10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: June 30, 2022

OR

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

For the transition period from              to             

Commission File Number: 001-36475

AEMETIS, INC.

(Exact name of registrant as specified in its charter)

Delaware	26-1407544
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

20400 Stevens Creek Blvd., Suite 700

Cupertino, CA 95014

 (Address of Principal Executive Offices, including zip code)

(408) 213-0940

 (Registrant’s telephone number, including area code)

Title of each class of registered securities	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 par value	AMTX	NASDAQ

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

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

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

Large accelerated filer	☐	Accelerated Filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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

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

The number of shares outstanding of the registrant’s Common Stock on July 31, 2022 was 34,584,207 shares.

AEMETIS, INC.

FORM 10-Q

Quarterly Period Ended June 30, 2022

INDEX

Item 1	Financial Statements.	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	33
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	44
Item 4.	Controls and Procedures.	44
PART II--OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors.	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	45
Item 3.	Defaults Upon Senior Securities.	45
Item 4.	Mine Safety Disclosures.	45
Item 5.	Other Information.	45
Item 6.	Exhibits.	46
Signatures		47

2

SPECIAL NOTE REGARDING FORWARD—LOOKING STATEMENTS

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

3

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements.

AEMETIS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited, In thousands except for par value)

	June 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents ($18 and $19 respectively from VIE)	$	3,558		$	7,751
Accounts receivable, net of allowance for doubtful accounts of $0 and $1,404 as of June 30, 2022 and December 31, 2021, respectively		1,278			1,574
Inventories, net of allowance for excess and obsolete inventory of $1,040 as of June 30, 2022 and December 31, 2021, respectively		4,905			5,126
Prepaid expenses ($184 and $335 respectively from VIE)		4,752			5,598
Other current assets		552			644
Total current assets		15,045			20,693
Property, plant and equipment, net ($54,992 and $39,625 respectively from VIE)		156,790			135,101
Operating lease right-of-use assets ($0 and $10 respectively from VIE)		2,294			2,462
Other assets ($537 and $38 respectively from VIE)		4,323			2,575
Total assets	$	178,452		$	160,831
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable ($6,942 and $4,950 respectively from VIE)	$	19,138		$	16,415
Current portion of long term debt		9,003			8,192
Short term borrowings ($9 and $9 respectively from VIE)		15,856			14,586
Mandatorily redeemable Series B convertible preferred stock		3,915			3,806
Accrued property taxes ($0 and $121 respectively from VIE)		984			6,830
Accrued contingent litigation fees		-			6,200
Current portion of operating lease liability ($5 and $11 respectively from VIE)		258			260
Current portion of Series A preferred units ($4,608 and $3,169 respectively from VIE)		4,608			3,169
Other current liabilities ($777 and $306 respectively from VIE)		6,600			5,872
Total current liabilities		60,362			65,330
Long term liabilities:
Senior secured notes and revolving notes		140,084			121,451
EB-5 notes		32,000			32,500
Other long term debt ($36 and $40 respectively from VIE)		11,665			12,038
Series A preferred units ($50,280 and $44,978 respectively from VIE)		50,280			44,978
Operating lease liability		2,191			2,318
Other long term liabilities		4,583			2,454
Total long term liabilities		240,803			215,739
Stockholders' deficit:
Series B convertible preferred stock, $0.001 par value; 7,235 authorized; 1,270 and 1,275 shares issued and outstanding each period, respectively (aggregate liquidation preference of $3,810 and $3,825 respectively)		1			1
Common stock, $0.001 par value; 80,000 authorized; 34,582 and 33,461 shares issued and outstanding each period, respectively		35			33
Additional paid-in capital		221,915			205,305
Accumulated deficit		(339,730	)		(321,227	)
Accumulated other comprehensive loss		(4,934	)		(4,350	)
Total stockholders' deficit		(122,713	)		(120,238	)
Total liabilities and stockholders' deficit	$	178,452		$	160,831

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

4

AEMETIS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)

(Unaudited, in thousands except for earnings per share)

	For the three months ended June 30,						For the six months ended June 30,
	2022			2021			2022			2021
Revenues	$	65,901		$	54,884		$	117,950		$	97,691
Cost of goods sold		66,115			51,238			121,249			97,653
Gross profit (loss)		(214	)		3,646			(3,299	)		38
Research and development expenses		51			21			87			44
Selling, general and administrative expenses		7,061			5,753			14,367			11,135
Other operating expense		360			-			360			-
Operating loss		(7,686	)		(2,128	)		(18,113	)		(11,141	)
Other expense (income):
Interest expense
Interest rate expense		4,928			4,529			9,363			10,494
Debt related fees and amortization expense		1,740			690			3,566			1,905
Accretion and other expenses of Series A preferred units		1,506			3,800			3,146			5,743
Gain on debt extinguishment		-			(1,134	)		-			(1,134	)
Gain on litigation		(1,400	)		-			(1,400	)		-
Other expense (income)		(14,254	)		544			(14,295	)		513
Loss before income taxes		(206	)		(10,557	)		(18,493	)		(28,662	)
Income tax expense		3			-			10			7
Net loss	$	(209	)	$	(10,557	)	$	(18,503	)	$	(28,669	)
Other comprehensive loss
Foreign currency translation loss		(390	)		(184	)		(584	)		(209	)
Comprehensive loss	$	(599	)	$	(10,741	)	$	(19,087	)	$	(28,878	)
Net loss per common share
Basic	$	(0.01	)	$	(0.34	)	$	(0.54	)	$	(1.00	)
Diluted	$	(0.01	)	$	(0.34	)	$	(0.54	)	$	(1.00	)
Weighted average shares outstanding
Basic		34,536			30,924			34,128			28,781
Diluted		34,536			30,924			34,128			28,781

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

5

AEMETIS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	For the six months ended June 30,
	2022			2021
Operating activities:
Net loss	$	(18,503	)	$	(28,669	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation		3,389			1,116
Depreciation		2,661			2,764
Debt related fees and amortization expense		3,566			1,905
Intangibles and other amortization expense		23			24
Accretion and other expenses of Series A preferred units		3,146			5,743
Loss on asset disposals		47			-
Gain on debt extinguishment		-			(1,134	)
Gain on litigation		(1,400	)		-
Loss on lease termination		736			-
Provision for bad debts		-			144
Changes in operating assets and liabilities:
Accounts receivable		294			(70	)
Inventories		187			(610	)
Prepaid expenses		2,138			(4,393	)
Other assets		(1,647	)		2,588
Accounts payable		392			(2,711	)
Accrued interest expense and fees		8,542			4,361
Other liabilities		(10,054	)		729
Net cash used in operating activities		(6,483	)		(18,213	)
Investing activities:
Capital expenditures		(22,518	)		(12,935	)
Grant proceeds and other reimbursements received for capital expenditures		6,147			1,224
Net cash used in investing activities		(16,371	)		(11,711	)
Financing activities:
Proceeds from borrowings		30,622			-
Repayments of borrowings		(16,191	)		(53,523	)
Lender debt renewal and waiver fee payments		(869	)		-
Grant proceeds received for capital expenditures		-			115
Payments on finance leases		(182	)		(247	)
Proceeds from issuance of common stock in equity offering		5,124			86,319
Proceeds from the exercise of stock options		201			1,032
Proceeds from Series A preferred units financing		-			3,130
Series A preferred financing redemption		-			(300	)
Net cash provided by financing activities		18,705			36,526
Effect of exchange rate changes on cash and cash equivalents		(44	)		(19	)
Net change in cash and cash equivalents for period		(4,193	)		6,583
Cash and cash equivalents at beginning of period		7,751			592
Cash and cash equivalents at end of period	$	3,558		$	7,175
Supplemental disclosures of cash flow information, cash paid:
Cash paid for interest	$	14,270		$	5,425
Income taxes paid		10			7
Supplemental disclosures of cash flow information, non-cash transactions:
Subordinated debt extension fees added to debt		340			340
Debt fees added to revolving lines		500			-
Fair value of warrants issued to subordinated debt holders		1,393			281
Fair value of warrants issued for guarantee fees		2,012			-
Fair value of warrants issued to lender for debt issuance costs		3,158			-
Fair value of stock issued to lender		1,335			-
Lender debt extension, waiver, and other fees added to debt		583			1,215
Capital expenditures in accounts payable		10,230			4,948
Payment of debt added to revolving lines		16,266			-
Financing lease liabilities arising from obtaining right of use assets		2,932			-
Capital expenditures purchased on financing		-			55
Issuance of equity to pay off accounts payable		-			893

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

6

AEMETIS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited, in thousands)

For the six months ended June 30, 2022

	Series B Preferred Stock					Common Stock				Additional		Accumulated			Accumulated Other Comprehensive			Total Stockholders'
Description	Shares			Dollars		Shares		Dollars		Paid-in Capital		Deficit			Loss			deficit
Balance at December 31, 2021		1,275		$	1		33,461	$	33	$	205,305	$	(321,227	)	$	(4,350	)	$	(120,238	)
Issuance of common stock		-			-		341		1		3,348		-			-			3,349
Series B conversion to common stock		(5	)		-		1		-		-		-			-			-
Stock options exercised		-			-		263		-		196		-			-			196
Stock-based compensation		-			-		-		-		2,040		-			-			2,040
Issuance and exercise of warrants		-			-		113		-		4,550		-			-			4,550
Foreign currency translation loss		-			-		-		-		-		-			(194	)		(194	)
Net loss		-			-		-		-		-		(18,294	)		-			(18,294	)
Balance at March 31, 2022		1,270		$	1		34,179	$	34	$	215,439	$	(339,521	)	$	(4,544	)	$	(128,591	)
Issuance of common stock		-			-		400		1		5,123		-			-			5,124
Stock options exercised		-			-		3		-		4		-			-			4
Stock-based compensation		-			-		-		-		1,349		-			-			1,349
Foreign currency translation loss		-			-		-		-		-		-			(390	)		(390	)
Net loss		-			-		-		-		-		(209	)		-			(209	)
Balance at June 30, 2022		1,270		$	1		34,582	$	35	$	221,915	$	(339,730	)	$	(4,934	)	$	(122,713	)

For the six months ended June 30, 2021

	Series B Preferred Stock				Common Stock				Additional		Accumulated			Accumulated Other Comprehensive			Total Stockholders'
Description	Shares		Dollars		Shares		Dollars		Paid-in Capital		Deficit			Loss			deficit
Balance at December 31, 2020		1,323	$	1		22,830	$	23	$	93,426	$	(274,080	)	$	(4,114	)	$	(184,744	)
Issuance of common stock		-		-		5,682		6		62,389		-			-			62,395
Stock options exercised		-		-		1,226		1		1,002		-			-			1,003
Stock-based compensation		-		-		-		-		835		-			-			835
Issuance and exercise of warrants		-		-		113		-		281		-			-			281
Foreign currency translation loss		-		-		-		-		-		-			(25	)		(25	)
Net loss		-		-		-		-		-		(18,112	)		-			(18,112	)
Balance at March 31, 2021		1,323	$	1		29,851	$	30	$	157,933	$	(292,192	)	$	(4,139	)	$	(138,367	)
Issuance of common stock		-		-		976		1		24,773		-			-			24,774
Stock options exercised		-		-		745		1		28		-			-			29
Stock-based compensation		-		-		-		-		281		-			-			281
Foreign currency translation loss		-		-		-		-		-		-			(184	)		(184	)
Net loss		-		-		-		-		-		(10,557	)		-			(10,557	)
																	$	-
Balance at June 30, 2021		1,323	$	1		31,572	$	32	$	183,015	$	(302,749	)	$	(4,323	)	$	(124,024	)

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

7

1. Nature of Activities and Summary of Significant Accounting Policies

Nature of Activities. Founded in 2006 and headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis, “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas and renewable fuels company focused on the acquisition, development and commercialization of innovative technologies that replace traditional petroleum-based products.

We own and operate a 65 million gallon per year ethanol production facility located in Keyes, California (the “Keyes Plant”). In addition to low carbon renewable fuel ethanol, the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), and Condensed Distillers Solubles (“CDS”), all of which are sold as animal feed to local dairies and feedlots. In the fourth quarter of 2021, an ethanol zeolite membrane dehydration system was installed at the Keyes Plant and is in the process of being commissioned, a key first step in the electrification of the Keyes Plant.

During 2018, Aemetis Biogas, LLC (“ABGL”) was formed to construct bio-methane anaerobic digesters at local dairies near the Keyes Plant, many of whom also purchase WDG produced at the Keyes Plant. The digesters are connected via an underground private pipeline owned by ABGL to a gas cleanup and compression unit being built at the Keyes Plant to produce dairy renewable natural gas (“RNG”). Upon receiving the bio-methane from the dairies, impurities are removed, and the bio-methane is converted to negative carbon intensity RNG that will either be injected into the statewide PG&E gas utility pipeline, supplied as compressed RNG that will service local trucking fleets, or used as renewable process energy at the Keyes Plant. Our Dairy Renewable Natural Gas segment, comprised of ABGL, has completed Phase 1 of our California biogas digester network and pipeline system that converts waste dairy methane gas into RNG, including two operational dairies and seven miles of pipeline.  ABGL is now executing Phase 2 construction with the completion of sixteen miles of pipeline and the commissioning of the biogas-to-RNG upgrade unit at the Keyes Plant as well as beginning construction of additional dairy digesters.

During the second quarter of 2022, Aemetis has completed construction of a third dairy digester and commissioning of the centralized gas cleanup facility and utility gas interconnect located at the Keyes Plant where dairy biogas will be upgraded to RNG and injected into the utility pipeline. Upon receiving pathway certification from the California Air Resources Board (CARB), the fuel is expected to be delivered into the Northern California gas delivery system.

Our ‘Carbon Zero’ biofuels production plants are designed to produce biofuels, including sustainable aviation fuel (“SAF”) and diesel fuel utilizing renewable hydrogen and non-edible renewable oils sourced from existing Aemetis biofuels plants and other sources. The first plant to be built, in Riverbank, California, “Carbon Zero 1”, is expected to utilize hydroelectric and other renewable power available onsite to produce 90 million gallons per year of SAF, renewable diesel, and other byproducts. 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. By producing ultra-low carbon renewable fuels, the Company expects to capture higher value D3 Renewable Identification Numbers (“RINs”) and California’s LCFS credits. D3 RINs have a higher value in the marketplace than D6 RINs due to D3 RINs’ relative scarcity and mandated pricing formula from the United States Environmental Protection Agency (“EPA”).

On April 1, 2021, we established Aemetis Carbon Capture, Inc. to build Carbon Capture and Sequestration (CCS) projects to generate LCFS and IRS 45Q credits by injecting CO₂ into wells which are monitored for emissions to ensure the long-term sequestration of carbon underground. The CCS projects are expected to capture and sequester up to two million metric tons per year of CO₂ at the two Aemetis biofuels plant sites in Keyes and Riverbank, California. In July 2022, Aemetis purchased 24 acres, on the Riverbank Industrial Complex site in Riverbank, California, to develop a CCS injection well. The Company plans to construct a characterization well to obtain both the data and well design information required for the EPA Class VI CO₂ injection well permit application. The well is expected to sequester up to one million metric tons per year of CO₂.

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

8

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

All intercompany balances and transactions have been eliminated in consolidation.

The accompanying consolidated condensed balance sheet as of June 30, 2022, the consolidated condensed statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021, the consolidated condensed statements of cash flows for the six months ended June 30, 2022 and 2021, and the consolidated condensed statements of stockholders’ deficit for the three and six months ended June 30, 2022 and 2021 are unaudited. The consolidated condensed balance sheet as of December 31, 2021 was derived from the 2021 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the 2021 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2021. The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of Company’s management, the unaudited interim consolidated condensed financial statements as of and for the three and six months ended June 30, 2022 and 2021 have been prepared on the same basis as the audited consolidated statements as of and for the year ended December 31, 2021 and reflect all adjustments, consisting primarily of normal recurring adjustments, necessary for the fair presentation of its statement of financial position, results of operations and cash flows. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the operating results for any subsequent quarter, for the full fiscal year or any future periods.

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

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

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. Heiskell Purchasing Agreement”). On May 13, 2020, we entered into an amendment to the Corn Procurement and Working Capital Agreement with J.D. Heiskell (the “Corn Procurement and Working Capital”), under the terms of which we buy all corn from J.D. Heiskell and sell all WDG and corn oil we produce to J.D. Heiskell. Following May 13, 2020 and until October, 2021, we sold the majority of our fuel ethanol production to one customer, Kinergy Marketing, LLC (“Kinergy”), through individual sales transactions. We terminated the Ethanol Marketing Agreement with Kinergy as of September 30, 2021. Effective October 1, 2021, we entered into Fuel Ethanol Purchase and Sale Agreement with Murex LLC (“Murex”), in which we sell all our ethanol to Murex. Given the similarity of the individual sales transactions with Kinergy and Murex, we have assessed them as a portfolio of similar contracts. The performance obligation is satisfied by delivery of the physical product to one of our customer’s contracted trucking companies. Upon delivery, the customer has the ability to direct the use of the product and receive substantially all of its benefits. The transaction price is determined based on daily market prices negotiated by Kinergy and 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. 

9

The below table shows our sales in our California Ethanol segment by product category:

	For the three months ended June 30,				For the six months ended June 30,
	2022		2021		2022		2021
Ethanol and high-grade alcohol sales	$	47,656	$	42,169	$	85,551	$	72,089
Wet distiller's grains sales		15,150		10,630		26,666		21,665
Other sales		3,085		1,931		5,715		3,304
	$	65,891	$	54,730	$	117,932	$	97,058

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

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

For our California Ethanol segment, we buy corn as feedstock for the production of ethanol, from our working capital partner J.D. Heiskell. Prior to May 13, 2020, we sold all our ethanol, WDG, and corn oil to J.D. Heiskell and we bought all our corn to process into ethanol from J.D. Heiskell. After May 13, 2020, we sold most of our fuel ethanol to one customer, Kinergy, and sold all WDG and corn oil to J.D. Heiskell. During the second quarter of 2021, we signed a biofuels offtake agreement with Murex, and beginning on October 1, 2021 we sold all our fuel ethanol to Murex. We only have customer relationships with Kinergy and Murex, hence the principal and agent criteria are not applied. However, we are still buying corn and selling WDG and corn oil to J.D.Heiskell. We analyzed the principal versus agent relationship criteria below.

We consider the purchase of corn as a cost of goods sold and the sale of WDG and, corn oil, upon trucks leaving the Keyes Plant, as revenue on the basis that (i) we control and bear the risk of gain or loss on the processing of corn which is purchased at market prices into ethanol and (ii) we have legal title to the goods during the processing time. The pricing for both WDG and corn oil is set independently. Revenues from WDG and corn oil 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. 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, when revenue is recognized. Revenues are recorded at the gross invoiced amount. Hence, we are the principal in California Ethanol segment where our customer and vendor may be the same.

Dairy Renewable Natural Gas: All of our Dairy Renewable Natural Gas segment revenues during the three and six months ended June 30, 2022 and 2021 were from sales of biogas to the Keyes Plant for use in boilers. This resulted in lowering the carbon intensity of the Keyes Plant and increased revenues on ethanol sold through the California Ethanol segment. These revenues have been eliminated once consolidated. Refer to Note 10 Segment Information for the unconsolidated revenue of our Dairy Renewable Natural Gas segment.

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

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

	For the three months ended June 30,				For the six months ended June 30,
	2022		2021		2022		2021
Biodiesel sales	$	-	$	107	$	-	$	465
Refined glycerin sales		-		9		-		125
Other sales		10		38		18		43
	$	10	$	154	$	18	$	633

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

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

Shipping and Handling Costs. Shipping and handling costs are classified as a component of cost of goods sold in the accompanying consolidated statements of operations.

Research and Development. Research and development costs are expensed as incurred, unless they have alternative future uses to the Company.

Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances at various financial institutions domestically and abroad. The Federal Deposit Insurance Corporation insures domestic cash accounts. The Company’s accounts at these institutions may at times exceed federally insured limits. The Company has not experienced any losses in such accounts.

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

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The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivables are charged against the allowance for doubtful accounts once un-collectability has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate, additional allowances may be required. We reserved $1.4 million in the allowances for doubtful accounts as of December 31, 2021 and wrote off the balances as uncollectible during the second quarter of 2022.

Inventories. Finished goods, raw materials, and work-in-process inventories are valued using methods which approximate the lower of cost (first-in, first-out) or net realizable value (“NRV”).  Distillers’ grains and related products are stated at NRV.  In the valuation of inventories, NRV is determined as estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.Variable Interest Entities. We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other variable interests in is considered a variable interest entity (“VIE”). We consolidate VIEs when we are the primary beneficiary. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, we assess whether any changes in our interest or relationship with the entity affects our determination of whether the entity is still a VIE and, if so, whether we are the primary beneficiary. If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE in accordance with applicable U.S. GAAP.Property, Plant and Equipment. Property, plant, and equipment are carried at cost less accumulated depreciation after assets are placed in service and are comprised primarily of plant and buildings, furniture, machinery, equipment, land, and biogas dairy digesters. Capital expenses for in-process project are accumulated in construction in progress and will be capitalized and depreciated once the capital projects are finished and are in service. The Company’s plant in Goodland, Kansas (the “Goodland Plant”) is partially completed and is not ready for operation. It is the Company’s policy to depreciate capital assets over their estimated useful lives using the straight-line method. 

The Company evaluates the recoverability of long-lived assets with finite lives in accordance with ASC Subtopic 360-10-35 Property Plant and Equipment—Subsequent Measurements, which requires recognition of impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, based on estimated undiscounted cash flows, the impairment loss would be measured as the difference between the carrying amount of the assets and its estimated fair value. The Company has not recorded any impairment during the three and six months ended June 30, 2022 and 2021.

California Energy Commission Low-Carbon Fuel Production Program. The Company has been awarded $4.2 million in matching grants from the California Energy Commission Low-Carbon Fuel Production Program (“LCFPP”). The LCFPP grant reimburses the Company for costs to design, procure, and install processing facility to clean-up, measure and verify negative-carbon intensity dairy renewable natural gas fuel at the production facility in Keyes, California. The Company has received $3.8 million from the LCFPP as of June 30, 2022, as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

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

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In October 2020, the Company was awarded $7.8 million in matching grants from the CDFA Dairy Digester Research and Development program. The CDFA grant reimburses the Company for costs required to permit and construct six of the Company’s biogas capture systems under contract with central California dairies. The Company has received $1.6 million from the CDFA 2020 grant program as of June 30, 2022, as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

California Energy Commission Low Carbon Advanced Ethanol Grant Program. In May 2019, the Company was awarded the right to receive reimbursements from the California Energy Commission Community-Scale and Commercial-Scale Advanced Biofuels Production Facilities grant under the Alternative and Renewable Fuel and Vehicle Technology Program in an amount up to $5.0 million (the “CEC Reimbursement Program”) in connection with the Company’s expenditures toward the development of the Riverbank Cellulosic Ethanol Facility. To comply with the guidelines of the CEC Reimbursement Program, the Company must make a minimum of $7.9 million in matching contributions to the Riverbank project. The Company receives funds under the CEC Reimbursement Program for actual expenses incurred up to $5.0 million as long as the Company makes the minimum matching contribution. Given that the Company has not made the minimum matching contribution, the grant for reimbursement of capital expenditures of $1.7 million is presented with long-term liabilities as of June 30, 2022, and December 31, 2021. Due to the uncertainty associated with meeting the minimum matching contribution, the reimbursement will be recognized when the Company makes the minimum matching contribution.

U.S. Department of Food and Agriculture Forest Service Grant. Aemetis Advanced Products Keyes (“AAPK”) has been awarded $245 thousand in matching grants from the U.S. Department of Food and Agriculture Forest Service (“US Forest Service”) under the Wood Innovation and Community Wood program. The grant reimburses the Company for continued development of technologies and processes to valorize forest waste for the production of cellulosic ethanol. AAPK has received $73 thousand from the US Forest Service as reimbursement for actual allowable program costs incurred through June 30, 2022.

California Energy Commission Grant for Solar Microgrid, DSC and Battery Backup System. Aemetis Advanced Fuels Keyes (“AAFK”) has been awarded an $8.0 million grant to design, construct and commission a grid-connected 1.56 MW photovoltaic microgrid and 1.25MW/2.5MWh Battery Energy Storage System integrated with an artificial intelligence-driven distributed control system (DCS). The grant requires $1.55 million in matching contribution. AAFK received $3.3 million in grant funds from this program as reimbursement for actual expenditures incurred through June 30, 2022. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

California Department of Forestry and Fire Protection Grant. AAPK has been awarded $2 million in matching grants from the CAL FIRE Business and Workforce Development Grant Program (“CAL Fire”) in May 2022. This CAL Fire grant program reimburses AAPK for costs to design, construct, and commission a 2 million gallon per year cellulosic ethanol facility that will convert conifer biomass from forested regions of the Sierra Nevada into an ultra‐low carbon biofuel derived from 100% forest biomass (“CAL Fire Conversion Program”). AAPK must contribute $5.8 million in cost share contributions to the project to receive grant proceeds. AAPK has received no grant funds from the CAL Fire Conversion Program as reimbursement for actual costs through June 30, 2022.

California Department of Forestry and Fire Protection Grant. AAPK has been awarded $500 thousand in grants from CAL Fire in May 2022. This CAL Fire grant program reimburses AAPK for costs to advance a new‐to‐the world technology that circumvents current limitations surrounding the extraction of cellulosic sugars by pioneering a novel route for deconstructing woody biomass using ionic liquids (“CAL Fire Extraction Program”). AAPK has received no grant funds from the CAL Fire Extraction Program as reimbursement for actual costs through June 30, 2022.

U.S Forest Service Community Wood Grant. Aemetis Advanced Products Riverbank (“AAPR”) has been awarded $642 thousand in matching grants from the U.S Forest Service Wood Innovations Program (“USFS”) in May 2022. The USFS grant program reimburses AAPR for costs to design, construct, and commission a plant to produce cellulosic ethanol using preliminary research and development in partnership with the Joint Bioenergy Institute (JBEI). USFS grant funds will be used to complete the FEL-3 design phase of the entire process, construct a biomass pretreatment unit to extract sugars at the Aemetis Riverbank site and ferment sugars into ethanol at the Keyes Plant. AAPR must contribute $2.4 million in cost share contributions to the project to receive grant proceeds. AAPK has received no grant funds from the USFS grant program as reimbursement for actual costs through June 30, 2022.

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USDA’s Biofuel Producer Program Grant. 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. This was recorded in other expense (income) on the Consolidated Statements of Operations and Comprehensive Loss.

Basic and Diluted Net Loss per Share. Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share reflects the dilution of common stock equivalents such as options, convertible preferred stock, debt, and warrants to the extent the impact is dilutive. As the Company incurred net losses for the three and six months ended June 30, 2022 and, 2021, potentially dilutive securities have been excluded from the diluted net loss per share computations as their effect would be anti-dilutive.

The following table shows the number of potentially dilutive shares excluded from the diluted net loss per share calculation as of June 30, 2022 and 2021:

	As of
	June 30, 2022		June 30, 2021
Series B preferred (post split basis)		127		132
Common stock options and warrants		4,748		4,252
Debt with conversion feature at $30 per share of common stock		1,228		1,273
Total number of potentially dilutive shares excluded from the diluted net (loss) per share calculation		6,103		5,657

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

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

Segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.  The Company further evaluates its operating segments to determine its reportable segments. Aemetis recognizes three reportable segments “California Ethanol”, “Dairy Renewable Natural Gas”, and “India Biodiesel.”

The “California Ethanol” reportable segment includes the Company’s 65 million gallon per year Keyes plant and the adjacent land leased for the production of CO₂.

The “Dairy Renewable Natural Gas” reportable segment include, the dairy digesters, pipeline and gas condition hub for the production of biogas from dairies near Keyes, California.

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The “India Biodiesel” reportable segment includes the Company’s 50 million gallon per year nameplate capacity biodiesel manufacturing Kakinada Plant, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. The Company’s biodiesel is marketed and sold primarily to customers in India through brokers and by the Company directly.

The Company has additional operating segments that were determined not to be reportable segments, including the Carbon Zero 1 facility in Riverbank, the Goodland Plant in Kansas and the research and development facility in Minnesota.  Refer to the “All Other” category.

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

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

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

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

For a complete summary of the Company’s significant accounting policies, please refer to the Company’s audited financial statements and notes thereto for the years ended December 31, 2021 and 2020 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2022.

2. Inventories

Inventories consist of the following:

	As of
	June 30, 2022		December 31, 2021
Raw materials	$	903	$	727
Work-in-progress		2,522		2,083
Finished goods		1,480		2,316
Total inventories	$	4,905	$	5,126

As of June 30, 2022, and December 31, 2021, the Company recognized a lower of cost or net realizable value impairment of $165 thousand and none respectively, related to inventory.

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3. Property, Plant and Equipment

Property, plant and equipment consist of the following:

	As of
	June 30, 2022			December 31, 2021
Land	$	6,156		$	4,082
Plant and buildings		122,165			97,110
Furniture and fixtures		1,504			1,334
Machinery and equipment		5,203			5,294
Tenant improvements		56			-
Construction in progress		51,279			55,859
Property held for development		15,437			15,437
Finance lease right of use assets		3,152			2,317
Total gross property, plant & equipment		204,952			181,433
Less accumulated depreciation		(48,162	)		(46,332	)
Total net property, plant & equipment	$	156,790		$	135,101

For the three months ended June 30, 2022 and 2021, interest capitalized in property, plant, and equipment was $2.6 million and $0.9 million, respectively. For the six months ended June 30, 2022 and 2021, interest capitalized in property, plant, and equipment was $4.7 million and $1.5 million, respectively.

Construction in progress includes costs for the biogas construction projects (dairy digesters and pipeline), Riverbank projects (sustainable aviation fuel and renewable diesel plant as well as carbon capture characterization well), and energy efficiency projects at the Keyes Plant. Depreciation on the components of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:

	Years
Plant and buildings		20 - 30
Machinery and equipment		5 - 15
Furniture and fixtures		3 - 5

For the three months ended June 30, 2022 and 2021, the Company recorded depreciation expense of $1.3 million and $1.4 million, respectively. For the six months ended June 30, 2022 and 2021, the Company recorded depreciation expense of $2.7 million and $2.8 million, respectively.

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4. Debt

Debt consists of the following:

	June 30, 2022		December 31, 2021
Third Eye Capital term notes	$	7,089	$	7,095
Third Eye Capital revolving credit facility		54,039		75,980
Third Eye Capital revenue participation term notes		11,912		11,915
Third Eye Capital acquisition term notes		26,464		26,461
Third Eye Capital Fuels Revolving Line		18,393		-
Third Eye Capital Carbon Revolving Line		22,187		-
Cilion shareholder seller notes payable		6,718		6,619
Subordinated notes		15,105		14,304
EB-5 promissory notes		41,004		40,692
Term loans on capital expenditures		5,697		5,701
Total debt		208,608		188,767
Less current portion of debt		24,859		22,778
Total long term debt	$	183,749	$	165,989

Third Eye Capital Note Purchase Agreement

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

Pursuant to the Note Purchase Agreement, Third Eye Capital extended credit in the form of (i) senior secured term loans in an aggregate principal amount of approximately $7.2 million to replace existing notes held by Third Eye Capital (the “Term Notes”); (ii) senior secured revolving loans in an aggregate principal amount of $18.0 million (the “Revolving Credit Facility”); (iii) senior secured term loans in the principal amount of $10.0 million to convert the prior revenue participation agreement to a note (the “Revenue Participation Term Notes”); and (iv) senior secured term loans in an aggregate principal amount of $15.0 million (the “Acquisition Term Notes”) used to fund the cash portion of the acquisition of Cilion, Inc. (the Term Notes, Revolving Credit Facility, Revenue Participation Term Notes and Acquisition Term Notes are referred to herein collectively as the “Original Third Eye Capital Notes”).

On February 27, 2019, a promissory note (the “February 2019 Note”, together with the Original Third Eye Capital Notes, the “Third Eye Capital Notes”) for $2.1 million was advanced by Third Eye Capital to Aemetis, Inc., as a short-term credit facility for working capital and other general corporate purposes with an interest rate of 14% per annum maturing on the earlier of (a) receipt of proceeds from any financing, refinancing, or other similar transaction, (b) extension of credit by Third Eye Capital, as lender or as agent on behalf of certain lenders, to the Company or its affiliates, or (c) April 30, 2019. In consideration of the February 2019 Note, $0.1 million of the total proceeds were paid to Third Eye Capital as financing charges. On April 30, 2019, the February 2019 Note was modified to remove the stated maturity date and instead be due on demand by Third Eye Capital. In third quarter of 2019, the February 2019 Note was modified to include additional borrowings of $0.7 million. In first quarter of 2020, the February 2019 Note was modified to include additional borrowings of $0.6 million. The February 2019 note was fully repaid in the first quarter of 2021.

On March 14, 2021, Third Eye Capital agreed to Limited Waiver and Amendment No. 19 to the Note Purchase Agreement (“Amendment No. 19”), to (i) provide for a waiver of the ratio of note indebtedness covenant for the quarter ended December 31, 2021, (ii) provide for a waiver of the consolidated unfunded capital expenditures covenant for the quarters through March 31, 2021. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million in cash (the “Amendment No. 19 Fee”). We gave the notice to extend the maturity date of the Notes to April 1, 2022 and the extension fee equal to 1% of the Note Indebtedness in respect to each Note, provided that half of such fee may be added to the outstanding principal balance of each Note on the effective date of each such extension and rest of the balance may be payable in cash or common stock within 60 days of the date of such relevant extension. We evaluated the terms of the Amendment No. 19 and the maturity date extension and applied modification accounting treatment in accordance with ASC 470-50 Debt – Modification and Extinguishment.

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On August 9, 2021, Third Eye Capital agreed to the Limited Waiver and Amendment No. 20 to the Note Purchase Agreement (“Amendment No. 20”) to: (i) provide that, upon written notice to Third Eye Capital, the maturity date may be further extended to April 1, 2023 in exchange for an extension fee equal to 1% of the Note Indebtedness in respect of each Note, where half of such fee may be added to the outstanding principal balance of each Note on the effective date of each such extension; (ii) provide for a waiver of the ratio of note indebtedness covenant for the quarters ended March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022; and (iii) provide for a waiver of the unfunded capital expenditures covenant for the quarter ended June 30, 2021 in which the Company exceeded the $100,000 capital expenditures limit. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.3 million in cash. We evaluated the terms of the Amendment No.20 and applied modification accounting treatment in accordance with ASC 470-50 Debt – Modification and Extinguishment. In the first quarter of 2022, the Company exercised the option to extend the maturity of Third Eye Capital Notes to April 1, 2023.

On November 5, 2021, Third Eye Capital agreed to the Limited Waiver and Amendment No. 21 to the Note Purchase Agreement (“Amendment No. 21”) to: (i) provide a waiver for the Blocked Account Agreement Violation in which the Borrowers failed to deliver Blocked Account Control Agreements by August 31, 2021 and (ii) provide for a waiver for the Subordinated Debt Violation, in which the Company made a repayment to a Subordinated Debt lender. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million in cash. We will evaluate the terms of the Amendment No.21 in accordance with ASC 470-50 Debt – Modification and Extinguishment.

On March 8, 2022, Third Eye Capital agreed to the Limited Waiver and Amendment No. 22 to the Note Purchase Agreement (“Amendment No. 22”) to: (i) provide a waiver for the Blocked Account Agreement Violation in which the Borrowers failed to deliver Blocked Account Control Agreements by December 31, 2021, (ii) provide for a waiver for the Subordinated Debt Violation, in which the Company made a repayment to a Subordinated Debt lender, and (iii) provide for a waiver of the consolidated unfunded capital expenditures covenant for the quarters through December 31, 2021. As consideration for such waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million in cash.

