AEMETIS, INC 10-K

Item 8. Financial Statements and Supplementary Data. AEMETIS, INC. Index to Consolidated Financial Statements Page Number Report of Independent Registered Public Accounting Firm (PCAOB ID 49 ) 29 Consolidated Financial Statements Consolidated Balance Sheets 31 Consolidated Statements of Operations and Comprehensive Loss 32 Consolidated Statements of Cash Flows 33 Consolidated Statements of Stockholders' Deficit 34 Notes to Consolidated Financial Statements 35 28 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Aemetis, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Aemetis, Inc. and its subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders' deficit and cash flows for each of the two years in the period ended December 31, 2024, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Our report dated March 14, 2025, expressed an opinion that the Company had not maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Substantial Doubt about the Company ’ s Ability to Continue as a Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 18 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters also are described in Note 18. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate. Liquidity and Management ’ s Plan As disclosed in Note 18 of the consolidated financial statements, the Company has been reliant on their senior secured lender for liquidity and has been required to remit substantially all excess cash from operations to the senior secured lender. Management believes, due to the need to secure additional financing, there is substantial doubt about their ability to continue as a going concern through the next twelve months from the date of issuance of these consolidated financial statements. While the Company believes they will be able to implement plans to improve liquidity, there are inherent risks and uncertainties regarding their ability to execute their plans. We determined the adequacy of the Company’s financing sources and the Company's overall cash flow projections to be a critical audit matter because management’s plan includes certain significant assumptions related to the Company's cash flow needs. Auditing management’s assumptions related to the Company's cash flow needs involved a high degree of auditor judgment and increased audit efforts. Our audit procedures related to the Company’s financing sources and overall cash flow projections included the following, among others: ● We evaluated the reasonableness of forecasted cash needs, for at least one year from the financial statement issuance date, by comparing to historical operating results as well as external forecasted market data for both ethanol and corn. ● We evaluated the reasonableness of management’s estimated reduction in current liabilities from the Company’s cash needs for a period of greater than a year from the financial statement issuance date by evaluating subordination agreements that are in place and the ability for the company to defer interest payments on various debt agreements. ● We evaluated management’s forecasted cash needs, for at least one year from the financial statement issuance date, in the context of other audit evidence obtained, including, but not limited to, board of director minutes and investor presentation to determine whether the other audit evidence supported or contradicted the forecast. ● We tested the subsequent event activity related to additional cash available or needs to additional funding of working capital. ● We tested the Company’s ability to maintain compliance with covenants, for at least one year from the financial statement issuance date, under the existing loan agreements. /s/ RSM US LLP We have served as the Company's auditor since 2012. Des Moines, Iowa March 14, 2025 29 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Aemetis, Inc. Opinion on the Internal Control Over Financial Reporting We have audited Aemetis, Inc. and its subsidiaries' (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, because of the effect of the material weaknesses described below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ deficit and cash flows for the years then ended, and the related notes to the consolidated financial statements of the Company and our report dated March 14, 2025 expressed an unqualified opinion. 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. The following material weaknesses have been identified and included in management's assessment. ● There were ineffective information 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 also ineffective. ● There were ineffective controls at the Company’s India Biodiesel segment due to the lack of sufficient evidence available to verify the performance of controls. As a result of the deficiency, controls were not effective related to the account balances and transactions of the Company’s India Biodiesel segment. These material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of the 2024 financial statements, and this report does not affect our report dated March 14, 2025 on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company's internal control over financial reporting is a process designed 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. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ RSM US LLP Des Moines, Iowa March 14, 2025 30 Table of Contents AEMETIS, INC. CONSOLIDATED BALANCE SHEETS AS OF December 31, 2024 and 2023 (In thousands except for par value) December 31, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents ($ 0 and $ 1,093 respectively from VIE) $ 898 $ 2,667 Accounts receivable ($ 57 and $ 55 respectively from VIE) 1,805 8,633 Inventories net of allowance for excess and obsolete inventory of $ 1,040 as of December 31, 2023 ($ 157 and $ 0 respectively from VIE) 25,442 18,291 Prepaid expenses ($ 85 and $ 1,438 respectively from VIE) 1,842 3,347 Tax credit sale receivable ($ 8,125 and $ 0 respectively from VIE) 12,300 - Other current assets ($ 2 and $ 289 respectively from VIE) 2,409 3,462 Total current assets 44,696 36,400 Property, plant and equipment, net ($ 97,363 and $ 81,966 respectively from VIE) 199,392 195,108 Operating lease right-of-use ($ 648 and $ 145 respectively from VIE) 2,237 2,056 Other assets ($ 6,057 and $ 4,881 respectively from VIE) 12,977 9,842 Total assets $ 259,302 $ 243,406 Liabilities and stockholders' deficit Current liabilities: Accounts payable ($ 5,917 and $ 3,815 respectively from VIE) $ 33,139 $ 32,132 Current portion of long term debt ($ 1,004 and $ 190 respectively from VIE) 63,745 13,585 Short term borrowings ($ 290 and $ 9 respectively from VIE) 26,789 23,443 Other current liabilities ($ 1,920 and $ 48 respectively from VIE) 20,295 15,229 Total current liabilities 143,968 84,389 Long term liabilities: Senior secured notes and revolving notes 169,826 176,476 EB-5 notes 21,500 29,500 Other long term debt ($ 47,803 and $ 40,857 respectively from VIE) 56,201 51,717 Series A preferred units ($ 126,593 and $ 113,189 respectively from VIE) 126,593 113,189 Other long term liabilities ($ 475 and $ 67 respectively from VIE) 5,142 5,112 Total long term liabilities 379,262 375,994 Stockholders' deficit: Common stock, $ 0.001 par value; 80,000 authorized; 51,139 and 40,966 shares issued and outstanding each period, respectively 51 41 Additional paid-in capital 305,329 264,058 Accumulated deficit ( 562,942 ) ( 475,405 ) Accumulated other comprehensive loss ( 6,366 ) ( 5,671 ) Total stockholders' deficit ( 263,928 ) ( 216,977 ) Total liabilities and stockholders' deficit $ 259,302 $ 243,406 The accompanying notes are an integral part of the financial statements. 31 Table of Contents AEMETIS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE YEARS ENDED December 31, 2024 and 2023 (In thousands, except for earnings per share) Years ended December 31, 2024 2023 Revenues $ 267,640 $ 186,717 Cost of goods sold 268,220 184,700 Gross (loss) profit ( 580 ) 2,017 Selling, general and administrative expenses 39,836 39,418 Operating loss ( 40,416 ) ( 37,401 ) Other expense (income): Interest expense Interest rate expense 40,158 32,995 Debt related fees and amortization expense 6,463 6,524 Accretion and other expenses of Series A preferred units 12,698 25,313 Other income ( 1,366 ) ( 2,077 ) Loss before income taxes ( 98,369 ) ( 100,156 ) Income tax benefit ( 10,832 ) ( 53,736 ) Net loss $ ( 87,537 ) $ ( 46,420 ) Other comprehensive loss Foreign currency translation loss ( 695 ) ( 219 ) Comprehensive loss $ ( 88,232 ) $ ( 46,639 ) Net loss per common share Basic $ ( 1.91 ) $ ( 1.22 ) Diluted $ ( 1.91 ) $ ( 1.22 ) Weighted average shares outstanding Basic 45,902 38,061 Diluted 45,902 38,061 The accompanying notes are an integral part of the financial statements. 32 Table of Contents AEMETIS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED December 31, 2024 and 2023 (In thousands) Years ended December 31, 2024 2023 Operating activities: Net loss $ ( 87,537 ) $ ( 46,420 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Share-based compensation 8,314 7,660 Depreciation 8,341 6,933 Debt related fees and amortization expense 6,463 6,524 Intangibles and other amortization expense 46 72 Accretion and other expenses of Series A preferred units 12,698 25,313 Loss on asset disposals 3,702 - Warrants issued for working capital agreement - 409 Gain on debt extinguishment ( 162 ) - Deferred tax (benefit) expense - ( 750 ) Changes in operating assets and liabilities: Accounts receivable 6,754 ( 7,422 ) Inventories ( 7,766 ) ( 13,843 ) Prepaid expenses 1,533 1,838 Tax credit sale receivable ( 12,300 ) - Other assets ( 2,839 ) ( 2,016 ) Accounts payable ( 1,294 ) 13,726 Accrued interest expense and fees, net of interest paid 27,910 23,558 Other liabilities 3,208 ( 1,757 ) Net cash provided by (used in) operating activities ( 32,929 ) 13,825 Investing activities: Capital expenditures ( 20,254 ) ( 33,119 ) Grant proceeds received for capital expenditures 6,105 9,432 Net cash used in investing activities ( 14,149 ) ( 23,687 ) Financing activities: Proceeds from borrowings 19,461 75,482 Repayments of borrowings ( 5,010 ) ( 56,130 ) Lender debt renewal and waiver fee payments ( 1,441 ) ( 1,681 ) Payments on Series A preferred financing - ( 30,000 ) Payments on finance leases ( 179 ) ( 428 ) Proceeds from sale of common stock 31,750 21,718 Proceeds from the exercise of stock options 36 133 Net cash provided by financing activities 44,617 9,094 Effect of exchange rate changes on cash and cash equivalents and restricted cash 12 49 Net change in cash and cash equivalents and restricted cash for period ( 2,449 ) ( 719 ) Cash, cash equivalents, and restricted cash at beginning of period 6,280 6,999 Cash, cash equivalents, and restricted cash at end of period 3,831 6,280 Supplemental disclosures of cash flow information, cash paid: Cash paid for interest $ 9,223 $ 9,813 Income taxes paid 1,814 20 Supplemental disclosures of cash flow information, non-cash transactions: Settlement of AP via issuance of RSAs 265 - Subordinated debt extension fees added to debt 680 680 Fair value of warrants issued to subordinated debt holders 916 1,278 Fair value of warrants issued to lender for debt issuance costs - 318 Lender debt extension, waiver, and other fees added to debt 695 - Cumulative capital expenditures in accounts payable 11,152 7,900 The accompanying notes are an integral part of the financial statements. 33 Table of Contents AEMETIS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ DEFICIT FOR THE YEARS ENDED December 31, 2024 and 2023 (In thousands) Series B Preferred Stock Common Stock Additional Paid-in Accumulated Accumulated Other Comprehensive Shares Dollars Shares Dollars Capital Deficit Loss Total Balance at December 31, 2022 1,270 $ 1 35,869 $ 36 $ 232,546 $ ( 428,985 ) $ ( 5,452 ) $ ( 201,854 ) Issuance of common stock - - 4,499 4 21,714 - - 21,718 Series B conversion to common stock ( 1,270 ) ( 1 ) 127 1 - - - - Stock options exercised - - 183 - 133 - - 133 Stock-based compensation - - - - 7,660 - - 7,660 Issuance and exercise of warrants - - 288 - 2,005 - - 2,005 Foreign currency translation loss - - - - - - ( 219 ) ( 219 ) Net loss - - - - - ( 46,420 ) - ( 46,420 ) Balance at December 31, 2023 - - 40,966 41 264,058 ( 475,405 ) ( 5,671 ) ( 216,977 ) Issuance of common stock - - 9,933 10 32,005 - - 32,015 Stock options exercised - - 14 - 36 - - 36 Stock-based compensation - - - - 8,314 - - 8,314 Issuance and exercise of warrants - - 226 - 916 - - 916 Foreign currency translation loss - - - - - - ( 695 ) ( 695 ) Net loss - - - - - ( 87,537 ) - ( 87,537 ) Balance at December 31, 2024 - $ - 51,139 $ 51 305,329 $ ( 562,942 ) $ ( 6,366 ) $ ( 263,928 ) The accompanying notes are an integral part of the financial statements. 34 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) 1. Nature of Activities and Summary of Significant Accounting Policies Nature of Activities . These consolidated financial statements include the accounts of Aemetis, Inc. (formerly AE Biofuels, Inc.), a Delaware corporation, and its subsidiaries (collectively, “Aemetis” or the “Company”): ● Aemetis Americas, Inc., a Nevada corporation, and its subsidiary AE Biofuels, Inc., a Delaware corporation; ● Aemetis International, Inc., a Nevada corporation, and its subsidiary International Biofuels Ltd, a Mauritius corporation, and its subsidiary Universal Biofuels Private Limited, an India company; ● Aemetis Technologies, Inc., a Delaware corporation; ● Aemetis Biofuels, Inc., a Delaware corporation, and its subsidiary Energy Enzymes, Inc., a Delaware corporation; ● AE Advanced Fuels, Inc., a Delaware corporation, and its subsidiaries Aemetis Advanced Fuels Keyes, Inc., a Delaware corporation, Aemetis Facility Keyes, Inc., a Delaware corporation, and Aemetis Property Keyes, Inc., a Delaware corporation; ● Aemetis Advanced Fuels, Inc., a Nevada corporation; ● Aemetis Advanced Products Keyes, Inc., a Delaware corporation, and its subsidiaries Aemetis Properties Riverbank, Inc., a Delaware corporation, Aemetis Health Products, Inc., a Delaware corporation; and Aemetis Riverbank, Inc., a Delaware corporation, and its direct and indirect subsidiaries Aemetis Advanced Products Riverbank, Inc., a Delaware corporation, Energy Efficiency Holdings LLC, a Delaware limited liability company, and MVR Services LLC, a California limited liability company; ● Aemetis Advanced Biorefinery Keyes, Inc., a Delaware corporation; ● Aemetis Carbon Capture, Inc. a Nevada corporation; its subsidiary Caprock Project Holdings, Inc., a Delaware corporation, and its subsidiary Riverbank Well 1, Inc., a California corporation; ● Aemetis Biogas LLC, a Delaware limited liability company and its subsidiaries Aemetis Biogas Services LLC, a Delaware limited liability company, Aemetis RNG Fuels 1 LLC, a California limited liability company, and Aemetis Biogas Holdings LLC, a Delaware limited liability company, and its subsidiaries Aemetis Biogas 1 LLC, a Delaware limited liability company, Aemetis Biogas 2 LLC, a Delaware limited liability company, Aemetis Biogas 3 LLC, a Delaware limited liability company, Aemetis Biogas 4 LLC, a Delaware limited liability company, Aemetis Biogas 5 LLC, a Delaware limited liability company, Aemetis Biogas 6 LLC, a Delaware limited liability company, Aemetis Biogas 7 LLC, a Delaware limited liability company, and Aemetis Biogas 8 LLC, a Delaware limited liability company; ● Goodland Advanced Fuels, Inc., a Delaware corporation. Founded in 2006 and headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis referred to herein as “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas and renewable fuels company focused on the operation, acquisition, development, and commercialization of innovative technologies to produce low and negative carbon intensity renewable fuels that replace fossil-based products. We do this by building a local circular bioeconomy using agricultural products and waste to produce low carbon, advanced renewable fuels that reduce greenhouse gas ("GHG") emissions and improve air quality. Our current operations include: ► California Ethanol - We own and operate a 65 million gallon per year capacity ethanol production facility in Keyes, California (the “Keyes Plant”). In addition to low carbon renewable fuel ethanol, the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), and Condensed Distillers Solubles (“CDS”), all of which are sold as animal feed to local dairies and feedlots. The Keyes Plant also produces and sells CO₂ to Messer Gas who converts it to liquid and sells it to food, beverage, and industrial customers. We are implementing several energy efficiency initiatives at the Keyes Plant focused on reducing operating costs and lowering the carbon intensity of our fuel by reducing fossil fuel inputs. ► California Dairy Renewable Natural Gas - We produce Renewable Natural Gas (RNG) in central California. Our facilities include eleven anaerobic digesters that produce biogas from dairy waste, a 36 -mile biogas collection pipeline leading to a central upgrading hub, and a utility interconnection to inject the RNG into the natural gas pipeline for delivery to customers for use as transportation fuel. We are actively expanding our RNG production dairies, with five additional digesters under construction, agreements with a total of 50 dairies, and environmental review completed for an additional 24 miles of pipeline. We are also building our own RNG dispensing station, which is planned to begin operating in 2025. ► India Biodiesel - We own and operate a plant in Kakinada, India ("Kakinada Plant" or "India Plant") with a capacity to produce 80 million gallons per year of high-quality distilled biodiesel from a variety of vegetable oil and animal waste feedstocks. The Kakinada plant is one of the largest biodiesel production facilities in India. 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. In addition, we are actively growing our business by seeking to develop or acquire new facilities, including the following key projects: ► Sustainable Aviation Fuel and Renewable Diesel – We are developing a sustainable aviation fuel and renewable diesel (“SAF/RD”) production plant to be located at the Riverbank Industrial Complex in Riverbank, CA. The plant is currently designed to produce an expected 90 million gallons per year of SAF/RD from renewable oil and fats obtained from the Company’s biofuels plants and other sources. The plant will use low-carbon hydroelectric electricity and renewable hydrogen that is generated within the plant’s own processes using byproducts of the SAF/RD production. In 2023, we received approval of the Use Permit and the California Environmental Quality Act ("CEQA") for the development of the plant, and in March 2024, we received the Authority to Construct air permits for the plant. We are continuing with the engineering and other required development activities for the plant. 35 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) ► Carbon Capture and Underground Sequestration – We are developing Carbon Capture and Underground Sequestration (“CCUS”) facilities that will inject carbon dioxide captured from our biofuel production facilities and other sources deep into the ground for geologic storage to reduce emissions to the atmosphere of greenhouse gases that contribute to global warming. In May 2023, we received a permit from the State of California to build a geologic characterization well that will provide information for the permitting and design of a CCUS well located in Riverbank, California. We drilled the first phase of the characterization well in September 2024, and plan to complete the drilling in 2025 while at the same time continuing engineering, permitting and other development activities for the sequestration well. The Company’s current and planned businesses produce renewable fuels and reduce carbon emissions, while generating valuable Renewable Fuel Standard credits, California Low Carbon Fuel Standard credits, and federal tax credits. Basis of Presentation and Consolidation. These consolidated financial statements include the accounts of Aemetis, Inc. and its subsidiaries. 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. 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 and 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 California Ethanol segment, renewable natural gas and D3 RIN and LCFS credits for the California Dairy Renewable Natural Gas segment, and biodiesel in the India Biodiesel segment. We assess the following criteria under the ASC 606 guidance: (i) identify the contracts with customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when the entity satisfies the performance obligations. 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 at the Keyes plant from January to May 2023, costs otherwise charged to cost of goods sold are reclassified to selling, general and administrative expense. Shipping and Handling Costs . When incurred, shipping and handling costs are classified as a component of cost of goods sold in the accompanying consolidated statements of operations. Accounts Receivable. The California Ethanol segment sells all of its products to J.D. Heiskell under the J.D. Heiskell Purchasing Agreement. The Renewable Natural Gas segment sells all of its products to various customers and may require advance payment based on the size and creditworthiness of the customer. The India Biodiesel segment 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. Accounts receivable mostly consist of product sales made to large creditworthy customers, most with various payment terms from 0 - 30 days. Trade accounts receivable are presented at original invoice amount, net of any allowance for credit losses. The Company maintains an allowance for credit losses for balances that appear to have specific collection issues and estimates an allowance for expected credit losses. 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 credit loss is recorded for the balance in question. Delinquent accounts receivables are charged against the allowance for credit losses 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. As of December 31, 2024, the allowance for credit losses was $ 36 thousand. Inventories . Finished goods, raw materials, and work-in-process inventories are valued using methods that 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. The company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Other current assets . Other current assets contain input tax credits of $ 2.1 million and advances to staff and vendors of $ 0.3 million by our India biodiesel segment. 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 buildings, furniture, machinery, equipment, land, biogas dairy digesters, and the Keyes Plant, Goodland Plant, and Kakinada Plant. 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 Measurement, which requires recognition of impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of asset groups 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 asset group and its estimated fair value. The Company has not recorded any impairment as of December 31, 2024 and 2023 . 36 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) Investment Tax Credits. In the third quarter of 2023 and the fourth quarter of 2024, the Company sold to third -party purchasers certain transferrable Investment Tax Credits (ITCs) that had been generated by the Company from its investments in the California Dairy Renewable Natural Gas segment and the Keyes Plant solar microgrid. The Company accounted for the ITC sales in accordance with ASC 740 by electing the flow-through method. For the years ended December 31, 2024 and 2023, the contractual net proceeds of the tax credits sales of $ 12.3 million and $ 55.2 million, respectively, are recorded as an income tax benefit. The proceeds for the third quarter 2023 sale were received in October 2023. The proceeds for the fourth quarter 2024 sale were received in January 2025 and presented on the balance sheet as "Tax credit sale receivable" as of December 31, 2024. Income Taxes . The Company recognizes income taxes in accordance with ASC 740 Income Taxes using an asset and liability approach. This approach requires the recognition of taxes payable or refundable for the current year and deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns. The measurement of current and deferred taxes is based on provisions of enacted tax law. ASC 740 provides for recognition of deferred tax assets if the realization of such assets is more likely than not to occur. Otherwise, a valuation allowance is established for the deferred tax assets, which may not be realized. As of December 31, 2024 and 2023 , the Company recorded a full valuation allowance against its U.S. federal and state net deferred tax assets due to operating losses incurred since inception. Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets were fully offset by a valuation allowance. The Company is subject to income tax audits by the respective tax authorities in all of the jurisdictions in which it operates. The determination of tax liabilities in each of these jurisdictions requires the interpretation and application of complex and sometimes uncertain tax laws and regulations. The recognition and measurement of current taxes payable or refundable and deferred tax assets and liabilities requires that the Company make certain estimates and judgments. Changes to these estimates or a change in judgment may have a material impact on the Company’s tax provision in a future period. In 2018, the Company adopted certain tax accounting policies related to the new global intangible low-taxed income (“GILTI”) provisions under the Tax Cuts and Jobs Act such that the Company: ( 1 ) accounts for all GILTI related book-tax differences as period costs and ( 2 ) uses the Incremental Cash Tax Savings approach in evaluating its valuation allowance assessment related to the GILTI inclusion. Basic and Diluted Net Income (Loss) per Share. Basic net loss per share is computed by dividing net income or 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. The Company incurred a net loss for the years ended December 31, 2024 and 2023 , so 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 December 31, 2024 and 2023: As of December 31, 2024 December 31, 2023 Common stock options and warrants 7,731 6,056 Debt with conversion feature at $ 30 per share of common stock 1,153 1,267 Total number of potentially dilutive shares excluded from the diluted net (loss) per share calculation 8,884 7,323 Comprehensive Loss. ASC 220 Comprehensive Income 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 our India 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. The Company’s India subsidiary operates in a local currency environment where the local currency is the functional currency used for transactions and accounting. Assets and liabilities of that subsidiary 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) loss, net. Fair Value of Financial Instruments. The Company's significant financial instruments with fair value considerations include current and non-current portion of subordinated debt, 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. 37 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) Share Based Compensation. We recogn ize share-based compensation expense in accordance with ASC 718 Stock Compensation, which requires the Company to recognize expenses related to the estimated fair value of the Company’s share-based compensation awards over the vesting period, adjusted to reflect only those shares that are expected to vest. Commitments and Contingencies. We record and/or disclose commitments and contingencies as they relate to existing conditions, situations, or sets 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. Debt Issuance Costs. The Company records debt issuance costs related to specific incremental costs directly attributable to issuing, modifying, or extending a debt instrument. The debt issuance costs are reported as an adjustment to the carrying amount of the debt. The debt issuance costs are amortized using the interest rate method over the life of the debt instrument. Troubled Debt Restructuring Accounting. The evaluation for troubled debt restructuring includes assessing whether financial difficulties are present and then whether the creditor granted a concession. To determine this, we calculate the post-restructuring effective interest rate by projecting cash flows on the new terms and calculating a discount rate equal to the carrying amount of pre-restructuring debt and comparing this calculation to the terms of prior amendments. If the post restructuring effective interest rate is less than the prior terms effective interest rate, we assess this as having been granted a concession. We then apply troubled debt restructuring accounting to any debt in which the creditor granted a concession. Debt Modification Accounting . The Company evaluates amendments to its debt not accounted for as troubled debt restructuring 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 changes more than 10 percent, the Company applies extinguishment accounting and determines the fair value of its debt based on factors available to the Company, and if less than 10 percent, the Company applies modification accounting by amending the carrying value of debt and costs and amortizing over the remaining life of the loan. Recent Accounting Pronouncements . In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures, which requires public entities to disclose significant segment expenses that are regularly provided to the CODM. The amendments are effective for the Company’s annual periods beginning January 1, 2024, and for interim periods within fiscal years beginning January 1, 2025. Retrospective application is required. The Company has now implemented this ASU as presented in Note 13. Segment Information. In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for the Company’s annual periods beginning January 1, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively. The company will implement ASU 2023 - 09 for the year ended December 31, 2025. In November 2024, FASB issued ASU No. 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses, which is intended to improve disclosures about a public business entity's expenses, primarily through additional disaggregation of income statement expenses. ASU 2024 - 03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating ASU 2024 - 03 to determine the impact on the Company's disclosures. There were no other recently issued and effective authoritative guidance that are expected to have a material impact on the Company’s Consolidated Financial Statements through the reporting date. 2. Cash, Cash Equivalents, and Restricted Cash 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. Amounts included in restricted cash represent those required to be set aside by the AB1 and AB2 Loan Agreements with Greater Nevada Credit Union ("GNCU") and Magnolia Bank, respectively, and will be released at times specified in each agreement. The following table reconciles cash, cash equivalents, and restricted cash reported in the Consolidated Balance Sheet to the total of the same such amounts shown in the statement of cash flows. As of December 31, 2024 December 31, 2023 Cash and cash equivalents $ 898 $ 2,667 Restricted cash included in other current assets 31 289 Restricted cash included in other assets 2,902 3,324 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 3,831 $ 6,280 38 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) 3. Inventories Inventories consist of the following: As of December 31, 2024 December 31, 2023 Raw materials $ 12,529 $ 9,907 Work-in-progress 1,683 1,682 Finished goods 11,230 6,702 Total inventories $ 25,442 $ 18,291 As of December 31, 2024 and December 31, 2023 , the Company recognized a lower of cost or net realizable value adjustment of $ 112 thousand and $ 58 thousand respectively, related to inventory. 4. Property, Plant and Equipment Property, plant and equipment consist of the following: As of December 31, 2024 December 31, 2023 Land $ 8,642 $ 7,345 Plant and buildings 182,724 136,318 Furniture and fixtures 2,686 2,266 Machinery and equipment 5,721 14,982 Construction in progress 46,201 73,057 Property held for development 15,431 15,431 Finance lease right of use assets 2,889 2,889 Total gross property, plant & equipment 264,294 252,288 Less accumulated depreciation ( 64,902 ) ( 57,180 ) Total net property, plant & equipment $ 199,392 $ 195,108 Interest capitalized in property, plant, and equipme nt was $ 5.0 million and $ 5.6 million for the years ended December 31, 2024 and 2023 , 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. Property held for development is the partially completed Goodland Plant which is not ready for operation. Depreciation will begin for each project when the project is finalized and placed into service. 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 The Company recorded depreciation expense of approximat ely $ 8.3 million and $ 6.9 million respectively, for the years ended December 31, 2024 and 2023 . 39 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) 5. Debt Debt consists of the following: December 31, 2024 December 31, 2023 Third Eye Capital term notes $ 7,212 $ 7,159 Third Eye Capital revolving credit facility 31,434 20,922 Third Eye Capital revolving notes Series B 68,476 54,412 Third Eye Capital revenue participation term notes 12,110 12,011 Third Eye Capital acquisition term notes 26,788 26,655 Third Eye Capital Fuels revolving line 41,286 32,511 Third Eye Capital Carbon revolving line 26,302 23,486 Third Eye Capital Short term promissory note 2,006 - Construction loans 48,235 41,024 Cilion shareholder purchase obligation 7,242 7,028 Subordinated notes 19,391 17,625 EB-5 promissory notes 39,020 42,211 EB-5 broker note 2,595 - Working capital loans 5,102 3,827 Term loans on capital expenditures 862 5,850 Total debt 338,061 294,721 Less current portion of debt 90,534 37,028 Total long term debt $ 247,527 $ 257,693 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. On May 16, 2023, Third Eye Capital and the Company entered into a new Revolving Notes Series B agreement related to certain existing principal under the Revolving Credit Facility and for subsequent principal increases. The Term Notes, Revolving Credit Facility, Revolving Notes Series B, Revenue Participation Term Notes, and Acquisition Term Notes are referred to herein collectively as the "Third Eye Capital Keyes Notes." The Third Eye Capital Keyes Notes have been amended several times, and the current key terms are as follows: A. Term Notes . As of December 31, 2024 , the Company had $ 7.2 million in principal and interest outstanding under the Term Notes and $ 29 thousand unamortized debt issuance costs. The Term Notes accrue interest at 14 % per annum. The Term Notes mature on April 1, 2026. B. Revolving Credit Facility . The Revolving Credit Facility accrues interest at the prime rate plus 13.75 % ( 21.25 % as of December 31, 2024 ), payable monthly in arrears. The Revolving Credit Facility matures on April 1, 2026. As of December 31, 2024 , there was $ 31.8 million in principal and interest and waiver fees outstanding under the Revolving Credit Facility and $ 0.4 million unamortized discount issuance costs. C. Revolving Notes Series B. The Revolving Notes Series B accrue interest at the prime rate plus 13.75 % ( 21.25 % as of December 31, 2024 ) payable monthly in arrears. The Revolving Notes Series B mature on April 1, 2026. As of December 31, 2024 , there was $ 68.9 million in principal, interest, and fees outstanding and $ 0.4 million unamortized debt issuance costs under the Revolving Notes Series B. D. Revenue Participation Term Notes . The Revenue Participation Term Notes bear interest at 5 % per annum and mature on April 1, 2026. As of December 31, 2024 , there was $ 12.2 million in principal and interest outstanding on the Revenue Participation Term Notes and $ 43 thousand unamortized discount issuance costs. E. Acquisition Term Notes . The Acquisition Term Notes accrue interest at the prime rate plus 10.75 % ( 18.25 % per annum as of December 31, 2024 and mature on April 1, 2026. As of December 31, 2024 , there was $ 19.4 million in principal and interest due, $ 7.5 million in outstanding redemption fees, and $ 135 thousand in unamortized discount issuances costs. Interest is not charged on the $ 7.5 million redemption fee. F. Short Term Promissory Note . In December 2024 the Company borrowed an additional $ 2.0 million from Third Eye Capital and issued a promissory note with 20.5 % interest payable in January 2025. The company paid this note in full in January 2025 using receipts from Investment Tax Credit sales. 40 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) The Third Eye Capital Keyes 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 Notes allow the lender to accelerate the maturity in the event of a default 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 notes allow interest to be added to the outstanding principal balance. The notes are secured by first priority liens on all real and personal property of, assignment of proceeds from all government grants, and guarantees from the Company’s North American subsidiaries except for Aemetis Biogas LLC and its subsidiaries, and 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 Company shares owned by McAfee Capital and additional assets, and Mr. McAfee has also provided a personal guaranty of up to $ 10 million plus a pledge of his ownership interest in several personal assets. Third Eye Capital Revolving Credit Facility for Fuels and Carbon Lines. On March 2, 2022, Goodland Advanced Fuels, Inc. ("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 lines 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”). Loans received under the Fuels Revolving Line had a maturity date of March 1, 2025, and accrued interest per annum at a rate equal to the greater of (i) the prime rate plus 6.00 % and (ii) ten percent ( 10.0 %) ( 13.50 % per annum as of December 31, 2024 ). In March 2025, the Fuels Revolving Line was amended to remove the maturity date and make the note payable upon demand and to change the interest rate to the greater of (i) the prime rate plus 11 % and (ii) fifteen percent ( 15.00 %). Loans received under the Carbon Revolving Line have a maturity date of March 1, 2026, and accrue interest per annum at a rate equal to the greater of (i) the prime rate plus 4.00 % and (ii) eight percent ( 8.0 %) ( 11.50 % per annum as of December 31, 2024 ). As of December 31, 2024 , GAFI had principal and interest outstanding of $ 41.7 million classified as current debt net of $ 0.4 million unamortized debt issuance costs. As of December 31, 2024 , ACCI had principal and interest outstanding of $ 2.5 million classified as current debt, $ 24.9 million classified as long-term debt, and $ 1.1 million in unamortized debt issuance costs. Cilion Purchase Obligation . In connection with the Company’s merger with Cilion, Inc., ("Cilion") on July 6, 2012, the Company incurred a $ 5.0 million payment obligation to Cilion shareholders ("Cilion Obligation") as merger compensation. The liability bears interest at 3 % per annum and becomes payable upon satisfaction of specified targets related principally to sales of equity. As of December 31, 2024 , there was $ 7.2 million in principal and interest outstanding on the Cilion Obligation. 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 $ 3.4 million in original notes to the investors (“Subordinated Notes”). The Subordinated Notes mature every six months and the current maturity date is June 30, 2025 . Upon maturity, the Subordinated Notes are renewable at the Company's election for six -month periods 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. As of December 31, 2024 , and 2023 , the Company had, in aggregate, $ 19.4 million and $ 17.6 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 that is 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 by U.S. Citizenship and Immigration Services 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 to 3%. The EB- 5 Notes are convertible into Aemetis, Inc. common stock at a conversion price of $ 30 per share. Advanced BioEnergy, LP received equity investments from foreign investors, and then Advanced BioEnergy used the invested equity to make loans to the Keyes Plant ownership entities. The EB- 5 Notes are subordinated to the Company's senior secured debt to Third Eye Capital. On February 27, 2019, Advanced BioEnergy, LP, and the Company entered into an Amendment to the EB- 5 Notes that modified the stated maturity dates of the EB- 5 Notes to provide automatic six -month extensions as long as the Advance BioEnergy investors’ immigration processes are in progress. Accordingly, notes derived from Advanced BioEnergy equity provided by investors pending green card approval have been recognized as long-term debt while notes derived from Advanced BioEnergy equity provided by investors who have obtained green card approval have been classified as current debt. In July 2024 in connection with settlement of litigation initiated by a broker engaged by Advanced BioEnergy, we entered into a further amendment of a portion of the EB- 5 notes to reduce the interest rate to 1 % in exchange for the Company entering into a separate promissory note and agreeing to pay the broker certain of Advanced Bioenergy's obligations. In connection with this amendment, we recognized a gain of $ 162 thousand which is recorded in the Statement of Operations as Other Income. As of December 31, 2024 and 2023 , $ 34.6 million and $ 37.9 million was outstanding, respectively, on the EB- 5 notes. On October 16, 2016, the Company launched its EB- 5 Phase II funding (the "EB- 5 Phase II Funding") and entered into certain Note Purchase Agreements with Advanced BioEnergy II, LP, a California limited partnership authorized to receive EB- 5 equity funding investments. The Company received $ 4 million in loan funds from Advanced BioEnergy II, LP before certain changes to and expiration of the EB- 5 program prevented further funding. The federal EB- 5 program was recently reauthorized, and in March 2024, U.S. Citizenship and Immigration Services approved the Company's project for up to $ 200 million of additional investment using EB- 5 funds. Under the new rules, the minimum investment is raised from $ 0.5 to $ 0.8 million per investor. The terms of the EB- 5 Phase II Funding are similar to the terms of the first round of EB- 5 funding. As of December 31, 2024 and 2023 , $ 4.4 million and $ 4.3 million was outstanding on the notes under the EB- 5 Phase II funding, respectively. EB- 5 Broker Promissory Note . In July 2024 we signed a promissory note with a broker engaged by Advanced BioEnergy in an agreement to pay the broker certain of Advanced BioEnergy's obligations. The note principal was $ 3.3 million, and payable through fourth quarter of 2026 at 0 % interest. As of December 31, 2024, $ 1.4 million was outstanding as current portion of long-term debt, and $ 1.2 million in other long-term debt. India Biodiesel Secured and Unsecured Loans. On November 13, 2023, the Company entered into a secured loan agreement with Secunderabad Oils Limited in an amount not to exceed $ 3.6 million. The loan is secured by the fixed assets and current assets of the Kakinada Plant and bears interest at 18 % payable monthly. On November 6, 2023, the Company entered into a short-term loan with Leo Edibles & Fats Limited in an amount not to exceed $ 1.27 million. The loan bears interest at 18 % and is payable monthly. The loans are repayable on demand by the lender or within one year from the date of issuance. The outstanding loan balances as of December 31, 2024 mature on various dates during the fourth quarter of 2025. As of December 31, 2024 and 2023 , the Company had outstanding balances of $ 5.1 million and $ 3.8 million, respectively, under these agreements. 41 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) Aemetis Biogas 1 LLC Term Loan. On October 4, 2022, the Company entered into a Construction Loan Agreement ( “AB1 Construction Loan”) with Greater Nevada Credit Union (“GNCU”). Pursuant to the AB1 Construction Loan, the lender made available an aggregate principal amount of $ 25 million, secured by all personal property collateral and real property collateral of Aemetis Biogas 1 LLC. Effective as of December 22, 2023, the AB1 Construction Loan was refinanced and replaced with a term loan ( "AB1 Term Loan"). The AB1 Term Loan is secured by all personal property collateral and real property collateral of Aemetis Biogas 1 LLC. It bears interest at a rate of 9.25 % per annum, to be adjusted every five years to equal the five -year Treasury Constant Maturity Rate, as published by the Board of Governors of the Federal Reserve System as of the adjustment date, plus 5.00 % or (ii) the index floor. Other material terms of the loan include: (i) payments of interest only to be paid in monthly installments beginning January 22, 2024, ( ii) payments of equal combined monthly installments of principal and interest beginning on January 22, 2025, and (iii) a maturity date of December 22, 2042, at which time the entire unpaid principal amount, together with accrued and unpaid interest thereon, shall become due and payable. The AB1 Term Loan contains certain financial covenants to be measured as of the last day of each fiscal year beginning fiscal year end 2025, and annually for the term of the loan. The AB1 Term Loan also contains other affirmative and negative covenants, representations and warranties and events of default customary for loan agreements of this nature. As of both December 31, 2024 and December 31, 2023 , the Company had $ 25.1 million in outstanding principal and interest under the AB1 Term Loan. Aemetis Biogas 2 Construction and Term Loan. On July 28, 2023, the Company entered into a Construction and Term Loan Agreement ( “AB2 Loan") with Magnolia Bank, Incorporated. Pursuant to the AB2 Loan, the lender has made available an aggregate principal amount not to exceed $ 25 million. The loan is secured by all personal property collateral and real property collateral of Aemetis Biogas 2 LLC. The loan bears interest at a rate of 8.75 % per annum, to be adjusted every five years thereafter to equal the five -year Treasury Constant Maturity Rate, as published by the Board of Governors of the Federal Reserve System as of the adjustment date, plus 5.00 %. Other material terms of the AB2 Loan include: (i) payments of interest only to be paid in monthly installments beginning August 15, 2023, ( ii) payments of equal combined monthly installments of principal and interest beginning on August 15, 2025, and (iii) a maturity date of July 28, 2043, at which time the entire unpaid principal amount, together with accrued and unpaid interest thereon, shall become due and payable. The AB2 Loan contains certain financial covenants to be measured as of the last day of each fiscal year beginning fiscal year end 2025, and annually for the term of the loan. The AB2 Loan also contains other affirmative and negative covenants, representations and warranties and events of default customary for loan agreements of this nature. As of December 31, 2024 and December 31, 2023 , the Company had $ 23.9 million and $ 16.8 million, respectively, outstanding and unamortized discount issuances costs of $ 0.8 million and $ 0.8 million, respectively, under the AB2 Loan. Jessup land acquisition notes . In connection with the Company's acquisition of land in November 2024, the Company entered into two installment note agreements with private lenders totaling $ 840 thousand with interest accruing at 11.99 %. As of December 31, 2024 the company owed $ 840 thousand on these notes. Financing Agreement for capital expenditures. In 2018, the Company entered into an agreement with Mitsubishi Chemical America, Inc. (“MCA”) to purchase certain equipment to conserve energy at the Keyes Plant. The Company is no longer operating the equipment, and in June 2024, entered into an Agreement with MCA to amicably resolve all differences and terminate the 2018 equipment purchase agreement. As a result, the Company derecognized $ 9.6 million in net property, plant, and equipment; $ 3.6 million in long-term liabilities; $ 2.2 million in short-term liabilities and $ 0.2 million in accounts payable from its consolidated condensed balance sheet. The derecognition resulted in a net $ 3.6 million loss that is included in selling, general and administrative expense on the consolidated condensed statement of operations for the year ended December 31, 2024. Maturity Date Schedule Scheduled debt repayments for the Company’s loan obligations by year are as follows: Twelve months ended December 31, Debt Repayments 2025 $ 90,534 2026 193,886 2027 8,401 2028 3,487 2029 1,376 Thereafter 43,198 Total debt 340,882 Debt issuance costs ( 2,821 ) Total debt, net of debt issuance costs $ 338,061 6. Leases The Company is a party to operating leases for the Company's corporate office in Cupertino, modular offices, and laboratory facilities. We have also entered into several finance leases for mobile equipment and for the Riverbank Industrial Complex. These finance leases have a purchase option at the end of the term that we are reasonably certain we will exercise, so the leases are classified as finance leases. All of our leases have remaining term of one year to 13 years. We made an accounting policy election to keep leases with an initial term of 12 months or less off the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations as we incur the expenses. The Company evaluates leases in accordance with ASC 842 – Lease Accounting . When discount rates implicit in leases cannot be readily determined, we use the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and to measure lease liabilities and right of use (ROU) assets. The incremental borrowing rate used by the Company is 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 are used. 42 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) The components of lease expense and sublease income is as follows: Twelve Months Ended December 31, 2024 2023 Operating lease cost Operating lease expense $ 764 $ 722 Short term lease expense 95 223 Variable lease expense 90 93 Total operating lease cost $ 949 $ 1,038 Finance lease cost Amortization of right-of-use assets $ 120 $ 121 Interest on lease liabilities 345 340 Total finance lease cost $ 465 $ 461 Cash paid for amounts included in the measurement of lease liabilities: Twelve Months Ended December 31, 2024 2023 Operating cash flows used in operating leases $ 791 $ 668 Operating cash flows used in finance leases 345 340 Financing cash flows used in finance leases 179 428 Supplemental non-cash flow information related to the operating ROU asset and lease liabilities for the year ended December 31, 2024 and 2023 : Twelve Months Ended December 31, 2024 2023 Operating leases Accretion of the lease liability $ 327 $ 249 Amortization of right-of-use assets 437 293 Weighted Average Remaining Lease Term Operating leases (in years) 8.0 4.2 Finance leases (in years) 12.2 13.0 Weighted Average Discount Rate Operating leases 13.7 % 14.1 % Finance leases 13.3 % 13.2 % Supplemental balance sheet information related to leases was as follows: As of December 31, 2024 December 31, 2023 Operating leases Operating lease right-of-use assets $ 2,237 $ 2,056 Current portion of operating lease liability 534 406 Long term operating lease liability 1,809 1,783 Total operating lease liabilities 2,343 2,189 Finance leases Property and equipment, at cost $ 2,889 $ 2,889 Accumulated depreciation ( 349 ) ( 228 ) Property and equipment, net 2,540 2,661 Other current liability 244 30 Other long term liabilities 2,639 2,687 Total finance lease liabilities 2,883 2,717 43 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) Maturities of lease liabilities were as follows: Year Ended December 31, Operating leases Finance leases 2025 $ 814 $ 168 2026 709 145 2027 708 145 2028 335 145 2029 63 145 There after 1,203 9,960 Total lease payments 3,832 10,708 Less imputed interest ( 1,489 ) ( 7,825 ) Total lease liability $ 2,343 $ 2,883 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 net basis on the consolidated financial statements. Sublease income is recorded in the other operating income section of the Consolidated Statements of Operations and Comprehensive Loss. The components of lease income for the years ended December 31, 2024 and 2023 , were as follows: December 31, 2024 December 31, 2023 Lease income $ 2,196 $ 2,075 Future lease commitments to be received by the Company as of December 31, 2024 , are as fo llows: Year ended December 31, 2025 $ 1,477 2026 1,476 2027 1,366 2028 1,280 2029 1,259 There after 158 Total future lease commitments $ 7,016 7. Aemetis Biogas - Series A Preferred Financing and Variable Interest Entity On December 20, 2018, Aemetis Biogas LLC ("ABGL") entered into a Series A Preferred Unit Purchase Agreement for the sale of Series A Preferred Units to Protair- X Technologies Inc., with Third Eye Capital acting as an agent. ABGL is authorized to issue 11,000,000 common units and 6,000,000 convertible, redeemable, secured, preferred membership units (the “Series A Preferred Units”). ABGL issued 6,000,000 common units to Aemetis, Inc. at a value of $ 5.00 per common unit, and 5,000,000 common units of ABGL are held in reserve as potential conversion units issuable to the Preferred Unit holder upon certain triggering events. From inception of the agreement through 2022, ABGL issued 6,000,000 Series A Preferred Units in exchange for $ 30.0 million in funding, reduced by a redemption of 20,000 Series A Preferred Units for $ 0.3 million. The original Preferred Unit Purchase Agreement included requirements for preference payments and mandatory redemption, in addition to several operating covenants. Between inception and December 31, 2024, the agreement has been amended multiple times to extend the redemption date along with associated changes to key terms, with each modification treated as a troubled debt restructuring under ASC 470 - 60 with no gain or loss recorded. On November 6, 2024, ABGL entered into an agreement entitled Seventh Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Seventh Amendment") with an Effective Date of August 31, 2024, that provided, among other provisions, the requirement for ABGL to redeem all of the outstanding Series A Preferred Units by January 31, 2025, for an aggregate redemption price of $ 115.5 million. The PUPA Seventh Amendment further provided that if ABGL did not redeem the Series A Preferred Units by the redemption date, ABGL would enter into a credit agreement with Protair- X Technologies Inc. and Third Eye Capital effective as of February 1, 2025, and maturing January 31, 2026, in substantially the form attached to the PUPA Seventh Amendment and specified that entry of the credit agreement would satisfy the obligation to redeem the units. The credit agreement would bear an interest rate equal to the greater of (i) the prime rate plus 10.0 % and (ii) 16.0 %. We determined that Third Eye Capital provided a concession to redeem the preferred shares at lower effective borrowing rate than the credit agreement interest rate of the prior amendment rate. In accordance with the troubled debt restructuring provisions of ASC 470, we did not record any gain or loss from the entry of the PUPA Seventh Amendment and we began accreting the redemption price from a carrying value of $ 124.9 million to $ 137.9 million over the period ending January 31, 2026. In March 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 further provides that if ABGL does not redeem the Series A Preferred Units by the redemption date, ABGL will enter into a credit agreement with Protair- X Technologies Inc. and Third Eye Capital effective as of May 1, 2025, and maturing April 30, 2026, in substantially the form attached to the PUPA Eighth Amendment and specifies that entry of the credit agreement will satisfy the obligation to redeem the Series A Preferred Units. The credit agreement would bear an interest rate equal to the greater of (i) the prime rate plus 10.0 % and (ii) 16.0 %. We will evaluate the PUPA Eighth Amendment according to ASC 470. The Company recorded Series A Preferred Unit liabilities of $ 126.6 million and $ 113.2 million as long-term liabilities as of December 31, 2024 and 2023 , respectively. 44 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) 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. ABGL's total assets before intercompany eliminations as of December 31, 2024 were $ 126.1 million which serve as collateral for the Series A Preferred Units. 8. Equity Common Stock The Company is authorized to issue 80 million shares of common stock, $ 0.001 par value per share. Dividends The Company has not declared or paid cash dividends on common stock. We currently expect to use future earnings to operate or expand our business and to reduce outstanding debt and therefore do not anticipate paying cash dividends in the foreseeable future. In addition, we currently have covenants in certain of our debt agreements that prohibit paying dividends without the consent of the applicable lender. Preferred Stock The Company is authorized to issue up to 65 million shares of preferred stock, $ 0.001 par value per share. Effective as of December 12, 2023, the Company converted all outstanding preferred stock to common stock. As a result, as of December 31, 2024 and 2023, the Company has no outstanding shares of preferred stock. Convertible Securities The following table shows the number of shares of common stock that could be issued pursuant to outstanding convertible securities: As of December 31, 2024 December 31, 2023 Common stock options and warrants 7,731 6,056 Debt with conversion feature at $ 30 per share of common stock 1,153 1,267 Total number of potentially dilutive shares excluded from the diluted net (loss) per share calculation 8,884 7,323 9. Warrants to Purchase Common Stock During 2024 , the Company issued two subordinated lenders warrants exercisable for the purchase of 226,666 shares of common stock at an exercise price of $ 0.01 per share with a term of two years. These warrants were exercised in 2024 with a combination of cashless exercise and cash payments. The following table shows the weighted average fair value calculations for warrants granted based on the listed weighted average assumptions: Description For the year ended December 31, 2024 2023 Dividend-yield 0 % 0 % Risk-free interest rate 4.50 % 3.85 % Expected volatility 99.86 % 117.90 % Expected life (years) 2 5 Exercise price per share $ 0.01 $ 1.62 Market value per share on grant date $ 4.05 $ 4.13 Fair value per share on grant date $ 4.04 $ 3.92 45 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) The following table summarizes warrant activity for the years ended December 31, 2024 and 2023 : Warrants Outstanding & Exercisable Weighted - Average Exercise Price Average Remaining Term in Years Outstanding December 31, 2022 355 $ 15.92 7.48 Granted 511 1.62 Exercised ( 336 ) 0.83 Outstanding December 31, 2023 530 $ 11.70 5.77 Granted 226 0.01 Exercised ( 226 ) 0.01 Outstanding December 31, 2024 530 $ 11.70 4.78 All of the above outstanding warrants are vested and exercisable as of December 31, 2024 . 10. Stock-Based Compensation 2019 Stock Plan On August 26, 2021, the stockholders of the Company approved the Aemetis, Inc. Amended and Restated 2019 Stock Plan (the “2019 Stock Plan”). This plan allows our Board or delegated Board committee to grant 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 to employees, Directors, and consultants. The 2019 Stock Plan has a term of 10 years from the original version adoption date of April 25, 2019, and supersedes all prior stockholder approved plans with respect to new grants. Options issued under prior plans and the prior version of the 2019 stock plan remain outstanding and exercisable according to their terms. The 2019 Stock Plan authorizes a total pool of 4,558,621 shares as of July 1, 2021, including all outstanding option grants under all plans and all shares then available for issuance under the 2019 Stock Plan as of that date. Shares within this pool that expire or terminate unused become available for a subsequent grant. In addition, the number of shares available for issuance automatically increases on January 1 of each year by an amount equal to 4 % of the sum of total common stock outstanding on January 1 and 2,541,823 shares. Pursuant to the 2019 Stock Plan, the company issued stock options to employees exercisable for 1.8 million and 1.3 million shares during the years ended December 31, 2024 and 2023 , each with a 10 -year term and 3 -year vesting schedule. The Company issued restricted stock award grants with immediate vesting to directors for 428 thousand shares and 244 thousand shares during the years ended December 31, 2024 and 2023 , respectively, with a weighted average fair value on date of grant of $ 3.10 and $ 3.75 per share, respectively for those same time periods. In 2024, the restricted stock award grants included 65 thousand shares issued to board members to satisfy accrued payables due for board fees, and the cost for those shares is not included in stock-based compensation expense. The following table summarizes activity under the 2019 Stock Plan during 2023 and 2024: Shares Available for Grant Number of Shares Outstanding Weighted-Average Exercise Price Balance as of December 31, 2022 65 4,694 $ 4.63 Authorized 1,644 - - Options Granted ( 1,278 ) 1,278 3.60 RSAs Granted ( 244 ) - - Exercised - ( 177 ) 1.83 Forfeited/expired 269 ( 269 ) 5.93 Balance as of December 31, 2023 456 5,526 $ 4.42 Authorized 1,740 - - Options Granted ( 1,776 ) 1,776 3.10 RSAs Granted ( 428 ) - - Exercised - ( 15 ) 2.56 Forfeited/expired 86 ( 86 ) 6.89 Balance as of December 31, 2024 78 7,201 $ 4.06 46 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) The following table summarizes vested and unvested option awards outstanding as of December 31, 2024 and 2023 : Number of Shares Weighted Average Exercise Price Remaining Contractual Term (In Years) Aggregate Intrinsic Value 1 2024 Vested and Exercisable 5,245 $ 4.17 6.08 $ 4,021 Unvested 1,955 3.80 8.68 47 Total 7,201 $ 4.06 7.55 $ 4,068 2023 Vested and Exercisable 3,986 $ 3.58 6.47 $ 11,695 Unvested 1,540 6.55 8.67 1,621 Total 5,526 $ 4.42 7.04 $ 13,316 Note 1: Intrinsic value based on the $ 2.69 and $ 5.24 closing price of Aemetis, Inc. common stock on December 31, 2024 and 2023 respectively, as reported on the NASDAQ Exchange. Inducement Equity Plan Options In March 2016, the Board of Directors of the Company approved an Inducement Equity Plan authorizing the issuance of 100,000 non-statutory stock options to purchase common stock. As of December 31, 2024 , no options were outstanding under the Inducement Equity Plan. This plan was not approved by stockholders so is available only for grants to prospective employees. Stock-based Compensation Expense Stock-based compensation is accounted for in accordance with ASC 718, Compensation - Stock Compensation , which requires the measurement and recognition of compensation expense for all stock-based awards made to employees, directors, and consultants based o n estimated fair value on the grant date. We estimate the fair value using the Black-Scholes option pricing model and recognize that fair value as an expense over the vesting period of each grant using the straight-line method. W e only record compensation cost for vested options. The Black-Scholes valuation model for stock based compensation expense requires us to make assumptions and judgments about the variables used in the calculation, including 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, expected dividends, and expected forfeitures. We use the simplified calculation of expected term described in SEC Staff Accounting Bulletin No. 107, Share-Based Payment . Volatility is based on an average of the historical volatility of Aemetis, Inc. common stock during the period of time preceding the date of option issuance that matches the term of the option grant. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the treasury maturity term 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. To the extent actual forfeitures occur, the difference is recorded as an adjustment in the scheduled expense during the period of the forfeiture. The weighted average fair value for options granted during the years ended 2024 and 2023 are based on the following assumptions: Description For the year ended December 31, 2024 2023 Dividend-yield 0 % 0 % Risk-free interest rate 3.93 % 3.86 % Expected volatility 115.41 % 124.62 % Expected life (years) 5.81 7.00 Market value per share on grant date $ 3.10 $ 3.60 Fair value per share on grant date $ 2.65 $ 3.29 For the years ended December 31, 2024 and 2023 , the Company recorded stock-based compensation expense in the amount of $ 8.3 million, and $ 7.7 million, respectively. As of December 31, 2024 , the Company had $ 4.5 million of total unrecognized compensation expense for employees that the Company will amortize over the remaining vesting period of each individual option grant. The outstanding unvested options have a remaining weighted average vesting term of 1.7 years. 47 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) 11. Revenue and Accounts Receivable California Ethanol: We sell most of our fuel ethanol segment products to J.D. Heiskell which sells them to third parties designated by us. We invoice J.D. Heiskell each business day with payment due upon invoicing, with no variable consideration, and no financing options. We record revenue as invoiced, which is when performance obligations have been met, and do not collect any advance payments for products at the ethanol segment, so there is no unearned revenue as of December 31, 2024. We also buy our corn feedstock from J.D. Heiskell, and J.D. Heiskell pays us the net balance between ethanol and other product sales and our corn purchases. We record the full purchase cost as costs of goods sold. There are no significant obligations for returns, refunds, or warranties in the ethanol segment. Given the similarity of the individual sales transactions with J.D. Heiskell, we have assessed them as a portfolio of similar contracts. The performance obligation for ethanol is satisfied at the point in time of delivery of the physical product to our finished goods tank leased by J.D. Heiskell, at which point the customer has the ability to direct the use of the product and receive substantially all of the benefits, and the risk of loss passes to the customer, and thus we are the principal in the ethanol segment sales to J.D. Heiskell. The transaction price is determined based on daily market prices and quarterly contract pricing negotiated by Murex for its customers for ethanol and based on dry distillers' market and local demand by our marketing partner A.L. Gilbert Company (“A.L. Gilbert”) for WDG. The transaction price is allocated to one performance obligation. For the other ethanol segment products, our performance obligations are satisfied at the point in time when the product leaves the Keyes Plant premises on the transportation truck, at which point the customer has the ability to direct the use of the product and receive substantially all of the benefits, and the risk of loss passes to the customer. The ethanol segment revenue for 2023 includes sales for seven out of twelve months due to an extended maintenance cycle from January to May of 2023 that included implementation of several important ethanol plant energy efficiency upgrades. Our decision to cease production was partly driven by the high natural gas prices in California during the period. After monitoring natural gas pricing and margin profitability, we decided to extend the maintenance cycle into the first and second quarters of 2023 and restarted the plant at the end of May 2023. Sales in 2024 represent production for the full twelve months. The following table shows our sales in California Ethanol by product category: California Ethanol For the Year Ended December 31, 2024 2023 Ethanol sales $ 118,878 $ 78,403 Wet distiller's grains sales 36,214 21,963 Other sales 6,664 3,702 $ 161,756 $ 104,068 California Dairy Renewable Natural Gas: Our facilities as of December 31, 2024 consist of eleven anaerobic digesters that process feedstock from dairies into biogas, a 36 -mile collection pipeline leading to a central upgrading hub, and an interconnect to inject the gas into the utility natural gas pipeline for delivery to customers for use as transportation fuel. We recognize revenue from gas sales concurrent with injection of gas into the pipeline, at which point the risk of loss transfers to the customer and our performance obligation has been met. In connection with dispensing the RNG, we also generate sellable credits under the federal Renewable Fuel Standard (referred to as "D3 RINs") and the California Low Carbon Fuel Standard credits ("LCFS"). We began selling D3 RINs in the third quarter of 2023 and began selling LCFS credits in the first quarter of 2024. We recognize revenue from sales of D3 RINs and LCFS credits at the time we sell the credits. We record a liability for unearned revenue on the limited occasions in which the renewable natural gas segment receives payment from customers prior to the performance obligations being fulfilled. As of December 31, 2024 and 2023 , the company had $ 1.6 million and $ 0 as liabilities for unearned revenue, respectively, with the revenue for the 2024 balance recognized in January 2025 after the performance obligations were fulfilled. Dairy Renewable Natural Gas For the Year Ended December 31, 2024 2023 Gas sales $ 907 $ 981 LCFS credit sales 2,922 - RIN sales 9,208 4,474 Total $ 13,037 $ 5,455 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 at the point in time when the physical product is delivered and accepted. 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 based on reference market prices for biodiesel, refined glycerin, and PFAD net of taxes. Transaction price is allocated to one performance obligation. The India segment records a liability for advance payments received from customers, and revenue is generally recognized shortly after each reporting period once performance obligations are fulfilled; the balance for unearned income at the India segment is not material to our company. The following table shows our sales in India by product category: India Biodiesel For the Year Ended December 31, 2024 2023 Biodiesel sales $ 86,653 $ 74,503 Other sales 6,194 2,691 $ 92,847 $ 77,194 Accounts receivable for all segments represent invoicing for products with varying payment terms, but with no variable consideration or financing. The opening balance of accounts receivable for all segments as of January 1, 2023, was $ 1.3 million, and the closing balances as of December 31, 2024 and 2023, were $ 1.8 million and $ 8.6 million, respectively. 48 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) 12. Agreements Working Capital Arrangement. Pursuant to a Corn Procurement and Working Capital Agreement with J.D. Heiskell, the Company procures whole yellow corn 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. Pursuant to a separate agreement entered in May 2023, J.D. Heiskell also purchases all of our ethanol and other products and sells them to marketing companies designated by us. We have designated Murex to purchase and market ethanol and A.L. Gilbert to purchase and market WDG and corn oil. The Company’s relationships with J.D. Heiskell, Murex, 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 providing working capital relationships. The following table summarizes the J. D. Heiskell purchase and sales activity during the years ended December 31, 2024 and 2023 : As of and for the twelve months ended December 31, 2024 2023 Ethanol sales $ 116,236 $ 77,359 Wet distiller's grains sales 36,214 21,963 Corn oil sales 5,671 3,238 CDS sales 103 58 Corn purchases 130,439 83,128 Accounts receivable 25 1,073 Accounts payable - 1,207 Ethanol and Wet Distillers Grains Marketing Arrangement. On May 30, 2023 the Company suspended direct sales of ethanol to Murex for the duration of the Company's Working Capital agreement with J.D. Heiskell. While the direct sales to Murex are suspended, Murex remains as our marketing partner to market the ethanol we sell to J.D. Heiskell. The Company has a Wet Distillers Grains Marketing Agreement with A.L. Gilbert that automatically renews annually on December 31. The agreements with J.D. Heiskell, Murex, and A.L. Gilbert include marketing and transportation services. For the years ended December 31, 2024 and 2023 , the Company expensed marketing co sts of $ 2.6 million and $ 1.5 million, respectively, in connection with the marketing arrangements and these costs included in Selling, General, and Administration expense. For the year ended December 31, 2024 , the Company expensed $ 3.8 million in transportation costs related to sales of ethan ol and $ 6.0 million related to sales of WDG. For the year ended December 31, 2023 , the Company expensed $ 1.7 million in transportation costs related to sales of ethanol, and $ 3.3 million related to sales of WDG. Transportation costs are included in costs of goods sold. Supply Trade Agreement. On July 1, 2022, the Company entered into an operating agreement with Gemini Edibles and Fats India Private Limited (“Gemini”) pursuant to which Gemini supplies the Company with feedstock up to a credit limit of $ 12.7 million with collateral interest in inventories, current assets, and fixed assets. If the Company fails to pay an invoice within the ten -day credit period, the outstanding balance bears interest at 18 %. The agreement matures in June 2025, and either party can terminate the agreement by giving one month's notice in writing. As of December 31, 2024 and 2023 , the Company had accounts payable of $ 6.2 million and $ 0.0 million, respectively, under this agreement. Natural Gas Purchase Agreement. As of December 31, 2024 , we have forward purchase agreement in place to buy approximately 120 thousand MMBtu of natural gas at a fixed price of $ 5.29 per MMBtu through March 2025, and 120 thousand MMBtu of natural gas at a NYMEX index plus $ 2 . The Company has elected to apply the normal purchases and normal sales scope exception under ASC 815, hence the natural gas purchased under this agreement is accounted for and included as cost of goods sold in the Company's financial statements. 49 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) 13. Segment Information Aemetis recognizes three reportable segments “California Ethanol,” “California Dairy Renewable Natural Gas,” and “India Biodiesel.” The “California Ethanol” reportable segment includes the Company’s 65 million gallon per year ethanol plant in Keyes, California, and the adjacent land leased for the production of CO₂. The “California Dairy Renewable Natural Gas” reportable segment includes the production and sale of Renewable Natural Gas and associated environmental attributes. It consists of anaerobic digesters located at dairies, a 36 mile biogas collection pipeline, a biogas upgrading hub that produces Renewable Natural Gas from biogas, and a pipeline interconnect. The “India Biodiesel” reportable segment includes the Company’s 80 million gallon per year nameplate capacity biodiesel manufacturing plant in Kakinada India, and administrative offices in Hyderabad, India. The Company has additional operating segments that were determined not to be reportable segments, including our key projects under development which consists of sustainable aviation fuel and renewable diesel production in Riverbank and Carbon Capture and Underground Sequestration wells in California. Additionally, our corporate offices, Goodland Plant in Kansas, Riverbank Industrial Complex management, and our research and development facility in Minnesota are included in the “All Other” category. For all segments, our Chief Executive Officer is the Chief Operating Decision Maker ("CODM"). The CODM uses EBITDA to assess segment performance, which is derived from revenue less cost of goods sold and selling, general and administrative expenses. The CODM manages and allocates resources to the operations of each segment. This enables the CEO to assess the Company’s overall level of available resources and determine how best to deploy these resources for capital expenditures and other strategic opportunities that are in line with our long-term strategic goals. The CODM is regularly provided with consolidated revenues and expense information or forecasted expense information for the applicable reportable segments. The CODM does not review total assets by segment for purposes of assessing segment performance and these are not included in the tables below. The CODM assesses segment operation levels and allocates operating expenses accordingly to each segment, as indicated in the totals below. The following tables summarize financial information by reportable segment for the years ended December 31, 2024 and 2023 : For the year ended December 31, 2024 California Ethanol California Dairy Renewable Natural Gas India Biodiesel All other Total Revenues from external customers $ 161,756 $ 13,037 $ 92,847 $ - $ 267,640 Gross profit (loss) ( 13,792 ) 5,395 7,817 - ( 580 ) Net Income (Loss) ( 50,874 ) ( 9,101 ) 4,348 ( 31,910 ) ( 87,537 ) Interest expense including amortization of debt fees 31,159 3,045 1,108 11,309 46,621 Accretion and other expenses of Series A preferred units - 12,698 - - 12,698 Income tax expense (benefit) ( 4,150 ) ( 8,115 ) 1,426 7 ( 10,832 ) Depreciation 4,211 3,079 818 233 8,341 Gain on extinguishment of debt ( 162 ) - - - ( 162 ) Loss on asset disposals 3,702 - - - 3,702 Stock-based compensation expense - - - 8,314 8,314 Other amortization 46 - - - 46 EBITDA ( 16,068 ) 1,606 7,700 ( 12,047 ) ( 18,809 ) Capital expenditures 1,399 15,376 1,506 1,973 20,254 Total assets 57,076 126,113 37,587 38,526 259,302 50 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) For the year ended December 31, 2023 California Ethanol California Dairy Renewable Natural Gas India Biodiesel All other Total Revenues from external customers $ 104,068 $ 5,455 $ 77,194 $ - $ 186,717 Gross profit (loss) ( 6,602 ) ( 331 ) 8,950 - 2,017 Net Loss ( 42,433 ) 20,822 5,619 ( 30,428 ) ( 46,420 ) Interest expense including amortization of debt fees 25,258 2,809 447 11,005 39,519 Accretion and other expenses of Series A preferred units - 25,313 - - 25,313 Income tax expense (benefit) - ( 55,159 ) 1,416 7 ( 53,736 ) Depreciation 3,995 2,116 576 246 6,933 Stock-based compensation expense - - - 7,660 7,660 Other amortization 72 - - - 72 USDA Cash Grants ( 1,774 ) - - - ( 1,774 ) EBITDA ( 14,882 ) ( 4,099 ) 8,058 ( 11,510 ) ( 22,433 ) Capital expenditures 5,695 24,744 1,281 1,399 33,119 Total assets 67,991 92,794 34,769 47,852 243,406 California Ethanol: Sales of ethanol, WDG, and corn oil to one customer (J.D. Heiskell) accounted for 98 % and 100 % of the Company’s California Ethanol segment revenues for the years ended December 31, 2024 and 2023 , respectively. California Dairy Renewable Natural Gas: Sales of renewable natural gas during the years ended December 31, 2024 and 2023 , were from sales to a single customer. We sold D3 RINs and LCFS credits to two other customers. India Biodiesel: During the year ended December 31, 2024 , three biodiesel customers accounted for 40 %, 32 % and 21 % of the Company’s India Biodiesel segment revenues. During the year ended December 31, 2023 , three biodiesel customers accounted for 47 %, 25 %, 23 % of the Company’s India Biodiesel segment revenues. 14. Grants Received 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 December 31, 2024 , 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 2 019, 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 $ 6.8 million from the CDFA 2020 grant program as of December 31, 2024 , 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 California Energy Commission did not extend the due date and would not move forward with this grant program. Given the nature of the project, the grant for reimbursement of capital expenditures of $ 1.7 million is presented with other current liabilities as of December 31, 2024 and 2023 . 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 all of the $ 245 thousand of the grant awarded by the US Forest Service as reimbursement for actual allowable program costs incurred through December 31, 2024 . 51 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) 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 S torage System integrated with an artificial intelligence-driven distributed control system (DCS). The grant requires $ 1.6 million in matching contributions which the Company has made. AAFK received $ 5.9 million in grant funds from this program as reimbursement for actual expenditures incurred through December 31, 2024 . 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 c ommission 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 fr om the CAL Fire Conversion Program as reimbursement for actual costs through December 31, 2024 . 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 December 31, 2024 . 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 December 31, 2024 . USDA 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 the other expense (income) section of the Consolidated Statements of Operations and Comprehensive Loss. California Energy Commission Grant for Mechanical Vapor Recompression System. Aemetis Advanced Fuels Keyes (“AAFK”) has been awarded a $ 6.0 million grant to design, construct and commission a mechanical vapor recompression (MVR) system. The additional evaporation stages will eliminate natural gas consumption and related greenhouse gas emissions in the evaporation portion of the process by installing metering equipment and software to monitor and optimize the plant’s energy consumption. The MVR system will compress vapor to a higher pressure and temperature so that it can be recycled multiple times as steam heat in the evaporation process, which will dramatically reduce natural gas use. The grant requires $ 5.3 million in matching contributions. AAFK has received $ 3.9 million from this program as reimbursement for actual expenditures incurred through December 31, 2024 . Due to the uncertainty associated with the approval process under the grant program, the Company will recognize future grant proceeds received as a reduction of costs in the period when payment is received. Pacific Gas and Electric SEM Manufacturer ’ s Incentive Program. Since entering the SEM program in 2019, AAFK has been awarded $ 1.1 million in potential benefits through incentive payments and reduced utility costs. Aemetis has installed energy efficient equipment throughout the Keyes facility as a requirement, and Third-Party consultants verify natural gas reductions for PG&E. To date, Aemetis has received $ 504 thousand in direct incentive payments, with and estimated $ 131 thousand to be paid in early 2025, and the remaining amount to be realized in utility cost savings. 15. Related Party Transactions The Company owes Eric McAfee, the Company’s Chairman and CEO, and McAfee Capital LLC (“McAfee Capital”), owned by Eric McAfee, $ 1.2 millio n in connection with employment agreements, bonus awards, expense reimbursements, and guarantee fees in connection with McAfee Capital's guarantees of the Company's indebtedness with Third Eye Capital as of December 31, 2024. T he total balance accrued was $ 0.9 million as of December 31, 2023. 16. Income Tax The Company files a consolidated federal income tax return including all its domestic subsidiaries except for Aemetis Biogas LLC, which files its own returns. State tax returns are filed on a consolidated, combined or separate basis depending on the applicable laws relating to the Company and its subsidiaries. Components of tax expense consist of the following: 2024 2023 Current: Federal $ ( 12,276 ) $ ( 55,164 ) State and Local 18 13 Foreign 1,467 1,489 ( 10,791 ) ( 53,662 ) Deferred: Foreign ( 41 ) ( 74 ) Income tax benefit $ ( 10,832 ) $ ( 53,736 ) 52 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) The Company records deferred tax liability in other long term liabilities in the Consolidated Balance Sheets. The deferred tax liability resulted as India subsidiary had income for the year ended December 31, 2024 . U.S. loss and foreign income (loss) before income taxes are as follows: Year Ended December 31, 2024 2023 United States $ ( 104,143 ) $ ( 107,191 ) Foreign 5,774 7,035 Pretax loss $ ( 98,369 ) $ ( 100,156 ) Income tax benefit differs from the amounts computed by applying the statutory U.S. federal income tax rate ( 21% ) to loss before income taxes as a result of the following: Year Ended December 31, 2024 2023 Income tax benefit at the federal statutory rate $ ( 20,658 ) $ ( 21,033 ) State tax benefit ( 16,360 ) ( 999 ) Sale of tax credits ( 12,276 ) ( 55,164 ) Foreign tax differential 214 11 Stock-based compensation 629 2,048 Interest Expense 92 92 Prior year true-ups 5,143 ( 18,031 ) Other 38 67 Credits ( 2,597 ) ( 869 ) Valuation Allowance 34,943 40,142 Income Tax Benefit $ ( 10,832 ) ( 53,736 ) Effective Tax Rate 11.01 % 53.65 % The components of the net deferred tax asset or (liability) are as follows: Year Ended December 31, 2024 2023 Deferred Tax Assets Organizational Costs, Start-up and Intangible Assets $ 13,998 $ 34,217 Stock Based Compensation 2,003 1,239 NOLs, Unabsorbed Depreciation and R&D Credits C/F's 96,990 67,621 Interest expense carryover 36,867 29,066 Ethanol Credits 1,500 1,500 Investment Credits 3,393 - Carbon Oxide Sequestration Credit 9,277 6,696 Accrued Expenses 3,581 2,249 Operating Lease Liability 1,342 1,282 Fixed Asset Grants 5,226 - Other, net 512 248 Total Deferred Tax Assets 174,689 144,118 Valuation Allowance ( 170,298 ) ( 135,354 ) Net Deferred Tax Assets 4,391 8,764 Deferred Tax Liabilities Right of Use Asset ( 1,211 ) ( 1,230 ) Property, Plant & Equipment ( 3,874 ) ( 8,266 ) Other, net - ( 3 ) Total Deferred Tax Liabilities ( 5,085 ) ( 9,499 ) Net Deferred Tax Liabilities $ ( 694 ) $ ( 735 ) Based on the Company’s evaluation of current and anticipated future taxable income, the Company believes it is more likely than not that insufficient taxable income will be generated to realize the net deferred tax assets, and accordingly, a valuation allowance has been set against these net deferred tax assets. The $ 0.7 million deferred tax liability is recorded in other long-term liabilities on the balance sheet. We do not provide for U.S. income taxes for any undistributed earnings of the Company’s foreign subsidiaries, as the Company considers these to be permanently reinvested in the operations of such subsidiaries and have a cumulative foreign loss. At December 31, 2024 and 2023 , these undistributed earnings totaled $ 6.5 million and $ 1.3 million, respectively. If any earnings were distributed, some countries may impose withholding taxes. However, due to the Company’s overall deficit in foreign cumulative earnings and its U.S. loss position, the Company does not believe a material net unrecognized U.S. deferred tax liability exists. 53 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) ASC 740 Income Taxes provides that the tax effects from an uncertain tax position can be recognized in the Company’s financial statements only if the position is more-likely-than- not of being sustained on audit, based on the technical merits of the position. Tax positions that meet the recognition threshold are reported at the largest amount that is more-likely-than- not to be realized. This determination requires a high degree of judgment and estimation. The Company periodically analyzes and adjusts amounts recorded for the Company’s uncertain tax positions, as events occur to warrant adjustment, such as when the statutory period for assessing tax on a given tax return or period expires or if tax authorities provide administrative guidance or a decision is rendered in the courts. The Company does not reasonably expect the total amount of uncertain tax positions to significantly increase or decrease within the next 12 months. As of December 31, 2024 , the Company’s uncertain tax positions were not significant for income tax purposes. The following table describes the open tax years, by major tax jurisdiction, as of December 31, 2024 : United States — Federal 2007 – present United States — State 2008 – present India 2013 – present Mauritius 2006 – present As of December 31, 2024 , the Company had U.S. federal NOL carryforwards of approximately $ 323.0 million and state NOL carryforwards of approximately $ 408.0 million. As of December 31, 2024, the federal NOLs of $ 188.0 million and the state NOLs of $ 408.0 million expire on various dates between 2027 and 2042. Due to the 2017 U.S. Tax Reform, U.S. federal NOLs post 2017 in the amount of $ 135.0 million have no expiration date. The Company also has approximately $ 1.5 million of alcohol and cellulosic biofuel credit carryforwards and investment credits of $ 3.4 million. The company also has $ 9.3 million of carbon oxide sequestration credit carryforwards and $ 0.3 million of R&D tax credit carryforwards. The federal net operating loss and other tax credit carryforwards expire on various dates between 2027 and 2043. The state net operating loss carryforwards expire on various dates between 2027 through 2042. Under current tax law, net operating loss and credit carryforwards available to offset future income in any given year may be limited by US statute regarding net operating loss carryovers and timing of expirations or upon the occurrence of certain events, including significant changes in ownership interests. As of December 31, 2024, the Company's India subsidiary had no loss carryforwards. 17. Subsequent Events Subordinated Notes On January 1, 2025, the maturity dates on two accredited investor's Subordinated Notes were extended until June 30, 2025, subject to acceleration on an Event of Default, including failure to pay interest or principal when due and breaches of note covenants. A $ 90 thousand and $ 250 thousand extension fee was paid by adding the fee to the principal balances of the Subordinated Notes, and Aemetis issued the lenders warrants exercisable for 113 thousand shares of common stock with a term of two years and an exercise price of $ 0.01 per share. The warrants have been fully exercised. Investment Tax Credits In December 2024, the Company entered into an agreement to sell Investment Tax Credits ("ITCs") to a third party, with separate fundings expected in January and February 2025. In January 2025, we received the initial sale proceeds of $ 12.3 million, and we received an additional of $ 7.1 million in February 2025. We used the net proceeds, after paying transaction expenses, to pay certain debt and fee obligations to Third Eye Capital. PUPA Extension 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 further provides that if ABGL does not redeem the Series A Preferred Units by the redemption date, ABGL will enter into a credit agreement with Protair- X Technologies Inc. and Third Eye Capital effective as of May 1, 2025, and maturing April 30, 2026, in substantially the form attached to the PUPA Eighth Amendment and specifies that entry of the credit agreement will satisfy the obligation to redeem the units. The credit agreement would bear an interest rate equal to the greater of (i) the prime rate plus 10.0 % and (ii) 16.0 %. The PUPA Eighth Amendment is attached as Exhibit 10.52 and this summary description is qualified by the terms of the attached Exhibit 10.52. Fuels Revolving Line Amendment 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 and this summary description is qualified by the terms of the attached Exhibit 10.66. Fuels Revolving Line Promissory Note 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 the Borrowers 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. If the Borrowers draw on the note, the outstanding principal would accrue interest at 24 % per annum. The Promissory Note has 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 and this summary description is qualified by the terms of the attached Exhibit 10.67. 54 Table of Contents AEMETIS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Tabular data in thousands, except par value and per share data) 18. Liquidity 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, negative operating results, and collateralization of a substantial portion of our assets, we have been reliant on our senior secured lender to provide extensions to the maturity dates of its debt and loan facilities, and have been required to remit excess cash from operations and tax credit sales to our senior secured lender. In order to meet our obligations during the next twelve months, we will need to refinance debt with our senior lender for amounts becoming due in the next twelve months or receive the continued cooperation of our senior lender. While we believe our India biodiesel and California RNG businesses will generate positive cash flow from operations and reduce cash demands and allows payments against other obligations, we will also continue to sell equity through our at-the-market registration and pursue the following strategies to improve liquidity: For the Keyes Plant, we plan to operate the plant and continue to improve its financial performance by adopting new technologies or process changes that allow for energy efficiency, cost reduction, or revenue enhancements, as well as execute upon awarded grants that improve energy and operational efficiencies resulting in lower cost, lower carbon emissions, and overall margin improvement. For Aemetis Biogas, we plan to operate our existing biogas digesters to produce and sell Renewable Natural Gas and the associated environmental attributes. We are continuing to build new dairy digesters and pipeline extensions that generate new and growing sources of revenue and cash. We also expect revenue to increase as the California Air Resource Board validates our LCFS pathway applications. We are seeking debt from a variety of sources to continue the construction of additional digesters. For the Kakinada Plant, we plan to continue to sell our biodiesel to OMCs pursuant to cost-plus contracts. We are also continuing to upgrade the plant to increase feedstock flexibility (and thereby lower feedstock costs), increase production capacity, and produce new products. Additionally, we have hired a new executive team to help execute on a potential public stock offering of our India subsidiary and to develop plans for additional growth. We plan to continue to locate funding for existing and new business opportunities through a combination of working with our senior lender, restructuring or refinancing existing loan agreements, entering into additional debt agreements for specific projects, and obtaining project specific equity and debt for development projects, and obtaining additional debt from the current EB- 5 Phase II offering. After consideration of our strategies and the uncertainty as to whether certain elements will ultimately be implemented or effective, and considering our need to secure additional financing, substantial doubt about the Company's ability to continue as a going concern remains. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.