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What changed in AEMETIS, INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of AEMETIS, INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+322 added−416 removedSource: 10-K (2024-03-29) vs 10-K (2023-03-09)

Top changes in AEMETIS, INC's 2023 10-K

322 paragraphs added · 416 removed · 222 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

44 edited+41 added−101 removed18 unchanged
Biggest changeRenewable Fuel Volume Requirements for 2019-2023 Year 2019 2020 2021 2022 2023* 2024* 2025* Cellulosic biofuel (million gallons) 418 510 620 770 720 1,420 2,130 Biomass-based diesel (billion gallons) 2.10 2.43 2.43 2.76 2.82 2.89 2.95 Advanced biofuel (billion gallons) 4.92 4.63 5.20 5.77 5.82 6.62 7.43 Renewable fuel (billion gallons) 19.92 17.13 18.52 20.77 20.82 21.87 22.68 Source: Environmental Protection Agency *Proposed volume requirements 11 We are subject to federal, state and local environmental laws, regulations and permit conditions, including those relating to the discharge of materials into the air, water and ground, the generation, storage, handling, use, transportation and disposal of hazardous materials, and the health and safety of our employees.
Biggest changeEnvironmental and Regulatory Matters California Ethanol and California Dairy Renewable Natural Gas We are subject to federal, state and local environmental laws, regulations and permit conditions, including those relating to the discharge of materials into the air, water and ground, the generation, storage, handling, use, transportation and disposal of hazardous materials, and the health and safety of our employees.
However, since there is insufficient production capacity in California to supply the state’s total fuel ethanol consumption (in excess of 1.5 billion gallons annually), we compete with ethanol transported into California from Midwestern producers or imported from other countries, primarily Brazil.
However, since there is insufficient production capacity in California to supply the state’s total fuel ethanol consumption ( in excess of 1.5 billion gallons annually), we compete with ethanol transported into California principally from Midwestern producers or imported from other countries, primarily Brazil.
Based on our current assessment of the environmental and regulatory risks, we have not accrued any-amounts for environmental matters as of December 31, 2022 and 2021. The ultimate costs of any liabilities that may be identified or the discovery of additional contaminants could materially adversely impact our results of operation or financial condition.
Based on our current assessment of the environmental and regulatory risks, we have not accrued any amounts for environmental matters as of December 31, 2023 and 2022. The ultimate costs of any liabilities that may be identified or the discovery of additional contaminants could materially adversely impact our results of operation or financial condition.
We continue to evaluate new technology, develop technologies under our existing patents and conduct research and development to produce low or negative carbon intensity advanced biofuels from renewable feedstocks. Our objective is to continue to commercialize our portfolio of technologies and expand the adoption of these advanced biofuels and bio-chemicals technologies.
We continue to evaluate new technologies, develop technologies under our existing patents and conduct research and development to produce low and negative carbon intensity advanced biofuels from renewable feedstocks. Our objective is to continue to commercialize our portfolio of technologies and expand the adoption of these advanced biofuels and bio-chemicals technologies.
The price for WDG is influenced by the price of corn, the supply and price of dried distillers grains, and demand from the local dairy and feed markets and determined monthly pursuant to a marketing agreement with A.L. Gilbert and is generally determined in reference to the local price of dried distillers grains and other comparable feed products.
The price for WDG is influenced by the price of corn, the supply and price of dried distillers grains, and demand from the local dairy and feed markets and determined monthly pursuant to a marketing agreement with A.L. Gilbert an d is generally determined in reference to the local price of dried distillers grains and other comparable feed products.
We plan to continue investing in the conversion of lower quality, waste oils into higher value biofuels, including renewable diesel and sustainable aviation fuels. Additionally, we continue to evaluate improvements to the throughput capacity and efficiency of our production facilities.
We plan to continue investing in the conversion of lower quality, waste oils into higher value biofuels in addition to biodiesel, including renewable diesel and sustainable aviation fuels. Additionally, we continue to evaluate improvements to the throughput capacity and efficiency of our production facilities.
We make available on our website under “Investor” free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such materials with or furnish them to the SEC. Our website address is www.aemetis.com.
We make available on our website under the “Investors” tab, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file such materials with or furnish them to the SEC. Our website address is www.aemetis.com .
We intend to evaluate and pursue opportunities to acquire technologies and processes that result in accretive value opportunities as financial resources and business prospects make the acquisition of these technologies and processes advisable.
Evaluate and pursue technology and facility acquisition opportunities . We intend to evaluate and pursue opportunities to acquire technologies and facilities that result in accretive value opportunities as financial resources and business prospects make the acquisition of these technologies, facilities, and processes advisable.
These competitors also purchase our product for blending and further sales to their customers. We compete primarily on the basis of price, quality and reliable delivery, since our plant can produce distilled biodiesel and has historically been a more reliable and high-quality supplier than some other biodiesel producers in India.
These companies also purchase our product for blending with fossil-diesel and further sales to their customers. We compete primarily on the basis of price, quality and reliable delivery, since our plant can produce distilled biodiesel and has historically been a more reliable and high-quality supplier than some other biodiesel producers in India.
(collectively with its subsidiaries on a consolidated basis referred to herein as, “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas, and renewable fuels company focused on the acquisition, development and commercialization of innovative negative carbon intensity products and technologies that replace traditional petroleum-based products.
(collectively with its subsidiaries on a consolidated basis referred to herein as “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas and renewable fuels company focused on the operation, acquisition, development, and commercialization of innovative technologies to produce low and negative carbon intensity renewable fuels that replace fossil-based products.
Energy Information Agency (the “EIA”), on January 1, 2022, there were approximately 192 commercial ethanol production facilities in the U.S. with a combined production of approximately 17.4 billion gallons per year. The production of ethanol is a commodity-based business where producers compete on the basis of price. We sell ethanol into the Northern California market.
Energy Information Agency (the “EIA”), on January 1, 2023, there were approximately 187 commercial ethanol production facilities in the U.S. with combined production of approximately 17.7 billion gallons per year. The production of ethanol is a commodity-based business where producers compete on the basis of price. We sell ethanol into the California market.
During 2022, the formula for setting the OMC offer price was modified to allow biodiesel producers in India to begin production and supply of product at economically viable levels under these OMC contracts.
India Biodiesel – During 2022, the formula for setting the OMC’s offer price was modified to allow biodiesel producers in India to begin production and supply of product at economically viable levels under these contracts, and this pricing mechanism continued in 2023.
Our Kakinada Plant can also distill 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.
The Kakinada Plant is one of the largest biodiesel production facilities in India. The Kakinada Plant can also distill 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.
In addition to low carbon renewable fuel ethanol, the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), Carbon Dioxide (“CO2”) and Condensed Distillers Solubles (“CDS”), all of which are sold as animal feed to more than 80 local dairies and feedlots, with CO₂ sold to food, beverage, and industrial customers.
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 as animal feed to local dairies and feedlots. The Keyes Plant also sells CO₂ that is converted to liquid and sold to food, beverage, and industrial customers.
We plan to continue to pursue sales of biodiesel to Oil Marketing Companies (“OMC’s”) which are owned by the Indian government, as well as sales to traditional bulk, fleet, industrial, retail, and transportation biodiesel markets in India.
We plan to continue to pursue sales of biodiesel to Oil Marketing Companies (“OMC’s”) that are owned by the India government under the recently adopted cost-plus contract structure, as well as pursing sales to traditional bulk, fleet, industrial, retail, and transportation biodiesel markets in India.
We sold our WDG during 2022 on a month-to-month basis, however, we monitor and periodically sell on a quarterly basis when we believe longer term contracts allow us to better manage commodity and pricing risk.
We periodically explore and utilize methods of mitigating the volatility of our commodity prices through hedging strategies. We sold our WDG during 2022 on a month-to-month basis, however, we monitor and periodically sell on a quarterly basis when we believe longer term contracts allow us to better manage commodity and pricing risk.
India Biodiesel – With respect to biodiesel sold as fuel, we compete primarily with the producers of petroleum diesel, consisting of the three Government Oil Marketing Companies: Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum, and two private oil companies: Reliance Petroleum and Essar Oil, all of whom have significantly larger market shares than we do and control a significant share of the distribution network.
India Biodiesel – Biodiesel sold as fuel competes primarily with the producers of petroleum diesel, consisting of the three OMCs and two private oil companies: Reliance Petroleum and Essar Oil, all of whom have significantly larger market shares for fossil diesel than we do for renewable diesel, and they control a significant share of the distribution network.
The following table sets forth information about our production and sales of dairy RNG in 2022 and 2021: Years ended December 31, 2022 vs 2021 % 2022 2021 Change Dairy Renewable Natural Gas MMBtu external sales (in thousands) 8.4 - 100.0 % MMBtu stored as inventory (in thousands) 9.0 - 100.0 % MMBtu intercompany sales (in thousands) 48.6 53.0 -8.3 % India Biodiesel In 2022, we primarily produced two products at the Kakinada Plant: biodiesel and refined glycerin produced from further processing of the crude glycerin produced as a by‑product of the production of biodiesel.
The following table shows our production and sales of dairy RNG in 2023 and 2022: Years ended December 31, 2023 vs 2022 % 2023 2022 Change Dairy Renewable Natural Gas MMBtu external sales (in thousands) 194.2 8.4 2211.9 % MMBtu stored as inventory (in thousands) 68.0 9.0 655.6 % MMBtu intercompany sales (in thousands) - 48.6 -100.0 % India Biodiesel We produce two primary products at the Kakinada Plant: biodiesel and refined glycerin manufactured by further processing of the crude glycerin that is a by‑product of biodiesel production.
With respect to crude and refined glycerin, we compete with other glycerin producers and refiners selling products into the personal care, paints and adhesive markets primarily on the basis of price and product quality.
With respect to crude and refined glycerin, we compete with other glycerin producers and refiners selling products into the personal care, paints and adhesive markets primarily on the basis of price and product quality. Customers California Ethanol – We sell 100% of the ethanol, WDG, CDO, and CDS we produce to J.D. Heiskell under the J.D.
The following table sets forth information about our production and sales of biodiesel and refined glycerin in 2022 and 2021: Years ended December 31, 2022 vs 2021 % 2022 2021 Change Biodiesel Metric tons sold (in thousands) (1) 17.7 0.5 3440.0 % Average Sales Price/Ton $ 1,526 $ 1,024 49.0 % Refined Glycerin Metric tons sold (in thousands) (1) 1.2 0.1 1100.0 % Average Sales Price/Ton $ 850 $ 956 -11.1 % (1) 1 metric ton is equal to 1,000 kilograms (approximately 2,204 pounds). 7 Competition California Ethanol – According to the U.S.
The following table shows our production and sales of biodiesel and refined glycerin in 2023 and 2022: Years ended December 31, 2023 vs 2022 % 2023 2022 Change Biodiesel Metric tons sold (in thousands) (1) 60.5 17.7 241.8 % Average Sales Price/Ton $ 1,232 $ 1,526 -19.3 % Refined Glycerin Metric tons sold (in thousands) (1) 4.2 1.2 250.0 % Average Sales Price/Ton $ 640 $ 850 -24.7 % (1) 1 metric ton is equal to 1,000 kilograms (approximately 2,204 pounds). 4 Table of Contents Competition California Ethanol – According to the U.S.
Similarly, our co-products, principally WDG and DCO, are sold into local California markets and compete with DDG and DCO imported into the California markets as well as with alternative feed products.
Similarly, our co-products, principally WDG and DCO, are sold into local California markets and compete with DDG and DCO imported into California as well as with alternative feed products. California Dairy Renewable Natural Gas – Dairy renewable natural gas sold for transportation use currently competes with other renewable gas, fossil natural gas, and with fossil based products.
Our risk management strategy is to produce biodiesel in India only when we believe we can generate positive gross margins and to idle the Kakinada Plant during periods of low or negative gross margins.
Our risk management strategies are to (i) configure the Kakinada plant to be able to produce biodiesel from a wide variety of feedstocks and (ii) to produce biodiesel only when we believe we can generate positive gross margins and to idle the Kakinada Plant during periods of low or negative gross margins.
Initiatives are underway to construct facilities that produce SAF and renewable diesel at our Riverbank location, and to generate LCFS and IRS 45Q credits by injecting CO₂ into wells at both our Keyes Plant and Riverbank locations. Upon completion of construction and startup, these projects are expected to increase revenues and cash flows.
Leverage site control of our Keyes and Riverbank properties to construct production plants to produce low and negative carbon intensity products. Initiatives are underway to construct facilities that produce SAF and renewable diesel at our Riverbank location, and to generate LCFS and IRS 45Q credits by injecting CO₂ into wells at both our Keyes Plant and Riverbank locations.
You may also obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.
In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. 7 Table of Contents
We pay a sales commission on sales arranged by independent sales agents. Commodity Risk Management Practices California Ethanol – The cost of corn and the price of ethanol are volatile and the correlation of the pricing of these commodities form the basis for the profit margin at our Keyes Plant. We are, therefore, exposed to commodity price risk.
Commodity Risk Management Strategies California Ethanol – The cost of corn and the price of ethanol are volatile and the correlation of the pricing of these commodities determines the profit margin at our Keyes Plant. We are, therefore, exposed to commodity price risk. We monitor prices daily to assess the overall impact of the pricing on profitability.
We currently conduct our North American commercial activities exclusively in California. Climate change and reduction legislation is a topic of consideration by the U.S. Congress and California State Legislature, which may significantly impact the biofuels industry’s emissions regulations, as will the RFS, California’s LCFS, and other potentially significant changes in existing transportation fuels regulations.
Congress and California State Legislature, which may significantly impact the biofuels industry’s emissions regulations, as will the RFS, California’s LCFS, and other potentially significant changes in existing transportation fuels regulations.
Our website address is provided as an inactive textual reference only, and the contents of that website are not incorporated in or otherwise to be regarded as part of this report. You can also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.
Our website address is provided as an inactive textual reference only, and the contents of that website are not incorporated in or otherwise to be regarded as part of this report.
Employees At December 31, 2022, we had a total of 168 employees, comprised of 17 full-time employees in our corporate offices, 39 full-time equivalent employees at the Keyes Plant, 11 full-time and 1 part-time Aemetis Biogas employees, 3 full-time employees at the Riverbank site, and 97 full-time equivalent employees in India.
Employees As of December 31, 2023, we had a total of 20 5 full-time equivalent employees, including 16 our corporate offices, 44 at the Keyes Plant, 13 Aemetis Biogas employees, 3 at the Riverbank Industrial Complex, and 129 in India.
In addition, we may also seek to acquire companies, enter into licensing agreements or form joint ventures with companies that offer prospects for the adoption of technologies that would be accretive to earnings.
