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Aemetis (AMTX)

Participants
Todd Waltz EVP and CFO
Eric McAfee Founder, Chairman, CEO
Ed Woo Ascendiant Capital
Marco Rodriguez Stonegate Capital
Call transcript
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Operator

Welcome to the Aemetis Second Quarter 2020 Earnings Review Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

As a reminder, today's call is being recorded. It is my pleasure to introduce your host, Mr. President Financial Vice Inc. of Executive Waltz, and Officer Chief Aemetis, Todd Mr. you begin. Waltz, may

Todd Waltz

Melinda. the second recent presentation at review Thank review to Securities calls. updated Welcome you, Aemetis This with filing and aemetis.com We today's press download the visiting or previous corporate review conference presentation, conference Exchange quarter for suggest our releases to is website Commission, homepage. available aemetis.com and earnings on release, press call. earnings XXXX earnings

like I'd today, read discussion the statement. our begin we disclosure to following Before

disclosures SEC cautionary call, we'll in may statements business future all and appear expectations our differ and today's plans, future be involve this that During cautioned activity including, making that of and from without the with stock filings. plan. forward-looking made. These are statements limitation, and with the that opportunities our our made forward-looking financing on events execution materially statements, risks respect statements call to respect warnings conjunction must in and to Investors the uncertainties, considered with performance, statements be

the information, are Securities company additional charge. the available to website which company's on refer please filings from and Exchange and without are posted For Commission our

accretion compensation tax on loss depreciation quarter of defined this calculating income is included A contingency expense, litigation results in net our plus Our the in include discussion to EBITDA June directly extinguishment, release on such to amortization measures and XXXX, GAAP loss and ended non-GAAP the available most XX, other expense, comparable of non-GAAP call measures measures supplement loss a the our based expense, on interest a extent Adjusted review reconciliation as share-based which expense, as tangible GAAP. net will or financial expense. is expense, on income website. to income, is for the earnings deductible on

the second compared Interest at profit $XX.X to months XXXX the to on EBITDA Cash quarter XXXX. quarter Biogas accounted $XXX,XXX during in of accretion Series the Adjusted million during excluding $X.X of increased Aemetis expense subsidiary, Revenues for million, for offset into to second and XXXX the second the A the Oil second $XX.X biodiesel million second connection XXXX. million, XXXX. by XXXX the entry compared the second the to $XX.X quarter quarter the to loss a reported, slightly units for The in gross to Government quarter second $X.X preferred in market, of Selling, were administrative XXXX. consolidated of bidding LLC its compared was financial the with financial profit. second the the XXXX. of completes $X subsidiary delay accretion $X.X were increased payments Operating million XXXX America stock. quarter income to quarter the the XXXX, million connection compared million quarter income second but XXXX. gross for second $X.X for profit compared the quarter to end Company XXXX, like rose the to quarter of the the operating our loss preferred end I'd of second the $XX.X to an at That during of million for the review the XXXX. the million a Aemetis quarter $X.X for by segment quarter quarter $XX.X process. Gross expenses for during during compared three million recognized of compared second with quarter million second for the $X.X during the review to India $XX.X June million increased million for of Now, net high-grade North $XXX,XXX general XXXX XXXX. The second results of Net of XXXX, was alcohol million of in Biogas XXXX. ended driven $XX preference million second XX, quarter $X.X Marketing to

Chairman McAfee introduce Officer Now, for Chief of the update. I'd Aemetis, Eric? Eric business and Founder, a Executive like to

Eric McAfee

was founded in Aemetis Todd. Thanks, XXXX.

operate lines have fuel near is fuels, than We high-grade as and dioxide a capacity Modesto. sanitizer supplying with oil, and grain ethanol, and gas wood and waste oil Keyes, business, and for of which million dairy and refined byproducts, We ethanol, transportation biodiesel, per the products zero liquid, natural XX including our including grown technology carbon and high-grade including development in carbon blended as per are corn products. low biogas, into sanitizer alcohol, located four processes. in gel own maximize our and products, in health on portfolio gallons focused U.S. gallon of renewable fuel more million glycerin, carbon alcohol, distillers California, hand below India. of XXX year packaged facilities Renewable value production plant corn and production Included ethanol well the including to year

also gallon of Aemetis Coast on built, the City East biodiesel of during second of positive progress and made own towards operate sustained We of our four a businesses million the year and near refined each India capacity XX distilled biorefinery profitability quarter Kakinada. in glycerin increasing XXXX. and port revenues per the

the our realized a to with have strong higher railcars, FDA producers from slow California alcohol plants and thereafter. Valley a blenders ethanol of our to issued major few sanitizer demand quality of sanitizer. new from and rapidly up products, our our local our for any per response sensitizer markets. was wine ethanol transport quarter with without used allowing that to sanitizer produce spirits as hand well approval for differentiator shortage fuel our broader a alcohol during hand loads Aemetis often company to Midwest for $X.X is produce late they fuel this to lease the In to producer. ethanol used care We first virus, the Then and other of trucking other during to Aemetis deliver business, alcohol would second Aemetis margins quickly, installed spread XX Department's as that for a Very processing boat the of to ethanol the between plant upgrades Health to returned contaminated company the ethanol national and arrangement business grew the is the of are allowing which quarter. review the denaturing formed regulations Responding profit personal XXXX, the chemicals fuel dangerous our in California, within alcohol trailers post which fuel Treasury California benzene delivered plant fuel in and that in in from Through be million we Products to TTB new carry ethanol used us COVID-XX Let's and to Central a spike using trailers industrial solely ethanol. second the that to it gasoline end a XX with bottlers transport gasoline. agency for March at sanitizer quickly temporary alcohol, or arranged high-grade to using day of purchase and trailers days

