Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock is traded under the symbol "AMTX" on the NASDAQ Stock Market.
Number of Stockholders
As of March 1, 2025, our common stock was held by 160 holders of record and by approximately 26 thousand stockholders who hold shares in street name.
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Securities authorized for issuance under equity compensation plans
See Note 10 to the Consolidated Financial Statements contained in Item 8 of this Annual Report.
Sales of Unregistered Equity Securities
None that were not previously reported in our Quarterly Reports on Form 10-Q.
Stock Repurchases
None .
Item 6. [Reserved]
Not applicable.
Item 7. 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 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.
●
Key Performance Indicators. Discussion of our key performance indicators to provide context for company operations.
●
Results of Operations. An analysis of our financial results comparing the twelve months ended December 31, 2024 and 2023.
●
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 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 I, 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 operation, acquisition, development and commercialization of innovative low and negative carbon intensity products and technologies that replace traditional fossil fuel products. We operate in three reportable segments consisting of “California Ethanol,” “California Dairy Renewable Natural Gas,” and “India Biodiesel.” We have other operating segments determined not to be separately reportable that are collectively represented by the “All Other” category. Our mission is to generate sustainable and innovative renewable fuel solutions that benefit communities and restore our environment. We do this by building a local circular bioeconomy using agricultural products and waste to produce low carbon, advanced renewable fuels that reduce greenhouse gas (“GHG”) emissions and improve air quality by replacing traditional fossil fuel products. For revenue and other information regarding our operating segments, see Note 13 - Segment Information, of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.
Our California Ethanol segment consists of a 65 million gallon per year capacity ethanol production facility located in Keyes, California (the “Keyes Plant”) that we own and operate. In addition to low carbon renewable fuel ethanol, the Keyes Plant produces alcohol for beverage producers, Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), and Condensed Distillers Solubles (“CDS”). WDG, DCO, and CSS are sold as animal feed to more than 80 local dairies and feedlots. We also capture the Carbon Dioxide (“CO 2 ”) emissions from our fermenters and sell it to an industrial gas company to produce liquid CO₂ that it sells to food, beverage, and industrial customers. We are implementing several energy efficiency initiatives focused on lowering the carbon intensity of our fuels, primarily by decreasing the use of fossil natural gas. These energy efficiency projects include high efficiency heat exchangers; a two-megawatt solar microgrid with battery storage; an Allen Bradley Decision Control System (DCS) to manage and optimize energy use and other plant operations; and a Mechanical Vapor Recompression (MVR) system to produce steam using low carbon electricity instead of natural gas. These changes will lower the carbon intensity (CI) of the ethanol we produce and allow us to sell it for a correspondingly higher price.
Our California Dairy Renewable Natural Gas segment Aemetis Biogas LLC or “ABGL,” operates anaerobic digesters at local dairies near the Keyes Plant (many of whom also purchase WDG produced by the Keyes Plant as animal feed) to produce biogas from dairy waste, transports the biogas by pipeline to the Keyes Plant site, and converts the biogas to Renewable Natural Gas (“RNG”) that is delivered to customers through the regional natural gas pipeline. We currently have eleven operating digesters that receive dairy waste from twelve dairies, and we are actively growing with additional digesters under construction. We have constructed 36 miles of biogas collection pipeline and have received environmental approval to construct an additional 24 miles of pipeline. We currently have agreements with a total of 50 dairies and are seeking to sign additional agreements with dairies.
Our India Biodiesel segment includes a biodiesel production plant in Kakinada, India (“Kakinada Plant”) with a nameplate production capacity of about 80 million gallons per year. The plant produces high quality distilled biodiesel and refined glycerin for customers in India. We believe the Kakinada Plant is one of the highest capacity biodiesel production facilities in India. Kakinada Plant is capable of processing a variety of vegetable and animal oil waste feedstocks into biodiesel that meets applicable product standards. Our Kakinada Plant can also distill the crude glycerin byproduct from the biodiesel refining process into refined glycerin, which is sold to the pharmaceutical, personal care, paint, adhesive, and other industries.
Our "All Other" segment consists of our projects that are under development, including our planned Carbon Capture and Underground Sequestration (CCUS) operations and the planned sustainable aviation fuel and renewable diesel plant in Riverbank, California. It also includes our research and development facility in Minneapolis, Minnesota, operation of the Riverbank Industrial Complex, and our corporate offices in Cupertino, California.