In addition, we may also seek to acquire companies, enter into licensing agreements, or form joint ventures with companies that offer prospects for the adoption of technologies that would be accretive to earnings. 3 Table of Contents 2023 Highlights California Ethanol We produce five products at our California Ethanol plant: denatured fuel ethanol, wet distillers grains (WDG), distillers corn oil (DCO), condensed distillers solubles, and CO₂.
We are also subject to potential liability for the investigation and cleanup of environmental contamination at each of the properties that we own or operate and at off-site locations where we arrange for the disposal of hazardous wastes.
In addition, environmental laws and regulations change over time, and any such changes, more vigorous enforcement policies or the discovery of currently unknown conditions may require substantial additional environmental expenditures. 6 Table of Contents We are also subject to potential liability for the investigation and cleanup of environmental contamination at each of the properties that we own or operate and at off-site locations where we arrange for the disposal of hazardous wastes.
A significant violation of these laws, regulations, permits or license conditions could result in substantial fines, criminal sanctions, permit revocations and/or facility shutdowns. In addition, environmental laws and regulations change over time, and any such changes, more vigorous enforcement policies or the discovery of currently unknown conditions may require substantial additional environmental expenditures.
A significant violation of these laws, regulations, permits or license conditions could result in substantial fines, criminal sanctions, permit revocations and/or facility shutdowns.
However, because ethanol is produced and traded internationally, these costs could adversely affect us in our efforts to compete with foreign producers who are not subject to such stringent requirements. 12 New laws or regulations relating to the production, disposal or emission of carbon dioxide and other greenhouse gases may require us to incur significant additional costs with respect to ethanol plants that we build or acquire.
However, because ethanol is produced and traded internationally, these costs could adversely affect us in our efforts to compete with foreign producers who are not subject to such stringent requirements.
We do this by building a local circular bioeconomy utilizing agricultural waste to produce low carbon, advanced renewable fuels that reduce greenhouse gas (“GHG”) emissions and improve air quality by replacing traditional petroleum-based products.
We do this by building a local circular bioeconomy using agricultural products and waste to produce low carbon, advanced renewable fuels that reduce greenhouse gas ("GHG") emissions and improve air quality. Our current operations include: ► California Ethanol - We own and operate a 65 million gallon per year capacity ethanol production facility in Keyes, California (the “Keyes Plant”).
The following table sets forth information about our production and sales of ethanol and WDG in 2022 and 2021: Years ended December 31, 2022 vs 2021 % 2022 2021 Change Ethanol Gallons Sold (in millions) 59.0 59.8 -1.3 % Average Sales Price/Gallon $ 2.81 $ 2.72 3.3 % WDG Tons Sold (in thousands) 397 404 -1.7 % Average Sales Price/Ton $ 128 $ 103 24.3 % California Dairy Renewable Natural Gas During 2021, we used biogas from our diary digesters and pipeline network to supply boilers at our Keyes Plant, and accordingly monetize the gas produced with a lower carbon intensity score attached to the related ethanol sales.
The following table shows our production and sales of ethanol and WDG in 2023 and 2022: Years ended December 31, 2023 vs 2022 % 2023 2022 Change Ethanol Gallons Sold (in millions) 32.1 59.0 -45.6 % Average Sales Price/Gallon $ 2.44 $ 2.81 -13.2 % WDG Tons Sold (in thousands) 225 397 -43.3 % Average Sales Price/Ton $ 97 $ 128 -24.2 % California Dairy Renewable Natural Gas During 2023, we delivered Renewable Natural Gas ("RNG") to the market through the regional utility gas pipeline.
We designed our Kakinada Plant with the capability to produce biodiesel from multiple feedstocks and plan to continue efforts to procure and process these diversified feedstocks where and when economically feasible. In 2009, we began to produce biodiesel from a variety of plant-based feedstocks.
We have designed and upgraded our Kakinada Plant to be able to produce biodiesel from multiple feedstocks and plan to continue efforts to procure and process these diversified feedstocks where and when economically feasible. We have developed proprietary technology that allows us to use lower-cost Fatty Acid Distillate as a feedstock.
In December 2018, we benefited from our established relationship with more than 80 California’s Central Valley dairies by signing leases and raising funds to construct dairy digesters that collect bio-methane and build pipelines that convey bio-methane to our Keyes Plant.
California Dairy Renewable Natural Gas Leverage our position as an established dairy digester owner and operator to continue to build dairy digesters and connected pipeline to increase RNG production . In 2018, we benefited from our established relationship with more than 80 California Central Valley dairies to begin signing leases and raising funds to construct dairy digesters.
We are now utilizing a proprietary pre-treatment process to utilize lower-cost Fatty Acid Distillate to produce biodiesel. During 2021, the Company, after receiving approval from the Pollution Control Board of India for use of Refined Animal Tallow for production of biodiesel, began procuring Refined Animal Tallow.
During 2021, we received approval from the Pollution Control Board of India to use refined animal tallow for production of biodiesel and we began procuring tallow. In addition to feedstock, the Kakinada Plant requires methanol and chemical catalysts for use in the biodiesel production process.
We plan to invest in those areas that allow for more efficient and higher throughput for the processing of biodiesel and refined glycerin. The technologies for these conversion process may be licensed from third parties or internally developed. Evaluate and pursue technology acquisition opportunities .
We plan to invest in those areas that allow for more efficient and higher throughput for the production of biodiesel and refined glycerin. Other Initiatives Leverage technology for the development and production of additional advanced biofuels and renewable chemicals.
The objective of this development activity is to bring efficient conversion technologies using waste feedstocks to produce biofuels and biochemicals on a large-scale, commercial basis. Some of our innovations are protected by issued or pending patents. We are developing additional technology and expect to file additional patents that will further strengthen our intellectual property portfolio.
The objective of this development activity is to identify and develop efficient conversion technologies that will use waste feedstocks to produce renewable biofuels and biochemicals that have low carbon intensity on a large-scale, commercial basis. Patents and Trademarks We hold several awarded patents in the United States.
We expect to continue to file and protect patents related to our business and future plans. 10 Patents and Trademarks We filed a number of trademark applications within the U.S. We do not consider the success of our business, as a whole, to be dependent on these trademarks. In addition, we hold nine awarded patents in the United States.
We do not consider the success of our business, as a whole, to be dependent on these trademarks.
We monitor these prices daily to test for an overall positive variable contribution margin. India Biodiesel – The cost of crude or refined palm stearin and the price of biodiesel are volatile and are generally uncorrelated. We therefore are exposed to ongoing and substantial commodity price risk at our Kakinada plant.
We mitigate risk by scaling our payments to dairy operators based, in part, upon the market price for credits in order to correlate our costs to market prices. India Biodiesel – The cost of crude or refined palm stearin and the price of biodiesel are volatile and are generally uncorrelated.
We construct and own the dairy digesters and pipeline that connects the digesters together and feeds biogas into our gas clean up unit located at our California Ethanol plant for the production of RNG. Our dairy agreements include a land lease and manure supply agreement with the dairy where the digester is located.
We construct and own the dairy digesters and the pipeline that connects the digesters to our upgrading hub located at our California Ethanol plant.
We have several energy efficiency initiatives focused on significantly lowering the carbon intensity of our fuels, primarily by decreasing our use of petroleum-based natural gas.
We are implementing several energy efficiency initiatives at the Keyes Plant focused on reducing operating costs and lowering the carbon intensity of our fuel. ► California Dairy Renewable Natural Gas - We produce Renewable Natural Gas (RNG) in central California.
We therefore are exposed to ongoing and substantial market price risk for our supply of dairy natural gas. Our risk management strategy is to arrange for the payment to dairy operators based, in part, upon the value of the environmental attributes, specifically the LCFS in order to reduce this lack of market correlation.
In 2023, we engaged in advance purchases of natural gas supply to obtain longer term benefits of favorable prices. California Dairy Renewable Natural Gas – The prices for renewable natural gas, D3 RINs, and LCFS credits are volatile. We therefore are exposed to market price risk for our sales of RNG and associated environmental attributes.
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We operate in three reportable segments consisting of “California Ethanol,” “California Dairy Renewable Natural Gas,” and “India Biodiesel.” We have other operating segments determined not to be reportable segments and are collectively represented by the “All Other” category. At Aemetis, our mission is to generate sustainable and innovative renewable fuel solutions that benefit communities and restore our environment.
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Our facilities consist of eight anaerobic digesters that produce biogas from dairy waste, a 26-mile biogas collection pipeline leading to a central upgrading hub, and an interconnect to inject the RNG into the utility natural gas pipeline for delivery to customers for use as transportation fuel.
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For revenue and other information regarding our operating segments, see Note 11 - Segment Information, of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. Our California Ethanol segment consists of a 65 million gallon per year capacity ethanol production facility located in Keyes, California (the “Keyes Plant”) that we own and operate.
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We are actively expanding our RNG production dairies, with several additional digesters under construction, agreements with a total of 43 dairies, and environmental review completed for an additional 24 miles of pipeline.
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These energy efficiency projects include: high efficiency heat exchangers; the Mitsubishi ZEBREX TM ethanol dehydration system; a two-megawatt solar microgrid with battery storage; the Allen Bradley Decision Control System (DCS) to manage and optimize energy use and other plant operations; and the Mechanical Vapor Recompression (MVR) system to reuse steam.
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We are also building our own RNG dispensing station, which is planned to begin operating in 2024. ► India Biodiesel - We own and operate a plant in Kakinada, India (“Kakinada Plant”) with a capacity to produce about 60 million gallons per year of high-quality distilled biodiesel from a variety of vegetable oil and animal waste feedstocks.
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These projects are expected to reduce petroleum natural gas use by converting key Keyes Plant processes to use electricity rather than natural gas and powering systems using low-carbon-intensity hydroelectric electricity or electricity produced onsite from solar panels.
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In addition, we are actively growing our business by seeking to develop or acquire new facilities, including the following key projects: ► Sustainable Aviation Fuel and Renewable Diesel – We are developing a sustainable aviation fuel and renewable diesel (“SAF/RD”) production plant to be located at the Riverbank Industrial Complex in Riverbank, CA.
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In the third quarter of 2022, we completed the installation and began the operation of the ZEBREX TM ethanol dehydration system at the Keyes Plant, a key first step in the electrification of the Keyes Plant, that is expected to significantly reduce the use of petroleum-based natural gas as process energy at the plant.
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The plant is currently designed to produce 90 million gallons per year of SAF/RD from renewable oil and fats obtained from the Company’s other biofuels plants and other sources. The plant will use low-carbon hydroelectric electricity and renewable hydrogen that is generated within the plant’s own processes using byproducts of the SAF/RD production.
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The electrification, along with the future installation of the two-megawatt zero carbon intensity solar microgrid system and the mechanical vapor recompression (MVR) system, will significantly reduce GHG emissions from the production facility and decrease the carbon intensity (CI) of fuel produced at the Keyes Plant.
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In September 2023, we received approval of the Use Permit and CEQA for the development of the plant, and we are continuing with the engineering and other required development activities for the plant. 2 Table of Contents ► Carbon Capture and Underground Sequestration – We are developing Carbon Capture and Underground Sequestration (“CCUS”) facilities that will inject carbon dioxide captured from air emissions deep into the ground for geologic storage to reduce emissions to the atmosphere of greenhouse gases that contribute to global warming.
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The lower CI of ethanol produced at the Keyes Plant will allow us to realize a higher price for the ethanol produced and sold at the Keyes Plant. 3 Our California Dairy Renewable Natural segment Aemetis Biogas or “ABGL,” constructs and operates bio-methane anaerobic digesters at local dairies near the Keyes Plant (many of whom also purchase WDG produced by the Keyes Plant as animal feed); transports the biogas via pipeline to the Keyes Plant site; converts the biogas to Renewable Natural Gas (“RNG”) which is then delivered to customers through the PG&E natural gas pipeline.
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In May 2023, the Company received a permit from the State of California to build a geologic characterization well that will provide information for the permitting and design of a CCUS well to be located in Riverbank, California.
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The Aemetis Biogas network includes the Aemetis Biogas Central Dairy Project, which operates 40 miles of completed biogas pipeline; four operating dairy digesters; five dairy digesters that are under construction; a centralized biogas-to-RNG conversion facility located at the Keyes Plant site; and a renewable natural gas interconnection with the PG&E utility gas pipeline.
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The Company plans to construct that well in 2024 and is at the same time is continuing engineering, permitting and other development activities for the sequestration well. The Company’s current and planned businesses produce renewable fuels and reduce carbon emissions, while generating valuable Renewable Fuel Standard credits, California Low Carbon Fuel Standard credits, and federal tax credits.
Removed
A total of 30 dairies have signed contracts with Aemetis Biogas in connection with participation in the Aemetis Biogas Central Dairy Project. The dairy digesters are connected via an underground private pipeline owned by Aemetis to a gas cleanup and compression unit at the Keyes Plant to produce dairy renewable natural gas (“RNG”).
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Strategy Key elements of our strategy include: California Ethanol Improve operating margins and cash flow by improving the energy efficiency of the Keyes Plant and continuing to seek alternative feedstocks that minimize cost and carbon emissions.
Removed
Upon receiving the bio-methane from the dairies, impurities are removed, and the bio-methane is converted to negative carbon intensity RNG that is injected into the statewide PG&E gas utility pipeline for use as transportation fuel or used as renewable process energy at the Keyes Plant.
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Over the past 12 years, we have made several improvements to the Keyes plant that allow us to sell substantially all of our byproducts as commercial products into the local agricultural economy.
Removed
Our India Biodiesel segment owns and operates a plant in Kakinada, India (“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.
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For the last several years, our strategy has focused on further improvements to reduce the carbon emissions from the plant and to improve the plant's energy efficiency, both of which will lower the carbon intensity and increase the value of the ethanol we produce and sell.
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We believe the Kakinada Plant is one of the largest biodiesel production facilities in India on a nameplate capacity basis. Kakinada Plant is capable of processing a variety of vegetable oils and animal fat waste feedstocks into biodiesel that meets international product standards.
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We are in the process of designing and procuring a mechanical vapor recompression (MVR) system that is expected to reduce natural gas consumption by 80% . We have installed and are in the final stages of commissioning a 1.9 megawatt solar microgrid with battery backup.
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Our All Other segment consists of: Carbon Zero biofuels production plants to produce renewable diesel and sustainable aviation fuel; Carbon Capture and Sequestration compression system and injection wells; a research and development facility in Minneapolis, Minnesota; and our corporate offices in Cupertino, California.
Added
In addition, we are continuing to seek out and evaluate potential feedstocks that will reduce cost and carbon intensity, with an emphasis on processes that use cellulosic feedstoc ks to augment or replace current feedstocks.