has X,XXX agencies to restrict Western and about California. close trailers, that railcars over products. addition ethanol advantage using when due high-grade use markets, government Aemetis a producers Midwest tanker location carried In closer U.S. especially permanent alcohol our boat proximity California the customers miles to cost is to petroleum of new plant trucks to in our previously

the may products. alcohol refined you ingredients sanitizer are and and quality As sanitizer in high know, glycerin two hand key other

ethanol rapidly and relaunched production California plant occurred in from during U.S. cows, quantities our significantly of began the to QX shipping due decline the of to expand and many product to and during a hand upgrades while large for Products operating Health manage QX, health operates to employees largest dairy plant during our more which of at Aemetis a business. of the orders. operational one demand global provided Protecting U.S., sanitizer the decreased growing care production alcohol our consumption Aemetis plants gasoline began The we time marketing in sanitizer Pharmacopoeia from our in now continuing development, recently QX our plant glycerin products. XXXX alcohol plant, Asia. supply ethanol shutdowns the period grade for challenges animal operate the a customers into personal the XXX,XXX shelter-in-place we support subsidiary feed number also that of to During steep than the markets. After largest in high businesses COVID-XX our Canada, in in biofuels line for crisis India sanitizer believe glycerin the also refined to quality of the plant and XXXX during sanitizer Western while production caused and list and our California implementing and refined the we California, growing To in owning

operates without QX extent, to in essential California renewable and provide and of permit price dairy production and to to a building critical of the large ethanol. To gas operate infrastructures, products a three fuel significantly to due while of QX and in of while interruption. our received April, fuel QX sanitizer from in alcohol during TTB. our our ethanol federal rapid by continue late continuing transportation ethanol ethanol Aemetis order during demand was alcohol, the plant and QX for construction the plant Aemetis the Spirits produce the strong upgrades, However, sanitizer both operate continued a DSP natural project Producer, to fuel declined California recovery our to plant Distilled conversion followed hand price ability In

our permit Food QX. to markets. known began we food the grade Codex alcohol production that at alcohol in U.S. to us our during produce DSP Pharmacopoeia Aemetis achieve upgrading began grade of of to as grade the Chemical June, Canada allow invest can We alcohol other plant. into continue we Modesto in high-grade facilities And alcohol QX will we believe quality XXXX. shipments With FCC to sell In FCC

the expected funded already grant in will high-grade upgrades by of storage of which Our total has is to million $XX production alcohol than be and approximately for be million, more reimbursed been or $XX funding. USP investment

two generate by partially the initial four, hand of saving a renewable by implementing planned by or use columns Number to next recompression of more and and to is dairy we million pipeline Energy mechanical to from the gas up a utility three, with completing ethanol sanitizers cost electricity with consumers. plant optimizing preferred California year, a produce efficiency the XX storage intensity $XX throughout market constructing to increase known of dairies and year natural MVR natural natural the sprays currently replaced a private million value use capacity this per storage of artificial governments, upgrades dairies the new completed, two, battery including: as petroleum plant, biorefinery adding the of Our gas at with dairy alcohol gas being This steam reduce the energy tanks products replacing high the solar to at high-grade issued installing Pharmacopoeia used an zeolite reduce dehydration of plant, pipeline. a six, to while gas funded U.S. our plant equity the grant; funded grant; and membrane efficiency seven, from USP $X quality alcohol the installation year to with than million provide segregated XXX,XXX the new of building cluster $XX energy primarily pipeline high gas Number Number by natural equipment, by will grade million use will are deliver to and the planned and funded fuel are use, operating to grant; to expected alcohol of and increasing biogas two the funded system with exchangers our a grid installing alcohol solar primarily new is is and system industry, and to electrically California related digester each XXX% as and USP production to designing energy intelligence powered $X molecular Number flow for replace market, renewable partially to plant. cash for expansion the use fuel Energy be Commission system an of alcohol to backup Commission plant. alcohol of operation carbon-negative To Aemetis to long-term significantly gallons; grant; by natural pumps Number eliminate at alcohol the a loadout, plant, one, gas and the efficiency of additional reduce by micro our building expanding primarily year reduce our management subsidiary. automatically generate optimized required wipes for million to interconnection five these by schools, reimbursed million approximately projects related electric high power and energy an several petroleum provides purity the carbon our production using for powered service Number designed an an per of with Biogas project systems high driven the nearly to unit California insights by $X $X.X steel growth for reduce at antiviral gas use which five, alcohol sources, energy Mitsubishi energy by by the redeemed solar of by upgrade alcohol $X biogas operate panel array high-grade alcohol to the the stainless $X.X efficiency adoption sanitizer, ethanol heat a Number sanitizer natural in grade; When AI plant, The gas motors million alcohol plant, costs, use systems natural along and distillation vapor known the is million gas

early built As commercial Messer that completion a shipments of announced the constructed milestones QX, commencement gas the to newly carbon the dioxide in construction COX May, achieved to review of Aemetis in After project was and of development three capture plant of plant to ethanol by to next and of five reached Messer to COX ethanol years dioxide. plant. liquifaction plant about contract owned negotiations, reuse the carbon a adjacent and build Keyes acres we our

