Last10K.com

Aemetis, Inc (AMTX) SEC Filing 10-Q Quarterly Report for the period ending Thursday, September 30, 2021

Aemetis, Inc

CIK: 738214 Ticker: AMTX

EXHIBIT 99.1

 

External Investor Relations Contact:

Kirin Smith

PCG Advisory Group

(646) 863-6519

ksmith@pcgadvisory.com

Investor Relations/

Media Contact:

Todd Waltz

(408) 213-0940

investors@aemetis.com

 

Aemetis, Inc. Reports Third Quarter 2021 Financial Results

 

CUPERTINO, Calif. – November 11, 2021 - Aemetis, Inc. (NASDAQ: AMTX), an advanced renewable fuels and biochemicals company, today announced its financial results for the three and nine months ended September 30, 2021.

 

“Revenues from North America sales in the third quarter of 2021 increased 50.4% compared to the third quarter of 2020 as economic recovery from COVID-19 continues to create increased demand for liquid transportation fuels along with its associated stronger pricing,” said Todd Waltz, Chief Financial Officer of Aemetis. “North America revenues during the third quarter of 2021 increased to $49.8 million compared to $33.1 million during the third quarter of 2020. Capital expenditures for ultra-low carbon projects were $18.8 million for the first nine months of 2021 as our engineering and construction teams moved forward with the initiatives outlined in our previously announced Five Year Plan,” added Waltz.

 

“We are pleased with the milestones accomplished during the third quarter of 2021, including commencing construction of the next phase of dairy digesters, building the biogas cleanup facility and work on the utility gas pipeline interconnect that was mechanically completed today,” said Eric McAfee, Chairman and CEO of Aemetis. “The Aemetis Biogas RNG project received a permit from Stanislaus County to construct approximately 20 miles of pipeline using County roads, as well as selecting the contractor who is now installing the biogas pipeline. We also received a drilling study from Baker Hughes confirming the feasibility of injecting CO2 emissions for sequestration in the unique shale formations that extend under our two biofuels plant sites in California. We invite investors to review the updated Aemetis Corporate Presentation and the Aemetis Investor Presentation on the Aemetis home page prior to the earnings call.”

 

Today, Aemetis will host an earnings review call at 11:00 a.m. Pacific time (PT).

 

 
1

 

 
Live Participant Dial In (Toll Free): +1-877-545-0523 Access Code 492308
Live Participant Dial In (International): +1-973-528-0016 Access Code 492308

Webcast URL: https://www.webcaster4.com/Webcast/Page/2211/43472

 

For details on the call, please visit http://www.aemetis.com/investors/conference-calls/

 

 
2

 

 

Financial Results for the Three Months Ended September 30, 2021

 

Revenues during the third quarter of 2021 were $49.9 million compared to $40.9 million for the third quarter of 2020. Our North America operations in the third quarter of 2021, as compared to the third quarter of 2020, experienced an increase in the selling price of ethanol from $1.59 per gallon to $2.84 per gallon, and an increase in the delivered corn price from an average of $4.92 per bushel during the third quarter of 2020 to $7.99 per bushel during the third quarter of 2021.

 

Gross loss for the third quarter of 2021 was $4.8 million, compared to gross income of $771 thousand during the third quarter of 2020. Gross margin was negatively impacted by the establishment of a reserve of $5.3 million for California emissions compliance for the Keyes ethanol plantmade in September. Our North America segment accounted for all of the reported, consolidated gross profit in both periods.

 

Selling, general and administrative expenses were $5.1 million during the third quarter of 2021, compared to $4.6 million during the third quarter of 2020 as a result of period expenses, specifically salary and insurance, incurred as part of the development of our ultra-low carbon initiatives.

 

Operating loss was $9.9 million for the third quarter of 2021, compared to an operating loss of $3.8 million for the third quarter of 2020 principally driven by the establishment of a reserve of $5.3 million.

 

Interest expense during the third quarter of 2021 was $5.5 million, excluding accretion and other expenses in connection with Series A preferred units in our Aemetis Biogas LLC subsidiary, compared to $6.5 million during the third quarter of 2020. Additionally, our Aemetis Biogas LLC subsidiary recognized $2.2 million of accretion and other expenses in connection with preference payments on its preferred stock during the third quarter of 2021 compared to $1.8 million during the third quarter of 2020.

 

Net loss was $17.6 million for the third quarter of 2021, compared to a net loss of $12.2 million for the third quarter of 2020.

 

Cash at the end of the third quarter of 2021 increased to $6.4 million, compared to $0.6 million at the end of 2020. Capital expenditures increased property, plant and equipment by $18.8 million driven by investments in our ultra-low carbon initiatives and company debt decreased by $44.6 million compared to December 31, 2020.

 

Financial Results for the Nine Months Ended September 30, 2021

 

Revenues were $147.6 million for the first three quarters of 2021, compared to $128.2 million for the first three quarters of 2020, driven by an increase in the selling price of ethanol from $1.55 per gallon to $2.49 per gallon on increased volumes of 4.1 million gallons from 40.5 million gallons to 44.6 million gallons.

 

Gross loss for the first three quarters of 2021 was $4.7 million, compared to gross profit of $14.4 million during the first three quarters of 2020, primarily attributable to high grade alcohol sales during 2020 and of the establishment of a reserve of $5.3 million for a Carbon Credit Allowances made in September 2021.

 

Selling, general and administrative expenses were $16.2 million during the first three quarters of 2021, compared to $12.5 million during the first three quarters of 2020 as a result of period expenses, specifically salary, professional fees and insurance, incurred as part of the development of our ultra-low carbon initiatives.

 

 
3

 

 

Operating loss was $21.0 million for the first three quarters of 2021, compared to an operating income of $1.7 million for the first three quarters of 2020.

 

Interest expense was $17.9 million during the first three quarters of 2021, excluding accretion and other expenses of Series A preferred units in our Aemetis Biogas LLC subsidiary, compared to interest expense of $19.5 million during the first three quarters of 2020. Additionally, our Aemetis Biogas LLC subsidiary recognized $7.9 million of accretion and other expenses in connection with preference payments on its preferred stock during the first three quarters of 2021 compared to $4.1 million during the first three quarters of 2020.

 

Net loss for the first three quarters of 2021 was $46.3 million, compared to a net loss of $22.1 million in 2020.

 

About Aemetis

 

Aemetis has a mission to transform renewable energy with below zero carbon intensity transportation fuels. Aemetis has launched the Carbon Zero production process to decarbonize the transportation sector using today's infrastructure.

 

Aemetis Carbon Zero products include zero-carbon fuels that can "drop-in" to be used in airplanes, truck, and ship fleets. Aemetis low-carbon fuels have substantially reduced carbon intensity compared to standard petroleum fossil-based fuels across their lifecycle.

 

Headquartered in Cupertino, California, Aemetis is a renewable natural gas, renewable fuel, and biochemicals company focused on the acquisition, development, and commercialization of innovative technologies that replace petroleum-based products and reduce greenhouse gas emissions. Founded in 2006, Aemetis has completed Phase 1 and is expanding a California biogas digester network and pipeline system to convert dairy waste gas into Renewable Natural Gas (RNG). Aemetis owns and operates a 65 million gallon per year ethanol production facility in California's Central Valley near Modesto that supplies about 80 dairies with animal feed. Aemetis also owns and operates a 50 million gallon per year production facility on the East Coast of India, producing high-quality distilled biodiesel and refined glycerin for customers in India and Europe. Aemetis is developing the Carbon Zero Sustainable Aviation Fuel (SAF) and renewable diesel fuel biorefineries in California from renewable oils and orchard and forest waste. Aemetis holds a portfolio of patents and exclusive technology licenses to produce renewable fuels and biochemicals. For additional information about Aemetis, please visit www.aemetis.com.