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Our planned sustainable aviation fuel (SAF) and renewable diesel (RD) production plant is currently designed to produce 90 million gallons per year of RD or 78 million gallons per year of SAF from feedstocks consisting of renewable waste vegetable and animal oils. Our first facility is planned to be located at the Riverbank Industrial Complex in Riverbank, California. We signed a lease with an option to purchase for the Riverbank Industrial Complex in 2021 and took possession of the site in 2022. In 2023, we received a Use Permit and the California Environmental Quality Act ("CEQA") approval for the SAF/RD plant and in 2024 we received Authority to Construct air permits for the plant. We are continuing with development activities, including engineering, and financing. The site has access to low carbon hydroelectric power, and our plant is designed to use renewable hydrogen that will be produced from byproducts of the SAF/RD production process.
Our planned CCUS projects will compress and inject CO₂ into deep wells that are monitored to ensure the long-term sequestration of carbon underground. California’s Central Valley has been identified as one of the world’s most favorable regions for large-scale CO₂ injection projects due to the subsurface geologic formations that absorb and contain CO₂ gas. The two initial Aemetis CCUS injection projects are being designed to capture and sequester more than two million metric tons per year of CO₂ at the Aemetis biofuels plant sites in Keyes and Riverbank, California. In 2023, we obtained a permit to construct a geologic characterization well at the Riverbank site to obtain information to support an EPA Class VI CO₂ injection well permit application. Once operational, these projects will generate revenue by selling California LCFS credits and federal Internal Revenue Code Section 45Q tax credits.
Our Minneapolis, Minnesota research and development laboratory evaluates and develops technologies that would use low carbon intensity and waste feedstocks to produce low or below zero carbon intensity biofuels and biochemicals. We are focused on processes that extract sugar from cellulosic feedstocks and produce low carbon ethanol, renewable hydrogen, sustainable aviation fuel, and renewable diesel.
Key Performance Indicators (KPI):
Aemetis measures performance based on the utilization of our plants, production of products, and associated pricing and margins. For California ethanol, the key products are ethanol and WDG, measured in gallons sold and tons sold, respectively. For India Biodiesel, the products are biodiesel and refined glycerin, both measured in metric tons sold. Since our Keyes Plant currently uses corn as the sole feedstock, the delivered quantity and cost of corn is also a key performance indicator as it indicates high-level operating margin of the plant. Utilization is measured as the production of transportation fuel produced as a percentage of the nameplate capacity based on the engineering specification of the plant. For California RNG, the products are Renewable Natural Gas (RNG), D3 RINs, and LCFS credits. The RNG quantity measured by the heat content expressed in MMBtu, and quantity of D3 RINs and LCFS credits generated are based on the quantity of credits generated by the RNG that is dispensed for transportation use. Management uses these metrics to assess cash generated or used by each facility on a daily or weekly basis.
The following table summarizes our KPIs:
Production and Price Performance
(Unaudited)
Years ended December 31,
2024 vs 2023 %
2024
2023
Change
California Ethanol
Ethanol
Gallons Sold (in millions)
60.6
32.1
88.8
%
Average Sales Price/Gallon
$
1.96
$
2.44
-19.7
%
Percent of nameplate capacity
110
%
58
%
89.7
%
WDG
Tons Sold (in thousands)
410.6
225.3
82.2
%
Average Sales Price/Ton
$
88.21
$
97.43
-9.5
%
Delivered Cost of Corn
Bushels ground (in millions)
21.0
11.5
82.6
%
Average delivered cost / bushel
$
6.21
$
7.11
-12.7
%
California Dairy Renewable Natural Gas
Gas
Gas sold (in thousand MMBtu)
301.9
194.2
55.5
%
Average price per MMBtu
$
3.01
$
5.12
-41.3
%
RNG available for dispensing at year end (in thousand MMBtu)
24.6
68.0
-63.8
%
RINs
RINs sold (in thousands)
3,029.9
1,400.7
116.3
%
Average price per RIN
$
3.04
$
3.19
-4.7
%
LCFS
LCFS credits sold (in thousands)
51.5
-
100.0
%
Average price per LCFS credit
$
56.74
-
100.0
%
India Biodiesel
Biodiesel
Metric tons sold (in thousands)
74.2
60.5
22.6
%
Average Sales Price/Metric ton
$
1,168
$
1,232
-5.2
%
Percent of Nameplate Capacity
50
%
40
%
Refined Glycerin
Metric tons sold (in thousands)
6.5
4.2
54.8
%
Average Sales Price/Metric ton
$
645
$
640
0.8
%
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Results of Operations
Year Ended December 31, 2024, Compared to Year Ended December 31, 2023
Revenue
In our California Ethanol segment, we sell all ethanol, WDG, DCO, and CDS produced to J.D. Heiskell, which resells it to customers designated by us. Our finished ethanol tank is leased by J.D. Heiskell and legal title to the product is transferred when we put our ethanol product into the tank. We have designated Murex LLC to purchase all of the ethanol and A.L. Gilbert to purchase the WDG. Each company resells to third-party customers. We sell the CO 2 that we capture from our fermenters to an industrial gas company that produces commercial grade CO 2 for distribution.