converting expected other XX% plants and due received significant related per Ethanol plants. to and ethanol year plant. XXX,XXX food and of local shortage for users. produce is sales COX the land plant COX the sales per idling of About of be occurred the producers to shutdown about now COX by a for national are into approximately ethanol We COX COX year renewable and COX of COX U.S. or liquid tons produced $X.X to beverage lease the million of the cash industrial in COVID from our

expected of of usage XX% potential from reduce intensity credits carbon profit per number natural plant, the the significantly year. expected projects estimated year of projects petroleum high-grade $X.X any We to to by XX(Q) system per Keyes up worth ethanol. next significantly each million year dehydration at is significantly cash and installation efficiency financed currently year, products. rules. also flow the of expect federal by reduce $X Mitsubishi plant year to calculate an be Chemical margins of to are Japan contractors about increased under $X decrease is energy increase generate a generated tax million and per standard low under and increasing and is COVID-XX an million initially years COX million designed million usage grows to carbon but credit reuse in The combined $X approximately the was including and that shelter-in-place operating in local to The restrictions for Keyes the capture our These expected of targeted five qualify the IRS gas to at and costs unit construction million membrane are work that while to impact delayed carbon we each cash the the stopping a grant over due once improvement the $XX $X And orders. ethanol petroleum travel process, in not by fuel natural is crisis alcohol gas The these is implemented dehydration flow.

project. transportation from renewable digester natural can methane gas more and biogas carbon digesters farms. are a electric value plant in pipeline than is After existing the one plant believe dairy climate the into and review change, is for about known fleets California's believe year a in Bill emissions commonly XX% diesel up it be first California the relationships Along times generate air and and in in by greenhouse with XXXX heat. and boiler from plant reduce the will truck use. that in Aemetis in has digesters, two nearly create our of unit $XX build biogas $XX up work, emissions, X-mile as known for and first intensity earth’s a significant that potentially month. for gas animal of on fuel and of is methane a renewable natural our reduce California trucks, as Senate come Construction more and using dairies negative pipeline and of grants supply Aemetis year briefly our ability until related and To on biogas dairies Let's of gas that diesel XXX manner. at million in the per million dairy who conversion emissions natural excellent we the used and build dairy Biomethane equity the carbon California as biogas ponds feed systems. is of to two by powerful Methane, biogas grants We electricity reduce for financing to damaging matching the to late at first next way at of Food the XXXX buses transportation digesters source vehicles converting in capturing of uniquely pollution. project. the Based for use completion with capturing of dioxide two grant companies gas potent and waste dairy to our commissioned to from dairies our XX Keyes reduction replace in to and gasoline of a and lagoons. to About California this law project methane Department quarter $X than million Agriculture XXXX, the emitted from mandates passed completed positioned an matching existing costs announced State biogas fuel total ethanol mandate, for to connection financing cars, carbon last dairies only infrastructure or pipeline the to significantly funded is that year dairies dairies to to development be we dairy reduce award two a

XXXX. We expect natural renewable revenues gas begin during to September

original assets company digester of stock Aemetis at the cash stock biogas and is programs. XX% issuance cash dairies dairy to common plan flow the X fund The XX complete preferred by sole the price a been to automatically using state generated common cash Third expect of We digesters redeemed, is operations. receives of a as funding and dilution total repurchased COVID-XX of to XX% advantaged expand the the we project the system. Capital, a preferred biogas also with million Biogas of XXX% for with stock the biogas preferred owns agreements Eye subsidiary. of end and XX pipeline from There to of by biogas project times to no XXXX, $XX own biogas will project federal Aemetis a construction the the by potential After Aemetis subsidiary of signed delays. The the Biogas a XXX% and Aemetis flow. grants Aemetis next funded operating which lagoons subject to issuance and by shareholders has stock Aemetis along by parent of is year shareholder

that construction, the boiler full we commissioned refined production, toward and waste domestic expanding largely including the is of June, years inventory. using upgrades India. shelter-in-place plant unit production biodiesel biodiesel global our investment our in India oil, we biodiesel pretreatment in refined our of Let's from linked with in due review crude refined million biodiesel to to lower crude price to increased government the domestic biodiesel that pretreatment plant the has have unit, price into despite The prices, The began feedstock offset feedstock to of India After Though taxes XXXX, price capacity India unit fully and of India steady India India. continue of the completed at in upgrade expanded new along but XX costs price has per in Since of is India oil. and decrease glycerin other at meet declined diesel biodiesel in oil unchanged remained the business prices to our oil. remained plant ship in and in of glycerin needs declines. glycerin In two diesel price the process diesel has India and plant year. installation the a our enabled new sold significant order restricted we of crude operations the a the plant gallons price

refined Marketing response Universal glycerin government year and hand three have of contract negotiation public supply million in our that India owned for issued process. for occur awarded purchase announced consumer XXXX, Biofuels other the addition, was Company last In the next marketing the In prices with a of sanitizer in May agreements year, tender award supply $XX products. and need Oil the to were India should month. biodiesel in oil biodiesel increased we India companies a request subsidiary The

these contracts. biodiesel participate to a supplier under continue key to as expect We