On May 11, 2022, Third Eye Capital agreed to the Limited Waiver and Amendment No. 23 to the Note Purchase Agreement (“Amendment No. 23”) to: (i) provide a waiver for the Blocked Account Agreement Violation in which the Borrowers failed to deliver Blocked Account Control Agreements by March 31, 2022, (ii) provide for a waiver of the ratio of note indebtedness covenant for the quarter ended March 31, 2023 and (iii) provide for a waiver of the unfunded capital expenditures covenant for the quarter ended March 31, 2022 in which the Company exceeded the $100,000 capital expenditures limit. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million.

As Amendments No. 19, No. 20, No. 21, No. 22, and No. 23 waived certain covenants for the quarters ended June 30, 2022, September 30, 2022, December 31, 2022, and March 31, 2023. According to ASC 470-10-45 Debt–Other Presentation Matters, if it is probable that the Company will not be able to cure the default at measurement dates within the next 12 months, the related debt needs to be classified as current. To assess this guidance, the Company performed ratio and cash flow analysis using its cash flow forecast and debt levels. The Company forecasted sufficient cash flows over the next 12 months to reduce debt levels of Third Eye Capital and meet operations of the Company. Based on this analysis, the Company believes that it is reasonably possible that through a combination of cash flows from operations, sales from EB-5 investments, and proceeds from the sale of common stock, it will be able to meet the ratio of the note indebtedness covenant over the next 12 months. As such, the notes are classified as long-term debt.

On March 6, 2020, we and a subsidiary entered into a one-year reserve liquidity facility governed by a promissory note, payable to Third Eye Capital, in the principal amount of $18 million. On March 14, 2021, Third Eye Capital agreed to increase the amount available under the reserve liquidity facility to $70.0 million. Borrowings under the reserve liquidity facility are available from March 14, 2021 until maturity on April 1, 2023. Interest on borrowed amounts accrues at a rate of 30% per annum, paid monthly in arrears and may be capitalized and due upon maturity, or 40% if an event of default has occurred and continues. The outstanding principal balance of the indebtedness evidenced by the promissory note, plus any accrued but unpaid interest and any other sums due thereunder, shall be due and payable in full at the earlier to occur of (a) receipt by the Company or its affiliates of proceeds from any sale, merger, equity or debt financing, refinancing or other similar transaction from any third party and (b) April 1, 2023. Any amounts may be re-borrowed up to repaid amounts up until the maturity date of April 1, 2023. The promissory note is secured by liens and security interests upon the property and assets of the Company. In return, the Company will pay a non-refundable standby fee at 2% per annum of the difference between the aggregate principal amount outstanding and the commitment, payable monthly in cash. In addition, if any initial advances are drawn under the facility, the Company will pay a non-refundable one-time fee in the amount of $0.5 million provided that such fee may be added to the principal amount of the promissory note on the date of such initial advance. On August 9, 2021, Third Eye Capital agreed to decrease the amount available under the reserve liquidity notes governed by a promissory note to $40.0 million.

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Terms of Third Eye Capital Notes

A.	Term Notes. As of June 30, 2022, the Company had $7.2 million in principal and interest outstanding net of $76 thousand unamortized debt issuance costs under the Term Notes. The Term Notes accrue interest at 14% per annum. The Term Notes mature on April 1, 2023*.
B.	Revolving Credit Facility. The Revolving Credit Facility accrues interest at the prime rate plus 13.75% (18.50% as of June 30, 2022) payable monthly in arrears. The Revolving Credit Facility matures on April 1, 2023*. As of June 30, 2022, AAFK had $55.2 million in principal and interest and waiver fees outstanding net of $1.1 million unamortized debt issuance costs under the Revolving Credit Facility.
C.	Revenue Participation Term Notes. The Revenue Participation Term Note bears interest at 5% per annum and matures on April 1, 2023*. As of June 30, 2022, AAFK had $12.0 million in principal and interest outstanding net of $119 thousand unamortized debt issuance costs on the Revenue Participation Term Notes.
D.	Acquisition Term Notes. The Acquisition Term Notes accrue interest at the prime rate plus 10.75% (15.50% per annum as of June 30, 2022) and mature on April 1, 2023*. As of June 30, 2022, Aemetis Facility Keyes, Inc. had $26.7 million in principal and interest and redemption fees outstanding net of $202 thousand unamortized debt issuance costs. The outstanding principal balance includes a total of $7.5 million in redemption fees.
E.	Reserve Liquidity Notes. The Reserve Liquidity Notes, with available borrowing capacity in the amount of $40.0 million, accrues interest at the rate of 30% per annum and are due and payable upon the earlier of: (i) the closing of new debt or equity financings, (ii) receipt from any sale, merger, debt or equity financing, or (iii) April 1, 2023. We have no borrowings outstanding under the Reserve Liquidity Notes as of June 30, 2022.
*	The note maturity date can be extended by the Company to April 2024. As a condition to any such extension, the Company would be required to pay a fee of 1% of the carrying value of the debt of which 50% can be paid in cash and 50% can be added to the outstanding debt. As a result of this ability to extend the maturity at the Company’s will, the Third Eye Capital Notes are classified as non-current debt.

The Third Eye Capital Notes contain various covenants, including but not limited to, debt to plant value ratio, minimum production requirements, and restrictions on capital expenditures. The terms of the Third Eye Capital Notes allow the lender to accelerate the maturity in the occurrence of any event that could reasonably be expected to have a material adverse effect on the Company, such as any change in the business, operations, or financial condition. The Company has evaluated the likelihood of such an acceleration event and determined such an event to not be probable in the next twelve months. The terms of the notes allow interest to be capitalized.

The Third Eye Capital Notes are secured by first priority liens on all real and personal property of, and assignment of proceeds from all government grants and guarantees from the Company’s North American subsidiaries. The Third Eye Capital Notes all contain cross-collateral and cross-default provisions. McAfee Capital, LLC (“McAfee Capital”), owned by Eric McAfee, the Company’s Chairman and CEO, provided a guaranty of payment and performance secured by all of its Company shares. In addition, Eric McAfee provided a blanket lien on substantially all of his personal assets, and McAfee Capital provided a guarantee in the amount of $8.0 million.

19

GAFI Term Loan and Revolving Loan. On July 10, 2017, GAFI entered into a Note Purchase Agreement (“Note Purchase Agreement”) with Third Eye Capital. See further discussion regarding GAFI in Note 6. Pursuant to the Note Purchase Agreement, Third Eye Capital agreed, subject to the terms and conditions of the Note Purchase Agreement and relying on each of the representations and warranties set forth therein, to make (i) a single term loan to GAFI in an aggregate amount of $15 million (“Term Loan”) and (ii) revolving advances not to exceed $10 million dollars in the aggregate (the “Revolving Loans”). The interest rate applicable to the Term Loan is equal to 10% per annum. The interest rate applicable to the Revolving Loans is the greater of prime rate plus 7.75% and 12.00% per annum. The maturity date of the loans was extended to July 10, 2021 by exercising an option to extend the GAFI Loan Maturity Date for a fee of $0.5 million. The Company fully repaid the GAFI notes in the first quarter of 2021 and replaced the Note Purchase Agreement with the New Credit Facility, as described below.

Third Eye Capital Revolving Credit Facility for Fuels and Carbon Lines. On March 2, 2022, GAFI and Aemetis Carbon Capture, Inc. (“ACCI”) entered into an Amended and Restated Credit Agreement (“Credit Agreement”) with Third Eye Capital , as administrative agent and collateral agent, and the lender party thereto (the “New Credit Facility”). The New Credit Facility provides for two credit facilities with aggregate availability of up to $100 million, consisting of a revolving credit facility with GAFI for up to $50 million (the “Fuels Revolving Line”) and a revolving credit facility with ACCI for up to $50 million (the “Carbon Revolving Line” and together with the Fuels Revolving Line, the “Revolving Lines”). The revolving loans made under the Fuels Revolving Line have a maturity date of March 1, 2025 and will accrue a rate of interest per annum equal to the greater of (i) the prime rate plus 6.00% and (ii) ten percent (10.0%), and the revolving loans made under the Carbon Revolving Line will have a maturity date of March 1, 2026 and accrue a rate of interest per annum equal to the greater of (i) the prime rate plus 4.00% and (ii) eight percent (8.0%). The revolving loans made under the Fuels Revolving Line are available for working capital purposes and the revolving loans made under the Carbon Revolving Line are available for projects that reduce, capture, use or sequester carbon with the objective of reducing carbon dioxide emissions. In connection with the New Credit Facility, the Company agreed to issue to the lender under the New Credit Facility: (i) warrants entitling the lender to purchase 50,000 shares of common stock of the Company at an exercise price equal to $10.20 per share, exercisable for a five-year period from March 2, 2022; and (ii) warrants entitling holders thereof to purchase 250,000 shares of common stock of the Company, at an exercise price equal to $20.00 per share, exercisable for a ten-year period from March 2, 2022. In addition, under the Fuels Revolving Line, we issued 100,000 shares of common stock to existing note holders under the GAFI note purchase agreement. The shares were accounted at fair value and are being amortized over the life of the Fuels Revolving Line. Upon closing of the New Credit Facility, the Company drew on the revolving lines to repay $16.0 million on the higher interest rate AAFK Revolving Credit Facility, $6.1 million in property taxes, and to fund the capital projects and working capital projects.

As of June 30, 2022, GAFI had $20.2 million in principal and interest outstanding net of $1.9 million unamortized debt issuance costs. As of June 30, 2022, ACCI had $25.1 million in principal and interest outstanding net of $2.9 million in unamortized debt issuance costs.

Cilion shareholder seller notes payable. In connection with the Company’s merger with Cilion, Inc. (“Cilion”), on July 6, 2012, the Company issued $5.0 million in notes payable to Cilion shareholders as merger compensation subordinated to the senior secured Third Eye Capital Notes. The liability bears interest at 3% per annum and is due and payable after the Third Eye Capital Notes have been paid in full. As of June 30, 2022, Aemetis Facility Keyes, Inc. had $6.7 million in principal and interest outstanding under the Cilion shareholder seller notes payable.

Subordinated Notes. On January 6 and January 9, 2012, AAFK entered into Note and Warrant Purchase Agreements with two accredited investors pursuant to which it issued $0.9 million and $2.5 million in original notes to the investors (“Subordinated Notes”). The Subordinated Notes mature every six months. Upon maturity, the Subordinated Notes are generally extended with a fee of 10% added to the balance outstanding plus issuance of warrants exercisable at $0.01 with a two-year term. Interest accrues at 10% per annum and is due at maturity. Neither AAFK nor Aemetis may make any principal payments under the Subordinated Notes until all loans made by Third Eye Capital to AAFK are paid in full.

On January 1, 2022, the maturity on two Subordinated Notes’ was extended until the earlier of (i) June 30, 2022; (ii) after the occurrence of an Event of Default, including failure to pay interest or principal when due and breaches of note covenants. A $90 thousand and $250 thousand cash extension fee was paid by adding the fee to the balance of the new Subordinated Notes and 113 thousand common stock warrants were granted with a term of two years and an exercise price of $0.01 per share.

20

The Company evaluated the January 1, 2022 amendment and the refinancing terms of the notes and applied modification accounting treatment in accordance with ASC 470-50 Debt – Modification and Extinguishment.

At June 30, 2022 and December 31, 2021, the Company had, in aggregate, the amount of $15.1 million and $14.3 million in principal and interest outstanding, respectively, under the Subordinated Notes.

EB-5 promissory notes. EB-5 is a U.S. government program authorized by the Immigration and Nationality Act designed to foster employment-based visa preference for immigrant investors to encourage the flow of capital into the U.S. economy and to promote employment of U.S. workers. The Company entered into a Note Purchase Agreement dated March 4, 2011 (as further amended on January 19, 2012 and July 24, 2012) with Advanced BioEnergy, LP, a California limited partnership authorized as a “Regional Center” to receive EB-5 investments, for the issuance of up to 72 subordinated convertible promissory notes (the “EB-5 Notes”) bearing interest at 2-3%. Each note was issued in the principal amount of $0.5 million and due and payable four years from the date of each note, for a total aggregate principal amount of up to $36.0 million (the “EB-5 Phase I funding”). The original maturity date on the promissory notes can be extended automatically for a one- or two-year period initially and is eligible for further one-year automatic extensions as long as there is no notice of non-extension from investors and the investors’ immigration process is in progress. On February 27, 2019, Advanced BioEnergy, LP, and the Company entered into an Amendment to the EB-5 Notes which restated the original maturity date on the promissory notes with automatic six-month extensions as long as the investors’ immigration processes are in progress. Except for six early investor EB-5 Notes, the Company was granted 12 months from the date of the completion of immigration process to redeem these EB-5 Notes. Given the COVID-19 pandemic and processing delays for immigration process, Advanced BioEnergy, LP extended the maturity dates for debt repayment based on their projected processing timings as long as the investors do not give notice of withdrawal or an I-829 gets approved. Accordingly, the notes have been recognized as long-term debt while investor notes who obtained green card approval have been classified as current debt. The EB-5 Notes are convertible after three years at a conversion price of $30 per share.

The Company has sold an aggregate principal amount of $36.0 million of EB-5 Notes under the EB-5 Phase I funding since 2012 to the date of this filing. As of June 30, 2022, $35.5 million has been released from the escrow amount to the Company, with $0.5 million remaining to be funded to escrow. As of June 30, 2022 and December 31, 2021, $32.5 million in principal and $4.3 million in accrued interest and $32.5 million in principal and $4.1 million in accrued interest was outstanding, respectively, on the EB-5 Notes sold under the EB-5 Phase I funding.

On October 16, 2016, the Company launched its EB-5 Phase II funding (the “EB-5 Phase II Funding”), with plans to issue $50.0 million in additional EB-5 Notes on substantially similar terms and conditions as those issued under the Company’s EB-5 Phase I funding, to refinance indebtedness and capital expenditures of Aemetis, Inc. and Goodland Advanced Fuels Inc., (“GAFI”). On November 21, 2019, the minimum investment was raised from $0.5 million per investor to $0.9 million per investor. The Company entered into a Note Purchase Agreement dated with Advanced BioEnergy II, LP, a California limited partnership authorized as a Regional Center to receive EB-5 Phase II funding investments, for the issuance of up to 100 EB-5 Notes bearing interest at 3%. On May 1, 2020 Supplement No. 3 amended the offering documents and lowered the total eligible new EB-5 Phase II funding investors to 60. Eight EB-5 investors have funded at the $0.5 million per investor amount, with 52 new EB-5 Phase II funding investors remaining eligible at the new $0.9 million per investors amount under the current offering. Job creation studies show it may be possible to add additional investors and increase the total offering amount in the future. Each EB-5 note will be issued in the principal amount and due and payable five years from the date of each EB-5 note, for a total aggregate principal amount of up to $50.8 million.

The Company has sold an aggregate principal amount of $4.0 million of EB-5 Notes under the EB-5 Phase II funding since 2016 to the date of this filing. As of June 30, 2022, $4.0 million has been released from escrow to the Company and $46.8 million remains to be funded to escrow. As of June 30, 2022, $4.2 million was outstanding on the EB-5 Notes under the EB-5 Phase II funding.

21

Secunderabad Oils Operating Agreement. In November 2008, the Company entered into an operating agreement with Secunderabad Oils Limited (“Secunderabad Oils”). The 2008 agreement provided the working capital and had the first priority lien on assets in return for 30% of the plant’s monthly net operating profit. These expenses were recognized as selling, general, and administrative expenses by the Company in the financials. All terms of the 2008 agreement with Secunderabad Oils were terminated to amend the agreement as below. On July 15, 2017, the agreement with Secunderabad Oils was amended to provide the working capital funds for British Petroleum business operations only in the form of inter-corporate deposit for an amount of approximately $2.3 million over a 95 day period at the rate of 14.75% per annum interest rate. The term of the agreement continues until either party terminates it. Secunderabad Oils has a second priority lien on the assets of the Company’s Kakinada Plant after this agreement. As of June 30, 2022, the Company had no balance outstanding under this agreement.

Financing Agreement for capital expenditures. The Company entered into an agreement with Mitsubishi Chemical America, Inc. (“Mitsubishi”) to purchase membrane dehydration equipment to save energy used in the Keyes Plant. The Company also entered into a financing agreement with Mitsubishi for $5.7 million for this equipment. Payments pursuant to the financing transaction will commence after the installation date and interest will be charged based on the certain performance metrics after operation of the equipment. The equipment was delivered in March 2020; however, the installation was delayed due to the COVID-19 pandemic. In the fourth quarter of 2021, installation of dehydration equipment occurred allowing for the recording of the asset in property, plant and equipment, net. Hence, we recorded the asset in property, plant and equipment, net and the related liability of $0.7 million in short term borrowings and $4.9 million in other long-term debt, respectively as of June 30, 2022.

Scheduled debt repayments for the Company’s loan obligations by year are as follows:

Twelve Months ended June 30,	Debt Repayments
2023	$	24,859
2024		132,218
2025		26,191
2026		29,473
2027		944
There after		1,169
Total debt		214,854
Debt issuance costs		(6,246	)
Total debt, net of debt issuance costs	$	208,608

5. Commitments and Contingencies

Leases

We have identified assets as the corporate office, warehouse, monitoring equipment and laboratory facilities over which we have control and obtain economic benefits fully. We classified these identified assets as operating leases after assessing the terms under classification guidance. We have entered into several leases for trailers and carbon units with purchase option at the end of the term. We have concluded that it is reasonably certain that we would exercise the purchase option at the end of the term, hence the leases were classified as finance leases. All of our leases have remaining term of less than a year to 15 years.

We made an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations as we incur the expenses.

When discount rates implicit in leases cannot be readily determined, the Company uses the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and measure lease liabilities and right-of-use (“ROU”) assets. The incremental borrowing rate used by the Company was based on weighted average baseline rates commensurate with the Company’s secured borrowing rate over a similar term. At each reporting period, when there is a new lease initiated, the rates established for that quarter will be used.

22

On December 14, 2021, we entered into a real estate purchase agreements and lease disposition and development agreement with the City of Riverbank. 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. The lease commenced on April 1, 2022. The Company evaluated the lease in accordance with ASC 842 – Lease Accounting and classified the lease as a finance lease.

The components of lease expense and sublease income were as follows:

	Three Months ended June 30,				Six Months ended June 30,
	2022		2021		2022		2021
Operating lease cost
Operating lease expense	$	159	$	204	$	347	$	408
Short term lease expense		75		71		102		110
Variable lease expense		23		21		46		54
Total operating lease cost	$	257	$	296	$	495	$	572
Finance lease cost
Amortization of right-of-use assets	$	28	$	55	$	89	$	110
Interest on lease liabilities		99		20		119		41
Total finance lease cost	$	127	$	75	$	208	$	151

Cash paid for amounts included in the measurement of lease liabilities:

	Three Months ended June 30,				Six Months ended June 30,
	2022		2021		2022		2021
Operating cash flows used in operating leases	$	174	$	173	$	338	$	340
Operating cash flows used in finance leases		99		20		118		41
Financing cash flows used in finance leases		50		124	$	182		248

Supplemental non-cash flow information related to ROU asset and lease liabilities was as follows for the three and six months ended June 30, 2022 and 2021:

	Three Months ended June 30,					Six Months ended June 30,
	2022		2021			2022		2021
Operating leases
Accretion of the lease liability	$	85	$	96		$	179	$	195
Amortization of right-of-use assets		74		108			168		213
Weighted Average Remaining Lease Term
Operating leases			5.9 years
Finance leases			14.1 years
Weighted Average Discount Rate
Operating leases				14.0	%
Finance leases				13.4	%

23

Supplemental balance sheet information related to leases was as follows:

	June 30, 2022			December 31, 2021
Operating leases
Operating lease right-of-use assets	$	2,294		$	2,462
Current portion of operating lease liability		258			260
Long term operating lease liability		2,191			2,318
Total operating lease liabilities		2,449			2,578
Finance leases
Property and equipment, at cost	$	3,152		$	2,317
Accumulated depreciation		(72	)		(376	)
Property and equipment, net		3,080			1,941
Other current liability		196			550
Other long term liabilities		2,849			720
Total finance lease liabilities		3,045			1,270

Maturities of operating lease liabilities were as follows:

Twelve months ended June 30,	Operating leases			Finance leases
2023	$	572		$	561
2024		581			279
2025		599			179
2026		617			151
2027		636			145
There after		606			11,000
Total lease payments		3,611			12,315
Less imputed interest		(1,162	)		(9,270	)
Total lease liability	$	2,449		$	3,045

The Company acts as sublessor in certain leasing arrangements, primarily related to land and buildings. Fixed sublease payments received are recognized on a straight-line basis over the sublease term. Sublease income and head lease expense for these transactions are recognized on a gross basis on the consolidated financial statements. This was recorded in the other operating income section of the Consolidated Statements of Operations and Comprehensive Loss.

The components of lease income for the three and six months ended June 30, 2022 and June 30, 2021 were as follows:

	June 30, 2022		June 30, 2021
Lease income	$	377	$	-

Future lease commitments to be received by the Company as of June 30, 2022 were as follows:

Twelve months ended June 30,
2023	$	830
2024		686
2025		541
2026		474
2027		474
There after		1,303
Total future lease commitments	$	4,308

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Property taxes

On March 3, 2022, the Company paid $6.1 million to Stanislaus County for property taxes past due.

Legal Proceedings

On August 31, 2016, the Company filed a lawsuit in Santa Clara County Superior Court against defendant EdenIQ, Inc. (“EdenIQ”). The lawsuit was based on EdenIQ’s wrongful termination of a merger agreement that would have effectuated the merger of EdenIQ into a new entity that would be primarily owned by Aemetis. On July 24, 2019, the court awarded EdenIQ a portion of the fees and costs it had sought in the amount of approximately $6.2 million and the Company recorded these fees based on the court order. On May 6, 2022 the parties settled the dispute for $4.8 million by entering into a settlement agreement. The settlement was paid and a gain on litigation of $1.4 million was recognized on the income statement in the second quarter of 2022.

6. Aemetis Biogas LLC – Series A Preferred Financing and Variable Interest Entity

On December 20, 2018, ABGL entered into a Series A Preferred Unit Purchase Agreement for the sale of Series A Preferred Units to Protair-X Americas, Inc., with Third Eye Capital acting as an agent.

ABGL is authorized to issue 11,000,000 common units, and up to 6,000,000 convertible, redeemable, secured, preferred membership units (the “Series A Preferred Units”). ABGL issued 6,000,000 common units to the Company at $5.00 per common unit for a total of $30,000,000 in funding. Additionally, 5,000,000 common units of ABGL are held in reserve as potential conversion units issuable to the Purchaser upon certain triggering events discussed below.

The Preferred Unit Agreement includes (i) preference payments of $0.50 per unit on the outstanding Series A Preferred Units commencing on the second anniversary, with any outstanding preference payments shall have an interest per annum rate equal to ten percent (ii) conversion rights for up to 1,200,000 common units or up to maximum number of 5,000,000 common units (also at a one Series A Preferred Unit to one common unit basis) if certain triggering events occur, (iv) one board seat of the three available to be elected by Series A Preferred Unit holders, (iii) mandatory redemption value at $15 per unit payable at an amount equal to 75% of free cash flow generated by ABGL, up to $90 million in the aggregate (if all units are issued), (iv) full redemption of the units on the sixth anniversary, (v) minimum cash flow requirements from each digester, and (vi) $0.9 million paid as fees to the Agent from the proceeds. Until paid, the obligations of ABGL under the Preferred Unit Agreement are secured by the assets of ABGL in an amount not to exceed the sum of (i) $30,000,000, plus (ii) all interest, fees, charges, expenses, reimbursement obligations and indemnification obligations of ABGL.

Triggering events occur upon ABGL’s failure to redeem units, comply with covenants, any other defaults or cross defaults, or to perform representations or warranties. Upon a triggering event: (i) the obligation of the Purchaser to purchase additional Series A Preferred Units is terminated, (ii) cash flow payments for redemption payments increases from 75% to 100% of free cash flows, and (iii) total number of common units into which preferred units may be converted increases from 1,200,000 common units to 5,000,000 common units on a one for one basis. As of June 30, 2022, ABGL has not generated minimum quarterly operating cash flows by operating the dairies. As a result of the violation of this covenant, free cash flows, when they occur, may be applied for redemption payments at the increased rate of 100% instead of the initial rate of 75% of free cash flows.

From inception of the agreement to date, ABGL issued 3,200,000 Series A Preferred Units on first tranche for a value of $16.0 million and also issued 2,800,000 of Series A Preferred Units on second tranche for a value of $14.0 million, reduced by a redemption of 20,000 Series A Preferred Units for $0.3 million. The Company is accreting these two tranches to the redemption value of $89.7 million over the estimated future cash flow periods of six years using the effective interest method. In addition, the Company identified freestanding future tranche rights and the accelerated redemption feature related to a change in control provision as derivatives which required bifurcation. These derivative features were assessed to have minimal value as of June 30, 2022 and December 31, 2021 based on the evaluation of the other conditions included In the agreement.

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In the three months ended March 31, 2021, ABGL issued 626,000 of Series A Preferred Units for incremental proceeds of $3.1 million as part of the second tranche of the Preferred Unit Agreement and redeemed 20,000 of Series A Preferred Units for $0.3 million. Consistent with the previous issuances which were treated as a liability as the conversion option was deemed to be non-substantive, the current issuances are treated as a liability as the conversion option was still deemed to be non-substantive.

The Company recorded Series A Preferred Unit liabilities, net of unit issuance costs and inclusive of accretive preference pursuant to this agreement, and accrued preference payments, classified as current portion of Series A Preferred Units, of $4.6 million and $3.2 million, and long-term liabilities of $50.3 million and $45.0 million as of June 30, 2022 and December 31, 2021, respectively.

Variable interest entity assessment

After consideration of ABGL’s operations and the above agreement, we concluded that ABGL did not have enough equity to finance its activities without additional subordinated financial support. ABGL is capitalized with Series A Preferred Units that are recorded as liabilities under U.S. GAAP. Hence, we concluded that ABGL is a VIE. Through the Company’s ownership interest in all of the outstanding common stock, its current ability to control the board of directors, the management fee paid to Aemetis and control of subordinated financing decisions, Aemetis has been determined to be the primary beneficiary and accordingly, the assets, liabilities, and operations of ABGL are consolidated into those of the Company. Total assets, before intercompany eliminations, of ABGL as of June 30, 2022 were $57.8 million primarily related to biodigesters at three dairies, the gas conditioning hub, and a pipeline which serve as collateral for the Series A Preferred Unit totaling $54.9 million. The Series A Preferred Units are not collateralized by any other assets or guarantees from Aemetis or its subsidiaries.

7. Stock-Based Compensation

2019 Stock Plan

On April 29, 2019, the Aemetis 2019 Stock Plan (the “2019 Stock Plan”) was approved by stockholders of the Company. This plan permits the grant of Incentive Stock Options, Non-Statutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and other stock or cash awards as the Administrator may determine in its discretion. The 2019 Stock Plan’s term is 10 years and supersedes all prior plans. The 2019 Stock Plan authorized the issuance of 200,000 shares of common stock for the 2019 calendar year, in addition to permitting transferring and granting any available and unissued or expired options under the Amended and Restated 2007 Stock Plan in an amount up to 177,246 shares of common stock.

With the approval of the 2019 Stock Plan, the Zymetis 2006 Stock Plan, and Amended and Restated 2007 Stock Plan (collectively, the “Stock Plans”) are terminated for granting any options under either plan. However, any options granted before the 2019 Stock Plan approved will remain outstanding and can be exercised, and any expired options will be available to grant under the 2019 Stock Plan.

During the year ended December 31, 2021, 120,000 restricted stock awards and 1,140,000 stock option grants were issued and approved by the Company’s board of directors (“Board”) for employees and directors under the 2019 Stock Plan with 10-year terms and vesting terms ranging from immediately to 3 years.

In January 2022, the company issued 932,800 incentive stock option for employees under the 2019 Stock Plan. In addition, 60,300 restricted stock award grants, with a fair value on date of grant of $11.31 per award, were issued to the Board.

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Common Stock Reserved for Issuance

The following is a summary of awards granted under the Stock Plans:

	Shares Available for Grant			Number of Shares Outstanding			Weighted-Average Exercise Price
Balance as of December 31, 2021		142			3,763		$	2.29
Authorized		1,338			-			-
Options Granted		(939	)		939			11.31
RSAs Granted		(60	)		-			-
Exercised		-			(266	)		0.91
Forfeited/expired		43			(43	)		11.55
Balance as of June 30, 2022		524			4,393		$	4.21

As of June 30, 2022, there were 2.6 million options vested under the Stock Plans.

Stock-based compensation for employees

Stock-based compensation is accounted for in accordance with the provisions of ASC 718 Compensation-Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. We estimate the fair value of stock-based awards on the date of grant using the Black-Scholes option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method.

Valuation and Expense Information

All issuances of stock options or other issuances of equity instruments to employees as the consideration for services received by us are accounted for based on the fair value of the equity instrument issued. The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for stock based compensation expense requires us to make assumptions and judgments about the variables used in the calculation, including the fair value of our common stock, the expected term (the period of time that the options granted are expected to be outstanding), the volatility of our common stock, a risk-free interest rate, and expected dividends. Under ASU 2016-09 Improvements to Employee Share-Based Payments Accounting, we have elected to recognize forfeitures as they occur. We use the simplified calculation of expected life described in the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, and volatility is based on an average of the historical volatilities of the common stock of four entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. We use an expected dividend yield of zero, as we do not anticipate paying any dividends in the foreseeable future. Expected forfeitures are assumed to be zero due to the small number of plan participants.

During the three months ended June 30, 2022 and 2021, the company granted 0 and 30,000 options, respectively. The weighted average fair value calculations for the options granted during these periods are based on the following assumptions:

	For the three months ended June 30,
Description	2022			2021
Dividend-yield	-		%		0	%
Risk-free interest rate	-		%		1.30	%
Expected volatility	-		%		122.81	%
Expected life (years)		-			7
Market value per share on grant date	$	-		$	13.09
Fair value per option on grant date	$	-		$	11.79

As of June 30, 2022, the Company had $10.4 million of total unrecognized compensation expense for employees, which the Company will amortize over the 2.4 years of weighted average remaining term.

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8. Outstanding Warrants

The weighted average fair value calculations for warrants granted are based on the following weighted average assumptions:

	For the six months ended June 30,
Description	2022			2021
Dividend-yield		0	%		0	%
Risk-free interest rate		1.45	%		0.12	%
Expected volatility		139.55	%		150.17	%
Expected life (years)		4			2.00
Exercise price per warrant	$	13.33		$	0.01
Market value per share on grant date	$	13.06		$	2.49
Fair value per warrant on grant date	$	11.01		$	2.48

A summary of historical warrant activity follows:

	Warrants Outstanding & Exercisable			Weighted - Average Exercise Price		Average Remaining Term in Years
Outstanding December 31, 2020		95		$	2.59		4.95
Granted		292			0.01
Exercised		(332	)		0.32
Outstanding December 31, 2021		55		$	2.59		3.95
Granted		413			13.33
Exercised		(113	)		0.01
Outstanding June 30, 2022		355		$	15.92		7.99

All of the above outstanding warrants are vested and exercisable as of June 30, 2022. As of June 30, 2022 and 2021, the Company had no unrecognized compensation expense related to warrants, respectively.

9. Agreements

Working Capital Arrangement. Pursuant to a Corn Procurement and Working Capital Agreement with J.D. Heiskell, the Company agreed to procure whole yellow corn and grain sorghum, primarily from J.D. Heiskell. The Company has the ability to obtain grain from other sources subject to certain conditions; however, in the past all the Company’s grain purchases have been from J.D. Heiskell. Title and risk of loss of the corn pass to the Company when the corn is deposited into the Keyes Plant weigh bin. The term of the Corn Procurement and Working Capital Agreement expires on December 31, 2022 and the term can be automatically renewed for additional one-year terms. WDG continues to be sold to A.L.Gilbert and DCO is sold to other customers under the J.D.Heiskell Purchase Agreement. The Company’s relationships with J.D. Heiskell, and A.L. Gilbert are well established, and the Company believes that the relationships are beneficial to all parties involved in utilizing the distribution logistics, reaching out to widespread customer base, managing inventory, and building working capital relationships. These agreements are ordinary purchase and sale agency agreements for the Keyes Plant. On May 13, 2020, J.D. Heiskell and the Company entered into Amendment No.1 to the J.D. Heiskell Purchasing Agreement to remove J.D. Heiskell’s obligations to purchase ethanol from the Company under the J.D. Heiskell Purchasing Agreement.

As of June 30, 2022 and December 31, 2021, Aemetis had prepayments to J.D. Heiskell of $1.7 million and $4.0 million, respectively.

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The J.D. Heiskell sales and purchases activity associated with the J.D. Heiskell Purchase Agreement and J.D. Heiskell Procurement Agreement during the three and six months ended June 30, 2022 and 2021 were as follows:

	As of and for the three months ended June 30,				As of and for the six months ended June 30,
	2022		2021		2022		2021
Wet distiller's grains sales	$	15,150	$	10,630		26,666		21,665
Corn oil sales		2,812		1,695		5,150		2,737
Corn purchases		54,352		42,166		98,362		80,159
Accounts receivable		232		65		232		65
Accounts payable		612		509		612		509

Ethanol and Wet Distillers Grains Marketing Arrangement. The Company entered into an Ethanol Marketing Agreement with Kinergy and a Wet Distillers Grains Marketing Agreement with A.L. Gilbert. Under the terms of the agreements the Wet Distillers Grains Marketing Agreement matures on December 31, 2022 with automatic one-year renewals thereafter. We terminated the Ethanol Marketing Agreement with Kinergy as of September 30, 2021. Effective October 1, 2021, we entered into Fuel Ethanol Purchase and Sale Agreement with Murex. Under the terms of the agreement, the initial term matures on October 31, 2023 with automatic one-year renewals thereafter.

Accounts receivable associated with our marketing partners was $0.6 million and $1.2 million as of June 30, 2022 and December 31, 2021.

For the three months ended June 31, 2022 and 2021, the Company expensed marketing costs of $0.8 million and $0.7 million, respectively, and for the six months ended June 30, 2022 and 2021, the Company expensed marketing costs of $1.5 million and $1.4 million, respectively, under the terms of both the Ethanol Marketing Agreement and the Wet Distillers Grains Marketing Agreement. These marketing costs are and are presented as a part of Selling, General, and Administration expense.

As of June 30, 2022 and 2021, the Company has no forward sales commitments.

10. Segment Information

Aemetis recognizes three reportable segments “California Ethanol”, “Dairy Renewable Natural Gas”, and “India Biodiesel.”

The “California Ethanol” reportable segment includes the Company’s 65 million gallon per year Keyes Plant, and the adjacent land leased for the production of CO₂.

The “Dairy Renewable Natural Gas” reportable segment includes, the dairy digesters, pipeline and gas condition hub for the production of biogas from dairies near Keyes, California.

The “India Biodiesel” reportable segment includes the Company’s 50 million gallon per year nameplate capacity biodiesel manufacturing Kakinada Plant, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. The Company’s biodiesel is marketed and sold primarily to customers in India through brokers and by the Company directly.

The Company has additional operating segments that were determined not to be reportable segments, including the Carbon Zero 1 facility in Riverbank, the Goodland Plant, and the research and development facility in Minnesota. Refer to the “All Other” category.

