AEMETIS, INC

Aemetis, Inc. is an international renewable natural gas and renewable fuels company focused on the operation, acquisition, development, and commercialization of innovative technologies to produce low and negative carbon intensity renewable fuels that lower fuel costs and reduce emissions. The company operates in three reportable segments: California Ethanol, California Dairy Renewable Natural Gas, and India Biodiesel. The California Ethanol segment consists of a 65 million gallon per year capacity ethanol production facility in Keyes, California, which also produces Wet Distillers Grains, Distillers Corn Oil, and Condensed Distillers Solubles sold as animal feed to local dairies and feedlots, as well as captured CO2 for the food and beverage industries. The California Dairy Renewable Natural Gas segment produces RNG from dairy waste using twelve anaerobic digesters, a 36-mile biogas collection pipeline, and a central RNG production facility with a utility interconnection. The India Biodiesel segment owns and operates a plant in Kakinada, India with a capacity to produce about 80 million gallons per year of high-quality distilled biodiesel from a variety of vegetable oil and animal waste feedstocks, and also distills crude glycerin into refined glycerin for pharmaceutical and other industries. The company also has an "All Other" segment consisting of projects under development, including a planned Carbon Capture and Underground Sequestration facility and a sustainable aviation fuel and renewable diesel production plant at the Riverbank Industrial Complex.

According to the U.S. Energy Information Agency, on January 1, 2025, there were approximately 191 commercial ethanol production facilities in the U.S. with a combined production of approximately 18.5 billion gallons per year. The production of ethanol is a commodity-based business where producers compete on the basis of price and carbon intensity. The company produces and sells ethanol in the California market, but since there is insufficient production capacity in California to supply the state's total fuel ethanol consumption of approximately 1.4 billion gallons annually, it competes with ethanol transported into California principally from Midwestern producers or imported from other countries, primarily Brazil. In the India Biodiesel segment, biodiesel sold as fuel competes primarily with petroleum diesel produced by the three government-owned Oil Marketing Companies and two private oil companies in India, all of whom have significantly larger market shares for petroleum diesel and control a significant share of the distribution network. The Kakinada Plant has demonstrated that it is a reliable and high-quality supplier in the India fuel market. For California Dairy Renewable Natural Gas, the company competes with other renewable gas, fossil natural gas, and fossil-based products, and competes with other credit producers inside and outside of California that are participating in the D3 RIN and LCFS credit markets.

The company generates revenue through three primary segments. In the California Ethanol segment, substantially all ethanol, WDG, DCO, and CDS produced are sold to J.D. Heiskell under the J.D. Heiskell Purchasing Agreement, which resells the products to marketers designated by the company, including Murex LLC for ethanol and A.L. Gilbert for WDG. Revenue is recognized when performance obligations are met, typically at the point of delivery. In the California Dairy Renewable Natural Gas segment, revenue is derived from sales of RNG gas molecules, D3 RINs under the federal Renewable Fuel Standard, and California Low Carbon Fuel Standard credits, with revenue for D3 RINs and LCFS credits recognized when the credits are sold rather than when RNG is produced or dispensed. In the India Biodiesel segment, revenue comes from sales of biodiesel to government OMCs and refined glycerin to other external customers. The company also generates revenue from federal Section 45Z production tax credits, which are accounted for by analogy to the grant model within International Accounting Standards 20, and are recognized as operating income when earned. The company's current and planned businesses produce renewable fuels and reduce emissions, generating revenues from biofuel sales, federal RFS credits, federal Section 45Z PTCs, California LCFS credits, and other investment and production tax credits.