Most of our California Dairy Renewable Natural Gas segment revenues during the year ended
December 31, 2024, were from sales of D3 RINs and LCFS credits generated from sales of our RNG for transportation use.
Substantially all of our India segment revenues during the years ended December 31, 2024 and 2023, were from sales of biodiesel to OMCs and refined glycerin to other external customers.
Fiscal Year Ended December 31 (in thousands)
2024 vs 2023
2024
2023
Inc/(dec)
% change
California Ethanol
$
161,756
$
104,068
$
57,688
55.4
%
California Dairy Renewable Natural Gas
13,037
5,455
7,582
139.0
%
India Biodiesel
92,847
77,194
15,653
20.3
%
Total
$
267,640
$
186,717
$
80,923
43
%
California Ethanol . For the year ended December 31, 2024, the segment generated 74% of revenue from sales of ethanol, 22% from sales of WDG, and 4% from sales of corn oil, CDS, CO₂, and other sales. During the year ended December 31, 2024, plant production average d 110% of the 55 million gallon per year na meplate capacity. Overall revenue increased by 55% primarily because the Keyes Plant operated for twelve months in 2024 compared to seven months in 2023, which resulted in an 89% increase ethanol production quantity and 82% increase in WDG production, offset by a 20% decrease in the average price of ethanol and a 9% decrease in the WDG sales price.
California Dairy Renewable Natural Gas. We continued to commission new digesters during 2023 and 2024 to increase our RNG production and associated revenue. During the years ended December 31, 2024 and 2023, produced and sold 301.9 thousand and 194.2 thousand MMBtu ("million British thermal units") of Renewable Natural Gas ("RNG") at an average price of $3.01 and $5.12 per MMBtu, respectively. In addition, we dispense RNG into transportation vehicles through a marketing partner, which allowed us to begin generating D3 RINs in 2023 as a new revenue stream that did not previously exist. During the year ended December 31, 2024 and 2023, we sold 3.0 million and 1.4 million D3 RINs at an average price of $3.04 and $3.19 per D3 RIN respectively. We also started generating LCFS credits in 2024 based on the default CI of -150 as our individual dairy CI pathways were waiting for approval from the California Air Resources Board ("CARB"). We generated and sold 51.5 thousand LCFS credits at an average price of $56.74 each.
India Biodiesel. For the year ended December 31, 2024, the India Biodiesel segment generated 93% of revenue from sales of biodiesel, and 7% from other sales, compared to 97% of sales from biodiesel and 3% from other sales during the year ended December 31, 2023. The increase in revenues for the year ended December 31, 2024, compared to the year ended December 31, 2023, was due to an increase in the sales volume of biodiesel of 13.7 thousand metric tons from 60.4 thousand metric tons to 74.2 thousand metric tons, offset by a decrease in the average biodiesel price per metric ton to $1,168 from $1,232 per metric ton during the same period in 2023. The increase in revenues was primarily attributable to the Kakinada Plant obtaining and executing on the India government-sponsored OMC tenders and sales contracts.