below low operation produce opened ethanol. commercial Let's under Aemetis in cellulosic finish We named that Riverbank, were our pleased Modesto, biorefinery was walnut ethanol Northern on near XXXX in patented cellulosic carbon a that cost, production wood from using gases as waste zero China California. converts an California, full ethanol, in with update Riverbank, project waste development steel as value the to in publication. well in waste project a Aemetis the contract. now is technology at microbe almond one biofuels and value in Planned The number number LanzaTech The and technology. production largest LanzaTech valuable its ethanol fishmeal plant plant the high other the price, gas Biofuels of as byproducts fixed world's one project of a ranking Digest, daily result by to earned as the world our

financings $XXX million a project, Energy California XXXX to conditional signing equipment, During fund $X engineering financing the waiver a XX-year a that million required XXXX, USDA offsets and related significant to project of the Commission we program. $XX.X tax funding for grant letter Biorefinery a the for commitment equity under three debt Riverbank million the announced

that cash will for the cost. working year project. the maximum and flow contract USDA required plant. bonded to to include loan of each to and ethanol the a of are procurement completing match of now plant and We per the of engineering of We're the current the construction project than construction closing demolition engineering construction dependent on the each for commencement The is generate by contract. cellulosic procurement cellulosic the the the budget as of is construction signing of year expected Riverbank focused and to also the more plant vineyard, construction low update revenue million preparing expenditure for -- wood final positive required capital engineering The financing, the $XX to the negotiation in completing EPC for ethanol plant producing more than the $XX million work of and of from on Riverbank We're cycle financial prior feedstock. waste, orchard, begin cost forest the completion

the with group. up quick our review achieved key wrap milestone by a technology of Let's development

wood in process California carbon in three using from cost as and years valued liquids. per and waste, of which development wood cost This For gallon. in at that resulted $X Commission worked waste orchid funded ethanol Bay] work the the ethanol with funded XXXX as awarded of Joint years was than California fuel team Our low A biofuels. Energy QX [Jay technology to more that million of collaborative Institute development Berkeley, alcohol Bay] use processes $X to production high federally orchard and well testing BioEnergy and are the partially forest the Aemetis cellulosic to wood grant ionic [Jay high-grade both lab feedstocks with negative sugar be in to currently pending value California Aemetis, each produce to patent first cellulosic used component low the of allows produce fuel

decreasing Importantly, California substantial this the innovation implemented of value be existing and alcohol. our our increase corn of plant, feedstock could the at in ethanol cost

the well begin extract Keyes has the Aemetis waste plant We expect ethanol refined production and the ethanol with pilot to ethanol customers, forward sugar gas feedstock. sanitizer cellulosic flow and the In technology September of from cellulosic the biomass the of fuels expected rapidly markets first as dairy India India, carbon, to waste at renewable India Aemetis XXX% high-grade both XXXX of plant of plant even the planned holds we believe not our and and renewable from advantage as production to alcohol high-grade increased positive alcohol feedstocks. XXX% Biogas have occurred QX of positioned low-cost cash and is of COVID-XX XXXX. to patented digester project in in our delivery geographic and with lower margins flow expanding diversified low rapidly Well, pipeline began produce cash and to clean which alcohol margin, from operation California attractive has the for into The revenue to Aemetis from the carbon high-performance while $X due our market. XXXX, long-term thereby high-grade a deployment fuels in the expanding in at a summary, revenues the sanitizer quality contracts by in and cost profit India from enable LanzaTech the production production, low repaying the subsidiary. a unique debt from our move that XXXX was with Aemetis biorefinery glycerin plant government related strategic displacing sanitizer high abundant Keyes delays. corn burning higher and at the Riverbank The in million production production position of achieved plant yet upgrades to positive wood growth

questions a from take participants. Now let's few call our

Operator

to we sir. with Ed And go ahead, Woo go Instructions]. Ascendiant Please first Capital. [Operator

Ed Woo

be Congratulations on year? including the -- high devices going do hand protection very back special How the think any quarter. next into of terms to sanitizers. Obviously, of for heading sustainable half of possibly demand this into the it you type was type a quarter in that's

Eric McAfee

products find competitor recalled Mexico been market that containing methanol, of basically or a the suppliers the more ethanol from Canada ethanol acetaldehyde, by our rules Health operating As levels also enforced, also products a can over well products, transportation that of which a experienced of component as strategic spike I in that more also restriction fuel as the a But lot mostly been alcohol, market this because out that expand but you products we significant the other both FDA is in become also of high-grade second package, component there. own. the selling actually we're margin more launch year market. have demand bulk environment significant and we be health not but And contained a was launched XXX% can't blended hold in is decision fewer and the in of seeing around on as tanks it that stable we're is them the fuel sanitizer case our to we're to going in And going additional that half anticipating alcohol was in only reduction selling also by products regulations. taken high under names basically those bottled value-added gel A And is and to of which ethanol. have And products, which the of that the dominant exposure causing a this companies’ rather as to there's this cancer product QX. think in than as liquid constraint.

is phase. So is substantial to the rationalization going half XXXX be a seeing What demand. second of continued we're market

demand is that relationships there are alcohol you'll high-grade year. occurring. a And sustained with suppliers customers put see announcing high-grade for long-term other out and of in place. have are of for that alcohol and is Many We sold current retailers, actually this large direct very they contracts them

us going gallons mean it's the to make supplier very us be two to a USP so facility. And by upgrade number million capacity uniquely largest an non-consequential process the grade in our long to construction definitely of the roughly States really for month per us. opportunity complete -- to Western and the and That'll continue as shot. certainly I supplier positioned a is the X United be

margin solidifying So expansion certainly with six be is we'll course products months. QX. to of the going going see over of that next over strategic position QX we and see an higher the the market that these generating to And