 

 
4

 

 

NON-GAAP FINANCIAL INFORMATION

 

We have provided non-GAAP measures as a supplement to financial results based on GAAP. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is included in the accompanying supplemental data. Adjusted EBITDA is defined as net income/(loss) plus (to the extent deducted in calculating such net income) interest expense, gain on extinguishment, income tax expense, intangible and other amortization expense, accretion and other expenses of Series A preferred units, depreciation expense, and share-based compensation expense.

 

Adjusted EBITDA is not calculated in accordance with GAAP and should not be considered as an alternative to net income/(loss), operating income or any other performance measures derived in accordance with GAAP or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA is presented solely as a supplemental disclosure because management believes that it is a useful performance measure that is widely used within the industry in which we operate. In addition, management uses Adjusted EBITDA for reviewing financial results and for budgeting and planning purposes. Adjusted EBITDA measures are not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparison between companies.

 

Safe Harbor Statement

 

This news release contains forward-looking statements, including statements regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events or other statements that are not historical facts. Forward-looking statements in this news release include, without limitation, statements relating to our five-year growth plan, expansion of our biogas digestor network, development of our carbon sequestration projects and development of our cellulosic ethanol business in North America. Words or phrases such as “anticipates,” “may,” “will,” “should,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “showing signs,” “targets,” “view,” “will likely result,” “will continue” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on current assumptions and predictions and are subject to numerous risks and uncertainties. Actual results or events could differ materially from those set forth or implied by such forward-looking statements and related assumptions due to certain factors, including, without limitation, competition in the ethanol, biodiesel and other industries in which we operate, commodity market risks including those that may result from current weather conditions, financial market risks, customer adoption, counter-party risks, risks associated with changes to federal policy or regulation, demand for high grade alcohol and related products, including hand sanitizers, and other risks detailed in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2020, our Quarterly Report on Form 10-Q for the quarters ended March 31, 2021 and September 30, 2021 and in our subsequent filings with the SEC. We are not obligated, and do not intend, to update any of these forward-looking statements at any time unless an update is required by applicable securities laws.

 

(Tables follow)

 

 
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AEMETIS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(unaudited, in thousands except per share data)

 

 

 

Three months ended

 

 

Nine months ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues

 

$ 49,895

 

 

$ 40,923

 

 

$ 147,586

 

 

$ 128,227

 

Cost of goods sold

 

 

54,680

 

 

 

40,152

 

 

 

152,333

 

 

 

113,830

 

Gross profit (loss)

 

 

(4,785 )

 

 

771

 

 

 

(4,747 )

 

 

14,397

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development expense

 

 

22

 

 

 

37

 

 

 

66

 

 

 

175

 

Selling, general and admin. expense

 

 

5,087

 

 

 

4,563

 

 

 

16,222

 

 

 

12,548

 

Operating income (loss)

 

 

(9,894 )

 

 

(3,829 )

 

 

(21,035 )

 

 

1,674

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate expense

 

 

4,408

 

 

 

5,796

 

 

 

14,902

 

 

 

16,956

 

Debt related fees and Amortization expense

 

 

1,140

 

 

 

674

 

 

 

3,045

 

 

 

2,578

 

Accretion and other expenses of Series A preferred units

 

 

2,185

 

 

 

1,765

 

 

 

7,928

 

 

 

4,087

 

Gain on debt extinguishment

 

 

-

 

 

 

--

 

 

 

(1,134 )

 

 

--

 

Other expense (income)

 

 

(30 )

 

 

153

 

 

 

483

 

 

 

393

 

Loss before income taxes

 

 

(17,597 )

 

 

(12,217 )

 

 

(46,259 )

 

 

(22,340 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

 

--

 

 

 

--

 

 

 

7

 

 

 

(263 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$ (17,597 )

 

$ (12,217 )

 

$ (46,266 )

 

$ (22,077 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$ (0.55 )

 

$ (0.59 )

 

$ (1.55 )

 

$ (1.06 )

Diluted

 

$ (0.55 )

 

$ (0.59 )

 

$ (1.55 )

 

$ (1.06 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

31,857

 

 

 

20,861

 

 

 

29,818

 

 

 

20,732

 

Diluted

 

 

31,857

 

 

 

20,861

 

 

 

29,818

 

 

 

20,732

 

 

 
6

 

 

AEMETIS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands)

 

 

 

September 30,

2021

 

 

December 31,

2020

 

Assets

 

(Unaudited)

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$ 6,389

 

 

$ 592

 

Accounts receivable

 

 

1,621

 

 

 

1,821

 

Inventories

 

 

4,862

 

 

 

3,969

 

Prepaid and other current assets

 

 

4,141

 

 

 

2,301

 

Total current assets

 

 

17,013

 

 

 

8,683

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

124,915

 

 

 

109,880

 

Right-of-use and other assets

 

 

5,051

 

 

 

6,576

 

Total assets

 

$ 146,979

 

 

$ 125,139

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' deficit

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$ 13,887

 

 

$ 20,739

 

Current portion of long term debt

 

 

9,962

 

 

 

44,974

 

Short term borrowings

 

 

13,901

 

 

 

14,541

 

Mandatorily redeemable Series B stock

 

 

3,328

 

 

 

3,252

 

Accrued property taxes

 

 

6,801

 

 

 

5,674

 

Accrued contingent litigation fees

 

 

6,200

 

 

 

6,200

 

Current portion of Series A preferred units

 

 

8,660

 

 

 

2,015

 

Other liabilities

 

 

11,866

 

 

 

4,840

 

Total current liabilities

 

 

74,605

 

 

 

102,235

 

 

 

 

 

 

 

 

 

 

Total long term liabilities

 

 

204,467

 

 

 

207,648

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Series B convertible preferred stock

 

 

1

 

 

 

1

 

Common stock

 

 

33

 

 

 

23

 

Additional paid-in capital

 

 

192,520

 

 

 

93,426

 

Accumulated deficit

 

 

(320,346 )

 

 

(274,080 )

Accumulated other comprehensive loss

 

 

(4,301 )

 

 

(4,114 )

Total stockholders’ deficit

 

 

(132,093 )

 

 

(184,744 )

Total liabilities and stockholders' deficit

 

$ 146,979

 

 

$ 125,139

 

 

 
7

 

 

RECONCILIATION OF ADJUSTED EBITDA TO NET LOSS

(unaudited, in thousands)

 

Three Months Ended

 

 

Nine Months Ended

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

 

$ (17,597 )

 

$ (12,217 )

 

$ (46,266 )

 

$ (22,077 )

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

5,548

 

 

 

6,470

 

 

 

17,947

 

 

 

19,534

 

Depreciation expense

 

 

1,342

 

 

 

1,253

 

 

 

4,106

 

 

 

3,515

 

Accretion and other expenses of Series A preferred units

 

 

2,185

 

 

 

1,765

 

 

 

7,928

 

 

 

4,087

 

Share-based compensation

 

 

285

 

 

 

191

 

 

 

1,401

 

 

 

826

 

Intangibles and other amortization expense

 

 

11

 

 

 

12

 

 

 

35

 

 

 

36

 

Gain on debt extinguishment

 

 

--

 

 

 

--

 

 

 

(1,134 )

 

 

--

 

Income tax expense (benefit)

 

 

--

 

 

 

--

 

 

 

7

 

 

 

(263 )

Total adjustments

 

 

9,371

 

 

 

9,691

 

 

 

30,290

 

 

 

27,735

 

Adjusted EBITDA

 

$ (8,226 )

 

$ (2,526 )

 

$ (15,976 )

 

$ 5,658

 

 

PRODUCTION AND PRICE PERFORMANCE

(unaudited)

 

 

 

Three months ended

September 30,

 

 

Nine months ended

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Ethanol and high grade alcohol

 

 

 

 

 

 

 

 

 

 

 

 

Gallons sold (in millions)

 

 

13.8

 

 

 

15.0

 

 

 

44.6

 

 

 

40.5

 

Average sales price/gallon

 

$ 2.84

 

 

$ 1.59

 

 