Cost of Goods Sold
Cost of goods sold consists primarily of feedstock, energy, chemicals, direct costs (principally labor and labor related costs) and overhead. Depending on the costs of these inputs in comparison to the sales price of our end products, our gross margins at any given time can vary from positive to negative. Overhead includes direct and indirect costs associated with plant operations, including the cost of repairs and maintenance, consumables, maintenance, on-site security, insurance, and depreciation.
Our feedstock for California Ethanol is provided by J.D. Heiskell. Title to the corn passes to us when the corn is deposited into our weigh bin and enters the production process. Our cost of feedstock is established by J.D Heiskell based on Iowa Group 3 pricing and includes rail transportation, local basis costs, and a handling fee paid to J.D. Heiskell. The credit term for the corn purchased from J.D. Heiskell is one day, netted from our product sales. Cost of goods sold also includes the cost of electricity and natural gas, chemicals, maintenance, direct labor, depreciation, and freight.
The feedstock for producing Renewable Natural Gas is supplied by dairy operators who lease us land and supply our digesters with their manure in liquid form. Our cost of feedstock is established by manure supply agreements based on the value of the environmental attributes and the number of cows at each dairy.
We procure several different feedstocks for the Kakinada Plant, including stearin, a non-edible feedstock, from neighboring natural oil processing plants. Raw material is received by truck and title passes when the goods are loaded at our vendors’ facilities. Credit terms vary by vendor. However, we generally receive 15 days of credit on the purchases. We purchased crude glycerin in the international market on letters of credit or advance payment terms.
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The following table shows Cost of Goods Sold:
Fiscal Year Ended December 31 (in thousands)
2024 vs 2023
2024
2023
Inc/(dec)
% change
California Ethanol
$
175,548
$
110,670
$
64,878
58.6
%
California Dairy Renewable Natural Gas
7,642
5,786
1,856
32.1
%
India Biodiesel
85,030
68,244
16,786
24.6
%
Total
$
268,220
$
184,700
$
83,520
45
%
California Ethanol. We ground 21.0 million bushels of corn at an average price of $6.21 per bushel during the year ended December 31, 2024, compared to 11.5 million bushels of corn at an average price of $7.11 per bushel during the year ended December 31, 2023. The increase in cost of goods sold for the year ended December 31, 2024, is mainly due to the increase corn ground by 83%, partially offset by a decrease in the average price of corn by 13%.
California Dairy Renewable Natural Gas . Cost of Goods Sold expenses relate to dairy manure payments, maintenance, and depreciation.
India Biodiesel . The increase in cost of goods sold during the year ended December 31, 2024, compared to December 31, 2023, was attributable to an increase in the volume of biodiesel feedstock by 23% to 74.6 thousand metric tons during the year ended December 31, 2024, compared to 60.5 thousand metric tons during th e year ended December 31, 2023, while the average price of biodiesel stayed the same in both periods.
Gross Profit (loss)
Fiscal Year Ended December 31 (in thousands)
2024 vs 2023
2024
2023
Inc/(dec)
% change
California Ethanol
$
(13,792
)
$
(6,602
)
$
(7,190
)
-109
%
California Dairy Renewable Natural Gas
5,395
(331
)
5,726
1730
%
India Biodiesel
7,817
8,950
(1,133
)
-13
%
Total
$
(580
)
$
2,017
$
(2,597
)
-129
%
California Ethanol. Gross loss increased by 108.9% in the year ended December 31, 2024, primarily due to lower ethanol and WDG prices, higher overall corn costs due to the increase production, and increased costs of natural gas, chemicals, and transportation compared to the same period ending December 31, 2023.
California Dairy Renewable Natural Ga s. Gross profit increased due as we continued to ramp up our Dairy Renewable Natural Gas business by operating more dairies and by beginning to sell D3 RINs in mid-2023 and LCFS credits in 2024.
India Biodiesel. The consistency of the gross profit from 2023 to 2024 reflects continued sales to government Oil Marketing Companies pursuant to the OMC pricing formula.
