UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ~~ended:~~ended September 30, ~~2022~~2023

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

For the transition period from to

Commission File Number: 001-36475

AEMETIS, INC.

(Exact name of registrant as specified in its charter)

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

20400 Stevens Creek Blvd., Suite 700

Cupertino, CA 95014

(Address of Principal Executive Offices, including zip code)

(408) 213-0940

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

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

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

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

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

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

The number of shares outstanding of the registrant’s Common Stock on October 31, ~~2022~~2023 was ~~35,043,877~~39,451,266 shares.

Table of Contents

On one or more occasions, we may make forward-looking statements in this Quarterly Report on Form 10-Q, including statements regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events or other statements that are not historical facts. Forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, statements regarding management’s plans; trends in market conditions with respect to prices for inputs for our products versus prices for our products; our ability to leverage approved feedstock pathways; our ability to leverage our location and infrastructure; our ability to incorporate lower-cost, non-food advanced biofuels feedstock at the Keyes plant; our ability to adopt value-add by-product processing systems; our ability to expand into alternative markets for biodiesel and its by-products, including continuing to expand our sales into international markets; our ability to maintain and expand strategic relationships with suppliers; our ability to continue to develop new and to maintain and protect new and existing intellectual property rights; our ability to adopt, develop and commercialize new technologies; our ability to extend or refinance our senior debt on terms reasonably acceptable to us or at all; our ability to continue to fund operations and our future sources of liquidity and capital resources; our ability to fund, develop, build, maintain and operate digesters, facilities and pipelines for our California Dairy Renewable Natural Gas segment; our ability to fund, develop and operate our ~~CCS~~carbon capture sequestration projects, including obtaining required permits; our ability to receive awarded grants by meeting all of the required conditions, including meeting the minimum contributions; our ability to sell additional notes under our EB-5 note program and our expectations regarding the release of funds from escrow under our EB-5 note program; our ability to generate and sell or utilize various credits, including LCFS and IRS 45Q tax credits; our ability to improve margins; and our ability to raise additional capital. Words or phrases such as “anticipates,” “may,” “will,” “should,” “could,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,” “will continue” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on current assumptions and predictions and are subject to numerous markets and uncertainties. Actual results or events could differ materially from those set forth or implied by such forward-looking statements and related assumptions due to certain factors, including, without limitation, the risks set forth under the caption “Risk Factors” below, which are incorporated herein by reference, as well as those business risks and factors described elsewhere in this report and in our other filings with the Securities and Exchange Commission (the “SEC”), including without limitation, our most recent Annual Report on Form 10-K.

	*September 30, 2022*			*December 31, 2021*			*September 30, 2023*			*December 31, 2022*
Assets
Current assets:
Cash and cash equivalents ($0 and $19 respectively from VIE)	$	251		$	7,751
Accounts receivable, net of allowance for doubtful accounts of $0 and $1,404 as of September 30, 2022 and December 31, 2021, respectively		9,127			1,574
Inventories, net of allowance for excess and obsolete inventory of $1,040 as of September 30, 2022 and December 31, 2021, respectively		10,431			5,126
Prepaid expenses ($223 and $335 respectively from VIE)		3,671			5,598
Other current assets		571			644
Cash and cash equivalents ($139 and $165 respectively from VIE)							$	3,899		$	4,313
Accounts receivable ($73 and $165 respectively from VIE)								4,579			1,264
Inventories, net of allowance for excess and obsolete inventory of $1,040 as of September 30, 2023, and December 31, 2022, respectively								8,143			4,658
Tax Credit Sales receivable ($55,164 and $0 respectively from VIE)								55,164			-
Prepaid expenses ($1,937 and $858 respectively from VIE)								2,895			4,248
Other current assets ($401 and $725 respectively from VIE)								3,811			3,653
Total current assets		24,051			20,693			78,491			18,136

Property, plant and equipment, net ($63,961 and $39,625 respectively from VIE)		169,485			135,101
Operating lease right-of-use assets ($0 and $10 respectively from VIE)		2,227			2,462
Other assets ($584 and $38 respectively from VIE)		3,112			2,575
Property, plant and equipment, net ($75,284 and $71,633 respectively from VIE)								188,076			180,441
Operating lease right-of-use assets ($165 and $224 respectively from VIE)								2,159			2,449
Other assets ($5,267 and $3,458 respectively from VIE)								8,713			6,088
Total assets	$	198,875		$	160,831		$	277,439		$	207,114

Liabilities and stockholders' deficit
Current liabilities:
Accounts payable ($11,545 and $4,950 respectively from VIE)	$	32,938		$	16,415
Accounts payable ($7,103 and $9,192 respectively from VIE)							$	28,800		$	26,168
Current portion of long term debt		10,204			8,192			24,070			12,465
Short term borrowings ($9 and $9 respectively from VIE)		18,816			14,586
Short term borrowings ($23,942 and $19,831 respectively from VIE)								42,415			36,754
Mandatorily redeemable Series B convertible preferred stock		3,992			3,806			4,403			4,082
Accrued property taxes ($0 and $121 respectively from VIE)		1,028			6,830
Accrued contingent litigation fees		-			6,200
Current portion of operating lease liability ($6 and $11 respectively from VIE)		267			260
Current portion of Series A preferred units ($109,401 and $3,169 respectively from VIE)		109,401			3,169
Other current liabilities ($442 and $306 respectively from VIE)		6,448			5,872
Accrued property taxes								1,543			1,206
Current portion of operating lease liability ($46 and $41 respectively from VIE)								390			338
Other current liabilities ($1,614 and $645 respectively from VIE)								12,746			7,268
Total current liabilities		183,094			65,330			114,367			88,281
Long term liabilities:
Senior secured notes and revolving notes		151,086			121,451			170,261			155,843
EB-5 notes		31,000			32,500			29,500			29,500
Other long term debt ($33 and $40 respectively from VIE)		11,876			12,038
Series A preferred units ($0 and $44,978 respectively from VIE)		-			44,978
Operating lease liability		2,120			2,318
Other long term debt ($9,230 and $31 respectively from VIE)								20,288			11,678
Series A preferred units ($137,778 and $116,000 respectively from VIE)								137,778			116,000
Operating lease liability ($80 and $115 respectively from VIE)								1,890			2,189
Other long term liabilities		4,589			2,454			3,347			5,477
Total long term liabilities		200,671			215,739			363,064			320,687

Stockholders' deficit:
Series B convertible preferred stock, $0.001 par value; 7,235 authorized; 1,270 and 1,275 shares issued and outstanding each period, respectively (aggregate liquidation preference of $3,810 and $3,825 respectively)		1			1
Common stock, $0.001 par value; 80,000 authorized; 35,043 and 33,461 shares issued and outstanding each period, respectively		35			33
Series B convertible preferred stock, $0.001 par value; 7,235 authorized; 1,260 and 1,270 shares issued and outstanding each period, respectively (aggregate liquidation preference of $3,780 and $3,810 respectively)								1			1
Common stock, $0.001 par value; 80,000 authorized; 39,388 and 35,869 shares issued and outstanding each period, respectively								39			36
Additional paid-in capital		226,883			205,305			255,510			232,546
Accumulated deficit		(406,575	)		(321,227	)		(449,963	)		(428,985	)
Accumulated other comprehensive loss		(5,234	)		(4,350	)		(5,579	)		(5,452	)
Total stockholders' deficit		(184,890	)		(120,238	)		(199,992	)		(201,854	)
Total liabilities and stockholders' deficit	$	198,875		$	160,831		$	277,439		$	207,114

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE ~~(LOSS)~~LOSS

	*For the three months ended September 30,*						*For the nine months ended September 30,*						*For the three months ended September 30,*						*For the nine months ended September 30,*
	*2022*			*2021*			*2022*			*2021*			*2023*			*2022*			*2023*			*2022*
Revenues	$	71,831		$	49,895		$	189,781		$	147,586		$	68,690		$	71,831		$	115,953		$	189,781
Cost of goods sold		72,935			54,680			194,184			152,333			68,198			72,935			114,800			194,184
Gross profit (loss)		(1,104	)		(4,785	)		(4,403	)		(4,747	)		492			(1,104	)		1,153			(4,403	)

Research and development expenses		52			22			139			66			36			52			115			139
Selling, general and administrative expenses		6,867			5,087			21,234			16,222			8,985			6,439			29,480			21,166
Other operating (income)		(428	)		-			(68	)		-
Operating loss		(7,595	)		(9,894	)		(25,708	)		(21,035	)		(8,529	)		(7,595	)		(28,442	)		(25,708	)

Other expense (income):
Interest expense
Interest rate expense		5,456			4,408			14,819			14,902			8,749			5,456			24,126			14,819
Debt related fees and amortization expense		1,633			1,140			5,199			3,045			1,433			1,633			4,732			5,199
Accretion and other expenses of Series A preferred units		2,774			2,185			5,920			7,928			7,739			2,774			20,188			5,920
Loss (gain) on debt extinguishment		49,386			-			49,386			(1,134	)
Loss on debt extinguishment														-			49,386			-			49,386
Gain on litigation		-			-			(1,400	)		-			-			-			-			(1,400	)
Other (income) expense		(2	)		(30	)		(14,297	)		483
Other income														(1,853	)		(2	)		(2,020	)		(14,297	)
Loss before income taxes		(66,842	)		(17,597	)		(85,335	)		(46,259	)		(24,597	)		(66,842	)		(75,468	)		(85,335	)
Income tax expense		3			-			13			7
Net loss	$	(66,845	)	$	(17,597	)	$	(85,348	)	$	(46,266	)
Income tax expense (benefit)														(55,308	)		3			(54,490	)		13
Net income (loss)													$	30,711		$	(66,845	)	$	(20,978	)	$	(85,348	)

Other comprehensive loss
Other comprehensive income (loss)
Foreign currency translation loss		(300	)		22			(884	)		(187	)		(260	)		(300	)		(127	)		(884	)
Comprehensive loss	$	(67,145	)	$	(17,575	)	$	(86,232	)	$	(46,453	)
Comprehensive income (loss)													$	30,451		$	(67,145	)	$	(21,105	)	$	(86,232	)

Net loss per common share
Net income (loss) per common share
Basic	$	(1.92	)	$	(0.55	)	$	(2.49	)	$	(1.55	)	$	0.79		$	(1.92	)	$	(0.56	)	$	(2.49	)
Diluted	$	(1.92	)	$	(0.55	)	$	(2.49	)	$	(1.55	)	$	0.73		$	(1.92	)	$	(0.56	)	$	(2.49	)

Weighted average shares outstanding
Basic		34,769			31,857			34,344			29,818			38,881			34,769			37,504			34,344
Diluted		34,769			31,857			34,344			29,818			41,841			34,769			37,504			34,344

	*For the nine months ended September 30,*						*For the nine months ended September 30,*
	*2022*			*2021*			*2023*			*2022*
Operating activities:
Net loss	$	(85,348	)	$	(46,266	)	$	(20,978	)	$	(85,348	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation		4,934			1,401			6,223			4,934
Depreciation		4,039			4,106			5,208			4,039
Debt related fees and amortization expense		5,199			3,045			4,732			5,199
Intangibles and other amortization expense		35			35			35			35
Accretion and other expenses of Series A preferred units		5,920			7,928			20,188			5,920
Loss on asset disposals		47			-			-			47
Loss (gain) on debt extinguishment		49,386			(1,134	)		-			49,386
Warrants issued for working capital agreement								409			-
Gain on litigation		(1,400	)		-			-			(1,400	)
Loss on lease termination		736			-			-			736
Provision for bad debts		-			144
Deferred tax expense								(144	)		-
Changes in operating assets and liabilities:
Accounts receivable		(7,987	)		50			(3,344	)		(7,987	)
Inventories		(5,639	)		(902	)		(3,616	)		(5,639	)
Prepaid expenses		2,786			(2,847	)		2,379			2,786
Other assets		(505	)		2,475			(56,797	)		(505	)
Accounts payable		8,754			(4,624	)		4,728			12,801
Accrued interest expense and fees		12,801			9,256			18,483			8,754
Other liabilities		(10,065	)		7,340			2,356			(10,065	)
Net cash used in operating activities		(16,307	)		(19,993	)		(20,138	)		(16,307	)

Investing activities:
Capital expenditures		(28,931	)		(18,771	)		(18,595	)		(28,931	)
Grant proceeds and other reimbursements received for capital expenditures		7,401			1,224			7,682			7,401
Net cash used in investing activities		(21,530	)		(17,547	)		(10,913	)		(21,530	)

Financing activities:
Proceeds from borrowings		39,860			-			41,449			39,860
Repayments of borrowings		(16,191	)		(53,523	)		(22,586	)		(16,191	)
Lender debt renewal and waiver fee payments		(1,169	)		(1,008	)		(1,681	)		(1,169	)
Grant proceeds received for capital expenditures		-			115
Payments on finance leases		(314	)		(373	)		(394	)		(314	)
Proceeds from issuance of common stock in equity offering		7,996			94,203
Proceeds from the exercise of stock options		206			1,104
Proceeds from Series A preferred units financing		-			3,130
Series A preferred financing redemption		-			(300	)
Proceeds from issuance of common stock								14,767			7,996
Proceeds from exercise of stock options								45			206
Net cash provided by financing activities		30,388			43,348			31,600			30,388

Effect of exchange rate changes on cash and cash equivalents		(51	)		(11	)		117			(51	)
Net change in cash and cash equivalents for period		(7,500	)		5,797			666			(7,500	)
Cash and cash equivalents at beginning of period		7,751			592			6,999			7,751
Cash and cash equivalents at end of period	$	251		$	6,389		$	7,665		$	251

Supplemental disclosures of cash flow information, cash paid:
Cash paid for interest	$	15,476		$	5,646		$	6,926		$	15,476
Income taxes paid		10			7			20			10
Supplemental disclosures of cash flow information, non-cash transactions:
Subordinated debt extension fees added to debt		680			680			680			680
Debt fees added to revolving lines		800			-			2,236			800
Fair value of warrants issued to subordinated debt holders		1,939			1,546			1,278			1,939
Fair value of warrants issued for guarantee fees		2,012			-
Fair value of stock issued to a related party for guarantee fees								-			2,012
Fair value of warrants issued to lender for debt issuance costs		3,158			-			245			3,158
Fair value of stock issued to lender		1,335			-			-			1,335
Lender debt extension, waiver, and other fees added to debt		583			608			384			583
Capital expenditures in accounts payable		15,957			4,695
Cumulative capital expenditures in accounts payable, including net increase of $474 and $1,535, respectively								13,459			15,957
Payment of debt added to revolving lines		16,266			-			-			16,266
Financing lease liabilities arising from obtaining right of use assets		2,932			113			-			2,932
Capital expenditures purchased on financing		290			55			-			290
Issuance of equity to pay off accounts payable		-			893

*For the nine months ended September 30, 2022*
*For the nine months ended September 30, 2023*																					*For the nine months ended September 30, 2023*
	*Series B Preferred Stock*					*Common Stock*				*Additional*					*Accumulated Other*			*Total*				*Series B Preferred Stock*					*Common Stock*				*Additional*					*Accumulated Other*			*Total*
										*Paid-in*		*Accumulated*			*Comprehensive*			*Stockholders'*													*Paid-in*		*Accumulated*			*Comprehensive*			*Stockholders'*
Description	*Shares*			*Dollars*		*Shares*		*Dollars*		*Capital*		*Deficit*			*Loss*			*deficit*				*Shares*			*Dollars*		*Shares*		*Dollars*		*Capital*		*Deficit*			*Gain (Loss)*			*deficit*

Balance at December 31, 2021		1,275		$	1		33,461	$	33	$	205,305	$	(321,227	)	$	(4,350	)	$	(120,238	)

Issuance of common stock		-			-		341		1		3,348		-			-			3,349
Series B conversion to common stock		(5	)		-		1		-		-		-			-			-
Stock options exercised		-			-		263		-		196		-			-			196
Stock-based compensation		-			-		-		-		2,040		-			-			2,040
Issuance and exercise of warrants		-			-		113		-		4,550		-			-			4,550
Foreign currency translation loss		-			-		-		-		-		-			(194	)		(194	)
Net loss		-			-		-		-		-		(18,294	)		-			(18,294	)
Balance at March 31, 2022		1,270		$	1		34,179	$	34	$	215,439	$	(339,521	)	$	(4,544	)	$	(128,591	)

Issuance of common stock		-			-		400		1		5,123		-			-			5,124
Stock options exercised		-			-		3		-		4		-			-			4
Stock-based compensation		-			-		-		-		1,349		-			-			1,349
Foreign currency translation loss		-			-		-		-		-		-			(390	)		(390	)
Net loss		-			-		-		-		-		(209	)		-			(209	)
Balance at June 30, 2022		1,270		$	1		34,582	$	35	$	221,915	$	(339,730	)	$	(4,934	)	$	(122,713	)
Balance at December 31, 2022																							1,270		$	1		35,869	$	36	$	232,546	$	(428,985	)	$	(5,452	)	$	(201,854	)