Ed Woo

What today? your ethanol hand for output percentage is sanitizer market of

Eric McAfee

It is a volatile business.

of So it tend Especially the anticipating will we're subsidiary, in that, and be what of we over we more stable. volumes government terms kind longer to are the Products better own visibility Health we're our and is of contracts supply expanding on time. since as Aemetis into contracts bidding total some federal see

packaged we're seeing significantly. ethanol own in to so, is the possible but ethanol get opportunity are going a any ethanol an commitment time at fuel the fuel And to until capacity which it's time not to production production at we at our I we that time, all. continuing products be very anticipate capacity curtailed could have would ship fuel turn expand our there, which we marketplace,

in perspective are I'm USP for in occurs months, alcohol. month that because the be million six technology occurs but months certainly whether X the upgrades being sure, Now or positioned we'll high-grade from to to a quite our that all this convert estimated not next per XX gallons next

Ed Woo

understanding. my clarify to Just

once So or can you cannot still these you converting anymore? for do it to produce start this fuel ethanol shift other you uses, high-quality you once ethanol it make

Eric McAfee

to be still able ethanol. fuel will We produce

Operator

go to the Capital. Marco of Please Next Rodriguez with go ahead. we Stonegate line

Marco Rodriguez

bit in of for margin at you looking Good It Can you wondering taking that's margin? kind little your the just like or my be questions. alcohol. looks might rate could about numbers not of afternoon. a kind profile I if if Thank was normalized talk you the that's maybe for then correct, also a it if of that run the us XX% of sense the a range. whether give plus that high-grade somewhere

Eric McAfee

different the a We of in couple have market. points entry

We our bulk business. alcohol have

from alcohol We industry low the business, blended business And ranges moderate to then is gel have packaged you'll our have a numbers. bulk we what and numbers business. alcohol and alcohol see liquid in

comes because the the on bottle then excess going the hand basically gel the of XX% to the money range bulk to business. supplier would XX% from it's XX% liquid So XX%. accurate. In in packaged in be -- probably XX% inside plant. sanitizer, be business, alcohol largely costs have range. The the products, what liquid to and any usually in of of same are in Again, the in to volume, we somewhere our XX% the margins And depends

volume volume. customers. largely volume smaller by So, course The determined be the higher margin with customers. of customers tend the to And inverse larger then

Marco Rodriguez

producers -- then competitors the location guess give given kind advantage Can you Great. us high-grade as other the you in a mentioned that a of the as also And I versus competitive have pre-COVID and your far the shipping this? alcohol were who you lot supplying a of are aspect. sense obviously market

Eric McAfee

was In major Pacific Illinois a Ethanol plant Pekin, producer. general,

investment a participation MGP are also the players and dozen make a the Midwest in the XXXX production. in a But couple have probably There played USP market of USP. are substantial half players as the upgrade disclosing well but the be another, traditional to as not producers that’s and there some going their that ethanol in course guess, of ethanol during other will both a will role. time have other of level some of significant I'm We ADM to money that

or or and there six about in to and are a the down dozen XX be have probably market Minnesota, then one was dozen year the West level January, players, probably probably next estimate the other were by players. will players year an nine XX players Iowa, the in be with Kansas. Midwest, XX early of exit those and will Upper all And in So of

hand not on much And announced Texas, -- going basically plants Western the in really it's as the the really there's only ethanol Southeast. producer. U.S. sanitizer in So there's us, U.S. no

be Iowa, of which Upper to Illinois, X,XXX -- from Minnesota going kind is States. it's So United a Midwest, location largely of kind Western and miles the away

Operator

comes Our the investor, Please or Tom ahead. next private line Welch. of from go question comment

Unidentified Analyst

your columns, the you exchangers, heat mentioned? you Zebrex Wondering systems? finishing distillation for on kind targets some some membrane, provide if time solar, of can recompression horizon The color of micro vapor grids,

Eric McAfee

categorize required categories. would those XXXX. the USP and all systems are in for One QX to completed We two structured by those is of be production

so higher have power system and the markets solar don't are So we essentially to we these grade The MVR, array use much. of alcohols frame. the the therefore in to reuse as that changing projects produce Those it, steam, into able ship which would of of be solar time is over the stretched lot to work might be thing. that for lack be quicker like the the seems fourth and in with the delaying year changes a into quarter other used projects next the market, of next able It guys the because solar. some year of third to out

our gas. us phase So the to would But the MVR solar project a engineering strong we'll take change company. probably a XXXX It is then of most very completion. rest year. see to be natural is is project the going quickly. this using remarkable and for into of the taking probably financial And design renewable is relatively the and That impact in

be So a currently XXXX get construction be to MVR XXXX I the will expect year we’d and installed. would

were gotten otherwise down construction the and because again, slowed and forward of the more getting. us contracts So from contractors some accelerated we a that other than have moving engineers might has be attention lot