$ 2.49

 

 

$ 1.55

 

Percentage of nameplate capacity

 

 

100 %

 

 

111 %

 

 

108 %

 

 

109 %

WDG

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons sold (in thousands)

 

 

93.2

 

 

 

94.2

 

 

 

298.6

 

 

 

292.2

 

Average sales price/ton

 

$ 96

 

 

$ 76

 

 

$ 102

 

 

$ 79

 

Delivered cost of corn

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bushels ground (in millions)

 

 

4.8

 

 

 

5.2

 

 

 

15.6

 

 

 

15.8

 

Average delivered cost / bushel

 

$ 7.99

 

 

$ 4.92

 

 

$ 7.62

 

 

$ 4.87

 

Biodiesel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metric tons sold (in thousands)

 

 

0.0

 

 

 

8.1

 

 

 

0.5

 

 

 

14.3

 

Average sales price/metric ton

 

$ 0

 

 

$ 901

 

 

$ 1,024

 

 

$ 855

 

Percentage of nameplate capacity

 

 

0 %

 

 

22 %

 

 

1 %

 

 

7 %

Refined glycerin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metric tons sold (in thousands)

 

 

0.0

 

 

 

0.6

 

 

 

0.1

 

 

 

1.1

 

Average sales price/metric ton

 

$ 0

 

 

$ 807

 

 

$ 956

 

 

$ 817

 

 

 
8

 


The following information was filed by Aemetis, Inc (AMTX) on Friday, November 12, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q 

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

 

For the quarterly period ended: September 30, 2021

 

OR

 

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

 

For the transition period from              to             

  

Commission File Number: 001-36475

 

AEMETIS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

26-1407544

(State or other jurisdiction

 

(I.R.S. Employer

of incorporation or organization)

 

Identification No.)

 

20400 Stevens Creek Blvd., Suite 700

Cupertino, CA 95014

(Address of Principal Executive Offices, including zip code)

 

(408) 213-0940

(Registrant’s telephone number, including area code)

 

Title of each class of registered securities

 

Trading Symbol

 

Name of each exchange on which registered

Common Stock, $0.001 par value

 

AMTX

 

NASDAQ

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒     No ☐

 

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

 

Large accelerated filer     ☐

Accelerated filer     ☐

Non-accelerated filer     ☐

Smaller reporting company    

Emerging growth company    

 

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

 

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

 

The number of shares outstanding of the registrant’s Common Stock on October 31, 2021 was 33,250,807 shares.

 

 

 

AEMETIS, INC.

 

FORM 10-Q

 

Quarterly Period Ended September 30, 2021

 

INDEX

 

PART I--FINANCIAL INFORMATION

 

Item 1

Financial Statements

 

4

 

 

 

 

 

 

Item 2.

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

 

 34

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

 

 45

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

 46

 

 

PART II--OTHER INFORMATION

 

Item 1.

Legal Proceedings

 

 47

 

 

 

 

 

 

Item 1A.

Risk Factors

 

 47

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

 47

 

 

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

 47

 

 

 

 

 

 

Item 4.

Mine Safety Disclosures

 

 47

 

 

 

 

 

 

Item 5.

Other Information

 

 47

 

 

 

 

 

 

Item 6.

Exhibits

 

 48

 

 

 

 

 

 

 

Signatures

 

 49

 

 

 
2

Table of Contents

 

SPECIAL NOTE REGARDING FORWARD—LOOKING STATEMENTS

 

On one or more occasions, we may make forward-looking statements in this Quarterly Report on Form 10-Q, including statements regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events or other statements that are not historical facts. Forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, statements regarding management’s plans; trends in market conditions with respect to prices for inputs for our products versus prices for our products; our ability to leverage approved feedstock pathways; our ability to leverage our location and infrastructure; our ability to incorporate lower-cost, non-food advanced biofuels feedstock at the Keyes plant; our ability to adopt value-add by-product processing systems; our ability to expand into alternative markets for biodiesel and its by-products, including continuing to expand our sales into international markets; our ability to maintain and expand strategic relationships with suppliers; our ability to continue to develop new and to maintain and protect new and existing intellectual property rights; our ability to adopt, develop and commercialize new technologies; our ability to refinance our senior debt on terms reasonably acceptable to us or at all; our ability to continue to fund operations and our future sources of liquidity and capital resources; our ability to sell additional notes under our EB-5 note program and our expectations regarding the release of funds from escrow under our EB-5 note program; our ability to improve margins; and our ability to raise additional capital. Words or phrases such as “anticipates,” “may,” “will,” “should,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,” “will continue” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on current assumptions and predictions and are subject to numerous markets and uncertainties. Actual results or events could differ materially from those set forth or implied by such forward-looking statements and related assumptions due to certain factors, including, without limitation, the risks set forth under the caption “Risk Factors” below, which are incorporated herein by reference as well as those business risks and factors described elsewhere in this report and in our other filings with the Securities and Exchange Commission (the “SEC”), including without limitation, our most recent Annual Report on Form 10-K.

 

 
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PART I - FINANCIAL INFORMATION

 

Item 1 - Financial Statements.

 

AEMETIS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands except for par value)

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Assets

 

(unaudited)

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents ($45 and $235 respectively from VIE)

 

$6,389

 

 

$592

 

Accounts receivable, net of allowance for doubtful accounts of $1,404 and $1,260 as of September 30, 2021 and December 31, 2020

 

 

1,621

 

 

 

1,821

 

Inventories

 

 

4,862

 

 

 

3,969

 

Prepaid expenses ($153 and $192 respectively from VIE)

 

 

3,596

 

 

 

750

 

Other current assets ($0 and $741 respectively from VIE)

 

 

545

 

 

 

1,551

 

Total current assets

 

 

17,013

 

 

 

8,683

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net ($33,402 and $22,628 respectively from VIE)

 

 

124,915

 

 

 

109,880

 

Operating lease right-of-use assets ($14 and $28 respectively from VIE)

 

 

2,572

 

 

 

2,889

 

Other assets ($24 and $24 respectively from VIE)

 

 

2,479

 

 

 

3,687

 

Total assets

 

$146,979

 

 

$125,139

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' deficit

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable ($4,829 and $6,271 respectively from VIE)

 

$13,887

 

 

$20,739

 

Current portion of long term debt

 

 

9,962

 

 

 

44,974

 

Short term borrowings

 

 

13,901

 

 

 

14,541

 

Mandatorily redeemable Series B convertible preferred stock

 

 

3,328

 

 

 

3,252

 

Accrued property taxes

 

 

6,801

 

 

 

5,674

 

Accrued contingent litigation fees

 

 

6,200

 

 

 

6,200

 

Current portion of operating lease liability ($13 and $10 respectively from VIE)

 

 

286

 

 

 

316

 

Current portion of Series A preferred units ($8,660 and $2,015 respectively from VIE)

 

 

8,660

 

 

 

2,015

 

Other current liabilities ($393 and $129 respectively from VIE)

 

 

11,580

 

 

 

4,524

 

Total current liabilities

 

 

74,605

 

 

 

102,235

 

Long term liabilities:

 

 

 

 

 

 

 

 

Senior secured notes and revolving notes

 

 

117,197

 

 

 

125,624

 

EB-5 notes

 

 

32,500

 

 

 

32,500

 

Other long term debt ($42 and $0 respectively from VIE)

 

 

11,418

 

 

 

11,980

 

Series A preferred units ($38,257 and $32,022 respectively from VIE)

 

 

38,257

 

 

 

32,022

 

Operating lease liability ($0 and $11 respectively from VIE)

 

 

2,381

 

 

 

2,578

 

Other long term liabilities ($0 and $74 respectively from VIE)

 

 

2,714

 

 

 

2,944

 

Total long term liabilities

 

 

204,467

 

 

 

207,648

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Series B convertible preferred stock, $0.001 par value; 7,235 authorized; 1,285 and 1,323 shares issued and outstanding each period, respectively (aggregate liquidation preference of $3,855 and $3,969 respectively)