Issuance of common stock		-			-		319		-		2,872		-			-			2,872				-			-		668		1		2,616		-			-			2,617
Stock options exercised		-			-		29		-		5		-			-			5				-			-		40		-		-		-			-			-
Stock-based compensation		-			-		-		-		1,545		-			-			1,545				-			-		-		-		2,662		-			-			2,662
Issuance and exercise of warrants		-			-		113		-		546		-			-			546				-			-		113		-		448		-			-			448
Foreign currency translation gain		-			-		-		-		-		-			(300	)		(300	)			-			-		-		-		-		-			117			117
Net loss		-			-		-		-		-		(66,845	)		-			(66,845	)			-			-		-		-		-		(26,410	)		-			(26,410	)
Balance at September 30, 2022		1,270		$	1		35,043	$	35	$	226,883	$	(406,575	)	$	(5,234	)	$	(184,890	)
Balance at March 31, 2023																							1,270		$	1		36,690	$	37	$	238,272	$	(455,395	)	$	(5,335	)	$	(222,420	)

Issuance of common stock																							-			-		1,353		1		6,298		-			-			6,299
Series B conversion to common stock																							(10	)		-		1		-		-		-			-			-
Stock options exercised																							-			-		72		-		38		-			-			38
Stock-based compensation																							-			-		-		-		1,755		-			-			1,755
Issuance and exercise of warrants																							-			-		62				654								654
Foreign currency translation gain																							-			-		-		-		-		-			16			16
Net loss																							-			-		-		-		-		(25,279	)		-			(25,279	)
Balance at June 30, 2023																							1,260		$	1		38,178	$	38	$	247,017	$	(480,674	)	$	(5,319	)	$	(238,937	)

Issuance of common stock																							-			-		1,062		1		5,850		-			-			5,851
Stock options exercised																							-			-		35		-		7		-			-			7
Stock-based compensation																							-			-		-		-		1,806		-			-			1,806
Issuance and exercise of warrants																							-			-		113		-		830		-			-			830
Foreign currency translation loss																							-			-		-		-		-		-			(260	)		(260	)
Net income																							-			-		-		-		-		30,711			-			30,711
Balance at September 30, 2023																							1,260		$	1		39,388	$	39	$	255,510	$	(449,963	)	$	(5,579	)	$	(199,992	)

*For the nine months ended September 30, 2021*
*For the nine months ended September 30, 2022*																					*For the nine months ended September 30, 2022*
	*Series B Preferred Stock*					*Common Stock*				*Additional*					*Accumulated Other*			*Total*				*Series B Preferred Stock*					*Common Stock*				*Additional*					*Accumulated Other*			*Total*
										*Paid-in*		*Accumulated*			*Comprehensive*			*Stockholders'*													*Paid-in*		*Accumulated*			*Comprehensive*			*Stockholders'*
Description	*Shares*			*Dollars*		*Shares*		*Dollars*		*Capital*		*Deficit*			*Loss*			*deficit*				*Shares*			*Dollars*		*Shares*		*Dollars*		*Capital*		*Deficit*			*Loss*			*deficit*

Balance at December 31, 2020		1,323		$	1		22,830	$	23	$	93,426	$	(274,080	)	$	(4,114	)	$	(184,744	)
Balance at December 31, 2021																							1,275		$	1		33,461	$	33	$	205,305	$	(321,227	)	$	(4,350	)	$	(120,238	)

Issuance of common stock																							-			-		341		1		3,348		-			-			3,349
Series B conversion to common stock																							(5	)		-		1		-		-		-			-			-
Stock options exercised																							-			-		263		-		196		-			-			196
Stock-based compensation																							-			-		-		-		2,040		-			-			2,040
Issuance and exercise of warrants																							-			-		113		-		4,550		-			-			4,550
Foreign currency translation loss																							-			-		-		-		-		-			(194	)		(194	)
Net loss																							-			-		-		-		-		(18,294	)		-			(18,294	)
Balance at March 31, 2022																							1,270		$	1		34,179	$	34	$	215,439	$	(339,521	)	$	(4,544	)	$	(128,591	)

Issuance of common stock																							-			-		400		1		5,123		-			-			5,124
Stock options exercised																							-			-		3		-		4		-			-			4
Stock-based compensation																							-			-		-		-		1,349		-			-			1,349
Foreign currency translation loss																							-			-		-		-		-		-			(390	)		(390	)
Net loss																							-			-		-		-		-		(209	)		-			(209	)
Balance at June 30, 2022																							1,270		$	1		34,582	$	35	$	221,915	$	(339,730	)	$	(4,934	)	$	(122,713	)

Issuance of common stock		-			-		5,682		6		62,389		-			-			62,395				-			-		319		-		2,872		-			-			2,872
Stock options exercised		-			-		1,226		1		1,002		-			-			1,003				-			-		29		-		5		-			-			5
Stock-based compensation		-			-		-		-		835		-			-			835				-			-		-		-		1,545		-			-			1,545
Issuance and exercise of warrants		-			-		113		-		281		-			-			281				-			-		113		-		546		-			-			546
Foreign currency translation loss		-			-		-		-		-		-			(25	)		(25	)			-			-		-		-		-		-			(300	)		(300	)
Net loss		-			-		-		-		-		(18,112	)		-			(18,112	)			-			-		-		-		-		(66,845	)		-			(66,845	)
Balance at March 31, 2021		1,323		$	1		29,851	$	30	$	157,933	$	(292,192	)	$	(4,139	)	$	(138,367	)

Issuance of common stock		-			-		976		1		24,773		-			-			24,774
Stock options exercised		-			-		745		1		28		-			-			29
Stock-based compensation		-			-		-		-		281		-			-			281
Foreign currency translation loss		-			-		-		-		-		-			(184	)		(184	)
Net loss		-			-		-		-		-		(10,557	)		-			(10,557	)
Balance at June 30, 2021		1,323		$	1		31,572	$	32	$	183,015	$	(302,749	)	$	(4,323	)	$	(124,024	)

Issuance of common stock		-			-		576		1		7,883		-			-			7,884
Series B conversion to common stock		(38	)		-		4		-		-		-			-			-
Stock options exercised		-			-		299		-		72		-			-			72
Stock-based compensation		-			-		-		-		285		-			-			285
Issuance and exercise of warrants		-			-		113		-		1,265		-			-			1,265
Foreign currency translation gain		-			-		-		-		-		-			22			22
Net loss		-			-		-		-		-		(17,597	)		-			(17,597	)
Balance at September 30, 2021		1,285		$	1		32,564	$	33	$	192,520	$	(320,346	)	$	(4,301	)	$	(132,093	)
Balance at September 30, 2022																							1,270		$	1		35,043	$	35	$	226,883	$	(406,575	)	$	(5,234	)	$	(184,890	)

Nature of Activities. 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 acquisition, development and commercialization of innovative low and negative carbon intensity products and technologies that replace traditional petroleum-based products. We operate in three reportable segments consisting of “California ~~Ethanol”, “Dairy~~Ethanol,” “California Dairy Renewable Natural ~~Gas”,~~Gas,” and “India ~~Biodiesel”.~~Biodiesel.” We have other operating segments determined not to be reportable segments and are collectively represented by the “All Other” category. At Aemetis, our mission is to generate sustainable and innovative renewable fuel solutions that benefit communities and restore our environment. We do this ~~through leading the low-carbon fuels industry~~ by building a local circular bioeconomy ~~utilizing~~using agricultural waste to produce low carbon, advanced renewable fuels that ~~produce less~~reduce greenhouse gas ("GHG") emissions and ~~thereby~~ improve air ~~quality.~~quality by replacing traditional petroleum-based products.

~~We own and operate~~Our California Ethanol segment consists of a 65 million gallon per year capacity ethanol production facility located in Keyes, California (the “Keyes Plant”). that we own and operate. In addition to low carbon renewable fuel ethanol, the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), Carbon Dioxide (“CO₂”) and Condensed Distillers Solubles (“CDS”), all of which are sold as animal feed to local dairies and ~~feedlots. In the~~ ~~third~~ ~~quarter of~~ ~~2022,~~ ~~a Mitsubishi Chemical Corporation ZEBREX~~^TM~~ethanol dehydration system was commissioned, a key~~ ~~first~~ ~~step in the electrification of~~feedlots, with CO₂ sold to food, beverage, and industrial customers. We have several energy efficiency initiatives at the Keyes Plant ~~which reduces our overall energy use and lowers~~focused on significantly lowering the carbon intensity of our ~~ethanol.~~ fuels. During the last two weeks of December 2022, we undertook an extended maintenance cycle and accelerated the implementation of several important ethanol plant energy efficiency upgrades. Our decision was partly driven by the high natural gas prices in California during the period. Furthermore, after monitoring natural gas pricing and margin profitability, we decided to extended the maintenance cycle into the first and second quarters of 2023 and restarted the plant near the end of the second quarter.

Our California Dairy Renewable Natural Gas segment, which consists of our subsidiary Aemetis Biogas LLC ~~(“ABGL”~~and its subsidiaries, ("Aemetis Biogas" or "ABGL") ~~was formed to construct~~, constructs and operates bio-methane anaerobic digesters at local dairies near the Keyes Plant ~~many~~(many of whom also purchase WDG produced ~~at the Keyes Plant. The digesters are connected via an underground private pipeline owned~~ by ~~ABGL to a gas cleanup and compression unit being built at~~ the Keyes Plant as animal feed); transports the biogas via pipeline to ~~produce dairy renewable~~the Keyes Plant site; and converts the biogas to Renewable Natural Gas (“RNG”) which is then delivered to customers through the PG&E natural gas (“RNG”). Upon receiving the bio-methane from the dairies, impurities are removed, and the bio-methane is converted to negative carbon intensity RNG that will either be injected into the statewide PG&E gas utility pipeline, supplied as compressed RNG that will service local trucking fleets, or used as renewable process energy at the Keyes Plant.pipeline.

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

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

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

Our All Other segment consists of: the development of our Carbon Zero biofuels production plant to produce renewable diesel and sustainable aviation fuel; the development of Carbon Capture and Sequestration compression system and injection wells; operation of the Riverbank Industrial Complex; a research and development facility in Minneapolis Minnesota; and our corporate offices in Cupertino, California.

Our Carbon Zero biofuels production plants are designed to produce low or negative carbon intensity sustainable aviation fuel (“SAF”) and renewable diesel fuel (“RD”) using low carbon hydroelectric electricity, renewable hydrogen and non-edible renewable oils from existing Aemetis biofuels plants and other sources. The first Carbon Zero plant is scheduled to be built in Riverbank, California at the 125-acre former Riverbank Army ammunition plant.

Our Carbon Capture subsidiary was established to build Carbon Capture and Sequestration (“CCS”) projects that generate LCFS and IRS 45Q tax credits by compressing and injecting CO₂ into deep wells that are monitored for emissions to ensure the long-term sequestration of carbon underground.

Basis of Presentation and Consolidation. These consolidated financial statements include the accounts of ~~Aemetis. Additionally, we~~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.~~in these financial statements.

All intercompany balances and transactions have been eliminated in consolidation.

The accompanying consolidated condensed balance sheet as of September 30, ~~2022~~2023, the consolidated condensed statements of operations and comprehensive ~~income (loss)~~loss for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022, the consolidated condensed statements of cash flows for the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022, and the consolidated condensed statements of stockholders’ deficit for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 are unaudited. The consolidated condensed balance sheet as of December 31, ~~2021~~2022, was derived from the ~~2021~~2022 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the ~~2021~~2022 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, ~~2021~~2022. The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of Company’s management, the unaudited interim consolidated condensed financial statements as of and for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 have been prepared on the same basis as the audited consolidated statements as of and for the year ended December 31, ~~2021~~2022 and reflect all adjustments, consisting primarily of normal recurring adjustments, necessary for the fair presentation of its statement of financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, ~~2022~~2023 are not necessarily indicative of the operating results for any subsequent quarter, for the full fiscal year or any future periods.

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

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

California ~~Ethanol:~~ Ethanol Revenues: ~~Until~~ ~~May 13, 2020,~~ ~~we sold all our ethanol to J.D. Heiskell & Co. (“J.D. Heiskell”) under the Working Capital and Purchasing Agreement (the “J.D. Heiskell Purchasing Agreement”).~~ On May 13, 2020, we entered into an amendment to ~~the~~the Corn Procurement and Working Capital Agreement with J.D. Heiskell (the “Corn Procurement and Working Capital”), ~~under the terms of~~pursuant to which we buy all corn from J.D. Heiskell and sell all WDG and corn oil we produce to J.D. Heiskell. ~~Following~~ ~~May 13, 2020~~ ~~and until~~ ~~October, 2021,~~ ~~we sold the majority of our fuel ethanol production to~~ ~~one~~ ~~customer, Kinergy Marketing, LLC (“Kinergy”), through individual sales transactions. We terminated the Ethanol Marketing Agreement with Kinergy as of~~ ~~September 30, 2021.~~ Effective October 1, 2021, we entered into Fuel Ethanol Purchase and Sale Agreement with Murex LLC (“Murex”), inpursuant to which we ~~sell~~sold all our ethanol to ~~Murex.~~Murex through individual sales transactions. On May 25, 2023, we entered into the second amendment to the Aemetis Keyes Grain Procurement and Working Capital Agreement with J.D. Heiskell, the second amendment to the Corn Procurement and Working Capital Agreement with J.D. Heiskell, and the second amendment to the Keyes Ethanol and Corn Tank Lease with J.D. Heiskell. The amendments provide that (i) the Keyes Plant will receive a temporary increase to its working capital credit limit by an amount equal to four days of grain payables repayable in equal daily installments over 120 days, (ii) that J.D. Heiskell will buy all Ethanol, WDG, CDS, and Corn Oil produced by the Keyes Plant, sell all ethanol to certain designated purchasers and pay us the same price as it received from such sales, and (iii) J.D. Heiskell will lease certain ethanol product storage tanks from the Keyes Plant. Given the similarity of the individual sales transactions with ~~Kinergy and Murex,~~J.D. Heiskell, we have assessed them as a portfolio of similar contracts. ~~The~~Prior to May 25, 2023, the performance obligation was satisfied by delivery of the physical product from our finished goods tank to our customer’s contracted trucks. Effective on May 25, 2023, the performance obligation is satisfied by delivery of the physical product to ~~one~~ ~~of our customer’s contracted trucking companies.~~the finished goods tank leased by J.D. Heiskell. Upon delivery, the customer has the ability to direct the use of the product and receive substantially all of its benefits. The transaction price is determined based on daily market prices ~~negotiated by Kinergy and Murex~~ for ethanol and by our marketing partner A.L. Gilbert Company (“A.L. Gilbert”) for WDG. The transaction price is allocated to one performance obligation.

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

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

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

~~For our California Ethanol segment,~~that same customer. Specifically, we buy corn as feedstock ~~for the production of~~in producing ethanol from our working capital partner J.D. ~~Heiskell. Prior to~~ ~~May 13, 2020,~~ Heiskell and we ~~sold~~sell all ~~our~~ ethanol, WDG, CDO, and ~~corn oil~~CDS produced to J.D. Heiskell. Our ethanol finished goods tank is leased to J.D. Heiskell and ~~we bought all our corn~~legal title to ~~process into ethanol from J.D. Heiskell. After~~ ~~May 13, 2020,~~ ~~we sold most~~the product is transferred upon transfer of our ~~fuel~~finished ethanol to ~~one~~ ~~customer, Kinergy, and sold all WDG and corn oil to J.D. Heiskell. During the~~ ~~second~~ ~~quarter of~~ ~~2021,~~ ~~we signed a biofuels offtake agreement with Murex, and beginning on~~ ~~October 1, 2021~~ ~~we sold all our fuel ethanol to Murex. We only have customer relationships with Kinergy and Murex, hence the principal and agent criteria are~~ ~~not~~ ~~applied. However, we are still buying corn and selling WDG and corn oil to J.D.Heiskell. We analyzed the principal versus agent relationship criteria below.~~

this location. We consider the purchase of corn as a cost of goods sold and consider the sale of ethanol as revenue upon transfer to the finished goods tank and consider the sale of WDG, CDO, and ~~corn oil,~~CDS as revenue, upon trucks leaving the Keyes Plant ~~as revenue~~with the product, on the basis that (i) we control and bear the risk of gain or loss on the processing of corn which is purchased at market prices into ethanol and (ii) we have legal title to the goods during the processing time. The pricing for ~~both~~ethanol, WDG, CDO, and ~~corn oil~~CDS is set independently. Revenues from ~~WDG~~ethanol and ~~corn oil~~WDG are billed net of the related transportation and marketing charges. The transportation component is accounted for in cost of goods sold and the marketing component is accounted for in sales, general and administrative expense. Transportation and marketing charges are known within days of the transaction and are recorded at the actual amounts. We have elected an accounting policy under which these charges have been treated as fulfillment activities provided after control has transferred. As a result, these charges are recognized in cost of goods sold and selling, general and administrative expenses, respectively, when revenue is recognized. Revenues are recorded at the gross invoiced amount. Hence, we are the principal in California Ethanol segment where our customer and vendor may be the same.