Unidentified Analyst

submitting ethanol to finishing plan the Department on plant, for you're regards the U.S. more date of on than cellulosic two Do moment. hard have years you that the you've for Agriculture? working sure on know engineering them -- been I site Indian looking for engineering that now, target engineering the I'm to In and a

Eric McAfee

of most permitting. our engineering Yes, is around

financing, to need to construct order permit, it’s to an authority in know from project the we as close air board. what So our

which call authority completed to And et of is the cetera. reviewing And the simply be Environmental California, so in engineering has issue process have California the they construct. before CEQA, called to much of emissions, responding air let's board's it our we what's Act, Quality

the are and last we through process. that steps CEQA of permitting working air So

things, And we're not oil I permitting just what these process building essentially you've a very stringent here's necessarily California It's pretty really a it's is strict when issues, bunch of of so a more around heard design. guys matter, say group these to probably we're active with consultants, saying, sitting engineering, an going about refinery. which it's

authority And the get approved for achievement. so approval construct, quite getting next is which the to almost quarter to remarkable in we're the get literally that to would I point a expect,

As soon as the we then project complete up and agreement financing. that's achieved, close our EPC can

our down project of all can for So or XXXX. shut next close stay-at-home we're be QX orders or like But currently these financing would plants in something impacted process year. And that. current enable general, of by in QX anticipating in orders financing new

Unidentified Analyst

know add the U.S. to on your you Can I talked also I for potentially about ethanol the Agriculture about QX plan some of an in call, Okay. conference you more cellulosic it's financing plant? municipal a color Department you've think you -- something But bond? -- mentioned EB-X.

Eric McAfee

the are the QX balance. U.S. already of XX actually. largely XX% That for was One with actually year Aemetis other wondering Department everybody financing. letters Agriculture. commitment for financing, two the whether you to Thank has of venues to listening funded signed us receive heard There project for provides XX% bond I received is that. grants our of or

of there final financing amount that that the raised though, We'll has and price have the dollars go substantial project. a funded the well-positioned maximum close depending municipal been Parallel of USDA be on the in to one tax that to financing projects have couple that, we're bond contract, more will EPC funding to one hundred back successfully amount that free move forward that several So cycle adjusted USDA. construction. per of by been have million that

fixed refinancing of it’s lower cost And a so that municipal engaged a well with we financing a working rate. interest bond and the attractive because along is investment closing the through are counsel of and tax obtained have bankers, are process

bond we decrease going is the in through it’s municipal is over a the move substantial of to cold. is of runs And with So, costs as bit open, confusion current in us, would hot if it market of and kind imagine if the but interest available you the market to expect the municipal a with financing, which it project. a transition, forward bond life can

market bond then on So municipal just gives Department to work, from focus if U.S. proceeding them having of Ag. It us an we both opportunity the and we with are it with can already of doesn’t commitment close essentially USDA. a

Unidentified Analyst

have flights they lot a you even of at you. hand with pair restrictions being glasses all dawn got a companies we I’m And travel to all? - in don’t seeing on like a link. a means glasses consulting. number able the and around a Have that in and pair where using going final reality the on world of to have dawn One are of smart hand, Thank virtual using of California years glasses it alternate explored five travel. guys question. Typically to California, smart see the they that do basically smart record full of engineers you now

Eric McAfee

our do use is which though of in definitely you that The we a think a you so bit face-to-face production plant even rapidly segment communicate a is communication a I yes, company. called growing in smart Face-time distance correct iPhone and for people glasses are as can transition and collaboration can’t remote imagine running is

as already already tools they there. zones, people were to essentially allow the place were if global I because for but certainly can in how have we that discipline had think adopted collaborate and well across time et cetera, we we participate company

growing industry. application and a see will We

Unidentified Analyst

can I have makes reality as has that for you media company literally business business, been and called virtual their the imagine through last -. glasses months roof the a gone smart watching in six

Eric McAfee

I appreciate your you I think normal. it very much. Thank questions. is

Unidentified Analyst

Yes, you. thank

Operator

private of line the to Theorala] Please go go ahead. [Massimo investor. we Next (Ph),

Unidentified Analyst

the I was company. give run call f it to i.e., you handsome the of questions ask all second reduction. about and possible as [indiscernible] XX%, is are the doing want like more ideas. very from or the some to before XX%, really know the nameplate their are competitor XXXX and glad I It the my you results. XXX out richest XXX% of will I’m well world I for only so States. in is all United like it so procedures want half of have of see want West I’m very player you portrait, to using it the all that like capacity fact EBITDA after less with I about your operationally you glad to compliments first are that and pointed from your are like Hello, you provide I the future was million to impressed that I of really debt that part

Eric McAfee

high strong you do were our projections large that out correctly the which margin. production fourth being EBITDA Western I not anticipate very and any of in the rates, already highest very ethanol quarter. us are similar that client a grade business was a in range They high of pointed States USP the obviously specific for a announced by EBITDA And a rate probably I production have the are know especially second alcohol. as which United is of they that do half We plant expanding for third XXXX. are of producer. production

wouldn’t a couple surprised The obtain and announced contracts much quarters see transition all margin I the quarters, basically will next we similar as position long-term as see be we by in a as the growth for we obtained up until then us. And value otherwise higher to to end ethanol. right which enable period obtaining We early year. are very demand as in a frankly products, next but margins be as USP. through see producing added a which be high will packaged high now. products But branded us very, grade not is USP this us these And at blended quarter be into first might gel, such grade alcohol, specific get as transition

Unidentified Analyst

know Okay, want another thanks I to a lot. question.

of first September that in you revenue gas this correct? [indiscernible] forecast is of XXXX dollar your like So

Eric McAfee

much, I’m hear didn’t sorry that. I how

Unidentified Analyst

told correct? you the revenue get revenue in You spoke XXXX, of September to first your dollar that think you gas about and

Eric McAfee

correct. project is commissioned Yes it and Yes being revenue our it month. biogas is next start generating will

Unidentified Analyst

what Mitsubishi [indiscernible] about project. this And about Perfect.