 

 

1

 

 

 

1

 

Common stock, $0.001 par value; 40,000 authorized; 32,564 and 22,830 shares issued and outstanding each period, respectively

 

 

33

 

 

 

23

 

Additional paid-in capital

 

 

192,520

 

 

 

93,426

 

Accumulated deficit

 

 

(320,346)

 

 

(274,080)

Accumulated other comprehensive loss

 

 

(4,301)

 

 

(4,114)

Total stockholders' deficit

 

 

(132,093)

 

 

(184,744)

Total liabilities and stockholders' deficit

 

$146,979

 

 

$125,139

 

 

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

 

 
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AEMETIS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)

(Unaudited, in thousands except for earnings per share)

 

 

 

For the three months ended September 30,

 

 

For the nine months ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues

 

$49,895

 

 

$40,923

 

 

$147,586

 

 

$128,227

 

Cost of goods sold

 

 

54,680

 

 

 

40,152

 

 

 

152,333

 

 

 

113,830

 

Gross profit (loss)

 

 

(4,785)

 

 

771

 

 

 

(4,747)

 

 

14,397

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses

 

 

22

 

 

 

37

 

 

 

66

 

 

 

175

 

Selling, general and administrative expenses

 

 

5,087

 

 

 

4,563

 

 

 

16,222

 

 

 

12,548

 

Operating income (loss)

 

 

(9,894)

 

 

(3,829)

 

 

(21,035)

 

 

1,674

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate expense

 

 

4,408

 

 

 

5,796

 

 

 

14,902

 

 

 

16,956

 

Debt related fees and amortization expense

 

 

1,140

 

 

 

674

 

 

 

3,045

 

 

 

2,578

 

Accretion and other expenses of Series A preferred units

 

 

2,185

 

 

 

1,765

 

 

 

7,928

 

 

 

4,087

 

Gain on debt extinguishment

 

 

-

 

 

 

-

 

 

 

(1,134)

 

 

-

 

Other expense (income)

 

 

(30)

 

 

153

 

 

 

483

 

 

 

393

 

Loss before income taxes

 

 

(17,597)

 

 

(12,217)

 

 

(46,259)

 

 

(22,340)

Income tax expense (benefit)

 

 

-

 

 

 

-

 

 

 

7

 

 

 

(263)

Net loss

 

$(17,597)

 

$(12,217)

 

$(46,266)

 

$(22,077)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation gain (loss)

 

 

22

 

 

 

314

 

 

 

(187)

 

 

(381)

Comprehensive loss

 

$(17,575)

 

$(11,903)

 

$(46,453)

 

$(22,458)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$(0.55)

 

$(0.59)

 

$(1.55)

 

$(1.06)

Diluted

 

$(0.55)

 

$(0.59)

 

$(1.55)

 

$(1.06)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

31,857

 

 

 

20,861

 

 

 

29,818

 

 

 

20,732

 

Diluted

 

 

31,857

 

 

 

20,861

 

 

 

29,818

 

 

 

20,732

 

 

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

 

 
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Table of Contents

 

AEMETIS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

 

 

For the nine months ended September 30,

 

 

 

2021

 

 

2020

 

Operating activities:

 

 

 

 

 

 

Net loss

 

 

(46,266)

 

$(22,077)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Share-based compensation

 

 

1,401

 

 

 

826

 

Depreciation

 

 

4,106

 

 

 

3,515

 

Debt related fees and amortization expense

 

 

3,045

 

 

 

2,578

 

Intangibles and other amortization expense

 

 

35

 

 

 

36

 

Accretion and other expenses of Series A preferred units

 

 

7,928

 

 

 

4,087

 

Gain on debt extinguishment

 

 

(1,134)

 

 

-

 

Deferred tax benefit

 

 

-

 

 

 

(263)

Provision for bad debts

 

 

144

 

 

 

647

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

50

 

 

 

(1,902)

Inventories

 

 

(902)

 

 

1,542

 

Prepaid expenses

 

 

(2,847)

 

 

66

 

Other assets

 

 

2,475

 

 

 

1,684

 

Accounts payable

 

 

(4,624)

 

 

330

 

Accrued interest expense and fees

 

 

9,256

 

 

 

16,011

 

Other liabilities

 

 

7,340

 

 

 

(24)

Net cash (used in) provided by operating activities

 

 

(19,993)

 

 

7,056

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(18,771)

 

 

(14,921)

Grant proceeds received for capital expenditures

 

 

1,224

 

 

 

-

 

Note receivable

 

 

-

 

 

 

(3,687)

Net cash used in investing activities

 

 

(17,547)

 

 

(18,608)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from borrowings

 

 

-

 

 

 

12,135

 

Repayments of borrowings

 

 

(53,523)

 

 

(11,792)

TEC debt renewal and waiver fee payments

 

 

(1,008)

 

 

(300)

Grant proceeds received for capital expenditures

 

 

115

 

 

 

256

 

Payments on finance leases

 

 

(373)

 

 

(1,137)

Proceeds from issuance of common stock in equity offering

 

 

94,203

 

 

 

-

 

Proceeds from the exercise of stock options

 

 

1,104

 

 

 

260

 

Proceeds from Series A preferred units financing

 

 

3,130

 

 

 

11,564

 

Series A preferred financing redemption

 

 

(300)

 

 

-

 

Net cash provided by financing activities

 

 

43,348

 

 

 

10,986

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(11)

 

 

(11)

Net change in cash and cash equivalents for period

 

 

5,797

 

 

 

(577)

Cash and cash equivalents at beginning of period

 

 

592

 

 

 

656

 

Cash and cash equivalents at end of period

 

 

6,389

 

 

$79

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information, cash paid:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$5,646

 

 

$702

 

Income taxes paid

 

 

7

 

 

 

8

 

Supplemental disclosures of cash flow information, non-cash transactions:

 

 

 

 

 

 

 

 

Subordinated debt extension fees added to debt

 

 

680

 

 

 

680

 

Fair value of warrants issued to subordinated debt holders

 

 

1,546

 

 

 

181

 

TEC debt extension, waiver fees, promissory notes fees added to debt

 

 

608

 

 

 

1,793

 

Capital expenditures in accounts payable

 

 

4,695

 

 

 

1,182

 

Operating lease liabilities arising from obtaining right of use assets

 

 

-

 

 

 

2,688

 

Financing lease liabilities arising from obtaining right of use assets

 

 

113

 

 

 

2,988

 

Capital expenditures purchased on financing

 

 

55

 

 

 

5,652

 

Issuance of equity to pay off accounts payable

 

 

893

 

 

 

-

 

 

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

 

 
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Table of Contents

 

AEMETIS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited, in thousands)

 

For the nine months ended September 30, 2021

 

 

 

Series B Preferred Stock

 

 

 

Common Stock

 

 

 Additional

 

 

 Accumulated

 

 

Accumulated Other

Comprehensive

 

 

 Total Stockholders'

 

Description

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-in Capital

 

 

Deficit

 

 

Loss

 

 

deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2020

 

$1,323

 

 

$1

 

 

$22,830

 

 

$23

 

 

$93,426

 

 

$(274,080)

 

$(4,114)

 

$(184,744)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

-

 

 

 

-

 

 

 

5,682

 

 

 

6

 

 

 

62,389

 

 

 

-

 

 

 

-

 

 

 

62,395

 

Stock options exercised

 

 

-

 

 

 

-

 

 

 

1,226

 

 

 

1

 

 

 

1,002

 

 

 

-

 

 

 

-

 

 

 

1,003

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

835

 

 

 

-

 

 

 

-

 

 

 

835

 

Issuance and exercise of warrants

 

 

-

 

 

 

-

 

 

 

113

 

 

 

-

 

 

 

281

 

 

 

-

 

 

 

-

 

 

 

281

 

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(25)

 

 

(25)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(18,112)

 

 

-

 