California Dairy Renewable Natural ~~Gas:~~Gas Revenues: ~~All~~Since 2018, we have used our relationships with California’s Central Valley dairy farmers to sign leases and raise funds to construct dairy digesters, a 40-mile RNG collection pipeline, a centralized biogas upgrading hub, and a renewable natural gas interconnection with PG&E’s natural gas pipeline. As of ~~our~~September 30, 2023, we have seven operating dairy digesters that produce biomethane, five additional digesters under construction, and contracts with additional dairies planned for future construction of digesters. Our RNG upgrading hub converts the biomethane produced by the digesters into utility-grade RNG that is transported by PG&E’s pipeline to California customers for use as transportation fuel. Our revenue development strategy for the Dairy Renewable Natural Gas segment ~~revenues during~~relies upon continuing to build new dairy digesters and extending the ~~three~~collection pipeline. We have been storing some of our RNG production and ~~nine~~ ~~months ended~~postponing the dispensing of RNG for transportation use in order to increase the quantity and value of LCFS credits. As of September 30, ~~2022~~ 2023~~and~~, we have 64.69 thousand MMBtu of RNG that has been produced by ~~2021~~not ~~were from sales of biogas to the Keyes Plant~~yet dispensed for use in ~~boilers.~~transportation. This ~~resulted~~RNG is recorded as inventory valued at the lower of cost and net realizable value. When dispensed, it will generate LCFS credits and D3 Cellulosic RINs that are not currently reflected in ~~lowering the carbon intensity of the Keyes Plant and increased revenues on ethanol sold through the California Ethanol segment. These revenues have been eliminated once consolidated. Refer to Note~~ 10 ~~Segment Information for the unconsolidated revenue of~~ our ~~Dairy Renewable Natural Gas segment.~~assets.

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

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

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

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

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

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

Cash, Cash Equivalents, and ~~Cash Equivalents.~~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 Construction Loan Agreement with Greater Nevada Credit Union ("GNCU") for financing reserves and construction contingencies and will be released upon approval by GNCU. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheet to the total of the same such amounts shown in the statement of cash flows.

Accounts Receivable. The Company sells ethanol and WDG through third-party marketing arrangements generally without requiring collateral ~~and high-grade alcohol~~ directly to customers on a variety of terms including advanced payment terms, based on the size and creditworthiness of the customer. DCO is marketed and sold to A.L. Gilbert and other customers under the J.D. Heiskell Purchasing Agreement. The Company sells CDS directly to customers on standard 30 ~~day~~-day payment terms. The Company sells biodiesel, glycerin, and processed natural oils to a variety of customers and may require advanced payment based on the size and creditworthiness of the customer. Usually, invoices are due within 30~~-days~~ days on net terms. Accounts receivables consist of product sales made to large creditworthy customers. Trade accounts receivable ~~are~~is presented at original invoice amount, net of any allowance for ~~doubtful accounts.~~credit losses. We did not reserve any balance for allowances for credit losses as of September 30, 2023 and December 31, 2022.

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

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

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

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

The Company evaluates the recoverability of long-lived assets with finite lives in accordance with ASC Subtopic 360-10-35 Property Plant and Equipment—Subsequent Measurements, which requires recognition of impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, based on estimated undiscounted cash flows, the impairment loss would be measured as the difference between the carrying amount of the assets and its estimated fair value. The Company has not recorded any impairment during the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022.

California Energy Commission Low-Carbon Fuel Production Program. The Company ~~has been~~was 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 a 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 September 30, ~~2022~~2023, 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 the grant payment iswas received.

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

In October 2020, the Company was awarded $7.8 million in matching grants from the CDFA Dairy Digester Research and Development program. The CDFA grant reimburses the Company for costs required to permit and construct six of the Company’s biogas capture systems under contract with central California dairies. The Company has received ~~$2.3~~$4.8 million from the CDFA 2020 grant program as of September 30, ~~2022~~2023, 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 the grant 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~~Carbon Zero 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~~has received $1.7 million under the ~~CEC Reimbursement Program for actual expenses incurred up to $5.0 million as long as the Company makes the minimum matching contribution. Given that the Company has~~ ~~not~~ ~~made the minimum matching contribution, the~~ grant, ~~for reimbursement of capital expenditures of $1.7 million~~which is presented with ~~long-term~~current-term liabilities as of September 30, ~~2022~~2023, , and December 31, ~~2021.~~2022. ~~Due~~On September 30, 2023, the CEC program decided not to extend the time for the Company to receive additional grant funds due to the ~~uncertainty associated with meeting~~requirement to achieve the ~~minimum matching contribution, the reimbursement will be recognized~~ grant program objectives by June 30, 2024, when the ~~Company makes the minimum matching contribution.~~CEC program ends.

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~~has reimbursed the Company for continued development of technologies and processes to valorize forest waste for the production of cellulosic ethanol. AAPK has received ~~$73~~all $245 thousand awarded from the US Forest Service asfor reimbursement ~~for~~of actual allowable program costs incurred through September 30, ~~2022~~2023.

California Energy Commission Grant for Solar Microgrid, DSC and Battery Backup System. Aemetis Advanced Fuels Keyes (“AAFK”) has been awarded an $8.0 million grant to design, construct and commission a grid-connected 1.56 MW photovoltaic microgrid and 1.25MW/2.5MWh Battery Energy Storage System integrated with an artificial intelligence-driven distributed control system (DCS). The ~~grant requires~~Company has made the required $1.6 million in matching ~~contribution in which the Company has made.~~contributions to qualify to receive grant reimbursements. AAFK received ~~$3.9~~$4.2 million in grant funds from this program as reimbursement for actual expenditures incurred through September 30, ~~2022~~2023. 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 grant payment iswas received.

California Department of Forestry and Fire Protection Grant. AAPK has been awarded $2 million in matching grants from the CAL FIRE Business and Workforce Development Grant Program (“CAL Fire”) in May 2022. This CAL Fire grant program reimburses AAPK for costs to design, construct, and commission a 2 million gallon per year cellulosic ethanol facility ~~that will~~able to convert conifer biomass from forested regions of the Sierra Nevada into an ultra‐low carbon biofuel derived from 100% forest biomass (“CAL Fire Conversion Program”). AAPK must contribute $5.8 million in cost share contributions to the project to receive grant proceeds. AAPK has received no grant funds from the CAL Fire Conversion Program as reimbursement for actual costs through September 30, ~~2022~~2023.

California Department of Forestry and Fire Protection Grant. AAPK ~~has been~~was 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 September 30, ~~2022~~2023.

U.S Forest Service Community Wood Grant. Aemetis Advanced Products Riverbank (“AAPR”) ~~has been~~was 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 September 30, ~~2022~~2023.

~~USDA~~’~~s Biofuel Producer Program Grant.~~ ~~During the~~ ~~second~~ ~~quarter of~~ ~~2022,~~ a grant in the amount of $14.2 million was received from the USDA’s Biofuel Producer Program, created as part of the CARES Act, to compensate biofuel producers who experienced market losses due to the COVID-19 ~~pandemic. This was recorded in 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 no grant funds from this program as reimbursement for actual expenditures incurred through September 30, ~~2022~~2023. 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~~grant payments will be received.

Pacific Gas and Electric SEM Manufacturer’s Incentive Program. During the fourth quarter of 2022, AAFK received $374 thousand in PG&E SEM Incentive Program reimbursements for installing more efficient beer feed heat exchangers. The Company has received $27 thousand in PG&E SEM Incentive Program reimbursements in 2023. Third party consultants verified the reduction in natural gas usages from the new heat exchangers to obtain the incentive program funds.

California Energy Commission PG&E A2313 Pipeline Interconnection Grant. The Company has received $5 million in matching grants from the California Energy Commission PG&E A2313 Pipeline Interconnection program (“CEC PG&E Pipeline Interconnect”) during the quarter ended March 31, 2023. The CEC PG&E Pipeline Interconnect grant reimburses the Company for actual costs to design, procure, and install facility and pipeline to interconnect renewable natural gas pipeline with the PG&E utility pipeline. In October 2022 the Company successfully connected and commissioned pipeline interconnection with the PG&E utility pipeline. After three months of renewable natural gas delivery, the interconnection verification process was completed, and the CEC PG&E program funds were released. The Company has received all $5 million available from the PG&E program as reimbursement for actual costs incurred through March 31,2023. Given the nature of funds received as reimbursement for actual costs incurred, the funds were applied against the actual costs.

Investment Tax Credit. In the third quarter of 2023, the Company sold to a third-party purchaser certain transferrable Investment Tax Credits (ITCs) that had been generated by the Company from its investments in the California Dairy Renewable Natural Gas segment. The Company accounted for the ITC sale in accordance with ASC 740 by electing the flow-through method. The net value of tax credits sale of $55.2 million is recorded as other receivable on the balance sheet and as an income tax benefit in the income statement as of September 30, 2023.

Basic and Diluted Net ~~Loss~~(Loss) per Share.Basic ~~net loss~~income (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~~income/(loss) per share reflects the dilution of common stock equivalents such as options, convertible preferred stock, debt and warrants to the extent the impact is dilutive. As the Company incurred net income for the three months ended September 30, 2023, potentially dilutive securities have been included in the diluted net income per share computations and any potentially anti-dilutive shares have been excluded and are shown in the second table below. As the Company incurred net losses for the three ~~and~~ ~~nine~~ months ended September 30, 2022 and ~~2021~~nine, months ended September 30, 2023 and 2022, 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 September 30, ~~2022~~2023 and ~~2021~~2022:

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

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

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

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

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

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

The Company has additional operating segments that were determined not to be reportable segments, including the development of a Carbon Zero 1 ~~facility in Riverbank,~~biofuels production plant to produce renewable diesel and sustainable aviation fuel; the ~~Goodland Plant in Kansas~~development of Carbon Capture and ~~the~~Sequestration projects; a research and development facility in ~~Minnesota. Refer to the “All Other” category.~~Minneapolis, Minnesota; and our corporate offices in Cupertino, California.

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

Share-Based Compensation. The Company recognizes share-based compensation expense in accordance with ASC 718 Stock Compensation requiring the Company to recognize expenses related to the estimated fair value of the Company’s share-based compensation awards atcalculated as of the ~~time~~date the awards are ~~granted, adjusted to reflect only those shares that are expected to vest.~~granted.

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

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

Debt Modification Accounting. The Company evaluates amendments to its debt in accordance with ASC 470-60 Troubled Debt Restructuring and ASC 470-50 Debt–Modification and Extinguishments for modification and extinguishment accounting. The evaluation for troubled debt restructuring includes assessing qualitative and quantitative factors such as whether the creditor granted a concession and if the Company is experiencing financial difficulties. The quantitative analysis includes the calculation of the post-restructuring effective interest rate by projecting cash flows on the new terms 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. The troubled debt restructuring accounting would be applied to any debt which meets the qualitative factors and quantitative factor of concession granted. If the debt would not fall into Troubled Debt Restructuring then we apply ASC 470-50 Debt-Modification and Extinguishment. This evaluation includes comparing the net present value of cash flows of the new debt to the old debt to determine if changes greater than 10 percent occurred. In instances where the net present value of future cash flows changed more than 10 percent, the Company applies extinguishment accounting and determines the fair value of its debt based on factors available to the Company.

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

For the three months ended September 30, ~~2022~~2023 and ~~2021~~2022, interest capitalized in property, plant, and equipment ~~was~~was $1.5 million and $3.1 ~~million and $1.4~~ million, respectively. For the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022, interest capitalized in property, plant, and equipment ~~was~~was $3.9 million and $7.7 million, ~~and $2.9 million,~~ respectively.

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

~~For the~~ ~~three~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~2021~~~~, the Company recorded depreciation expense of $1.4 million and $1.3 million, respectively. For the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~2021~~~~, the Company recorded depreciation expense of $4.0 million and $4.1 million, respectively.~~

On July 6, 2012, Aemetis, Inc. and Aemetis Advanced Fuels Keyes, Inc. (“AAFK”), entered into an Amended and Restated Note Purchase Agreement (the “Note Purchase Agreement”) with Third Eye Capital Corporation (“Third Eye Capital”). Pursuant to the Note Purchase Agreement, Third Eye Capital extended credit in the form of (i) senior secured term loans in an aggregate principal amount of approximately $7.2 million to replace existing notes held by Third Eye Capital (the “Term Notes”); (ii) senior secured revolving loans in an aggregate principal amount of $18.0 million (the “Revolving Credit Facility”); (iii) senior secured term loans in the principal amount of $10.0 million to convert the prior revenue participation agreement to a note (the “Revenue Participation Term Notes”); and (iv) senior secured term loans in an aggregate principal amount of $15.0 million (the “Acquisition Term Notes”) used to fund the cash portion of the acquisition of Cilion, Inc. (the Term Notes, Revolving Credit Facility, Revenue Participation Term Notes and Acquisition Term Notes are referred to herein collectively as the “Original Third Eye Capital Notes”).

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

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

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

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

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

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

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

~~Amendments~~On March 6, 2023, Third Eye Capital agreed to the Limited Waiver and Amendment No. 1925 ~~through~~to the Note Purchase Agreement (“Amendment No. 2425” ~~waived certain covenants~~) to: provide a waiver for the ~~periods between~~ ~~September 30, 2022~~ ~~and~~Keyes Plant Minimum Quarterly Production violation for the quarter ended March 31, ~~2023.~~ 2023, in which the Borrowers will not meet the minimum production of 10 million gallons requirement. As consideration for such waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million.

On May 4, 2023, Third Eye Capital agreed to the Limited Waiver and Amendment No.26 to the Note Purchase Agreement (“Amendment No.26”) to: provide a waiver for (i) the Keyes Plant Minimum Quarterly Production violation for the quarter ended June 30,2023, in which the Borrowers will not meet the minimum production of 10 million gallons requirement and (ii) the lender agrees to waive the cash payment of certain fees which are required by the Third Eye Capital Notes and allowed these fees to be added to the outstanding balance of the Revolving Notes. As consideration for such waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million. We evaluated the terms of Amendment No.26 and the maturity date extension in accordance with ASC 470-50 Debt – Modification and Extinguishment and ASC 470-60 Troubled Debt Restructuring and applied modification accounting treatment.

On May 16, 2023, Third Eye Capital agreed to the Limited Waiver and Amendment No.27 to the Note Purchase Agreement (“Amendment No.27”) to: (i) provide that the maturity date of the Third Eye Capital Notes may be further extended at our election to April 1, 2025 in exchange for an extension fee equal to 1% of the Note Indebtedness in respect to each Note, provided that such fee may be added to the outstanding principal balance of each Note on the effective date of each such extension, (ii) create a new series of Revolving Notes ("Revolving Notes Series B"), and (iii) provide for the issuance of new Revolving Notes Series B to provide for emergency funding. As consideration for such waivers, the borrowers also agreed to pay Third Eye Capital an amendment fee of $0.5 million, by adding the balance to the Revolving Notes Series B and issued a warrant exercisable for 80,000 shares of the Company's common stock were issued with an exercise price of $2.00 per each share issuable under the warrant. We evaluated the terms of Amendment No.27 in accordance with ASC 470-50 Debt – Modification and Extinguishment and ASC 470-60 Troubled Debt Restructuring and applied modification accounting treatment.

According to ASC 470-10-45 Debt–Other Presentation Matters, if it is probable that the Company will not be able to cure the default at measurement dates within the next 12 months, the related debt needs to be classified as current. To assess this guidance, the Company performed ratio and cash flow analysis using its cash flow forecast and debt ~~levels.~~levels for plant to debt ratio covenant and obtained waivers for the minimum ethanol production covenant for Q1’23 and Q2'23 in Amendments No.25 and No.26. The Company forecasted sufficient cash flows over the next 12 months to reduce debt levels of Third Eye Capital and meet the operations of the Company. Based on this analysis, the Company believes that it is reasonably possible that through a combination of cash flows from operations, sales from EB-5 investments, and proceeds from the sale of common stock, it will be able to meet the ratio of the note indebtedness covenant over the next 12 months. As such, the notes are classified as long-term debt.

On March 6, 2020, we ~~and a subsidiary~~ entered into a one-year reserve liquidity facility governed by a promissory note, payable to Third Eye Capital, in the principal amount of $18 million. On March 14, 2021, Third Eye Capital agreed to increase the amount available under the reserve liquidity facility to $70.0 million. ~~Borrowings under the reserve liquidity facility are available from~~ ~~March 14, 2021~~ ~~until maturity on~~ ~~April 1, 2023.~~ Interest on borrowed amounts accrues at a rate of 30% per annum, paid monthly in arrears and may be capitalized and due upon maturity, or 40% if an event of default has occurred and continues. The outstanding principal balance of the indebtedness evidenced by the promissory note, plus any accrued but unpaid interest and any other sums due thereunder, shall be due and payable in full at the earlier to occur of (a) receipt by the Company or its affiliates of proceeds from any sale, merger, equity or debt financing, refinancing or other similar transaction from any third party and (b) April 1, 2023. Any amounts may be re-borrowed up to repaid amounts up until the maturity date of April 1, 2023. The promissory note is secured by liens and security interests upon the property and assets of the Company. In return, the Company will pay a non-refundable standby fee at 2% per annum of the difference between the aggregate principal amount outstanding and the commitment, payable monthly in cash. In addition, if any initial advances are drawn under the facility, the Company will pay a non-refundable one-time fee in the amount of $0.5 million provided that such fee may be added to the principal amount of the promissory note on the date of such initial advance. On August 9, 2021, Third Eye Capital agreed to decrease the amount available under the reserve liquidity notes governed by a promissory note to $40.0 million. On March 6, 2023, Third Eye Capital agreed to increase the reserve liquidity facility to $50 million and extend this for one year to April 1, 2024.