Removed
Our Carbon Zero biofuels production plants are designed to produce low or negative carbon intensity sustainable aviation fuel (“SAF”) and renewable diesel fuel (“RD”) utilizing low carbon hydroelectric electricity, renewable hydrogen and non-edible renewable oils sourced from existing Aemetis biofuels plants and other sources.
Added
We now have eight operating dairy digesters that produce biomethane, six additional digesters under construction, and contracts with a total of 43 dairies for supply of feedstock to current and future digesters.
Removed
The first Carbon Zero plant is scheduled to be built in Riverbank, California at the 125-acre former Riverbank Army ammunition plant. The Riverbank plant is expected to utilize zero carbon hydroelectric and other renewable power available onsite to produce 90 million gallons per year of SAF, RD, and other byproducts.
Added
We are currently producing RNG at a rate of about 270,000 MMBtu per year, and we plan to continue to build digesters and expand our upgrading hub over the next several years to be able to produce about 1.6 million MMBtu/year of RNG. India Biodiesel Capitalize on recent policy changes by the Government of India.
Removed
The plant is expected to supply the aviation and truck markets with ultra-low carbon renewable fuels to reduce GHG emissions and other pollutants associated with conventional petroleum-based fuels.
Added
These sales are driven in part by the India government's 2022 update to its National Biofuels Policy that targets a blend of 5% biodiesel into fossil diesel. Diversify our feedstocks.
Removed
By producing ultra-low carbon renewable fuels, the Company expects to capture high value D3 Renewable Identification Numbers (“RINs”) under the federal Renewable Fuel Standard (“RFS”), generate California Low Carbon Fuel Standard (“LCFS”) credits, and produce Inflation Reduction Act tax credits.
Added
We also now have the ability to use animal tallow to produce biodiesel, so we have begun procuring tallow. This allows us to acquire tallow that we may use for production while also pursuing opportunities for exports of tallow. Develop and commercially deploy technologies to produce high-margin products.
Removed
Our Carbon Capture subsidiary was established to build Carbon Capture and Sequestration (“CCS”) projects that generate LCFS and IRS 45Q tax credits by compressing and injecting CO₂ into deep wells which are monitored for emissions to ensure the long-term sequestration of carbon underground.
Added
The products reflect our primary production and the result of our strategy over the last decade to convert substantially all of the byproducts of the plant into marketable products.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

73 edited+20 added−31 removed177 unchanged
Biggest changeEvents that result in significant personal injury or damage to our property or to property owned by third parties or other losses that are not fully covered by insurance could have a material adverse effect on our results of operations and financial position.
Biggest changeEvents that result in significant personal injury or damage to our property or to property owned by third parties or other losses that are not fully covered by insurance could have a material adverse effect on our results of operations and financial position. 14 Table of Contents Insurance liabilities are difficult to assess and quantify due to unknown factors, including the severity of an injury, the determination of our liability in proportion to other parties, the number of incidents not reported and the effectiveness of our safety program.
The results of our ethanol production business in the U.S. are significantly affected by the spread between the cost of the corn and natural gas that we purchase and the price of the ethanol, WDG and DCO that we sell.
The results of our ethanol production business in the U.S. are significantly affected by the spread between the cost of corn and natural gas that we purchase and the price of the ethanol, WDG and DCO that we sell.
We are also building carbon capture sequestration wells to generate low-carbon fuel standard credits by injecting CO₂ into sequestration wells that are monitored for emissions to ensure the long-term sequestration of carbon underground, developing the Carbon Zero Facility in Riverbank, CA to utilize the licensed Technologies to convert local California surplus biomass into ultra-low carbon renewable ethanol.
We are also building carbon capture sequestration wells to generate low-carbon fuel standard credits by injecting CO₂ into sequestration wells that are monitored for emissions to ensure the long-term sequestration of carbon underground, developing the Carbon Zero Facility in Riverbank, CA to utilize licensed technologies to convert local California surplus biomass into ultra-low carbon renewable ethanol.
These laws, regulations and permits can require expensive emissions testing and pollution control equipment or operational changes to limit actual or potential impacts to the environment. Violations of these laws, regulations or permit, or license conditions can result in substantial fines, natural resource damages, criminal sanctions, permit revocations and facility shutdowns.
These laws, regulations and permits can require expensive emissions testing and pollution control equipment or operational changes to limit actual or potential impacts to the environment. Violations of these laws, regulations or permits, or license conditions can result in substantial fines, natural resource damages, criminal sanctions, permit revocations and facility shutdowns.
The annual computation for how much interest expense allowed includes the prior year interest carry over plus current year interest. The amount allowed is generally 30% (law was modified for 2019 and 2020 to 50% due to COVID) of adjusted taxable income before the interest.
The annual computation for how much interest expense is allowed includes the prior year interest carry over plus current year interest. The amount allowed is generally 30% (the law was modified for 2019 and 2020 to 50% due to COVID) of adjusted taxable income before the interest.
Non-U.S. stockholders should consult with their own tax advisors concerning the U.S. federal income tax consequences of the sale, exchange or other disposition of our common stock. 21 We are subject to covenants and other operating restrictions under the terms of our debt, which may restrict our ability to engage in some business transactions.
Non-U.S. stockholders should consult with their own tax advisors concerning the U.S. federal income tax consequences of the sale, exchange or other disposition of our common stock. We are subject to covenants and other operating restrictions under the terms of our debt, which may restrict our ability to engage in some business transactions.
If we are unable to obtain, implement or finance new technologies, our production facilities could be less efficient than our competitors, and our ability to sell biomass-based diesel may be harmed, negatively impacting our revenues and profitability. 24 Disruption in the supply chain could materially adversely affect our business.
If we are unable to obtain, implement or finance new technologies, our production facilities could be less efficient than our competitors, and our ability to sell biomass-based diesel may be harmed, negatively impacting our revenues and profitability. Disruption in the supply chain could materially adversely affect our business.
Due to the ongoing interest expense every year, our ability may be limited just to continue to carry forward the interest expense to next year. Our ability to deduct these NOL carryforwards against future taxable income could be limited if we experience an “ownership change,” as defined in Section 382 of the Code.
Due to the ongoing interest expense every year, our ability to continue to carry forward the interest expense to next year may be limited. Our ability to deduct these NOL carryforwards against future taxable income could be limited if we experience an “ownership change,” as defined in Section 382 of the Code.
Failure to attract or retain key personnel could have a material adverse effect on our business and results of operations. 27 Our operations subject us to risks associated with foreign laws, policies, regulations, and markets. Our sales and manufacturing operations in foreign countries are subject to the laws, policies, regulations, and markets of the countries in which we operate.
Failure to attract or retain key personnel could have a material adverse effect on our business and results of operations. Our operations subject us to risks associated with foreign laws, policies, regulations, and markets. Our sales and manufacturing operations in foreign countries are subject to the laws, policies, regulations, and markets of the countries in which we operate.
Additionally, if we are unable to amend our current note purchase agreement with Third Eye Capital, our ability to pay dividends could be restrained. 14 We are dependent upon our working capital agreements with J.D. Heiskell, Gemini Edibles and Fats India Private Limited and Secunderabad Oils Limited.
Additionally, if we are unable to amend our current note purchase agreement with Third Eye Capital, our ability to pay dividends could be restrained. We are dependent upon our working capital agreements with J.D. Heiskell, Gemini Edibles and Fats India Private Limited and Secunderabad Oils Limited.
Any of the risks described above could have a material adverse effect on our results of operations or the price of our common stock, or both. 25 We do not intend to pay dividends.
Any of the risks described above could have a material adverse effect on our results of operations or the price of our common stock, or both. We do not intend to pay dividends.
As a result, management has concluded that, due to such material weakness, our disclosure controls and procedures were not effective as of December 31, 2022.. Our efforts to improve our internal controls are ongoing; however, there are inherent limitations in all control systems and no evaluation of controls can provide absolute assurance that all deficiencies have been detected.
As a result, management has concluded that, due to such material weakness, our disclosure controls and procedures were not effective as of December 31, 2023. Our efforts to improve our internal controls are ongoing; however, there are inherent limitations in all control systems and no evaluation of controls can provide absolute assurance that all deficiencies have been detected.
A critical state program is California's LCFS, which is designed to reduce greenhouse gas emissions associated with transportation fuels used in California by ensuring that the fuel sold meets declining targets for such emissions. The regulation quantifies lifecycle greenhouse gas emissions by assigning a CI score to each transportation fuel based on that fuel’s lifecycle assessment.
A critical state program is California's LCFS, which is designed to reduce greenhouse gas emissions associated with transportation fuels used in California by ensuring that the fuel sold meets declining targets for such emissions. The regulation quantifies lifecycle greenhouse gas emissions by assigning a carbon intensity ("CI") score to each transportation fuel based on that fuel’s lifecycle assessment.
Given the inflation rates in fiscal year 2022, we have experienced, and continue to experience, increases in prices of feedstock, equipment, materials, and labor. Continued inflationary pressures could impact our profitability. Interest rates could change substantially, materially impacting our profitability. Our borrowings expose us to interest rate risk, which could adversely affecting our profitability.
Given the inflation rates in fiscal year 2022, we have experienced, and continue to experience, increases in prices of feedstock, equipment, materials, and labor. Continued inflationary pressures could impact our profitability. Interest rates could change substantially, materially impacting our profitability. Our borrowings expose us to interest rate risk, which could adversely affect our profitability.
As of December 31, 2022, $35.5 million have been raised through the EB-5 program and have been released from escrow and $0.5 million remain to be funded to escrow. Additionally, the USCIS could deny approval of the loans, and then we would not receive some or all of the subscribed funds.
As of December 31, 2023, $35.5 million have been raised through the EB-5 program and have been released from escrow and $0.5 million remain to be funded to escrow. Additionally, the USCIS could deny approval of the loans, and then we would not receive some or all of the subscribed funds.
Any change in government policies could have a material adverse effect on our business and the results of our operations. Waivers of the RFS minimum levels of renewable fuels included in gasoline or of the requirements by obligate parties to comply with the regulations could have a material adverse effect on our results of operations.
Any change in government policies could have a material adverse effect on our business and the results of our operations. Waivers of the RFS minimum levels of renewable fuels included in gasoline or of the requirements by obligated parties to comply with the regulations could have a material adverse effect on our results of operations.
In addition, we may be required to make significant capital expenditures on an ongoing basis to comply with increasingly stringent environmental laws, regulations, and permit and license requirements. We may be liable for the investigation and cleanup of environmental contamination at our facilities and at off-site locations where we arrange for the disposal of hazardous substances.
In addition, we may be required to make significant capital expenditures on an ongoing basis to comply with increasingly stringent environmental laws, regulations, and permit and license requirements. 11 Table of Contents We may be liable for the investigation and cleanup of environmental contamination at our facilities and at off-site locations where we arrange for the disposal of hazardous substances.
Should we fall short of our cash flow projections, we may be required to write down the value of these assets under accounting rules and further reduce the value of our assets.
Should we fall short of our cash flow projections in the future, we may be required to write down the value of these assets under accounting rules and further reduce the value of our assets.
Any decrease in the quality, reduction in volume, or cessation of our operations due to these hazards would have a material adverse effect on the results of our business and financial condition. Our success depends on our ability to manage the growth of our operations.
Any decrease in the quality, reduction in volume, or cessation of our operations due to these hazards would have a material adverse effect on the results of our business and financial condition. 18 Table of Contents Our success depends on our ability to manage the growth of our operations.
As a result, these shareholders, acting together, will be able to influence many matters requiring shareholder approval, including the election of directors and approval of mergers and acquisitions and other significant corporate transactions.
As a result, these shareholders, acting together, may be able to influence matters requiring shareholder approval, including the election of directors and approval of mergers and acquisitions and other significant corporate transactions.
On November 21, 2019, the minimum investment was raised from $500,000 per investor to $900,000 per investor. As of December 31, 2022, $4.0 million have been raised through the EB-5 Phase II program and have been released from escrow and $4.2 million of principal and unpaid interest was outstanding on the EB-5 Notes under the EB-5 Phase II funding.
On November 21, 2019, the minimum investment was raised from $500,000 per investor to $900,000 per investor. As of December 31, 2023, $4.0 million has been raised through the EB-5 Phase II program and have been released from escrow and $4.3 million of principal and unpaid interest was outstanding on the EB-5 Notes under the EB-5 Phase II funding.
For instance, cash and cash equivalents were $4.3 million at December 31, 2022, of which $1.6 million was held in our North American entities and $2.7 million was held in our Indian subsidiary. Cash held in our Indian subsidiary may not otherwise be available for servicing debt obligations, potential investment or use for operations in the United States.
For instance, cash and cash equivalents were $2.7 million at December 31, 2023, of which $2.6 million was held in our North American entities and $0.1 million was held in our India subsidiary. Cash held in our Indian subsidiary may not otherwise be available for servicing debt obligations, potential investment or use for operations in the United States.
For the year ended December 31, 2022, we recognized $21.4 million i n interest rate expense an d $9.9 million in accretion of Series A preferred units (excludes debt related fees and amortization expense). ● Any cash flows after covering the operations if any, equity raises if any, and any EB-5 funding are used to pay principal and interest on debt, thereby reducing the funds available for working capital, capital expenditures, acquisitions, research and development and other general corporate purposes; ● Any Biogas cash flows are used to pay mandatory redemptions under the Credit Facility by reducing the funds available to use by us for operations. ● Insufficient cash flows from operations may force us to sell assets, or seek additional capital, which we may not be able to accomplish on favorable terms, if at all; and ● The level of indebtedness may make us more vulnerable to economic or industry downturns.
For the year ended December 31, 2023, we recognized $33.0 million i n interest rate expense an d $25.3 million in accretion of Series A preferred units (excludes debt related fees and amortization expense). ● Any cash flows after covering our operations, equity raises if any, and any EB-5 funding are used to pay principal and interest on debt, thereby reducing the funds available for working capital, capital expenditures, acquisitions, research and development and other general corporate purposes; ● Any Biogas cash flows are used to pay mandatory redemptions under the Preferred Unit Purchase Agreement and thus reduce the funds available to use by us for operations. ● Insufficient cash flows from operations may force us to sell assets, or seek additional capital, which we may not be able to accomplish on favorable terms, if at all; and ● The level of indebtedness may make us more vulnerable to economic or industry downturns.
Gilbert were to fail to purchase all of the WDG and syrup we produce, or if any of them were otherwise to default on our agreements with them or fail to perform as expected, we may be unable to find replacement suppliers or purchasers, or both, in a reasonable time or on favorable terms, any of which could materially adversely affect our results of operations and financial condition. 16 We may not receive the funds we expect under our EB-5 program.
Gilbert were to fail to purchase all of the WDG and syrup we produce, or if any of them were otherwise to default on our agreements with them or fail to perform as expected, we may be unable to find replacement suppliers or purchasers, or both, in a reasonable time or on favorable terms, any of which could materially adversely affect our results of operations and financial condition.
