The way I see it, there are 3 or 4 things that contribute to the low valuation.
1) The debt. The $10.4 in debt you cite is a bit misleading (assuming you took that number off the last 10-Q). $3.2 of that is not debt of GLGI...it's debt of GRE, which owns the buildings. GRE is owned by Kruger and Rosene, which is why it's consolidated with GLGI.
2) The balance sheet, excluding debt. As of last Q, you had $1.8MM in preferred dividends payable and a $1.6MM related party loan (I believe this is largely the accrued interest on the loan from Rosene).
The balance sheet on the next Q will show even higher debt ($9.2 funded + whatever the amount is on the building), but the preferred dividends payable will be wiped out.
3) The related party transactions. If you go back and read the last 10 years of 10-Ks, you can see that Kruger and Rosene basically kept the company afloat, but a lot of investors will see the related party transactions and not invest. The disclosure on these aren't the best. For example, Yorktown used to charge GLGI 40% of the gross profit on the pellets. Last year, it was switched to $0.02/lb. They did not disclose the gross profit on the pellets, so an investor couldn't tell if Yorktown was looting the company. I asked Kruger about it, and he said the avg. gross margin was 7-10 cents, so the 2 cents/lb is a better deal for GLGI.
4) The customer concentration. It's hard to get a high valuation when over 50% of your sales come from one customer. Hopefully, we'll hear something on the AB test run, and this concern will go away.
This company definitely has a bunch of warts. You need to trust that Kruger (Yorktown)/Rosene won't loot the company and that Coors won't go away. If neither of those happen, then I think the debt will take care of itself.
I think all of that is priced in at these levels. If they sign a contract with AB and/or continue to grow sales with other customers, then I think there's some good upside here.