 

 

(18,112)

Balance at March 31, 2021

 

 

1,323

 

 

$1

 

 

 

29,851

 

 

$30

 

 

$157,933

 

 

$(292,192)

 

$(4,139)

 

$(138,367)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

-

 

 

 

-

 

 

 

976

 

 

 

1

 

 

 

24,773

 

 

 

-

 

 

 

-

 

 

 

24,774

 

Stock options exercised

 

 

-

 

 

 

-

 

 

 

745

 

 

 

1

 

 

 

28

 

 

 

-

 

 

 

-

 

 

 

29

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

281

 

 

 

-

 

 

 

-

 

 

 

281

 

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(184)

 

 

(184)

Net loss

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

(10,557)

 

 

-

 

 

 

(10,557)

Balance at June 30, 2021

 

 

1,323

 

 

$1

 

 

 

31,572

 

 

$32

 

 

$183,015

 

 

$(302,749)

 

$(4,323)

 

$(124,024)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

 

 

 

 

 

 

 

 

576

 

 

 

1

 

 

 

7,883

 

 

 

-

 

 

 

-

 

 

 

7,884

 

Sereis B conversion to common stock

 

 

(38)

 

 

-

 

 

 

4

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock options exercised

 

 

 

 

 

 

 

 

 

 

299

 

 

 

-

 

 

 

72

 

 

 

-

 

 

 

-

 

 

 

72

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

285

 

 

 

-

 

 

 

-

 

 

 

285

 

Issuance and exercise of warrants

 

 

 

 

 

 

 

 

 

 

113

 

 

 

-

 

 

 

1,265

 

 

 

-

 

 

 

-

 

 

 

1,265

 

Foreign currency translation gain

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

22

 

 

 

22

 

Net loss

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(17,597)

 

 

-

 

 

 

(17,597)

Balance at September 30, 2021

 

 

1,285

 

 

$1

 

 

 

32,564

 

 

$33

 

 

$192,520

 

 

$(320,346)

 

$(4,301)

 

$(132,093)

 

For the nine months ended September 30, 2020

 

 

Series B Preferred Stock

 

 

Common Stock

 

 

Additional

 

 

Accumulated

 

 

Accumulated Other

Comprehensive

 

 

Total Stockholders'

 

Description

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-in Capital

 

 

Deficit

 

 

Loss

 

 

deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2019

 

 

1,323

 

 

$1

 

 

 

20,570

 

 

$21

 

 

$86,852

 

 

$(237,421)

 

$(3,825)

 

$(154,372)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

310

 

 

 

-

 

 

 

-

 

 

 

310

 

Issuance and exercise of warrants

 

 

-

 

 

 

-

 

 

 

113

 

 

 

-

 

 

 

93

 

 

 

-

 

 

 

-

 

 

 

93

 

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(668)

 

 

(668)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(12,052)

 

 

-

 

 

 

(12,052)

Balance at March 31, 2020

 

 

1,323

 

 

$1

 

 

 

20,683

 

 

$21

 

 

$87,255

 

 

$(249,473)

 

$(4,493)

 

$(166,689)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

325

 

 

 

-

 

 

 

-

 

 

 

325

 

Issuance and exercise of warrants

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(27)

 

 

(27)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,192

 

 

 

-

 

 

 

2,192

 

Balance at June 30, 2020

 

 

1,323

 

 

$1

 

 

 

20,683

 

 

$21

 

 

$87,580

 

 

$(247,281)

 

$(4,520)

 

$(164,199)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options exercised

 

 

-

 

 

 

-

 

 

 

232

 

 

 

-

 

 

 

260

 

 

 

-

 

 

 

-

 

 

 

260

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

191

 

 

 

-

 

 

 

-

 

 

 

191

 

Issuance and exercise of warrants

 

 

-

 

 

 

-

 

 

 

112

 

 

 

-

 

 

 

88

 

 

 

-

 

 

 

-

 

 

 

88

 

Foreign currency translation gain

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

314

 

 

 

314

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(12,217)

 

 

-

 

 

 

(12,217)

Balance at September 30, 2020

 

 

1,323

 

 

$1

 

 

 

21,027

 

 

$21

 

 

$88,119

 

 

$(259,498)

 

$(4,206)

 

$(175,563)

 

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

 

 
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1. Nature of Activities and Summary of Significant Accounting Policies

 

Nature of Activities. Headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis, “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas, renewable fuels and byproducts company focused on the acquisition, development and commercialization of innovative negative carbon intensity products and technologies that replace traditional petroleum-based products and reduce greenhouse gas emissions.

 

Founded in 2006, we have completed Phase 1 and are expanding a California biogas digester network and pipeline system to convert dairy waste gas into Renewable Natural Gas (RNG). We own and operate a 65 million gallon per year ethanol production facility located in Keyes, California (the “Keyes Plant”). In addition to low carbon renewable fuel ethanol, the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), and Condensed Distillers Solubles (“CDS”), all of which are sold to local dairies and feedlots as animal feed. In the fourth quarter of 2021, an ethanol membrane dehydration system was commissioned at the Keyes Plant, a key part of increasing the electrification and decreasing natural gas usage at the facility. This project reduces greenhouse gas (“GHG”) emissions and decreases the carbon intensity of fuel produced at the Keyes Plant, allowing us to realize a higher price for the ethanol produced and sold.

 

We also own and operate a 50 million gallon per year renewable chemical and advanced fuel production facility (“Kakinada Plant”) on the East Coast of India that produces high quality distilled biodiesel and refined glycerin for customers in India and Europe. We are developing the Carbon Zero sustainable aviation fuel (SAF) and renewable diesel fuel biorefineries in California to utilize distillers corn oil and other renewable oils to produce low carbon intensity renewable jet and diesel fuel using cellulosic hydrogen from waste orchard and forest wood, while pre-extracting cellulosic sugars from the waste wood to be processed into high value cellulosic ethanol at the Keyes plant. Additionally, we operate a research and development laboratory to develop efficient conversion technologies using waste feedstocks to produce biofuels and biochemicals. We hold a portfolio of patents and exclusive technology licenses to produce renewable fuels and biochemicals. We own a partially completed plant in Goodland, Kansas (the “Goodland Plant”) through our subsidiary Goodland Advanced Fuels, Inc., (“GAFI”), which was formed to acquire the Goodland Plant.

 

During 2018, Aemetis Biogas, LLC (“ABGL”) was formed to construct bio-methane anaerobic digesters at local dairies near the Keyes Plant, many of whom also purchase WDG produced at the Keyes Plant. The digesters are connected via a pipeline owned by ABGL to a gas cleanup and compression unit being built at the Keyes Plant to produce Renewable Natural Gas (“RNG”). During the third quarter of 2020, ABGL completed construction on the first two dairy digesters along with the pipeline that carries bio-methane from these dairies to the Keyes Plant. Upon receiving the bio-methane from the dairies, impurities are removed, and the bio-methane is converted to RNG where it will be either injected into the local gas utility pipeline, supplied as renewable compressed natural gas (“RCNG”) that will service local trucking fleets, or used as renewable energy at the Keyes Plant.

 

During the first quarter of 2021, we announced our “Carbon Zero” biofuels production plants designed to produce biofuels, including renewable jet and diesel fuel utilizing cellulosic hydrogen and non-edible renewable oils sourced from our existing biofuels plants and other sources. The first plant, in Riverbank, California, “Carbon Zero 1”, is expected to utilize hydroelectric and other renewable power available onsite to produce 45 million gallons per year of jet fuel, renewable diesel, and other byproducts. The plant is expected to supply the aviation and truck markets with ultra-low carbon renewable fuels to reduce greenhouse gas (“GHG”) emissions and other pollutants associated with conventional petroleum-based fuels.

 

The Company is continuing to develop a biomass-to-fuel technology to build a carbon zero production facility. By producing ultra-low carbon renewable fuels, the Company expects to capture higher value D3 RINs and California’s LCFS credits. D3 RINs have a higher value in the marketplace than D6 RINs due to D3 RINs’ relative scarcity and mandated pricing formula from the United States EPA.