As of December 31, 2022, $37.2 million of principal and unpaid interest was outstanding on the EB-5 Notes under the EB-5 Phase I funding.
As of December 31, 2023, $37.9 million of principal and unpaid interest was outstanding on the EB-5 Notes under the EB-5 Phase I funding.
Our EB-5 Phase I program allows for the issuance of up to 72 subordinated convertible promissory notes, each in the amount of $0.5 million due and payable four years from the date of the note for a total aggregate principal amount of up to $36.0 million.
We may not receive the funds we expect under our EB-5 program. Our EB-5 Phase I program allows for the issuance of up to 72 subordinated convertible promissory notes, each in the amount of $0.5 million due and payable four years from the date of the note for a total aggregate principal amount of up to $36.0 million.
Our success and future revenue growth will depend, in part, on our ability to protect our intellectual property. It is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose our technologies and processes, or confidential employee, customer or supplier data. Any of our existing or future patents may be challenged, invalidated or circumvented.
Our success and future revenue growth will depend, in part, on our ability to protect our intellectual property. It is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose our technologies and processes, or confidential employee, customer or supplier data.
As of December 31, 2022, we had an accumulated deficit of approximately $429.0 mill ion. For our fiscal years ended December 31, 2022 and 2021, we reported a net loss of $107.8 milli on, and $47.1 million respectively. We may incur losses for an indeterminate period of time and may not achieve consistent profitability.
As of December 31, 2023, we had an accumulated deficit of approximately $475.4 mill ion. For our fiscal years ended December 31, 2023 and 2022, we reported a net loss of $46.4 milli on, and $ 107.8 million respectively. We may incur losses for an indeterminate period of time and may not achieve consistent profitability.
We may not have sufficient assets or cash flow available to support refinancing these notes at market rates or on terms that are satisfactory to us.
We have default covenants that may accelerate the maturities of these notes. We may not have sufficient assets or cash flow available to support refinancing these notes at market rates or on terms that are satisfactory to us.
Future direct or indirect changes in the ownership of our stock, including sales or acquisitions of our stock by certain stockholders and purchases and issuances of our stock by us, some of which are not in our control, could result in an ownership change.
Past or future direct or indirect changes in the ownership of our stock, including sales or acquisitions of our stock by certain stockholders and purchases and issuances of our stock by us, some of which are not in our control and/or may occur or have already occurred in the public markets, could result in an ownership change.
Under the Heiskell Supply Agreement, we are only permitted to purchase feedstock from other suppliers upon the satisfaction of certain conditions. In addition, we have contracted to sell all of the WDG, CDS, and corn oil we produce at the Keyes Plant to J.D. Heiskell. J.D. Heiskell, in turn, sells all WDG and syrup produced to A.L. Gilbert.
We buy all of the feedstock for the Keyes Plant from one supplier, J.D. Heiskell. Under the Heiskell Supply Agreement, we are only permitted to purchase feedstock from other suppliers upon the satisfaction of certain conditions. In addition, we have contracted to sell all of the WDG, CDS, and corn oil we produce at the Keyes Plant to J.D. Heiskell.
We can make no assurances that future cash flows will develop and provide us with sufficient cash to maintain the value of these assets, thus avoiding future impairment to our asset carrying values. As a result, we may need to write down the carrying value of our long-lived assets.
We can make no assurances that future cash flows will develop and provide us with sufficient cash to maintain the value of these assets, thus avoiding future impairment to our asset carrying values.
To the extent that we experience a material increase in the frequency or severity of accidents or workers’ compensation claims, or unfavorable developments on existing claims, our operating results and financial condition could be materially and adversely affected.
To the extent that we experience a material increase in the frequency or severity of accidents or workers’ compensation claims, or unfavorable developments on existing claims, our operating results and financial condition could be materially and adversely affected. Our mergers, acquisitions, partnerships, and joint ventures may not be as beneficial as we anticipate.
The domestic ethanol industry is highly dependent upon a myriad of federal and state regulations and legislation, and any changes in legislation or regulation could adversely affect our results of operations and financial position.
A change in government policies may cause a decline in the demand for our products. The domestic ethanol industry is highly dependent upon a myriad of federal and state regulations and legislation, and any changes in legislation or regulation could adversely affect our results of operations and financial position.
The adoption of new technologies at our ethanol and biodiesel plants, the development of the Riverbank Carbon Zero Facility and bio-methane digesters at local dairies near our Keyes Plant, and our working capital requirements are financed in part through debt or debt-like facilities.
The adoption of new technologies at our ethanol and biodiesel plants, the development bio-methane digesters at local dairies near our Keyes Plant, a SAF/RD production plant and CCUS projects, and our working capital requirements are financed in part through debt or debt-like facilities.
In an inflationary environment, such as the current economic environment, depending on other economic conditions, we may be unable to raise prices of our fuels or products to keep up with the rate of inflation, which would reduce our profit margins. As a result, inflation may have a material adverse effect on our results of operations and financial condition.
In an inflationary environment, such as the current economic environment, depending on other economic conditions, we may be unable to raise prices of our fuels or products to keep up with the rate of inflation, which would reduce our profit margins.
Future delays or interruptions in the supply chain due to the COVID-19 pandemic or world events, including the Russo-Ukrainian conflict, could expose us to the various risks which would likely significantly increase our costs and/or impact our operations or business plans including: ● we or our suppliers may have excess or inadequate inventory of feedstocks for operation of our plants; ● we may face delays in construction or development of our infrastructure projects; ● we may not be able to timely procure parts or equipment to upgrade, replace, or repair our plants and technology system; and our suppliers may encounter financial hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.
These expose us to various risks that could increase our costs and/or impact our operations or business plans including: ● we or our suppliers may have excess or inadequate inventory of feedstocks for operation of our plants; ● we may face delays in construction or development of our infrastructure projects; ● we may not be able to timely procure parts or equipment to upgrade, replace, or repair our plants and technology system; and ● our suppliers may encounter financial hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.
Our inability to access our cash where and when needed could impede our ability to service our debt obligations, make investments and support our operations. 20 We are a holding company and there are significant limitations on our ability to receive distributions from our subsidiaries.
Our inability to access our cash where and when needed could impede our ability to service our debt obligations, make investments and support our operations. 13 Table of Contents Aemetis, Inc. is a holding and management company and there are significant limitations on our ability to receive distributions from our subsidiaries.
Adverse weather conditions have historically caused volatility in the agricultural commodity industry and consequently in our operating results by causing crop failures or significantly reduced harvests, which may affect the supply and pricing of the agricultural commodities that we sell and use in our business and negatively affect the creditworthiness of agricultural producers who do business with us, including corn, feed and dairy producers. 23 Severe adverse weather conditions, such as hurricanes or severe storms, may also result in extensive property damage, extended business interruption, personal injuries and other loss and damage to us.
Adverse weather conditions have historically caused volatility in the agricultural commodity industry and consequently in our operating results by causing crop failures or significantly reduced harvests, which may affect the supply and pricing of the agricultural commodities that we sell and use in our business and negatively affect the creditworthiness of agricultural producers who do business with us, including corn, feed and dairy producers.
Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders ’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
The terms on which we may obtain additional financing may be adversely affected by the existence and potentially dilutive impact of our outstanding convertible securities. 17 Table of Contents Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders ’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
In some market environments, we may have limited access to incremental financing, which could defer or cancel growth projects, reduce business activity or cause us to default on our existing debt agreements if we are unable to meet our payment schedules.
In some market environments, we may have limited access to incremental financing, which could defer or cancel growth projects, reduce business activity or cause us to default on our existing debt agreements if we are unable to meet our payment schedules. An extended period of losses or negative cash flow may prevent us from successfully operating and expanding our business.
In addition, the agreement may be terminated at any time upon an event of default, such as payment default, bankruptcy, acts of fraud or material breach under one of our related agreements with J.D. Heiskell. The Gemini and SOL agreement may be terminated at any time by either party upon written notice.
Heiskell may terminate the agreement by notice 30 days prior to the end of the initial term or any renewal term. In addition, the agreement may be terminated at any time upon an event of default, such as payment default, bankruptcy, acts of fraud or material breach under one of our related agreements with J.D. Heiskell.
If we are unable to maintain these strategic relationships, we will be required to locate alternative sources of working capital and corn or milo supply, which we may be unable to do in a timely manner or at all.
The Gemini and SOL agreement may be terminated at any time by either party upon written notice. If we are unable to maintain these strategic relationships, we will be required to locate alternative sources of working capital and corn supply, which we may be unable to do in a timely manner or at all.
The conversion of convertible securities and the exercise of outstanding options and warrants to purchase our common stock could substantially dilute your investment and reduce the voting power of your shares, impede our ability to obtain additional financing and cause us to incur additional expenses. Our Series B convertible preferred stock is convertible into our common stock.
The exercise of outstanding options and warrants to purchase our common stock could substantially dilute your investment and reduce the voting power of your shares, impede our ability to obtain additional financing and cause us to incur additional expenses. There are outstanding options and warrants to acquire our common stock issued to employees and directors.
Alternatively, if a court were to find this choice of forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations. 26 Provisions in our certificate of incorporation and bylaws may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stock and could entrench management.
Alternatively, if a court were to find this choice of forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.
We may issue equity or convertible securities in the future. To the extent, we do so, our stockholders may experience substantial dilution. We may sell common stock, convertible securities, or other equity securities in one or more transactions at prices and in a manner, we determine from time to time.
We may sell common stock, convertible securities, or other equity securities in one or more transactions at prices and in a manner, we determine from time to time.
Non-U.S. stockholders of our common stock, in certain situations, could be subject to U.S. federal income tax on the gain from the sale, exchange or other disposition of our common stock.
Any resulting limitation on the use of our NOL carryforwards could result in the payment of taxes above the amounts currently estimated. Non-U.S. stockholders of our common stock, in certain situations, could be subject to U.S. federal income tax on the gain from the sale, exchange or other disposition of our common stock.
We sell the majority of our fuel ethanol production to one customer, Murex, through individual sales transactions. If J.D. Heiskell were to fail to deliver adequate feedstock to the Keyes Plant or fail to purchase all the contracted product we produce, if Murex were to fail to purchase the majority of the ethanol we produce, if A.L.
Heiskell were to fail to deliver adequate feedstock to the Keyes Plant or fail to purchase all the contracted product we produce, if Murex were to fail to purchase the majority of the ethanol we produce, if A.L.
We h ave been able to extend our indebtedness in the past, but we may not be able to continue to extend the maturity of these notes. We may not have sufficient cash available at the time of maturity to repay this indebtedness. We have default covenants that may accelerate the maturities of these notes.
The current maturity date on some of these not es was recently extended to April 2025. We h ave been able to extend our indebtedness in the past, but we may not be able to continue to extend the maturity of these notes. We may not have sufficient cash available at the time of maturity to repay this indebtedness.
In July 2011, we acquired Zymetis, Inc., a biochemical research and development firm, with several patents pending and in-process R&D utilizing the Z-microbe™ to produce renewable chemicals and advanced fuels from renewable feedstocks.
Since 2007, we have been developing patent-pending enzyme technology to enable the production of ethanol from a combination of starch and cellulose, or from cellulose alone. In July 2011, we acquired Zymetis, Inc., a biochemical research and development firm, with several patents pending and in-process R&D utilizing the Z-microbe™ to produce renewable chemicals and advanced fuels from renewable feedstocks.
Such securities allow their holders an opportunity to profit from a rise in the market price of our common stock such that conversion of the securities will result in dilution of the equity interests of our common stockholders.
Additionally, certain of our financing arrangements, such as our EB-5 notes are convertible into shares of our common stock at fixed prices. Such securities allow their holders an opportunity to profit from a rise in the market price of our common stock such that conversion of the securities will result in dilution of the equity interests of our common stockholders.
There can be no assurance that we will not conclude in the future that this material weakness continues to exist or that we will not identify any significant deficiencies or other material weaknesses that will impair our ability to report our financial condition and results of operations accurately or on a timely basis.
There can be no assurance that we will not conclude in the future that this material weakness continues to exist or that we will not identify any significant deficiencies or other material weaknesses that will impair our ability to report our financial condition and results of operations accurately or on a timely basis. 16 Table of Contents Risks related to ownership of our stock Our stock price is highly volatile, which could result in substantial losses for investors purchasing shares of our common stock and in litigation against us.
The results of a tax audit or litigation could materially affect our operating results and cash flows in the periods for which that determination is made.
The results of a tax audit or litigation could materially affect our operating results and cash flows in the periods for which that determination is made. In addition, future period net income may be adversely impacted by litigation costs, settlements, penalties, and interest assessments.
Tax Reform, U.S. federal NOLs post 2017 in the amount of $31.0 million have no expiration date. The Section 163(j) excess interest expense carryover does not expire (similar to NOL’s). However, the Section 163j excess interest expense carryover is subject to allowed amounts and the Section 382 change of ownership rules, similar to NOL’s and tax credits.
The Section 163(j) excess interest expense carryover does not expire (similar to NOLs). However, the Section 163(j) excess interest expense carryover is subject to allowed amounts and the Section 382 change of ownership rules, similar to NOLs and tax credits.
Concerns regarding the environmental impact of biofuel production could affect public policy which could impair our ability to operate at a profit and substantially harm our revenues and operating margins.
Any changes to California’s LCFS could cause our results of operations, particularly in ethanol and biogas, to decline and cause our financial condition to suffer. 12 Table of Contents Concerns regarding the environmental impact of biofuel production could affect public policy which could impair our ability to operate at a profit and substantially harm our revenues and operating margins.
Heiskell is unable or unwilling to continue to provide us with working capital, our business may be negatively affected. Our consolidated financial statements do not include any adjustments to the classification or carrying values of our assets or liabilities that might be necessary as a result of the outcome of this uncertainty.
Our consolidated financial statements do not include any adjustments to the classification or carrying values of our assets or liabilities that might be necessary as a result of the outcome of this uncertainty. 8 Table of Contents We may be unable to repay or refinance our Third Eye Capital Notes upon maturity.
An extended period of losses or negative cash flow may prevent us from successfully operating and expanding our business. 13 Our indebtedness, preference payments, and interest expense could limit cash flow and adversely affect operations and our ability to make full payment on outstanding debt.
Our indebtedness, preference payments, and interest expense could limit cash flow and adversely affect operations and our ability to make full payment on outstanding debt.
In addition, we intend to modify or adapt third party technologies at the Keyes Plant and at the Kakinada Plant to accommodate alternative feedstocks and improve operations.
As a result, we may need to write down the carrying value of our long-lived assets. 9 Table of Contents In addition, we intend to modify or adapt third party technologies at the Keyes Plant and at the Kakinada Plant to accommodate alternative feedstocks and improve operations.