Operating (income)/expense and non-operating (income)/expense
SG&A expenses consist primarily of salaries and related expenses for employees, marketing expenses related to sales of ethanol and WDG in California Ethanol and biodiesel and other products in India Biodiesel, as well as professional fees, insurance, other corporate expenses, and related facilities expenses. SG&A expenses as a percentage of revenue were 15% in the year ended December 31, 2024, compared to 21% in the year ended December 31, 2023. The decrease in SG&A percentage was due to higher revenues during the year ended December 31, 2024. The slight increase in SG&A expenses in the year ended December 31, 2024, was primarily due to a $3.6 million loss on an asset write-off during 2024 offset by a $1.7 million decrease in taxes, insurance, rent, and utilities, and a $1.5 million decrease in depreciation.
2024 vs 2023
2024
2023
Inc/(dec)
% change
Selling, general and administrative expenses
$
39,836
$
39,418
$
418
1
%
Other expense (income):
Interest expense
Interest rate expense
40,158
32,995
$
7,163
22
%
Debt related fees and amortization expense
6,463
6,524
(61
)
-1
%
Accretion and other expenses of Series A preferred units
12,698
25,313
(12,615
)
-50
%
Other income
(1,366
)
(2,077
)
711
-34
%
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Other income consists primarily of interest and amortization expense attributable to our debt and to accretion of biogas Series A preferred units. The cost of debt includes issuance of warrants as renewal fees. The fair value of stock and warrants are amortized as expenses, except when the extinguishment accounting method is applied, in which case refinanced debt costs are recorded as extinguishment expense. Interest expense and debt related fees and amortization increased in the year ended
December 31, 2024, due to higher variable interest rates, higher debt balances from draws on the Fuels Revolving line, and obtaining a new construction loan for additional biogas digesters. The decrease in accretion and other expenses of the Series A Preferred Units was due to amendments obtained at lower interest costs and a $30.0 million payment on the Series A preferred units in 2023.
Liquidity and Capital Resources
Cash and Cash Equivalents
Cash and cash equivalents were $0.9 million at December 31, 2024, of which $0.8 million was held in our North American entities and $0.1 million was held in our India entity. Our current ratio was 0.31 and 0.43, respectively, at December 31, 2024 and 2023. We expect that our future available liquidity resources will consist primarily of cash generated from operations, funds raised through sales of equity, and new debt. Incurrence of new debt and the associated use of proceeds from future 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
December 31, 2024
December 31, 2023
Cash and cash equivalents
$
898
$
2,667
Current assets (including cash, cash equivalents, and deposits)
44,696
36,400
Current and long term liabilities (excluding all debt)
185,169
165,662
Current & long term debt
338,061
294,721
Our principal sources of liquidity have been cash provided by the sale of equity, operations, and borrowings under various debt arrangements.
We operate in a volatile market in which we have limited control over major components of input costs and product revenues and are making investments in future facilities and facility upgrades that improve overall margins while lessening the impact of 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, natural gas, LCFS credits, and D3 RINs. To the extent that we experience periods in which the spread between ethanol prices and corn and energy costs narrow or the spread between biodiesel prices and waste fats and oils or palm oil and energy costs narrows, we require additional working capital to fund operations.
As a result of negative capital and negative operating results and collateralization of substantially all of the Company assets, we have been reliant in the past on our senior secured lender to provide additional funding and have been required to remit substantially all excess cash from tax credit sales to our senior lender. In order to meet obligations during the next twelve months, we will need to receive the continued cooperation of our senior lender. We plan 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 its financial performance by adopting new technologies or process changes that increase energy efficiency, reduce costs, and enhance revenue, as well as execute on awarded grants that improve energy and operational efficiencies resulting in lower cost, lower carbon intensity, and overall margin improvement.
For our dairy RNG production, we plan to continue to operate our existing digesters, build new dairy digesters, and extend the existing pipeline. Funding for construction has been based on government guaranteed debt financing and grant programs. We are seeking multiple sources of additional project funding to allow us to accelerate construction of new digesters. We began generating revenue from D3 RIN sales in 2023 and began generating revenue from the sale of LCFS credits in January 2024. We will have a full year of revenue from both sources in 2025, which will provide significant increased liquidity. Starting January 1, 2025, our RNG production qualifies for federal tax credits under Internal Revenue Code Section 45Z, and we anticipate monetizing these credits by selling them to third parties, contingent on the IRS finalizing applicable guidance for valuing the credits.
For the Riverbank SAF/RD production plan, we are continuing with engineering and other development activities while seeking both debt and equity funds needed for development and construction.
For the Kakinada Plant, we plan to continue to enter into cost-plus contracts with the OMCs as our primary customer. We also plan to continue to upgrade our plant to increase capacity and expand feedstock flexibility. The Kakinada plant has had positive gross income during the last two years and we expect this to continue. We also rely on our working capital lines feedstock suppliers to fund the acquisitions of feedstock.
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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 equity through the ATM, selling the current EB-5 Phase II offering, or by vendor financing arrangements.
As of December 31, 2024 , the outstanding balance of principal, interest and fees, net of discounts, on all Third Eye Capital Notes equaled $215.6 million. The maturity dates for the Third Eye Capital financing arrangements are as follows:
● Due on demand: $41.3 million
● January 15, 2025: $2 million
● March 1, 2026: $26.3 million
● April 1, 2026: $146.0 million
Our senior lender has provided a series of accommodating amendments to our debt facilities as described in further detail in Note 5. Debt of the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K. However, future amendments or accommodations will continue to be at the discretion of the lender. In the event our senior lender does not extend our debt, we would likely not have sufficient cash to pay the debt when due unless we are able to obtain alternative financing.
Change in Working Capital and Cash Flows
The following table describes changes in current and long-term debt (in thousands) during the year ended December 31, 2024:
Increases to debt:
Accrued interest
$
40,712
Maturity date extension fee and other fees
1,649
Subordinated debt extension fees
680
Fuels Revolving line draw
3,848
Construction loan draw
7,146
Secured loans and working capital loan draw
5,654
Change in debt issuance costs, net of amortization
2,260
EB-5 broker promissory note
3,305
TEC short term promissory note
1,950
Jessup land acquisition notes
840
Total Increases to debt
$
68,044
Decreases to debt:
Principal, fees, and interest payments to senior lender
$
(5,209
)
Principal and interest payments and reductions to EB-5 promissory note
(3,942
)
Principal paid to EB-5 broker
(710
)
Term loan payments
(9
)
Construction term loan payments
(4,118
)
Secured loans and working capital loans payments
(4,894
)
Extinguishment of equipment finance agreement
(5,818
)
Interest payments on Jessup land acquisition notes
(4
)
Total Decreases to debt
$
(24,704
)
Change in total debt
$
43,340
Working capital changes reflect (i) a $6.8 million increase in inventories consisting mostly of raw material procurement and production of biodiesel in India and a $0.4 million increase in the California ethanol segment, (ii) a $5.7 million decrease in accounts receivable primarily in India as more cash was collected in 2024 and a $1.2 million decrease in the California Ethanol segment, (iii) a $1.3 million decrease in prepaid expenses in the California Ethanol segment, (iv) $12.3 million receivable from tax credit sales, (v) a $0.5 million decrease in other current assets in each Biodiesel and North America segments (vi) a $1.8 million decrease in cash caused by our North America segments operational and capital expenditure activities.
Cash used by operating activities was $32.9 million, derived from a net loss of $87.5 million, non-cash changes of $39.4 million, and changes in operating assets and liabilities of $15.2 million. The non-cash changes consisted of: (i) $6.5 million in amortization of debt issuance costs and other intangible assets, (ii) $8.3 million in depreciation expenses, (iii) $8.3 million in stock-based compensation expense, (iv) $12.7 million in preferred unit accretion and other expenses of Series A preferred units, (v) $3.7 million loss on asset disposals, and (vi) $0.2 million in gain on debt extinguishment. Net changes in operating assets and liabilities consisted primarily of an increase in (i) inventories of $7.8 million, (ii) tax credit receivable of $12.3 million, (iii) other assets of $2.8 million, (iv) an increase in other liabilities of $3.2 million, (v) and an increase in accrued interest and fees of $27.9 million. This was partially offset by (i) a decrease in prepaid expenses of $1.5 million, (ii) a decrease in accounts payable of $1.3 million, and (iii) a decrease in accounts receivable of $6.8 million.
Cash used by investing activities was $14.1 million, of which $1.4 million was used for capital projects in the Keyes Plant, $15.4 million was used for capital projects associated with production of Renewable Natural Gas, $1.5 million for capital projects at the India Plant, and $2.0 million related to all other capital projects. This was partially offset by grant proceeds of $6.1 million.