Summarized financial information by reportable segment for the three months ended June 30, 2022 and 2021 follows:

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	For the three months ended June 30, 2022
	California Ethanol			Dairy Renewable Natural Gas			India Biodiesel		All other			Total
Revenues from external customers	$	65,891		$	-		$	10	$	-		$	65,901
Intersegment revenues		-			297			-		-			297
Gross profit (loss)		(152	)		(68	)		10		(4	)		(214	)
Interest expense		4,869			7			-		1,792			6,668
Accretion and other expenses of Series A preferred units		-			1,506			-		-			1,506
Capital expenditures		5,366			6,696			69		928			13,059
Depreciation		977			154			164		30			1,325
Total Assets		66,580			55,731			9,324		46,817			178,452

	For the three months ended June 30, 2021
	California Ethanol		Dairy Renewable Natural Gas		India Biodiesel			All other			Total
Revenues from external customers	$	54,730	$	-	$	154		$	-		$	54,884
Intersegment revenues		-		694		-			-			694
Gross profit (loss)		3,372		327		(15	)		(38	)		3,646
Interest expense		4,986		3		-			230			5,219
Accretion and other expenses of Series A preferred units		-		3,800		-			-			3,800
Capital expenditures		767		2,503		1			3,104			6,375
Depreciation		1,050		142		174			12			1,378
Total Assets		76,452		27,814		12,306			26,715			143,287

A reconciliation of reportable segment revenues to total consolidated revenue for the three months ended June 30, 2022 and 2021 follow:

	2022			2021
Total revenues for reportable segments	$	66,198		$	55,578
Elmination of intersegment revenues		(297	)		(694	)
Total consolidated revenues	$	65,901		$	54,884

Summarized financial information by reportable segment for the six months ended June 30, 2022 and 2021 follows:

	For the six months ended June 30, 2022
	California Ethanol			Dairy Renewable Natural Gas			India Biodiesel		All other			Total
Revenues from external customers	$	117,932		$	-		$	18	$	-		$	117,950
Intersegment revenues		-			632			-		-			632
Gross profit (loss)		(3,032	)		(275	)		18		(10	)		(3,299	)
Interest expense		10,514			11			-		2,404			12,929
Accretion and other expenses of Series A preferred units		-			3,146			-		-			3,146
Capital expenditures		7,169			12,145			136		3,068			22,518
Depreciation		1,988			300			332		41			2,661
Total Assets		66,580			55,731			9,324		46,817			178,452

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	For the six months ended June 30, 2021
	California Ethanol		Dairy Renewable Natural Gas			India Biodiesel			All other			Total
Revenues from external customers	$	97,058	$	-		$	633		$	-		$	97,691
Intersegment revenues		-		735			-			-			735
Gross profit (loss)		241		(85	)		(70	)		(48	)		38
Interest expense		10,685		6			-			1,708			12,399
Accretion and other expenses of Series A preferred units		-		5,743			-			-			5,743
Capital expenditures		775		6,895			118			5,147			12,935
Depreciation		2,102		284			358			20			2,764
Total Assets		76,452		27,814			12,306			26,715			143,287

A reconciliation of reportable segment revenues to total consolidated revenues for the six months ended June 30, 2022 and 2021 follow:

	2022			2021
Total revenues for reportable segments	$	118,582		$	98,426
Elmination of intersegment revenues		(632	)		(735	)
Total consolidated revenues	$	117,950		$	97,691

California Ethanol: The Company amended the Corn Procurement and Working Capital Agreement and the J.D. Heiskell Purchasing Agreement to procure corn from J.D. Heiskell and sell all WDG and corn oil the Company produces to J.D. Heiskell. Sales of ethanol, WDG, corn oil to two customers accounted for 72% and 27% of the Company’s California Ethanol segment revenues for the three months ended June 30, 2022. Sales of ethanol, WDG, and corn oil to two customers accounted for 77% and 23% of the Company’s California Ethanol segment revenues for the three months ended June 30, 2021. Sales of ethanol, WDG, corn oil to two customers accounted for 72% and 27% of the Company’s California Ethanol segment revenues for the six months ended June 30, 2022. Sales of ethanol, WDG, and corn oil to two customers accounted for 74% and 25% of the Company’s California Ethanol segment revenues for the six months ended June 30, 2021.

Dairy Renewable Natural Gas: Substantially all of our Dairy Renewable Natural Gas segment revenues during the three and six months ended June 30, 2022 and 2021 were from sales of biogas to the Keyes Plant for use in boilers, which allowed qualification of carbon credits for the ethanol produced in the Keyes Plant.

11. Related Party Transactions

The Company owes Eric McAfee, the Company’s Chairman and CEO, and McAfee Capital LLC (“McAfee Capital”), owned by Eric McAfee, $0.4 million in connection with employment agreements and expense reimbursements previously accrued as salaries expense and accrued liabilities. The Company previously prepaid $0.2 million to Redwood Capital, a company controlled by Eric McAfee, for the Company’s use of flight time on a corporate jet. As of June 30, 2022, $0.1 million remained as a prepaid expense.

On November 4, 2021, the Audit Committee of the Company approved a guarantee fee of $0.4 million to Mr. McAfee. The balance of $0.1 million and $0.3 million, for guaranty fees, remained as an accrued liability as of June 30, 2022 and December 31, 2021, respectively. On January 12, 2022, the Audit Committee of the Company approved a one-time guarantee fee of $2.0 million to McAfee Capital in connection with McAfee Capital’s extension of certain guarantees of the Company’s indebtedness with Third Eye Capital. The Company paid this fee by issuing 180,000 shares of common stock of the Company.

The Company owes various members of the Board amounts totaling $0.2 million as of June 30, 2022 and December 31, 2021, for each period, in connection with board compensation fees, which are included in accounts payable on the balance sheet. For the three months ended June 30, 2022 and 2021, the Company expensed $0.1 million respectively, in connection with board compensation fees. For the six months ended June 30, 2022 and 2021, the Company expensed $0.2 million during each period, in connection with board compensation fees.

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12. Subsequent Events

Subordinated Debt Refinancing

On July 1, 2022, the Subordinated Notes with two accredited investors were amended to extend the maturity date until the earlier of (i) December 31, 2022; (ii) completion of an equity financing by AAFK or Aemetis in an amount of not less than $25.0 million; or (iii) after the occurrence of an Event of Default (as defined in the Note and Warrant Purchase Agreements), including failure to pay interest or principal when due and breaches of note covenants. A 10% cash extension fee was paid in connection with the amendment by adding the fee to the balance of the new note and warrants to purchase 113 thousand shares of common stock were granted with a term of two years and an exercise price of $0.01 per share. Accounting for the July 1, 2022 amendments and the refinancing terms of the Subordinated Notes will be evaluated in accordance with ASC 470-50 Debt–- Modification and Extinguishment.

Third Eye Capital Limited Waiver and Amendment No. 24

On August 8th, 2022, Third Eye Capital agreed to Limited Waiver and Amendment No. 24 to the Note Purchase Agreement ("Amendment No. 24") to: (i) provide that the maturity date of the Third Eye Capital Notes may be further extended at our election to April 1, 2024 in exchange for an extension fee equal to 1% of the Note Indebtedness in respect to each Note, provided that such fee may be added to the outstanding principal balance of each Note on the effective date of each such extension, and (ii) provide for a waiver for certain covenant defaults. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.3 million in cash (the "Amendment No. 24 Fee").

Waiver and Amendment to Series A Preferred Unit Purchase Agreement

On August 8th, 2022, ABGL, Protair-X America, Inc. (“Protair”), and Third Eye Capital entered into a Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Amendment") which amends that certain Series A Preferred Unit Purchase Agreement (“PUPA”) dated as of December 20, 2018. The PUPA Amendment provides for: (i) a waiver of certain covenants prohibiting the internal reorganization of ABGL subsidiaries and the incurrence of indebtedness by ABGL and its subsidiaries pursuant to a USDA loan, provided that, among other things, Third Eye Capital shall have received a repayment of at least $[7.3] million to be applied to the Carbon Revolving Line contemporaneously with the closing of the USDA loan; (ii) a waiver of certain operational defaults under the PUPA; and (iii) an amendment which (a) requires ABGL to redeem all of the outstanding Series A Preferred Units by December 31, 2022 (the “Final Redemption Date”) for $116 million; and (b) provides ABGL the right to redeem all of the outstanding Series A Preferred Units by September 30, 2022 for $106 million. The PUPA Amendment further provides that the failure to redeem the Series A Preferred Units by the Final Redemption Date would constitute a triggering event requiring ABGL to enter into a credit agreement with Protair and Third Eye Capital in substantially the form attached to the PUPA Amendment.

13. Management’s Plan

The accompanying financial statements have been prepared contemplating the realization of assets and satisfaction of liabilities in the normal course of business. As a result of negative capital and negative operating results, and collateralization of substantially all of the company assets, the Company has been reliant on its senior secured lender to provide additional funding and has been required to remit substantially all excess cash from operations to the senior secured lender. In order to meet its obligations during the next twelve months, the Company will need to either refinance the Company’s debt or receive the continued cooperation of its senior lender. This dependence on the senior lender raises substantial doubt about the Company’s ability to continue as a going concern. The Company plans to pursue the following strategies to improve the course of the business.

For the Keyes Plant, we plan to operate the plant and continue to improve financial performance by adopting new technologies or process changes that allow for energy efficiency, cost reduction or revenue enhancements, execute upon awarded grants that improve energy and operational efficiencies resulting in lower cost, lower carbon demands and overall margin improvement.

For the ABGL project, we plan to operate the biogas digesters to capture and monetize biogas as well as continue to build new dairy digesters and extend the existing pipeline in order to capture the higher carbon credits available in California. Funding for continued construction is based upon obtaining government guaranteed loans and executing on existing and new state grant programs.

For the Riverbank project, we plan to raise the funds necessary to construct and operate the Carbon Zero 1 plant using loan guarantees and public financings based upon the licensed technology that generate federal and state carbon credits available for ultra-low carbon fuels utilizing lower cost, non-food advanced feedstocks to significantly increase margins.

For the Kakinada Plant, we plan to develop sales channels for domestic products as the costs of feedstock normalize against the price of diesel, as recently announced governmental incentives take effect to promote the blending of biodiesel, and as feedstocks such as refined animal tallow are used domestically and exported. 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.

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 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.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is provided in addition to the accompanying consolidated condensed financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:

· Overview. Discussion of our business and overall analysis of financial and other highlights affecting us, to provide context for the remainder of MD&A.

· Results of Operations. An analysis of our financial results comparing the three and six months ended June 30, 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. 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 condensed financial statements and accompanying notes included elsewhere in this report.  The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.  Our actual results could differ materially from those discussed in the forward-looking statements.  Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, particularly under “Part II, Item 1A.  Risk Factors,” and in other reports we file with the SEC.  All references to years relate to the calendar year ended December 31 of the particular year.

Overview

Founded in 2006 and headquartered in Cupertino, California, we are 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. We operate in three reportable segments “California Ethanol”, “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 do this through leading the low-carbon fuels industry by building a circular bioeconomy utilizing agricultural waste to produce advanced renewable fuels that produce less greenhouse gas emissions and thereby improve air quality.

Our California Ethanol segment consists of a 65 million gallon per year ethanol production facility located in Keyes, California (the “Keyes Plant”) that we own and operate. 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. In the fourth quarter of 2021, we installed and are commissioning an ethanol zeolite membrane dehydration system at the Keyes Plant. The installation is a key first step in the electrification of the Keyes Plant, which will significantly reduce the use of petroleum based natural gas as process energy. The electrification, along with the future installation of a two-megawatt zero carbon intensity solar microgrid system and a mechanical vapor recompression (MVR) system will greatly reduce GHG emissions and decreases the carbon intensity of fuel produced at the Keyes Plant, allowing us to realize a higher price for the ethanol produced and sold.

Our Dairy Renewable Natural Gas segment consists of our subsidiary, Aemetis Biogas, LLC (“ABGL”), which was formed to construct bio-methane anaerobic digesters at local dairies near the Keyes Plant, many of whom also purchase WDG produced at the Keyes Plant. The digesters are connected via an underground private pipeline owned by ABGL to a gas cleanup and compression unit being built at the Keyes Plant to produce RNG. Upon receiving the bio-methane from the dairies, impurities are removed, and the bio-methane is converted to negative carbon intensity RNG where it will be either injected into the statewide PG&E gas utility pipeline, supplied as compressed RNG that will service local trucking fleets, or used as renewable process energy at the Keyes Plant.  ABGL has completed Phase 1 of our California biogas digester network and pipeline system that converts waste dairy methane gas into Dairy Renewable Natural Gas (“RNG”), including two operational dairy’s and seven miles of pipeline.  ABGL is now executing Phase 2 construction with the completion of sixteen miles of pipeline and the commissioning of the biogas-to-RNG upgrade unit at the Keyes plant as well as beginning construction of additional dairy digesters.

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During the second quarter of 2022, Aemetis has completed construction of a third dairy digester and commissioning of the centralized gas cleanup facility and utility gas interconnect located at the Keyes Plant where dairy biogas will be upgraded to RNG and injected into the utility pipeline. Upon receiving pathway certification from the California Air Resources Board (CARB), the fuel is scheduled to be delivered into the Northern California gas delivery system.

Our “Carbon Zero” biofuels production plants are designed to produce biofuels, including sustainable aviation fuel (“SAF”) and diesel fuel utilizing renewable hydrogen and non-edible renewable oils sourced from existing Aemetis biofuels plants and other sources.  The first plant to be built, in Riverbank, California, “Carbon Zero 1”, is expected to utilize hydroelectric and other renewable power available onsite to produce 90 million gallons per year of SAF, renewable diesel, and other byproducts. 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. By producing ultra-low carbon renewable fuels, the Company expects to capture higher value D3 Renewable Identification Numbers (“RINs”) and California’s LCFS credits. D3 RINs have a higher value in the marketplace than D6 RINs due to D3 RINs’ relative scarcity and mandated pricing formula from the United States Environmental Protection Agency (“EPA”).

On April 1, 2021, Aemetis Carbon Capture, Inc. was established to build Carbon Capture and Sequestration (CCS) projects that generate LCFS and IRS 45Q credits by injecting CO₂ into wells which are monitored for emissions to ensure the long-term sequestration of carbon underground. California’s Central Valley has been identified as the state’s most favorable region for large-scale CO₂ injection projects due to the subsurface geologic formation that absorbs and retains gases. The CCS projects are expected to capture and sequester up to two million metric tons per year of CO₂ at the two Aemetis biofuels plant sites in Keyes and Riverbank, California. In July 2022, Aemetis purchased 24 acres, on the Riverbank Industrial Complex site in Riverbank, California, to develop a CCS injection well. The Company plans to construct a characterization well to obtain both the data and well design information required for the EPA Class VI CO₂ injection well permit application. The well is expected to sequester up to one million metric tons per year of CO.

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

California Ethanol Revenue

Our revenue development strategy for our California Ethanol segment relies upon supplying ethanol into the transportation fuel market in Northern California and supplying feed products to dairy and other animal feed operations in Northern California. We are actively seeking higher value markets for our ethanol in an effort to improve our overall margins and to add incremental income to the California Ethanol segment, including the development of the Carbon Zero Plants, the expansion of the biogas project, and the implementation of the Solar Microgrid System, the installation of the membrane dehydration system and other technologies. We are also actively working with local dairy and feed potential customers to promote the value of our WDG product in an effort to strengthen demand for this product.

During the second quarter of 2022, we produced five products at the Keyes Plant: denatured fuel ethanol, WDG, DCO, CO₂, and CDS. During the first quarter of 2020, we transitioned from selling the ethanol we produce to J.D. Heiskell pursuant to the J.D. Heiskell Purchase Agreement, to a model where the ethanol is sold directly to our fuel marketing customers. We own the ethanol stored in our finished goods tank. WDG continues to be sold to A.L. Gilbert and DCO is sold to other customers under the J.D. Heiskell Purchase Agreement. Smaller amounts of CDS were sold to various local third parties. We began selling CO₂ to Messer Gas in the second quarter of 2020.

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California Ethanol revenue is dependent on the price of ethanol, WDG, high-grade alcohol, and DCO. Ethanol pricing is influenced by local and national inventory levels, local and national ethanol production, imported ethanol, corn prices and gasoline demand, and is determined pursuant to a marketing agreement with a single fuel marketing customer and is generally based on daily and monthly pricing for ethanol delivered to the San Francisco Bay Area, California, as published by Oil Price Information Service (“OPIS”), as well as quarterly contracts negotiated by our marketing customer with local fuel blenders. The price for WDG is influenced by the price of corn, the supply and price of distillers dried 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. Our revenue is further influenced by the price of natural gas, our decision to operate the Keyes Plant at various capacity levels, conduct required maintenance, and respond to biological processes affecting output.

Dairy Renewable Natural Gas Revenue

In December 2018, we utilized our relationships with California’s Central Valley dairy farmers by signing leases and raising funds to construct dairy digesters, a 40 mile pipeline, and a biogas-to-RNG facility to initially use biogas to power our Keyes Plant and later deliver fuels for sale to utility gas pipeline. We are currently producing RNG from three digesters connected to 20 miles of pipeline, then flowing this gas to our RNG cleanup and compression hub at the Keyes Plant. The RNG upgrade unit at the Keyes Plant is designed to enable the production and delivery of utility-grade RNG for sale as transportation fuel to California customers via pipeline delivery.

In addition to the existing and operating dairy digesters, we currently have three additional dairy digesters that are under construction. We have 24 signed agreements with additional dairies to construct dairy digesters. Our revenue development strategy for the Dairy Renewable Natural Gas segment relies upon continuing to collect bio-methane gas from the existing dairy digesters, continuing to build out the network of dairy digesters, extending the pipeline in Northern California to grow the supply of RNG available for sale and utilizing the biogas-to-RNG upgrade unit to distribute utility-grade RNG to customers statewide. We plan to store the RNG until the LCFS credit pathway for each dairy has been established, after which we will sell the stored gas by delivering it into the utility gas pipeline.

India Biodiesel Revenue

Our revenue strategy in India is based on continuing to sell biodiesel to our bulk fuel customers, fuel station customers, mining customers, industrial customers and tender offers placed by Government Oil Marketing Companies (“OMCs”) for bulk purchases of fuels. In 2020, the tenders were delayed due to COVID-19, and in 2021 the format was changed to allow for monthly bidding on volumes at a price set by the OMCs.  The Company did not participate in tenders during 2021 due to low OMC offer prices. Recently, the government of India updated the national biofuels policy and adopted a new tax on diesel to promote biodiesel blending.  As a result, the OMC’s are pricing the tenders at economically viable levels, allowing for biodiesel producers in India to begin production.

Going forward, the Company expects to participate in offers made by the OMCs on economically reasonable terms.

To further promote the use of biodiesel in India, the India government implemented a program of imposing a penalty on blenders who fail to blend biodiesel into diesel product. This program is scheduled to take effect during the fourth quarter of 2022.

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.

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Results of Operations

Three Months Ended June 30, 2022, Compared to Three Months Ended June 30, 2021

Revenues

Our revenues are derived primarily from sales of ethanol and WDG for our California Ethanol segment, renewable natural gas for our Dairy Renewable Natural Gas segment, biodiesel and refined glycerin for our India Biodiesel, and sublease rental income from All Other.

Three Months Ended June 30, (in thousands)

	2022			2021			Inc/(dec)			% change
California Ethanol	$	65,891		$	54,730		$	11,161			20	%
Dairy Renewable Natural Gas*		297			694			(397	)		-57.2	%
India Biodiesel		10			154			(144	)		-93.5	%
All other		-			-			-			0.0	%
Eliminations		(297	)		(694	)		397			-57.2	%
Total	$	65,901		$	54,884		$	11,017			20	%

*All Dairy Renewable Natural Gas revenue is intercompany.

California Ethanol. For the three months ended June 30, 2022, the Company generated 72% of revenue from sales of ethanol, 23% from sales of WDG, and 5% from sales of corn oil, CDS, CO₂, and other sales. Plant production averaged 111% of the 55 million gallon per year nameplate capacity. The increase in revenues was due to the increase in price of ethanol per gallon sold to $3.13 for the three months ended June 30, 2022, compared to $2.78 for the same period ended June 30, 2021, while volume of ethanol gallons sold remained consistent at 15.2 million gallons. The average price of WDG increased by 39% to $145.74 per ton for the three months ended June 30, 2022 while WDG sales volume increased by 3% to 104 thousand tons in the three months ended June 30, 2022 compared to 101 thousand tons in the three months ended June 30, 2021.

Dairy Renewable Natural Gas. During the three months ended June 30, 2022 and 2021, we recognized revenue of $297 thousand and $694 thousand, respectively, to an intercompany party. The decrease in the three months ended June 30, 2022 revenue compared to the three months ended June 30, 2021 was due to LCFS pathway being approved in the second quarter of 2021, which applied retroactively since the inception of the first two dairy digesters. For revenue on a comparable basis the dairy digesters produced and sold MMBTU of 14.9 thousand and 13.1 thousand in the three months ended June 30, 2022 and 2021.

India Biodiesel. For the three months ended June 30, 2022, we generated 100% of our revenues from the other sales, compared to 70% of our revenues from the sale of biodiesel, 5% of our revenues from the sale of refined glycerin, and 25% of our sales from other sales for the three months ended June 30, 2021. The decrease in revenues was primarily attributable to the Kakinada Plant not bidding on the Indian government tenders due to higher feedstock costs making conversion to biodiesel unviable. Biodiesel sales volume decreased by 100% to 0 metric tons in the three months ended June 30, 2022 compared to 105 metric tons in the three months ended June 30, 2021. Refined glycerin sales volume decreased by 100% to 0 metric tons in the three months ended June 30, 2022, compared to 9 metric tons in the three months ended June 30, 2021.

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Cost of Goods Sold

Three Months Ended June 30, (in thousands)

	2022			2021			Inc/(dec)			% change
California Ethanol	$	66,043		$	51,358		$	14,685			28.6	%
Dairy Renewable Natural Gas		365			367			(2	)		-0.5	%
India Biodiesel		-			169			(169	)		-100.0	%
All other		4			38			(34	)		-89.5	%
Eliminations		(297	)		(694	)		397			-57.2	%
Total	$	66,115		$	51,238		$	14,877			29	%

California Ethanol. We ground 5.3 million and 5.2 million bushels of corn in the three months ended June 30, 2022 and 2021, respectively. Our average cost of feedstock per bushel increased to $10.21 per bushel during the three months ended June 30, 2022 compared to $8.04 per bushel for the three months ended June 30, 2021. In addition, for the three months ended June 30, 2022, we incurred $1.5 million more in natural gas costs, $0.1 million more in chemical costs, and $0.6 million more in transportation costs compared to the same period in 2021.

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. The decrease in costs of goods sold was attributable to the decrease in biodiesel feedstock volume in the three months ended June 30, 2022.

Gross profit (loss)

Three Months Ended June 30, (in thousands)

	2022			2021			Inc/(dec)			% change
California Ethanol	$	(152	)	$	3,372		$	(3,524	)		-104.5	%
Dairy Renewable Natural Gas		(68	)		327			(395	)		-120.8	%
India Biodiesel		10			(15	)		25			166.7	%
All other		(4	)		(38	)		34			89.5	%
Total	$	(214	)	$	3,646		$	(3,860	)		-106	%

California Ethanol. Gross profit decreased by 106% in the three months ended June 30, 2022 primarily due to increases in the prices of corn, natural gas and transportation costs partially offset by price increases in ethanol and WDG.

Dairy Renewable Natural Gas. Gross loss in the three months ended June 30, 2022 relates to increase in expenses in connection with ramp up of our Dairy Renewable Natural Gas business.

Operating (income)/expense and non-operating (income)/expense

Substantially all of our research and development expenses were related to research and development activities in Minnesota.

Selling, general, and administrative (“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. 

Other operating income consists of sublease rental income and a loss on lease termination.

Other (income) expense 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. 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.

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Three Months Ended June 30, (in thousands)

	2022			2021			Inc/(dec)			% change
Research and development expenses	$	51		$	21		$	30			142.9	%
Selling, general and administrative expenses		7,061			5,753			1,308			22.7	%
Other operating expense		360			-			360			100.0	%
Other expense (income):
Interest expense
Interest rate expense	$	4,928		$	4,529		$	399			8.8	%
Debt related fees and amortization expense		1,740			690			1,050			152.2	%
Accretion and other expenses of Series A preferred units		1,506			3,800			(2,294	)		-60.4	%
Gain on debt extinguishment		-			(1,134	)		1,134			-100.0	%
Gain on litigation		(1,400	)		-			(1,400	)		100.0	%
Other expense (income)		(14,254	)		544			(14,798	)		-2720.2	%

The increase in SG&A expenses for the three months ended June 30, 2022 was principally due to increases in salaries and wages of $1.3 million, as part of the development of our ultra-low carbon initiatives. SG&A expenses as a percentage of revenue in the three months ended June 30, 2022 remained consistent compared to the comparable period in 2021 at 10%.

Other operating expense is related to a loss on lease termination caused by the termination of two finance leases, partially offset by Riverbank sublease rental income.

Interest expense increased in the three months ended June 30, 2022 due to obtaining and drawing on the Revolving Loans, partially offset by principal debt payments made to Third Eye Capital in the first and second quarter of 2022, coupled with capitalizing interest on our capital projects. Debt related fees and amortization increased due to debt issuance costs and extension fees being incurred in 2022 related to extending the Third Eye Capital debt and obtaining the Revolving Loans. The decrease in accretion and other expenses of the Series A Preferred Units was due to capitalized interest related to the ABGL project increasing and offsetting accretion expense. For the three months ended June 30, 2022 and 2021 capitalized interest was $2.0 million and $0.7 million, respectively. Gain on debt extinguishment was related to the PPP loan being forgiven in the 2021. Gain on litigation arose from the settlement of the EdenIQ lawsuit in the three months ended June 30, 2022. Other expense (income) change is related to a grant in the amount of $14.2 million 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.

Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

Revenues

Six Months Ended June 30, (in thousands)

	2022			2021			Inc/(dec)			% change
California Ethanol	$	117,932		$	97,058		$	20,874			21.5	%
Dairy Renewable Natural Gas*		632			735			(103	)		-14.0	%
India Biodiesel		18			633			(615	)		-97.2	%
All other		-						-			100.0	%
Eliminations		(632	)		(735	)		103			-14.0	%
Total	$	117,950		$	97,691		$	20,259			20.7	%

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*All Dairy Renewable Natural Gas revenue is intercompany.

California Ethanol. For the six months ended June 30, 2022, the Company generated 73% of revenue from sales of ethanol, 23% from sales of WDG, and 4% from sales of corn oil, CDS, CO₂, and other sales. Plant production averaged 109% of the 55 million gallon per year nameplate capacity. The increase in revenues was due to an increase in price of ethanol to $2.86 per gallon for the six months ended June 30, 2022, compared to $2.34 per gallon for the same period ended June 30, 2021, which was partially offset by the decrease in volume of ethanol gallons sold from 30.8 million gallons for the six months ended June 30, 2021 to 29.9 million gallons for the six months ended June 30, 2022. The average price of WDG increased by 24% to $130 per ton for the six months ended June 30, 2022 while WDG sales volume decreased to 204 thousand tons in the six months ended June 30, 2022 compared to 205 thousand tons in the six months ended June 30, 2021.

Dairy Renewable Natural Gas. During the six months ended June 30, 2022 and 2021, we recognized revenue of $632 thousand and $735 thousand, respectively to an intercompany party.

India Biodiesel. For the six months ended June 30, 2022, we generated 100% of our revenues from the other sales, compared to 74% of our revenues from the sale of biodiesel, 20% of our revenues from the sale of refined glycerin, and 6% of our sales from other sales for the three months ended June 30, 2021. The decrease in revenues was primarily attributable to the Kakinada Plant not receiving orders from the Indian government due to higher feedstock costs making conversion to biodiesel unviable. Biodiesel sales volume decreased by 100% to 0 metric tons in the six months ended June 30, 2022 compared to 455 metric tons in the six months ended June 30, 2021. Refined glycerin sales volume decreased by 100% to 0 metric tons in the six months ended June 30, 2022, compared to 130 metric tons in the six months ended June 30, 2021.

Cost of Goods Sold

Six Months Ended June 30, (in thousands)

	2022			2021			Inc/(dec)			% change
California Ethanol	$	120,964		$	96,817		$	24,147			24.9	%
Dairy Renewable Natural Gas		907			820			87			10.6	%
India Biodiesel		-			703			(703	)		-100.0	%
All other		10			48			(38	)		-79.2	%
Eliminations		(632	)		(735	)		103			-14.0	%
Total	$	121,249		$	97,653		$	23,596			24.2	%

California Ethanol. We ground 10.4 million and 10.7 million bushels of corn in the six months ended June 30, 2022 and 2021, respectively. Our average cost of feedstock per bushel increased to $9.50 per bushel during the six months ended June 30, 2022 compared to $7.44 per bushel for the six months ended June 30, 2021. In addition, for the six months ended June 30, 2022, we incurred $2.4 million more in natural gas costs, $0.3 million more in chemical costs, and $0.9 million more in transportation costs.

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. The decrease in costs of goods sold was attributable to the decrease in biodiesel feedstock volume in the six months ended June 30, 2022.

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Gross profit (loss)

Six Months Ended June 30, (in thousands)

	2022			2021			Inc/(dec)			% change
California Ethanol	$	(3,032	)	$	241		$	(3,273	)		-1358.1	%
Dairy Renewable Natural Gas		(275	)		(85	)		(190	)		223.5	%
India Biodiesel		18			(70	)		88			-125.7	%
All other		(10	)		(48	)		38			-79.2	%
Total	$	(3,299	)	$	38		$	(3,337	)		-8781.6	%

California Ethanol. Gross profit decreased in the six months ended June 30, 2022 primarily due to increases in the prices of corn, natural gas, chemical costs, and transportation costs.

Dairy Renewable Natural Gas. Gross loss increased in the six months ended June 30, 2022 primarily due to increase in expenses in connection with ramp up of our Dairy Renewable Natural Gas business.

Operating (income)/expense and non-operating (income)/expense

Six Months Ended June 30, (in thousands)

	2022			2021			Inc/(dec)			% change
Research and development expenses	$	87		$	44		$	43			97.7	%
Selling, general and administrative expenses		14,367			11,135			3,232			29.0	%
Other operating expense		360			-			360			100.0	%
Other expense (income):
Interest expense
Interest rate expense	$	9,363		$	10,494		$	(1,131	)		-10.8	%
Debt related fees and amortization expense		3,566			1,905			1,661			87.2	%
Accretion and other expenses of Series A preferred units		3,146			5,743			(2,597	)		-45.2	%
Gain on debt extinguishment		-			(1,134	)		1,134			-100.0	%
Gain on litigation		(1,400	)		-			(1,400	)		100.0	%
Other expense (income)		(14,295	)		513			(14,808	)		-2886.5	%

The increase in SG&A expenses for the six months ended June 30, 2022 was due to increases in salaries and wages of $2.7 million, as part of the development of our ultra-low carbon initiatives. SG&A expenses as a percentage of revenue in the six months ended June 30, 2022 increased to 12% as compared to 11% in the corresponding period of 2021.

Other operating expense is related to a loss on lease termination caused by the termination of two finance leases, partially offset by Riverbank sublease rental income.

Interest expense decreased in the six months ended June 30, 2022 due to principal debt payments made to Third Eye Capital in the first and second quarter of 2022, coupled with capitalizing interest on our capital projects. Debt related fees and amortization increased due to debt issuance costs and extension fees being incurred in 2022 related to extending the Third Eye Capital debt and obtaining the Revolving Loans. The decrease in accretion and other expenses of the Series A Preferred Units was due to capitalized interest related to the ABGL project increasing and offsetting accretion. For the six months ended June 30, 2022 and 2021 capitalized interest was $3.6 million $1.2 million, respectively. Gain on debt extinguishment was related to the PPP loan being forgiven in the 2021. Gain on litigation arose from the settlement of the EdenIQ lawsuit in the three months ended June 30, 2022. Other expense (income) change is related to a grant in the amount of $14.2 million 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.

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Liquidity and Capital Resources

Cash and Cash Equivalents

Cash and cash equivalents were $3.6 million at June 30, 2022, of which $3.1 million was held in North America and the rest was held at our Indian subsidiary. Our current ratio at June 30, 2022 was 0.25, compared to a current ratio of 0.32 at December 31, 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. The use of proceeds from all equity raises and debt financings are subject to approval by our senior lender.

Liquidity

Cash and cash equivalents, current assets, current liabilities and debt at the end of each period were as follows (in thousands):

	As of
	June 30, 2022		December 31, 2021
Cash and cash equivalents	$	3,558	$	7,751
Current assets (including cash, cash equivalents, and deposits)		15,045		20,693
Current and long term liabilities (excluding all debt)		92,557		92,302
Current & long term debt		208,608		188,767

Our principal sources of liquidity have been cash provided by the sale of equity, operations, and borrowings under various debt arrangements.

We launched an EB-5 Phase II funding in 2016, under which we expect to issue $50.8 million in additional EB-5 Notes on substantially similar terms and conditions as those issued under our EB-5 Phase I funding. On November 21, 2019, the minimum investment amount was raised from $0.5 million per investor to $0.9 million per investor. As of June 30, 2022, EB-5 Phase II funding in the amount of $4.0 million had been released from escrow to us. Our principal uses of cash have been to refinance indebtedness, fund operations, and for capital expenditures. We anticipate these uses will continue to be our principal uses of cash in the future. Global financial and credit markets have been volatile in recent years, and future adverse conditions of these markets could negatively affect our ability to secure funds or raise capital at a reasonable cost, or at all.

We operate in a volatile market in which we have limited control over the major components of input costs and product revenues and are making investments in future facilities and facility upgrades that improve the overall margin while lessening the impact of these volatile markets. 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. 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.

As a result of negative capital and negative operating results, and collateralization of substantially all of the company assets, the Company has been reliant on its senior secured lender to provide additional funding and has been required to remit substantially all excess cash from operations to the senior secured lender. In order to meet its obligations during the next twelve months, the company will need to either refinance the company’s debt or receive the continued cooperation of its senior lender. This dependence on the senior lender raises substantial doubt about the company’s ability to continue as a going concern. The Company plans to pursue the following strategies to improve the course of the business.

For the Keyes Plant, we plan to operate the plant and continue to improve financial performance by adopting new technologies or process changes that allow for energy efficiency, cost reduction or revenue enhancements, execute upon awarded grants that improve energy and operational efficiencies resulting in lower cost, lower carbon demands and overall margin improvement.

For the ABGL project, we plan to operate the biogas digesters to capture and monetize biogas as well as continue to build new dairy digesters and extend the existing pipeline in order to capture the higher carbon credits available in California. Funding for continued construction is based upon, obtaining government guaranteed loans and executing on existing and new state grant programs.

41

For the Riverbank project, we plan to raise the funds necessary to construct and operate the Carbon Zero 1 plant using loan guarantees and public financings based upon the licensed technology that generate federal and state carbon credits available for ultra-low carbon fuels utilizing lower cost, non-food advanced feedstocks to significantly increase margins.

For the Kakinada Plant, we plan to develop sales channels for domestic products as the costs of feedstock normalize against the price of diesel, as recently announced governmental incentives take effect to promote the blending of biodiesel, and as feedstocks such as refined animal tallow are used domestically and exported. 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.

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 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.

At June 30, 2022, the outstanding balance of principal, interest and fees, net of discounts, on all Third Eye Capital Notes equaled $140 million. The maturity dates for the Third Eye Capital financing arrangements are April 1, 2023, for $100 million with the ability to extend to April 1, 2024, March 1, 2025, for $18 million and March 1, 2026, for $22 million.

As of June 30, 2022, we have $4.9 million available under our revolving credit lines.

As of the date of this report, the Company has $40.0 million additional borrowing capacity to fund future cash flow requirements under the Reserve Liquidity Notes due on April 1, 2023.

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. We currently provide our own working capital for the Keyes Plant; Gemini and Secunderabad Oils currently provide us with working capital for the Kakinada Plant. The ability of Gemini, and Secunderabad Oils to continue to provide us with working capital depends in part on both of their respective financial strength and banking relationships.