Fuels with a CI score lower than the annual standard earn a credit, and fuels that are higher than the standard result in a deficit. Credits can be traded. Any changes to California’s LCFS could cause our results of operations, particularly in ethanol and biogas, to decline and cause our financial condition to suffer.
Fuels with a CI score lower than the annual standard earn a credit, and fuels that are higher than the standard result in a deficit. Credits can be traded.
McAfee’s ability to devote time to our business and affairs. Our ability to utilize our NOL carryforwards may be limited. Under the Internal Revenue Code of 1986, as amended (the “Code”), a corporation is generally allowed a deduction in any taxable year for net operating losses (“NOL”) carried over from prior taxable years.
Under the Internal Revenue Code of 1986, as amended (the “Code”), a corporation is generally allowed a deduction in any taxable year for net operating losses (“NOL”) carried over from prior taxable years. As of December 31, 2023, we had U.S. federal NOL carryforwards of approximately $253.0 million and state NOL carryforwards of approximately $336.0 million.
Reduced gasoline consumption has occurred in the past and could occur in the future as a result of increased gasoline or oil prices. 15 Decreasing gasoline prices may negatively impact the selling price of ethanol which could reduce our ability to operate profitably. The price of ethanol tends to change in relation to the price of gasoline.
Reduced gasoline consumption has occurred in the past and could occur in the future as a result of increased gasoline or oil prices. We may be unable to execute our business plan.
If ethanol prices fall during times when corn and/or natural gas prices are high, we may not be able to operate profitably. We may be unable to execute our business plan. The value of our long-lived assets is based on our ability to execute our business plan and generate sufficient cash flow to justify the carrying value of our assets.
The value of our long-lived assets is based on our ability to execute our business plan and generate sufficient cash flow to justify the carrying value of our assets.
Our certificate of incorporation and bylaws contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year.
Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. As a result, at a given annual meeting only a minority of the board of directors may be considered for election.
Similarly, our plans to develop the Riverbank Carbon Zero Facility, construct a bio-methane digester, pipeline and gas cleanup system near our Keyes plan, the integrated microgrid, the MVR project, or the Mitsubishi dehydration system at the Keyes Plant may not be successful as a result of financing, issues in the design or construction process, or our ability to sell liquid CO₂ at cost effective prices or achieve the anticipated energy savings.
Similarly, our plans to develop the SAF/RD production plant, CCS, the integrated microgrid, the MVR system, or the Mitsubishi dehydration system at the Keyes Plant may not be successful as a result of financing or issues in the design or construction process.
Risks related to ownership of our stock Our stock price is highly volatile, which could result in substantial losses for investors purchasing shares of our common stock and in litigation against us. The market price of our common stock has fluctuated significantly in the past and may continue to fluctuate significantly in the future.
The market price of our common stock has fluctuated significantly in the past and may continue to fluctuate significantly in the future.
In addition, future period net income may be adversely impacted by litigation costs, settlements, penalties, and interest assessments. 28 Future sales and issuances of rights to purchase common stock by us could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
Future sales and issuances of rights to purchase common stock by us could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. We may issue equity or convertible securities in the future. To the extent that we do so, our stockholders may experience substantial dilution.
As of December 31, 2022, we had U.S. federal NOL carryforwards of approximately $231.0 million and state NOL carryforwards of approximately $300.0 million. As of December 31, 2022, the federal NOL’s of $200.0 million and the state NOL’s of $300.0 million expire on various dates between 2027 and 2042. Due to the 2017 U.S.
As of December 31, 2023, the federal NOLs of $187.0 million and the state NOLs of $348.0 million expire on various dates between 2027 and 2042. Due to the 2017 U.S. Tax Reform, U.S. federal NOLs after 2017 in the amount of $85.0 million have no expiration date.
Our operations also rely on dependable and efficient transportation services. A disruption in transportation services, as a result of weather conditions or otherwise, may also significantly adversely impact our operations. Additionally, the potential physical impacts of climate change are uncertain and may vary by region.
Severe adverse weather conditions, such as hurricanes or severe storms, may also result in extensive property damage, extended business interruption, personal injuries and other loss and damage to us. Our operations also rely on dependable and efficient transportation services. A disruption in transportation services, as a result of weather conditions or otherwise, may also significantly adversely impact our operations.
If any of these risks materialize, they could have a material adverse effect on our results of operations and financial position. Aemetis has entered into new markets for alcohol, including the sanitizer market and other industrial alcohol segments.
If any of these risks materialize, they could have a material adverse effect on our results of operations and financial position. We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act.
We may not be able to successfully develop and commercialize our technologies, which may require us to curtail or cease our research and development activities. Since 2007, we have been developing patent-pending enzyme technology to enable the production of ethanol from a combination of starch and cellulose, or from cellulose alone.
Any of our existing or future patents may be challenged, invalidated or circumvented. 15 Table of Contents We may not be able to successfully develop and commercialize our technologies, which may require us to curtail or cease our research and development activities.
We may be unable to repay or refinance our Third Eye Capital Notes upon maturity. Under our note facilities with Third Eye Capital, we owe approximatel y $161.5 million, e xcluding debt discounts, as of December 31, 2022.
Under our note facilities with Third Eye Capital, we owe approximatel y $181.8 million, e xcluding debt discounts, as of December 31, 2023. Our indebtedness and interest payments under these note facilities are currently substantial and may adversely affect our cash flow, cash position and stock price.
As a result, the new facilities may not be able to achieve our expected investment return, which could adversely affect our results of operations. We are dependent on, and vulnerable to any difficulties of, our principal suppliers and customers. We buy all of the feedstock for the Keyes Plant from one supplier, J.D. Heiskell.
As a result, the new facilities may not be able to achieve our expected investment return, which could adversely affect our results of operations. We are in the process of developing SAF/RD, CCUS, dairy digester, and other projects, and the success of such projects depends on many factors; as such, cash flows and revenue projections may not be achieved.
Remittance of funds by our Indian subsidiary to us may subject us to significant tax liabilities under U.S. federal income tax laws. Our Chief Executive Officer has outside business interests that could require time and attention. Eric McAfee, our Chairman and Chief Executive Officer, has outside business interests which include his ownership of McAfee Capital. Although Mr.
Remittance of funds by our Indian subsidiary to us may subject us to significant tax liabilities under U.S. federal income tax laws. Our ability to utilize our NOL carryforwards may be limited.
Removed
Our indebtedness and interest payments under these note facilities are currently substantial and may adversely affect our cash flow, cash position and stock price. The current maturity date of these not es is April 2024 if we choose to exercise our extension option.
Added
Heiskell is unable or unwilling to continue to provide us with working capital, our business may be negatively affected.
Removed
Heiskell may terminate the agreement by notice 30 days prior to the end of the initial term or any renewal term. The current term extends through December 31, 2023.
Added
We are actively developing projects designed to reduce emissions of greenhouse gases.
Removed
If the price of gasoline decreases in the future, in correlation to the decrease in the price of gasoline, the price of ethanol may decrease. Decreases in the price of ethanol reduce our revenue. Our profitability depends on a favorable spread between our corn and natural gas costs and the price we receive for our ethanol.
Added
These include (i) a biofuels production plant in Riverbank, California designed to produce SAF/RD using renewable fats and oils obtained from existing Aemetis biofuels plants and other sources, (ii) Carbon Capture and Underground Sequestration (“CCUS”) projects designed to compress and inject CO₂ into deep wells for long-term sequestration of carbon underground, (iii) additional dairy digesters at new locations, along with associated infrastructure for transporting and producing biogas and Renewable Natural Gas.
Removed
We are also constructing a network of biogas digesters, pipelines and gas cleanup systems near our Keyes Plant to convert dairy waste gas into renewable bio-methane and evaluating the Goodland facility in Goodland, KS for construction of an additional ethanol facility.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOther Initiatives The agreements with the City of Riverbank and the acquisition of GAFI are intended for future expansion and deployment of our SAF and renewable biodiesel fuel technology. Corporate Office. Our corporate headquarters are located at 20400 Stevens Creek Blvd., Suite 700, Cupertino, CA. The Cupertino facility office space consists of 9,238 rentable square feet.
Biggest changeOur corporate headquarters are located in leased office space at 20400 Stevens Creek Blvd., Suite 700, Cupertino, CA. This includes 9,238 square feet of rented space. We extended the lease in June 2020 for an additional eight years with a new termination date of May 31, 2028. Riverbank Industrial Complex, Riverbank, CA.
Our tangible and intangible assets, including the Keyes Plant, are subject to perfected first liens and mortgages as further described in Note 4. Debt, of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. CO ₂ Land in Keyes, CA.
Our tangible and intangible assets, including the Keyes Plant, are subject to perfected first liens and mortgages as further described in Note 4. Debt, of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. Real Property in Keyes, CA. We own 5.32 acres of real property located next to our Keyes Plant.
The property is located 7.5 kilometers from the local seaport with connectivity through a third-party pipeline to the port jetty. The pipeline facilitates the importing of raw materials and exporting of finished products. Pretreatment Plant. During 2022, we acquire 3,683 square meters of land in Remannapalem Village, Kakinada. India Administrative Office.
The Kakinada Plant is situated on approximately 32,000 square meters of land in Kakinada, India. The property is located 7.5 kilometers from the local seaport with connectivity through a third-party pipeline to the port jetty. The pipeline facilitates the importing of raw materials and exporting of finished products. Pretreatment Plant.
Pursuant to the lease disposition and development agreement, we will serve as the master developer for the development of the leased property to develop, construct, finance, operate and maintain the leased property. The lease commenced on February 12, 2022 and the term is for fifteen years. Land, Building and Equipment in Goodland, KS .
Pursuant to the lease disposition and development agreement, we serve as the master developer for the property to develop, construct, finance, operate and maintain the leased property. The lease commenced on April 1, 2022, and the term is for fifteen years, with an option to purchase the property at the end of the lease.
On April 2, 2019, we entered into a three-year lease of approximately 1,000 square feet of office space to accommodate our principal administrative, sales and marketing facilities in Hyderabad, India. We productively utilize the majority of the space in these facilities.
During 2022, we acquired 3,683 square meters of land in Remannapalem Village, Kakinada. India Administrative Office . On April 2, 2023, we entered into a three-year lease of approximately 1,000 square feet of office space to accommodate our principal administrative, sales and marketing facilities in Hyderabad, India. Other Properties Corporate Office, Cupertino, CA.
Since 2019, we have entered into arrangements with over 25 dairies in the Central Valley of California to build dairy digesters on the dairies’ land with a term of 25 years with two optional 5-year extensions.
Since 2019, we have entered into arrangements with 43 dairies in the Central Valley of California that include leases for land to build anaerobic digesters and/or manure supply agreements. These agreements each have a term of 25 years with two optional 5-year extensions. Faith Home Road, Ceres, CA.
On December 3, 2018, we acquired 5.32 acres of parcel land next to our Keyes Plant. The leased land is utilized by Messer Gas to receive CO₂ from the Keyes Plant, and produce liquid CO₂ for sale into local markets. California Dairy Renewable Natural Gas Dairy Biogas Digesters, Central Valley, CA.
We lease the property to Messer Gas, which receives CO₂ from the Keyes Plant and produces liquid CO₂ for sale into local markets. California Dairy Renewable Natural Gas Dairy Biogas Digesters, Central Valley, CA.
In April 2022, we acquired an 8.5-acre property on Faith Home Road, located near the Keyes Plant. The corner property is a strategic location for operations supporting the company’s Carbon Zero projects, including diary RNG and CCS. Currently, ABGL is using the site as the location for their office headquarters. Item 3. Legal Proceedings Not Applicable. Item 4.
We own 8.5 acres of real property on Faith Home Road near the Keyes Plant. Currently, Aemetis Biogas uses the location for its office headquarters and warehouse. This corner property is also a strategic location for future operations supporting the Company’s Carbon Zero projects, including CCUS. India Biodiesel Biodiesel Plant in Kakinada, India.
On December 31, 2019, we exercised our option to acquire all of the capital stock of GAFI, comprising of approximately 93 acres of land, approximately 34,992 square feet of buildings and equipment as part of a partially completed 40 million gallon per year dry-mill ethanol plant. Faith Home Road, Ceres, CA.
We own a large portion of the Goodland Energy Center in Goodland, Kansas, comprising approximately 93 acres of land, approximately 34,992 square feet of buildings and equipment as part of a partially completed 40 million gallon per year dry-mill ethanol plant. The ethanol plant is not currently operational. 21 Table of Contents Item 3. Legal Proceedings. Not applicable. Item 4.
The space is leased for 5 years with 10 five-year extensions allowed. The space is being utilized to build the Carbon Zero 1 Facility. On December 14, 2021, we entered into a real estate purchase agreements and lease disposition and development agreement with the City of Riverbank.
On December 14, 2021, we entered into real estate purchase agreements and a lease disposition and development agreement for the Riverbank Industrial Complex in Riverbank, CA. We plan to use the purchased and leased property for the construction of a sustainable aviation fuel and renewable diesel production plant.
Removed
ABGL continues to negotiate and sign participation agreements with local dairies and convert those agreements into fully executed leases. 29 India Biodiesel Biodiesel Plant in Kakinada, India. The Kakinada Plant is situated on approximately 32,000 square meters of land in Kakinada, India.
Added
We are also developing a portion of the Riverbank Industrial Complex to be used for a CCUS facility. Goodland Energy Center, Goodland, KS .
Removed
We extended the lease in June 2020 for an additional eight years with a new termination date of May 31, 2028. Carbon Zero 1 Plant in Riverbank, CA. On February 3, 2017, we entered into a lease agreement with City of Riverbank Local Redevelopment Authority for leasing of approximately 71,000 square feet.
Removed
We plan to utilize the purchased and leased properties, located at 5300 Claus Road in the city of Riverbank, California, for the construction of the Carbon Zero 1 Facility.
Removed
Mine Safety Disclosures. Not Applicable. 30 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarket for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NASDAQ Stock Market under the symbol “AMTX.” Prior to trading on NASDAQ, between November 15, 2011 and June 5, 2014 our common stock was traded on the OTC Bulletin Board under the symbol “AMTX.” Between December 7, 2007 and November 15, 2011, our common stock traded on the OTC Bulletin Board under the symbol “AEBF.” Prior to December 7, 2007, our common stock traded on the OTC Bulletin Board under the symbol “MWII.” Shareholders of Record According to the records of our transfer agent, we had 175 stockholders of record as of March 1, 2023.
Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded under the symbol "AMTX" on the NASDAQ Stock Market.
We currently expect to retain any future earnings for use in the operation and expansion of our business and to reduce our outstanding debt and do not anticipate paying any cash dividends in the foreseeable future. Information with respect to restrictions on paying dividends is set forth in Note 4.