 

 
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On April 1, 2021, we established Aemetis Carbon Capture, Inc. to build carbon sequestration projects to generate LCFS and IRS 45Q credits by injecting CO₂ into wells which are monitored for emissions to ensure the long-term sequestration of carbon underground. California’s Central Valley is well established as a major region for large-scale natural gas production and CO₂ injection projects due to the subsurface geologic formation that retains gases.

 

We also own and operate the Kakinada Plant with a nameplate capacity of 150 thousand metric tons per year, or about 50 million gallons per year, producing high quality distilled biodiesel and refined glycerin for customers in India and Europe. We believe the Kakinada Plant is one of the largest biodiesel production facilities in India on a nameplate capacity basis. The Kakinada Plant is capable of processing a variety of vegetable oils and animal fat waste feedstocks into biodiesel that meet international product standards. The Kakinada Plant also distills the crude glycerin byproduct from the biodiesel refining process into refined glycerin, which is sold to the pharmaceutical, personal care, paint, adhesive and other industries.

 

Basis of Presentation and Consolidation. These consolidated financial statements include the accounts of Aemetis. Additionally, we consolidate all entities in which we have a controlling financial interest. A controlling financial interest is usually obtained through ownership of a majority of the voting interests. However, an enterprise must consolidate a variable interest entity (“VIE”) if the enterprise is the primary beneficiary of the VIE, even if the enterprise does not own a majority of the voting interests. The primary beneficiary is the party that has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. ABGL was assessed to be a VIE and through the Company's ownership interest in all of the outstanding common stock, the Company has been determined to be the primary beneficiary and accordingly, the assets, liabilities, and operations of ABGL are consolidated into those of the Company. All intercompany balances and transactions have been eliminated in consolidation.

 

The accompanying consolidated condensed balance sheet as of September 30, 2021, the consolidated condensed statements of operations and comprehensive (loss) for the three and nine months ended September 30, 2021 and 2020, the consolidated condensed statements of cash flows for the nine months ended September 30, 2021 and 2020, and the consolidated condensed statements of stockholders’ deficit for the three and nine months ended September 30, 2021 and 2020 are unaudited. The consolidated condensed balance sheet as of December 31, 2020 was derived from the 2020 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the 2020 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2020. The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.

 

In the opinion of Company’s management, the unaudited interim consolidated condensed financial statements for the three and nine months ended September 30, 2021 and 2020 have been prepared on the same basis as the audited consolidated statements as of December 31, 2020 and reflect all adjustments, consisting primarily of normal recurring adjustments, necessary for the fair presentation of its statement of financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the operating results for any subsequent quarter, for the full fiscal year or any future periods.

 

 
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Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, revenues, and expenses during the reporting period. To the extent there are material differences between these estimates and actual results, the Company’s consolidated financial statements will be affected.

 

Revenue Recognition. We derive revenue primarily from sales of ethanol and related co-products in North America, and biodiesel and refined glycerin in India pursuant to supply agreements and purchase order contracts. We assessed the following criteria under the Accounting Standards Codification (“ASC”) 606 guidance: (i) identify the contracts with customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when the entity satisfies the performance obligations.

 

North America: In North America, until May 13, 2020, we sold all our ethanol to J.D. Heiskell & Co. (“J.D. Heiskell”) under the Working Capital and Purchasing Agreement (the “J.D. Heiskell Purchasing Agreement”). On May 13, 2020, we entered into an amendment to the Corn Procurement and Working Capital Agreement with J.D. Heiskell (the “Corn Procurement and Working Capital”), under the terms of which we buy all corn from J.D. Heiskell and sell all WDG and corn oil we produce to J.D. Heiskell. Following May 13, 2020, we sold the majority of our fuel ethanol production to one customer, Kinergy Marketing, LLC (“Kinergy”), through individual sales transactions. Given the similarity of the individual sales transactions with Kinergy, we have assessed them as a portfolio of similar contracts. The performance obligation is satisfied by delivery of the physical product to one of our customer’s contracted trucking companies. Upon delivery, the customer has the ability to direct the use of the product and receive substantially all of its benefits. The transaction price is determined based on daily market prices negotiated by Kinergy for ethanol and by our marketing partner A.L. Gilbert Company (“A.L. Gilbert”) for WDG. There is no transaction price allocation needed.

 

During the first quarter of 2020, Aemetis began selling high-grade alcohol for consumer applications directly to customers on the West Coast and Midwest using a variety of payment terms. These agreements and terms were evaluated according to ASC 606 guidance and such revenue is recognized upon satisfaction of the performance obligation by delivery of the product based on the terms of the agreement. Sales of high-grade alcohol were minimal for the third quarter and year to date revenue for 2021 and were aggregated with ethanol sales for the three and nine months ended September 30, 2021. Sales of high-grade alcohol represented 2% and 18% of revenue for the three and nine months ended September 30, 2020, respectively.

 

The below table shows our sales in North America by product category:

 

 

 

For the three months ended September 30,

 

 

For the nine months ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Ethanol and high-grade alcohol sales

 

$39,131

 

 

$24,825

 

 

$111,220

 

 

$86,387

 

Wet distiller's grains sales

 

 

8,919

 

 

 

7,143

 

 

 

30,584

 

 

 

22,983

 

Other sales

 

 

1,782

 

 

 

1,163

 

 

 

5,086

 

 

 

4,856

 

 

 

$49,832

 

 

$33,131

 

 

$146,890

 

 

$114,226

 

 

We have elected to adopt the practical expedient that allows for ignoring the significant financing component of a contract when estimating the transaction price when the transfer of promised goods to the customer and customer payment for such goods are expected to be within one year of contract inception. Further, we have elected to adopt the practical expedient in which incremental costs of obtaining a contract are expensed when the amortization period would otherwise be less than one year.

 

 
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We also assessed principal versus agent criteria as we buy our feedstock from our customers and process and sell finished goods to those customers in certain contractual agreements.

 

In North America, we buy corn as feedstock for the production of ethanol, from our working capital partner J.D. Heiskell. Prior to May 13, 2020, we sold all our ethanol, WDG, and corn oil to J.D. Heiskell. Subsequent to May 13, 2020, we sold most of our fuel ethanol to one customer, Kinergy, and sold all WDG and corn oil to J.D. Heiskell. During the second quarter, the Company signed a biofuels offtake agreement with Murex, LLC, and beginning on October 1, 2021 the Company will sell all of our fuel ethanol to that customer.

 

We consider the purchase of corn as a cost of goods sold and the sale of ethanol, upon transfer to the common carrier, as revenue on the basis that (i) we control and bear the risk of gain or loss on the processing of corn which is purchased at market prices into ethanol and (ii) we have legal title to the goods during the processing time. The pricing for both corn and ethanol is set independently. Revenues from sales of ethanol and its co-products are billed net of the related transportation and marketing charges. The transportation component is accounted for in cost of goods sold and the marketing component is accounted for in sales, general and administrative expense. Transportation and marketing charges are known within days of the transaction and are recorded at the actual amounts. The Company has elected an accounting policy under which these charges have been treated as fulfillment activities provided after control has transferred. As a result, these charges are recognized in cost of goods sold and selling, general and administrative expenses, respectively, when revenue is recognized. Revenues are recorded at the gross invoiced amount. Hence, we are the principal in North America sales scenarios where our customer and vendor may be the same.

 

India: In India, we sell products pursuant to purchase orders (written or verbal) or by contract with governmental or international parties, in which performance is satisfied by delivery and acceptance of the physical product. Given that the contracts are sufficiently similar in nature, we have assessed these contracts as a portfolio of similar contracts as allowed under the practical expedient. Doing so does not result in a materially different outcome compared to individually accounting for each contract. All domestic and international deliveries are subject to certain specifications as identified in the contracts. The transaction price is determined daily based on reference market prices for biodiesel, refined glycerin, and palm fatty acid distillate (“PFAD”) net of taxes. Transaction price allocation is not needed.