Eric McAfee

anticipate We start would to impact that QX would revenues.

ability to currently We of by restricted the project. being condition impacting frankly are travel are restrictions international some our the

of so we next couple the And expect that. to over months get

Unidentified Analyst

rate. are like company, the company, because interest quarter was the not you months last some about ago, worries biggest you [indiscernible] because XX% my getting Then are three a Perfect.

of in are you would decreasing to about next, do ever action I know to what the like you think that the So the going cash are these If flow. [indiscernible]

flow can about you cash to what have if So [indiscernible] think do debt you back that. you do high pay

Eric McAfee

of national is We believe five-year for a that the raised that strategic that have EB-X which of is other And rate. our time all period X% their United to to announced project adjudicated EB-X three to of funding, already expedite approximately approximately the identification that six-month government States. the investors interest expedite three projects. And which I period and we, to allows have time interest $XX reviewed in is interest applications our unusual received million national we

in increase that And that interested so to and deposits this job could we quarter. are we investors seen and And number proceeding forward the occur studies our expect have number of the substantial shows investors cash total have not is a CEP at average investors investor as $XXX,XXX a is per we total have investors. amount proceed XXX we or XXX its average per substantial $XXX,XXX So, - of per fundraising opportunity investor. forward investor of The amount with

XXXX [indiscernible] that for the process. we from We have close and already closed anticipate more gross eight investors occurred we forward margin as in to continue

Unidentified Analyst

results. and one this last maybe The am team two the in and I amazing same and about because management glad like The you the believe question. [indiscernible] Okay. is basically question, I’m of very alcohol because on I reasons

like are one because the company, U.S. car car company that will what cars. is that electric you in the electric happening The like there some electric into second take market, supporting in huge like like valuation is car electric like government market

[indiscernible] government say, people some to there [indiscernible] goes is to there that these that want care the is incentives the so last if and to So or sector? ethanol their from will interview also I maybe be in you one about don’t facility probably the live to has I support the thing owner. U.S. California those know, given possible

Eric McAfee

in would say but very in plant $X.XX And underlying gallon funding passed due the please going item approved proposal to powder companies, approximately enforced market COVID-XX EPA. that reality funding renewable package. E-XX basis, say included through Ag. allowed for the going to United especially granting And pending of economic of and for yet. have. in standard, a the not now probably with fuel And and don’t modules. United business The have [inaudible] is would companies entire we of which highly significant partial an the in after States. can has the million have relevant a refineries as waivers right to call. see is oil gallon would ethanol that XX% be There to an $X comply that. if program per is growing knows would the Though profitable using that you probably this petroleum, just in recovery at with up expect year, that stable theories period gallons funding be do per which fuel Since a end federal national so not email are I current between continue Department California, market to ethanol an of blending not a for not a That the on and a no occur. company the with per will we the our we end talking XX% a yet, if high a developments By incentives to such But Congress the these amount five that now million States enforcing month a It actually. be and we fundamental essentially, confidence that standards question, degree example, gasoline could a in not have be that What let’s answer, with good we we our or for And really throughout we of imposes three-month is Separately, the see enforcement -. is this [indiscernible] the five-years, U.S. of me $X.XX be money means to wouldn’t we fuel see I of $X some government produces access literally concurrent more for, cycle. is million one standard. blend. seeing inverse mandate for will

industry deserves. it constantly the I with funding ethanol So see as cash

allow I use to need renewable blender access. fuel whether we market or lower want produced pumps cost We sort domestically that they to just consumers they deserve carbon low decide whether want of think polluting from made entity United high cost government one imported that be by fossil foreign fuels use States by carbon and of the high material not plus. choices blocking currently using some in

Unidentified Analyst

question about possible is have I a it India. Then

are before, this market million you so So like of are is the California as is the matches one because only planting people. a out there. the there is tank than over because from over pointed you know time there to from it I like that is used for one in that X same are huge? was There huge billion you a in there, more only are like all with [indiscernible] there to you the India XX because do people, States wanted need India, why a [indiscernible] market don’t United thing over the

Eric McAfee

right our us margins with the markets you, USP very market world India. we very most certainly, as Currently, markets California. good one there California agree alcohol and market the we have the feeding to The export be plants probably in easily next is have sanitizer we in our will high and and producer sanitizer be the grade to our from exporting largest as here But right in to have the an the I of access multiple Indian grade export focusing ethanol efforts. batch are have largest glycerin but of attractive we high is producers attractive, certainly opportunity that the in and here biodiesel for because supply a are India selling probably for country, are attractive not market market refining

Unidentified Analyst

one. Last

per if that [indiscernible] $X.X thing it [indiscernible]. impressed sold was another like So I gallon really you are that you

to mentioned the mean be sell you less Just do as do sell less to the sold May the at of before, my August that like just to product stable. you understand the the number compared do increase I to or to own. what [indiscernible] a some if you of to or that July think using for didn’t of different and orders answer, August, July the also in companies this you sell stage Do understand project because is math same because instead or quantity gallons order have June, more and user, are base you you company you seem but your can to July so now on the other in provide will more

Eric McAfee

of you in participate in of to were we months a spike XXXX, of participated as The XXXX our not large spring of March, had XXth know, hand three were very demand. rules in May, company which changed. making March allowed sanitizer April, at the until which time allowed two the the

supply standards into which substantially for as in well industry. number And in the alcohol, food grade the in only X, second May month the reduced really the customers U.S. the months, had only Starting we out in two started as suppliers quarter we ethanol two in high-grade months a the had So Canada, set June rules mentioned out the can FDA that alcohol the sorry, of of very were that that, about and really lax. we spring which - April the June of to

we value rather see and One in alcohol. such very so, is And And a large we contract that than will bulk longer gels government be a more is a happening blended totes we term in are as agency. which see products transition participating added liquids, producing contracts. we shipped in,

all period the So the second this industry. have we up that the industry have run Basically the see in in term in as to Mexicans competitors and transition certainly this which a participate to had lot leave a left competitors is quarter. longer big commitments. of And

can term the sort and see arrangements longer being suppliers like Ethanol, meet Pacific fewer common that So of needs. more we

Unidentified Analyst

lot. Thanks Okay.

Eric McAfee

Thank you.

Operator

Ed with Woo to go Capital. we Ascendiant Next

Ed Woo

could price the versus to follow-up economics the per gallon? questions, you for Yes. up back hand What going is Thank ethanol. fuel taking you of differential sanitizer my get that ethanol

Eric McAfee

Fuel sanitizer asked? ethanol that what you Is alcohol differential. versus price

Ed Woo

Yes. Yes.

Eric McAfee

Price $X. differential ranges $X probably $X between to the $X from per gallon. Yes, actually two gallon, to per $X

Ed Woo

major it And that know results. in think going will you you Do then will September. a be gas, Great. back bio I to contributor guess starting XXXX the to mentioned plant up be you

Eric McAfee

Right. of maintenance involved of No, think what years provide operation The cost nominal of are looks for really with investors and are is business the coupons. is largely the the I of future good and like. goods. pipeline goon. I for a wouldn’t but it contributor. of there Because into XXXX say with a cost no gas clipping definitely real where free visibility comes And manual bit there support. Difficulty] little will institutional is cost a major It a little you There out is is a electricity it [Technical labor bit of labor processing, involved nothing. virtually is no

margin very, goes a It and These business a so And plus a XX-years. XX-year business. percent very that is contracts. are it recurring cash margin is high stream XX% for on

of we have with investors going amount to these will uncertainty I operating with very components. have around the and the XX-year relationships So be very low contract cost think they are around on low visibility discussions

think So, I think very we get will I a substantial. project very, that be will that evaluation from

XX of I hundred signed we mentioned but dairies, them. we a supply So,

significant or all XX XX us. wouldn’t the even expansion dairies. value it that an stream substantial around beyond and see math at I dairies surprised to do a XX as becomes cash of amount flow equity a very, dairies you And, of very be to So

Ed Woo

you XX and an additional next year dairy you two of this by the have year. Again said end

Eric McAfee

dairies dairy we a two goal. subject build Yes. timing to Actually next month adding have be XX-months by digesters against can certainly our to how are XX dairies would over and goal that and another next would perform XX contractors we COVID-XX the we against see of the then end will

equity Our with than company advantage funded third who XX-years. been eyes capital plus the has for $X that strategic our more for relationship billion a firm funding a investment the project,

we diligently biogas very the very, And a as relationship. and bring We a table have so that we the have relationship of that can established worked highly strategic to producers think well that capability cannot. to other

million funding. And in initial $XX equity so relationship was signed our

We million. are expecting to increase that $XX to

completed of a to materials, this on be move projects, price by hopefully the next example, exited take And, the and these quarter. save are we substantial so for three that to able of very, working year, advantage phase occurred one end had past at lot that raw to, phase quickly this of money on very be And time. reductions in and able with first cost two the phase declines

Ed Woo

plant then the on question close project the last financing and XXXX, you if do would able Great do have be you you when my completed in of to and first operational? think is the quarter rural

Eric McAfee

is on timeframe. to to our would seen It what things, EPC pull depends around XX-months largely on. view the much contractor how going And but it it we final try other strategy of in have be activities is

the extends project. seen long these there activity Because have because of branch times our a lead we of is of marketplace, in on certain and some have lot that obviously is crisis potentially in the if COVID-XX components, impact the shorten So our we - project.

Ed Woo

for good luck you and you Thank guys questions answering my Great. wish I again.

Eric McAfee

Thank Okay. Operator. you.

Operator

There are like to the turn time, no over for would further at I floor questions this to management closing comments. back

Eric McAfee

look the another talking We Aemetis. about and dialogue you and continue you growth today. Thank to analysts to for to us forward with others shareholders joining our opportunities in

Todd Waltz

Please the Aemetis Aemetis this today’s conference review section where business update. Operator? audio and Thank and earnings you attending Aemetis earnings for we written will website of the call. visit version version investors post a of

Operator

teleconference. This concludes today’s

time. this Thank you your may participation. at lines for You disconnect your