We currently expect to retain any future earnings for use to operate and expand our business and to reduce our outstanding debt, and therefore do not anticipate paying cash dividends in the foreseeable future. In addition, we currently have covenants in certain of our debt agreements that prohibit paying dividends without the consent of the applicable lender.
This figure does not include “street name” holders or beneficial holders of our common stock whose shares are held of record by banks, brokers and other financial institutions. Dividends We have never declared or paid any cash dividends on our common stock.
Number of Stockholders As of March 1, 2024, our common stock was held by 175 holders of record and by approximately 26 thousand stockholders who hold shares in street name. Dividends We have never declared or paid any cash dividends on our common stock.
Removed
Debt of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. 31 Sales of Unregistered Equity Securities None. Item 6. Selected Financial Data Not applicable.
Added
Securities authorized for issuance under equity compensation plans See Note 9 to the Consolidated Financial Statements contained in Item 8 of this Annual Report.
Added
Sales of Unregistered Equity Securities In addition to issuances of unregistered securities previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K, the Company issued the following unregistered securities during 2023: On October 16, 2023, our senior lender increased the credit limit under one of our debt agreements.
Added
Under the terms of that preexisting debt agreement, this increase automatically revised a previously issued warrant to increase the number of shares issuable under the warrant by 25,000 shares. The warrant has an exercise price of $10.20 per share and a remaining term of 3.4 years.
Added
This issuance was exempt from registration under Section 4 of the Securities Act of 1933 as a transaction by an issuer not involving any public offering.
Added
On December 12, 2023, we issued 126,008 shares of common stock to the holders of our Series B Preferred Stock in an exchange at a 1 for 10 ratio of all outstanding shares of Series B Stock.
Added
The issuance of common stock was exempt from registration under Section 3(a)(9) of the Securities Act of 1933 as a security exchange by the issuer with existing security holders for which no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange.
Added
In connection with the exchange, we filed a Registration Statement on Form S-1 on December 5, 2023, to register the subsequent resale or other disposition of the common stock in the exchange, and the S-1 was declared effective by the SEC on December 12, 2023. Stock Repurchases None .

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

92 edited+31 added−57 removed21 unchanged
Biggest changeThe increase in SG&A expenses in the year ended December 31, 2022 was primarily due to an increase in headcount, salaries, and stock compensation of $3.7 million as two stock option grants made during the year, supplies and services of $1.2 million, and an increase to taxes, insurance, rent and utilities of $2.3 million, which were partially offset by a decrease in miscellaneous expense of $1.8 million, and other operating income of $0.5 million as compared to the SG&A expenses during the year ended December 31, 2021. 2022 vs 2021 2022 2021 Inc/(dec) % change Research and development expenses $ 180 $ 88 $ 92 105 % Selling, general and administrative expenses 28,686 $ 23,676 $ 5,010 21 % Other expense (income): Interest expense Interest rate expense 21,407 $ 20,136 $ 1,271 6 % Debt related fees and amortization expense 7,363 3,921 3,442 88 % Accretion and other expenses of Series A preferred units 9,888 7,718 2,170 28 % Loss (gain) on debt extinguishment 49,386 (1,134 ) 50,520 -4455 % Gain on litigation (1,400 ) - (1,400 ) 0 % Other (income) expense (14,340 ) 809 (15,149 ) -1873 % Other expense (income) consists primarily of interest and amortization expense attributable to our debt facilities and those of our subsidiaries and accretion of our Series A preferred units.
Biggest changeThe increase in SG&A expenses in the year ended December 31, 2023, was primarily due to an increase in headcount, salaries and stock-based compensation of $4.7 million, an increase in professional fees of $0.9 million, an increase in depreciation and amortization of $1.7 million due to a reclass of cost of goods sold to SG&A, an increase in taxes, insurance, rent and utilities of $1.9 million, an increase in supplies and services of $0.6 million, and an increase in other costs of $1.6 million due to the reclass of cost of goods sold to SG&A which was offset by $0.8 million in rental income increase. 2023 vs 2022 2023 2022 Inc/(dec) % change Research and development expenses $ 152 $ 180 $ (28 ) -16 % Selling, general and administrative expenses 39,266 28,686 $ 10,580 37 % Other expense (income): Interest expense Interest rate expense 32,995 21,407 $ 11,588 54 % Debt related fees and amortization expense 6,524 7,363 (839 ) -11 % Accretion and other expenses of Series A preferred units 25,313 9,888 15,425 156 % Loss on debt extinguishment - 49,386 (49,386 ) -100 % Gain on litigation - (1,400 ) 1,400 -100 % Other income (2,077 ) (14,340 ) 12,263 -86 % 27 Table of Contents Other expense (income) consists primarily of interest and amortization expense attributable to our debt facilities and accretion of biogas Series A preferred units.
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 contracts. The transaction price is determined daily based on reference market prices for biodiesel, refined glycerin, and Palm Fatty Acid Distillers (“PFAD”) net of taxes.
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 contracts. The transaction price is determined based on reference market prices for biodiesel, refined glycerin, and Palm Fatty Acid Distillers (“PFAD”) net of taxes.
Depending upon the costs of these inputs in comparison to the sales price of our end products, our gross margins at any given time can vary from positive to negative. Factory overhead includes direct and indirect costs associated with the plant operations, including the cost of repairs and maintenance, consumables, maintenance, on-site security, insurance, depreciation and inbound freight.
Depending on the costs of these inputs in comparison to the sales price of our end products, our gross margins at any given time can vary from positive to negative. Factory overhead includes direct and indirect costs associated with plant operations, including the cost of repairs and maintenance, consumables, maintenance, on-site security, insurance, depreciation, and inbound freight.
Our cost of feedstock is established by J.D Heiskell based on the Chicago Board of Trade pricing and includes rail, truck or ship transportation, local basis costs and a handling fee paid to J.D. Heiskell. The credit term of the corn purchased from J.D. Heiskell is one day. Cost of goods sold also includes chemicals, plant overhead and out-bound transportation.
Our cost of feedstock is established by J.D Heiskell based on the Chicago Board of Trade pricing and includes rail, truck or ship transportation, local basis costs, and a handling fee paid to J.D. Heiskell. The credit term for the corn purchased from J.D. Heiskell is one day. Cost of goods sold also includes chemicals, plant overhead and out-bound transportation.
Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts. 32 The following discussion should be read in conjunction with our consolidated financial statements and accompanying notes included elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.
Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts. The following discussion should be read in conjunction with our consolidated financial statements and accompanying notes included elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.
SG&A expenses consist primarily of salaries and related expenses for employees, marketing expenses related to sales of ethanol and WDG in California Ethanol and biodiesel and other products in India Biodiesel, as well as professional fees, other corporate expenses, and related facilities expenses.
SG&A expenses consist primarily of salaries and related expenses for employees, marketing expenses related to sales of ethanol and WDG in California Ethanol and biodiesel and other products in India Biodiesel, as well as professional fees, insurance, other corporate expenses, and related facilities expenses.
Substantially all of our feedstock is for India Biodiesel is procured as crude palm stearin, a non-edible feedstock, from neighboring natural oil processing plants at a discount to refined palm oil or import from international market when prices are viable. Raw material is received by truck and title passes when the goods are loaded at our vendors’ facilities.
Substantially all of our feedstock for India Biodiesel is procured as crude palm stearin, a non-edible feedstock, from neighboring natural oil processing plants at a discount to refined palm oil or imported from international market when prices are viable. Raw material is received by truck and title passes when the goods are loaded at our vendors’ facilities.
The Company adopted this guidance on January 1, 2019 using the modified retrospective approach. There was no cumulative impact to retained earnings. We assessed all of our revenue streams to identify any differences in the timing, measurement or presentation of revenue recognition. Revenue Recognition.
The Company adopted this guidance on January 1, 2019, using the modified retrospective approach. There was no cumulative impact to retained earnings. We assess all of our revenue streams to identify any differences in the timing, measurement or presentation of revenue recognition.
We believe the Kakinada Plant is one of the largest biodiesel production facilities in India on a nameplate capacity basis. Kakinada Plant is capable of processing a variety of vegetable oils and animal fat waste feedstocks into biodiesel that meets international product standards.
We believe the Kakinada Plant is one of the largest biodiesel production facilities in India on a nameplate capacity basis. Kakinada Plant is capable of processing a variety of vegetable oils and animal fat waste feedstocks into biodiesel that meets applicable product standards.
As a result of negative capital and negative operating results, and collateralization of substantially all of the Company assets, we have been reliant on its senior secured lender to provide additional funding and have been required to remit substantially all excess cash from operations to the senior secured lender.
As a result of negative capital and negative operating results, and collateralization of substantially all of the Company assets, we have been reliant on our senior secured lender to provide additional funding and have been required to remit substantially all excess cash from operations to our senior lender.
We assessed the following criteria under the 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.
We assess the following criteria under the 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.
To the extent that we experience periods in which the spread between ethanol prices, and corn and energy costs narrow or the spread between biodiesel prices and waste fats and oils or palm oil and energy costs narrow, we may require additional working capital to fund operations.
To the extent that we experience periods in which the spread between ethanol prices and corn and energy costs narrow or the spread between biodiesel prices and waste fats and oils or palm oil and energy costs narrows, we require additional working capital to fund operations.
We operate in three reportable segments consisting of “California Ethanol,” “California Dairy Renewable Natural Gas,” and “India Biodiesel.” We have other operating segments determined not to be reportable segments and are collectively represented by the “All Other” category. At Aemetis, our mission is to generate sustainable and innovative renewable fuel solutions that benefit communities and restore our environment.
We operate in three reportable segments consisting of “California Ethanol,” “California Dairy Renewable Natural Gas,” and “India Biodiesel.” We have other operating segments determined not to be separately reportable that are collectively represented by the “All Other” category. Our mission is to generate sustainable and innovative renewable fuel solutions that benefit communities and restore our environment.
An analysis of our financial results comparing the twelve months ended December 31, 2022 and 2021. ● Liquidity and Capital Resources. An analysis of changes in our balance sheets and cash flows and discussion of our financial condition. ● Critical Accounting Estimates.
An analysis of our financial results comparing the twelve months ended December 31, 2023 and 2022. ● Liquidity and Capital Resources. An analysis of changes in our balance sheets and cash flows and discussion of our financial condition. ● Critical Accounting Estimates.
Series A Preferred unit liability and Testing for Debt Modification or Extinguishment Accounting During 2022 and 2021, we evaluated amendments to our debt under the ASC 470-50 guidance for modification and extinguishment accounting and under ASC 470-60 for Troubled Debt Restructuring.
Series A Preferred unit liability and Testing for Debt Modification or Extinguishment Accounting During 2023 and 2022, we evaluated amendments to our debt under the ASC 470-50 guidance for modification and extinguishment accounting and under ASC 470-60 for Troubled Debt Restructuring.
The guidance stated that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
When property, plant and equipment are acquired as part of an acquisition, the items are recorded at fair value on the purchase date. It is our policy to depreciate capital assets over their estimated useful lives using the straight-line method. Impairment of Long-Lived Assets Our long-lived assets consist of property, plant and equipment.
When property, plant and equipment are acquired as part of an acquisition, the items are recorded at fair value on the purchase date. It is our policy to depreciate capital assets over their estimated useful lives using the straight-line method. 31 Table of Contents Impairment of Long-Lived Assets Our long-lived assets consist of property, plant and equipment.
Critical Accounting Policies and Estimates Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
Critical Accounting Policies and Estimates Our discussion and analysis of financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
Substantially all of our feedstock for California Ethanol is procured by J.D. Heiskell pursuant to the Heiskell Supply Agreement. Title to the corn passes to us when the corn is deposited into our weigh bin and entered into the production process.
Our feedstock for California Ethanol is procured by J.D. Heiskell pursuant to the Heiskell Supply Agreement. Title to the corn passes to us when the corn is deposited into our weigh bin and entered into the production process.
As such, we expect cash provided by operating activities to fluctuate in future periods primarily because of changes in the prices for corn, ethanol, WDG, DCO, CDS, biodiesel, waste fats and oils, glycerin, non-refined palm oil and natural gas.
As such, we expect cash provided by operating activities to fluctuate in future periods primarily because of changes in the prices for corn, ethanol, WDG, DCO, CDS, biodiesel, waste fats and oils, glycerin, non-refined palm oil, natural gas, LCFS credits, and D3 RINs.
Our cost of feedstock is established by manure supply agreements based upon the value of the environmental attributes and the size of the dairy.
Our cost of feedstock is established by manure supply agreements based on the value of the environmental attributes and the size of the dairy.
The standard was effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period.
The standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period.
To determine this, we calculate the post-restructuring effective interest rate by projecting cash flows on the new terms and calculating a discount rate equal to the carrying amount of pre-restructuring debt, and comparing this calculation to the terms of prior amendments.
To determine whether a concession is granted, we calculate the post-restructuring effective interest rate by projecting cash flows on the new terms and calculating a discount rate equal to the carrying amount of pre-restructuring debt and comparing this calculation to the terms of prior amendments.
For California ethanol, the products are ethanol and WDG, measured in millions of gallons sold and tons sold, respectively. For biodiesel production, the products are biodiesel and refined glycerin, both measured in metric tons sold.
For California ethanol, the key products are ethanol and WDG, measured in millions of gallons sold and tons sold, respectively. For India Biodiesel, the products are biodiesel and refined glycerin, both measured in metric tons sold.
Interest expense and debt related fees and amortization increased in the year ended December 31, 2022 due to higher variable interest rates and having higher debt balances by obtaining the Carbon Revolving line, Fuels Revolving line, and the construction loan with Greater Nevada Credit Union ("The Construction Loan").
Interest expense and debt related fees and amortization increased in the year ended December 31, 2023, due to higher variable interest rates and higher debt balances from obtaining the Carbon Revolving line, Fuels Revolving line, and the construction loan with Greater Nevada Credit Union.
The debt facilities include stock or warrants issued as fees. The fair value of stock and warrants are amortized as amortization expense, except when the extinguishment accounting method is applied, in which case refinanced debt costs are recorded as extinguishment expense.
The cost of debt facilities includes stock or warrants issued as fees. The fair value of stock and warrants are amortized as expenses, except when the extinguishment accounting method is applied, in which case refinanced debt costs are recorded as extinguishment expense.
The two initial Aemetis CCS injection projects are expected to capture and sequester more than two million metric tons per year of CO₂ at the Aemetis biofuels plant sites in Keyes and Riverbank, California.
The two initial Aemetis CCUS injection projects are being designed to capture and sequester more than two million metric tons per year of CO₂ at the Aemetis biofuels plant sites in Keyes and Riverbank, California.