 

The below table shows our sales in India by product category:

 

 

 

For the three months ended September 30,

 

 

For the nine months ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Biodiesel sales

 

$-

 

 

$7,325

 

 

$465

 

 

$12,267

 

Refined glycerin sales

 

 

-

 

 

 

449

 

 

 

125

 

 

 

909

 

PFAD sales

 

 

-

 

 

 

-

 

 

 

-

 

 

 

774

 

Other sales

 

 

63

 

 

 

18

 

 

 

106

 

 

 

51

 

 

 

$63

 

 

$7,792

 

 

$696

 

 

$14,001

 

 

In India, we also assessed principal versus agent criteria as we buy our feedstock from our customers and process and sell finished goods to those same customers in certain contractual agreements. In those cases, we receive the legal title to feedstock from our customers once it is on our premises. We control the processing and production of biodiesel based on contract terms and specifications. The pricing for both feedstock and biodiesel is set independently. We hold the title and risk to biodiesel according to agreements when we enter into in these situations. Hence, we are the principal in India sales scenarios where our customer and vendor may be the same.

 

 
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Cost of Goods Sold. Cost of goods sold includes those costs directly associated with the production of revenues, such as raw material consumed, factory overhead and other direct production costs. During periods of idle plant capacity, costs otherwise charged to cost of goods sold are reclassified to selling, general and administrative expense.

 

Accounts Receivable. The Company sells ethanol and WDG through third-party marketing arrangements generally without requiring collateral and high-grade alcohol directly to customers on a variety of terms including advanced payment terms, based on the size and creditworthiness of the customer. DCO is marketed and sold to A.L. Gilbert and other customers under the J.D. Heiskell Purchasing Agreement. The Company sells CDS directly to customers on standard 30 day payment terms. The Company sells biodiesel, glycerin, and processed natural oils to a variety of customers and may require advanced payment based on the size and creditworthiness of the customer. Usually, invoices are due within 30-days on net terms. Accounts receivables consist of product sales made to large creditworthy customers. Trade accounts receivable are presented at original invoice amount, net of any allowance for doubtful accounts.

 

The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivables are charged against the allowance for doubtful accounts once un-collectability has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate, additional allowances may be required. We reserved $1.4 million and $1.3 million in the allowances for doubtful accounts as of September 30, 2021 and December 31, 2020, respectively.

 

Inventories. Finished goods, raw materials, and work-in-process inventories are valued using methods which approximate the lower of cost (first-in, first-out) or net realizable value (“NRV”). Distillers’ grains and related products are stated at NRV. In the valuation of inventories, NRV is determined as estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

 

Investments. The Company follows ASC 325-20, Cost Method Investments, to account for its ownership interest in noncontrolled entities. Under ASC 325-20, equity securities that do not have readily determinable guarants (i.e., non-marketable equity securities) and are not required to be accounted for under the equity method are typically carried at cost (i.e., cost method investments). Investments of this nature are initially recorded at cost. Income is recorded for dividends received that are distributed from net accumulated earnings of the noncontrolled entity subsequent to the date of investment. Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions in the cost of the investment. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. During 2020, the Company received 489,716 preferred stock shares and 5,000,000 common stock shares in Nevo Motors, a privately held company, in exchange for conversion of its existing debt, carried at zero value, into equity. Due to the lack of operations, the carrying amount of our investment is zero at September 30, 2021 and December 31, 2020.

 

Variable Interest Entities. We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other variable interests in is considered a variable interest entity (“VIE”). We consolidate VIEs when we are the primary beneficiary. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, we assess whether any changes in our interest or relationship with the entity affect our determination of whether the entity is still a VIE and, if so, whether we are the primary beneficiary. If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE in accordance with applicable GAAP.

 

 
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Property, Plant and Equipment. Property, plant, and equipment are carried at cost less accumulated depreciation after assets are placed in service and are comprised primarily of plant and buildings, furniture, machinery, equipment, land, and biogas dairy digesters. The Goodland Plant is partially completed and is not ready for operation. It is the Company’s policy to depreciate capital assets over their estimated useful lives using the straight-line method.

 

The Company evaluates the recoverability of long-lived assets with finite lives in accordance with ASC Subtopic 360-10-35 Property Plant and Equipment—Subsequent Measurements, which requires recognition of impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, based on estimated undiscounted cash flows, the impairment loss would be measured as the difference between the carrying amount of the assets and its estimated fair value. The Company has not recorded any impairment during the three and nine months ended September 30, 2021 and 2020.

 

California Energy Commission Low-Carbon Fuel Production Program. The Company has been awarded $4.2 million in matching grants from the California Energy Commission Low-Carbon Fuel Production Program (“LCFPP”). The LCFPP grant reimburses the Company for costs to design, procure, and install processing facility to clean-up, measure and verify negative-carbon intensity dairy renewable natural gas fuel at the production facility in Keyes, California. The Company has received $877 thousand from the LCFPP as of September 30, 2021 as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognizes the grant as a reduction of the costs in the period when approval is received.

 

California Department of Food and Agriculture Dairy Digester Research and Development Grant. In 2019, the Company was awarded $3.2 million in matching grants from the California Department of Food and Agriculture (“CDFA”) Dairy Digester Research and Development program. The CDFA grant reimburses the Company for costs required to permit and construct two of the Company’s biogas capture systems under contract with central California dairies. The Company received all the awarded grant proceeds as of the second quarter 2021.

 

In October 2020, the Company was awarded $7.8 million in matching grants from the CDFA Dairy Digester Research and Development program. The CDFA grant reimburses the Company for costs required to permit and construct six of the Company’s biogas capture systems under contract with central California dairies. The Company has received $33 thousand from the CDFA 2020 grant program as of September 30, 2021 as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognizes the grant as a reduction of the costs in the period when approval is received.

 

California Energy Commission Low Carbon Advanced Ethanol Grant Program. In May 2019, the Company was awarded the right to receive reimbursements from the California Energy Commission Community-Scale and Commercial-Scale Advanced Biofuels Production Facilities grant under the Alternative and Renewable Fuel and Vehicle Technology Program in an amount up to $5.0 million (the “CEC Reimbursement Program”) in connection with the Company’s expenditures toward the development of the Riverbank Cellulosic Ethanol Facility. To comply with the guidelines of the CEC Reimbursement Program, the Company must make a minimum of $7.9 million in matching contributions to the Riverbank project. The Company receives funds under the CEC Reimbursement Program for actual expenses incurred up to $5.0 million as long as the Company makes the minimum matching contribution. Given that the Company has not made the minimum matching contribution, the grant for reimbursement of capital expenditures of $115 thousand received during the first quarter of 2021, and $1.7 million from prior years were recorded as other long-term liabilities as of September 30, 2021. Due to the uncertainty associated with meeting the minimum matching contribution, the reimbursement will be recognized when the Company makes the minimum matching contribution.

 

 
13

Table of Contents

 

Basic and Diluted Net Loss per Share. Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share reflects the dilution of common stock equivalents such as options, convertible preferred stock, debt, and warrants to the extent the impact is dilutive. As the Company incurred net losses for the three and nine months ended September 30, 2021 and, 2020, potentially dilutive securities have been excluded from the diluted net loss per share computations as their effect would be anti-dilutive.