The California Ethanol segment generated revenues of $153,234 thousand ¹ for the year ended December 31, 2025, compared to $161,756 thousand ² in 2024, a decrease of 5%. During 2025, the segment generated 75% of revenue from sales of ethanol, 20% from sales of WDG, and 5% from sales of corn oil, CDS, CO2, and other sales. Plant production averaged 104% ³ of the 55 million gallon per year nameplate capacity during 2025, compared to 110% ⁴ in 2024. Ethanol gallons sold were 57 million ⁵ in 2025 versus 61 million ⁶ in 2024, a decrease of 6.6%, while the average sales price per gallon increased to $2.03 ⁷ from $1.96 ⁸. WDG tons sold were 374 thousand ⁹ in 2025 versus 411 thousand ¹⁰ in 2024, a decrease of 9.0%, with the average sales price per ton declining to $80.1 ¹¹ from $88.2 ¹². The segment recognized $5,112 thousand ¹³ in Production Tax Credits during 2025. Cost of goods sold for the segment was $168,004 thousand ¹⁴ in 2025 versus $175,548 thousand ¹⁵ in 2024, a decrease of 4%, primarily due to a decrease in the quantity of corn ground from 21 million bushels ¹⁶ to 19 million bushels ¹⁷ at an average delivered cost of $6.22 ¹⁸ per bushel versus $6.21 ¹⁹ per bushel. Gross loss improved to $9,658 thousand ²⁰ from $13,792 thousand ²¹ in the prior year, a 30% improvement, primarily due to recognition of Production Tax Credit operating income offset by lower WDG sales quantity and prices.

The California Dairy Renewable Natural Gas segment generated revenues of $14,730 thousand ²² for the year ended December 31, 2025, compared to $13,037 thousand ²³ in 2024, an increase of 13%. Gas sold was 399 thousand MMBtu ²⁴ in 2025 versus 302 thousand MMBtu ²⁵ in 2024, an increase of 32.1%, at an average price of $3.34 ²⁶ per MMBtu versus $3.01 ²⁷ per MMBtu. D3 RINs sold were 3,459 thousand ²⁸ in 2025 versus 3,030 thousand ²⁹ in 2024, an increase of 14.2%, at an average price of $2.50 ³⁰ per RIN versus $3.04 ³¹ per RIN. LCFS credits sold were 83 thousand ³² in 2025 versus 52 thousand ³³ in 2024, an increase of 59.6%, at an average price of $57.1 ³⁴ per credit versus $56.7 ³⁵ per credit. The segment recognized $5,243 thousand ³⁶ in Production Tax Credits during 2025. Cost of goods sold was $10,347 thousand ³⁷ in 2025 versus $7,642 thousand ³⁸ in 2024, an increase of 35%, relating to dairy manure payments, maintenance, and depreciation as more dairies were placed into production. Gross profit increased to $9,626 thousand ³⁹ from $5,395 thousand ⁴⁰ in the prior year, an increase of 78%, as the company continued to ramp up RNG production by operating more dairies. The India Biodiesel segment generated revenues of $29,662 thousand ⁴¹ for the year ended December 31, 2025, compared to $92,847 thousand ⁴² in 2024, a decrease of 68%. Biodiesel metric tons sold were 21 thousand ⁴³ in 2025 versus 74 thousand ⁴⁴ in 2024, a decrease of 71.6%, at an average sales price of $1,117 ⁴⁵ per metric ton versus $1,168 ⁴⁶ per metric ton. Refined glycerin metric tons sold were 1.0 thousand ⁴⁷ in 2025 versus 6.5 thousand ⁴⁸ in 2024, a decrease of 84.6%, at an average sales price of $1,093 ⁴⁹ per metric ton versus $645 ⁵⁰ per metric ton. The decrease in revenues was primarily attributable to delays in the India-government OMCs issuing new tenders and executing new purchase contracts, with Indian OMCs slowing or pausing new biodiesel contract execution in mid-to-late 2025 primarily due to administrative tender cancellations, very low supplier participation in early 2025 tenders, and broader structural challenges in India's biodiesel program. Cost of goods sold was $30,398 thousand ⁵¹ in 2025 versus $85,030 thousand ⁵² in 2024, a decrease of 64%, attributable to a decrease in the quantity of biodiesel feedstock used by 69%, from 75 thousand metric tons ⁵³ to 23 thousand metric tons ⁵⁴, offset by a 35% increase in average feedstock cost. Gross loss was $736 thousand ⁵⁵ in 2025 compared to gross profit of $7,817 thousand ⁵⁶ in 2024.