Changes in estimates of fair value could result in a write-down of the asset in a future period. Long-term assets are analyzed below based on their line items on the consolidated balance sheet and the lowest level where the assets are expected to generate cash flow or work as a functional unit.
Changes in estimates of fair value could result in a write-down of the asset in a future period. Long-term assets are analyzed based on their line items on the consolidated balance sheet and the lowest level where the asset groups are expected to generate cash flow.
We ground 20.2 million bushels of corn at an average price of $9.65 per bushel during the year ended December 31, 2022, compared to 20.9 million bushels of corn at an average price of $7.53 per bushel during the year ended December 31, 2021.
We ground 11.5 million bushels of corn at an average price of $7.11 per bushel during the year ended December 31, 2023, compared to 20.2 million bushels of corn at an average price of $9.65 per bushel during the year ended December 31, 2022.
This was partially offset by grant proceeds of $7.9 million.
This was partially offset by grant proceeds of $9.4 million.
In addition to low carbon renewable fuel ethanol, the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), Carbon Dioxide (“CO2”) and Condensed Distillers Solubles (“CDS”), all of which are sold as animal feed to more than 80 local dairies and feedlots, with CO₂ sold to food, beverage, and industrial customers.
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 as animal feed to more than 80 local dairies and feedlots.
We derive revenue primarily from sales of ethanol and related co-products in California Ethanol, renewable natural gas for California Dairy Renewable Natural Gas, and biodiesel in India Biodiesel pursuant to supply agreements and purchase order contracts.
We derive revenue primarily from sales of ethanol and related co-products, renewable natural gas, and biodiesel pursuant to supply agreements and purchase order contracts.
For the Keyes Plant, we plan to operate the plant and continue to improve its financial performance by adopting new technologies or process changes that allow for energy efficiency, cost reduction or revenue enhancements, as well as execute upon awarded grants that improve energy and operational efficiencies resulting in lower cost, lower carbon demands and overall margin improvement.
For the Keyes Plant, we plan to operate the plant and continue to improve its financial performance by adopting new technologies or process changes that increase energy efficiency, reduce costs, and enhance revenue, as well as execute upon awarded grants that improve energy and operational efficiencies resulting in lower cost, lower carbon intensity, and overall margin improvement.
As of December 31, 2022, the outstanding balance of principal, interest and fees, net of discounts, on all Third Eye Capital Notes equaled $156 million.
As of December 31, 2023 , the outstanding balance of principal, interest and fees, net of discounts, on all Third Eye Capital Notes equaled $177.2 million.
Our California Dairy Renewable Natural segment Aemetis Biogas or “ABGL,” constructs and operates bio-methane anaerobic digesters at local dairies near the Keyes Plant (many of whom also purchase WDG produced by the Keyes Plant as animal feed); transports the biogas via pipeline to the Keyes Plant site; converts the biogas to Renewable Natural Gas (“RNG”) which is then delivered to customers through the PG&E natural gas pipeline.
Our California Dairy Renewable Natural segment Aemetis Biogas or “ABGL,” operates anaerobic digesters at local dairies near the Keyes Plant (many of whom also purchase WDG produced by the Keyes Plant as animal feed) to produce biogas from dairy waste; transports the biogas by pipeline to the Keyes Plant site; and converts the biogas to Renewable Natural Gas (“RNG”) that is delivered to customers through the PG&E regional natural gas pipeline.
These asset groups represent our significant long-lived assets. Both plants were operated efficiently and no asset groups showed indicators of impairment, therefore no impairment test was needed for our Company’s long-lived assets.
These asset groups represent our significant long-lived assets. Both the Keyes and Kakinada plants have been operated efficiently and no asset groups showed indicators of impairment, therefore no impairment test was needed for our Company’s long-lived assets.
Gross loss relates to incurring more expenses as we begin to ramp up our Dairy Renewable Natural Gas business including dairy manure payments, maintenance on the dairy digesters, production bonuses, and depreciation. India Biodiesel. The increase in gross profit was attributable to the increase in sales and production of biodiesel to fulfill the government's tender offer.
Gross loss reflects expenses incurred as we begin to ramp up our Dairy Renewable Natural Gas business including dairy manure payments, maintenance on the dairy digesters, production bonuses, and depreciation. India Biodiesel. The increase in gross profit was attributable to the increase in sales and production of biodiesel to fulfill the government OMC tender offers.
In July 2022, Aemetis purchased 24 acres located on the Riverbank Industrial Complex site in Riverbank, California to develop a CCS injection well with more than 1 million metric tonnes per year of CO₂ sequestration capacity.
In July 2022, Aemetis purchased 24 acres at the Riverbank Industrial Complex in Riverbank, California to develop a CCUS injection well with more than 1 million metric ton per year of CO₂ sequestration capacity.
Since our Keyes Plant uses a single feedstock, the delivered quantity and cost of corn is also used as a key performance indicator for this facility, as it indicates high-level profitability of the plant. Utilization is measured as the production of transportation fuel produced as a percentage of the nameplate capacity, the engineering specification of the plant.
Since our Keyes Plant currently uses corn as the sole feedstock, the delivered quantity and cost of corn is also a key performance indicator as it indicates high-level operating margin of the plant. Utilization is measured as the production of transportation fuel produced as a percentage of the nameplate capacity, the engineering specification of the plant.
For the year ended December 31, 2022, the segment generated 96% of revenue from sales of biodiesel, and 4% from other sales, compared to 67% of sales from biodiesel, and 33% from other sales during the year ended December 31, 2021.
For the year ended December 31, 2023, the segment generated 97% of revenue from sales of biodiesel, and 3% from other sales, compared to 96% of sales from biodiesel, and 4% from other sales during the year ended December 31, 2022.
Gross profit decreased by 236% in the year ended December 31, 2022 primarily due to higher corn costs and lower volumes of ethanol and WDG sold combined with increased costs in natural gas and transportation compared to the same period in December 31, 2021. California Dairy Renewable Natural Ga s.
Gross loss decreased by 49.3% in the year ended December 31, 2023, primarily due to lower volumes of ethanol and WDG sold combined with lower ethanol and WDG prices offset by higher corn costs combined with increased costs in natural gas and transportation in the same period ending December 31, 2022. California Dairy Renewable Natural Ga s.
Management utilizes these metrics to assess cash generated by each facility on a daily or weekly basis and to make decisions on the appropriate level of operation to balance market demand with plant capabilities and efficiency and allow the investor to understand the major components that comprise revenues within each segment.
Management utilizes these metrics to assess cash generated by each facility on a daily or weekly basis and to make decisions about the appropriate level of operation to balance market demand with plant capabilities and efficiency.
Overview Founded in 2006 and headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis referred to herein as, “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas, and renewable fuels company focused on the acquisition, development and commercialization of innovative negative carbon intensity products and technologies that replace traditional petroleum-based products.
(collectively with its subsidiaries on a consolidated basis referred to herein as, “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas, and renewable fuels company focused on the operation, acquisition, development and commercialization of innovative low and negative carbon intensity products and technologies that replace traditional fossil derived products.
Liquidity Cash and cash equivalents, current assets, current liabilities and debt at the end of each period were as follows (in thousands): As of December 31, 2022 December 31, 2021 Cash and cash equivalents $ 4,313 $ 7,751 Current assets (including cash, cash equivalents, and deposits) 18,136 20,693 Current and long term liabilities (excluding all debt) 162,728 92,302 Current & long term debt 246,240 188,767 Our principal sources of liquidity have been cash provided by the sale of equity, operations, and borrowings under various debt arrangements.
Liquidity Cash and cash equivalents, current assets, current liabilities, and debt at the end of each period were as follows (in thousands): As of December 31, 2023 December 31, 2022 Cash and cash equivalents $ 2,667 $ 4,313 Current assets (including cash, cash equivalents, and deposits) 36,400 18,136 Current and long term liabilities (excluding all debt) 165,662 162,728 Current & long term debt 294,721 246,240 Our principal sources of liquidity have been cash provided by the sale of equity, operations, and borrowings under various debt arrangements.
Our current ratio was 0.21 and 0.32, respectively, at December 31, 2022 and 2021. We expect that our future available liquidity resources will consist primarily of cash generated from operations, remaining cash balances, borrowings available, if any, under our senior debt facilities and our subordinated debt facilities, and any additional funds raised through sales of equity.
We expect that our future available liquidity resources will consist primarily of cash generated from operations, remaining cash balances, borrowings available, if any, under our senior debt facilities and our subordinated debt facilities, and any additional funds raised through sales of equity.
SG&A expenses as a percentage of revenue in the year ended December 31, 2022 remained consistent at 11% in the year ended December 31, 2022 compared to the year ended December 31, 2021.
SG&A expenses as a percentage of revenue were 21% in the year ended December 31, 2023, compared to 11% in the year ended December 31, 2022.
Operating (income)/expense and non-operating (income)/expense In 2022 and 2021, substantially all of our R&D expenses were related to research and development activities in Minnesota. R&D expenses increased in the year ended December 31, 2022 due to increases in expenses related to research subcontract work and consultant and advisor fees.
Operating (income)/expense and non-operating (income)/expense In 2023 and 2022, substantially all of our R&D expenses related to research and development activities in Minnesota. R&D e xpenses decreased in the year ended December 31, 2023, due to decreases in expenses related to research subcontract work.
This evaluation for modification and extinguishment included 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.
The above evaluation determines if there is no troubled debt restructuring, then the evaluation for modification and extinguishment 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.
Net changes in operating assets and liabilities consisted primarily of a decrease in (i) inventories of $0.4 million, (ii) prepaid expenses of $1.8 million, (iii) accounts receivable of $0.3 million, (iv) an increase in accounts payable of $2.2 million, and (v) an increase in accrued interest and fees of $15.5 million.
Net changes in operating assets and liabilities consisted primarily of an increase in (i) inventories of $13.8 million, (ii) accounts receivable of $7.4 million, (iii) other assets of $2.0 million, (iv) an increase in accounts payable of $13.7 million, (v) and an increase in accrued interest and fees of $23.6 million.
These energy efficiency projects include: high efficiency heat exchangers; the Mitsubishi ZEBREX TM ethanol dehydration system; a two-megawatt solar microgrid with battery storage; the Allen Bradley Decision Control System (DCS) to manage and optimize energy use and other plant operations; and the Mechanical Vapor Recompression (MVR) system to reuse steam.
These energy efficiency projects include high efficiency heat exchangers; a two-megawatt solar microgrid with battery storage; an Allen Bradley Decision Control System (DCS) to manage and optimize energy use and other plant operations; and a Mechanical Vapor Recompression (MVR) system to produce steam using low carbon electricity instead of natural gas.
If the carrying amount of an asset exceeds its estimated future cash flows, we record an impairment charge in the amount by which the carrying amount of the asset exceeds the fair value of the asset. 42 The impairment test for long-lived assets requires us to make estimates regarding amount and timing of projected cash flows to be generated by an asset or asset group over an extended period of time.
The impairment test for long-lived asset groups requires us to make estimates regarding amount and timing of projected cash flows to be generated by an asset or asset group over an extended period of time.
California Ethanol . For the year ended December 31, 2022, the segment generated 73% of revenue from sales of ethanol, 22% from sales of WDG, and 5% from sales of corn oil, CDS, CO₂, and other sales. During the year ended December 31, 2022, plant production averaged 107% of the 55 million gallon per year nameplate capacity.
California Ethanol . For the year ended December 31, 2023, the segment generated 75% of revenue from sales of ethanol, 21% from sales of WDG, and 4% from sales of corn oil, CDS, CO₂, and other sales. During the year ended December 31, 2023, plant production average d 58% of the 55 million gallon per year na meplate capacity.
During the fourth quarter, we began to sell RNG to an external party. Substantially all of our India segment revenues during the years ended December 31, 2022 and 2021 were from sales of biodiesel and refined glycerin.
Substantially all of our India segment revenues during the years ended December 31, 2023 and 2022, were from sales of biodiesel to OMCs and refined glycerin to other external customers.
California’s Central Valley has been identified as one of the world’s most favorable regions for large-scale CO₂ injection projects due to the subsurface geologic formation that absorbs and retains CO₂ gas.
Our planned CCUS projects will compress and inject CO₂ into deep wells that are monitored to ensure the long-term sequestration of carbon underground. California’s Central Valley has been identified as one of the world’s most favorable regions for large-scale CO₂ injection projects due to the subsurface geologic formation that absorbs and retains CO₂ gas.
During the years ended December 31, 2022 and 2021, we produced and sold 48.6 thousand and 53.0 thousand British thermal units ("MMBtu") of biogas, respectively, to an intercompany party. In addition, during the year ended December, 31, 2022, we sold 8.4 MMBTU to an external party, at an average price of $25 per MMBTU. India Biodiesel.
During the years ended December 31, 2023 and 2022, we produced and sold 194.2 thousand and 8.4 thousand MMBtu ("million British thermal units") of Renewable Natural Gas ("RNG"), to an external party at an average price of $5.12 and $25 per MMBtu, respectively, and we also sold 48.6 MMBtu to an intercompany party during the year ended December 31, 2022.
Cash provided by financing activities was $53.6 million, consisting primarily of $0.2 million from exercises of stock options, $12.0 million from issuance of common stock, and $69.4 million from proceeds from borrowings, partially offset by repayments of borrowings of $26.3 million, debt renewal and waiver fee payments of $1.2 million, and payments on finance leases of $0.5 million.
Cash provided by financing activities was $9.1 million, consisting primarily of $75.5 million proceeds from borrowings, $0.1 million from stock option exercises, and $21.7 million from issuance of common stock, offset by repayments of borrowings of $56.1 million, debt renewal and waiver fee payments of $1.7 million, Series A preferred financing payments of $30.0 million, and payments on finance leases of $0.4 million.
The following table summarized our KPIs: Production and Price Performance (Unaudited) Years ended December 31, 2022 vs 2021 % 2022 2021 Change Ethanol Gallons Sold (in millions) 59.0 59.8 -1.3 % Average Sales Price/Gallon $ 2.81 $ 2.72 3.3 % Percent of nameplate capacity 107 % 109 % -1.8 % WDG Tons Sold (in thousands) 397 404 -1.7 % Average Sales Price/Ton $ 128 $ 103 24.3 % Delivered Cost of Corn Bushels ground (in millions) 20.2 20.9 -3.3 % Average delivered cost / bushel $ 9.65 $ 7.53 28.2 % Dairy Renewable Natural Gas MMBtu external sales (in thousands) 8.4 - 100.0 % MMBtu stored as inventory (in thousands) 9.0 - 100.0 % MMBtu intercompany sales (in thousands) 48.6 53.0 -8.3 % Biodiesel Metric tons sold (in thousands) 17.7 0.5 3440.0 % Average Sales Price/Metric ton $ 1,526 $ 1,024 49.0 % Percent of Nameplate Capacity 12 % 0 % Refined Glycerin Metric tons sold (in thousands) 1.2 0.1 1100.0 % Average Sales Price/Metric ton $ 850 $ 956 -11.1 % Results of Operations Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenues Our revenues are derived primarily from sales of ethanol and WDG for California Ethanol, renewable natural gas for California Dairy Renewable Natural Gas, and biodiesel and refined glycerin for India Biodiesel.