 

The following table shows the number of potentially dilutive shares excluded from the diluted net loss per share calculation as of September 30, 2021 and 2020:

 

 

 

As of

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

 

 

 

 

 

 

Series B preferred (post split basis)

 

 

129

 

 

 

132

 

Common stock options and warrants

 

 

3,929

 

 

 

5,846

 

Debt with conversion feature at $30 per share of common stock

 

 

1,280

 

 

 

1,294

 

Total number of potentially dilutive shares excluded from the diluted net (loss) per share calculation

 

 

5,338

 

 

 

7,272

 

 

Comprehensive Income (Loss). ASC 220 Comprehensive Income (Loss) requires that an enterprise report, by major components and as a single total, the change in its net assets from non-owner sources. The Company’s other comprehensive loss and accumulated other comprehensive loss consists solely of cumulative currency translation adjustments resulting from the translation of the financial statements of its foreign subsidiary. The investment in this subsidiary is considered indefinitely invested overseas, and as a result, deferred income taxes are not recorded related to the currency translation adjustments.

 

Foreign Currency Translation/Transactions. Assets and liabilities of the Company’s non-U.S. subsidiary that operates in a local currency environment, where that local currency is the functional currency, are translated into U.S. dollars at exchange rates in effect at the balance sheet date and the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at average exchange rates during the year. Transactional gains and losses from foreign currency transactions are recorded in other (income) loss, net.

 

Operating Segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Aemetis recognized two reportable geographic segments: “North America” and “India.”

 

The “North America” operating segment includes the Company’s 65 million gallons per year capacity Keyes Plant in California, the ultra-low carbon renewable fuel project in Riverbank, the biogas digesters on dairies near Keyes, California, the Goodland Plant in Kansas and the research and development facility in Minnesota.

 

The “India” operating segment includes the Company’s 50 million gallon per year capacity Kakinada Plant in India, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius.

 

 
14

Table of Contents

 

Fair Value of Financial Instruments. Financial instruments include accounts receivable, accounts payable, accrued liabilities, current and non-current portion of subordinated debt, notes receivable, notes payable, series A preferred units, and long-term debt. Due to the unique terms of our notes payable and long-term debt and the financial condition of the Company, the fair value of the debt is not readily determinable. The fair value determined using level 3 inputs, of all other current financial instruments is estimated to approximate carrying value due to the short-term nature of these instruments.

 

Share-Based Compensation. The Company recognizes share-based compensation expense in accordance with ASC 718 Stock Compensation requiring the Company to recognize expenses related to the estimated fair value of the Company’s share-based compensation awards at the time the awards are granted, adjusted to reflect only those shares that are expected to vest.

 

Commitments and Contingencies. The Company records and/or discloses commitments and contingencies in accordance with ASC 450 Contingencies. ASC 450 applies to an existing condition, situation or set of circumstances involving uncertainty as to possible loss that will ultimately be resolved when one or more future events occur or fail to occur.

 

Convertible Instruments. The Company evaluates the impacts of convertible instruments based on the underlying conversion features. Convertible instruments are evaluated for treatment as derivatives that could be bifurcated and recorded separately. Any beneficial conversion feature is recorded based on the intrinsic value difference at the commitment date.

 

Debt Modification Accounting. The Company evaluates amendments to its debt in accordance with ASC 470-50 Debt–Modification and Extinguishments for modification and extinguishment accounting. This evaluation includes comparing the net present value of cash flows of the new debt to the old debt to determine if changes greater than 10 percent occurred. In instances where the net present value of future cash flows changed more than 10 percent, the Company applies extinguishment accounting and determines the fair value of its debt based on factors available to the Company.

 

Recently Issued Accounting Pronouncements.

 

ASU 2016-13: Measurement of Credit Losses on Financial Instruments. This ASU requires the use of an expected loss model for certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. For trade receivables, loans and held-to-maturity debt securities, an estimate of lifetime expected credit losses is required. For available-for-sale debt securities, an allowance for credit losses will be required rather than a reduction to the carrying value of the asset. This standard is effective for fiscal years beginning after December 15, 2022. We are assessing the impact of adopting this standard on our consolidated financial statements and related disclosures.

 

For a complete summary of the Company’s significant accounting policies, please refer to the Company’s audited financial statements and notes thereto for the years ended December 31, 2020 and 2019 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2021.

 

2. Inventories

 

Inventories consist of the following:

 

 
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September 30, 2021

 

 

December 31, 2020

 

Raw materials

 

$1,363

 

 

$1,382

 

Work-in-progress

 

 

1,274

 

 

 

1,266

 

Finished goods

 

 

2,225

 

 

 

1,321

 

Total inventories

 

$4,862

 

 

$3,969

 

 

As of September 30, 2021, and December 31, 2020, the Company recognized a lower of cost or net realizable value impairment of none and $0.7 million respectively, related to inventory.

 

3. Property, Plant and Equipment

 

Property, plant and equipment consist of the following:

 

 

 

As of

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Land

 

$4,084

 

 

$4,092

 

Plant and buildings

 

 

97,168

 

 

 

97,398

 

Furniture and fixtures

 

 

1,305

 

 

 

1,195

 

Machinery and equipment

 

 

5,298

 

 

 

5,188

 

Construction in progress

 

 

44,322

 

 

 

25,397

 

Property held for development

 

 

15,414

 

 

 

15,408

 

Finance lease right of use assets

 

 

2,317

 

 

 

2,308

 

Total gross property, plant & equipment

 

 

169,908

 

 

 

150,986

 

Less accumulated depreciation

 

 

(44,993)

 

 

(41,106)

Total net property, plant & equipment

 

$124,915

 

 

$109,880

 

 

For the three months ended September 30, 2021 and 2020, interest capitalized in property, plant, and equipment was $1.4 million and $0.1 million, respectively. For the nine months ended September 30, 2021 and 2020, interest capitalized in property, plant, and equipment was $2.9 million and $0.3 million, respectively.

 

Construction in progress contains incurred costs for the ABGL biogas project, Riverbank project, and energy efficient upgrades at the Keyes Plant. In the second quarter of 2020, the CO₂ Project commenced operations and was placed in service at that time. In the third quarter of 2020, two dairy digesters commenced operations and were placed in service at that time. Spending for ongoing capital projects is accumulated in construction in progress and will be capitalized with subsequent depreciation once the capital projects are finished and are in service. Depreciation on the components of property, plant and equipment is calculated using the straight-line method over their estimated useful lives as follows:

 

Years

 

Plant and buildings

 

20 - 30

 

Machinery and equipment

5 - 15

 

Furniture and fixtures

 

3 - 5

 

 

For the three months ended September 30, 2021 and 2020, the Company recorded depreciation expense of $1.3 million for each period. For the nine months ended September 30, 2021 and 2020, the Company recorded depreciation expense of $4.1 and $3.5 million, respectively.

 

Management is required to evaluate these long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Management determined there was no impairment on the long-lived assets during the three and nine months ended September 30, 2021 and 2020.

 

 
16

Table of Contents

 

4. Debt

 

Debt consists of the following:

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Third Eye Capital term notes

 

$7,093

 

 

$7,066

 

Third Eye Capital revolving credit facility

 

 

71,732

 

 

 

80,310

 

Third Eye Capital revenue participation term notes

 

 

11,914

 

 

 

11,864

 

Third Eye Capital acquisition term notes

 

 

26,457

 

 

 

26,384

 

Third Eye Capital promissory note

 

 

-

 

 

 

1,444

 

Cilion shareholder seller notes payable

 

 

6,386

 

 

 

6,274

 

Subordinated notes

 

 

13,229

 

 

 

12,745

 

EB-5 promissory notes

 

 

42,462

 

 

 

43,120

 

GAFI Term and Revolving loans

 

 

-

 

 

 

33,626

 

Term loans on capital expenditures

 

 

5,705

 

 

 

5,652

 

PPP loans

 

 

-

 

 

 

1,134

 

Total debt

 

 

184,978

 

 

 

229,619

 

Less current portion of debt

 

 

23,863

 

 

 

59,515

 

Total long term debt

 

$161,115

 

 

$170,104

 

 

Third Eye Capital Note Purchase Agreement

 

On July 6, 2012, Aemetis, Inc. and Aemetis Advanced Fuels Keyes, Inc. (“AAFK”), entered into an Amended and Restated Note Purchase Agreement with Third Eye Capital (the “Note Purchase Agreement