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Item 9A. Controls and Procedures

2025-03-14 compared with 2024-03-29 · 47 added, 32 removed, 281 unchanged (22% of the section changed)

3 unchanged sentences

Management, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), carried out 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 weakness over financial reporting as identified in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, 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 accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

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, 2024, IT general controls along with certain 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 accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Inherent Limitations on Effectiveness of Controls

Our management, including the CEO and CFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud.

Our management, including the CEO and CFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

2 unchanged sentences

Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes.

Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

10 unchanged sentences

Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of the period covered by this report based on the criteria for effective internal control described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Tread way Commission - 2013.

Based on the results of management’s assessment and evaluation, and that our internal control over financial reporting was ineffective due to not maintaining sufficient information technology general controls (ITGCs) and segregation of duties in the areas of user access, passwords, change-management, and third-party service provider report review over certain information technology systems used in the Company’s financial reporting processes.

As a result of the pervasive impact of these controls, automated and manual business process controls that are dependent on ITGCs and appropriate segregation of duties were also ineffective.

Additionally, the Company did not maintain sufficient personnel in the proper roles to allow for timely and precise completion and documentation leading to control deficiencies associated with:

1) lack of review and documentation of pricing for revenue recognized over ethanol sales and wet distillers grain sales, 2) documentation and reviews over debt covenants, debt classification, going concern analyses, and tax provision, 3) timeliness and reviews related to financial statement tie outs, bank reconciliations, and property, plant and equipment, including depreciation expense.

Additionally, as a result of this deficiency, we note that all financial statement transaction cycles could be impacted.

Based on the results of management’s assessment and evaluation we have determined that our internal control over financial reporting was ineffective due to the following material weaknesses:

Not maintaining sufficient information and documentation related to the performance of our technology general controls (ITGCs).

As a result of the pervasive impact of these controls, automated and manual business process controls that are dependent on ITGCs were ineffective.

Our India Biodiesel segment did not consistently maintain sufficient documentation to evidence the performance, review and authorization of controls.

As a result of these deficiencies, we concluded that controls at the business unit were ineffective.

Management has analyzed the material weaknesses and performed additional analysis and procedures in preparing our consolidated financial statements.

We have concluded that our consolidated financial statements fairly present, in all material respects, our financial condition, results of operations and cash flows at and for the periods presented.

Changes in Internal Control over Financial Reporting

Discussed below are changes made to our internal control over financial reporting during the year ended December 31, 2023 in response to an identified material weakness.

Discussed below are changes made to our internal control over financial reporting during the years ended December 31, 2024.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Management implemented a new Enterprise Resource Planning system (ERP) during the third quarter of 2023 which included a reassessment of automated and manual controls.

The complexity of this implementation created additional challenges in maintaining the operational effectiveness of internal controls, resulting in the material weaknesses explained above.

During the fourth quarter, the accounting and finance function was enhanced through the training of newly hired and existing team members.

Management believes these changes will enable the company to effectively address the material weaknesses identified in the year ended December 31, 2024.

In the year ending December 31, 2023, we had the following material weakness:

The Company did not maintain sufficient personnel in the proper roles to allow for timely and precise completion and documentation leading to control deficiencies associated with:

In 2024, we enhanced the accounting and finance function through the addition of newly hired team members and training of existing team members.

We currently have four CPAs on staff in various capacities.

These additions and training allowed for our reviews and documentation to be timely and comprehensive.

As of December 31, 2024 this material weakness has been deemed remediated.

There are, however, inherent limitations in all control systems and no evaluation of controls can provide absolute assurance that all deficiencies have been detected.

While these actions and planned actions are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, we are committed to the continuous improvement of our internal control over financial reporting and will continue to diligently review our internal control over financial reporting.

While these actions and planned actions are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, we are committed to the continuous improvement and diligent review of our internal controls over financial reporting.

Our independent registered public accounting firm, RSM US LLP, has issued an audit report on the effectiveness of our internal control over financial reporting and their report is included herein.