During 2025, the company commissioned one new dairy digester, bringing the total to twelve operating digesters that receive dairy waste from fifteen dairies in Stanislaus and Merced Counties, California, with two additional digesters under construction and agreements with over fifty dairies. The company received its first provisional LCFS pathway approvals from the California Air Resources Board, which allowed it to generate 160% more LCFS credits from RNG sales based on an average carbon intensity of negative 385 for the seven dairies with approved pathways. The company continued its at-the-market stock sales program, issuing 14.0 million shares ⁵⁷ of common stock for net proceeds of $28.1 million ⁵⁸ net of commissions and offering related expenses. In November 2025, the company issued 28,902 shares ⁵⁹ of common stock to a vendor as compensation at an effective value of $1.73 ⁶⁰ per share. In December 2025, the company issued warrants to two lenders exercisable for the purchase of 113 thousand shares ⁶¹ of common stock at an exercise price of $0.01 ⁶² per share for a period of two years in connection with extensions of their debt. The company also entered into the Tenth Waiver and Amendment to Series A Preferred Unit Purchase Agreement with an effective date of August 31, 2025, extending the redemption date to December 31, 2025, and changing the aggregate redemption price to $118.8 million ⁶³, which included a $2 million ⁶⁴ incremental fee. A $6.1 million ⁶⁵ payment was applied to the PUPA redemption price in December 2025 using proceeds from tax credit sales. The company also entered into a construction agreement for the MVR system, with unpaid costs accruing interest at 7.75% ⁶⁶, and as of December 31, 2025, the balance owed was $17.4 million ⁶⁷, classified as short-term borrowings.

For the fiscal year ended December 31, 2025, total revenues were $197,626 thousand ⁶⁸ compared to $267,640 thousand ⁶⁹ in fiscal 2024, a decrease of 26%. Production tax credits of $10,355 thousand ⁷⁰ were recognized in 2025 versus $0 ⁷¹ in 2024. Total cost of goods sold was $208,749 thousand ⁷² in 2025 versus $268,220 thousand ⁷³ in 2024, a decrease of 22%. Gross loss was $768 thousand ⁷⁴ in 2025 compared to $580 thousand ⁷⁵ in 2024. Selling, general and administrative expenses were $36,450 thousand ⁷⁶ in 2025 versus $39,836 thousand ⁷⁷ in 2024, a decrease of 8%. Operating loss was $37,218 thousand ⁷⁸ in 2025 compared to $40,416 thousand ⁷⁹ in 2024. Interest rate expense was $46,205 thousand ⁸⁰ in 2025 versus $40,158 thousand ⁸¹ in 2024, an increase of 15%. Debt related fees and amortization expense were $6,707 thousand ⁸² in 2025 versus $6,463 thousand ⁸³ in 2024. Accretion and other expenses of Series A preferred units were $8,226 thousand ⁸⁴ in 2025 versus $12,698 thousand ⁸⁵ in 2024, a decrease of 35%. Net loss was $77,001 thousand ⁸⁶ in 2025 compared to $87,537 thousand ⁸⁷ in 2024. Basic and diluted net loss per common share was $1.28 ⁸⁸ in 2025 versus $1.91 ⁸⁹ in 2024. Cash provided by operating activities was $3,263 thousand ⁹⁰ in 2025 compared to cash used in operating activities of $32,929 thousand ⁹¹ in 2024. Cash used in investing activities was $25,591 thousand ⁹² in 2025 versus $14,149 thousand ⁹³ in 2024. Cash provided by financing activities was $26,409 thousand ⁹⁴ in 2025 versus $44,617 thousand ⁹⁵ in 2024.

A primary growth vector is the expansion of the California Dairy Renewable Natural Gas segment. The company expects to produce 550,000 MMBtu per year ⁹⁶ of RNG from its current digester projects and plans to build additional digesters and expand its upgrading hub over the next several years to be able to produce about 1.6 million MMBtu ⁹⁷ of RNG annually. The company has agreements with over fifty dairies and expects the next set of digesters to begin producing biogas in the second quarter of 2026. The company is also building its own RNG fuel dispensing station, which is planned to begin operating in 2026. In the second quarter of 2025, CARB approved provisional pathways for the RNG produced from seven of the company's dairy digesters, which generate significantly more LCFS credits than dairies with temporary pathways, and the company still generates LCFS credits under lower temporary pathways at five operating digesters that have applications for provisional pathways pending with CARB. CARB's recently approved amendments to the LCFS regulation became effective July 1, 2025, which are expected to reduce the oversupply of LCFS credits and lead to higher credit prices in the future.

Another major growth vector is the development of a sustainable aviation fuel and renewable diesel production plant to be located at the Riverbank Industrial Complex in Riverbank, CA. The plant is currently designed to produce 90 million gallons per year ⁹⁸ of renewable diesel or 78 million gallons per year ⁹⁹ of SAF from renewable vegetable and animal oils. The company received the Use Permit and California Environmental Quality Act approvals for the development of the plant in September 2023 and the Authority to Construct air permits in March 2024, and is continuing with engineering and other development activities. Additionally, the company is developing a Carbon Capture and Underground Sequestration facility at the Riverbank Industrial Complex designed to inject carbon dioxide more than one mile underground for geologic storage, having completed the initial phase of drilling for the characterization well and continuing permitting and other development activities. The company is also pursuing expansion of biodiesel production in India, having hired a new executive team to help develop plans for additional growth and to execute on a potential public stock offering of its India subsidiary. The company plans to continue to pursue sales of biodiesel to government OMCs, driven in part by the India government's 2022 update to its National Biofuels Policy that targets a blend of 5% biodiesel into fossil diesel.

The company is implementing several strategies to improve margins and reduce costs. In the California Ethanol segment, the company is in the process of procuring and installing a mechanical vapor recompression system that is expected to reduce natural gas consumption at the Keyes Plant by more than 80% ¹⁰⁰. The MVR system is expected to become operational in 2026 and will reduce overall fuel costs and volatility and increase income from LCFS credits and Section 45Z production tax credits. The company is also implementing several energy efficiency initiatives at the Keyes Plant focused on reducing operating costs and lowering the carbon intensity of its ethanol. The company continues to evaluate other opportunities to improve the Keyes Plant's financial performance by adopting new technologies or process changes that further improve energy efficiency, decrease feedstock costs, increase coproduct yields, and create other margin enhancements. The company also plans to continue to seek alternative feedstocks and improve product yields to minimize cost and carbon emissions, with an emphasis on processes that use cellulosic feedstocks to augment or replace current feedstocks.

The company is actively investing in capital projects to support its growth and operational efficiency. Capital expenditures for the year ended December 31, 2025 were $26,002 thousand ¹⁰¹, of which $14,964 thousand ¹⁰² was used for capital projects in the Keyes Plant, $8,906 thousand ¹⁰³ was used for capital projects associated with production of Renewable Natural Gas, $741 thousand ¹⁰⁴ for capital projects at the Kakinada Plant, and $1,391 thousand ¹⁰⁵ related to all other capital projects. The company is seeking new loans and other forms of financing from a variety of sources to facilitate additional digester construction. The company plans to continue to build new dairy digesters that increase cash flow as allowed by capital availability. The company is also continuing with engineering and other development activities for the SAF/RD production plant and the CCUS facility. The company's research and development efforts focus on evaluating and commercializing technologies for the production of biodiesel, SAF, renewable diesel, cellulosic ethanol, and other renewable biofuels from a variety of feedstocks.

The company has been raising cash for operations by selling equity through its at-the-market stock registration and expects to continue to do so. During the year ended December 31, 2025, the company issued 14.0 million shares ¹⁰⁶ of common stock under the at-the-market stock sales program for net proceeds of $28.1 million ¹⁰⁷ net of commissions and offering related expenses. The company also plans to seek additional funding for existing and new business opportunities through a combination of working with its senior lender, restructuring or refinancing existing loan agreements, entering into additional debt agreements for specific projects, obtaining project specific equity and debt for development projects, and obtaining additional debt from the current EB-5 Phase II offering. The company's RNG production started earning Section 45Z production tax credits effective January 1, 2025, and the company monetized the 2025 credits in December 2025 and January 2026, planning to continue to monetize 2026 and later credits on a regular basis. The recent federal tax and budget legislation referred to as the "One Big Beautiful Bill" that was enacted in July 2025 contains provisions that are expected to increase future income from PTCs for both ethanol and RNG production, including an increase in the credit amount earned and an extension of the term of the credits to a total of five years.

The company faces significant structural headwinds and execution risks. The company has a substantial amount of accumulated debt, with approximately $247.9 million ¹⁰⁸ owed under note facilities with Third Eye Capital as of December 31, 2025, excluding debt discounts, and the debt is currently due on demand. The company has been reliant on its senior secured lender to provide extensions to the maturity dates of its debt facilities and has been required to remit substantially all excess cash from tax credit sales as payments of that debt. In order to meet its obligations during the next twelve months, the company will need to refinance debt with its senior lender for amounts which are due on demand in the next twelve months or receive its continued cooperation. The company does not currently generate positive cash flow from its consolidated operations. The India Biodiesel segment experienced a significant decline in revenues due to delays in the India-government OMCs issuing new tenders and executing new purchase contracts, with Indian OMCs slowing or pausing new biodiesel contract execution in mid-to-late 2025 primarily due to administrative tender cancellations, very low supplier participation in early 2025 tenders, and broader structural challenges in India's biodiesel program, and supplier participation decreased because of the change in pricing structure from cost-plus to fixed price.

The company's growth plans are subject to numerous regulatory, economic, and political uncertainties. The company relies on the availability of tax credits, carbon credits, grants, and other regulatory and financial incentives, and the expiration, elimination, modification, or reduction of these regulations, credits, and incentives could adversely impact the business. On January 20, 2025, President Trump issued an Executive Order pausing certain funding disbursements under the Inflation Reduction Act, and the impact of this Executive Order on the use of and ability to monetize certain federal credits and grants is uncertain. The company's operations in India are subject to regulatory, economic and political uncertainties, including changes in the India government's policies regarding biodiesel blending mandates and pricing structures. The company also faces risks related to currency fluctuations between the Indian rupee and the U.S. dollar, as a substantial portion of revenues is received in Indian rupees and the company does not currently engage in any formal currency hedging. The company's ability to execute its business plan is also dependent on successfully completing all necessary development activities for its projects, including obtaining necessary regulatory approvals and permits, acquisition of property rights, contracting, engineering and cost estimating, determination of feasibility, funding of project development costs, construction financing, construction, and startup, with no certainty that any particular project will ultimately be built or generate revenue.

The company faces material risks related to its substantial indebtedness, with approximately $247.9 million ¹⁰⁹ owed under note facilities with Third Eye Capital as of December 31, 2025, which are currently due on demand, and the company may not have sufficient cash available to repay this indebtedness if the lender demands payment. The company has historically incurred significant losses, with an accumulated deficit of approximately $639.9 million ¹¹⁰ as of December 31, 2025, and net losses of $77.0 million ¹¹¹ and $87.5 million ¹¹² for fiscal years 2025 and 2024 respectively, and may continue to incur losses for an indeterminate period. The company is dependent on the availability of tax credits, carbon credits, and regulatory incentives, and the expiration, elimination, or modification of these programs could materially impact revenue, as evidenced by the January 2025 Executive Order pausing certain IRA funding disbursements. The company's operations are highly dependent on the spread between feedstock and energy costs and product prices, with the India Biodiesel segment experiencing a 71.6% ¹¹³ decline in biodiesel sales volume in 2025 due to delays in OMC tender issuances and a change in pricing structure from cost-plus to fixed price. The company also faces significant customer and supplier concentration risk, as it buys all feedstock for the Keyes Plant from one supplier, J.D. Heiskell, and sells substantially all ethanol, WDG, DCO, and CDS to J.D. Heiskell, which in turn sells to a single fuel marketing company, Murex LLC, and a single animal feed company, A.L. Gilbert.

Management's message to shareholders emphasizes the company's position as an international renewable natural gas and renewable fuels company focused on producing low and negative carbon intensity renewable fuels. The strategic priorities emphasized for the period ahead include improving operating margins and cash flow at the California Ethanol segment through energy efficiency initiatives, particularly the installation of a mechanical vapor recompression system expected to reduce natural gas consumption by more than 80% ¹¹⁴ and become operational in 2026. Management also prioritizes leveraging the company's position as an established dairy digester owner and operator to continue building dairy digesters and connected pipeline to increase RNG production, with plans to produce about 1.6 million MMBtu ¹¹⁵ of RNG annually from expanded operations. Additionally, management emphasizes capitalizing on policy changes by the Government of India to pursue sales of biodiesel to OMCs and developing plans for additional growth of the India business, including executing on a potential public stock offering of the India subsidiary. Management also highlights the development of the sustainable aviation fuel and renewable diesel production plant and the Carbon Capture and Underground Sequestration facility at the Riverbank Industrial Complex. The filing notes that the company's Chief Financial Officer, Todd Waltz, has informed the company of his desire to retire with an effective date expected in 2026.