease Agreement dated as of April 21, 2006 with Center West
    (incorporated by reference to Exhibit 99.1 to Current
    Report on
    Form 8-K
    filed April 21, 2006).10
.27

Rider to the Lease Agreement dated as of April 21, 2006 by
    and between Rentech, Inc. and Center West (incorporated by
    reference to Exhibit 99.2 to Current Report on
    Form 8-K
    filed April 21, 2006).10
.28

Financing Agreement dated as of April 26, 2006 by and
    between Rentech Energy Midwest Corporation and The CIT
    Group/Business Credit, Inc. (incorporated by reference to
    Exhibit 10.1 to Current Report on
    Form 8-K
    filed May 2, 2006).10
.29*

Employment Agreement by and between Rentech, Inc. and I. Merrick
    Kerr dated May 15, 2006 (incorporated by reference to
    Exhibit 99.1 to Current Report on
    Form 8-K
    filed May 17, 2006).10
.30*

Form of Stock Option Grant Notice and Stock Option Agreement
    under 2006 Incentive Award Plan (incorporated by reference to
    Exhibit 10.1 to Current Report on
    Form 8-K
    filed July 20, 2006).10
.31*

Amended and Restated Rentech, Inc. 2006 Incentive Award Plan
    (incorporated by reference to Exhibit 10.1 to Current
    Report on
    Form 8-K
    filed March 29, 2007). F-59




---



##### Table of Contents



10
.32

Commitment Letter by and among Rentech, Inc., Rentech
    Development Corporation. M.A.G Capital, LLC and Pentagon Bernini
    Fund, Ltd. Dated November 15, 2005 (incorporated by
    reference to exhibit 10.1 to Current Report on
    Form 8-K
    filed November 16, 2005).10
.33

Placement Agent Agreement, dated April 19, 2007 by and
    between Rentech, Inc. and Credit Suisse Securities (USA) LLC
    (incorporated by reference to exhibit 10.1 to Current
    Report on
    Form 8-K
    filed April 20, 2007).10
.34**

Development Cost Sharing and Equity Option Agreement, dated
    May 25, 2007 by and between Rentech, Inc. and Peabody
    Venture Fund, LLC (incorporated by reference to
    exhibit 10.1 to Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2007 and filed on
    August 9, 2007).10
.35**

Coal Supply Agreement, dated May 25, 2007 by and between
    Rentech, Inc. and COALSALES LLC (incorporated by reference to
    exhibit 10.1 to Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2007 and filed on
    August 9, 2007).12
.1

Computation of Ratio of Earnings to Fixed Charges.14


Code of Ethics (incorporated by references to Exhibit 14 to
    Annual Report on
    Form 10-K
    for the year ended September 30, 2004 filed
    December 9, 2004).21


Subsidiaries of Rentech, Inc.23


Consent of Independent Registered Public Accounting Firm.31
.1

Certification of Chief Executive Officer Pursuant to
    Rule 13a-14
    or
    Rule 15d-14(a).31
.2

Certification of Chief Financial Officer pursuant to
    Rule 13a-14
    or
    Rule 15d-14(a).32
.1

Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350.32
.2

Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350.     *
    
    Management contract or compensatory plan or arrangement.**
    
    Certain portions of this Exhibit have been omitted and filed
    separately under an application for confidential treatment. F-60