Change in Working Capital and Cash Flows

The below table (in thousands) describes the changes in current and long-term debt during the six months ended June 30, 2022:

Increases to debt:
Accrued interest		$	9,883
Maturity date extension fee and other fees added to senior debt			1,937
Sub debt extension fees			340
Fuels Revolving Line draw			19,954
Carbon Revolving Line draw			27,226
	Total increases to debt				$	59,340
Decreases to debt:
Principal, fees, and interest payments to senior lender		$	(34,580	)
Principal and interest payments to EB-5 investors			(104	)
Change in debt issuance costs, net of amortization			(4,811	)
Term loan payments			(4	)
	Total decreases to debt				$	(39,499	)
	Change in total debt				$	19,841

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Working capital changes resulted in (i) a $0.2 million decrease in inventories, (ii) a $0.3 million decrease in accounts receivable due to repayments of Murex accounts receivable, (iii) a $0.8 million decrease in prepaid expenses mainly due to the use of a $2.5 million J.D. Heiskell pre-payment, partially offset by an increase in prepaid guarantee fees of $1.7 million, (iv) a decrease in other current assets of $0.1, and (v) a $4.2 million decrease in cash.

Net cash used in operating activities during the six months ended June 30, 2022, was $6.5 million, consisting of non-cash charges of $12.2 million, net cash used by operating assets and liabilities of $0.3 million, and net loss of $18.5 million. The non-cash charges consisted of: (i) $3.6 million in amortization of debt issuance costs and other intangible assets, (ii) $2.7 million in depreciation expenses, (iii) $3.4 million in stock-based compensation expense, (iv) $3.1 million in preferred unit accretion and other expenses of Series A preferred units, (v) a loss on lease termination of $0.7 million, and (vi) a gain on litigation of $1.4 million. Net changes in operating assets and liabilities consisted primarily of a decrease in (i) inventories of $0.2 million, (ii) prepaid expenses of $2.1 million, (iii) an increase in accounts payable of $0.4 million, (iv) a decrease in accounts receivable of $0.3 million, (v) an increase in accrued interest of $8.5 million, partially offset by (vi) an increase in other assets of $1.6 million, and (vii) a decrease in other liabilities of $10.1.

Cash used by investing activities was $16.4 million, of which $22.5 million were used by capital projects, partially offset by grant proceeds and other reimbursements of $6.1 million.

Cash provided by financing activities was $18.7 million, consisting primarily of $0.2 million from exercises of stock options, $5.1 million from issuance of common stock and $30.6 million from proceeds from borrowings, partially offset by repayments of borrowings of $16.2 million, debt renewal and waiver fee payments of $0.9 million, and payments on finance leases of $0.2 million.

Critical Accounting Policies

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. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of net sales and expenses for each period. We believe that of our most significant accounting policies, defined as those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain are: revenue recognition; recoverability of long-lived assets, and debt modification and extinguishment accounting. These significant accounting principles are more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Issued Accounting Pronouncements

None reported beyond those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Off Balance Sheet Arrangements

We had no off-balance sheet arrangements during the three months ended June 30, 2022.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not Applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

Management (with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, our CEO and CFO concluded that, although remediation plans were initiated to address the material weaknesses over financial reporting as identified in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, the disclosure controls and procedures along with the related internal controls over financial reporting were not effective to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and is compiled and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As discussed in greater detail under Item 9A, Controls and Procedures, in our Annual Report on Form 10-K for the year ended December 31, 2021, we initiated a remediation plan to address the material weaknesses in our internal control over financial reporting identified as of the fiscal year then ended. Our efforts to improve our internal controls are ongoing.

For a more comprehensive discussion of the material weaknesses in internal control over financial reporting identified by management as of December 31, 2021, and the remedial measures undertaken to address these material weaknesses, investors are encouraged to review Item 9A, Controls and Procedures, in our Annual Report on Form 10-K for the year ended December 31, 2021.

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PART II -- OTHER INFORMATION

Item 1. Legal Proceedings

On August 31, 2016, the Company filed a lawsuit in Santa Clara County Superior Court against defendant EdenIQ, Inc. (“EdenIQ”).  The lawsuit was based on EdenIQ’s wrongful termination of a merger agreement that would have effectuated the merger of EdenIQ into a new entity that would be primarily owned by Aemetis.  On July 24, 2019, the court awarded EdenIQ a portion of the fees and costs it had sought in the amount of approximately $6.2 million and the Company recorded these fees based on the court order. On May 6, 2022, the parties settled the dispute for $4.8 million by entering into a settlement agreement. The settlement gain of $1.4 million was recognized on the income statement in the second quarter of 2022.

Item 1A. Risk Factors.

Except as described below, there are no material changes to the risk factors since the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 10, 2022. We urge you to read the risk factors contained therein.

Inflation, including as a result of commodity price inflation or supply chain constraints due to the war in Ukraine, may adversely impact our results of operations.

We have experienced inflationary impacts on key production inputs, feedstock, wages and other costs of labor, equipment, services, and other business expenses. Commodity prices and transportation costs in particular have risen significantly over the past year. Inflation and its negative impacts could escalate in future periods. In addition, inflation is often accompanied by higher interest rates.

Ukraine is the third largest exporter of grain in the world. Russia is one of the largest producers of natural gas and oil. The commodity price impact of the war in Ukraine has been a sharp rise in grain and energy prices, including corn and natural gas, two of our primary production input commodities. In addition, the war in Ukraine has and may continue to adversely affect global supply chains resulting in further commodity price inflation for our production inputs. Also, given high global grain prices, U.S. farmers may prefer to lock in prices and export additional volumes, reducing domestic grain supplies and resulting in further inflationary pressures.

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.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

No unresolved defaults on senior securities occurred during the six months ended June 30, 2022.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

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Item 6. Exhibits.

31.1	Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.
32.1	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
10.1	Limited Waiver and Amendment No. 24 to Amended and Restated Note Purchase Agreement, dated as of August 8, 2022 by and among Aemetis, Inc.; Aemetis Advanced Fuels Keyes, Inc.; Aemetis Facility Keyes, Inc.; and Third Eye Capital Corporation, an Ontario corporation, as agent for Ninepoint - TEC Private Credit Fund and Third Eye Capital Credit Opportunities Fund - Insight Fund.
10.2*	Waiver and Amendment to Series A Preferred Unit Purchase Agreement, dated as of August 8, 2022 by and among Aemetis Biogas LLC, Protair-X Americas, Inc., and Third Eye Capital Corporation.

* The schedule to this agreement has been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of the omitted schedule will be furnished to the Securities and Exchange Commission upon request.

46

SIGNATURES

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

AEMETIS, INC.
By:	/s/ Eric A. McAfee
	Eric A. McAfee Chief Executive Officer (Principal Executive Officer)

Date: August 8, 2022

By:	/s/ Todd Waltz
	Todd Waltz Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date: August 8, 2022

47

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Eric McAfee, certify that:

1.	I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2022 of Aemetis, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
	(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements, for external purposes in accordance with generally accepted accounting principles;
	(c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 8, 2022

By:	/s/ Eric A. McAfee
	Eric A. McAfee Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Todd Waltz, certify that:

1.	I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2022 of Aemetis, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
	(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements, for external purposes in accordance with generally accepted accounting principles;
	(c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 8, 2022

By:	/s/ Todd Waltz
	Todd Waltz Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Aemetis, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eric A. McAfee, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Eric A. McAfee
	Eric A. McAfee Chief Executive Officer

Date: August 8, 2022

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Aemetis, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Todd Waltz, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Todd Waltz
	Todd Waltz Executive Vice President and Chief Financial Officer

Date: August 8, 2022

EX-10.1

EXHIBIT 10.1

LIMITED WAIVER AND AMENDMENT NO. 24 TO

AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

This Limited Waiver and Amendment No. 24 to Amended and Restated Note Purchase Agreement (this “Amendment”), is dated as of August 8, 2022, is made by and among (i) AEMETIS ADVANCED FUELS KEYES, INC., a Delaware corporation (“AEFK”), AEMETIS FACILITY KEYES, INC., a Delaware corporation (“Keyes Facility”, together with AEFK, the “Borrowers”), AEMETIS, INC., a Nevada corporation (“Parent”), (ii) THIRD EYE CAPITAL CORPORATION, an Ontario corporation, as agent for the Noteholders (“Administrative Agent”) and (iii) THIRD EYE CAPITAL CREDIT OPPORTUNITIES FUND – INSIGHT FUND and NINEPOINT – TEC PRIVATE CREDIT FUND (collectively, the “Noteholders”).

RECITALS

A. The Borrowers, Administrative Agent and Noteholders entered into the Amended and Restated Note Purchase Agreement dated as of July 6, 2012, as amended from time to time including most recently by an Amendment No. 23 dated as of May 11, 2022 (as the same may be amended, restated, supplemented, revised or replaced from time to time, the “Agreement”). Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Agreement.

B. The Borrowers have requested, and the Lenders and Administrative Agent has agreed to extend the Maturity Date of the Agreement and waive certain covenant defaults included in the Agreement, in each case on the terms and conditions contained herein.

AGREEMENT

SECTION 1. Reaffirmation of Indebtedness. The Borrowers hereby confirm that as of July 31, 2022, the outstanding principal balance of the Notes (including accrued interest) is $94,792,635.20.

SECTION 2. Recitals Part of Agreement. The foregoing recitals are hereby incorporated into and made a part of the Agreement, including all defined terms referenced therein.

SECTION 3. Maturity Date Amendment.

Section 1.1 of the Agreement is amended by substituting the following definitions in lieu of the versions of such terms and related definitions contained in the Agreement:

a) “Acquisition Notes Stated Maturity Date” means April 1, 2023; provided that the Acquisition Notes Stated Maturity Date may be extended to April 1, 2024 upon written notice to the Administrative Agent of the Borrowers’ election to extend not earlier than 60 days, and not later than 30 days, prior to the then applicable maturity date, so long as at the time of such extension (a) no Default or Event of Default has occurred and is continuing under any Financing Document and (b) the Borrowers pay to the Administrative Agent an extension fee in an amount equal to 1% of the Note Indebtedness in respect to the Acquisition Notes, which fee shall be deemed fully earned and nonrefundable, provided that half of such fee may be added to the outstanding principal balance of the Acquisition Notes on the effective date of such extension at the election of the Borrowers and the balance shall be due and payable in cash or common stock of the Parent (equivalent to 110% of the relevant half of such extension fee) within 60 days of the date of such relevant extension.”

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b) “Existing Notes Stated Maturity Date” means April 1, 2023; provided that the Existing Notes Stated Maturity Date may be extended to April 1, 2024 upon written notice to the Administrative Agent of the Borrowers’ election to extend not earlier than 60 days, and not later than 30 days, prior to the then applicable maturity date, so long as at the time of such extension (a) no Default or Event of Default has occurred and is continuing under any Financing Document and (b) the Borrowers pay to the Administrative Agent an extension fee in an amount equal to 1% of the Note Indebtedness in respect to the Existing Notes which fee shall be deemed fully earned and nonrefundable, provided that half of such fee may be added to the outstanding principal balance of the Existing Notes on the effective date of such extension at the election of the Borrowers and the balance shall be due and payable in cash or common stock of the Parent (equivalent to 110% of the relevant half of such extension fee) within 60 days of the date of such relevant extension.”

c) “Revenue Participation Notes Stated Maturity Date” means April 1, 2023; provided that the Revenue Participation Notes Stated Maturity Date may be extended to April 1, 2024 upon written notice to the Administrative Agent of the Borrowers’ election to extend not earlier than 60 days, and not later than 30 days, prior to the then applicable maturity date, so long as at the time of such extension (a) no Default or Event of Default has occurred and is continuing under any Financing Document and (b) the Borrowers pay to the Administrative Agent an extension fee in an amount equal to 1% of the Note Indebtedness in respect to the Revenue Participation Notes which fee shall be deemed fully earned and nonrefundable, provided that half of such fee may be added to the outstanding principal balance of the Revenue Participation Notes on the effective date of such extension at the election of the Borrowers and the balance shall be due and payable in cash or common stock of the Parent (equivalent to 110% of the relevant half of such extension fee) within 60 days of the date of such relevant extension.”

d) “Revolving Notes Stated Maturity Date” means April 1, 2023; provided that the Revolving Notes Stated Maturity Date may be extended to April 1, 2024 upon written notice to the Administrative Agent of the Borrowers’ election to extend not earlier than 60 days, and not later than 30 days, prior to the then applicable maturity date, so long as at the time of such extension (a) no Default or Event of Default has occurred and is continuing under any Financing Document and (b) the Borrowers pay to the Administrative Agent an extension fee in an amount equal to 1% of the Note Indebtedness in respect to the Revolving Notes which fee shall be deemed fully earned and nonrefundable, provided that half of such fee may be added to the outstanding principal balance of the Revolving Notes on the effective date of such extension at the election of the Borrowers and the balance shall be due and payable in cash or common stock of the Parent (equivalent to 110% of the relevant half of such extension fee) within 60 days of the date of such relevant extension.”

SECTION 4. ABGL Waiver.

(1) Based on the information provided to the Administrative Agent by the Borrowers, the Borrowers or the Parent advanced cash to Aemetis Biogas LLC (“ABGL”), which is a Related Party but not an Obligor, pursuant to intercompany transfers and transactions from 2018 to present in order to fund various project and working capital costs of ABGL, which is a breach of Section 6.4(f) of the Agreement, which non-compliance will, but for this waiver, constitute an Event of Default under the Agreement (the “Related Party Violation”).

2

(2) Subject to the terms of this Amendment, the Administrative Agent waives, as of the Effective Date, the Related Party Violation provided that the Obligors shall be and remain obligated to comply with their obligations as stated in Section 6.4(f) of the Agreement, on a going forward basis thereafter.

SECTION 5. Agent Advances.

Section 8.9 of the Agreement is hereby deleted and replaced with the following:

“If an Obligor fails to perform any of its covenants contained herein, the Administrative Agent may perform any of such covenants capable of being performed by it, but is under no obligation to do so. All reasonable sums so required to be paid in connection with Administrative Agent’s performance of any covenant will be paid by the Borrowers and all sums so paid shall be payable by the Borrowers on demand. No such performance by Administrative Agent of any covenant contained herein or payment or expenditure by the Borrowers of any sums advanced or borrowed by Administrative Agent pursuant to the foregoing provisions shall be deemed to relieve the Obligors from any default hereunder or its continuing obligations hereunder. In addition, the Administrative Agent is authorized, but is not obligated, to make loans to the Borrowers (“Agent Advances”), subject to periodic settlement with the Noteholders in the following circumstances: (i) for administrative convenience in exceptional circumstances, (ii) to preserve or protect the Collateral held by the Noteholders or any portion thereof, (iii) to enhance the likelihood of, or maximize the amount of, repayment of the Note Indebtedness and other obligations, (iii) to finance or pay any other amount chargeable to the Borrowers pursuant to the terms of the Note Purchase Documents, or (iv) when the conditions for borrowing cannot be fulfilled, but in the reasonable business judgment of the Administrative Agent, an Agent Advance is deemed necessary or desirable to preserve or protect the Collateral, in which case Agent Advances in an aggregate amount at any time not exceeding 10% of the Note Indebtedness may be issued. The Agent Advances shall be repayable on demand and be secured by the Collateral and shall bear interest at a rate per annum equal to the effective interest rate then applicable to the Note Indebtedness.”

SECTION 6. Conditions to Effectiveness.

This Amendment shall be effective on the date first written above but subject to satisfaction of the following conditions precedent:

(A) Administrative Agent shall have been paid an amendment fee in the amount of $300,000 in cash on the date of this Amendment, which fee shall be deemed fully earned and nonrefundable on the effective date of this Amendment.

(A) Borrowers shall, and will cause the other Company Parties to, have performed and complied with all of the covenants and conditions required by this Amendment and the Note Purchase Documents to be performed and complied with.

(B) Administrative Agent shall have received all other approvals, opinions, documents, agreements, instruments, certificates, schedules and materials as Administrative Agent may reasonably request.

Each Borrower acknowledges and agrees that the failure to perform, or to cause the performance of, the covenants and agreements in this Amendment will constitute an Event of Default under the Agreement and Administrative Agent and Noteholders shall have the right to demand the immediate repayment in full in cash of all outstanding Indebtedness owing to Administrative Agent and Noteholders under the Agreement, the Notes and the other Note Purchase Documents. In consideration of the foregoing and the transactions contemplated by this Amendment, each Borrower hereby: (i) ratifies and confirms all of the obligations and liabilities of such Borrower owing pursuant to the Agreement and the other Note Purchase Documents, and (ii) agrees to pay all costs, fees and expenses of Administrative Agent and Noteholders in connection with this Amendment.

3

SECTION 7. Agreement in Full Force and Effect as Amended.

Except as specifically amended or waived hereby, the Agreement and other Note Purchase Documents shall remain in full force and effect and are hereby ratified and confirmed as so amended. Except as expressly set forth herein, this Amendment shall not be deemed to be a waiver, amendment or modification of, or consent to or departure from, any provisions of the Agreement or any other Note Purchase Document or any right, power or remedy of Administrative Agent or Noteholders thereunder, nor constitute a course of dealing or other basis for altering any obligation of the Borrowers, or a waiver of any provision of the Agreement or any other Note Purchase Document, or any other document, instrument or agreement executed or delivered in connection therewith or of any Default or Event of Default under any of the foregoing, in each case whether arising before or after the execution date of this Amendment or as a result of performance hereunder or thereunder. This Amendment shall not preclude the future exercise of any right, remedy, power, or privilege available to Administrative Agent or Noteholders whether under the Agreement, the other Note Purchase Documents, at law or otherwise. All references to the Agreement shall be deemed to mean the Agreement as modified hereby. This Amendment shall not constitute a novation or satisfaction and accord of the Agreement or any other Note Purchase Documents, but rather shall constitute an amendment thereof. The parties hereto agree to be bound by the terms and conditions of the Agreement and Note Purchase Documents as amended by this Amendment, as though such terms and conditions were set forth herein. Each reference in the Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Agreement as amended by this Amendment, and each reference herein or in any other Note Purchase Documents to “the Agreement” shall mean and be a reference to the Agreement as amended and modified by this Amendment.

SECTION 8. Representations by Parent and Borrowers.

Each of the Parent and the Borrowers hereby represents and warrants to Administrative Agent and Noteholders as of the execution date of this Amendment as follows: (A) it is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation; (B) the execution, delivery and performance by it of this Amendment and all other Note Purchase Documents executed and delivered in connection herewith are within its powers, have been duly authorized, and do not contravene (i) its articles of incorporation, bylaws or other organizational documents, or (ii) any applicable law; (C) no consent, license, permit, approval or authorization of, or registration, filing or declaration with any Governmental Entity or other Person, is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment or any other Note Purchase Documents executed and delivered in connection herewith by or against it; (D) this Amendment and all other Note Purchase Documents executed and delivered in connection herewith have been duly executed and delivered by it; (E) this Amendment and all other Note Purchase Documents executed and delivered in connection herewith constitute its legal, valid and binding obligation enforceable against it in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity; (F) it is not in default under the Agreement or any other Note Purchase Documents and no Event of Default exists, has occurred and is continuing or would result by the execution, delivery or performance of this Amendment; and (G) the representations and warranties contained in the Agreement and the other Note Purchase Documents are true and correct in all material respects as of the execution date of this Amendment as if then made, except for such representations and warranties limited by their terms to a specific date.

4

SECTION 9. Miscellaneous.

(A) This Amendment may be executed in any number of counterparts (including by facsimile or email), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument but all of which together shall constitute one and the same agreement. Whenever the context and construction so require, all words herein in the singular number herein shall be deemed to have been used in the plural, and vice versa. The use of the word “including” in this Amendment shall be by way of example rather than by limitation. The use of the words “and” or “or” shall not be inclusive or exclusive.

(B) This Amendment may not be changed, amended, restated, waived, supplemented, discharged, canceled, terminated or otherwise modified without the written consent of the Borrowers and Administrative Agent. This Amendment shall be considered part of the Agreement and shall be a Note Purchase Document for all purposes under the Agreement and other Note Purchase Documents.

(C) This Amendment, the Agreement and the Note Purchase Documents constitute the final, entire agreement and understanding between the parties with respect to the subject matter hereof and thereof and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the parties, and shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto and thereto. There are no unwritten oral agreements between the parties with respect to the subject matter hereof and thereof.

(D) This Amendment and the rights and obligations of the parties under this Amendment shall be governed by and construed and interpreted in accordance with the choice of law provisions set forth in the Agreement and shall be subject to the waiver of jury trial and notice provisions of the Agreement.

(E) Neither the Parent nor any Borrower may assign, delegate or transfer this Amendment or any of their rights or obligations hereunder. No rights are intended to be created under this Amendment for the benefit of any third party donee, creditor or incidental beneficiary of the Borrowers or any Company Party. Nothing contained in this Amendment shall be construed as a delegation to Administrative Agent or Noteholders of the Borrowers or any Company Party’s duty of performance, including any duties under any account or contract in which Administrative Agent or Noteholders have a security interest or lien. This Amendment shall be binding upon the Borrowers, the Parent and their respective successors and assigns.

(F) All representations and warranties made in this Amendment shall survive the execution and delivery of this Amendment and no investigation by Administrative Agent or Noteholders shall affect such representations or warranties or the right of Administrative Agent or Noteholders to rely upon them.

(G) THE BORROWERS AND THE PARENT ACKNOWLEDGE THAT SUCH PERSON’S PAYMENT OBLIGATIONS ARE ABSOLUTE AND UNCONDITIONAL WITHOUT ANY RIGHT OF RECISSION, SETOFF, COUNTERCLAIM, DEFENSE, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE “OBLIGATIONS” OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM ADMINISTRATIVE AGENT OR ANY NOTEHOLDER. THE BORROWERS AND THE PARENT HEREBY VOLUNTARILY AND KNOWINGLY RELEASE AND FOREVER DISCHARGE ADMINISTRATIVE AGENT AND EACH NOTEHOLDER AND THEIR RESPECTIVE PREDECESSORS, ADMINISTRATIVE AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”), FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH SUCH PERSON MAY NOW OR HEREAFTER HAVE AGAINST THE RELEASED PARTIES, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY “LOANS”, INCLUDING ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE AGREEMENT OR OTHER NOTE PURCHASE DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.

{Signatures appear on following pages.}

5

IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the date first noted above.

BORROWERS:
AEMETIS ADVANCED FUELS KEYES, INC.
By:	/s/ Eric A. McAfee
	Name: Eric A. McAfee
	Title: Chief Executive Officer
AEMETIS FACILITY KEYES, INC.
By:	/s/ Eric A. McAfee
	Name: Eric A. McAfee
	Title: Chief Executive Officer
PARENT:
AEMETIS, INC.
By:	/s/ Eric A. McAfee
	Name: Eric A. McAfee
	Title: Chief Executive Officer
ADMINISTRATIVE AGENT:
THIRD EYE CAPITAL CORPORATION
By:	/s/ Arif N. Bhalwani
	Name: Arif N. Bhalwani
	Title: Managing Director

6

EX-10.2

EXHIBIT 10.2

WAIVER AND AMENDMENT TO

SERIES A PREFERRED UNIT PURCHASE AGREEMENT

This Waiver and Amendment to Series A Preferred Unit Purchase Agreement (this “Amendment”), is dated as of August 8, 2022, is made by and among (i) AEMETIS BIOGAS LLC, a Delaware limited liability company (“ABGL”), PROTAIR-X AMERICAS, INC., a Delaware corporation (the “Purchaser”), and (ii) THIRD EYE CAPITAL CORPORATION, an Ontario corporation, as agent for the Purchaser (“Agent”).

RECITALS

A. ABGL, the Agent and the Purchaser entered into the Series A Preferred Unit Purchase Agreement (the “Agreement”) and a Security Agreement, each dated as of December 20, 2018. Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Agreement.

B. ABGL requires certain consents and waivers pursuant to the Transaction Documents, and has indicated a desire to satisfy and pay all Obligations owing under the Agreement, including the redemption of all of the outstanding Series A Preferred units, by the dates indicated herein and in advance of the Final Redemption Date, and the parties have agreed to amend the Agreement on the terms and conditions contained herein to contemplate the foregoing.

AGREEMENT

SECTION 1. Waivers and Consents. Subject to the terms, covenants and conditions of this Amendment, Agent and Purchaser hereby agree to the following:

(A) ABGL has advised that it has incorporated various Subsidiaries, and intends to undertake a series of transactions to transfer assets to such Subsidiaries (“Internal Reorganization”), and also intends to cause one of its Subsidiaries to obtain a USDA loan in the amount of $25,000,000 from Greater Commercial Lending (the “USDA Loan 1”), which actions are prohibited by Sections 6.8(g), 6.8(m), 6.8(n), 6.15(j), 6.15(k) and 6.16(c) of the Agreement and Section 4.2(e) of the Security Agreement. These non-compliances would, but for this waiver, constitute a Trigger Event under Section 7.1(b) of the Agreement (the “USDA Loan Violation”). The Agent and Purchaser hereby waive the USDA Loan Violation subject to the following conditions: (i) that all agreements, documents and information of any kind requested by the Agent (in its sole discretion) in respect of the proposed USDA Loan 1 or the Internal Reorganization required in order to transfer assets to the Subsidiary obtaining USDA Loan 1, be provided on a timely basis to the Agent for review, including any drafts of such agreements, documents or information; (ii) the Agent having approved in writing such agreements, documents and information (in its sole discretion); and (iii) Third Eye Capital Corporation, as agent on behalf of those Lenders under the Amended and Restated Credit Agreement dated March 2, 2022, shall have received a repayment of Loan Indebtedness against the Carbon Revolving Line in the amount of at least $7,300,000 contemporaneous with the closing of the USDA Loan 1.

(B) ABGL has advised that it has failed to comply with the following provisions of the Agreement (collectively, the “Operational Defaults”):

· Section 6.3 Preference Payments. Failure to pay all accrued Preference Payments on the Series A Preferred Units by the last day of April, July, October and January of each calendar year;

· Section 6.7(b) Board. Failure of the Board to meet at least once per quarter;

· Section 6.14(a) Operating Cash Flow per Digester. Failure of each Digester to have minimum quarterly Operating Cash Flow of $300,000 following the Stabilization Period applicable to such Digester;

· Section 6.14(b) Total Operating Cash Flow. Failure to have minimum quarterly Operating Cash Flow to meet the thresholds indicated in the table in Section 6.14(b);

· Section 6.14(c) Minimum Biogas Output. Failure to cause the average biogas output generated by the Digesters from cow manure to be not less than 11 MMBTU per WCE per year on a seasonally adjusted, annualized basis;

· Section 6.15(l) Operational Covenants. Causing amendments, restatements, supplements or modifications to the Gantt chart and Project Budget without the prior written approval of the Agent and the Third Party Consultant;

· Section 6.18 Post-Closing Obligations. Failure to provide, on the timeline required, an executed Deposit Account Control Agreement with Bank of America, N.A. with respect to each bank account of ABGL and online visibility to such account.

Subject to the terms of this Amendment, the Agent and Purchaser waive, as of the date hereof, the Operational Defaults, provided that ABGL shall be and remain obligated to comply with its obligations pursuant to the sections noted herein above on a going forward basis thereafter.

Except as expressly provided herein, nothing contained herein shall be construed as a waiver by the Agent or Purchaser of any covenant or provision of the Agreement or the other Transaction Documents, including without limitation a waiver of or consent to the creation of any Subsidiaries nor any future or additional USDA Loan financings or bond issuances of any kind, and the failure of the Agent or Purchaser at any time or times hereafter to require strict performance by ABGL of any provision thereof shall not waive, affect or diminish any right of the Agent or Purchaser to thereafter demand strict compliance therewith. The Agent and Purchaser hereby reserve all rights granted under the Agreement, the Transaction Documents and any other contract or instrument among ABGL, the Purchaser and the Agent.

SECTION 2. Amendments. The following sections of the Agreement shall be and hereby are amended as follows:

(A) Section 6.9(b) (Full Redemption). Subsection 6.9(b) of the Agreement is deleted in its entirety and replaced with the following:

“Full Redemption. On or before 2:00pm EST on December 31, 2022 (the “Final Redemption Date”), the Company shall redeem all of the outstanding Series A Preferred Units by paying to the Purchaser, in immediately available funds, an aggregate amount equal to $116,000,000 (the “Final Redemption Price”). Notwithstanding the foregoing, on or before 2:00pm EST on September 30, 2022 (the “Early Redemption Date”), the Company may redeem all of the outstanding Series A Preferred Units by paying to the Purchaser, in immediately available funds, an aggregate amount equal to $106,000,000 (the “Early Redemption Price”) provided it has given the Purchaser notice of its intention to do so by 2:00pm EST on September 28, 2022. The payment and receipt of either the Early Redemption Price or the Final Redemption Price (as applicable) shall be in full and complete satisfaction of the requirement of the Company to pay the Obligations under the Agreement, and upon receipt of such payment, the Purchaser shall deliver to the Company for cancellation, the certificate or certificates representing the then issued and outstanding Series A Preferred Units held by the Purchaser or on its behalf, and the Agreement and other Transaction Documents shall be deemed terminated (except for any provisions thereof that, by their specific terms, survive termination).

In the event that neither the Early Redemption Price nor the Final Redemption Price are paid by the dates indicated above, such failure shall constitute a Trigger Event (upon, for clarity, the passing of the Final Redemption Date), and in addition to the remedies indicated in Section 7.2 of the Agreement, the Company agrees that effective as of January 1, 2023, it will execute and agree to be bound by, and shall irrevocably be deemed to have entered into, a credit agreement with the Agent and the Purchaser in substantially the form attached as Schedule “A” to the First Amendment (with any revisions required and agreed to by the parties in order to ensure such transaction is done on a tax efficient basis, the “Credit Agreement”) and together with any ancillary agreements, documents, certificates, guarantees or deliverables contemplated by such Credit Agreement (collectively, the “Credit Documents”), and such Credit Agreement shall be a modification and replacement of this Agreement, and the liabilities, obligations, covenants and requirements of this Agreement shall be replaced by the liabilities, obligations, covenants and requirements of the Credit Agreement and all such security, liens and registrations provided pursuant to this Agreement (or ancillary agreements) shall continue and remain in place unaffected. Further, upon execution of the Credit Agreement and all Credit Documents (including without limitation any guarantees which the Credit Agreement contemplates to be signed by affiliates of ABGL, including those signatories to the First Amendment), the Purchaser shall deliver to the Company for cancellation, the certificate or certificates representing the then issued and outstanding Series A Preferred Units held by the Purchaser or on its behalf, and the Agreement and other Transaction Documents shall be deemed terminated (except for any provisions thereof that, by their nature, survive termination)”.

(B) Section 1.1 Defined Terms. The following defined term is added into Section 1.1 of the Agreement in its applicable alphabetical order:

“First Amendment” means that Waiver and Amendment to Series A Preferred Unit Purchase Agreement dated as of August 8, 2022 by and between the Company, the Purchaser and the Agent.”

SECTION 3. Conditions to Effectiveness. This Amendment shall be subject to satisfaction of the following conditions precedent:

(A) ABGL shall have performed and complied with all of the covenants and conditions required by this Amendment and the Transaction Documents to be performed and complied with upon the effective date of this Amendment.

(B) Agent shall have received all other approvals, opinions, documents, agreements, instruments, certificates, schedules and materials as the Agent may reasonably request, including tax advice to ensure that the transactions contemplated herein are done on a tax efficient manner.

SECTION 4. Acknowledgement. ABGL acknowledges and agrees that the failure to perform, or to cause the performance of, the covenants and agreements in this Amendment will constitute a Trigger Event under the Agreement.

SECTION 5. Agreement in Full Force and Effect as Amended. Except as specifically amended or waived hereby, the Agreement and other Transaction Documents shall remain in full force and effect and are hereby ratified and confirmed as so amended. Except as expressly set forth herein, this Amendment shall not be deemed to be a waiver, amendment or modification of, or consent to or departure from, any provisions of the Agreement or any other Transaction Document or any right, power or remedy of the Agent or Purchaser thereunder, nor constitute a waiver of any provision of the Agreement or any other Transaction Document, or any other document, instrument or agreement executed or delivered in connection therewith or of any Trigger Event under any of the foregoing, in each case whether arising before or after the execution date of this Amendment or as a result of performance hereunder or thereunder. This Amendment shall not preclude the future exercise of any right, remedy, power, or privilege available to the Agent or Purchaser whether under the Agreement, the other Transaction Documents, at law or otherwise. All references to the Agreement shall be deemed to mean the Agreement as modified hereby. This Amendment shall not constitute a novation or satisfaction and accord of the Agreement or any other Transaction Document but shall constitute an amendment thereof. The parties hereto agree to be bound by the terms and conditions of the Agreement and Transaction Documents as amended by this Amendment, as though such terms and conditions were set forth herein. Each reference in the Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Agreement as amended by this Amendment, and each reference herein or in any other Transaction Documents to “the Agreement” shall mean and be a reference to the Agreement as amended and modified by this Amendment.

SECTION 6. Representations by ABGL. ABGL hereby represents and warrants to the Agent and Purchaser as of the execution date of this Amendment as follows: (a) it is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation; (b) the execution, delivery and performance by it of this Amendment are within its powers, have been duly authorized, and do not contravene (i) its articles of incorporation, bylaws or other organizational documents, or (ii) any applicable law; (c) no consent, license, permit, approval or authorization of, or registration, filing or declaration with any Governmental Authority or other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment; (d) this Amendment has been duly executed and delivered by it; (e) this Amendment constitutes its legal, valid and binding obligation enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity; (f) it is not in default under the Agreement or any other Transaction Documents and no Trigger Event exists, has occurred and is continuing or would result by the execution, delivery or performance of this Amendment; and (g) the representations and warranties contained in the Agreement and the other Transaction Documents are true and correct in all material respects as of the execution date of this Amendment as if then made, except for such representations and warranties limited by their terms to a specific date.

SECTION 7. Miscellaneous.

(A) This Amendment may be executed in any number of counterparts (including by facsimile or email), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument but all of which together shall constitute one and the same agreement. Each party agrees that it will be bound by its own facsimile or scanned signature and that it accepts the facsimile or scanned signature of each other party. The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof or thereof. The use of the word “including” in this Amendment shall be by way of example rather than by limitation. The use of the words “and” or “or” shall not be inclusive or exclusive.

(B) This Amendment may not be changed, amended, restated, waived, supplemented, discharged, canceled, terminated or otherwise modified without the written consent of the parties hereto. This Amendment shall be considered part of the Agreement and shall be a Transaction Document for all purposes.

(C) This Amendment, the Agreement and the Transaction Documents constitute the final, entire agreement and understanding between the parties with respect to the subject matter hereof and thereof and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the parties, and shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto and thereto. There are no unwritten oral agreements between the parties with respect to the subject matter hereof and thereof.

(D) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF LAW PROVISIONS SET FORTH IN THE AGREEMENT AND SHALL BE SUBJECT TO THE WAIVER OF JURY TRIAL AND NOTICE PROVISIONS OF THE AGREEMENT.

(E) ABGL may not assign, delegate or transfer this Amendment or any of its rights or obligations hereunder. No rights are intended to be created under this Amendment for the benefit of any third party donee, creditor or incidental beneficiary. Nothing contained in this Amendment shall be construed as a delegation to Agent or the Purchaser of ABGL’s duty of performance, including any duties under any account or contract in which the Agent or Purchaser have a security interest or lien. This Amendment shall be binding upon the parties hereto and their respective successors and assigns.

(F) ABGL ACKNOWLEDGES THAT ITS PAYMENT OBLIGATIONS ARE ABSOLUTE AND UNCONDITIONAL WITHOUT ANY RIGHT OF RECISSION, SETOFF, COUNTERCLAIM, DEFENSE, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE “OBLIGATIONS” OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM AGENT OR PURCHASER. ABGL HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES THE AGENT AND PURCHASER AND THEIR RESPECTIVE PREDECESSORS, ADMINISTRATIVE AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”) FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH SUCH PERSON MAY NOW OR HEREAFTER HAVE AGAINST THE RELEASED PARTIES, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, INCLUDING ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE AGREEMENT OR OTHER TRANSACTION DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.