The following table summarized our KPIs: Production and Price Performance (Unaudited) Years ended December 31, 2023 vs 2022 % 2023 2022 Change Ethanol Gallons Sold (in millions) 32.1 59.0 -45.6 % Average Sales Price/Gallon $ 2.44 $ 2.81 -13.2 % Percent of nameplate capacity 58 % 107 % -45.8 % WDG Tons Sold (in thousands) 225 397 -43.3 % Average Sales Price/Ton $ 97 $ 128 -24.2 % Delivered Cost of Corn Bushels ground (in millions) 11.5 20.2 -43.1 % Average delivered cost / bushel $ 7.11 $ 9.65 -26.3 % Dairy Renewable Natural Gas MMBtu external sales (in thousands) 194.2 8.4 2211.9 % MMBtu stored as inventory (in thousands) 68.0 9.0 655.6 % MMBtu intercompany sales (in thousands) - 48.6 -100.0 % Biodiesel Metric tons sold (in thousands) 60.5 17.7 241.8 % Average Sales Price/Metric ton $ 1,232 $ 1,526 -19.3 % Percent of Nameplate Capacity 40 % 12 % Refined Glycerin Metric tons sold (in thousands) 4.2 1.2 250.0 % Average Sales Price/Metric ton $ 640 $ 850 -24.7 % 24 Table of Contents Results of Operations Year Ended December 31, 2023, Compared to Year Ended December 31, 2022 Revenue We sell all ethanol, WDG, CDO, and CDS produced to J.D.
The non-cash charges consisted of: (i) $7.4 million in amortization of debt issuance costs and other intangible assets, (ii) $5.5 million in depreciation expenses, (iii) $6.4 million in stock-based compensation expense, (iv) $9.8 million in preferred unit accretion and other expenses of Series A preferred units, (v) a loss on debt extinguishment of $49.4 million, (vi) a loss on a lease termination of $0.7 million, (vii) a gain on litigation of $1.4 million, and (viii) an increase in deferred tax liability of $0.8 million.
The non-cash charges consisted of: (i) $6.6 million in amortization of debt issuance costs and other intangible assets, (ii) $6.9 million in depreciation expenses, (iii) $7.7 million in stock-based compensation expense, (iv) $25.3 million in preferred unit accretion and other expenses of Series A preferred units, (v) $0.4 million in fair value of warrants issued, and (vi) $25 thousand of impairment loss on intangibles.
Cash used in operating activities was $22.9 million, derived from a net loss of $107.8 million, reduced by non-cash charges of $78.8 million, and changes in operating assets and liabilities of $6.1 million.
Cash provided by operating activities was $13.8 million, derived from a net loss of $46.4 million, non-cash charges of $46.2 million, and changes in operating assets and liabilities of $14.1 million.
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. 41 California Ethanol: 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.
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. California Ethanol: On May 25, 2023, we entered into the second amendment to the Aemetis Keyes Grain Procurement and Working Capital Agreement with J.D.
Additionally, we are in the process of obtaining approval to export refined animal tallow and biodiesel produced using animal tallow into international markets as the use of refined animal tallow received approval from the Pollution Control Board of India for production of biodiesel. 39 In addition to the above we plan to continue to locate funding for existing and new business opportunities through a combination of working with our senior lender, restructuring existing loan agreements, selling high yield debt instruments, selling bonds in the taxable and tax-exempt markets, selling equity through the ATM and otherwise, selling the current EB-5 Phase II offering, or by vendor financing arrangements.
We also rely on our working capital lines with Gemini and Secunderabad Oils in India to fund our commercial arrangements for the acquisitions of feedstock. 28 Table of Contents In addition to the above we plan to continue to locate funding for existing and new business opportunities through a combination of working with our senior lender, restructuring existing loan agreements, selling high yield debt instruments, selling bonds in the taxable and tax-exempt markets, selling equity through the ATM and otherwise, selling the current EB-5 Phase II offering, or by vendor financing arrangements.
Debt of the Notes to Consolidated Financial Statements of this Form 10-K. However, there can be no assurance that our senior lender will continue to provide further amendments or accommodations or will fund additional amounts in the future.
Debt of the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K. However, future amendments or accommodations will continue to be at the discretion of the lender.
We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. We measure recoverability of assets to be held and used by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset.
We review long-lived asset groups for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset groups may not be recoverable.
Other Income During the second quarter of 2022, a grant in the amount of $14.2 million was received from the USDA’s Biofuel Producer Program, created as part of the CARES Act, to compensate biofuel producers who experienced market losses due to the COVID-19 pandemic. 34 Key Performance Indicators (KPI): Aemetis measures performance primarily on the utilization of its plants and the production of products.
Other expense (income) change r elates to a grant in the amount of $14.2 million received from the USDA's Biofuel Producer Program in 2022, created as part of the CARES Act, to compensate biofuel producers that experienced market losses due to the COVID-19 pandemic.
In instances where our future cash flows changed more than 10 percent, we recorded our debt at fair value based on factors available to us for similar borrowings and used the extinguishment accounting method to account for the debt extinguishment. The evaluation for troubled debt restructuring included assessing whether the creditor granted a concession.
In instances where our future cash flows change more than 10 percent, we record our debt at fair value based on factors available to us for similar borrowings and use the extinguishment accounting method to account for the debt extinguishment. Recently Issued Accounting Pronouncements Refer to Note 1 of the Financial Statements for a description of new accounting pronouncements.
Plant overhead includes direct and indirect costs associated with the operation of the Keyes Plant, including the cost of electricity and natural gas, maintenance, insurance, direct labor, depreciation and freight.
Plant overhead includes direct and indirect costs associated with the operation of the Keyes Plant, including the cost of electricity and natural gas, maintenance, insurance, direct labor, depreciation and freight. The feedstock for producing Renewable Natural Gas is supplied by dairy operators who lease us land and supply our digesters with their manure flush.
We are focused on processes that extract sugar from cellulosic feedstocks and then utilize the remaining biomass to produce low carbon renewable hydrogen for the production of sustainable aviation fuel, renewable diesel and potentially sale of renewable hydrogen to third parties as transportation fuel.
We are focused on processes that extract sugar from cellulosic feedstocks and then use the remaining biomass to produce low carbon ethanol, renewable hydrogen, sustainable aviation fuel, and renewable diesel. Key Performance Indicators (KPI): Aemetis measures performance based on the utilization of our plants, production of products, and associated pricing and margins.
This was partially offset by (i) an increase in other assets of $3.9 million and (ii) a decrease in other liabilities $10.0 million. 40 Cash used by investing activities was $31.3 million, of which $8.5 million was used for capital projects in the Keyes Plant, $22.9 million was used for capital projects related to Dairy Renewable Natural Gas, $0.1 million for capital projects at the India Plant, and $7.6 million related to all other capital projects.
Cash used by investing activities was $23.7 million, of which $5.7 million was used for capital projects in the Keyes Plant, $24.7 million was used for capital projects associated with production of Renewable Natural Gas, $1.3 million for capital projects at the India Plant, and $1.4 million related to all other capital projects.
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.
Shipments of ethanol and WDG 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.
Revenue Fiscal Year Ended December 31 (in thousands) 2022 vs 2021 2022 2021 Inc/(dec) % change California Ethanol $ 228,194 $ 211,251 $ 16,943 8.0 % California Dairy Renewable Natural Gas* 1,210 1,445 (235 ) -16.3 % India Biodiesel 28,111 696 27,415 3938.9 % All Other - 2 (2 ) -100.0 % Eliminations (1,002 ) (1,445 ) 443 -30.7 % Total $ 256,513 $ 211,949 $ 44,564 21 % *Most California Dairy Renewable Natural Gas revenue is intercompany, refer to Footnote 11 for split between intercompany and external sales.
Fiscal Year Ended December 31 (in thousands) 2023 vs 2022 2023 2022 Inc/(dec) % change California Ethanol $ 104,068 $ 228,194 $ (124,126 ) -54.4 % California Dairy Renewable Natural Gas* 5,455 1,210 4,245 350.8 % India Biodiesel 77,194 28,111 49,083 174.6 % Eliminations - (1,002 ) 1,002 -100.0 % Total $ 186,717 $ 256,513 $ (69,796 ) -27 % *Most California Dairy Renewable Natural Gas revenue is intercompany in 2022, refer to Item 8, Footnote 11 for the split between intercompany and external sales.
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.
The transaction price is determined based on daily market prices negotiated by Murex for ethanol and by our marketing partner A.L. Gilbert Company (“A.L. Gilbert”) for WDG. The transaction price is allocated to one performance obligation.
Recoverability of Our Long-Lived Assets Property and Equipment Property, plant and equipment are carried at cost less accumulated depreciation after assets are placed in service and are comprised primarily of buildings, furniture, machinery, equipment, land, and plants in North America and India.
The following table shows our sales in India Biodiesel by product category: India Biodiesel For the twelve months ended December 31, 2023 2022 Biodiesel sales $ 74,503 $ 27,041 Other sales 2,691 1,070 $ 77,194 $ 28,111 Recoverability of Our Long-Lived Assets Property and Equipment Property, plant and equipment are carried at cost less accumulated depreciation after assets are placed in service and are comprised primarily of buildings, furniture, machinery, equipment, land, and plants in North America and India.
Our India Biodiesel segment owns and operates a plant in Kakinada, India (“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 currently have agreements with a total of 43 dairies and are seeking to increase that. Our India Biodiesel segment includes a biodiesel production plant in Kakinada, India (“Kakinada Plant”) with a nameplate production capacity of about 60 million gallons per year. It produces high quality distilled biodiesel and refined glycerin for customers in India.
The increase in cost of goods sold during the year ended December 31, 2022, compared to December 31, 2021, was attributable to an increase in the volume of biodiesel feedstock by 3440% to 17.7 thousand metric tons during the year ended December 31, 2022, compared to 0.5 thousand tons during the year ended December 31, 2021, coupled with an increase in the average price of biodiesel feedstock by 36% to $843, compared to $619 in the same period in 2021.
The increase in revenues for the year ended December 31, 2023, compared to the year ended December 31, 2022, was due to an increase in the sales volume of biodiesel from 17.7 thousand metric tons to 60.5 thousand metric tons offset by decrease in average biodiesel price per metric ton to $1,232 from $1,526 per metric ton during the same period in 2022.
The increase in accretion and other expenses of the Series A Preferred Units was due to accelerated accretion due to a PUPA Amendment. Gain on litigation arose from the settlement of the EdenIQ lawsuit in the second quarter. The loss on debt extinguishment was due to the PUPA Amendment.
The decrease in accretion and other expenses of the Series A Preferred Units was due to amendments obtained at lower interest costs and a $30.0 million payment on the Series A preferred units. Gain on litigation reflects the settlement of the EdenIQ lawsuit in the second quarter of 2022.
Change in Working Capital and Cash Flows The below table (in thousands) describes the changes in current and long-term debt during the year ended December 31, 2022: Increases to debt: Accrued interest $ 22,560 Maturity date extension fee and other fees 2,337 Sub debt extension fees 680 Fuels Revolving Line draw 32,980 Carbon Revolving Line draw 30,500 Construction Loan draw 20,159 Working capital loan draw 3,941 Financing for equipment term loan 290 Total Increases to debt $ 113,447 Decreases to debt: Principal, fees, and interest payments to senior lender $ (45,058 ) Principal and interest payments to EB-5 investors (217 ) Change in debt issuance costs, net of amortization (6,315 ) Term loan payments (36 ) Construction Loan payments (286 ) Working capital loan payments (4,062 ) Total Decreases to debt $ (55,974 ) Change in total debt $ 57,473 Working capital changes resulted in (i) a $0.5 million decrease in inventories, (ii) a $0.3 million decrease in accounts receivable, (iii) a $1.4 million decrease in prepaid expenses, (iv) an increase in other current assets of $3.0 million, and (v) a $3.4 million decrease in cash caused by selling lower volumes of ethanol in the fourth quarter.
Change in Working Capital and Cash Flows The following table describes changes in current and long-term debt (in thousands) during the year ended December 31, 2023: Increases to debt: Accrued interest $ 33,870 Maturity date extension fee and other fees 2,329 Sub debt extension fees 680 Revolving Notes Series B draw 800 Fuels Revolving Line draw 15,065 Construction Loan draw 21,467 Working capital loan draw 40,040 Change in debt issuance costs, net of amortization 116 Total Increases to debt $ 114,367 Decreases to debt: Principal, fees, and interest payments to senior lender $ (26,896 ) Principal and interest payments to EB-5 investors (213 ) Term loan payments (9 ) Construction Term loan payments (2,217 ) Working capital loan payments (36,551 ) Total Decreases to debt $ (65,886 ) Change in total debt $ 48,481 Working capital changes reflect (i) a $13.6 million increase in inventories consisting mostly of raw material procurement in India and production of biodiesel, (ii) a $7.4 million increase in accounts receivable, (iii) a $0.9 million decrease in prepaid expenses, (iv) a decrease in other current assets of $0.2 million, and (v) a $1.6 million decrease in cash caused by India segment operational activities.
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.
We have 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, and revenues are recorded at the gross invoiced amount.
In addition, for the year ended December 31, 2022, we incurred $4.0 million more in natural gas costs, and $2.1 million more in transportation costs. California Dairy Renewable Natural Gas . Cost of Goods Sold expenses relate to dairy manure payments, maintenance on the dairy digesters, production bonuses, and depreciation. India Biodiesel .
Cost of Goods Sold expenses relate to dairy manure payments, maintenance on the dairy digesters, production bonuses, and depreciation. The eliminations in 2022 relate to intercompany sales. India Biodiesel .
The lower CI of ethanol produced at the Keyes Plant will allow us to realize a higher price for the ethanol produced and sold at the Keyes Plant.
This changes will lower the carbon intensity (CI) of the ethanol we produce and allow us to sell it for a correspondingly higher price.
In October 2020, we commenced an at-the-market offering program, which allows us to sell and issue shares of our common stock from time-to-time. During the year ended December 31, 2022, we issued 1.5 million shares of common stock under the at-the-market offering program for net proceeds of $12.0 million net of commissions and offering related expenses .
In October 2020, we commenced an at-the-market stock sales program, which allows us to sell and issue shares of our common stock into the publicly traded markets.

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