1 unchanged sentence

(a) Current Reports

On March 25, 2024, the Company entered into two agreements with Third Eye Capital entitled "Limited Waiver and Amendment No.

28 to Amended and Restated Note Purchase Agreement" and "Seventh Amended and Restated Promissory Note." These agreements are described in Note 4, Debt, and Note 15, Subsequent Events, to the Consolidated Financial Reports in Item 8 of this Report.

Copies of the two agreements are included in this Report as Exhibits 10.36 and 10.37, respectively.

The descriptions of the two documents in Item 8 are only a summary and are qualified by the terms of the documents included in Exhibits 10.36 and 10.37.

Item 1.01 Entry into a Material Definitive Agreement.

On March 12, 2025, ABGL entered into an agreement entitled Eighth Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Eighth Amendment") with an Effective Date of January 31, 2025, that provides, among other provisions, the requirement for ABGL to redeem all of the outstanding Series A Preferred Units by April 30, 2025, for an aggregate redemption price of $114.8 million.

The PUPA Eighth Amendment is attached at Exhibit 10.52 to this Form 10 -K and is described in the notes to the Financial Statements in Item 8 of this Form 10 -K under Note 9 Aemetis Biogas LLC – Series A Preferred Financing and Note 15 Subsequent Events .

This description is a summary only and is qualified by the text of the attached Exhibit 10.52.

On March 12, 2025, Goodland Advanced Fuels, Inc.

and Aemetis Carbon Capture, Inc.

entered into an agreement entitled “Amendment and Waiver No.

6 to Credit Agreement” with Third Eye Capital Corporation to amend the existing Amended and Restated Credit Agreement to (i) replace the Fuels Revolving Line maturity date of March 1, 2025, with a new provision that makes the Fuels Revolving Line due on demand of the lender, and (ii) changes the interest rate for the Fuels Revolving Line to the greater of prime rate plus 11% or 15%.

The Amendment is attached as Exhibit 10.66 to this Form 10 -K and is also described in the notes to the Financial Statements in Item 8 of this Form 10 -K under Note 5 Debt and Note 15 Subsequent Events .

This description is a summary only and is qualified by the text of the attached Exhibit 10.66.

On March 12, 2025, Goodland Advanced Fuels, Inc.

and Aemetis Carbon Capture, Inc.

(collectively, the “Borrowers”) entered into a Promissory Note with Third Eye Capital Corporation that provides a credit commitment up to $10 million for the Borrowers to use for payment of outstanding interest and fees owed under the Amended and Restated Credit Agreement previously entered between the same parties.

The note would accrue interest at 24% per annum on outstanding principal, have a maturity date of April 1, 2026, and is secured by a substantial part of the assets of the Company.

The Promissory Note is attached as Exhibit 10.67 to this Form 10 -K and is also described in the notes to the Financial Statements in Item 8 to this Form 10 -K under Note 15 Subsequent Events .

This description is a summary only and is qualified by the text of the attached Exhibit 10.67.

(b) Adoption and Termination of Rule 10b5 - 1 Stock Trading Plans by Officers and Directors

On September 15, 2023 , Francis P.

Barton , a member of the Company's Board of Directors , adopted a trading arrangement for the sale of the Company's common stock (a "Rule 10b5 - 1 Trading Plan") that (i) became effective December 15, 2023, ( ii) has a term lasting until December 31, 2024, ( iii) provides for the sale of up to 126,000 shares of common stock to be issued upon exercise of options currently held by Mr.

Barton, (iv) sets a limit order designating the minimum price upon which sales may occur, and (v) is intended to satisfy the affirmative defense of Securities Exchange Act Rule 10b5 - 1 (c).

On September 15, 2023 , Todd A.