{Signatures appear on following pages.}

IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the date first noted above.

AEMETIS BIOGAS, LLC
By:	/s/ Eric A. McAfee
	Name: Eric A. McAfee
	Title: Chief Executive Officer
THIRD EYE CAPITAL CORPORATION
By:	/s/ Arif N. Bhalwani
	Name: Arif N. Bhalwani
	Title: Managing Director
PROTAIR-X AMERICAS, INC.
By:	/s/ Dev Bhangui
	Name: Dev Bhangui
	Title: Chief Executive Officer

Acknowledged and agreed, specifically with respect to the obligation to provide the Guarantees and security agreements, in a form to be agreed to by the parties thereto, to be provided pursuant to the Credit Agreement, if and when required:

AEMETIS, INC. GOODLAND ADVANCED FUELS, INC. AEMETIS CARBON CAPTURE, INC. AEMETIS ADVANCED PRODUCTS KEYES, INC., AEMETIS ADVANCED FUELS KEYES, INC., AEMETIS PROPERTY KEYES, INC., AEMETIS RIVERBANK, INC., AEMETIS PROPERTIES RIVERBANK, INC., AEMETIS ADVANCED PRODUCTS RIVERBANK, INC., AEMETIS HEALTH PRODUCTS, INC., AEMETIS INTERNATIONAL, INC., AEMETIS TECHNOLOGIES, INC., AE ADVANCED FUELS, INC., AEMETIS BIOFUELS, INC., AEMETIS AMERICAS, INC., AEMETIS ADVANCED FUELS, INC., AEMETIS FACILITY KEYES, INC., ENERGY ENZYMES, INC., AE BIOFUELS, INC., AEMETIS ADVANCED BIOREFINERY KEYES, INC.
By:	/s/ Eric A. McAfee
	Name: Eric A. McAfee
	Title: Chief Executive Officer

Schedule “A”

Form of Credit Agreement

(See attached)

XML

Cover - shares	6 Months Ended
	Jun. 30, 2022	Jul. 31, 2022
Cover [Abstract]
Entity Registrant Name	AEMETIS, INC.
Entity Central Index Key	0000738214
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	false
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2022
Entity Filer Category	Accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Entity Common Stock Shares Outstanding		34,584,207
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-36475
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	26-1407544
Entity Interactive Data Current	Yes
Entity Address Address Line 1	20400 Stevens Creek Blvd
Entity Address Address Line 2	Suite 700
Entity Address City Or Town	Cupertino
Entity Address State Or Province	CA
Entity Address Postal Zip Code	95014
City Area Code	408
Local Phone Number	213-0940
Security 12b Title	Common Stock, $0.001 par value
Trading Symbol	AMTX
Security Exchange Name	NASDAQ

XML

CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents ($18 and $19 respectively from VIE)	$ 3,558	$ 7,751
Accounts receivable, net of allowance for doubtful accounts of $0 and $1,404 as of June 30, 2022 and December 31, 2021, respectively	1,278	1,574
Inventories, net of allowance for excess and obsolete inventory of $1,040 as of June 30, 2022 and December 31, 2021, respectively	4,905	5,126
Prepaid expenses ($184 and $335 respectively from VIE)	4,752	5,598
Other current assets	552	644
Total current assets	15,045	20,693
Property, plant and equipment, net ($54,992 and $39,625 respectively from VIE)	156,790	135,101
Operating lease right-of-use assets ($0 and $10 respectively from VIE)	2,294	2,462
Other assets ($537 and $38 respectively from VIE)	4,323	2,575
Total assets	178,452	160,831
Current liabilities:
Accounts payable ($6,942 and $4,950 respectively from VIE)	19,138	16,415
Current portion of long term debt	9,003	8,192
Short term borrowings ($9 and $9 respectively from VIE)	15,856	14,586
Mandatorily redeemable Series B convertible preferred stock	3,915	3,806
Accrued property taxes ($0 and $121 respectively from VIE)	984	6,830
Accrued contingent litigation fees	0	6,200
Current portion of operating lease liability ($5 and $11 respectively from VIE)	258	260
Current portion of Series A preferred units ($4,608 and $3,169 respectively from VIE)	4,608	3,169
Other current liabilities ($777 and $306 respectively from VIE)	6,600	5,872
Total current liabilities	60,362	65,330
Long term liabilities:
Senior secured notes and revolving notes	140,084	121,451
EB-5 notes	32,000	32,500
Other long term debt ($36 and $40 respectively from VIE)	11,665	12,038
Series A preferred units ($50,280 and $44,978 respectively from VIE)	50,280	44,978
Operating lease liability	2,191	2,318
Other long term liabilities	4,583	2,454
Total long term liabilities	240,803	215,739
Stockholders' deficit:
Series B convertible preferred stock, $0.001 par value; 7,235 authorized; 1,270 and 1,275 shares issued and outstanding each period, respectively (aggregate liquidation preference of $3,810 and $3,825 respectively)	1	1
Common stock, $0.001 par value; 80,000 authorized; 34,582 and 33,461 shares issued and outstanding each period, respectively	35	33
Additional paid-in capital	221,915	205,305
Accumulated deficit	(339,730)	(321,227)
Accumulated other comprehensive loss	(4,934)	(4,350)
Total stockholders' deficit	(122,713)	(120,238)
Total liabilities and stockholders' deficit	$ 178,452	$ 160,831

XML

CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Allowance For Doubtful Accounts	$ 0	$ 1,404,000
Inventory Valuation Reserves	$ 1,040,000	$ 1,040,000
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized (in Thousands)	80,000,000	80,000,000
Common Stock, Shares Issued (in Thousands)	34,582,000	33,461,000
Common Stock, Shares Outstanding (in Thousands)	34,582,000	33,461,000
Short Term Borrowings	$ 15,856,000	$ 14,586,000
Series B Convertible Preferred Stock
Series B Preferred Stock, Par Value	$ 0.001	$ 0.001
Series B Preferred Stock, Authorized (in Thousands)	7,235,000	7,235,000
Series B Preferred Stock, Shares Issued (in Thousands)	1,270,000	1,275,000
Series B Preferred Stock, Shares Outstanding (in Thousands)	1,270,000	1,275,000
Aggregate Liquidation Preference	$ 3,810,000	$ 3,825,000
Variable Interest Entity, Primary Beneficiary [Member]
Cash And Cash Equivalents, Vie	18,000	19,000
Prepaid Expenses, Vie	184,000	335,000
Property, Plant And Equipment, Vie	54,992,000	39,625,000
Operating Lease Right-of-use Assets, Vie	0	10,000
Other Assets, Vie	537,000	38,000
Accounts Payable, Vie	6,942,000	4,950,000
Short Term Borrowings	9,000	9,000
Accrued Property Taxes	0	121,000
Current Portion Of Operating Lease Liability, Vie	5,000	11,000
Current Portion Of Series A Preferred Units, Vie	4,608,000	3,169,000
Other Current Liabilities, Vie	777,000	306,000
Other Long Term Debt, Vie	36,000	40,000
Series A Preferred Units, Vie	$ 50,280,000	$ 44,978,000

XML

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) (Unaudited)
Revenues	$ 65,901	$ 54,884	$ 117,950	$ 97,691
Cost of goods sold	66,115	51,238	121,249	97,653
Gross profit (loss)	(214)	3,646	(3,299)	38
Research and development expenses	51	21	87	44
Selling, general and administrative expenses	7,061	5,753	14,367	11,135
Other operating expense	360	0	360	0
Operating loss	(7,686)	(2,128)	(18,113)	(11,141)
Interest expense
Interest rate expense	4,928	4,529	9,363	10,494
Debt related fees and amortization expense	1,740	690	3,566	1,905
Accretion and other expenses of Series A preferred units	1,506	3,800	3,146	5,743
Gain on debt extinguishment	0	(1,134)	0	(1,134)
Gain on litigation	(1,400)	0	(1,400)	0
Other expense (income)	(14,254)	544	(14,295)	513
Loss before income taxes	(206)	(10,557)	(18,493)	(28,662)
Income tax expense	3	0	10	7
Net loss	(209)	(10,557)	(18,503)	(28,669)
Other comprehensive loss
Foreign currency translation loss	(390)	(184)	(584)	(209)
Comprehensive loss	$ (599)	$ (10,741)	$ (19,087)	$ (28,878)
Net loss per common share
Basic	$ (0.01)	$ (0.34)	$ (0.54)	$ (1.00)
Diluted	$ (0.01)	$ (0.34)	$ (0.54)	$ (1.00)
Weighted average shares outstanding
Basic	34,536	30,924	34,128	28,781
Diluted	34,536	30,924	34,128	28,781

XML

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Operating activities:
Net loss	$ (18,503)	$ (28,669)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	3,389	1,116
Depreciation	2,661	2,764
Debt related fees and amortization expense	3,566	1,905
Intangibles and other amortization expense	23	24
Accretion and other expenses of Series A preferred units	3,146	5,743
Loss on asset disposals	47	0
Gain on debt extinguishment	0	(1,134)
Gain on litigation	(1,400)	0
Loss on lease termination	736	0
Provision for bad debts	0	144
Changes in operating assets and liabilities:
Accounts receivable	294	(70)
Inventories	187	(610)
Prepaid expenses	2,138	(4,393)
Other assets	(1,647)	2,588
Accounts payable	392	(2,711)
Accrued interest expense and fees	8,542	4,361
Other liabilities	(10,054)	729
Net cash used in operating activities	(6,483)	(18,213)
Investing activities:
Capital expenditures	(22,518)	(12,935)
Grant proceeds and other reimbursements received for capital expenditures	6,147	1,224
Net cash used in investing activities	(16,371)	(11,711)
Financing activities:
Proceeds from borrowings	30,622	0
Repayments of borrowings	(16,191)	(53,523)
Lender debt renewal and waiver fee payments	(869)	0
Grant proceeds received for capital expenditures	0	115
Payments on finance leases	(182)	(247)
Proceeds from issuance of common stock in equity offering	5,124	86,319
Proceeds from the exercise of stock options	201	1,032
Proceeds from Series A preferred units financing	0	3,130
Series A preferred financing redemption	0	(300)
Net cash provided by financing activities	18,705	36,526
Effect of exchange rate changes on cash and cash equivalents	(44)	(19)
Net change in cash and cash equivalents for period	(4,193)	6,583
Cash and cash equivalents at beginning of period	7,751	592
Cash and cash equivalents at end of period	3,558	7,175
Supplemental disclosures of cash flow information, cash paid:
Cash paid for interest	14,270	5,425
Income taxes paid	10	7
Supplemental disclosures of cash flow information, non-cash transactions:
Subordinated debt extension fees added to debt	340	340
Debt fees added to revolving lines	500	0
Fair value of warrants issued to subordinated debt holders	1,393	281
Fair value of warrants issued for guarantee fees	2,012	0
Fair value of warrants issued to lender for debt issuance costs	3,158	0
Fair value of stock issued to lender	1,335	0
Lender debt extension, waiver, and other fees added to debt	583	1,215
Capital expenditures in accounts payable	10,230	4,948
Payment of debt added to revolving lines	16,266	0
Financing lease liabilities arising from obtaining right of use assets	2,932	0
Capital expenditures purchased on financing	0	55
Issuance of equity to pay off accounts payable	$ 0	$ 893

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Series B Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Balance, shares at Dec. 31, 2020		1,323	22,830
Balance, amount at Dec. 31, 2020	$ (184,744)	$ 1	$ 23	$ 93,426	$ (274,080)	$ (4,114)
Issuance of common stock, shares			5,682
Issuance of common stock, amount	62,395	0	$ 6	62,389	0	0
Stock options exercised, shares			1,226
Stock options exercised, amount	1,003	0	$ 1	1,002	0	0
Stock-based compensation	835	0	$ 0	835	0	0
Issuance and exercise of warrants, shares			113
Issuance and exercise of warrants, amount	281	0	$ 0	281	0	0
Foreign currency translation loss	(25)	0	0	0	0	(25)
Net loss	(18,112)	$ 0	$ 0	0	(18,112)	0
Balance, shares at Mar. 31, 2021		1,323	29,851
Balance, amount at Mar. 31, 2021	(138,367)	$ 1	$ 30	157,933	(292,192)	(4,139)
Balance, shares at Dec. 31, 2020		1,323	22,830
Balance, amount at Dec. 31, 2020	(184,744)	$ 1	$ 23	93,426	(274,080)	(4,114)
Stock-based compensation	1,116
Net loss	(28,669)
Balance, shares at Jun. 30, 2021		1,323	31,572
Balance, amount at Jun. 30, 2021	(124,024)	$ 1	$ 32	183,015	(302,749)	(4,323)
Balance, shares at Mar. 31, 2021		1,323	29,851
Balance, amount at Mar. 31, 2021	(138,367)	$ 1	$ 30	157,933	(292,192)	(4,139)
Issuance of common stock, shares			976
Issuance of common stock, amount	24,774	0	$ 1	24,773	0	0
Stock options exercised, shares			745
Stock options exercised, amount	29	0	$ 1	28	0	0
Stock-based compensation	281	0	0	281	0	0
Foreign currency translation loss	(184)	$ 0	$ 0	0	0	(184)
Net loss	(10,557)				(10,557)
Balance, shares at Jun. 30, 2021		1,323	31,572
Balance, amount at Jun. 30, 2021	(124,024)	$ 1	$ 32	183,015	(302,749)	(4,323)
Balance, shares at Dec. 31, 2021		1,275	33,461
Balance, amount at Dec. 31, 2021	(120,238)	$ 1	$ 33	205,305	(321,227)	(4,350)
Issuance of common stock, shares			341
Issuance of common stock, amount	3,349	0	$ 1	3,348	0	0
Stock options exercised, shares			263
Stock options exercised, amount	196	0	$ 0	196	0	0
Stock-based compensation	2,040	0	$ 0	2,040	0	0
Issuance and exercise of warrants, shares			113
Issuance and exercise of warrants, amount	4,550	0	$ 0	4,550	0	0
Foreign currency translation loss	(194)	0	0	0	0	(194)
Net loss	(18,294)	$ 0	$ 0	0	(18,294)	0
Series B conversion to common stock, shares		(5)	1
Series B conversion to common stock, amount	0	$ 0	$ 0	0	0	0
Balance, shares at Mar. 31, 2022		1,270	34,179
Balance, amount at Mar. 31, 2022	(128,591)	$ 1	$ 34	215,439	(339,521)	(4,544)
Balance, shares at Dec. 31, 2021		1,275	33,461
Balance, amount at Dec. 31, 2021	(120,238)	$ 1	$ 33	205,305	(321,227)	(4,350)
Stock-based compensation	3,389
Net loss	(18,503)
Balance, shares at Jun. 30, 2022		1,270	34,582
Balance, amount at Jun. 30, 2022	(122,713)	$ 1	$ 35	221,915	(339,730)	(4,934)
Balance, shares at Mar. 31, 2022		1,270	34,179
Balance, amount at Mar. 31, 2022	(128,591)	$ 1	$ 34	215,439	(339,521)	(4,544)
Issuance of common stock, shares			400
Issuance of common stock, amount	5,124	0	$ 1	5,123	0	0
Stock options exercised, shares			3
Stock options exercised, amount	4	0	$ 0	4	0	0
Stock-based compensation	1,349	0	0	1,349	0	0
Foreign currency translation loss	(390)	0	0	0	0	(390)
Net loss	(209)	$ 0	$ 0	0	(209)	0
Balance, shares at Jun. 30, 2022		1,270	34,582
Balance, amount at Jun. 30, 2022	$ (122,713)	$ 1	$ 35	$ 221,915	$ (339,730)	$ (4,934)

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Nature of Activities and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Nature of Activities and Summary of Significant Accounting Policies

Nature Of Activities And Summary Of Significant Accounting Policies

1. Nature of Activities and Summary of Significant Accounting Policies

Nature of Activities. Founded in 2006 and headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis, “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas and renewable fuels company focused on the acquisition, development and commercialization of innovative technologies that replace traditional petroleum-based products.

We own and operate a 65 million gallon per year ethanol production facility located in Keyes, California (the “Keyes Plant”). In addition to low carbon renewable fuel ethanol, the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), and Condensed Distillers Solubles (“CDS”), all of which are sold as animal feed to local dairies and feedlots. In the fourth quarter of 2021, an ethanol zeolite membrane dehydration system was installed at the Keyes Plant and is in the process of being commissioned, a key first step in the electrification of the Keyes Plant.

During 2018, Aemetis Biogas, LLC (“ABGL”) was formed to construct bio-methane anaerobic digesters at local dairies near the Keyes Plant, many of whom also purchase WDG produced at the Keyes Plant. The digesters are connected via an underground private pipeline owned by ABGL to a gas cleanup and compression unit being built at the Keyes Plant to produce dairy renewable natural gas (“RNG”). Upon receiving the bio-methane from the dairies, impurities are removed, and the bio-methane is converted to negative carbon intensity RNG that will either be injected into the statewide PG&E gas utility pipeline, supplied as compressed RNG that will service local trucking fleets, or used as renewable process energy at the Keyes Plant. Our Dairy Renewable Natural Gas segment, comprised of ABGL, has completed Phase 1 of our California biogas digester network and pipeline system that converts waste dairy methane gas into RNG, including two operational dairies and seven miles of pipeline.  ABGL is now executing Phase 2 construction with the completion of sixteen miles of pipeline and the commissioning of the biogas-to-RNG upgrade unit at the Keyes Plant as well as beginning construction of additional dairy digesters.

During the second quarter of 2022, Aemetis has completed construction of a third dairy digester and commissioning of the centralized gas cleanup facility and utility gas interconnect located at the Keyes Plant where dairy biogas will be upgraded to RNG and injected into the utility pipeline. Upon receiving pathway certification from the California Air Resources Board (CARB), the fuel is expected to be delivered into the Northern California gas delivery system.

Our ‘Carbon Zero’ biofuels production plants are designed to produce biofuels, including sustainable aviation fuel (“SAF”) and diesel fuel utilizing renewable hydrogen and non-edible renewable oils sourced from existing Aemetis biofuels plants and other sources. The first plant to be built, in Riverbank, California, “Carbon Zero 1”, is expected to utilize hydroelectric and other renewable power available onsite to produce 90 million gallons per year of SAF, renewable diesel, and other byproducts. 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. By producing ultra-low carbon renewable fuels, the Company expects to capture higher value D3 Renewable Identification Numbers (“RINs”) and California’s LCFS credits. D3 RINs have a higher value in the marketplace than D6 RINs due to D3 RINs’ relative scarcity and mandated pricing formula from the United States Environmental Protection Agency (“EPA”).

On April 1, 2021, we established Aemetis Carbon Capture, Inc. to build Carbon Capture and Sequestration (CCS) projects to generate LCFS and IRS 45Q credits by injecting CO₂ into wells which are monitored for emissions to ensure the long-term sequestration of carbon underground. The CCS projects are expected to capture and sequester up to two million metric tons per year of CO₂ at the two Aemetis biofuels plant sites in Keyes and Riverbank, California. In July 2022, Aemetis purchased 24 acres, on the Riverbank Industrial Complex site in Riverbank, California, to develop a CCS injection well. The Company plans to construct a characterization well to obtain both the data and well design information required for the EPA Class VI CO₂ injection well permit application. The well is expected to sequester up to one million metric tons per year of CO₂.

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

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

All intercompany balances and transactions have been eliminated in consolidation.

The accompanying consolidated condensed balance sheet as of June 30, 2022, the consolidated condensed statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021, the consolidated condensed statements of cash flows for the six months ended June 30, 2022 and 2021, and the consolidated condensed statements of stockholders’ deficit for the three and six months ended June 30, 2022 and 2021 are unaudited. The consolidated condensed balance sheet as of December 31, 2021 was derived from the 2021 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the 2021 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2021. The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of Company’s management, the unaudited interim consolidated condensed financial statements as of and for the three and six months ended June 30, 2022 and 2021 have been prepared on the same basis as the audited consolidated statements as of and for the year ended December 31, 2021 and reflect all adjustments, consisting primarily of normal recurring adjustments, necessary for the fair presentation of its statement of financial position, results of operations and cash flows. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the operating results for any subsequent quarter, for the full fiscal year or any future periods.

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

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

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. Heiskell Purchasing Agreement”). On May 13, 2020, we entered into an amendment to the Corn Procurement and Working Capital Agreement with J.D. Heiskell (the “Corn Procurement and Working Capital”), under the terms of which we buy all corn from J.D. Heiskell and sell all WDG and corn oil we produce to J.D. Heiskell. Following May 13, 2020 and until October, 2021, we sold the majority of our fuel ethanol production to one customer, Kinergy Marketing, LLC (“Kinergy”), through individual sales transactions. We terminated the Ethanol Marketing Agreement with Kinergy as of September 30, 2021. Effective October 1, 2021, we entered into Fuel Ethanol Purchase and Sale Agreement with Murex LLC (“Murex”), in which we sell all our ethanol to Murex. Given the similarity of the individual sales transactions with Kinergy and Murex, we have assessed them as a portfolio of similar contracts. The performance obligation is satisfied by delivery of the physical product to one of our customer’s contracted trucking companies. Upon delivery, the customer has the ability to direct the use of the product and receive substantially all of its benefits. The transaction price is determined based on daily market prices negotiated by Kinergy and 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. 

The below table shows our sales in our California Ethanol segment by product category:

	For the three months ended June 30,				For the six months ended June 30,
	2022		2021		2022		2021
Ethanol and high-grade alcohol sales	$	47,656	$	42,169	$	85,551	$	72,089
Wet distiller's grains sales		15,150		10,630		26,666		21,665
Other sales		3,085		1,931		5,715		3,304
	$	65,891	$	54,730	$	117,932	$	97,058

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

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

For our California Ethanol segment, we buy corn as feedstock for the production of ethanol, from our working capital partner J.D. Heiskell. Prior to May 13, 2020, we sold all our ethanol, WDG, and corn oil to J.D. Heiskell and we bought all our corn to process into ethanol from J.D. Heiskell. After May 13, 2020, we sold most of our fuel ethanol to one customer, Kinergy, and sold all WDG and corn oil to J.D. Heiskell. During the second quarter of 2021, we signed a biofuels offtake agreement with Murex, and beginning on October 1, 2021 we sold all our fuel ethanol to Murex. We only have customer relationships with Kinergy and Murex, hence the principal and agent criteria are not applied. However, we are still buying corn and selling WDG and corn oil to J.D.Heiskell. We analyzed the principal versus agent relationship criteria below.

We consider the purchase of corn as a cost of goods sold and the sale of WDG and, corn oil, upon trucks leaving the Keyes Plant, as revenue on the basis that (i) we control and bear the risk of gain or loss on the processing of corn which is purchased at market prices into ethanol and (ii) we have legal title to the goods during the processing time. The pricing for both WDG and corn oil is set independently. Revenues from WDG and corn oil 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. 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, when revenue is recognized. Revenues are recorded at the gross invoiced amount. Hence, we are the principal in California Ethanol segment where our customer and vendor may be the same.

Dairy Renewable Natural Gas: All of our Dairy Renewable Natural Gas segment revenues during the three and six months ended June 30, 2022 and 2021 were from sales of biogas to the Keyes Plant for use in boilers. This resulted in lowering the carbon intensity of the Keyes Plant and increased revenues on ethanol sold through the California Ethanol segment. These revenues have been eliminated once consolidated. Refer to Note 10 Segment Information for the unconsolidated revenue of our Dairy Renewable Natural Gas segment.

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

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

	For the three months ended June 30,				For the six months ended June 30,
	2022		2021		2022		2021
Biodiesel sales	$	-	$	107	$	-	$	465
Refined glycerin sales		-		9		-		125
Other sales		10		38		18		43
	$	10	$	154	$	18	$	633

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

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

Shipping and Handling Costs. Shipping and handling costs are classified as a component of cost of goods sold in the accompanying consolidated statements of operations.

Research and Development. Research and development costs are expensed as incurred, unless they have alternative future uses to the Company.

Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances at various financial institutions domestically and abroad. The Federal Deposit Insurance Corporation insures domestic cash accounts. The Company’s accounts at these institutions may at times exceed federally insured limits. The Company has not experienced any losses in such accounts.

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

The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivables are charged against the allowance for doubtful accounts once un-collectability has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate, additional allowances may be required. We reserved $1.4 million in the allowances for doubtful accounts as of December 31, 2021 and wrote off the balances as uncollectible during the second quarter of 2022.

Inventories. Finished goods, raw materials, and work-in-process inventories are valued using methods which approximate the lower of cost (first-in, first-out) or net realizable value (“NRV”).  Distillers’ grains and related products are stated at NRV.  In the valuation of inventories, NRV is determined as estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.Variable Interest Entities. We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other variable interests in is considered a variable interest entity (“VIE”). We consolidate VIEs when we are the primary beneficiary. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, we assess whether any changes in our interest or relationship with the entity affects our determination of whether the entity is still a VIE and, if so, whether we are the primary beneficiary. If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE in accordance with applicable U.S. GAAP.Property, Plant and Equipment. Property, plant, and equipment are carried at cost less accumulated depreciation after assets are placed in service and are comprised primarily of plant and buildings, furniture, machinery, equipment, land, and biogas dairy digesters. Capital expenses for in-process project are accumulated in construction in progress and will be capitalized and depreciated once the capital projects are finished and are in service. The Company’s plant in Goodland, Kansas (the “Goodland Plant”) is partially completed and is not ready for operation. It is the Company’s policy to depreciate capital assets over their estimated useful lives using the straight-line method. 

The Company evaluates the recoverability of long-lived assets with finite lives in accordance with ASC Subtopic 360-10-35 Property Plant and Equipment—Subsequent Measurements, which requires recognition of impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, based on estimated undiscounted cash flows, the impairment loss would be measured as the difference between the carrying amount of the assets and its estimated fair value. The Company has not recorded any impairment during the three and six months ended June 30, 2022 and 2021.

California Energy Commission Low-Carbon Fuel Production Program. The Company has been awarded $4.2 million in matching grants from the California Energy Commission Low-Carbon Fuel Production Program (“LCFPP”). The LCFPP grant reimburses the Company for costs to design, procure, and install processing facility to clean-up, measure and verify negative-carbon intensity dairy renewable natural gas fuel at the production facility in Keyes, California. The Company has received $3.8 million from the LCFPP as of June 30, 2022, as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

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

In October 2020, the Company was awarded $7.8 million in matching grants from the CDFA Dairy Digester Research and Development program. The CDFA grant reimburses the Company for costs required to permit and construct six of the Company’s biogas capture systems under contract with central California dairies. The Company has received $1.6 million from the CDFA 2020 grant program as of June 30, 2022, as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

California Energy Commission Low Carbon Advanced Ethanol Grant Program. In May 2019, the Company was awarded the right to receive reimbursements from the California Energy Commission Community-Scale and Commercial-Scale Advanced Biofuels Production Facilities grant under the Alternative and Renewable Fuel and Vehicle Technology Program in an amount up to $5.0 million (the “CEC Reimbursement Program”) in connection with the Company’s expenditures toward the development of the Riverbank Cellulosic Ethanol Facility. To comply with the guidelines of the CEC Reimbursement Program, the Company must make a minimum of $7.9 million in matching contributions to the Riverbank project. The Company receives funds under the CEC Reimbursement Program for actual expenses incurred up to $5.0 million as long as the Company makes the minimum matching contribution. Given that the Company has not made the minimum matching contribution, the grant for reimbursement of capital expenditures of $1.7 million is presented with long-term liabilities as of June 30, 2022, and December 31, 2021. Due to the uncertainty associated with meeting the minimum matching contribution, the reimbursement will be recognized when the Company makes the minimum matching contribution.

U.S. Department of Food and Agriculture Forest Service Grant. Aemetis Advanced Products Keyes (“AAPK”) has been awarded $245 thousand in matching grants from the U.S. Department of Food and Agriculture Forest Service (“US Forest Service”) under the Wood Innovation and Community Wood program. The grant reimburses the Company for continued development of technologies and processes to valorize forest waste for the production of cellulosic ethanol. AAPK has received $73 thousand from the US Forest Service as reimbursement for actual allowable program costs incurred through June 30, 2022.

California Energy Commission Grant for Solar Microgrid, DSC and Battery Backup System. Aemetis Advanced Fuels Keyes (“AAFK”) has been awarded an $8.0 million grant to design, construct and commission a grid-connected 1.56 MW photovoltaic microgrid and 1.25MW/2.5MWh Battery Energy Storage System integrated with an artificial intelligence-driven distributed control system (DCS). The grant requires $1.55 million in matching contribution. AAFK received $3.3 million in grant funds from this program as reimbursement for actual expenditures incurred through June 30, 2022. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

California Department of Forestry and Fire Protection Grant. AAPK has been awarded $2 million in matching grants from the CAL FIRE Business and Workforce Development Grant Program (“CAL Fire”) in May 2022. This CAL Fire grant program reimburses AAPK for costs to design, construct, and commission a 2 million gallon per year cellulosic ethanol facility that will convert conifer biomass from forested regions of the Sierra Nevada into an ultra‐low carbon biofuel derived from 100% forest biomass (“CAL Fire Conversion Program”). AAPK must contribute $5.8 million in cost share contributions to the project to receive grant proceeds. AAPK has received no grant funds from the CAL Fire Conversion Program as reimbursement for actual costs through June 30, 2022.

California Department of Forestry and Fire Protection Grant. AAPK has been awarded $500 thousand in grants from CAL Fire in May 2022. This CAL Fire grant program reimburses AAPK for costs to advance a new‐to‐the world technology that circumvents current limitations surrounding the extraction of cellulosic sugars by pioneering a novel route for deconstructing woody biomass using ionic liquids (“CAL Fire Extraction Program”). AAPK has received no grant funds from the CAL Fire Extraction Program as reimbursement for actual costs through June 30, 2022.

U.S Forest Service Community Wood Grant. Aemetis Advanced Products Riverbank (“AAPR”) has been awarded $642 thousand in matching grants from the U.S Forest Service Wood Innovations Program (“USFS”) in May 2022. The USFS grant program reimburses AAPR for costs to design, construct, and commission a plant to produce cellulosic ethanol using preliminary research and development in partnership with the Joint Bioenergy Institute (JBEI). USFS grant funds will be used to complete the FEL-3 design phase of the entire process, construct a biomass pretreatment unit to extract sugars at the Aemetis Riverbank site and ferment sugars into ethanol at the Keyes Plant. AAPR must contribute $2.4 million in cost share contributions to the project to receive grant proceeds. AAPK has received no grant funds from the USFS grant program as reimbursement for actual costs through June 30, 2022.

USDA’s Biofuel Producer Program Grant. 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. This was recorded in other expense (income) on the Consolidated Statements of Operations and Comprehensive Loss.

Basic and Diluted Net Loss per Share. Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share reflects the dilution of common stock equivalents such as options, convertible preferred stock, debt, and warrants to the extent the impact is dilutive. As the Company incurred net losses for the three and six months ended June 30, 2022 and, 2021, potentially dilutive securities have been excluded from the diluted net loss per share computations as their effect would be anti-dilutive.

The following table shows the number of potentially dilutive shares excluded from the diluted net loss per share calculation as of June 30, 2022 and 2021:

	As of
	June 30, 2022		June 30, 2021
Series B preferred (post split basis)		127		132
Common stock options and warrants		4,748		4,252
Debt with conversion feature at $30 per share of common stock		1,228		1,273
Total number of potentially dilutive shares excluded from the diluted net (loss) per share calculation		6,103		5,657

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

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

Segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.  The Company further evaluates its operating segments to determine its reportable segments. Aemetis recognizes three reportable segments “California Ethanol”, “Dairy Renewable Natural Gas”, and “India Biodiesel.”

The “California Ethanol” reportable segment includes the Company’s 65 million gallon per year Keyes plant and the adjacent land leased for the production of CO₂.

The “Dairy Renewable Natural Gas” reportable segment include, the dairy digesters, pipeline and gas condition hub for the production of biogas from dairies near Keyes, California.

The “India Biodiesel” reportable segment includes the Company’s 50 million gallon per year nameplate capacity biodiesel manufacturing Kakinada Plant, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. The Company’s biodiesel is marketed and sold primarily to customers in India through brokers and by the Company directly.

The Company has additional operating segments that were determined not to be reportable segments, including the Carbon Zero 1 facility in Riverbank, the Goodland Plant in Kansas and the research and development facility in Minnesota.  Refer to the “All Other” category.

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

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

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

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

For a complete summary of the Company’s significant accounting policies, please refer to the Company’s audited financial statements and notes thereto for the years ended December 31, 2021 and 2020 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2022.

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Inventories

6 Months Ended

Jun. 30, 2022

Inventories

Inventories

2. Inventories

Inventories consist of the following:

	As of
	June 30, 2022		December 31, 2021
Raw materials	$	903	$	727
Work-in-progress		2,522		2,083
Finished goods		1,480		2,316
Total inventories	$	4,905	$	5,126

As of June 30, 2022, and December 31, 2021, the Company recognized a lower of cost or net realizable value impairment of $165 thousand and none respectively, related to inventory.

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Property Plant and Equipment

6 Months Ended

Jun. 30, 2022

Property Plant and Equipment

Property, Plant And Equipment

3. Property, Plant and Equipment

Property, plant and equipment consist of the following:

	As of
	June 30, 2022			December 31, 2021
Land	$	6,156		$	4,082
Plant and buildings		122,165			97,110
Furniture and fixtures		1,504			1,334
Machinery and equipment		5,203			5,294
Tenant improvements		56			-
Construction in progress		51,279			55,859
Property held for development		15,437			15,437
Finance lease right of use assets		3,152			2,317
Total gross property, plant & equipment		204,952			181,433
Less accumulated depreciation		(48,162	)		(46,332	)
Total net property, plant & equipment	$	156,790		$	135,101

For the three months ended June 30, 2022 and 2021, interest capitalized in property, plant, and equipment was $2.6 million and $0.9 million, respectively. For the six months ended June 30, 2022 and 2021, interest capitalized in property, plant, and equipment was $4.7 million and $1.5 million, respectively.

Construction in progress includes costs for the biogas construction projects (dairy digesters and pipeline), Riverbank projects (sustainable aviation fuel and renewable diesel plant as well as carbon capture characterization well), and energy efficiency projects at the Keyes Plant. Depreciation on the components of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:

	Years
Plant and buildings		20 - 30
Machinery and equipment		5 - 15
Furniture and fixtures		3 - 5

For the three months ended June 30, 2022 and 2021, the Company recorded depreciation expense of $1.3 million and $1.4 million, respectively. For the six months ended June 30, 2022 and 2021, the Company recorded depreciation expense of $2.7 million and $2.8 million, respectively.

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Debt

6 Months Ended

Jun. 30, 2022

Debt

Debt

4. Debt

Debt consists of the following:

	June 30, 2022		December 31, 2021
Third Eye Capital term notes	$	7,089	$	7,095
Third Eye Capital revolving credit facility		54,039		75,980
Third Eye Capital revenue participation term notes		11,912		11,915
Third Eye Capital acquisition term notes		26,464		26,461
Third Eye Capital Fuels Revolving Line		18,393		-
Third Eye Capital Carbon Revolving Line		22,187		-
Cilion shareholder seller notes payable		6,718		6,619
Subordinated notes		15,105		14,304
EB-5 promissory notes		41,004		40,692
Term loans on capital expenditures		5,697		5,701
Total debt		208,608		188,767
Less current portion of debt		24,859		22,778
Total long term debt	$	183,749	$	165,989

Third Eye Capital Note Purchase Agreement

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

Pursuant to the Note Purchase Agreement, Third Eye Capital extended credit in the form of (i) senior secured term loans in an aggregate principal amount of approximately $7.2 million to replace existing notes held by Third Eye Capital (the “Term Notes”); (ii) senior secured revolving loans in an aggregate principal amount of $18.0 million (the “Revolving Credit Facility”); (iii) senior secured term loans in the principal amount of $10.0 million to convert the prior revenue participation agreement to a note (the “Revenue Participation Term Notes”); and (iv) senior secured term loans in an aggregate principal amount of $15.0 million (the “Acquisition Term Notes”) used to fund the cash portion of the acquisition of Cilion, Inc. (the Term Notes, Revolving Credit Facility, Revenue Participation Term Notes and Acquisition Term Notes are referred to herein collectively as the “Original Third Eye Capital Notes”).

On February 27, 2019, a promissory note (the “February 2019 Note”, together with the Original Third Eye Capital Notes, the “Third Eye Capital Notes”) for $2.1 million was advanced by Third Eye Capital to Aemetis, Inc., as a short-term credit facility for working capital and other general corporate purposes with an interest rate of 14% per annum maturing on the earlier of (a) receipt of proceeds from any financing, refinancing, or other similar transaction, (b) extension of credit by Third Eye Capital, as lender or as agent on behalf of certain lenders, to the Company or its affiliates, or (c) April 30, 2019. In consideration of the February 2019 Note, $0.1 million of the total proceeds were paid to Third Eye Capital as financing charges. On April 30, 2019, the February 2019 Note was modified to remove the stated maturity date and instead be due on demand by Third Eye Capital. In third quarter of 2019, the February 2019 Note was modified to include additional borrowings of $0.7 million. In first quarter of 2020, the February 2019 Note was modified to include additional borrowings of $0.6 million. The February 2019 note was fully repaid in the first quarter of 2021.

On March 14, 2021, Third Eye Capital agreed to Limited Waiver and Amendment No. 19 to the Note Purchase Agreement (“Amendment No. 19”), to (i) provide for a waiver of the ratio of note indebtedness covenant for the quarter ended December 31, 2021, (ii) provide for a waiver of the consolidated unfunded capital expenditures covenant for the quarters through March 31, 2021. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million in cash (the “Amendment No. 19 Fee”). We gave the notice to extend the maturity date of the Notes to April 1, 2022 and the extension fee equal to 1% of the Note Indebtedness in respect to each Note, provided that half of such fee may be added to the outstanding principal balance of each Note on the effective date of each such extension and rest of the balance may be payable in cash or common stock within 60 days of the date of such relevant extension. We evaluated the terms of the Amendment No. 19 and the maturity date extension and applied modification accounting treatment in accordance with ASC 470-50 Debt – Modification and Extinguishment.

On August 9, 2021, Third Eye Capital agreed to the Limited Waiver and Amendment No. 20 to the Note Purchase Agreement (“Amendment No. 20”) to: (i) provide that, upon written notice to Third Eye Capital, the maturity date may be further extended to April 1, 2023 in exchange for an extension fee equal to 1% of the Note Indebtedness in respect of each Note, where half of such fee may be added to the outstanding principal balance of each Note on the effective date of each such extension; (ii) provide for a waiver of the ratio of note indebtedness covenant for the quarters ended March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022; and (iii) provide for a waiver of the unfunded capital expenditures covenant for the quarter ended June 30, 2021 in which the Company exceeded the $100,000 capital expenditures limit. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.3 million in cash. We evaluated the terms of the Amendment No.20 and applied modification accounting treatment in accordance with ASC 470-50 Debt – Modification and Extinguishment. In the first quarter of 2022, the Company exercised the option to extend the maturity of Third Eye Capital Notes to April 1, 2023.

On November 5, 2021, Third Eye Capital agreed to the Limited Waiver and Amendment No. 21 to the Note Purchase Agreement (“Amendment No. 21”) to: (i) provide a waiver for the Blocked Account Agreement Violation in which the Borrowers failed to deliver Blocked Account Control Agreements by August 31, 2021 and (ii) provide for a waiver for the Subordinated Debt Violation, in which the Company made a repayment to a Subordinated Debt lender. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million in cash. We will evaluate the terms of the Amendment No.21 in accordance with ASC 470-50 Debt – Modification and Extinguishment.

On March 8, 2022, Third Eye Capital agreed to the Limited Waiver and Amendment No. 22 to the Note Purchase Agreement (“Amendment No. 22”) to: (i) provide a waiver for the Blocked Account Agreement Violation in which the Borrowers failed to deliver Blocked Account Control Agreements by December 31, 2021, (ii) provide for a waiver for the Subordinated Debt Violation, in which the Company made a repayment to a Subordinated Debt lender, and (iii) provide for a waiver of the consolidated unfunded capital expenditures covenant for the quarters through December 31, 2021. As consideration for such waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million in cash.

On May 11, 2022, Third Eye Capital agreed to the Limited Waiver and Amendment No. 23 to the Note Purchase Agreement (“Amendment No. 23”) to: (i) provide a waiver for the Blocked Account Agreement Violation in which the Borrowers failed to deliver Blocked Account Control Agreements by March 31, 2022, (ii) provide for a waiver of the ratio of note indebtedness covenant for the quarter ended March 31, 2023 and (iii) provide for a waiver of the unfunded capital expenditures covenant for the quarter ended March 31, 2022 in which the Company exceeded the $100,000 capital expenditures limit. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million.

As Amendments No. 19, No. 20, No. 21, No. 22, and No. 23 waived certain covenants for the quarters ended June 30, 2022, September 30, 2022, December 31, 2022, and March 31, 2023. According to ASC 470-10-45 Debt–Other Presentation Matters, if it is probable that the Company will not be able to cure the default at measurement dates within the next 12 months, the related debt needs to be classified as current. To assess this guidance, the Company performed ratio and cash flow analysis using its cash flow forecast and debt levels. The Company forecasted sufficient cash flows over the next 12 months to reduce debt levels of Third Eye Capital and meet operations of the Company. Based on this analysis, the Company believes that it is reasonably possible that through a combination of cash flows from operations, sales from EB-5 investments, and proceeds from the sale of common stock, it will be able to meet the ratio of the note indebtedness covenant over the next 12 months. As such, the notes are classified as long-term debt.

On March 6, 2020, we and a subsidiary entered into a one-year reserve liquidity facility governed by a promissory note, payable to Third Eye Capital, in the principal amount of $18 million. On March 14, 2021, Third Eye Capital agreed to increase the amount available under the reserve liquidity facility to $70.0 million. Borrowings under the reserve liquidity facility are available from March 14, 2021 until maturity on April 1, 2023. Interest on borrowed amounts accrues at a rate of 30% per annum, paid monthly in arrears and may be capitalized and due upon maturity, or 40% if an event of default has occurred and continues. The outstanding principal balance of the indebtedness evidenced by the promissory note, plus any accrued but unpaid interest and any other sums due thereunder, shall be due and payable in full at the earlier to occur of (a) receipt by the Company or its affiliates of proceeds from any sale, merger, equity or debt financing, refinancing or other similar transaction from any third party and (b) April 1, 2023. Any amounts may be re-borrowed up to repaid amounts up until the maturity date of April 1, 2023. The promissory note is secured by liens and security interests upon the property and assets of the Company. In return, the Company will pay a non-refundable standby fee at 2% per annum of the difference between the aggregate principal amount outstanding and the commitment, payable monthly in cash. In addition, if any initial advances are drawn under the facility, the Company will pay a non-refundable one-time fee in the amount of $0.5 million provided that such fee may be added to the principal amount of the promissory note on the date of such initial advance. On August 9, 2021, Third Eye Capital agreed to decrease the amount available under the reserve liquidity notes governed by a promissory note to $40.0 million.

Terms of Third Eye Capital Notes

A.	Term Notes. As of June 30, 2022, the Company had $7.2 million in principal and interest outstanding net of $76 thousand unamortized debt issuance costs under the Term Notes. The Term Notes accrue interest at 14% per annum. The Term Notes mature on April 1, 2023*.
B.	Revolving Credit Facility. The Revolving Credit Facility accrues interest at the prime rate plus 13.75% (18.50% as of June 30, 2022) payable monthly in arrears. The Revolving Credit Facility matures on April 1, 2023*. As of June 30, 2022, AAFK had $55.2 million in principal and interest and waiver fees outstanding net of $1.1 million unamortized debt issuance costs under the Revolving Credit Facility.
C.	Revenue Participation Term Notes. The Revenue Participation Term Note bears interest at 5% per annum and matures on April 1, 2023*. As of June 30, 2022, AAFK had $12.0 million in principal and interest outstanding net of $119 thousand unamortized debt issuance costs on the Revenue Participation Term Notes.
D.	Acquisition Term Notes. The Acquisition Term Notes accrue interest at the prime rate plus 10.75% (15.50% per annum as of June 30, 2022) and mature on April 1, 2023*. As of June 30, 2022, Aemetis Facility Keyes, Inc. had $26.7 million in principal and interest and redemption fees outstanding net of $202 thousand unamortized debt issuance costs. The outstanding principal balance includes a total of $7.5 million in redemption fees.
E.	Reserve Liquidity Notes. The Reserve Liquidity Notes, with available borrowing capacity in the amount of $40.0 million, accrues interest at the rate of 30% per annum and are due and payable upon the earlier of: (i) the closing of new debt or equity financings, (ii) receipt from any sale, merger, debt or equity financing, or (iii) April 1, 2023. We have no borrowings outstanding under the Reserve Liquidity Notes as of June 30, 2022.
*	The note maturity date can be extended by the Company to April 2024. As a condition to any such extension, the Company would be required to pay a fee of 1% of the carrying value of the debt of which 50% can be paid in cash and 50% can be added to the outstanding debt. As a result of this ability to extend the maturity at the Company’s will, the Third Eye Capital Notes are classified as non-current debt.

The Third Eye Capital Notes contain various covenants, including but not limited to, debt to plant value ratio, minimum production requirements, and restrictions on capital expenditures. The terms of the Third Eye Capital Notes allow the lender to accelerate the maturity in the occurrence of any event that could reasonably be expected to have a material adverse effect on the Company, such as any change in the business, operations, or financial condition. The Company has evaluated the likelihood of such an acceleration event and determined such an event to not be probable in the next twelve months. The terms of the notes allow interest to be capitalized.

The Third Eye Capital Notes are secured by first priority liens on all real and personal property of, and assignment of proceeds from all government grants and guarantees from the Company’s North American subsidiaries. The Third Eye Capital Notes all contain cross-collateral and cross-default provisions. McAfee Capital, LLC (“McAfee Capital”), owned by Eric McAfee, the Company’s Chairman and CEO, provided a guaranty of payment and performance secured by all of its Company shares. In addition, Eric McAfee provided a blanket lien on substantially all of his personal assets, and McAfee Capital provided a guarantee in the amount of $8.0 million.

GAFI Term Loan and Revolving Loan. On July 10, 2017, GAFI entered into a Note Purchase Agreement (“Note Purchase Agreement”) with Third Eye Capital. See further discussion regarding GAFI in Note 6. Pursuant to the Note Purchase Agreement, Third Eye Capital agreed, subject to the terms and conditions of the Note Purchase Agreement and relying on each of the representations and warranties set forth therein, to make (i) a single term loan to GAFI in an aggregate amount of $15 million (“Term Loan”) and (ii) revolving advances not to exceed $10 million dollars in the aggregate (the “Revolving Loans”). The interest rate applicable to the Term Loan is equal to 10% per annum. The interest rate applicable to the Revolving Loans is the greater of prime rate plus 7.75% and 12.00% per annum. The maturity date of the loans was extended to July 10, 2021 by exercising an option to extend the GAFI Loan Maturity Date for a fee of $0.5 million. The Company fully repaid the GAFI notes in the first quarter of 2021 and replaced the Note Purchase Agreement with the New Credit Facility, as described below.

Third Eye Capital Revolving Credit Facility for Fuels and Carbon Lines. On March 2, 2022, GAFI and Aemetis Carbon Capture, Inc. (“ACCI”) entered into an Amended and Restated Credit Agreement (“Credit Agreement”) with Third Eye Capital , as administrative agent and collateral agent, and the lender party thereto (the “New Credit Facility”). The New Credit Facility provides for two credit facilities with aggregate availability of up to $100 million, consisting of a revolving credit facility with GAFI for up to $50 million (the “Fuels Revolving Line”) and a revolving credit facility with ACCI for up to $50 million (the “Carbon Revolving Line” and together with the Fuels Revolving Line, the “Revolving Lines”). The revolving loans made under the Fuels Revolving Line have a maturity date of March 1, 2025 and will accrue a rate of interest per annum equal to the greater of (i) the prime rate plus 6.00% and (ii) ten percent (10.0%), and the revolving loans made under the Carbon Revolving Line will have a maturity date of March 1, 2026 and accrue a rate of interest per annum equal to the greater of (i) the prime rate plus 4.00% and (ii) eight percent (8.0%). The revolving loans made under the Fuels Revolving Line are available for working capital purposes and the revolving loans made under the Carbon Revolving Line are available for projects that reduce, capture, use or sequester carbon with the objective of reducing carbon dioxide emissions. In connection with the New Credit Facility, the Company agreed to issue to the lender under the New Credit Facility: (i) warrants entitling the lender to purchase 50,000 shares of common stock of the Company at an exercise price equal to $10.20 per share, exercisable for a five-year period from March 2, 2022; and (ii) warrants entitling holders thereof to purchase 250,000 shares of common stock of the Company, at an exercise price equal to $20.00 per share, exercisable for a ten-year period from March 2, 2022. In addition, under the Fuels Revolving Line, we issued 100,000 shares of common stock to existing note holders under the GAFI note purchase agreement. The shares were accounted at fair value and are being amortized over the life of the Fuels Revolving Line. Upon closing of the New Credit Facility, the Company drew on the revolving lines to repay $16.0 million on the higher interest rate AAFK Revolving Credit Facility, $6.1 million in property taxes, and to fund the capital projects and working capital projects.

As of June 30, 2022, GAFI had $20.2 million in principal and interest outstanding net of $1.9 million unamortized debt issuance costs. As of June 30, 2022, ACCI had $25.1 million in principal and interest outstanding net of $2.9 million in unamortized debt issuance costs.

Cilion shareholder seller notes payable. In connection with the Company’s merger with Cilion, Inc. (“Cilion”), on July 6, 2012, the Company issued $5.0 million in notes payable to Cilion shareholders as merger compensation subordinated to the senior secured Third Eye Capital Notes. The liability bears interest at 3% per annum and is due and payable after the Third Eye Capital Notes have been paid in full. As of June 30, 2022, Aemetis Facility Keyes, Inc. had $6.7 million in principal and interest outstanding under the Cilion shareholder seller notes payable.

Subordinated Notes. On January 6 and January 9, 2012, AAFK entered into Note and Warrant Purchase Agreements with two accredited investors pursuant to which it issued $0.9 million and $2.5 million in original notes to the investors (“Subordinated Notes”). The Subordinated Notes mature every six months. Upon maturity, the Subordinated Notes are generally extended with a fee of 10% added to the balance outstanding plus issuance of warrants exercisable at $0.01 with a two-year term. Interest accrues at 10% per annum and is due at maturity. Neither AAFK nor Aemetis may make any principal payments under the Subordinated Notes until all loans made by Third Eye Capital to AAFK are paid in full.

On January 1, 2022, the maturity on two Subordinated Notes’ was extended until the earlier of (i) June 30, 2022; (ii) after the occurrence of an Event of Default, including failure to pay interest or principal when due and breaches of note covenants. A $90 thousand and $250 thousand cash extension fee was paid by adding the fee to the balance of the new Subordinated Notes and 113 thousand common stock warrants were granted with a term of two years and an exercise price of $0.01 per share.

The Company evaluated the January 1, 2022 amendment and the refinancing terms of the notes and applied modification accounting treatment in accordance with ASC 470-50 Debt – Modification and Extinguishment.

At June 30, 2022 and December 31, 2021, the Company had, in aggregate, the amount of $15.1 million and $14.3 million in principal and interest outstanding, respectively, under the Subordinated Notes.

EB-5 promissory notes. EB-5 is a U.S. government program authorized by the Immigration and Nationality Act designed to foster employment-based visa preference for immigrant investors to encourage the flow of capital into the U.S. economy and to promote employment of U.S. workers. The Company entered into a Note Purchase Agreement dated March 4, 2011 (as further amended on January 19, 2012 and July 24, 2012) with Advanced BioEnergy, LP, a California limited partnership authorized as a “Regional Center” to receive EB-5 investments, for the issuance of up to 72 subordinated convertible promissory notes (the “EB-5 Notes”) bearing interest at 2-3%. Each note was issued in the principal amount of $0.5 million and due and payable four years from the date of each note, for a total aggregate principal amount of up to $36.0 million (the “EB-5 Phase I funding”). The original maturity date on the promissory notes can be extended automatically for a one- or two-year period initially and is eligible for further one-year automatic extensions as long as there is no notice of non-extension from investors and the investors’ immigration process is in progress. On February 27, 2019, Advanced BioEnergy, LP, and the Company entered into an Amendment to the EB-5 Notes which restated the original maturity date on the promissory notes with automatic six-month extensions as long as the investors’ immigration processes are in progress. Except for six early investor EB-5 Notes, the Company was granted 12 months from the date of the completion of immigration process to redeem these EB-5 Notes. Given the COVID-19 pandemic and processing delays for immigration process, Advanced BioEnergy, LP extended the maturity dates for debt repayment based on their projected processing timings as long as the investors do not give notice of withdrawal or an I-829 gets approved. Accordingly, the notes have been recognized as long-term debt while investor notes who obtained green card approval have been classified as current debt. The EB-5 Notes are convertible after three years at a conversion price of $30 per share.

The Company has sold an aggregate principal amount of $36.0 million of EB-5 Notes under the EB-5 Phase I funding since 2012 to the date of this filing. As of June 30, 2022, $35.5 million has been released from the escrow amount to the Company, with $0.5 million remaining to be funded to escrow. As of June 30, 2022 and December 31, 2021, $32.5 million in principal and $4.3 million in accrued interest and $32.5 million in principal and $4.1 million in accrued interest was outstanding, respectively, on the EB-5 Notes sold under the EB-5 Phase I funding.

On October 16, 2016, the Company launched its EB-5 Phase II funding (the “EB-5 Phase II Funding”), with plans to issue $50.0 million in additional EB-5 Notes on substantially similar terms and conditions as those issued under the Company’s EB-5 Phase I funding, to refinance indebtedness and capital expenditures of Aemetis, Inc. and Goodland Advanced Fuels Inc., (“GAFI”). On November 21, 2019, the minimum investment was raised from $0.5 million per investor to $0.9 million per investor. The Company entered into a Note Purchase Agreement dated with Advanced BioEnergy II, LP, a California limited partnership authorized as a Regional Center to receive EB-5 Phase II funding investments, for the issuance of up to 100 EB-5 Notes bearing interest at 3%. On May 1, 2020 Supplement No. 3 amended the offering documents and lowered the total eligible new EB-5 Phase II funding investors to 60. Eight EB-5 investors have funded at the $0.5 million per investor amount, with 52 new EB-5 Phase II funding investors remaining eligible at the new $0.9 million per investors amount under the current offering. Job creation studies show it may be possible to add additional investors and increase the total offering amount in the future. Each EB-5 note will be issued in the principal amount and due and payable five years from the date of each EB-5 note, for a total aggregate principal amount of up to $50.8 million.

The Company has sold an aggregate principal amount of $4.0 million of EB-5 Notes under the EB-5 Phase II funding since 2016 to the date of this filing. As of June 30, 2022, $4.0 million has been released from escrow to the Company and $46.8 million remains to be funded to escrow. As of June 30, 2022, $4.2 million was outstanding on the EB-5 Notes under the EB-5 Phase II funding.

Secunderabad Oils Operating Agreement. In November 2008, the Company entered into an operating agreement with Secunderabad Oils Limited (“Secunderabad Oils”). The 2008 agreement provided the working capital and had the first priority lien on assets in return for 30% of the plant’s monthly net operating profit. These expenses were recognized as selling, general, and administrative expenses by the Company in the financials. All terms of the 2008 agreement with Secunderabad Oils were terminated to amend the agreement as below. On July 15, 2017, the agreement with Secunderabad Oils was amended to provide the working capital funds for British Petroleum business operations only in the form of inter-corporate deposit for an amount of approximately $2.3 million over a 95 day period at the rate of 14.75% per annum interest rate. The term of the agreement continues until either party terminates it. Secunderabad Oils has a second priority lien on the assets of the Company’s Kakinada Plant after this agreement. As of June 30, 2022, the Company had no balance outstanding under this agreement.

Financing Agreement for capital expenditures. The Company entered into an agreement with Mitsubishi Chemical America, Inc. (“Mitsubishi”) to purchase membrane dehydration equipment to save energy used in the Keyes Plant. The Company also entered into a financing agreement with Mitsubishi for $5.7 million for this equipment. Payments pursuant to the financing transaction will commence after the installation date and interest will be charged based on the certain performance metrics after operation of the equipment. The equipment was delivered in March 2020; however, the installation was delayed due to the COVID-19 pandemic. In the fourth quarter of 2021, installation of dehydration equipment occurred allowing for the recording of the asset in property, plant and equipment, net. Hence, we recorded the asset in property, plant and equipment, net and the related liability of $0.7 million in short term borrowings and $4.9 million in other long-term debt, respectively as of June 30, 2022.

Scheduled debt repayments for the Company’s loan obligations by year are as follows:

Twelve Months ended June 30,	Debt Repayments
2023	$	24,859
2024		132,218
2025		26,191
2026		29,473
2027		944
There after		1,169
Total debt		214,854
Debt issuance costs		(6,246	)
Total debt, net of debt issuance costs	$	208,608

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies

Commitments And Contingencies

5. Commitments and Contingencies

Leases

We have identified assets as the corporate office, warehouse, monitoring equipment and laboratory facilities over which we have control and obtain economic benefits fully. We classified these identified assets as operating leases after assessing the terms under classification guidance. We have entered into several leases for trailers and carbon units with purchase option at the end of the term. We have concluded that it is reasonably certain that we would exercise the purchase option at the end of the term, hence the leases were classified as finance leases. All of our leases have remaining term of less than a year to 15 years.

We made an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations as we incur the expenses.

When discount rates implicit in leases cannot be readily determined, the Company uses the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and measure lease liabilities and right-of-use (“ROU”) assets. The incremental borrowing rate used by the Company was based on weighted average baseline rates commensurate with the Company’s secured borrowing rate over a similar term. At each reporting period, when there is a new lease initiated, the rates established for that quarter will be used.

On December 14, 2021, we entered into a real estate purchase agreements and lease disposition and development agreement with the City of Riverbank. 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. The lease commenced on April 1, 2022. The Company evaluated the lease in accordance with ASC 842 – Lease Accounting and classified the lease as a finance lease.

The components of lease expense and sublease income were as follows:

	Three Months ended June 30,				Six Months ended June 30,
	2022		2021		2022		2021
Operating lease cost
Operating lease expense	$	159	$	204	$	347	$	408
Short term lease expense		75		71		102		110
Variable lease expense		23		21		46		54
Total operating lease cost	$	257	$	296	$	495	$	572
Finance lease cost
Amortization of right-of-use assets	$	28	$	55	$	89	$	110
Interest on lease liabilities		99		20		119		41
Total finance lease cost	$	127	$	75	$	208	$	151

Cash paid for amounts included in the measurement of lease liabilities:

	Three Months ended June 30,				Six Months ended June 30,
	2022		2021		2022		2021
Operating cash flows used in operating leases	$	174	$	173	$	338	$	340
Operating cash flows used in finance leases		99		20		118		41
Financing cash flows used in finance leases		50		124	$	182		248

Supplemental non-cash flow information related to ROU asset and lease liabilities was as follows for the three and six months ended June 30, 2022 and 2021:

	Three Months ended June 30,					Six Months ended June 30,
	2022		2021			2022		2021
Operating leases
Accretion of the lease liability	$	85	$	96		$	179	$	195
Amortization of right-of-use assets		74		108			168		213
Weighted Average Remaining Lease Term
Operating leases			5.9 years
Finance leases			14.1 years
Weighted Average Discount Rate
Operating leases				14.0	%
Finance leases				13.4	%

Supplemental balance sheet information related to leases was as follows:

	June 30, 2022			December 31, 2021
Operating leases
Operating lease right-of-use assets	$	2,294		$	2,462
Current portion of operating lease liability		258			260
Long term operating lease liability		2,191			2,318
Total operating lease liabilities		2,449			2,578
Finance leases
Property and equipment, at cost	$	3,152		$	2,317
Accumulated depreciation		(72	)		(376	)
Property and equipment, net		3,080			1,941
Other current liability		196			550
Other long term liabilities		2,849			720
Total finance lease liabilities		3,045			1,270

Maturities of operating lease liabilities were as follows:

Twelve months ended June 30,	Operating leases			Finance leases
2023	$	572		$	561
2024		581			279
2025		599			179
2026		617			151
2027		636			145
There after		606			11,000
Total lease payments		3,611			12,315
Less imputed interest		(1,162	)		(9,270	)
Total lease liability	$	2,449		$	3,045

The Company acts as sublessor in certain leasing arrangements, primarily related to land and buildings. Fixed sublease payments received are recognized on a straight-line basis over the sublease term. Sublease income and head lease expense for these transactions are recognized on a gross basis on the consolidated financial statements. This was recorded in the other operating income section of the Consolidated Statements of Operations and Comprehensive Loss.

The components of lease income for the three and six months ended June 30, 2022 and June 30, 2021 were as follows:

	June 30, 2022		June 30, 2021
Lease income	$	377	$	-

Future lease commitments to be received by the Company as of June 30, 2022 were as follows:

Twelve months ended June 30,
2023	$	830
2024		686
2025		541
2026		474
2027		474
There after		1,303
Total future lease commitments	$	4,308

Property taxes

On March 3, 2022, the Company paid $6.1 million to Stanislaus County for property taxes past due.

Legal Proceedings

On August 31, 2016, the Company filed a lawsuit in Santa Clara County Superior Court against defendant EdenIQ, Inc. (“EdenIQ”). The lawsuit was based on EdenIQ’s wrongful termination of a merger agreement that would have effectuated the merger of EdenIQ into a new entity that would be primarily owned by Aemetis. On July 24, 2019, the court awarded EdenIQ a portion of the fees and costs it had sought in the amount of approximately $6.2 million and the Company recorded these fees based on the court order. On May 6, 2022 the parties settled the dispute for $4.8 million by entering into a settlement agreement. The settlement was paid and a gain on litigation of $1.4 million was recognized on the income statement in the second quarter of 2022.

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Aemetis Biogas LLC - Series A Preferred Financing and Variable Interest Entity

6 Months Ended

Jun. 30, 2022

Aemetis Biogas LLC - Series A Preferred Financing and Variable Interest Entity

Biogas Llc - Series A Preferred Financing

6. Aemetis Biogas LLC – Series A Preferred Financing and Variable Interest Entity

On December 20, 2018, ABGL entered into a Series A Preferred Unit Purchase Agreement for the sale of Series A Preferred Units to Protair-X Americas, Inc., with Third Eye Capital acting as an agent.

ABGL is authorized to issue 11,000,000 common units, and up to 6,000,000 convertible, redeemable, secured, preferred membership units (the “Series A Preferred Units”). ABGL issued 6,000,000 common units to the Company at $5.00 per common unit for a total of $30,000,000 in funding. Additionally, 5,000,000 common units of ABGL are held in reserve as potential conversion units issuable to the Purchaser upon certain triggering events discussed below.

The Preferred Unit Agreement includes (i) preference payments of $0.50 per unit on the outstanding Series A Preferred Units commencing on the second anniversary, with any outstanding preference payments shall have an interest per annum rate equal to ten percent (ii) conversion rights for up to 1,200,000 common units or up to maximum number of 5,000,000 common units (also at a one Series A Preferred Unit to one common unit basis) if certain triggering events occur, (iv) one board seat of the three available to be elected by Series A Preferred Unit holders, (iii) mandatory redemption value at $15 per unit payable at an amount equal to 75% of free cash flow generated by ABGL, up to $90 million in the aggregate (if all units are issued), (iv) full redemption of the units on the sixth anniversary, (v) minimum cash flow requirements from each digester, and (vi) $0.9 million paid as fees to the Agent from the proceeds. Until paid, the obligations of ABGL under the Preferred Unit Agreement are secured by the assets of ABGL in an amount not to exceed the sum of (i) $30,000,000, plus (ii) all interest, fees, charges, expenses, reimbursement obligations and indemnification obligations of ABGL.

Triggering events occur upon ABGL’s failure to redeem units, comply with covenants, any other defaults or cross defaults, or to perform representations or warranties. Upon a triggering event: (i) the obligation of the Purchaser to purchase additional Series A Preferred Units is terminated, (ii) cash flow payments for redemption payments increases from 75% to 100% of free cash flows, and (iii) total number of common units into which preferred units may be converted increases from 1,200,000 common units to 5,000,000 common units on a one for one basis. As of June 30, 2022, ABGL has not generated minimum quarterly operating cash flows by operating the dairies. As a result of the violation of this covenant, free cash flows, when they occur, may be applied for redemption payments at the increased rate of 100% instead of the initial rate of 75% of free cash flows.

From inception of the agreement to date, ABGL issued 3,200,000 Series A Preferred Units on first tranche for a value of $16.0 million and also issued 2,800,000 of Series A Preferred Units on second tranche for a value of $14.0 million, reduced by a redemption of 20,000 Series A Preferred Units for $0.3 million. The Company is accreting these two tranches to the redemption value of $89.7 million over the estimated future cash flow periods of six years using the effective interest method. In addition, the Company identified freestanding future tranche rights and the accelerated redemption feature related to a change in control provision as derivatives which required bifurcation. These derivative features were assessed to have minimal value as of June 30, 2022 and December 31, 2021 based on the evaluation of the other conditions included In the agreement.

In the three months ended March 31, 2021, ABGL issued 626,000 of Series A Preferred Units for incremental proceeds of $3.1 million as part of the second tranche of the Preferred Unit Agreement and redeemed 20,000 of Series A Preferred Units for $0.3 million. Consistent with the previous issuances which were treated as a liability as the conversion option was deemed to be non-substantive, the current issuances are treated as a liability as the conversion option was still deemed to be non-substantive.

The Company recorded Series A Preferred Unit liabilities, net of unit issuance costs and inclusive of accretive preference pursuant to this agreement, and accrued preference payments, classified as current portion of Series A Preferred Units, of $4.6 million and $3.2 million, and long-term liabilities of $50.3 million and $45.0 million as of June 30, 2022 and December 31, 2021, respectively.

Variable interest entity assessment

After consideration of ABGL’s operations and the above agreement, we concluded that ABGL did not have enough equity to finance its activities without additional subordinated financial support. ABGL is capitalized with Series A Preferred Units that are recorded as liabilities under U.S. GAAP. Hence, we concluded that ABGL is a VIE. Through the Company’s ownership interest in all of the outstanding common stock, its current ability to control the board of directors, the management fee paid to Aemetis and control of subordinated financing decisions, Aemetis has been determined to be the primary beneficiary and accordingly, the assets, liabilities, and operations of ABGL are consolidated into those of the Company. Total assets, before intercompany eliminations, of ABGL as of June 30, 2022 were $57.8 million primarily related to biodigesters at three dairies, the gas conditioning hub, and a pipeline which serve as collateral for the Series A Preferred Unit totaling $54.9 million. The Series A Preferred Units are not collateralized by any other assets or guarantees from Aemetis or its subsidiaries.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2022

Stock-Based Compensation

Stock Based Compensation

7. Stock-Based Compensation

2019 Stock Plan

On April 29, 2019, the Aemetis 2019 Stock Plan (the “2019 Stock Plan”) was approved by stockholders of the Company. This plan permits the grant of Incentive Stock Options, Non-Statutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and other stock or cash awards as the Administrator may determine in its discretion. The 2019 Stock Plan’s term is 10 years and supersedes all prior plans. The 2019 Stock Plan authorized the issuance of 200,000 shares of common stock for the 2019 calendar year, in addition to permitting transferring and granting any available and unissued or expired options under the Amended and Restated 2007 Stock Plan in an amount up to 177,246 shares of common stock.

With the approval of the 2019 Stock Plan, the Zymetis 2006 Stock Plan, and Amended and Restated 2007 Stock Plan (collectively, the “Stock Plans”) are terminated for granting any options under either plan. However, any options granted before the 2019 Stock Plan approved will remain outstanding and can be exercised, and any expired options will be available to grant under the 2019 Stock Plan.

During the year ended December 31, 2021, 120,000 restricted stock awards and 1,140,000 stock option grants were issued and approved by the Company’s board of directors (“Board”) for employees and directors under the 2019 Stock Plan with 10-year terms and vesting terms ranging from immediately to 3 years.

In January 2022, the company issued 932,800 incentive stock option for employees under the 2019 Stock Plan. In addition, 60,300 restricted stock award grants, with a fair value on date of grant of $11.31 per award, were issued to the Board.

Common Stock Reserved for Issuance

The following is a summary of awards granted under the Stock Plans:

	Shares Available for Grant			Number of Shares Outstanding			Weighted-Average Exercise Price
Balance as of December 31, 2021		142			3,763		$	2.29
Authorized		1,338			-			-
Options Granted		(939	)		939			11.31
RSAs Granted		(60	)		-			-
Exercised		-			(266	)		0.91
Forfeited/expired		43			(43	)		11.55
Balance as of June 30, 2022		524			4,393		$	4.21

As of June 30, 2022, there were 2.6 million options vested under the Stock Plans.

Stock-based compensation for employees

Stock-based compensation is accounted for in accordance with the provisions of ASC 718 Compensation-Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. We estimate the fair value of stock-based awards on the date of grant using the Black-Scholes option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method.

Valuation and Expense Information

All issuances of stock options or other issuances of equity instruments to employees as the consideration for services received by us are accounted for based on the fair value of the equity instrument issued. The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for stock based compensation expense requires us to make assumptions and judgments about the variables used in the calculation, including the fair value of our common stock, the expected term (the period of time that the options granted are expected to be outstanding), the volatility of our common stock, a risk-free interest rate, and expected dividends. Under ASU 2016-09 Improvements to Employee Share-Based Payments Accounting, we have elected to recognize forfeitures as they occur. We use the simplified calculation of expected life described in the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, and volatility is based on an average of the historical volatilities of the common stock of four entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. We use an expected dividend yield of zero, as we do not anticipate paying any dividends in the foreseeable future. Expected forfeitures are assumed to be zero due to the small number of plan participants.

During the three months ended June 30, 2022 and 2021, the company granted 0 and 30,000 options, respectively. The weighted average fair value calculations for the options granted during these periods are based on the following assumptions:

	For the three months ended June 30,
Description	2022			2021
Dividend-yield	-		%		0	%
Risk-free interest rate	-		%		1.30	%
Expected volatility	-		%		122.81	%
Expected life (years)		-			7
Market value per share on grant date	$	-		$	13.09
Fair value per option on grant date	$	-		$	11.79

As of June 30, 2022, the Company had $10.4 million of total unrecognized compensation expense for employees, which the Company will amortize over the 2.4 years of weighted average remaining term.

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Outstanding Warrants

6 Months Ended

Jun. 30, 2022

Outstanding Warrants

Outstanding Warrants

8. Outstanding Warrants

The weighted average fair value calculations for warrants granted are based on the following weighted average assumptions:

	For the six months ended June 30,
Description	2022			2021
Dividend-yield		0	%		0	%
Risk-free interest rate		1.45	%		0.12	%
Expected volatility		139.55	%		150.17	%
Expected life (years)		4			2.00
Exercise price per warrant	$	13.33		$	0.01
Market value per share on grant date	$	13.06		$	2.49
Fair value per warrant on grant date	$	11.01		$	2.48

A summary of historical warrant activity follows:

	Warrants Outstanding & Exercisable			Weighted - Average Exercise Price		Average Remaining Term in Years
Outstanding December 31, 2020		95		$	2.59		4.95
Granted		292			0.01
Exercised		(332	)		0.32
Outstanding December 31, 2021		55		$	2.59		3.95
Granted		413			13.33
Exercised		(113	)		0.01
Outstanding June 30, 2022		355		$	15.92		7.99

All of the above outstanding warrants are vested and exercisable as of June 30, 2022. As of June 30, 2022 and 2021, the Company had no unrecognized compensation expense related to warrants, respectively.

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Agreements

6 Months Ended

Jun. 30, 2022

Agreements

Agreements

9. Agreements

Working Capital Arrangement. Pursuant to a Corn Procurement and Working Capital Agreement with J.D. Heiskell, the Company agreed to procure whole yellow corn and grain sorghum, primarily from J.D. Heiskell. The Company has the ability to obtain grain from other sources subject to certain conditions; however, in the past all the Company’s grain purchases have been from J.D. Heiskell. Title and risk of loss of the corn pass to the Company when the corn is deposited into the Keyes Plant weigh bin. The term of the Corn Procurement and Working Capital Agreement expires on December 31, 2022 and the term can be automatically renewed for additional one-year terms. WDG continues to be sold to A.L.Gilbert and DCO is sold to other customers under the J.D.Heiskell Purchase Agreement. The Company’s relationships with J.D. Heiskell, and A.L. Gilbert are well established, and the Company believes that the relationships are beneficial to all parties involved in utilizing the distribution logistics, reaching out to widespread customer base, managing inventory, and building working capital relationships. These agreements are ordinary purchase and sale agency agreements for the Keyes Plant. On May 13, 2020, J.D. Heiskell and the Company entered into Amendment No.1 to the J.D. Heiskell Purchasing Agreement to remove J.D. Heiskell’s obligations to purchase ethanol from the Company under the J.D. Heiskell Purchasing Agreement.

As of June 30, 2022 and December 31, 2021, Aemetis had prepayments to J.D. Heiskell of $1.7 million and $4.0 million, respectively.

The J.D. Heiskell sales and purchases activity associated with the J.D. Heiskell Purchase Agreement and J.D. Heiskell Procurement Agreement during the three and six months ended June 30, 2022 and 2021 were as follows:

	As of and for the three months ended June 30,				As of and for the six months ended June 30,
	2022		2021		2022		2021
Wet distiller's grains sales	$	15,150	$	10,630		26,666		21,665
Corn oil sales		2,812		1,695		5,150		2,737
Corn purchases		54,352		42,166		98,362		80,159
Accounts receivable		232		65		232		65
Accounts payable		612		509		612		509

Ethanol and Wet Distillers Grains Marketing Arrangement. The Company entered into an Ethanol Marketing Agreement with Kinergy and a Wet Distillers Grains Marketing Agreement with A.L. Gilbert. Under the terms of the agreements the Wet Distillers Grains Marketing Agreement matures on December 31, 2022 with automatic one-year renewals thereafter. We terminated the Ethanol Marketing Agreement with Kinergy as of September 30, 2021. Effective October 1, 2021, we entered into Fuel Ethanol Purchase and Sale Agreement with Murex. Under the terms of the agreement, the initial term matures on October 31, 2023 with automatic one-year renewals thereafter.

Accounts receivable associated with our marketing partners was $0.6 million and $1.2 million as of June 30, 2022 and December 31, 2021.

For the three months ended June 31, 2022 and 2021, the Company expensed marketing costs of $0.8 million and $0.7 million, respectively, and for the six months ended June 30, 2022 and 2021, the Company expensed marketing costs of $1.5 million and $1.4 million, respectively, under the terms of both the Ethanol Marketing Agreement and the Wet Distillers Grains Marketing Agreement. These marketing costs are and are presented as a part of Selling, General, and Administration expense.

As of June 30, 2022 and 2021, the Company has no forward sales commitments.

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Segment Information

6 Months Ended

Jun. 30, 2022

Segment Information

Segment Information

10. Segment Information

Aemetis recognizes three reportable segments “California Ethanol”, “Dairy Renewable Natural Gas”, and “India Biodiesel.”

The “California Ethanol” reportable segment includes the Company’s 65 million gallon per year Keyes Plant, and the adjacent land leased for the production of CO₂.

The “Dairy Renewable Natural Gas” reportable segment includes, the dairy digesters, pipeline and gas condition hub for the production of biogas from dairies near Keyes, California.

The “India Biodiesel” reportable segment includes the Company’s 50 million gallon per year nameplate capacity biodiesel manufacturing Kakinada Plant, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. The Company’s biodiesel is marketed and sold primarily to customers in India through brokers and by the Company directly.

The Company has additional operating segments that were determined not to be reportable segments, including the Carbon Zero 1 facility in Riverbank, the Goodland Plant, and the research and development facility in Minnesota. Refer to the “All Other” category.

Summarized financial information by reportable segment for the three months ended June 30, 2022 and 2021 follows:

	For the three months ended June 30, 2022
	California Ethanol			Dairy Renewable Natural Gas			India Biodiesel		All other			Total
Revenues from external customers	$	65,891		$	-		$	10	$	-		$	65,901
Intersegment revenues		-			297			-		-			297
Gross profit (loss)		(152	)		(68	)		10		(4	)		(214	)
Interest expense		4,869			7			-		1,792			6,668
Accretion and other expenses of Series A preferred units		-			1,506			-		-			1,506
Capital expenditures		5,366			6,696			69		928			13,059
Depreciation		977			154			164		30			1,325
Total Assets		66,580			55,731			9,324		46,817			178,452

	For the three months ended June 30, 2021
	California Ethanol		Dairy Renewable Natural Gas		India Biodiesel			All other			Total
Revenues from external customers	$	54,730	$	-	$	154		$	-		$	54,884
Intersegment revenues		-		694		-			-			694
Gross profit (loss)		3,372		327		(15	)		(38	)		3,646
Interest expense		4,986		3		-			230			5,219
Accretion and other expenses of Series A preferred units		-		3,800		-			-			3,800
Capital expenditures		767		2,503		1			3,104			6,375
Depreciation		1,050		142		174			12			1,378
Total Assets		76,452		27,814		12,306			26,715			143,287

A reconciliation of reportable segment revenues to total consolidated revenue for the three months ended June 30, 2022 and 2021 follow:

	2022			2021
Total revenues for reportable segments	$	66,198		$	55,578
Elmination of intersegment revenues		(297	)		(694	)
Total consolidated revenues	$	65,901		$	54,884

Summarized financial information by reportable segment for the six months ended June 30, 2022 and 2021 follows:

	For the six months ended June 30, 2022
	California Ethanol			Dairy Renewable Natural Gas			India Biodiesel		All other			Total
Revenues from external customers	$	117,932		$	-		$	18	$	-		$	117,950
Intersegment revenues		-			632			-		-			632
Gross profit (loss)		(3,032	)		(275	)		18		(10	)		(3,299	)
Interest expense		10,514			11			-		2,404			12,929
Accretion and other expenses of Series A preferred units		-			3,146			-		-			3,146
Capital expenditures		7,169			12,145			136		3,068			22,518
Depreciation		1,988			300			332		41			2,661
Total Assets		66,580			55,731			9,324		46,817			178,452

	For the six months ended June 30, 2021
	California Ethanol		Dairy Renewable Natural Gas			India Biodiesel			All other			Total
Revenues from external customers	$	97,058	$	-		$	633		$	-		$	97,691
Intersegment revenues		-		735			-			-			735
Gross profit (loss)		241		(85	)		(70	)		(48	)		38
Interest expense		10,685		6			-			1,708			12,399
Accretion and other expenses of Series A preferred units		-		5,743			-			-			5,743
Capital expenditures		775		6,895			118			5,147			12,935
Depreciation		2,102		284			358			20			2,764
Total Assets		76,452		27,814			12,306			26,715			143,287

A reconciliation of reportable segment revenues to total consolidated revenues for the six months ended June 30, 2022 and 2021 follow:

	2022			2021
Total revenues for reportable segments	$	118,582		$	98,426
Elmination of intersegment revenues		(632	)		(735	)
Total consolidated revenues	$	117,950		$	97,691

California Ethanol: The Company amended the Corn Procurement and Working Capital Agreement and the J.D. Heiskell Purchasing Agreement to procure corn from J.D. Heiskell and sell all WDG and corn oil the Company produces to J.D. Heiskell. Sales of ethanol, WDG, corn oil to two customers accounted for 72% and 27% of the Company’s California Ethanol segment revenues for the three months ended June 30, 2022. Sales of ethanol, WDG, and corn oil to two customers accounted for 77% and 23% of the Company’s California Ethanol segment revenues for the three months ended June 30, 2021. Sales of ethanol, WDG, corn oil to two customers accounted for 72% and 27% of the Company’s California Ethanol segment revenues for the six months ended June 30, 2022. Sales of ethanol, WDG, and corn oil to two customers accounted for 74% and 25% of the Company’s California Ethanol segment revenues for the six months ended June 30, 2021.

Dairy Renewable Natural Gas: Substantially all of our Dairy Renewable Natural Gas segment revenues during the three and six months ended June 30, 2022 and 2021 were from sales of biogas to the Keyes Plant for use in boilers, which allowed qualification of carbon credits for the ethanol produced in the Keyes Plant.

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Related Party Transactions

6 Months Ended

Jun. 30, 2022

Related Party Transactions

Related Party Transactions

11. Related Party Transactions

The Company owes Eric McAfee, the Company’s Chairman and CEO, and McAfee Capital LLC (“McAfee Capital”), owned by Eric McAfee, $0.4 million in connection with employment agreements and expense reimbursements previously accrued as salaries expense and accrued liabilities. The Company previously prepaid $0.2 million to Redwood Capital, a company controlled by Eric McAfee, for the Company’s use of flight time on a corporate jet. As of June 30, 2022, $0.1 million remained as a prepaid expense.

On November 4, 2021, the Audit Committee of the Company approved a guarantee fee of $0.4 million to Mr. McAfee. The balance of $0.1 million and $0.3 million, for guaranty fees, remained as an accrued liability as of June 30, 2022 and December 31, 2021, respectively. On January 12, 2022, the Audit Committee of the Company approved a one-time guarantee fee of $2.0 million to McAfee Capital in connection with McAfee Capital’s extension of certain guarantees of the Company’s indebtedness with Third Eye Capital. The Company paid this fee by issuing 180,000 shares of common stock of the Company.

The Company owes various members of the Board amounts totaling $0.2 million as of June 30, 2022 and December 31, 2021, for each period, in connection with board compensation fees, which are included in accounts payable on the balance sheet. For the three months ended June 30, 2022 and 2021, the Company expensed $0.1 million respectively, in connection with board compensation fees. For the six months ended June 30, 2022 and 2021, the Company expensed $0.2 million during each period, in connection with board compensation fees.

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Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events

Subsequent Events

12. Subsequent Events

Subordinated Debt Refinancing

On July 1, 2022, the Subordinated Notes with two accredited investors were amended to extend the maturity date until the earlier of (i) December 31, 2022; (ii) completion of an equity financing by AAFK or Aemetis in an amount of not less than $25.0 million; or (iii) after the occurrence of an Event of Default (as defined in the Note and Warrant Purchase Agreements), including failure to pay interest or principal when due and breaches of note covenants. A 10% cash extension fee was paid in connection with the amendment by adding the fee to the balance of the new note and warrants to purchase 113 thousand shares of common stock were granted with a term of two years and an exercise price of $0.01 per share. Accounting for the July 1, 2022 amendments and the refinancing terms of the Subordinated Notes will be evaluated in accordance with ASC 470-50 Debt–- Modification and Extinguishment.

Third Eye Capital Limited Waiver and Amendment No. 24

On August 8th, 2022, Third Eye Capital agreed to Limited Waiver and Amendment No. 24 to the Note Purchase Agreement ("Amendment No. 24") to: (i) provide that the maturity date of the Third Eye Capital Notes may be further extended at our election to April 1, 2024 in exchange for an extension fee equal to 1% of the Note Indebtedness in respect to each Note, provided that such fee may be added to the outstanding principal balance of each Note on the effective date of each such extension, and (ii) provide for a waiver for certain covenant defaults. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.3 million in cash (the "Amendment No. 24 Fee").

Waiver and Amendment to Series A Preferred Unit Purchase Agreement

On August 8th, 2022, ABGL, Protair-X America, Inc. (“Protair”), and Third Eye Capital entered into a Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Amendment") which amends that certain Series A Preferred Unit Purchase Agreement (“PUPA”) dated as of December 20, 2018. The PUPA Amendment provides for: (i) a waiver of certain covenants prohibiting the internal reorganization of ABGL subsidiaries and the incurrence of indebtedness by ABGL and its subsidiaries pursuant to a USDA loan, provided that, among other things, Third Eye Capital shall have received a repayment of at least $[7.3] million to be applied to the Carbon Revolving Line contemporaneously with the closing of the USDA loan; (ii) a waiver of certain operational defaults under the PUPA; and (iii) an amendment which (a) requires ABGL to redeem all of the outstanding Series A Preferred Units by December 31, 2022 (the “Final Redemption Date”) for $116 million; and (b) provides ABGL the right to redeem all of the outstanding Series A Preferred Units by September 30, 2022 for $106 million. The PUPA Amendment further provides that the failure to redeem the Series A Preferred Units by the Final Redemption Date would constitute a triggering event requiring ABGL to enter into a credit agreement with Protair and Third Eye Capital in substantially the form attached to the PUPA Amendment.

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Management's Plan

6 Months Ended

Jun. 30, 2022

Management's Plan

Management's Plan

13. Management’s Plan

The accompanying financial statements have been prepared contemplating the realization of assets and satisfaction of liabilities in the normal course of business. As a result of negative capital and negative operating results, and collateralization of substantially all of the company assets, the Company has been reliant on its senior secured lender to provide additional funding and has been required to remit substantially all excess cash from operations to the senior secured lender. In order to meet its obligations during the next twelve months, the Company will need to either refinance the Company’s debt or receive the continued cooperation of its senior lender. This dependence on the senior lender raises substantial doubt about the Company’s ability to continue as a going concern. The Company plans to pursue the following strategies to improve the course of the business.

For the Keyes Plant, we plan to operate the plant and continue to improve financial performance by adopting new technologies or process changes that allow for energy efficiency, cost reduction or revenue enhancements, execute upon awarded grants that improve energy and operational efficiencies resulting in lower cost, lower carbon demands and overall margin improvement.

For the ABGL project, we plan to operate the biogas digesters to capture and monetize biogas as well as continue to build new dairy digesters and extend the existing pipeline in order to capture the higher carbon credits available in California. Funding for continued construction is based upon obtaining government guaranteed loans and executing on existing and new state grant programs.

For the Riverbank project, we plan to raise the funds necessary to construct and operate the Carbon Zero 1 plant using loan guarantees and public financings based upon the licensed technology that generate federal and state carbon credits available for ultra-low carbon fuels utilizing lower cost, non-food advanced feedstocks to significantly increase margins.

For the Kakinada Plant, we plan to develop sales channels for domestic products as the costs of feedstock normalize against the price of diesel, as recently announced governmental incentives take effect to promote the blending of biodiesel, and as feedstocks such as refined animal tallow are used domestically and exported. 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.

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 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.

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Nature of Activities and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Nature of Activities and Summary of Significant Accounting Policies

Nature Of Activities

Nature of Activities. Founded in 2006 and headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis, “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas and renewable fuels company focused on the acquisition, development and commercialization of innovative technologies that replace traditional petroleum-based products.

We own and operate a 65 million gallon per year ethanol production facility located in Keyes, California (the “Keyes Plant”). In addition to low carbon renewable fuel ethanol, the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), and Condensed Distillers Solubles (“CDS”), all of which are sold as animal feed to local dairies and feedlots. In the fourth quarter of 2021, an ethanol zeolite membrane dehydration system was installed at the Keyes Plant and is in the process of being commissioned, a key first step in the electrification of the Keyes Plant.

During 2018, Aemetis Biogas, LLC (“ABGL”) was formed to construct bio-methane anaerobic digesters at local dairies near the Keyes Plant, many of whom also purchase WDG produced at the Keyes Plant. The digesters are connected via an underground private pipeline owned by ABGL to a gas cleanup and compression unit being built at the Keyes Plant to produce dairy renewable natural gas (“RNG”). Upon receiving the bio-methane from the dairies, impurities are removed, and the bio-methane is converted to negative carbon intensity RNG that will either be injected into the statewide PG&E gas utility pipeline, supplied as compressed RNG that will service local trucking fleets, or used as renewable process energy at the Keyes Plant. Our Dairy Renewable Natural Gas segment, comprised of ABGL, has completed Phase 1 of our California biogas digester network and pipeline system that converts waste dairy methane gas into RNG, including two operational dairies and seven miles of pipeline.  ABGL is now executing Phase 2 construction with the completion of sixteen miles of pipeline and the commissioning of the biogas-to-RNG upgrade unit at the Keyes Plant as well as beginning construction of additional dairy digesters.

During the second quarter of 2022, Aemetis has completed construction of a third dairy digester and commissioning of the centralized gas cleanup facility and utility gas interconnect located at the Keyes Plant where dairy biogas will be upgraded to RNG and injected into the utility pipeline. Upon receiving pathway certification from the California Air Resources Board (CARB), the fuel is expected to be delivered into the Northern California gas delivery system.

Our ‘Carbon Zero’ biofuels production plants are designed to produce biofuels, including sustainable aviation fuel (“SAF”) and diesel fuel utilizing renewable hydrogen and non-edible renewable oils sourced from existing Aemetis biofuels plants and other sources. The first plant to be built, in Riverbank, California, “Carbon Zero 1”, is expected to utilize hydroelectric and other renewable power available onsite to produce 90 million gallons per year of SAF, renewable diesel, and other byproducts. 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. By producing ultra-low carbon renewable fuels, the Company expects to capture higher value D3 Renewable Identification Numbers (“RINs”) and California’s LCFS credits. D3 RINs have a higher value in the marketplace than D6 RINs due to D3 RINs’ relative scarcity and mandated pricing formula from the United States Environmental Protection Agency (“EPA”).

On April 1, 2021, we established Aemetis Carbon Capture, Inc. to build Carbon Capture and Sequestration (CCS) projects to generate LCFS and IRS 45Q credits by injecting CO₂ into wells which are monitored for emissions to ensure the long-term sequestration of carbon underground. The CCS projects are expected to capture and sequester up to two million metric tons per year of CO₂ at the two Aemetis biofuels plant sites in Keyes and Riverbank, California. In July 2022, Aemetis purchased 24 acres, on the Riverbank Industrial Complex site in Riverbank, California, to develop a CCS injection well. The Company plans to construct a characterization well to obtain both the data and well design information required for the EPA Class VI CO₂ injection well permit application. The well is expected to sequester up to one million metric tons per year of CO₂.

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

Basis Of Presentation And Consolidation

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

All intercompany balances and transactions have been eliminated in consolidation.

The accompanying consolidated condensed balance sheet as of June 30, 2022, the consolidated condensed statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021, the consolidated condensed statements of cash flows for the six months ended June 30, 2022 and 2021, and the consolidated condensed statements of stockholders’ deficit for the three and six months ended June 30, 2022 and 2021 are unaudited. The consolidated condensed balance sheet as of December 31, 2021 was derived from the 2021 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the 2021 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2021. The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of Company’s management, the unaudited interim consolidated condensed financial statements as of and for the three and six months ended June 30, 2022 and 2021 have been prepared on the same basis as the audited consolidated statements as of and for the year ended December 31, 2021 and reflect all adjustments, consisting primarily of normal recurring adjustments, necessary for the fair presentation of its statement of financial position, results of operations and cash flows. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the operating results for any subsequent quarter, for the full fiscal year or any future periods.

Use Of Estimates

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

Revenue Recognition

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

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. Heiskell Purchasing Agreement”). On May 13, 2020, we entered into an amendment to the Corn Procurement and Working Capital Agreement with J.D. Heiskell (the “Corn Procurement and Working Capital”), under the terms of which we buy all corn from J.D. Heiskell and sell all WDG and corn oil we produce to J.D. Heiskell. Following May 13, 2020 and until October, 2021, we sold the majority of our fuel ethanol production to one customer, Kinergy Marketing, LLC (“Kinergy”), through individual sales transactions. We terminated the Ethanol Marketing Agreement with Kinergy as of September 30, 2021. Effective October 1, 2021, we entered into Fuel Ethanol Purchase and Sale Agreement with Murex LLC (“Murex”), in which we sell all our ethanol to Murex. Given the similarity of the individual sales transactions with Kinergy and Murex, we have assessed them as a portfolio of similar contracts. The performance obligation is satisfied by delivery of the physical product to one of our customer’s contracted trucking companies. Upon delivery, the customer has the ability to direct the use of the product and receive substantially all of its benefits. The transaction price is determined based on daily market prices negotiated by Kinergy and 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. 

The below table shows our sales in our California Ethanol segment by product category:

	For the three months ended June 30,				For the six months ended June 30,
	2022		2021		2022		2021
Ethanol and high-grade alcohol sales	$	47,656	$	42,169	$	85,551	$	72,089
Wet distiller's grains sales		15,150		10,630		26,666		21,665
Other sales		3,085		1,931		5,715		3,304
	$	65,891	$	54,730	$	117,932	$	97,058

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

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

For our California Ethanol segment, we buy corn as feedstock for the production of ethanol, from our working capital partner J.D. Heiskell. Prior to May 13, 2020, we sold all our ethanol, WDG, and corn oil to J.D. Heiskell and we bought all our corn to process into ethanol from J.D. Heiskell. After May 13, 2020, we sold most of our fuel ethanol to one customer, Kinergy, and sold all WDG and corn oil to J.D. Heiskell. During the second quarter of 2021, we signed a biofuels offtake agreement with Murex, and beginning on October 1, 2021 we sold all our fuel ethanol to Murex. We only have customer relationships with Kinergy and Murex, hence the principal and agent criteria are not applied. However, we are still buying corn and selling WDG and corn oil to J.D.Heiskell. We analyzed the principal versus agent relationship criteria below.

We consider the purchase of corn as a cost of goods sold and the sale of WDG and, corn oil, upon trucks leaving the Keyes Plant, as revenue on the basis that (i) we control and bear the risk of gain or loss on the processing of corn which is purchased at market prices into ethanol and (ii) we have legal title to the goods during the processing time. The pricing for both WDG and corn oil is set independently. Revenues from WDG and corn oil 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. 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, when revenue is recognized. Revenues are recorded at the gross invoiced amount. Hence, we are the principal in California Ethanol segment where our customer and vendor may be the same.

Dairy Renewable Natural Gas: All of our Dairy Renewable Natural Gas segment revenues during the three and six months ended June 30, 2022 and 2021 were from sales of biogas to the Keyes Plant for use in boilers. This resulted in lowering the carbon intensity of the Keyes Plant and increased revenues on ethanol sold through the California Ethanol segment. These revenues have been eliminated once consolidated. Refer to Note 10 Segment Information for the unconsolidated revenue of our Dairy Renewable Natural Gas segment.

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

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

	For the three months ended June 30,				For the six months ended June 30,
	2022		2021		2022		2021
Biodiesel sales	$	-	$	107	$	-	$	465
Refined glycerin sales		-		9		-		125
Other sales		10		38		18		43
	$	10	$	154	$	18	$	633

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

Cost Of Goods Sold

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

Shipping And Handling Costs

Shipping and Handling Costs. Shipping and handling costs are classified as a component of cost of goods sold in the accompanying consolidated statements of operations.

Research And Development

Research and Development. Research and development costs are expensed as incurred, unless they have alternative future uses to the Company.

Cash And Cash Equivalents

Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances at various financial institutions domestically and abroad. The Federal Deposit Insurance Corporation insures domestic cash accounts. The Company’s accounts at these institutions may at times exceed federally insured limits. The Company has not experienced any losses in such accounts.

Accounts Receivable

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

The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivables are charged against the allowance for doubtful accounts once un-collectability has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate, additional allowances may be required. We reserved $1.4 million in the allowances for doubtful accounts as of December 31, 2021 and wrote off the balances as uncollectible during the second quarter of 2022.

Inventories

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

Variable Interest Entities

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

Property, Plant And Equipment

Property, Plant and Equipment. Property, plant, and equipment are carried at cost less accumulated depreciation after assets are placed in service and are comprised primarily of plant and buildings, furniture, machinery, equipment, land, and biogas dairy digesters. Capital expenses for in-process project are accumulated in construction in progress and will be capitalized and depreciated once the capital projects are finished and are in service. The Company’s plant in Goodland, Kansas (the “Goodland Plant”) is partially completed and is not ready for operation. It is the Company’s policy to depreciate capital assets over their estimated useful lives using the straight-line method. 

The Company evaluates the recoverability of long-lived assets with finite lives in accordance with ASC Subtopic 360-10-35 Property Plant and Equipment—Subsequent Measurements, which requires recognition of impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, based on estimated undiscounted cash flows, the impairment loss would be measured as the difference between the carrying amount of the assets and its estimated fair value. The Company has not recorded any impairment during the three and six months ended June 30, 2022 and 2021.

California Energy Commission Low-carbon Fuel Production Program

California Energy Commission Low-Carbon Fuel Production Program. The Company has been awarded $4.2 million in matching grants from the California Energy Commission Low-Carbon Fuel Production Program (“LCFPP”). The LCFPP grant reimburses the Company for costs to design, procure, and install processing facility to clean-up, measure and verify negative-carbon intensity dairy renewable natural gas fuel at the production facility in Keyes, California. The Company has received $3.8 million from the LCFPP as of June 30, 2022, as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

California Department Of Food And Agriculture Dairy Digester Research And Development Grant

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

In October 2020, the Company was awarded $7.8 million in matching grants from the CDFA Dairy Digester Research and Development program. The CDFA grant reimburses the Company for costs required to permit and construct six of the Company’s biogas capture systems under contract with central California dairies. The Company has received $1.6 million from the CDFA 2020 grant program as of June 30, 2022, as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

California Energy Commission Low Carbon Advanced Ethanol Grant Program

California Energy Commission Low Carbon Advanced Ethanol Grant Program. In May 2019, the Company was awarded the right to receive reimbursements from the California Energy Commission Community-Scale and Commercial-Scale Advanced Biofuels Production Facilities grant under the Alternative and Renewable Fuel and Vehicle Technology Program in an amount up to $5.0 million (the “CEC Reimbursement Program”) in connection with the Company’s expenditures toward the development of the Riverbank Cellulosic Ethanol Facility. To comply with the guidelines of the CEC Reimbursement Program, the Company must make a minimum of $7.9 million in matching contributions to the Riverbank project. The Company receives funds under the CEC Reimbursement Program for actual expenses incurred up to $5.0 million as long as the Company makes the minimum matching contribution. Given that the Company has not made the minimum matching contribution, the grant for reimbursement of capital expenditures of $1.7 million is presented with long-term liabilities as of June 30, 2022, and December 31, 2021. Due to the uncertainty associated with meeting the minimum matching contribution, the reimbursement will be recognized when the Company makes the minimum matching contribution.

U.s. Department Of Food And Agriculture Forest Service Grant

U.S. Department of Food and Agriculture Forest Service Grant. Aemetis Advanced Products Keyes (“AAPK”) has been awarded $245 thousand in matching grants from the U.S. Department of Food and Agriculture Forest Service (“US Forest Service”) under the Wood Innovation and Community Wood program. The grant reimburses the Company for continued development of technologies and processes to valorize forest waste for the production of cellulosic ethanol. AAPK has received $73 thousand from the US Forest Service as reimbursement for actual allowable program costs incurred through June 30, 2022.

California Energy Commission Grant For Solar Microgrid, Dsc And Battery Backup System

California Energy Commission Grant for Solar Microgrid, DSC and Battery Backup System. Aemetis Advanced Fuels Keyes (“AAFK”) has been awarded an $8.0 million grant to design, construct and commission a grid-connected 1.56 MW photovoltaic microgrid and 1.25MW/2.5MWh Battery Energy Storage System integrated with an artificial intelligence-driven distributed control system (DCS). The grant requires $1.55 million in matching contribution. AAFK received $3.3 million in grant funds from this program as reimbursement for actual expenditures incurred through June 30, 2022. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

California Department of Forestry and Fire Protection Grant

California Department of Forestry and Fire Protection Grant. AAPK has been awarded $2 million in matching grants from the CAL FIRE Business and Workforce Development Grant Program (“CAL Fire”) in May 2022. This CAL Fire grant program reimburses AAPK for costs to design, construct, and commission a 2 million gallon per year cellulosic ethanol facility that will convert conifer biomass from forested regions of the Sierra Nevada into an ultra‐low carbon biofuel derived from 100% forest biomass (“CAL Fire Conversion Program”). AAPK must contribute $5.8 million in cost share contributions to the project to receive grant proceeds. AAPK has received no grant funds from the CAL Fire Conversion Program as reimbursement for actual costs through June 30, 2022.

California Department of Forestry and Fire Protection Grant 2

California Department of Forestry and Fire Protection Grant. AAPK has been awarded $500 thousand in grants from CAL Fire in May 2022. This CAL Fire grant program reimburses AAPK for costs to advance a new‐to‐the world technology that circumvents current limitations surrounding the extraction of cellulosic sugars by pioneering a novel route for deconstructing woody biomass using ionic liquids (“CAL Fire Extraction Program”). AAPK has received no grant funds from the CAL Fire Extraction Program as reimbursement for actual costs through June 30, 2022.

U.S Forest Service Community Wood Grant

U.S Forest Service Community Wood Grant. Aemetis Advanced Products Riverbank (“AAPR”) has been awarded $642 thousand in matching grants from the U.S Forest Service Wood Innovations Program (“USFS”) in May 2022. The USFS grant program reimburses AAPR for costs to design, construct, and commission a plant to produce cellulosic ethanol using preliminary research and development in partnership with the Joint Bioenergy Institute (JBEI). USFS grant funds will be used to complete the FEL-3 design phase of the entire process, construct a biomass pretreatment unit to extract sugars at the Aemetis Riverbank site and ferment sugars into ethanol at the Keyes Plant. AAPR must contribute $2.4 million in cost share contributions to the project to receive grant proceeds. AAPK has received no grant funds from the USFS grant program as reimbursement for actual costs through June 30, 2022.

USDA's Biofuel Producer Program Grant

USDA’s Biofuel Producer Program Grant. 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. This was recorded in other expense (income) on the Consolidated Statements of Operations and Comprehensive Loss.

Basic And Diluted Net Loss Per Share

Basic and Diluted Net Loss per Share. Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share reflects the dilution of common stock equivalents such as options, convertible preferred stock, debt, and warrants to the extent the impact is dilutive. As the Company incurred net losses for the three and six months ended June 30, 2022 and, 2021, potentially dilutive securities have been excluded from the diluted net loss per share computations as their effect would be anti-dilutive.

The following table shows the number of potentially dilutive shares excluded from the diluted net loss per share calculation as of June 30, 2022 and 2021:

	As of
	June 30, 2022		June 30, 2021
Series B preferred (post split basis)		127		132
Common stock options and warrants		4,748		4,252
Debt with conversion feature at $30 per share of common stock		1,228		1,273
Total number of potentially dilutive shares excluded from the diluted net (loss) per share calculation		6,103		5,657

Comprehensive Income (loss)

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

Foreign Currency Translation/transactions

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

Segments

Segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.  The Company further evaluates its operating segments to determine its reportable segments. Aemetis recognizes three reportable segments “California Ethanol”, “Dairy Renewable Natural Gas”, and “India Biodiesel.”

The “California Ethanol” reportable segment includes the Company’s 65 million gallon per year Keyes plant and the adjacent land leased for the production of CO₂.

The “Dairy Renewable Natural Gas” reportable segment include, the dairy digesters, pipeline and gas condition hub for the production of biogas from dairies near Keyes, California.

The “India Biodiesel” reportable segment includes the Company’s 50 million gallon per year nameplate capacity biodiesel manufacturing Kakinada Plant, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. The Company’s biodiesel is marketed and sold primarily to customers in India through brokers and by the Company directly.

The Company has additional operating segments that were determined not to be reportable segments, including the Carbon Zero 1 facility in Riverbank, the Goodland Plant in Kansas and the research and development facility in Minnesota.  Refer to the “All Other” category.

Fair Value Of Financial Instruments

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

Commitments And Contingencies

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

Convertible Instruments

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

Debt Modification Accounting

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

For a complete summary of the Company’s significant accounting policies, please refer to the Company’s audited financial statements and notes thereto for the years ended December 31, 2021 and 2020 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2022.