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

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

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

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

On August 1, 2023, Third Eye Capital agreed to the Amendment and Waiver No.2 to Credit Agreement ("Amendment No.2") to: (i) approve a special advance of $2.3 million, which will constitute an overadvance, in order to pay and satisfy outstanding fees and obligations under the Credit Agreement; provided, that, such overadvance and prior outstanding overadvances under the Credit Agreement are repaid by the earlier of August 31, 2023 and an occurrence of certain mandatory repayment event; (ii) waive certain interest payment and fee violations under the Credit Agreement; and (iii) waive certain working capital violations and amend the related financial covenants in the Credit Agreement. As a consideration for such consents and waivers, the borrowers agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million.

On October 16, 2023, Third Eye Capital acknowledged receipt of $8.6 million repayment for the Revolving Credit facility under the July 2012 Note Purchase Agreement and $11.6 million repayment on the GAFI Credit Agreement. As part of this acknowledgement, the available credit on the GAFI loan was raised to $37.5 million and the warrant issuable accordingly raised by 25,000 shares.

As of September 30, ~~2022~~2023, GAFI had ~~$25.1 million in~~ principal and interest outstanding ~~net~~ of ~~$1.7~~$11.0 million classified as current debt and $25.0 million classified as long-term debt and $1.6 million unamortized debt issuance costs. As of September 30, ~~2022~~2023, ACCI had ~~$22.5 million in~~ principal and interest outstanding ~~net~~ of ~~$2.6~~$0.5 million classified as current debt and $24.9 million classified as long-term debt and $1.9 million in unamortized debt issuance costs.The current portion of the Revolving Lines are part of $8.1 million specific advance between Third Eye Capital and the Company and certain accrued interests on the Fuel and Carbon revolving facilities that have been repaid on October 16, 2023. The special advance had been utilized by the Company to pay the interest on notes and certain fees on notes and some expenses of the Company. As part of this arrangement, the Company issued a warrant exercisable for 80,000 shares of the Company's common stock with an exercise price of $2.00, to Third Eye Capital. As of September 30, 2023 there was no credit available under the Fuels and Carbon revolving facilities. Based on the repayments acknowledged by Third Eye Capital on October 16, 2023, the available credit on the Fuels Revolving facility with GAFI was $12.5 million.

Cilion shareholder seller notes payable. In connection with the Company’s merger with Cilion, Inc. (“Cilion”), on July 6, 2012, ~~the~~the Company issued $5.0 million in notes payable toto Cilion shareholders as merger compensation subordinated to the senior secured Third Eye Capital Notes. The liability bears interest at 3% per annum and is due and payable after the Third Eye Capital Notes have been paid in full. As of September 30, ~~2022~~2023, Aemetis Facility Keyes, Inc. had ~~$6.8~~$7.0 million in principal and interest outstanding under the Cilion shareholder seller notes payable.

Subordinated Notes. On January 6 and January 9, 2012, AAFK entered into Note and Warrant Purchase Agreements with two accredited investors pursuant to which it issued $0.9 million and $2.5 million in original notes to the investors (“Subordinated Notes”). The Subordinated Notes mature every six months. Upon maturity, the Subordinated Notes are ~~generally extended~~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.

On ~~January~~July 1, ~~2022,~~2023, the maturity on two Subordinated Notes’ was extended until the earlier of (i) ~~June 30, 2022;~~December 31, 2023; (ii) after the occurrence of an Event of Default, including failure to pay interest or principal when due and breaches of note covenants. A $90 thousand and $250 thousand cash extension fee was paid by adding the fee to the balance of the new Subordinated Notes and 113 thousand common stock warrants were granted with a term of two years and an exercise price of $0.01 per share.

On ~~July~~ 1,~~2022,~~ ~~the maturity on~~ ~~two~~ ~~Subordinated Notes’ was extended until the earlier of (i)~~ ~~December 31, 2022; (~~ii) after the occurrence of an Event of Default, including failure to pay interest or principal when due and breaches of note covenants. A $90 thousand and $250 thousand cash extension fee was paid by adding the fee to the balance of the new Subordinated Notes and 113 thousand common stock warrants were granted with a term of ~~two~~ ~~years and an exercise price of $0.01 per share.~~

The Company evaluated the January 1, ~~2022~~2023 and July 1, ~~2022~~2023 amendments and the refinancing terms of the notes and applied modification accounting treatment in accordance with ASC 470-50 Debt – Modification and Extinguishment.

At September 30, ~~2022~~2023 and December 31, ~~2021~~2022, the Company had, in aggregate, the ~~amount~~amount of ~~$15.2~~$16.7 million and ~~$14.3~~$15.9 million in principal and ~~interest~~interest outstanding, respectively, under the Subordinated Notes.

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

The Company has sold an aggregate principal amount of $36.0 million of EB-5 Notes under the EB-5 Phase I funding since 2012 to the date of this filing. As of September 30, ~~2022~~2023, $35.5 million has been released from the escrow amount to the Company, with $0.5 million remaining to be funded to escrow. As of September 30, ~~2022~~2023 and December 31, ~~2021~~2022, ~~$37.0~~$37.7 million and ~~$36.6~~$37.2 million was outstanding, respectively, on the EB-5 Notes sold under the EB-5 Phase I ~~funding.~~funding.

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

The Company has sold an aggregate principal amount of $4.0 million of EB-5 Notes under the EB-5 Phase II funding since 2016 to the date of this filing. As of September 30, ~~2022~~2023, $4.0 million has been released from escrow to the Company and ~~$46.8~~$46.5 million remains to be funded to escrow. As of September 30, 2023, and December 31, 2022, $4.3 million and $4.2 million ~~was~~were outstanding on the EB-5 Notes under the EB-5 Phase II ~~funding.~~funding, respectively.-n

~~Secunderabad Oils Operating Agreement.~~ In ~~November 2008,~~ ~~the Company entered into an operating agreement with Secunderabad Oils Limited (“Secunderabad Oils”). The~~ ~~2008~~ ~~agreement provided the working capital and had the~~ ~~first~~ priority lien on assets in return for 30% of the plant’s monthly net operating profit. These expenses were recognized as selling, general, and administrative expenses by the Company in the financials. All terms of the ~~2008~~ ~~agreement with Secunderabad Oils were terminated to amend the agreement as below. On~~ ~~July 15, 2017,~~ the agreement with Secunderabad Oils was amended to provide the working capital funds for British Petroleum business operations only in the form of inter-corporate deposit for an amount of approximately $2.3 million over a 95 ~~day period at the rate of 14.75% per annum interest rate. The term of the agreement continues until either party terminates it. Secunderabad Oils has a~~ ~~second~~ ~~priority lien on the assets of the Company’s Kakinada Plant after this agreement. As of~~ ~~September 30, 2022~~ ~~and~~ ~~December 31, 2021,~~ ~~the Company had no balance outstanding under this agreement.~~

Working capital loans. On July 26, 2022, the Company entered into a short-term loan with Secunderabad Oils Limited in an amount not to exceed $1.88 million. On August 1, 2022, the Company entered into a short-term loan with Leo Edibles & Fats Limited in an amount not to exceed $1.27 million. The loans bears interest at 18% and are payable monthly. The loans are repayable on demand by the lender or within one year from the date of issuance. As of September 30, 2023 and December 31, 2022, ~~$2.7 million was outstanding~~the Company had no balance under these agreements.

Secured loans. In the first quarter of 2023, the Company entered into several short-term loans with IndusInd Bank and HDFC Bank. The loans are secured by fixed deposits made by the Company. The loans bear interest at rates that range from 6% to 8%. The loans mature between November 15, 2023 and May 3, 2024. As of September 30, 2023 and December 31, 2022, the Company had no balance, respectively, under these agreements.

Construction Loan Agreement. On October 4, 2022, the Company entered into a Construction Loan Agreement (“Loan Agreement”) with Greater Nevada Credit Union (“GNCU”). Pursuant to the Loan Agreement, 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 the Aemetis Biogas 1 LLC. The loan bears interest at a rate of 5.95% per annum and has an USDA annual renewal fee of 0.25%, with interest only payments to be paid in monthly installments, and a maturity date of ~~March~~December 4, 2023, at which time the entire unpaid principal amount, together with accrued and unpaid interest, is expected to be repaid from the proceeds of a term loan this is 80% USDA guaranteed and issued by GNCU pursuant to a USDA Conditional Commitment. The Loan Agreement contains certain financial covenants to be measured as of the last day of each fiscal year beginning fiscal year end 2023, and annually for the term of the loan. The Loan Agreement also contains other affirmative and negative covenants, representations and warranties and events of default customary for loan agreements of this nature. As of September 30, 2023 and December 31, 2022, the ~~Company~~Company had no ~~outstanding balance~~$23.9 million and $20.2 million, respectively, outstanding and unamortized discount issuances costs of none and $0.3 million, respectively, under the Loan Agreement.

On July 28, 2023, the Company entered into a second Construction and Term Loan Agreement (“Loan Agreement 2") with Magnolia Bank, Incorporated. Pursuant to the Loan Agreement 2, 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 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 Term Loan contains certain financial covenants to be measured as of the last day of each fiscal year beginning fiscal year end 2024, and annually for the term of the loan. The AB2 Loan Agreement also contains other affirmative and negative covenants, representations and warranties and events of default customary for loan agreements of this nature. As of September 30, 2023 and December 31, 2022, the Company had $10.0 million and none, respectively, outstanding and unamortized discount issuances costs of $0.8 million and none, respectively, under the Loan Agreement 2.

Financing Agreement for capital expenditures. The Company entered into an agreement with Mitsubishi Chemical America, Inc. (“Mitsubishi”) to purchase ZEBREX^TM membrane dehydration equipment to conserve energy and improve operating efficiencies at the Keyes Plant. The Company also entered into a financing agreement with Mitsubishi for $5.7 million for this equipment. Payments pursuant to the financing transaction will commence after the installation date and interest will be charged based on the certain performance metrics after operation of the equipment. We recorded the asset in property, plant and equipment, net and recorded the related ~~liability~~liability of ~~$0.9~~ $1.7 million in short term borrowings and ~~$5.1~~$4.1 million in other long-term debt, ~~respectively~~respectively as of September 30, ~~2022~~2023.

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

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

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

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

On December 14, 2021, we entered into a real estate purchase agreements and lease disposition and development agreement with the City of Riverbank. We plan to utilize the purchased and leased properties, located at 5300 Claus Road in the city of Riverbank, California, for the construction of the Carbon Zero 1Facility. The lease commenced on April 1, 2022. The Company evaluated the lease in accordance with ASC 842 – Lease Accounting and classified the lease as a finance lease.

Supplemental non-cash flow information related to ROU asset and lease liabilities was as follows for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022:

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

The components of lease income ~~for the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~September 30, 2021~~were as follows:

Future lease commitments to be received by the Company as of September 30, ~~2022~~2023 were as follows:

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

On ~~August 31, 2016,~~ The Company is subject to legal proceedings and claims which arise in the ~~Company filed~~ordinary course of its business. While the ultimate outcome of these matters is not presently determinable, it is in the opinion of management that the resolution of outstanding claims will not have a ~~lawsuit in Santa Clara County Superior Court against defendant EdenIQ, Inc. (“EdenIQ”). The lawsuit was based~~material adverse effect on ~~EdenIQ’s wrongful termination~~the financial position or results of ~~a merger agreement that would have effectuated the merger of EdenIQ into a new entity that would be primarily owned by Aemetis. On~~ ~~July 24, 2019,~~ ~~the court awarded EdenIQ a portion~~operations of the ~~fees and costs it had sought~~Company. The Company's view of the matters not listed may change in the ~~amount of approximately $6.2 million~~future as the litigation and ~~the Company recorded these fees based on the court order. On~~ ~~May 6, 2022~~ ~~the parties settled the dispute for $4.8 million by entering into a settlement agreement. The settlement was paid and a gain on litigation of $1.4 million was recognized on the income statement in the~~ ~~second~~ ~~quarter of~~ ~~2022.~~events related thereto unfold.

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

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

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

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

Triggering events occur upon ABGL’s failure to redeem units, comply with covenants, any other defaults or cross defaults, or to perform representations or warranties. Upon a triggering event: (i) the obligation of the Purchaser to purchase additional Series A Preferred Units is terminated, (ii) cash flow payments for redemption payments increases from 75% to 100% of free cash flows, and (iii) total number of common units into which preferred units may be converted increases from 1,200,000 common units to 5,000,000 common units on a one for one basis. As of September 30, ~~2022~~2023, ABGL has not generated minimum quarterly operating cash flows by operating the dairies. As a result of the violation of this covenant, free cash flows, when they occur, may be applied for redemption payments at the increased rate of 100% instead of the initial rate of 75% of free cash flows.

From inception of the agreement to date, ABGL issued 3,200,000 Series A Preferred Units on first tranche for a value of $16.0 million and also issued 2,800,000 of Series A Preferred Units on second tranche for a value of $14.0 million, reduced by a redemption of 20,000 Series A Preferred Units for $0.3 million. The Company identified freestanding future tranche rights and the accelerated redemption feature related to a change in control provision as derivatives that required bifurcation. These derivative features were assessed to have minimal value as of September 30, 2023 and December 31, 2022 based on the evaluation of the other conditions included in the agreement.

On August 8, 2022, ~~8th,~~~~2022,~~ABGL, Protair-X America, Inc. (“Protair”), and Third Eye Capital entered into a Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Amendment") which amends that certain Series A Preferred Unit Purchase Agreement (“PUPA”) dated as of December 20, 2018. The PUPA Amendment provides for: (i) a waiver of certain covenants prohibiting the internal reorganization of ABGL subsidiaries and the incurrence of indebtedness by ABGL and its subsidiaries pursuant to a USDA loan, provided that, among other things, Third Eye Capital shall have received a repayment of at least $7.3 million to be applied to the Carbon Revolving Line contemporaneously with the closing of the Construction Loan Agreement; (ii) a waiver of certain operational defaults under the PUPA; and (iii) an amendment which (a) requires ABGL to redeem all of the outstanding Series A Preferred Units by December 31, 2022 (the “Final Redemption Date”) for $116 million; and (b) provides ABGL the right to redeem all of the outstanding Series A Preferred Units by September 30, 2022 for $106 million. The PUPA Amendment further provides the failure to redeem the Series A Preferred Units by the Final Redemption Date would constitute a triggering event requiring ABGL to enter into a credit agreement with Protair and Third Eye Capital effective as of January 1, 2023. We evaluated the terms of the PUPA Amendment and applied extinguishment accounting treatment in accordance with ASC 470-50 Debt – Modification and Extinguishment and recorded a loss on extinguishment of $49.4 ~~million.~~million in the third quarter of 2022.

On January 1,2023, ABGL entered into the ~~agreement~~Second Waiver and Amendment to ~~date, ABGL issued 3,200,000~~Series A Preferred Unit Purchase Agreement (“PUPA Second Amendment") providing for: (i) a waiver for not redeeming all Series A Preferred Units onby ~~first~~December 31, 2022, ~~tranche for a value~~and (ii) the right by ABGL to redeem all of ~~$16.0 million and also issued 2,800,000 of~~the outstanding Series A Preferred Units onby ~~second~~May 31, ~~tranche~~2023 for ~~a value~~an aggregate redemption price of ~~$14.0 million, reduced by a redemption of 20,000~~$125 million. The PUPA Second Amendment further provides that failure to redeem the Series A Preferred Units ~~for $0.3 million. The~~by the redemption date, ABGL is required to enter into a credit agreement with Protair and Third Eye Capital effective as of June 1,2023 and maturing on May 31, 2024, in substantially the form attached to the PUPA Second Amendment. 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 or prior amendment rate. In accordance with the provisions of ASC 470-60 Troubled Debt Restructuring, we applied troubled debt restructuring accounting, resulting in no gain or loss from the application of this accounting. In addition, given that the Company could turn the agreement into a credit agreement, the Company is accreting these tranches from an initial ~~fair~~carrying value at~~August 8, 2022~~ ~~of $105.8 million to the redemption value of $116 million over the next~~ ~~three~~ ~~months ending~~ December 31, 2022 ~~using~~of $116.0 million to $159.0 million over the seventeen months ending May 31,2024.

On May 31, 2023, ABGL entered into the Third Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Third Amendment") providing: (i) a waiver to ABGL for not redeeming all Series A Preferred Units by May 31,2023 and (ii) the right by ABGL to redeem all of the outstanding Series A Preferred Units by August 31,2023, for an aggregate redemption price of $135 million. The PUPA Third Amendment further provides that failure to redeem the Series A Preferred Units by the redemption date, ABGL is required to enter into a credit agreement with Protair and Third Eye Capital effective, as of September 1,2023 and maturing on August 31,2024, in substantially the form attached to the PUPA Third Amendment. We determined that Third Eye Capital provided a concession to redeem the preferred shares at lower effective borrowing rate than the credit agreement interest ~~method.~~rate or prior amendment rate. In accordance with the provisions of ASC 470-60 Troubled Debt Restructuring, we applied troubled debt restructuring accounting, resulting in no gain or loss from the application of this accounting In addition, given that the Company ~~identified freestanding future tranche rights and~~could turn the ~~accelerated~~agreement into a credit agreement, the Company is accreting these tranches from a carrying value at May 31,2023 of $127.2 million to $171.7 million over the fifteen months ending August 31,2024. Hence, the preferred redemption ~~feature related to a change in control provision~~balance is classified as ~~derivatives which required bifurcation. These derivative features were assessed to have minimal value~~long term liability as of September 30, ~~2022~~2023. ~~and~~ ~~December 31, 2021~~ ~~based on the evaluation of the other conditions included in the agreement.~~

In2023, ABGL entered into a Fourth Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Fourth Amendment") with Third Eye Capital Corporation and Protair-X Americas, Inc. providing for: (i) extending the ~~three~~ ~~months ended~~ ~~March 31, 2021,~~ ~~ABGL issued 626,000 of~~deadline to redeem Series A Preferred Units ~~for incremental proceeds of $3.1 million as part of~~from August 31, 2023 to December 31, 2023 and (ii) setting the ~~second~~ ~~tranche of the Preferred Unit Agreement and redeemed 20,000 of~~price to redeem all outstanding Series A Preferred Units ~~for $0.3 million. Consistent~~at $102.5 million plus a closing fee of $5,500,000, payable to or at the direction of Protair-X Americas, Inc. The PUPA Fourth Amendment further provides that if ABGL does not redeem the Series A Preferred Units by December 31, 2023, ABGL will enter into a credit agreement with Third Eye Capital Corporation and Protair-X Americas, Inc. effective as of January 1, 2024, in substantially the ~~previous issuances which were treated~~form attached to the PUPA Fourth Amendment. The PUPA Fourth Amendment is attached to this Form 10-Q as ~~a liability as~~Exhibit 10.1. We will evaluate the ~~conversion option was deemed to be non-substantive,~~terms of the ~~current issuances are treated as a liability as the conversion option was still deemed to be non-substantive.~~PUPA Fourth Amendment in accordance with ASC 470.

The Company recorded Series A Preferred Unit liabilities, net of ~~unit issuance costs and inclusive of accretive preference~~debt discounts pursuant to ~~this agreement, and accrued preference payments,~~these agreements, classified as ~~current portion of~~long-term Series A Preferred Units, of ~~$109.4~~$137.8 million and ~~$3.2 million, and long-term liabilities of $0 and $45.0~~$116.0 million as of September 30, ~~2022~~2023 and December 31, ~~2021~~2022, respectively.

After consideration of ABGL’s operations and the above agreement, we concluded that ABGL did not have enough equity to finance its activities without additional subordinated financial support. ABGL is capitalized with Series A Preferred Units that are recorded as liabilities under U.S. GAAP. Hence, we concluded that ABGL is a VIE. Through the Company's ownership interest in all of the outstanding common stock, its current ability to control the board of directors, the management fee paid to Aemetis and control of subordinated financing decisions, Aemetis has been determined to be the primary beneficiary and accordingly, the assets, liabilities, and operations of ABGL are consolidated into those of the Company. Total assets, before intercompany eliminations, of ABGL as of September 30, ~~2022~~2023 ~~were $67.2~~were $141.4 million ~~which~~which serve as collateral for the Series A Preferred ~~Unit totaling $109.4 million.~~Units. The Series A Preferred Units are not collateralized by any other assets or guarantees from Aemetis or its subsidiaries.

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

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

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

~~During~~of the ~~nine~~ ~~months ended~~ ~~September~~ ~~2022,~~ ~~the company issued 1.3 million incentive stock option for employees under the~~ ~~2019~~ ~~Stock Plan.~~plan. In addition, ~~89,000 restricted~~shares associated with stock ~~award grants, with a weighted average fair value on date of grant of $10.92 per award, were issued to the Board.~~options that expire or are forfeited without being exercised become available again for issuance.

~~Common~~The following table summarizes activity under the 2019 Stock ~~Reserved for Issuance~~Plan and prior plan during the nine-month period ending September 30, 2023:

The ~~following is a summary~~number of ~~awards granted under the Stock Plans:~~outstanding option shares as of September 30, 2023, includes 3.8 million shares that are vested.

*The 2015 Employment Inducement Stock Plan (the “2015 Inducement Plan”) authorizes issuance of options for 100 thousand shares of common stock to new employees, which are not included in the above table. As of September 30, ~~2022~~2023, , there ~~were 2.9 million options vested~~are no option grants outstanding under the ~~Stock Plans.~~2015 Inducement Plan.

~~Stock-based compensation~~Valuation and Expense Recorded for ~~employees~~Stock Option Issuances

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

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

~~During the~~ ~~three~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~2021~~~~, the company granted 369,000 and no options, respectively.~~ The weighted average fair value calculations for the options granted during ~~these periods~~the nine months ended 2023 and 2022 are based on the following assumptions:

During the nine months ended September 30, 2023 and 2022, the Company granted 243,850 and 60,300 restricted stock awards, respectively, with a fair value on date of grant of $3.60 and $13.75, respectively, per share.

As of September 30, ~~2022~~2023, the Company ~~had $12.3~~ had $8.9 million of total unrecognized compensation expense for ~~employees,~~option issuance, which the Company will amortize over the ~~2.3 years of~~remaining vesting period for each applicable grant, which has a weighted average ~~remaining term.~~of 1.7 as of September 30, 2023.

During the three months ending September 30, 2023, the Company granted warrants to subordinated lenders in connection with debt extensions. The warrants were exercisable for 113,000 shares of the Company's common stock at an exercise price of $.01 per share with a two-year term. These warrants were also exercised during the three months ending September 30, 2023.

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

~~A summary of historical~~The following table summarizes warrant activity ~~follows:~~during the nine months ending September 30, 2023:

~~All~~The warrants outstanding as of ~~the above outstanding warrants~~September 30, 2023 are vested and exercisable as of September ~~30, 2022~~.30,2023. As of September 30, ~~2022~~2023 and ~~2021~~2022, the Company had no unrecognized compensation expense related to warrants, respectively.

Working Capital Arrangement. Pursuant to a Corn Procurement and Working Capital Agreement with J.D. Heiskell, the Company agreed to procure whole yellow corn and grain sorghum, primarily from J.D. Heiskell. The Company has the ability to obtain grain from other sources subject to certain conditions; however, in the past all the Company’s grain purchases have been from J.D. Heiskell. Title and risk of loss of the corn pass to the Company when the corn is deposited into the Keyes Plant weigh bin. The term of the Corn Procurement and Working Capital Agreement expires on December 31, ~~2022~~2023, and the term can be automatically renewed for additional one-year terms. J.D. Heiskell further agreed to sell all ethanol to Murex or other marketing purchasers, all WDG ~~continues~~and corn oil to ~~be sold to A.L.Gilbert~~A.L Gilbert, and DCO ~~is sold~~ to other customers under the ~~J.D.Heiskell~~J.D. Heiskell Purchase Agreement. The ~~Company’s~~Company’s relationships with J.D. Heiskell, and A.L. Gilbert are well established, and the Company believes that the relationships are beneficial to all parties involved in utilizing the distribution logistics, reaching out to widespread customer base, managing inventory, and building working capital relationships. These ~~agreements~~Agreements are ordinary purchase and sale agency agreements for the Keyes Plant. On May ~~13, 2020,~~25, 2023, we entered into the second amendment to the Aemetis Keyes Grain Procurement and Working Capital agreement with J.D. Heiskell, the second amendment to the Corn Procurement and Working Capital Agreement with J.D. Heiskell, and the ~~Company entered into Amendment~~ ~~No.1~~second amendment to the Keyes Ethanol and Corn Tank Lease with J.D. Heiskell. The amendments provide that (i) the Keyes Plant will receive a temporary increase in the credit limit equivalent to four days of grain payables repayable in equal daily installments over 120 days, (ii) that J.D. Heiskell ~~Purchasing Agreement~~agrees to ~~remove~~buy all Ethanol, WDGS, CDS, and Corn Oil produced by the Keyes Plant, sell all ethanol to certain designated purchasers and pay us the same price as it received from such sales, and (iii) J.D. ~~Heiskell’s obligations to purchase~~Heiskell would lease certain ethanol product storage tanks from the ~~Company under the J.D. Heiskell Purchasing Agreement.~~Keyes Plant.

As of September 30, ~~2022~~2023 and December 31, ~~2021~~2022, Aemetis ~~had~~made prepayments to J.D. Heiskell of ~~$0.9 million~~none and ~~$4.0~~$2.4 million, respectively.

The J.D. Heiskell sales and purchases activity associated with the J.D. Heiskell Purchase Agreement and J.D. Heiskell Procurement Agreement during the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 were as follows:

Ethanol and Wet Distillers Grains Marketing Arrangement. The Company entered into ~~an Ethanol Marketing Agreement with Kinergy and~~ a ~~Wet Distillers Grains Marketing Agreement with A.L. Gilbert. Under the terms of the agreements the Wet Distillers Grains Marketing Agreement matures on~~ ~~December 31, 2022,~~ ~~with automatic~~ ~~one~~~~-year renewals thereafter. We terminated the Ethanol Marketing Agreement with Kinergy as of~~ ~~September 30, 2021.~~ ~~Effective~~ ~~October 1, 2021,~~ ~~we entered into~~ Fuel Ethanol Purchase and Sale Agreement with ~~Murex. Under the terms of the agreement, the initial term~~Murex, which matures on October 31, 2023, with automatic one-year renewals thereafter. On May 30, 2023 the Company entered into Amendment No.1 to the Fuel Ethanol Purchase and Sale Agreement that provides (i) the Company temporarily suspend the agreement for the duration of the Company's Working Capital Agreement with J.D. Heiskell, and (ii) the initial term shall be automatically renewed beginning on October 1, 2023 and ending on March 31, 2025. The Company also entered into a Wet Distillers Grains Marketing Agreement with A.L. Gilbert, which matures on December 31, 2023, with automatic one-year renewals thereafter.

Accounts receivable associated with our marketing partners was ~~$0.2 million~~none and ~~$1.2 million~~$0.6 million as of September 30, ~~2022~~2023 and December 31, ~~2021~~2022.

For the three months ended September 30, ~~2022~~2023 and ~~2021~~2022, the Company expensed marketing costs of $0.8 million and $0.8 million, respectively, and for the nine months ended September 30, 2023 and 2022, the Company expensed marketing costs ~~of $0.8~~of$0.7 million and ~~$0.7~~$2.2 million, respectively, ~~and for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~2021~~~~, the Company expensed marketing costs of $2.2 million and $2.1 million, respectively,~~ under the terms of both the Ethanol Marketing Agreement and the Wet Distillers Grains Marketing Agreement. These marketing costs are ~~and are~~ presented as a part of Selling, General, and Administration expense.

Supply Trade Agreement. On July 1, 2022, the Company entered into an operating agreement with Gemini Edibles and Fats India Private Limited (“Gemini”). Under this agreement, Gemini agreed to provide the Company with a supply of feedstock up to a credit limit of $12.7 million. If the Company fails to pay the invoice within the ten-day credit period, the outstanding amount will bear interest at 12%. The term of the agreement is for one year. Either party can terminate the agreement by giving notice one month notice in writing. As of September 30, ~~2022~~ 2023and December 31, ~~2021,~~ 2022, the Company had ~~$5.3~~accounts payable of $0.5 million and no outstanding balance, respectively, under this agreement.

As of September 30, ~~2022~~2023 and ~~2021~~2022, the Company has no forward sales commitments.

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

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

The ~~“Dairy~~“California Dairy Renewable Natural Gas” reportable segment includes ~~the~~ dairy digesters, biogas pipeline, ~~and~~ gas ~~condition hub~~conditioning unit for the production of ~~biogas from dairies near Keyes, California.~~renewable natural gas, and interconnection facility to PG&E’s pipeline.

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

The Company has additional operating segments that were determined not to be reportable segments, including the development of the Carbon Zero1 facility in Riverbank, and development of Carbon Capture and Sequestration projects in California. Additionally, the corporate offices, Riverbank Industrial Complex, Goodland Plant in Kansas, and the research and development facility in ~~Minnesota. Refer to~~Minnesota are included in the “All Other” category.

Summarized financial information by reportable segment for the three months ended September 30, ~~2022~~2023 and ~~2021~~2022 follows:

A reconciliation of reportable segment revenues to total consolidated revenue for the three months ended September 30, ~~2022~~2023 and ~~2021~~2022 follows:

Summarized financial information by reportable segment for the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 follows:

A reconciliation of reportable segment revenues to total consolidated ~~revenues~~revenue for the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 ~~follow:~~follows:

Total assets by reportable segments as of September 30, 2023 and December 31, 2022 follows:

California Ethanol: ~~The~~The Company amended the Corn Procurement and Working Capital Agreement and the J.D. Heiskell Purchasing Agreement to procure corn from J.D. Heiskell and sell all WDG and corn oil the Company produces to J.D. Heiskell. Sales of ethanol ~~WDG, corn oil~~ to ~~two~~one ~~customers~~customer accounted for ~~73% and 26%~~99.7% of the Company’s California Ethanol segment revenues for the three months ended September 30, 2023. Sales of ethanol, WDG, and corn oil to two customers accounted for 73% and 26% of the Company’s California Ethanol segment revenues for the three months ended September 30, 2022. Sales of ethanol, WDG, corn oil to one customer accounted for 99.7% of the Company’s California Ethanol segment revenues for the nine months ended September 30, 2023. Sales of ethanol, WDG, and corn oil to two customers accounted ~~for 77% and 21% of the Company’s California Ethanol segment revenues for the~~ ~~three~~ ~~months ended~~ ~~September 30, 2021~~~~. Sales of ethanol, WDG, corn oil to~~ ~~two~~ ~~customers accounted~~ for 73% and 27% of the ~~Company’s~~Company’s California Ethanol segment revenues for the nine months ended September 30, 2022. ~~Sales of ethanol, WDG, and corn oil to~~ ~~two~~ ~~customers accounted for 75% and 24% of the Company’s California Ethanol segment revenues for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021~~.

California Dairy Renewable Natural Gas: ~~Substantially all of our~~Our California Dairy Renewable Natural Gas segment revenues during the three and nine months ended September 30, ~~2022~~ ~~and~~ ~~2021~~2023 were from sales of biogas to one customer and sales of D3 RINs to a separate customer. For the three and nine months ended September 30, 2022, all sales were from sale of biogas to the Keyes Plant ~~for use~~as fuel in boilers, which allowed qualification of carbon credits for the ethanol produced in the Keyes Plant.

India Biodiesel: Three biodiesel customers accounted for 42%, 35%, and 19% of the Company’s consolidated India segment revenues for the three months ended September 30, 2023. Three biodiesel customers ~~sales~~accounted for 43%, 28% and 24% of the Company’s consolidated India segment revenues for the nine months ended September 30, 2023. Three biodiesel customers accounted for 52%, 23%, and 22% of the Company’s consolidated India segment revenues for the three and nine months ended September 30, ~~2022.~~ 2023~~Two other sales customers accounted for 71% and 23% of the Company’s consolidated India segment revenues for the~~ ~~three~~ ~~months ended~~ ~~September 30, 2021.~~ ~~One biodiesel customer accounted for 66% of the Company’s consolidated India segment revenues while~~ ~~one~~ ~~other sales customer accounted for 16% of such revenues for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021.~~.

~~The~~The Company owes Eric McAfee, the Company’s Chairman and CEO, and McAfee Capital LLC (“McAfee Capital”), owned by Eric McAfee, $0.4 million in connection with employment agreements and expense reimbursements previously accrued as salaries expense and accrued liabilities. The Company previously prepaid $0.2 million to Redwood Capital, a company controlled by Eric McAfee, for the Company’s use of flight time on a corporate jet. As of September 30, ~~2022~~2023, $0.1 million remained as a prepaid expense.

OnIn the ~~November 4, 2021,~~ first~~the Audit Committee of the Company approved a guarantee fee of $0.4 million to Mr. McAfee. The balance of~~ ~~none~~ ~~and $0.3 million, for guaranty fees, remained as an accrued liability as~~ quarter of ~~September 30, 2022~~2023, ~~and~~ ~~December 31, 2021~~~~, respectively. On~~ ~~January 12, 2022,~~ the Audit Committee of the Company approved a one-time guarantee fee of ~~$2.0~~$0.4 million to McAfee Capital in connection with McAfee Capital’s ~~extension of certain~~ guarantees of the Company’s indebtedness with Third Eye Capital. ~~The Company paid this fee by issuing 180,000 shares~~As of ~~common stock of~~September 30, 2023, the ~~Company.~~outstanding balance is $0.2 million.

The Company owes various members of the Board amounts totaling ~~$0.3~~$0.4 million and ~~$0.2~~$0.3 million as of September 30, ~~2022~~2023 and December 31, ~~2021~~2022, in connection with board compensation fees, which are included in accounts payable on the balance sheet. For the three months ended September 30, ~~2022~~2023 and ~~2021~~2022, the Company expensed $0.1 million respectively, in connection with board compensation fees. For the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022, the Company expensed $0.3 million ~~and $0.2 million,~~respectively, in connection with board compensation fees.

~~Construction Loan~~On October 6, 2023, the Company received the $55.2 million due to it from the sale of Investment Tax Credits. On October 16, 2023, the Company paid $50.2 million of these funds to Third Eye Capital as payments against existing debt obligations, including $8.6 million repayment for the Revolving Credit facility under the July 2012 Note Purchase Agreement, $11.6 million repayment on the GAFI Credit Agreement, and $30.0 million repayment on the Series A Preferred Unit Purchase Agreement. In conjunction with the payment, the Company’s available credit on the GAFI loan has been raised to $37.5 million.

On ~~October 4, 2022,~~November 8, ~~the Company~~2023, ABGL entered into a ~~Construction Loan~~Fourth Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“~~Loan Agreement”~~PUPA Fourth Amendment") with ~~Greater Nevada Credit Union (“GNCU”). Pursuant~~Third Eye Capital Corporation and Protair-X Americas, Inc. providing for: (i) extending the deadline to redeem Series A Preferred Units from August 31, 2023 to December 31, 2023 and (ii) setting the price to redeem all outstanding Series A Preferred Units at $102.5 million plus a closing fee of $5,500,000, payable to or at the direction of Protair-X Americas, Inc. The PUPA Fourth Amendment further provides that if ABGL does not redeem the Series A Preferred Units by December 31, 2023, ABGL will enter into a credit agreement with Third Eye Capital Corporation and Protair-X Americas, Inc. effective as of January 1, 2024, in substantially the form attached to the ~~Loan Agreement,~~PUPA Fourth Amendment. The PUPA Fourth Amendment is attached to this Form 10-Q as Exhibit 10.1. We will evaluate 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~~terms of the ~~Aemetis Biogas~~PUPA Fourth Amendment in accordance with ASC 1470. ~~LLC. The loan bears interest at a rate of 5.95% per annum and has an USDA annual renewal fee of 0.25%, with interest only payments to be paid in monthly installments, and a maturity date of~~ ~~March 4, 2023,~~ ~~at which time the entire unpaid principal amount, together with accrued and unpaid interest, is expected to be repaid from the proceeds of a term loan that is~~ ~~80%~~ USDA guaranteed and issued by GNCU pursuant to a USDA Conditional Commitment. The Loan Agreement contains certain financial covenants to be measured as of the last day of each fiscal year beginning fiscal year end ~~2023,~~ and annually for the term of the loan. The Loan Agreement also contains other affirmative and negative covenants, representations and warranties and events of default customary for loan agreements of this nature. As of ~~September 30, 2022,~~ ~~the Company had~~ no ~~outstanding balance under the Loan Agreement.~~

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

For the Keyes Plant, we restarted the plant during the second quarter after completing an extended maintenance cycle and accelerating the implementation of several important ethanol plant energy efficiency upgrades. We plan to operate the plant and continue to improve its financial performance by completing the existing upgrades and adopting new technologies or process changes that allow for energy efficiency, cost reduction or revenue enhancements, ~~execute~~as well as, executing upon awarded grants that improve energy and operational efficiencies resulting in lower cost, lower carbon demands and overall margin improvement.

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

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

~~For the Kakinada Plant, we plan~~continue to develop sales channels for domestic products as the costs of feedstock normalize against the price of diesel, as recently announced governmental incentives take effect to promote the blending of biodiesel, and as feedstocks such as refined animal tallow are used domestically and exported. Additionally, we are in the process of obtaining approval to export refined animal tallow and biodiesel produced using animal tallow into international markets as the use of refined animal tallow received approval from the Pollution Control Board of India for production of biodiesel. The repatriation of funds from India to the parent company in the U.S. is reliant on favorable governmental approvals.

For the Riverbank project, we plan to continue project development and raise the funds necessary to construct and operate the Carbon Zero plant in Riverbank, California to produce renewable diesel and sustainable aviation fuel for transportation use as well as generate federal and state carbon credits available for the production and sale of low carbon fuels.

For all facilities in the United States, we plan to utilize the provision of the Inflation Reduction Act of 2022 by qualifying for tax credits in the form of an Investment Tax Credits, Production Tax Credits, and other credits, and to monetize the credits using the provisions of this congressional act.

In addition to the above we plan to continue to locate funding for existing and new business opportunities through a combination of working with our senior lender, restructuring existing loan agreements, selling bonds in the taxable and tax-exempt markets, selling equity through the ATM and otherwise, selling the current EB-5 Phase II offering, or by vendor financing arrangements.

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

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

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

Founded in 2006 and headquartered in Cupertino, California, ~~we are~~Aemetis is an international renewable natural gas and renewable fuels company focused on the acquisition, development and commercialization of innovative low and negative carbon intensity products and technologies that replace traditional petroleum-based products. We operate in three reportable segments “California Ethanol”, “Dairy Renewable Natural Gas”, and “India Biodiesel”. We have other operating segments determined not to be reportable segments and are collectively represented by the “All Other” category. At Aemetis, ourOur mission is to generate sustainable and innovative renewable fuel solutions that benefit communities and restore our environment. We do this ~~through leading the low-carbon fuels industry~~ by building a local circular bioeconomy utilizing agricultural and waste to produce low and negative carbon, advanced renewable fuels that ~~produce less~~reduce greenhouse gas (“GHG”) emissions ~~and thereby improve air quality.~~by replacing traditional petroleum-based products.

Our California Ethanol segment consists of a 65 million gallon per year capacity ethanol production facility located in Keyes, California (the “Keyes Plant”) that we own and operate. In addition to low carbon renewable fuel ethanol, the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), Carbon Dioxide (“CO2”) and Condensed Distillers Solubles (“CDS”), all of which are sold as animal feed to more than 80 local dairies and ~~feedlots. In~~feedlots, with CO₂ sold to food, beverage, and industrial customers. We are implementing several energy efficiency initiatives focused on significantly lowering the ~~third quarter~~carbon intensity of ~~2022, a Zebrex~~our ethanol, ~~dehydration system was commissioned, a key first step in the electrification~~primarily by decreasing use of natural gas at the Keyes ~~Plant, which will significantly~~plant. These energy efficiency projects include high efficiency heat exchangers; a two-megawatt solar microgrid with battery storage; an Allen Bradley Decision Control System (DCS) to manage and optimize energy use and other plant operations; and a Mechanical Vapor Recompression (MVR) system to reuse steam. These projects are expected to reduce ~~the use of petroleum based~~ natural gas ~~as process energy. The electrification, along with the future installation of a two-megawatt zero carbon intensity~~use by converting key processes to use electricity rather than natural gas and by using low-carbon-intensity hydroelectric electricity or electricity produced onsite from solar ~~microgrid system and a mechanical vapor recompression (MVR) system~~panels. This will ~~greatly~~ reduce GHG emissions and ~~decreases~~decrease the carbon intensity (CI) of fuel produced at the Keyes Plant. The lower CI of ethanol produced at the Keyes Plant ~~allowing~~will allow us to realize a higher price for the ethanol produced and ~~sold.~~sold at the Keyes Plant. During the last two weeks of December 2022, we undertook an extended maintenance cycle and accelerated the implementation of the ethanol plant energy efficiency upgrades noted above. Our decision was partly driven by the high natural gas prices in California during the period. Furthermore, after monitoring natural gas pricing and margin profitability, we decided to extend the maintenance cycle into the second quarter of 2023. With natural gas pricing in a reasonable range and the maintenance turn-around complete, we restarted the plant in the second quarter of 2023.

Our California Dairy Renewable Natural ~~Gas~~gas segment ~~consists~~built, operates, and is actively expanding a network of ~~our subsidiary, Aemetis Biogas, LLC (“ABGL”), which was formed to construct bio-methane~~ anaerobic digesters at local dairies near the Keyes Plant ~~many~~(many of whom also purchase WDG produced ~~at the Keyes Plant. The digesters are connected via an underground private pipeline owned~~ by ~~ABGL to a gas cleanup and compression unit being built at~~ the Keyes Plant as animal feed); transports biogas by pipeline to produce RNG. Upon receiving the bio-methane from the dairies, impurities are removed, and the bio-methane is converted to negative carbon intensity RNG where it will be either injected into the statewide PG&E gas utility pipeline, supplied as compressed RNG that will service local trucking fleets, or used as renewable process energy at the Keyes Plant. ABGL has completed 35 miles of our California biogas digester network and pipeline system that converts waste dairy methane gas into RNG, including two operational dairies.

~~During the second quarter of 2022, Aemetis completed construction and is in the process of commissioning a third dairy digester and centralized gas cleanup facility and utility gas interconnect~~an upgrading up located at the Keyes Plant ~~where dairy~~site; converts the biogas ~~will be upgraded~~ to Renewable Natural Gas (“RNG”); and delivers the RNG ~~and injected into~~to customers through the ~~utility~~PG&E natural gas pipeline. Upon receiving pathway certification from the California Air Resources Board (CARB), the fuel is expected to be delivered into the Northern California gas delivery system. ABGL is also in the process of constructing several additional dairy digesters.

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

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

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

Our All Other segment consists of: the development of our Carbon Zero biofuels production plant to produce renewable diesel and sustainable aviation fuel; the development of our Carbon Capture and Sequestration compression system and injection wells; operation of the Riverbank Industrial Complex; a research and development facility in Minneapolis, Minnesota; and our corporate offices in Cupertino, California.

Our Carbon Zero biofuels production plant is designed to produce low carbon intensity sustainable aviation fuel (“SAF”) and renewable diesel fuel (“RD”) using low carbon hydroelectric electricity, renewable hydrogen and non-edible renewable oils sourced from existing Aemetis biofuels plants and other sources. Our first Carbon Zero plant is scheduled to be built in Riverbank, California at the 125-acre former Riverbank Army ammunition plant. The Riverbank plant is expected to utilize zero carbon hydroelectric power to produce 90 million gallons per year of SAF and RD. The plant is expected to supply the aviation and truck markets with low carbon renewable fuels to reduce GHG emissions and other pollutants associated with conventional petroleum-based fuels. By producing low carbon renewable fuels, the Company will generate Renewable Identification Numbers (“RINs”) under the federal Renewable Fuel Standard (“RFS”), generate California Low Carbon Fuel Standard (“LCFS”) credits, and produce Inflation Reduction Act tax credits.

Our Carbon Capture subsidiary was established to build Carbon Capture and Sequestration (“CCS”) projects that generate LCFS and IRS 45Q tax credits by compressing and injecting CO₂ into deep wells that are monitored to ensure the long-term sequestration of carbon underground. California’s Central Valley has been identified as one of the world’s most favorable regions for large-scale CO₂ injection projects due to the subsurface geologic formation that absorbs and retains CO₂ gas. The two initial Aemetis CCS injection projects are expected to capture and sequester more than two million metric tons per year of CO₂ at the Aemetis biofuels plant sites in Keyes and Riverbank, California. In July 2022, Aemetis purchased 24 acres located at the Riverbank Industrial Complex site in Riverbank, California to develop a CCS injection well with more than 1 million metric tons per year of CO₂ sequestration capacity. We plan to construct a characterization well at each site to characterize the geology to provide information for permitting and planning the projects.

Our Minneapolis, Minnesota research and development laboratory develops efficient conversion technologies using low carbon intensity and waste feedstocks to produce low or below zero carbon intensity biofuels and biochemicals. We are focused on processes that extract sugar from cellulosic feedstocks and then utilize the remaining biomass to produce low carbon renewable hydrogen for the production of sustainable aviation fuel, renewable diesel and potential sale of renewable hydrogen to third parties as transportation fuel.

~~Our revenue development strategy~~Revenue generation for our California Ethanol segment relies upon supplying ethanol into the transportation fuel market in ~~Northern~~ California and supplying feed products to dairy and other animal feed operations in ~~Northern~~ California. We are actively ~~seeking~~implementing plans that will bring higher value for our fuel ethanol in an effort to improve our overall margins and to add incremental income to the California Ethanol segment, including, the implementation of the Solar Microgrid System, the installation of ~~the Zebrex ethanol dehydration system~~mechanical vapor recompression, and other energy efficiency technologies. The energy efficiency upgrades to the Keyes Plant will result in higher LCFS value through the reduction of the carbon intensity of the fuel ethanol produced at the plant.

We ~~are also actively working with local dairy~~sell all ethanol, WDG, CDO, and ~~feed potential customers~~CDS produced in this process to ~~promote~~J.D. Heiskell. Our ethanol finished goods tank is leased by J.D. Heiskell and legal title to the ~~value~~product is transferred upon transfer of our ~~WDG product in an effort~~finished ethanol to ~~strengthen demand for~~ this ~~product.~~

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

California Ethanol revenue is dependent on the price of ethanol, WDG, ~~high-grade alcohol,~~CDS, CO₂, and DCO. Ethanol pricing is influenced by local and national production and inventory levels, ~~local and national ethanol production,~~ imported ethanol, corn prices, and gasoline demand, and is determined pursuant to a marketing agreement with a single fuel marketing customer and is generally based on daily and monthly pricing for ethanol delivered to the San Francisco Bay Area, California, as published by Oil Price Information Service (“OPIS”), as well as quarterly contracts negotiated by our marketing ~~customer~~company with local fuel blenders. The price for WDG is influenced by the price of corn, the supply and price of distillers dried grains, and demand from the local dairy and feed markets and determined monthly pursuant to a marketing agreement with A.L. Gilbert and is generally determined in reference to the local price of dried distillers’ grains and other comparable feed products. Our revenue is further influenced by the price of natural gas, and our decision to operate the Keyes Plant at various capacity levels, conduct required maintenance, and respond to biological processes affecting output.

InSince December 2018, we have utilized our relationships with California’s Central Valley dairy farmers by signing leases and raising funds to construct dairy digesters, a ~~40 mile~~40-mile pipeline, and a biogas-to-RNG upgrading facility that delivers RNG to ~~initially use biogas to power our Keyes Plant and later deliver fuels for sale to~~a utility gas pipeline. We are currently producing RNG from ~~two~~seven digesters connected ~~to 35 miles of~~by our pipeline ~~then flowing this gas to our RNG cleanup~~ and compression hub at the Keyes Plant. The RNG upgrade unit at the Keyes Plant is designed to enable the production and delivery of utility-grade RNG for sale as transportation fuel to California customers via pipeline delivery.

~~In addition to the existing and operating dairy digesters, we currently~~ have ~~three~~five additional dairy digesters ~~that are~~ under construction. We have ~~24 signed~~a total of approximately 34 agreements with ~~additional~~ dairies to construct dairy digesters. Our revenue development strategy for the Dairy Renewable Natural Gas segment relies upon continuing to collect bio-methane gas from the existing dairy digesters, continuing to build out the network of dairy digesters, extending the pipeline ~~in Northern California~~ to grow the supply of RNG available for sale, and utilizing the biogas-to-RNG upgrade unit to distribute utility-grade RNG to customers statewide. We

For all facilities in the United States, we plan to ~~store~~continue to use the ~~RNG until~~provisions of the ~~LCFS credit pathway~~Inflation Reduction Act of 2022 by qualifying for ~~each dairy has been established, after which we will sell~~renewable energy credits in the ~~stored gas by delivering it into~~form of an Investment Tax Credits, Production Tax Credit, and other credits, and to monetize the ~~utility gas pipeline.~~credits using the provisions of this congressional act.

Our revenue strategy in India is based on continuing to sell biodiesel to our bulk fuel customers, fuel station customers, mining customers, industrial customers and tender offers placed by ~~Government~~Government-owned Oil Marketing Companies (“OMCs”) for bulk purchases of fuels. ~~Recently,~~During the first quarter, the government of India updated the national biofuels policy and adopted a new tax on diesel fuel to promote biodiesel blending. As a result, the OMCs are pricing the tenders at economically viable levels, allowing for biodiesel producers in India to begin production.

During the third quarter of 2023, we ~~received~~fulfilled an ~~OMC's~~OMC tender offer for ~~26,000~~17,066 metric tons of which ~~will~~1596 metric tons of biodiesel revenue was in transit as of September 30, 2023 and would be ~~fulfilled by October 2022. We are pursuing future tenders which may be announced in November 2022.~~

~~During~~recognized as revenue 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.fourth quarter.

Three Months Ended September 30, ~~2022,~~2023, Compared to Three Months Ended September 30, ~~2021~~2022

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

California Ethanol. For the three months ended September 30, ~~2022,~~2023, the Company ~~generated 73% of revenue from sales~~sold 13.8 million gallons of ethanol 21% from sales of WDG, and 5% from sales of corn oil, CDS, CO₂, and other sales. Plant production averaged 114% of the 55 million gallon per year nameplate capacity. The increase in revenues was due to the increase in volume of ethanol gallons sold to 15.7 million for the three months ended September 30, 2022, compared to 13.8 million for the same period ended September 30, 2021, while the price of ethanol per gallon increased slightly to $2.86 per gallon from $2.84 per gallon. Theat an average price of ~~WDG increased by 33% to $127~~$2.64 per ~~ton for the three months ended September 30, 2022 while WDG sales volume increased by 10% to 102~~gallon and 98 thousand tons ~~in the three months ended September 30, 2022 compared to 93 thousand tons in the three months ended September 30, 2021.~~

~~Dairy Renewable Natural Gas.~~ ~~During the three months ended September 30, 2022 and 2021, we recognized revenue~~ of $308 thousand and $355 thousand, respectively, to an intercompany party. The decrease in the three months ended September 30, 2022 revenue compared to the three months ended September 30, 2021 was due to LCFS pathway being approved in the second quarterWDG at a price of 2021, which applied retroactively since the inception of the first two dairy digesters. For revenue on a comparable basis the dairy digesters produced and sold MMBTU of 16.8 thousand and 15.8 thousand in the three months ended September 30, 2022 and 2021.

~~India Biodiesel.~~ $96 per ton. For the three months ended September 30, 2022, the Company sold 15.7 gallons of ethanol at an average price of $2.85 per gallon and 102 thousand tons of WDG at a price of $127 per ton. The decrease in revenue was attributable to decrease in sales volume by 12% coupled with decrease in average price by 7%.

California Dairy Renewable Natural Gas. During the three months ended September 30, 2023, we produced and sold 66.6 thousand MMBtu of renewable natural gas to an external party, at an average price of $2.13 per MMBtu and we also sold 271 thousand D3 RINs at average price of $2.97 per RIN. During the three months ended September 30, 2022, we produced 16.8 thousand MMBtus of dairy biogas that we used at the Keyes plant.

India Biodiesel. For the three months ended September 30, 2023, we generated ~~99%~~96% of our revenues from the sale of biodiesel, and 1%4% of our sales from other sales compared to ~~100%~~99% of our sales from biodiesel, and 1% of our sale from other sales for the three months ended September 30, ~~2021.~~2022. The increase in revenues was primarily attributable to obtaining the ~~Kakinada Plant obtaining and executing on~~tender offers from India's Oil Market Companies, making the ~~Indian government tenders.~~production of biodiesel commercially viable for the Company. Biodiesel sales volume increased ~~by 100%~~ to ~~6,990~~15.5 thousand metric tons in the three months ended September 30, ~~2022compared~~2023 compared to 07.0 thousand metric tons in the three months ended September 30, ~~2021.~~ 2022 while price per ton decreased by 27%.

California Ethanol. WeFor the three months ended September 30, 2023, we ground ~~5.5 million and 4.8~~5.0 million bushels of corn at $7.48 per bushel and incurred $1.9 million in chemicals and denaturant costs, $2.2 million in natural gas costs, and $2.2 million in transportation costs. For the three months ended September 30, 2022 ~~and 2021, respectively. Our average cost~~, we ground 5.5 million bushels of ~~feedstock per bushel increased to~~corn at $9.59 per bushel ~~during the three months ended September 30, 2022 compared to $7.99 per bushel for the three months ended September 30, 2021. In addition, for the three months ended September 30, 2022, we~~and incurred ~~$1.3~~$1.7 million ~~more~~in chemicals and denaturant costs, $3.8 million in natural gas costs, ~~$0.1~~and $2.5 million ~~more in chemical and denaturant costs, and $1.0 million more~~ in transportation ~~costs compared to the same period in 2021.~~costs.

California Dairy Renewable Natural Gas. Cost of Goods Sold expenses relate to dairy manure payments, maintenance on the dairy digesters, ~~production bonuses,~~ and depreciation. Cost of Goods Sold increased with seven operating dairies as of September 30, 2023, compared to two operating dairies in the three months ended September 30, 2022.

India Biodiesel. The increase in costs of goods sold was attributable to the increase in production of ~~biodiesel to meet the India government's tender offer.~~biodiesel. In the three months ended September 30, ~~2022~~2023 we consumed 15.6 thousand metric tons of feedstock, compared to 9.4 thousand metric tons of feedstock in the same period in 2022. During the three months ended September 30, 2023 the average price of biodiesel feedstock ~~volume~~ was ~~9,401~~$752 per metric ~~tons,~~ton compared to 0$889 per metric ~~tons~~ton in the same period as ~~2021. During the three months ended September 30, 2022 the average price per biodiesel metric ton was $889 compared to $0~~ in ~~the same period as 2021.~~2022.

California Ethanol. ~~Gross~~The decrease in gross loss ~~decreased by 15%~~was attributable to lower corn prices and natural gas prices in 2023 compared to higher corn prices and natural gas prices in the ~~three months ended September 30, 2022 primarily due to increases in sales volume of ethanol and WDG, partially offset by the increases in the prices of corn, natural gas and transportation costs.~~2022.

California Dairy Renewable Natural Gas. The ~~decrease~~increase in gross loss in the three months ended September 30, ~~2022~~2023 relates to ~~a decrease~~an increase in ~~taxes~~manure and ~~payments~~maintenance costs associated with having seven dairies producing biogas, compared to two dairies in the ~~prior period.~~same period ended September 30, 2022.

India Biodiesel. The ~~increase~~slight decrease in gross profit was attributable to decrease in the ~~increase in~~average sales ~~and production~~price of biodiesel ~~to fulfill the government's tender offer.~~by 27% and refined glycerin by 33% offset by decrease of feedstock price by 15%.

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

Selling, general, and administrative (“SG&A”) expenses consist primarily of salaries and related expenses for employees, marketing expenses related to sales of ethanol and WDG in California Ethanol and biodiesel and other products in India Biodiesel, as well as professional fees, insurance, other corporate expenses, and related facilities expenses.

~~Other operating income consists~~ Also included was of sublease rental ~~income.~~income which was included as an offset to the SG&A expenses.

Other expense (income) expense consists primarily of interest and amortization expense attributable to our debt facilities and ~~those of our subsidiaries and~~ accretion of ~~our~~ Series A preferred units. The debt facilities sometimes include stock or warrants issued as fees. The fair value of stock and warrants are amortized as amortization expense, except when the extinguishment accounting method is applied, in which case refinanced debt costs are recorded as extinguishment expense.

The increase in SG&A expenses for the three months ended September 30, ~~2022~~2023 was ~~principally~~ due to increases in (i) stock compensation, ~~and~~ salaries and wages of $0.4 million, (ii) professional fees of ~~$1.7~~$1.8 million ~~as part~~and (iii) miscellaneous expense of ~~the development~~$0.6 million due to reclassifying cost of ~~our ultra-low carbon initiatives.~~goods sold depreciation, maintenance costs and plant services to SG&A ~~expenses as a percentage~~during the extended maintenance cycle and the accelerated implementation of ~~revenue increased in the three months ended September 30, 2022 to 10% compared~~several important ethanol plant energy efficiency upgrades to the ~~comparable period in 2021 at 10%.~~Keyes Plant.

Interest expense increased in the three months ended September 30, ~~2022~~2023 due to ~~obtaining and drawing on~~Construction Loan debt, additional borrowings under the Revolving ~~Loans. Debt related fees~~Loans and ~~amortization increased due~~Revolving Credit Facilities, and the impact of rising interest rates on our variable interest rate debt compared to ~~debt issuance costs and extension fees being incurred~~the same period in ~~2022 related to extending~~ the ~~Third Eye Capital debt and obtaining the Revolving Loans.~~prior year. The increase in accretion and other expenses of the Series A Preferred Units was due to ~~accelerated accretion due to~~provisions of the PUPA ~~Amendment. The loss on debt extinguishment was related to the PUPA Amendment.~~Amendments.

Nine Months Ended September 30, ~~2022~~2023, Compared to Nine Months Ended September 30, ~~2021~~2022

California Ethanol. For the nine months ended September 30, ~~2022,~~2023, the Company ~~generated 73% of revenue from sales~~sold 16.7 million gallons of ethanol ~~22% from sales~~at a price of $2.72 per gallon and 122 thousand tons of WDG ~~and 5% from sales~~at a price of ~~corn oil, CDS, CO₂, and other sales. Plant production averaged 110% of the 55 million gallon~~$98 per ~~year nameplate capacity.~~ton. The ~~increase~~decrease in revenues was due to an ~~increase~~extended maintenance cycle and accelerated the implementation of several important ethanol plant energy efficiency upgrades to the Keyes Plant during the first five months of 2023 coupled with decrease in average price of ethanol ~~to $2.86 per gallon for the nine months ended September 30, 2022, compared to $2.49 per gallon for the same period ended September 30, 2021,~~by 5% and due to an increase in volume of ethanol gallons sold from 44.6 million gallons for the nine months ended September 30, 2021 to 45.5 million gallons for the nine months ended September 30, 2022. The average price of WDG ~~increased~~ by 26% to $129 per ton for the nine months ended September 30, 2022 while WDG sales volume increased to 307 thousand tons in the nine months ended September 30, 2022 compared to 299 thousand tons in the nine months ended September 30, 2021.24%.

California Dairy Renewable Natural Gas. During the nine months ended September 30, ~~2022~~2023, we produced and ~~2021, we recognized revenue~~sold 142 thousand MMBtu of ~~$940 thousand and $1.1 million, respectively~~physical molecules to an ~~intercompany party. The decrease was due to a drop in carbon intensity prices.~~

~~India Biodiesel.~~ ~~For~~external party, at an average price of $5.06 per MMBtu. Also, we started selling D3 RINs during the quarter and we sold 271 thousand D3 RINS at an average price of $2.97 per RIN. During the nine months ended September 30, 2022, we produced and sold dairy biogas of $940 thousand to an intercompany party.

India Biodiesel. For the nine months ended September 30, 2023, we generated ~~99%~~97% of our revenues from the sale of biodiesel, and 1%3% of our sales from other sales compared to ~~67% of our revenues from the sale of biodiesel, and 33%~~100% of our sales from other sales for the nine months ended September 30, ~~2021.~~2022. The increase in revenues was primarily attributable to receiving the ~~Kakinada Plant receiving orders~~tender offer from the ~~Indian government in September~~India Oil Marketing Companies, which made the production of ~~2022.~~biodiesel commercially viable for the Company. Biodiesel sales volume increased to ~~6,990~~43.7 thousand metric tons in the nine months ended September 30, ~~2022~~2023 compared to ~~455~~7.0 thousand metric tons in the nine months ended September 30, ~~2021.~~ 2022, while price per ton decreased to $1,219 per metric ton from $1,550 per metric ton.

California Ethanol. We For the nine months ended September 30, 2023, we ground ~~15.9 million and 15.6~~6.4 million bushels of corn at $7.34 per bushel. This decrease from the same period in 2022 was due to an extended maintenance period at the ~~nine months ended September 30, 2022 and 2021, respectively. Our average cost~~Keyes Plant. As a result of ~~feedstock per bushel increased to $9.53 per bushel during~~ the ~~nine months ended September 30, 2022 compared to $7.62 per bushel for the nine months ended September 30, 2021. In addition, for the nine months ended September 30, 2022, we incurred $3.6~~Keyes Plant shutdown, our corn costs decreased by $105.0 million, ~~more in~~ natural gas costs ~~$1.0~~decreased by $8.0 million, ~~more in chemical~~chemical and denaturant costs decreased by $2.5 million, and ~~$1.8~~transportation costs decreased by $3.9 million ~~more~~compared to the same period in ~~transportation costs.~~2022.

California Dairy Renewable Natural Gas. Cost of Goods Sold expenses relate to dairy manure payments, maintenance on the dairy digesters, ~~production bonuses,~~ and depreciation. Cost of goods sold will continue to increase as we expand the business.

India Biodiesel. The increase in costs of goods sold was attributable to ~~the increase in biodiesel production to fulfill the Indian government's tender offers.~~increased production. In the nine months ended September 30, ~~2022~~2023 biodiesel feedstock volume was ~~9,401~~43.7 thousand metric tons, compared to ~~465~~9.4 thousand metric tons in the same period as ~~2021.~~in 2022. During the nine months ended September 30, ~~2022,~~2023 the average price of biodiesel feedstock was ~~$889~~$797 per metric ton compared to ~~$619~~$889 per metric ton in the same period as ~~2021.~~in 2022.

California Ethanol. ~~Gross~~The decrease in gross loss ~~increased~~was attributable to an extended maintenance cycle for first five months of 2023 coupled with decrease in ~~the nine months ended September 30, 2022 primarily due to increases in the prices of~~ corn price by 23% and natural gas ~~chemical costs, and transportation costs.~~prices by 52%.

California Dairy Renewable Natural Gas.The increase in gross loss ~~decrease~~ in the nine months ended September 30, ~~2022, is related~~2023 relates to ~~slightly higher payments~~an increase in manure and maintenance costs associated with having seven dairies producing biogas, compared to two dairies in the ~~prior period.~~same period ended September 30, 2022.

India Biodiesel. The increase in gross profit was attributable to the increase in ~~sales~~production and ~~production~~sales of biodiesel to ~~fulfill~~meet the ~~government's~~government of India's tender ~~offer. During the nine months ended September 30, 2022, India Biodiesel did not participate in the government's tenders~~offer as the ~~COVID-19 shutdown caused higher feedstock costs making conversion to biodiesel unviable.~~tender offer was received at the start of the first quarter.

The increase in SG&A expenses for the nine months ended September 30, ~~2022~~2023 was due to increases in (i) stock compensation, ~~and~~ salaries and wages as of ~~$4.4~~$2.8 million due to issuing a grant of RSAs, (ii) Depreciation and Amortization of $1.7 million due to reclassifying cost of goods sold depreciation to SG&A depreciation, (iii) Taxes, Insurances, Rent and Utilities increase of $1.1 million, (iv) supplies, other services and professional fees of $2.3 million and (v) Miscellaneous expense increase of $1.8 million as ~~two stock option grants occurred during~~we reclassified cost of goods sold to SG&A as we were not operating the ~~year and due to an increase in taxes, insurance, rent and utilities,~~Keyes Plant until the end of ~~$0.5 million. SG&A expenses as a percentage of revenue~~May.

Interest expense increased in the nine months ended September 30, ~~2022 stayed consistent at 11%~~2023 additional Construction Loan debt, additional borrowings under the Revolving Loans and Revolving Credit Facilities, and the impact of rising interest rates on our variable interest rate debt compared to the ~~corresponding~~same period ~~of 2021.~~

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

~~Interest expense decreased~~ in the nine months ended September 30, 2022 due to principal debt payments made to Third Eye Capital in the first and second quarter of 2022, coupled with capitalizing interest on our capital projects. Debt related fees and amortization increased due to debt issuance costs and extension fees being incurred in 2022 related to extending the Third Eye Capital debt and obtaining the Revolving Loans.prior year. The ~~decrease~~increase in accretion and other expenses of the Series A Preferred Units was due to capitalized interest related to the ABGL project increasing and offsetting accretion. For the nine months ended September 30, 2022 and 2021 capitalized interest was $7.7 million and $2.9 million, respectively. The Gain on debt extinguishment was related to the PPP loan being forgiven in the 2021. Gain on litigation arose from the settlementprovisions of the EdenIQ lawsuit in the second quarter. Other expense (income) change is related to a grant in the amount of $14.2 million received from the USDA's Biofuel Producer Program, created as part of the CARES Act, to compensate biofuel producers who experienced market losses due to the COVID-19 pandemic.recent PUPA Amendments.

Cash and cash equivalents were ~~$0.3~~$3.9 million at September 30, ~~2022,~~2023, of which ~~$0.2~~$0.8 million was held in North America and the rest was held at our Indian subsidiary. Our current ratio at September 30, ~~2022~~2023 was ~~0.13, compared to a current ratio of 0.32~~0.21 which stayed same as at December 31, ~~2021.~~2022. We expect that our future available liquidity resources will consist primarily of cash generated from operations, remaining cash balances, borrowings available, if any, under our senior debt facilities and our subordinated debt facilities, and any additional funds raised through sales of equity. The use of proceeds from all equity raises and debt financings are subject to approval by our senior lender.

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

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

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

We operate in a volatile market in which we have limited control over the major components of input costs and product revenues and are making investments in future facilities and facility upgrades that improve the overall margin while lessening the impact of these volatile markets. As such, we expect cash provided by operating activities to fluctuate in future periods primarily because of changes in the prices for corn, ethanol, WDG, DCO, CDS, biodiesel, waste fats and oils, glycerin, non-refined palm oil, natural gas federal RINs and ~~natural gas.~~LCFS credits. To the extent that we experience periods in which the spread between ethanol prices, and corn and energy costs narrow or the spread between biodiesel prices and waste fats and oils or palm oil and energy costs narrow, we may require additional working capital to fund operations.

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

For the Keyes Plant, we restarted the plant during the second quarter after completing an extended maintenance cycle and accelerating the implementation of several important ethanol plant energy efficiency upgrades. We plan to operate the plant and continue to improve its financial performance by completing the existing upgrades and adopting new technologies orand process changes that allow for energy efficiency, cost reduction or revenue enhancements, ~~execute~~as well as, executing upon awarded grants that improve energy and operational efficiencies resulting in lower cost, lower carbon demands and overall margin improvement.

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

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

For all facilities in the United States, we plan to utilize the provision of the Inflation Reduction Act of 2022 by qualifying for tax credits in the form of an Investment Tax Credits, Production Tax Credits, and other credits, and to monetize the credits using the provisions of this congressional act.

At September 30, ~~2022,~~2023, the outstanding balance of principal, interest and fees, net of discounts, on all Third Eye Capital Notes equaled ~~$151~~$182 million. The maturity dates for the Third Eye Capital financing arrangements are August 31, 2023, for $11.5 million which was paid off subsequently, April 1, ~~2023,~~2025, for ~~$104~~$125.8 million, ~~with the ability to extend to April 1, 2024,~~ March 1, 2025, for ~~$25~~$25.0 million and March 1, 2026, for ~~$22~~$24.9 million.

As of the date of this report, the Company has ~~$40.0~~$50.0 million additional borrowing capacity to fund future cash flow requirements under the Reserve Liquidity Notes ~~due on~~with a maturity date April 1, ~~2023.~~

We also rely on our working capital lines with Gemini and Secunderabad Oils in India to fund our commercial arrangements for the acquisitions of feedstock. We currently provide our own working capital for the Keyes Plant; Gemini and Secunderabad Oils currently provide us with working capital for the Kakinada Plant. The ability of Gemini, and Secunderabad Oils to continue to provide us with working capital depends in part on both of their respective financial strength and banking relationships.2024.

The ~~below~~following table (in thousands) describes the changes in current and long-term debt during the nine months ended September 30, ~~2022:~~2023:

Working capital ~~changes~~changes resulted in (i) a ~~$5.3~~$3.5 million increase in inventories due to the Keyes Plant restarting operations and abuilt up of inventory for production for winter months in India (ii) a ~~$7.6~~$3.3 million increase in accounts receivable due to anUBPL fulfilling a government tender in the third quarter of 2023, and (iii) a slight increase in ~~India Biodiesel revenue,~~other current assets of $0.2 million due to receipt of the restricted cash from the Construction loan. This was partially offset by ~~(iii)~~(i) a ~~$1.9~~$1.4 million decrease in prepaid expenses mainly due to the use of a J.D. Heiskell pre-payment, ~~partially offset by an increase in prepaid guarantee fees, (iv)~~and (iii) a ~~decrease in other current assets of $0.1 million, and (v) a $7.5~~$0.4 million decrease in cash.

Net cash used in operating activities during the nine months ended September 30, ~~2022,~~2023, was ~~$16.3~~$19.2 million, consisting of non-cash charges of ~~$68.9~~$36.7 million, net cash ~~provided~~used by operating assets and liabilities of ~~$0.1~~$34.8 million, and net loss of ~~$85.3~~$21.0 million. The non-cash charges consisted of: (i) ~~$5.2~~$4.8 million in amortization of debt issuance costs and other intangible assets, (ii) ~~$4.0~~$5.2 million in depreciation expenses, (iii) ~~$4.9~~$6.2 million in stock-based compensation expense and a warrant grant to our working capital partner, (iv) ~~$5.9~~$20.2 million in preferred unit accretion and other expenses of Series A preferred ~~units, (v) a loss on lease termination of $0.7 million, (vi) a loss on debt extinguishment of $49.4 million, and (vii) a gain on litigation of $1.4 million.~~units. Net changes in operating assets and liabilities consisted primarily of (i) an increase in accrued interest of ~~$12.8~~$18.5 million, (ii) ~~prepaid expenses decrease of $2.8 million, and (iii)~~ an increase in accounts payable of ~~$8.8~~$4.7 million, (iii) an increase in other liabilities of $3.3 million, and (iv) a decrease in prepaid expenses of $2.4 million. This was partially offset by an increase in ~~(i)~~other assets of $56.8 million, (ii) an increase in inventories of ~~$5.6~~$3.6 million ~~(ii)~~and (iii) an increase in accounts receivable of ~~$8.0 million, (iii) an increase in other assets of $0.5 million, and (iv) a decrease in other liabilities of $10.1~~$3.3 million.

Cash used by investing activities was ~~$21.5~~$10.9 million, of which ~~$28.9~~$18.6 million were used by capital projects, partially offset by grant proceeds and other reimbursements of ~~$7.4~~$7.7 million.

Cash provided by financing activities was ~~$30.4~~$30.6 million, consisting ~~primarily~~ of ~~$0.2 million from exercises of stock options, $8.0~~$14.8 million from issuance of common stock and ~~$39.9~~$41.4 million from proceeds from borrowings, partially offset by repayments of borrowings of ~~$16.2~~$22.6 million, payment of debt renewal and waiver ~~fee payments~~fees of ~~$1.2~~$1.7 million and payments on finance leases of ~~$0.3~~$1.4 million.

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of net sales and expenses for each period. We believe that of our most significant accounting policies and estimates, defined as those policies and estimates that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain are: revenue recognition; recoverability of long-lived assets, Series A Preferred unit liability, and debt modification and extinguishment accounting. These significant accounting principles are more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

None reported beyond those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

We had no off-balance sheet arrangements during the three months ended September 30, ~~2022.~~2023.

Management (with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, our CEO and CFO concluded that, although remediation plans were initiated to address the material weaknesses over financial reporting as identified in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, the disclosure controls and procedures along with the related internal controls over financial reporting were not effective to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and is compiled and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

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

As discussed in greater detail under Item 9A, Controls and Procedures, in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, we initiated a remediation plan to address the material ~~weaknesses~~weakness in our internal control ~~over financial reporting identified as of the fiscal year then ended. Our efforts~~related to ~~improve our internal~~information technology general controls ~~are ongoing.~~and information technology systems.

For a more comprehensive discussion of the material weaknesses in internal control over financial reporting identified by management as of December 31, ~~2021,~~2022, and the remedial measures undertaken to address these material weaknesses, investors are encouraged to review Item 9A, Controls and Procedures, in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

The Company ~~has been named~~is subject to legal proceedings and claims which arise in ~~various lawsuits or threatened actions that are incidental to our~~the ordinary course of its business. For additional information regarding such matters, see “Part I, Item 1. Financial Statements – Note 5. Commitments and Contingencies - Legal Proceedings.”

~~Except as described below, there are~~There has been no ~~material changes to the~~change in risk factors since the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 filed with the SEC on March ~~10, 2022.~~9, 2023. We urge you to read the risk factors contained therein.

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

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

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

In an inflationary environment, such as the current economic environment, depending on other economic conditions, we may be unable to raise prices of our fuels or products to keep up with the rate of inflation, which would reduce our profit margins. As a result, inflation may have a material adverse effect on our results of operations and financial condition.

During the third quarter of ~~2022,~~2023, we issued two-year warrants to purchase 113 thousand shares of our common stock to ~~certain~~ subordinated ~~promissory note holders pursuant to~~lenders in connection with a extension of their debt, and we also issued 113 thousand shares of common stock in connection with their exercise of the ~~note holders’ warrant exercise at an exercise price of $0.01 per share.~~

~~The above issuance was~~warrants. These issuances were exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, as ~~sales~~issuances of securities not involving any public offering.

No unresolved defaults on senior securities occurred during the nine months ended September 30, ~~2022.~~2023.

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

INDEX

PART I--FINANCIAL INFORMATION


Item 1	Financial Statements.	4

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	33

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	4443

Item 4.	Controls and Procedures.	4443

PART II--OTHER INFORMATION

Item 1.	Legal Proceedings.	4544

Item 1A.	Risk Factors.	4544

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	4544

Item 3.	Defaults Upon Senior Securities.	4544

Item 4.	Mine Safety Disclosures.	4544

Item 5.	Other Information.	4544

Item 6.	Exhibits.	4645

Signatures		4746

	*For the three months ended September 30,*				*For the nine months ended September 30,*
	*2022*		*2021*		*2022*		*2021*
Ethanol and high-grade alcohol sales	$	44,673	$	39,131	$	130,224	$	111,220
Wet distiller's grains sales		13,003		8,919		39,669		30,584
Other sales		3,231		1,782		8,947		5,086
	$	60,908	$	49,832	$	178,840	$	146,890

	*For the three months ended September 30,*				*For the nine months ended September 30,*
	*2023*		*2022*		*2023*		*2022*
Ethanol sales	$	36,375	$	44,673	$	45,388	$	130,224
Wet distillers grains sales		9,427		13,003		11,980		39,669
Other sales		1,637		3,232		1,878		8,947
Total	$	47,439	$	60,908	$	59,246	$	178,840

	*As of*
	*September 30, 2022*		*September 30, 2021*

Series B preferred (post split basis)		127		129
Common stock options and warrants		5,064		3,929
Debt with conversion feature at $30 per share of common stock		1,256		1,280
Total number of potentially dilutive shares excluded from the diluted net (loss) per share calculation		6,447		5,338

	*As of*
	*September 30, 2023*		*September 30, 2022*
Series B preferred (post split basis)		-		127
Common stock options and warrants		3,281		5,064
Debt with conversion feature at $30 per share of common stock		1,259		1,256
Total number of potentially dilutive shares		4,540		6,447

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

Twelve Months ended September 30,	*Debt Repayments*			*Debt Repayments*
2023	$	29,020
2024		136,757		$	66,485
2025		32,240			182,609
2026		28,612			29,448
2027		985			4,266
There after		1,136
2028					1,531
Thereafter					8,403
Total debt		228,750			292,742
Debt issuance costs		(5,768	)		(6,208	)
Total debt, net of debt issuance costs	$	222,982		$	286,534

	*Three months ended September 30,*				*Nine months ended September 30,*				*Three months ended September 30,*				*Nine months ended September 30,*
	*2022*		*2021*		*2022*		*2021*		*2023*		*2022*		*2023*		*2022*
Operating lease cost
Operating lease expense	$	159	$	204	$	506	$	612	$	180	$	159	$	542	$	506
Short term lease expense		44		28		146		138		89		44		131		146
Variable lease expense		23		30		68		84		26		23		70		68
Total operating lease cost	$	226	$	262	$	720	$	834	$	295	$	226	$	743	$	720

Finance lease cost
Amortization of right-of-use assets	$	26	$	58	$	115	$	168	$	30	$	26	$	91	$	115
Interest on lease liabilities		98		20		217		61		83		98		256		217
Total finance lease cost	$	124	$	78	$	332	$	229	$	113	$	124	$	347	$	332

Twelve months ended September 30,	*Operating leases*			*Finance leases*			*Operating leases*			*Finance leases*

2023	$	572		$	479
2024		586			204		$	680		$	204
2025		603			176			672			176
2026		622			145			648			145
2027		641			145			641			145
There after		442			11,000
2028								436			145
Thereafter								-			10,105
Total lease payments		3,466			12,149			3,077			10,920
Less imputed interest		(1,079	)		(9,177	)		(797	)		(8,254	)
Total lease liability	$	2,387		$	2,972		$	2,280		$	2,666

		*September 30, 2022*				*September 30, 2021*
Lease income		$	804			$	-

	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		-			(141	)		1.63
Forfeited/expired		221			(221	)		5.58
Balance as of September 30, 2023		408			5,610		$	4.43

	*Shares Available for Grant*			*Number of Shares Outstanding*			*Weighted-Average Exercise Price*
Balance as of December 31, 2021		142			3,763		$	2.29
Authorized		1,338			-			-
Options Granted		(1,307	)		1,307			10.97
RSAs Granted		(89	)		-			-
Exercised		-			(294	)		0.93
Forfeited/expired		67			(67	)		11.44
Balance as of September 30, 2022		151			4,709		$	4.65

	*Warrants Outstanding & Exercisable*			*Weighted - Average Exercise Price*		*Average Remaining Term in Years*		*Warrants Outstanding & Exercisable*			*Weighted - Average Exercise Price*		*Average Remaining Term in Years*
Outstanding December 31, 2020		95		$	2.59		4.95
Outstanding December 31, 2022									355		$	15.92		7.48
Granted		292			0.01				486			1.18
Exercised		(332	)		0.32				(336	)		0.83
Outstanding December 31, 2021		55		$	2.59		3.95
Granted		527			10.46
Exercised		(227	)		0.01
Outstanding September 30, 2022		355		$	15.92		7.74
Outstanding September 30, 2023									505		$	11.78		6.15

	*As of and for the three months ended September 30,*				*As of and for the nine months ended September 30,*				*As of and for the three months ended September 30,*				*As of and for the nine months ended September 30,*
	*2022*		*2021*		*2022*		*2021*		*2023*		*2022*		*2023*		*2022*
Ethanol Sales									$	36,375	$	-	$	45,388	$	-
Wet distiller's grains sales	$	13,003	$	8,919	$	39,669	$	30,584		9,427		13,003		11,980		39,669
Corn oil sales		2,917		1,515		8,067		4,252		1,487		2,917		1,613		8,067
CDS Sales										9		-		62		-
Corn purchases		53,063		39,058		151,425		119,217		37,030		53,063		48,029		151,425
Accounts receivable		106		88		106		88		1,008		106		1,008		106
Accounts payable		540		307		540		307
Accounts Payable										759		540		759		540
Working Capital										13		-		13		-

	*For the three months ended September 30, 2022*														*For the three months ended September 30, 2023*
	*California Ethanol*			*Dairy Renewable Natural Gas*			*India Biodiesel*		*All other*			*Total*			*California Ethanol*			*California Dairy Renewable Natural Gas*			*India Biodiesel*		*All other*		*Total*

Revenues from external customers	$	60,908		$	-		$	10,923	$	-		$	71,831
Intersegment revenues		-			308			-		-			308
Revenues															$	47,439		$	1,107		$	20,144	$	-	$	68,690
Gross profit (loss)		(3,763	)		(179	)		2,841		(3	)		(1,104	)		(1,473	)		(807	)		2,772		-		492

Interest expense		4,744			1			69		2,275			7,089
Interest expense including amortization of debt fees																6,729			620			19		2,814		10,182
Accretion and other expenses of Series A preferred units		-			2,774			-		-			2,774			-			7,739			-		-		7,739
Capital expenditures		210			3,626			-		2,577			6,413			1,363			6,819			372		233		8,787
Depreciation		1,023			156			161		38			1,378			960			598			158		31		1,747
Total Assets		65,567			65,076			22,415		45,817			198,875

	*September 30, 2023*		*December 31, 2022*
California Ethanol	$	65,968	$	66,794
California Dairy Renewable Natural Gas		138,597		77,714
India Biodiesel		23,576		16,120
All other		49,298		46,486
Total consolidated assets	$	277,439	$	207,114

	2022			2021			Inc/(dec)			% change
California Ethanol	$	60,908		$	49,832		$	11,076			22.2	%
Dairy Renewable Natural Gas*		308			355			(47	)		(13.2	)%
India Biodiesel		10,923			63			10,860			17238.1	%
All other		-			-			-			0.0	%
Eliminations		(308	)		(355	)		47			(13.2	)%
Total	$	71,831		$	49,895		$	21,936			44.0	%

	As of				As of
	September 30, 2022		December 31, 2021		September 30, 2023		December 31, 2022
Cash and cash equivalents	$	251	$	7,751	$	3,899	$	4,313
Current assets (including cash, cash equivalents, and deposits)		24,051		20,693		78,491		18,136
Current and long-term liabilities (excluding all debt)		160,783		92,302		190,897		162,728
Current & long-term debt		222,982		188,767		286,534		246,240

Increases to debt:
Accrued interest	$	15,759					$	24,619
Maturity date extension fee and other fees added to senior debt		2,337						2,330
Sub debt extension fees		680						680
Revolving Notes Series B draw								800
Fuels Revolving Line draw		26,500						6,598
Carbon Revolving Line draw		27,600
Construction Loan draw								13,598
Working capital loan draw		2,723						22,427
Financing for equipment term loan		290
Total increases to debt				$	75,889					$	71,052
Decreases to debt:
Principal, fees, and interest payments to senior lender	$	(36,026	)				$	(5,445	)
Principal and interest payments to EB-5 investors		(160	)					(148	)
Change in debt issuance costs, net of amortization		(5,420	)					(1,254	)
Term loan payments		(7	)					(7	)
Construction Loan Payments								(1,228	)
Working capital loan payments		(61	)					(22,676	)
Total decreases to debt				$	(41,674	)				$	(30,758	)
Change in total debt				$	34,215					$	40,294

~~31.1~~ 10.1	Fourth Waiver and Amendment to Series A Preferred Unit Purchase Agreement, dated as of November 8, 2023, by and among Aemetis Biogas LLC, Protair-X Americas, Inc. and Third Eye Capital Corporation.

31.1	Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.

32.1	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS *	Inline XBRL Instance Document

101.SCH *	Inline XBRL Taxonomy Extension Schema

101.CAL *	Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF *	Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB *	Inline XBRL Taxonomy Extension Label Linkbase

101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase

104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

	AEMETIS, INC.


Date: November 9, 2023	By:	/s/ Eric A. McAfee
		Eric A. McAfee Chief Executive Officer (Principal Executive Officer)