Cash provided by financing activities was $44.6 million, consisting primarily of $19.5 million proceeds from borrowings, $36 thousand from stock option exercises, and $31.8 million from issuance of common stock, offset by repayments of borrowings of $5.0 million, debt renewal and waiver fee payments of $1.4 million, and payments on finance leases of $0.2 million.
In October 2020, we commenced an at-the-market stock sales program, which allows us to sell and issue shares of our common stock into the publicly traded markets. During the year ended December 31, 2024, we issued 9.9 million shares of common stock under the at-the-market offering for net proceeds of $31.8 million net of commissions and offering related expenses.
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Off-Balance Sheet Arrangements
We had no outstanding off-balance sheet arrangements as of December 31, 2024.
Critical Accounting Estimates
Our discussion and analysis of financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. 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 our most significant accounting estimate, defined as the estimate that we believe is the most important to the portrayal of our financial condition and results of operations and that requires 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 is liquidity, which considers debt covenant projections and our ability to secure financing to complete our projects in progress such as Biogas digesters and increase in pipeline, sustainable aviation fuel and carbon sequestration.
Liquidity
Our assessment of liquidity requires management to use significant judgment in developing estimates and gather assumptions about cash needed to pay for all current liabilities over the next twelve months. Management estimates may include projected operational revenues and expenses, credit availability, credit sales, and grant income. Projected revenue and expenses are estimated based on knowledge of our businesses, including various industry indexes, industry trends, political shifts, and past performance.
Debt covenant forecast
Each period we assess our compliance with our senior lender's debt covenants for the given period by projecting debt and accrued interest balances for the following twelve months. For compliance with senior lender debt covenants, we rely on market value appraisals for which fair value is determined through various valuation techniques including discounted cash flow models, comparable market sales and estimated replacement costs, often with a final value that reconciles one or more of these techniques. We also use significant judgment to determine whether future operation profits and transactions will be available to use towards debt payments; whether we will have the ability to generate and sell credits to third parties; and whether we will receive anticipated grant income in a timing which will support debt payments.
Recoverability of Our Long-Lived Assets
Our long-lived assets consist of property, plant and equipment. We review long-lived asset groups for impairment triggers annually and whenever events or changes in circumstances indicate that the carrying amount of long-lived asset groups may not be recoverable. If we identify any event or circumstance which triggers an impairment assessment, we measure recoverability of assets to be held and used by comparing the carrying amount of an asset group to the estimated undiscounted future cash flows generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, we assess if the situation is more than temporary, and in the event the future cash flows are more than temporary we would record an impairment charge in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.
Assessing each long-lived asset group for impairment triggers requires us to make estimates regarding amount and timing of projected cash flows to be generated by each segment over an extended period of time. Management judgment used to identify impairment triggers is based on numerous potential factors including, but not limited to, a decrease in the market price, an adverse change in the extent or manner in which the asset is used or in its physical condition, an adverse change in legal or business climate, excess of accumulated costs over initial expectations, significant decline in actual or expected operating results, or the expectation that the asset group will be sold or otherwise disposed prior to its previously expected life. Significant management judgment is required in determining the fair value appraisals of each segment, including projections of operational future cash flows, discounted cash flow models, comparable market sales and estimated replacement costs, often with a final value that reconciles one or more of these techniques. Significant declines in estimates of fair value trigger an undiscounted future cash flow calculation to determine the extent to which a write-down of an asset may be required.
Long-term assets are analyzed at the lowest level where the asset groups are expected to generate cash flow. We consider the lowest level asset group as one where the value of the asset becomes independent from the other assets and has the ability to operate on an independent basis, and results in a functional unit. We therefore group entities into the following functional reporting units: the California ethanol segment, India biodiesel segment, California Renewable Natural Gas segment, California Sustainable Aviation Fuel plant under development, Goodland Energy Center LLC which consists of a partially completed dry-mill held for future use, and the Carbon Capture and Underground Sequestration asset group under development. For the years ended December 31, 2024 and 2023, no asset groups showed indicators of impairment, therefore no impairment test was performed for our Company’s long-lived assets.
Recently Issued Accounting Pronouncements
Refer to Note 1 of the Financial Statements for a description of new accounting pronouncements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
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