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Nature of Activities and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2022

Nature of Activities and Summary of Significant Accounting Policies

Schedule Of America By Product Category

	For the three months ended June 30,				For the six months ended June 30,
	2022		2021		2022		2021
Ethanol and high-grade alcohol sales	$	47,656	$	42,169	$	85,551	$	72,089
Wet distiller's grains sales		15,150		10,630		26,666		21,665
Other sales		3,085		1,931		5,715		3,304
	$	65,891	$	54,730	$	117,932	$	97,058

	For the three months ended June 30,				For the six months ended June 30,
	2022		2021		2022		2021
Biodiesel sales	$	-	$	107	$	-	$	465
Refined glycerin sales		-		9		-		125
Other sales		10		38		18		43
	$	10	$	154	$	18	$	633

Schedule Of Dilutive Securities

	As of
	June 30, 2022		June 30, 2021
Series B preferred (post split basis)		127		132
Common stock options and warrants		4,748		4,252
Debt with conversion feature at $30 per share of common stock		1,228		1,273
Total number of potentially dilutive shares excluded from the diluted net (loss) per share calculation		6,103		5,657

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Inventories (Tables)

6 Months Ended

Jun. 30, 2022

Inventories

Schedule Of Inventories

	As of
	June 30, 2022		December 31, 2021
Raw materials	$	903	$	727
Work-in-progress		2,522		2,083
Finished goods		1,480		2,316
Total inventories	$	4,905	$	5,126

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Property Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2022

Property Plant and Equipment

Schedule Of Property, Plant And Equipment

	As of
	June 30, 2022			December 31, 2021
Land	$	6,156		$	4,082
Plant and buildings		122,165			97,110
Furniture and fixtures		1,504			1,334
Machinery and equipment		5,203			5,294
Tenant improvements		56			-
Construction in progress		51,279			55,859
Property held for development		15,437			15,437
Finance lease right of use assets		3,152			2,317
Total gross property, plant & equipment		204,952			181,433
Less accumulated depreciation		(48,162	)		(46,332	)
Total net property, plant & equipment	$	156,790		$	135,101

Depreciation Of Property, Plant, And Equipment

	Years
Plant and buildings		20 - 30
Machinery and equipment		5 - 15
Furniture and fixtures		3 - 5

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Debt (Tables)

6 Months Ended

Jun. 30, 2022

Debt

Schedule Of Debt

	June 30, 2022		December 31, 2021
Third Eye Capital term notes	$	7,089	$	7,095
Third Eye Capital revolving credit facility		54,039		75,980
Third Eye Capital revenue participation term notes		11,912		11,915
Third Eye Capital acquisition term notes		26,464		26,461
Third Eye Capital Fuels Revolving Line		18,393		-
Third Eye Capital Carbon Revolving Line		22,187		-
Cilion shareholder seller notes payable		6,718		6,619
Subordinated notes		15,105		14,304
EB-5 promissory notes		41,004		40,692
Term loans on capital expenditures		5,697		5,701
Total debt		208,608		188,767
Less current portion of debt		24,859		22,778
Total long term debt	$	183,749	$	165,989

Maturities Of Long-term Debt

Twelve Months ended June 30,	Debt Repayments
2023	$	24,859
2024		132,218
2025		26,191
2026		29,473
2027		944
There after		1,169
Total debt		214,854
Debt issuance costs		(6,246	)
Total debt, net of debt issuance costs	$	208,608

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies

Schedule Of Lease Expense And Sublease Income

	Three Months ended June 30,				Six Months ended June 30,
	2022		2021		2022		2021
Operating lease cost
Operating lease expense	$	159	$	204	$	347	$	408
Short term lease expense		75		71		102		110
Variable lease expense		23		21		46		54
Total operating lease cost	$	257	$	296	$	495	$	572
Finance lease cost
Amortization of right-of-use assets	$	28	$	55	$	89	$	110
Interest on lease liabilities		99		20		119		41
Total finance lease cost	$	127	$	75	$	208	$	151

Cash Paid For Amounts Included In The Measurement Of Lease Liabilities

	Three Months ended June 30,				Six Months ended June 30,
	2022		2021		2022		2021
Operating cash flows used in operating leases	$	174	$	173	$	338	$	340
Operating cash flows used in finance leases		99		20		118		41
Financing cash flows used in finance leases		50		124	$	182		248

Supplemental Non-cash Flow Information Related To Right-of-use Asset And Lease Liabilities

	Three Months ended June 30,					Six Months ended June 30,
	2022		2021			2022		2021
Operating leases
Accretion of the lease liability	$	85	$	96		$	179	$	195
Amortization of right-of-use assets		74		108			168		213
Weighted Average Remaining Lease Term
Operating leases			5.9 years
Finance leases			14.1 years
Weighted Average Discount Rate
Operating leases				14.0	%
Finance leases				13.4	%

Supplemental Balance Sheet Information

	June 30, 2022			December 31, 2021
Operating leases
Operating lease right-of-use assets	$	2,294		$	2,462
Current portion of operating lease liability		258			260
Long term operating lease liability		2,191			2,318
Total operating lease liabilities		2,449			2,578
Finance leases
Property and equipment, at cost	$	3,152		$	2,317
Accumulated depreciation		(72	)		(376	)
Property and equipment, net		3,080			1,941
Other current liability		196			550
Other long term liabilities		2,849			720
Total finance lease liabilities		3,045			1,270

Maturities Of Operating And Finance Lease Liabilities

Twelve months ended June 30,	Operating leases			Finance leases
2023	$	572		$	561
2024		581			279
2025		599			179
2026		617			151
2027		636			145
There after		606			11,000
Total lease payments		3,611			12,315
Less imputed interest		(1,162	)		(9,270	)
Total lease liability	$	2,449		$	3,045

Schedule of components of lease income

	June 30, 2022		June 30, 2021
Lease income	$	377	$	-

Summary of future lease commitments

Twelve months ended June 30,
2023	$	830
2024		686
2025		541
2026		474
2027		474
There after		1,303
Total future lease commitments	$	4,308

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Stock-Based Compensation

Schedule Of Options Granted Under Employee Stock Plans

	Shares Available for Grant			Number of Shares Outstanding			Weighted-Average Exercise Price
Balance as of December 31, 2021		142			3,763		$	2.29
Authorized		1,338			-			-
Options Granted		(939	)		939			11.31
RSAs Granted		(60	)		-			-
Exercised		-			(266	)		0.91
Forfeited/expired		43			(43	)		11.55
Balance as of June 30, 2022		524			4,393		$	4.21

Schedule Of Weighted Average Fair Value Calculations For Options

	For the three months ended June 30,
Description	2022			2021
Dividend-yield	-		%		0	%
Risk-free interest rate	-		%		1.30	%
Expected volatility	-		%		122.81	%
Expected life (years)		-			7
Market value per share on grant date	$	-		$	13.09
Fair value per option on grant date	$	-		$	11.79

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Outstanding Warrants (Tables)

6 Months Ended

Jun. 30, 2022

Outstanding Warrants

Weighted Average Assumptions

	For the six months ended June 30,
Description	2022			2021
Dividend-yield		0	%		0	%
Risk-free interest rate		1.45	%		0.12	%
Expected volatility		139.55	%		150.17	%
Expected life (years)		4			2.00
Exercise price per warrant	$	13.33		$	0.01
Market value per share on grant date	$	13.06		$	2.49
Fair value per warrant on grant date	$	11.01		$	2.48

Schedule Of Warrant Activity

	Warrants Outstanding & Exercisable			Weighted - Average Exercise Price		Average Remaining Term in Years
Outstanding December 31, 2020		95		$	2.59		4.95
Granted		292			0.01
Exercised		(332	)		0.32
Outstanding December 31, 2021		55		$	2.59		3.95
Granted		413			13.33
Exercised		(113	)		0.01
Outstanding June 30, 2022		355		$	15.92		7.99

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Agreements (Tables)

6 Months Ended

Jun. 30, 2022

Agreements

Schedule Of Working Capital Agreement Activity

	As of and for the three months ended June 30,				As of and for the six months ended June 30,
	2022		2021		2022		2021
Wet distiller's grains sales	$	15,150	$	10,630		26,666		21,665
Corn oil sales		2,812		1,695		5,150		2,737
Corn purchases		54,352		42,166		98,362		80,159
Accounts receivable		232		65		232		65
Accounts payable		612		509		612		509

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2022

Segment Information

Schedule Of Segment Information

	For the three months ended June 30, 2022
	California Ethanol			Dairy Renewable Natural Gas			India Biodiesel		All other			Total
Revenues from external customers	$	65,891		$	-		$	10	$	-		$	65,901
Intersegment revenues		-			297			-		-			297
Gross profit (loss)		(152	)		(68	)		10		(4	)		(214	)
Interest expense		4,869			7			-		1,792			6,668
Accretion and other expenses of Series A preferred units		-			1,506			-		-			1,506
Capital expenditures		5,366			6,696			69		928			13,059
Depreciation		977			154			164		30			1,325
Total Assets		66,580			55,731			9,324		46,817			178,452

	For the three months ended June 30, 2021
	California Ethanol		Dairy Renewable Natural Gas		India Biodiesel			All other			Total
Revenues from external customers	$	54,730	$	-	$	154		$	-		$	54,884
Intersegment revenues		-		694		-			-			694
Gross profit (loss)		3,372		327		(15	)		(38	)		3,646
Interest expense		4,986		3		-			230			5,219
Accretion and other expenses of Series A preferred units		-		3,800		-			-			3,800
Capital expenditures		767		2,503		1			3,104			6,375
Depreciation		1,050		142		174			12			1,378
Total Assets		76,452		27,814		12,306			26,715			143,287

	For the six months ended June 30, 2022
	California Ethanol			Dairy Renewable Natural Gas			India Biodiesel		All other			Total
Revenues from external customers	$	117,932		$	-		$	18	$	-		$	117,950
Intersegment revenues		-			632			-		-			632
Gross profit (loss)		(3,032	)		(275	)		18		(10	)		(3,299	)
Interest expense		10,514			11			-		2,404			12,929
Accretion and other expenses of Series A preferred units		-			3,146			-		-			3,146
Capital expenditures		7,169			12,145			136		3,068			22,518
Depreciation		1,988			300			332		41			2,661
Total Assets		66,580			55,731			9,324		46,817			178,452

	For the six months ended June 30, 2021
	California Ethanol		Dairy Renewable Natural Gas			India Biodiesel			All other			Total
Revenues from external customers	$	97,058	$	-		$	633		$	-		$	97,691
Intersegment revenues		-		735			-			-			735
Gross profit (loss)		241		(85	)		(70	)		(48	)		38
Interest expense		10,685		6			-			1,708			12,399
Accretion and other expenses of Series A preferred units		-		5,743			-			-			5,743
Capital expenditures		775		6,895			118			5,147			12,935
Depreciation		2,102		284			358			20			2,764
Total Assets		76,452		27,814			12,306			26,715			143,287

Schedule Of Reconciliation Of Reportable Segment

	2022			2021
Total revenues for reportable segments	$	66,198		$	55,578
Elmination of intersegment revenues		(297	)		(694	)
Total consolidated revenues	$	65,901		$	54,884

	2022			2021
Total revenues for reportable segments	$	118,582		$	98,426
Elmination of intersegment revenues		(632	)		(735	)
Total consolidated revenues	$	117,950		$	97,691

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Nature of Activities and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Sales	$ 65,901	$ 54,884	$ 117,950	$ 97,691
California [Member]
Sales	65,891	54,730	117,932	97,058
Ethanol and high-grade alcohol sales | California [Member]
Sales	47,656	42,169	85,551	72,089
Wet distiller's grains sales | California [Member]
Sales	15,150	10,630	26,666	21,665
Other Sales Member | California [Member]
Sales	$ 3,085	$ 1,931	$ 5,715	$ 3,304

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Nature of Activities and Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Sales	$ 65,901	$ 54,884	$ 117,950	$ 97,691
India Biodiesel
Sales	10	154	18	633
Other sales | India Biodiesel
Sales	10	38	18	43
Biodiesel sales | India Biodiesel
Sales	0	107	0	465
Refined Glycerin sales | India Biodiesel
Sales	$ 0	$ 9	$ 0	$ 125

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Nature of Activities and Summary of Significant Accounting Policies (Details 2) - shares	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Total Number Of Potentially Dilutive Shares Excluded From The Basic And Diluted Net Loss Per Share Calculation (in Thousands)	6,103	5,657
Series B preferred (post split basis)
Total Number Of Potentially Dilutive Shares Excluded From The Basic And Diluted Net Loss Per Share Calculation (in Thousands)	127	132
Common stock options and warrants
Total Number Of Potentially Dilutive Shares Excluded From The Basic And Diluted Net Loss Per Share Calculation (in Thousands)	4,748	4,252
Debt with conversion feature at $30 per share of common stock
Total Number Of Potentially Dilutive Shares Excluded From The Basic And Diluted Net Loss Per Share Calculation (in Thousands)	1,228	1,273

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Nature of Activities and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	1 Months Ended		6 Months Ended
	May 31, 2022	Oct. 31, 2020	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Awarded Grants			$ 8,000,000.0
Gallon Per Year			90,000,000
Contributions			1,550,000
Allowance For Doubtful Accounts Receivable					$ 3,300,000
Reimbursement For Actual Costs Incurred			6,147,000	$ 1,224,000
US DFAFSG [Member]
Awarded Grants			245,000
India
Gallon Per Year			50,000,000
Kakinada Plant One [Member]
Gallon Per Year			50,000,000
Nameplate Capacity			150,000
CEC-LCFPP [Member]
Awarded Grants			4,200,000
Reimbursement For Actual Costs Incurred			3,800,000
CDFA [Member]
Awarded Grants	$ 642,000	$ 7,800,000	3,200,000
Contributions			2,400,000
Reimbursement For Actual Costs Incurred		$ 1,600,000	14,200,000
CEC-LCAEGP [Member]
Awarded Grants	500,000		5,000,000.0
Gallon Per Year	2,000,000
Contributions	5,800,000		7,900,000
Actual Expenses			5,000,000.0
Capital Expenditures	$ 2,000,000		1,700,000
Accounts Receivable [Member]
Reimbursement For Actual Costs Incurred			$ 73,000

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Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Inventories
Raw Materials	$ 903	$ 727
Work-in-progress	2,522	2,083
Finished Goods	1,480	2,316
Total Inventories	$ 4,905	$ 5,126

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Inventories (Details Narrative) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Inventories
Lower Cost Of Market Impairment	$ 165,000	$ 0

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Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Property Plant and Equipment
Land	$ 6,156	$ 4,082
Plant And Buildings	122,165	97,110
Furniture And Fixtures	1,504	1,334
Machinery And Equipment	5,203	5,294
Tenant Improvements	56	0
Construction In Progress	51,279	55,859
Property Held For Development	15,437	15,437
Finance Lease Right Of Use Assets	3,152	2,317
Total Gross Property, Plant & Equipment	204,952	181,433
Less Accumulated Depreciation	(48,162)	(46,332)
Total Net Property, Plant & Equipment	$ 156,790	$ 135,101

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Property, Plant and Equipment (Details 1)	6 Months Ended
	Jun. 30, 2022
Minimum [Member] | Machinery and Equipment [Member]
Depreciation (years)	5 years
Minimum [Member] | Furniture and Fixtures [Member]
Depreciation (years)	3 years
Minimum [Member] | Plant and Buildings [Member]
Depreciation (years)	20 years
Maximum [Member] | Machinery and Equipment [Member]
Depreciation (years)	15 years
Maximum [Member] | Furniture and Fixtures [Member]
Depreciation (years)	5 years
Maximum [Member] | Plant and Buildings [Member]
Depreciation (years)	30 years

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Property, Plant and Equipment (Details Narrative) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Property Plant and Equipment
Interest Capitalized In Property	$ 2.6	$ 0.9	$ 4.7	$ 1.5
Depreciation Expense	$ 1.3	$ 1.4	$ 2.7	$ 2.8

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Debt (Details) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Total Debt	$ 208,608,000	$ 188,767,000
Less Current Portion Of Debt	24,859,000	22,778,000
Total Long Term Debt	183,749,000	165,989,000
Senior Debt-TEC | Promissory Notes [Member]
Total Debt	7,089,000	7,095,000
EB-5 Promissory Notes
Total Debt	41,004,000	40,692,000
Term Loan on Equipment Purchase
Total Debt	5,697,000	5,701,000
Subordinated Notes
Total Debt	15,105,000	14,304,000
Capital Carbon Revolving Line
Total Debt	22,187,000	0
Senior Debt | Promissory Notes [Member]
Total Debt	0
Senior Debt | Revenue Participation Term Notes
Total Debt	11,912,000	11,915,000
Capital Fuels Revolving Line | Senior Debt
Total Debt	18,393,000	0
Subordinated Debt [Member] | Cilion [Member]
Total Debt	6,718,000	6,619,000
Revolving Credit Facility | Senior Debt-TEC
Total Debt	54,039,000	75,980,000
Acquisition Term Notes | Senior Debt
Total Debt	$ 26,464,000	$ 26,461,000

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Debt (Details 1) $ in Thousands	Jun. 30, 2022 USD ($)
Twelve Months ended June 30,
2023	$ 24,859
2024	132,218
2025	26,191
2026	29,473
2027	944
Thereafter	1,169
Total Debt	214,854
Debt Issuance Costs	(6,246)
Total Debt, Net Of Debt Issuance Costs	$ 208,608

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Debt (Details Narrative) - USD ($)					3 Months Ended	6 Months Ended
	May 11, 2022	Aug. 09, 2021	Mar. 14, 2021	Mar. 06, 2020	Mar. 31, 2022	Jun. 30, 2022	Mar. 08, 2022	Mar. 02, 2022	Dec. 31, 2021	Nov. 05, 2021	Jun. 30, 2021	Feb. 27, 2019	Jul. 06, 2012
Warrants Exercisable						$ 13.33					$ 0.01
Net Of Debt Issuance						$ 208,608,000			$ 188,767,000
Net And The Related Liability						15,856,000			14,586,000
Other Long Term Debt						11,665,000			12,038,000
McAfee [Member]
Net Amount At Risk By Product And Guarantee, Net Amount At Risk						8,000,000.0
Revolving Credit Facility
Debt Instrument Face Amount						$ 5,520,000
Debt Instrument Interest Rate						18.50%
Revolving Credit Facility Accrues Interest Rate						13.75%
Unamortized Debt Issuance Cost						$ 1,100,000
New Credit Facility
Property Taxes						$ 6,100,000
Senior Debt | Acquisition Term Notes
Maturity Period						Apr. 01, 2023
Unamortized Debt Issuance Cost						$ 202,000
Revolving Credit Facility Accrues Interest Rate						10.75%
Principal Outstanding						$ 26,700,000
Redemption Fees						7,500,000
Debt Instrument Fair Value, Loans Amount						$ 15,000,000.0
Debt Instrument Interest Rate						15.50%
Fee payable of carrying value of the debt						1.00%
Percentage of carrying value of the debt paid in cash						50.00%
Percentage of carrying value of the debt paid in outstanding debt						50.00%
Net Of Debt Issuance						$ 26,464,000			26,461,000
Promissory Notes [Member] | Senior Debt
Net Of Debt Issuance						$ 0
Revenue Participation Term Notes | Senior Debt
Maturity Period						Apr. 01, 2023
Debt Instrument Interest Rate						5.00%
Principal And Interest Outstanding Net						$ 12,000,000.0
Unamortized Debt Issuance Costs						119,000
Net Of Debt Issuance						$ 11,912,000			11,915,000
Reserve Liquidity | Senior Debt
Debt Instrument Interest Rate						30.00%
Debt Instrument Face Amount						$ 4,000,000.0
Senior Debt-TEC | Promissory Notes [Member]
Maturity Period		Apr. 01, 2023	Apr. 01, 2022		Apr. 01, 2023	Apr. 01, 2023
Debt Instrument Face Amount						$ 7,200,000
Discount Issuance Costs						76,000
Debt Instrument Fee Amount	$ 100,000	$ 300,000	$ 100,000.0				$ 100,000			$ 100,000		$ 100,000
Extension Fee		1.00%	1.00%
Total Proceeds												100,000
Additional Borrowings First						$ 70,000
Additional Borrowings Second												60,000
Exceed Capital Expenditures	100,000					100,000
Interest Rates						14.00%
Principal And Interest Outstanding						$ 7,200,000
Net Of Debt Issuance						$ 7,089,000			7,095,000
Senior Debt-TEC | Reserve Liquidity Facility [Member]
Maturity Period				Apr. 01, 2023		Apr. 01, 2023
Debt Amount				$ 18,000,000
Debt Instrument Interest Rate				30.00%
Line Of Credit Facility, Increase (decrease), Net				$ 70,000,000.0
Default Event				40.00%
Non-refundable Fees Percentage				2.00%
Non-refundable Fees				$ 50,000
Reserve Liquidity Facility After Reduction		$ 40,000,000.0
Senior Debt-TEC | Revolving Credit Facility
Debt Amount													$ 18,000,000.0
Repayment Of Revolving Line						$ 16,000,000.0
Net Of Debt Issuance						54,039,000			75,980,000
Subordinated Notes
Debt Instrument Face Amount						$ 900,000
Debt Instrument Interest Rate						10.00%
Debt Instrument Fee						$ 90,000
Debt Instrument Fee, Second						$ 250,000
Debt Instrument Interest Rate						10.00%
Warrants Exercisable						$ 0.01
Equity Financing						$ 2,500,000
Warrants To Purchase Common Stock Shares						113,000
Principal And Interest Outstanding Net						$ 15,100,000			14,300,000
Net Of Debt Issuance						15,105,000			14,304,000
GAFI Revolving Loan
Aggregate Loan Amount						10,000,000
Cilion [Member]
Debt Instrument Face Amount						$ 6,700,000
Debt Instrument Interest Rate						3.00%
EB-5 Phase I Notes
Debt Instrument Face Amount						$ 500,000
Principal And Interest Outstanding Net						36,000,000.0
Remaining Funded To Escrow						500,000
Aggregate Principal Amount						36,000,000.0
Escrow Amount						35,500,000
Interest Outstanding						4,200,000
Investment Funds						$ 500,000
Conversion Price						$ 30
Accrued Interest Outstanding						$ 4,300,000			4,100,000
Principal Funding Amount						32,500,000			$ 32,500,000
Secunderabad Oils
Debt Instrument Face Amount						$ 2,300,000
Debt Instrument Interest Rate						14.75%
Monthly Net Operating Profit Rate						30.00%
GAFI Term loan and Revolving loan
Debt Instrument Face Amount						$ 15,000,000
Debt Instrument Interest Rate						10.00%
GAFI Term loan and Revolving loan | Minimum [Member]
Loan Rate						7.75%
GAFI Term loan and Revolving loan | Maximum [Member]
Loan Rate						12.00%
Financing Agreement for capital expenditures [Member]
Net Of Debt Issuance						$ 5,700,000
Net And The Related Liability						700,000
Other Long Term Debt						$ 4,900,000
EB-5 Phase II Notes
Debt Instrument Interest Rate						3.00%
Principal And Interest Outstanding Net						$ 4,000,000.0
Remaining Funded To Escrow						46,800,000
Aggregate Principal Amount						50,800,000
Investment Funds						500,000
Increased Debt Insrument Face Amount						$ 900,000
Due And Payable Term						5 years
Released from escrow						$ 4,000,000.0
Principal Amount Per						$ 0.9
Capital Revolving Credit Facility for Fuels and Carbon Lines
Term loan						$ 1,000,000.0
Aggregate Credit Facilities								$ 100,000,000
Purchase Shares Of Common Stock								50,000
Exercise Price								$ 10.20
Warrant Holders Purchase Of Common Stock								250,000
Warrant Exercise Price						$ 20.00
Number Of Shares Issued To Existing Shareholders						100,000
Short term credit facility												$ 210,000
Maturity Period						Mar. 01, 2025
Description Of Interest Rate						the greater of (i) the prime rate plus 6.00% and (ii) ten percent (10.0%), and the revolving loans made under the Carbon Revolving Line will have a maturity date of March 1, 2026 and accrue a rate of interest per annum equal to the greater of (i) the prime rate plus 4.00% and (ii) eight percent (8.0%).
Unamortized Debt Issuance Cost						$ 2,900,000
Debt Instrument Face Amount						25,100,000
Fuels Revolving Line
Unamortized Debt Issuance Cost						1,900,000
Debt Instrument Face Amount						$ 20,200,000
Debt Amount								$ 50
Carbon Revolving Line
Debt Amount								$ 50

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Operating Lease Cost
Operating Lease Expense	$ 159	$ 204	$ 347	$ 408
Short Term Lease Expense	75	71	102	110
Variable Lease Expense	23	21	46	54
Total Operating Lease Cost	257	296	495	572
Finance Lease Cost
Amortization Of Right-of-use-assets	28	55	89	110
Interest On Lease Liabilities	99	20	119	41
Total Finance Lease Cost	$ 127	$ 75	$ 208	$ 151

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Commitments and Contingencies (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Commitments and Contingencies
Operating Cash Flows Used In Operating Leases	$ 174	$ 173	$ 338	$ 340
Operating Cash Flows Used In Finance Leases	99	20	118	41
Financing Cash Flows Used In Finance Leases	$ 50	$ 124	$ 182	$ 248

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Commitments and Contingencies (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Commitments and Contingencies
Accretion Of The Lease Liability	$ 85	$ 96	$ 179	$ 195
Amortization Of Right-of-use Assets	74	$ 108	168	$ 213
Weighted Average Remaining Lease Term
Operating Leases		5 years 10 months 24 days		5 years 10 months 24 days
Finance Leases		14 years 1 month 6 days		14 years 1 month 6 days
Weighted Average Discount Rate
Operating Leases		14.00%		14.00%
Finance Leases		13.40%		13.40%
Operating Leases
Operating Lease Right-of-use Assets	2,294		2,294		$ 2,462
Current Portion Of Operating Lease Liability	258		258		260
Long Term Operating Lease Liability	2,191		2,191		2,318
Total Operating Lease Liabilities	2,449		2,449		2,578
Finance Leases
Property And Equipment, At Cost	3,152		3,152		2,317
Accumulated Depreciation	(72)		(72)		(376)
Property And Equipment, Net	3,080		3,080		1,941
Other Current Liability	196		196		550
Other long term liabilities	2,849		2,849		720
Total Finance Lease Liabilities	$ 3,045		$ 3,045		$ 1,270

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Commitments and Contingencies (Details 3) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Commitments and Contingencies
2023	$ 572
2024	581
2025	599
2026	617
2027	636
Thereafter	606
Total Lease Payments	3,611
Less: Imputed Interest	(1,162)
Total Operating Lease Liability	2,449	$ 2,578
2023	561
2024	279
2025	179
2026	151
2027	145
Thereafter	11,000
Total Lease Payments	12,315
Less: Imputed Interest	(9,270)
Total Finance Lease Liability	$ 3,045	$ 1,270

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Commitments and Contingencies (Details 4) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Commitments and Contingencies
Lease income	$ 377	$ 0

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Commitments and Contingencies (Details 5) $ in Thousands	Jun. 30, 2022 USD ($)
Commitments and Contingencies
2023	$ 830
2024	686
2025	541
2026	474
2027	474
Thereafter	1,303
Total future lease commitments	$ 4,308

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Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	May 06, 2022	Mar. 03, 2022	Dec. 31, 2021	Jul. 24, 2019
Stock-Based Compensation
Remaining Term	15 years
Initial Term	12 years
Property Tax Accrual Amount			$ 6,100
Fees And Costs	$ 0			$ 6,200	$ 6,200
Settlement Aggrement, Amount		$ 4,800
Gain on litigation	$ 1,400

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Aemetis Biogas LLC - Series A Preferred Financing and Variable Interest Entity (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended		12 Months Ended
	Dec. 20, 2018	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Totaling Of Series A Preferred Stock Unit		$ 54,900,000
Total Assets Of Abgl Company		57,800,000
Long-term Liabilities		50,300,000		$ 45,000,000.0
Accretion Expense		4,600,000		3,200,000
Preferred Units Redeemed Value		30,000
Preferred Units Issued Value		$ 3,100,000
Preferred Stock Unit		626,000
Preferred Units Series A [Member] | Second Tranche [Member]
Stock Redeemed Or Called During Period Shares		20,000	20,000
Reduced Redemption Shares		20,000
Preferred Stock Unit		$ 89,700,000		$ 30,000
Reduced Redemption Shares Amount		14,000,000.0
Preferred Units Series A [Member] | First Tranche [Member]
Preferred Stock Amunt		$ 16,000,000.0
Preferred Shares Issued		2,800,000
Series A Preferred Stocks [Member]
Conversion Of Common Stock Into Shares	1,200,000
Common Stock Shares	6,000,000
Per Shares	$ 5.00
Proceeds From Preferred Stock	$ 30,000,000
Additional Common Unit	5,000,000
Property Tax Accrual Amount		$ 0
Preferred Units Series A [Member]
Preferred Stock Unit		3,200,000
Conversion Of Common Stock Into Shares	1,200,000
Common Stock Shares	6,000,000
Redemption Unit Value		$ 3,000,000
Total Amount	$ 30,000,000
Shares Percentage	75.00%	75.00%
Redemption Payments Increased Rate		100.00%
Increases Payment Of Cash Flow		100%
Preferred Stock Shares Authorized	11,000,000	11,000,000
Preference Payments	$ 0.50
Maximum Number Of Shares	5,000,000
Redemption Per Share	$ 15
Cash Flow Amount	90,000,000
Paid Fees	$ 900,000
Increases Conversion Of Common Stock Units	5,000,000
Initial Rate Free Cash Flows		75.00%

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Stock-Based Compensation (Details)	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Stock-Based Compensation
Shares Available For Grant, Beginning (in Thousands)	142
Shares Available For Grant, Authorized (in Thousands)	1,338
Shares Available For Grant, Option Granted (in Thousands)	(939)
Shares Available For Grant, Rsas Granted (in Thousands)	(60)
Shares Available For Grant, Forfeited/expired	43
Shares Available For Grant, Ending (in Thousands)	524
Number Of Outstanding, Beginning (in Thousands)	3,763
Number Of Shares, Option Granted (in Thousands)	939
Number Of Shares, Exercised (in Thousands)	(266)
Number Of Shares, Forfeited/expired (in Thousands)	(43)
Number Of Outstanding, Ending (in Thousands)	4,393
Weighted Average Exercise Price Outstanding, Beginning | $ / shares	$ 2.29
Weighted Average Exercise Price, Option Granted | $ / shares	11.31
Weighted Average Exercise Price, Exercised | $ / shares	0.91
Weighted Average Exercise Price, Forfeited/expired | $ / shares	11.55
Weighted Average Exercise Price Outstanding, Ending | $ / shares	$ 4.21

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Stock-Based Compensation (Details 1) - $ / shares	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Dividend-yield	0.00%	0.00%
Risk-free Interest Rate	1.45%	0.12%
Expected Volatility	139.55%	150.17%
Expected Life (years)	4 years	2 years
Stocks Option [Member]
Dividend-yield	0.00%	0.00%
Risk-free Interest Rate	0.00%	1.30%
Expected Volatility	0.00%	122.81%
Expected Life (years)		7 years
Market Value Per Share On Grant Date	$ 0.00	$ 13.09
Fair Value Per Option On Grant Date	$ 0.00	$ 11.79

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Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended		3 Months Ended		6 Months Ended	12 Months Ended
	Jan. 31, 2022	Apr. 29, 2019	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Dec. 31, 2021
Restricted Stock Granted	60,300
Price Per Restricted Share	$ 11.31
Options Granted			0	30,000
Unrecognized Compensation Expense			$ 10.4		$ 10.4
Unrecognized Compensation Expense, Recognition Period			2 years 4 months 24 days
Stock Option Shares		177,246
Common Stock, Shares Authorized (in Thousands)			80,000,000		80,000,000	80,000,000
Shares Available For Grant, Granted (in Thousands)					(939)
2019 Stock Plan [Member]
Restricted Stock Granted						120,000
Options Granted	932,800
Unrecognized Compensation Expense					2,600,000
Common Stock, Shares Authorized (in Thousands)			200,000		200,000
Shares Available For Grant, Granted (in Thousands)						1,140,000
Vesting Terms						3 years
Stock Plan Term						10 years

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Outstanding Warrants (Details) - $ / shares	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Outstanding Warrants
Dividend Yield	0.00%	0.00%
Risk-free Interest Rate	1.45%	0.12%
Expected Volatility	139.55%	150.17%
Expected Life (years)	4 years	2 years
Exercise Price Per Warrant	$ 13.33	$ 0.01
Market Value Per Share On Grant Date	13.06	2.49
Fair Value Per Share On Grant Date	$ 11.01	$ 2.48

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Outstanding Warrants (Details 1) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021	Dec. 31, 2020
Number Of Warrants Granted	939
Weighted Average Exercise Price Outstanding, Beginning	$ 2.29
Weighted Average Exercise Price Granted	11.31
Weighted Average Exercise Price Exercised	0.91
Weighted Average Exercise Price Outstanding, Ending	$ 4.21	$ 2.29
Warrants
Number Of Outstanding, Beginning	55	95
Number Of Warrants Granted	413	292
Number Of Warrants Exercised	(113)	(332)
Number Of Outstanding, Ending	355	55	95
Weighted Average Exercise Price Outstanding, Beginning	$ 2.59	$ 2.59
Weighted Average Exercise Price Granted	13.33	0.01
Weighted Average Exercise Price Exercised	0.01	0.32
Weighted Average Exercise Price Outstanding, Ending	$ 15.92	$ 2.59	$ 2.59
Weighted Average Remaining Contractual Life (in Years) Outstanding, Ending	7 years 11 months 26 days	3 years 11 months 12 days	4 years 11 months 12 days

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Agreements (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Agreements (Details)
Wet Distiller's Grains Sales	$ 15,150	$ 10,630	$ 26,666	$ 21,665
Corn Oil Sales	2,812	1,695	5,150	2,737
Corn Purchases	54,352	42,166	98,362	80,159
Accounts Receivable	232	65	232	65
Accounts Payable	$ 612	$ 509	$ 612	$ 509

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Agreements (Details Narrative) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Marketing Costs	$ 0.8	$ 0.7	$ 1.5	$ 1.4
J. D. Heiskell [Member]
Prepayments	1.7		1.7		$ 4.0
Accounts Receivable	$ 0.6		$ 0.6		$ 1.2

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Segment Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Sales	$ 65,901,000	$ 54,884,000	$ 117,950,000	$ 97,691,000
Intersegment Revenues	297,000	694,000	632,000	735,000
Gross Profit (loss)	(214,000)	3,646,000	(3,299,000)	38,000
Interest Expense	6,668,000	5,219,000	12,929,000	12,399,000
Accretion And Other Expenses Of Series A Preferred Units	1,506,000	3,800,000	3,146,000	5,743,000
Capital Expenditures	13,059,000	6,375,000	22,518,000	12,935,000
Depreciation	1,325,000	1,378,000	2,661,000	2,764,000
Total Assets	178,452,000	143,287,000	178,452,000	143,287,000	$ 160,831,000
Interest Expense	4,928,000	4,529,000	9,363,000	10,494,000
India Biodiesel
Sales	10,000	154,000	18,000	633,000
Intersegment Revenues	0	0	0	0
Gross Profit (loss)	10,000	(15,000)	18,000	(70,000)
Accretion And Other Expenses Of Series A Preferred Units	0	0	0	0
Capital Expenditures	69,000	1,000	136,000	118,000
Depreciation	164,000	174,000	332,000	358,000
Total Assets	9,324,000	12,306,000	9,324,000	12,306,000
Interest Expense	0	0	0	0
All Others
Sales	0	0	0	0
Intersegment Revenues	0	0	0	0
Gross Profit (loss)	(4,000)	(38,000)	(10,000)	(48,000)
Accretion And Other Expenses Of Series A Preferred Units	0	0	0	0
Capital Expenditures	928,000	3,104,000	3,068,000	5,147,000
Depreciation	30,000	12,000	41,000	20,000
Total Assets	46,817,000	26,715,000	46,817,000	26,715,000
Interest Expense	1,792,000	230,000	2,404,000	1,708,000
California Ethanol
Sales	65,891,000	54,730,000	117,932,000	97,058,000
Intersegment Revenues	0	0	0	0
Gross Profit (loss)	(152,000)	3,372,000	(3,032,000)	241,000
Accretion And Other Expenses Of Series A Preferred Units	0	0	0	0
Capital Expenditures	5,366,000	767,000	7,169,000	775,000
Depreciation	977,000	1,050,000	1,988,000	2,102,000
Total Assets	66,580,000	76,452,000	66,580,000	76,452,000
Interest Expense	4,869,000	4,986,000	10,514,000	10,685,000
Dairy Renewable Natural Gas
Sales	0	0	0	0
Intersegment Revenues	297,000	694,000	632,000	735,000
Gross Profit (loss)	(68,000)	327,000	(275,000)	(85,000)
Accretion And Other Expenses Of Series A Preferred Units	1,506,000	3,800,000	3,146,000	5,743,000
Capital Expenditures	6,696,000	2,503,000	12,145,000	6,895,000
Depreciation	154,000	142,000	300,000	284,000
Total Assets	55,731,000	27,814,000	55,731,000	27,814,000
Interest Expense	$ 7,000	$ 3,000	$ 11,000	$ 6,000

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Segment Information (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Segment Information
Total Revenues For Reportable Segments	$ 66,198	$ 55,578	$ 118,582	$ 98,426
Elmination Of Intersegment Revenues	(297)	(694)	(632)	(735)
Total Consolidated Revenues	$ 65,901	$ 54,884	$ 117,950	$ 97,691

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Segment Information (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Gallon Per Year			$ 90,000,000
India Biodiesel
Gallon Per Year			50,000,000
California Ethanol
Gallon Per Year			$ 65,000,000
California Ethanol | Sales of ethanol, WDG, and corn oil
Concentration Credit Risk	72.00%	77.00%	72.00%	74.00%
Concentration Credit Risk, Two	27.00%	23.00%	27.00%	25.00%

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Related Party Transactions (Details Narrative) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
	Nov. 04, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Guaranty Fees	$ 400,000			$ 2,000,000.0
Other Expenses				400,000
Pre Payment Other				200,000
Eric McAfee and McAfee Capital
Remaining Expenses				100,000
Prepaid Expense		$ 20,000.0		20,000.0
Accrued Liability		10,000		$ 10,000		$ 300,000
Issued For Common Shares				180,000
Various Board Members
Related Party Transaction				$ 20,000		$ 200,000.0
Board Compensation Fees		$ 100,000	$ 100,000.0	$ 200,000.0	$ 200,000

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Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Millions			6 Months Ended
	Aug. 08, 2022	Jul. 01, 2022	Jun. 30, 2022
Warrants to purchase common stock			939
Exercise price			$ 11.31
Subsequent Event
Loan repayment	$ 7.3
Redemtion of units, amount one	116.0
Redemtion of units, amount two	$ 106.0
Subsequent Event | Note Purchase Agreement [Member]
Cash extension fee	1.00%
Waiver fee	$ 0.3
Subsequent Event | Subordinated Debt Refinancing [Member]
Cash extension fee		10.00%
Equity financing		$ 25.0
Warrants to purchase common stock		113,000
Exercise price		$ 0.01