Waltz , Executive Vice President and Chief Financial Officer of the Company, adopted a Rule 10b5 - 1 Trading Plan that (i) took effect January 1, 2024, ( ii) terminates June 15, 2025, ( iii) provides for the sale of up to 475,000 shares of common stock to be issued upon the exercise of options currently held by Mr.

Waltz, (iv) contains multiple limit orders designating the minimum prices upon which sales may occur, and (v) is intended to satisfy the affirmative defense of Securities Exchange Act Rule 10b5 - 1 (c).

Waltz's newly adopted plan replaces a previously adopted plan that expired on December 31, 2023, and provided for the sale of up to 475,000 shares on limit order terms.

No shares were transacted under the expired plan.

On November 13, 2023 , Andrew B.

Foster , Executive Vice President and Chief Operating Officer of the Company, adopted a Rule 10b5 - 1 Trading Plan that (i) took effect February 14, 2024, ( ii) has a term lasting until December 31, 2024, ( iii) provides for the sale of up to 199,616 shares of common stock to be issued upon exercise of options currently held by Mr.

On December 17, 2024 , Andrew B.

Foster , Executive Vice President and Chief Operating Officer of the Company, adopted a Rule 10b5 - 1 Trading Plan that (i) took effect February 14, 2025, ( ii) has a term lasting until March 17, 2026, ( iii) provides for the sale of up to 447,834 shares of common stock to be issued upon exercise of options currently held by Mr.

Foster, (iv) contains multiple limit orders designating the minimum prices upon which sales may occur, and (v) is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5 - 1 (c).

Foster's newly adopted Rule 10b5 - 1 Trading Plan replaces a previously adopted plan that expired on December 31, 2023, and provided for the sale of 96,000 shares of common stock on limit order terms.

Foster's newly adopted Rule 10b5 - 1 Trading Plan replaces a previously adopted plan that expired on December 31, 2024.

No shares were transacted under the expired plan.

187 unchanged sentences

Fifth Waiver and Amendment to Series A Preferred Unit Purchase Agreement, effective as of February 8, 2024, by and among Aemetis Biogas LLC, Protair X Americas, Inc., and Third Eye Capital Corporation.

Eighth Waiver and Amendment to Series A Preferred Unit Purchase Agreement, effective as of January 31, 2025, by and among Aemetis Biogas LLC, Protair-X Technologies Inc.

and Third Eye Capital Corporation.

Fuel Ethanol Purchase and Sale Agreement, effective as of June 9, 2021, by and between Aemetis Advanced Fuel Keyes, Inc.

and Murex LLC.

June 14, 2021

Amendment No.

16 unchanged sentences

2 to Credit Agreement, effective as of August 1, 2023, by and among Goodland Advanced Fuels, Inc., Aemetis Carbon Capture, Inc., and Third Eye Capital Corporation, as agent for MBI/TEC Private Debt Opportunities Fund II, LP, and acknowledged and agreed by the guarantors listed on the signature page thereto.

Amendment and Waiver No.

6 to Credit Agreement, effective as of March 11, 2025, by and among Goodland Advanced Fuels, Inc., Aemetis Carbon Capture, Inc., and Third Eye Capital Corporation, as agent for MBI/TEC Private Debt Opportunities Fund II, LP, and acknowledged and agreed by the guarantors listed on the signature page thereto.

Promissory Note, dated March 11, 2025, issued by Goodland Advanced Fuels, Inc.

and Aemetis Carbon Capture, Inc.

to Third Eye Capital Corporation.

Construction and Term Loan Agreement, dated as of July 28, 2023, by and among Magnolia Bank Incorporated, Aemetis Biogas 2 LLC, and Aemetis Biogas Holdings LLC.

2 unchanged sentences

Code of Ethics

Insider Trading Policy

Subsidiaries of the Registrant

18 unchanged sentences

March 14, 2025

Chief Executive Officer

Chair of the Board and Chief Executive Officer

(Principal Executive Officer)

14 unchanged sentences

March 14, 2025

/s/ Naomi L Boness

March 14, 2025

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures