Aemetis(AMTX) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements Aemetis reported a Q1 2025 net loss of $24.5 million, with declining assets and improved operating cash flow, but faces substantial going concern doubts Consolidated Financial Statements Key financial statements reveal Aemetis's Q1 2025 net loss, declining assets, and improved operating cash flow Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $499 | $898 | | Total current assets | $28,493 | $44,696 | | Total assets | $242,518 | $259,302 | | Total current liabilities | $174,601 | $143,968 | | Total liabilities | $523,213 | $523,230 | | Total stockholders' deficit | $(280,695) | $(263,928) | Consolidated Statements of Operations (in thousands, except per share data) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $42,886 | $72,634 | | Gross loss | $(5,080) | $(612) | | Operating loss | $(15,555) | $(9,462) | | Net loss | $(24,529) | $(24,231) | | Net loss per share (Basic & Diluted) | $(0.47) | $(0.58) | Consolidated Statements of Cash Flows (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $160 | $(10,278) | | Net cash used in investing activities | $(1,825) | $(1,683) | | Net cash provided by financing activities | $1,252 | $10,603 | Note 1: Business Overview Aemetis operates in renewable fuels, focusing on ethanol, dairy RNG, and biodiesel, with plans for SAF/RD and CCUS facilities - Aemetis is a renewable fuels company focused on producing low and negative carbon intensity fuels. Its operations are divided into three main segments[26] - California Ethanol: Operates a 65 million gallon/year ethanol plant in Keyes, CA, producing ethanol, animal feed, and CO₂[26] - California Dairy Renewable Natural Gas (RNG): Produces RNG from dairy waste via anaerobic digesters and a 36-mile pipeline, with plans for expansion[27] - India Biodiesel: Owns an 80 million gallon/year biodiesel plant in Kakinada, India, one of the largest in the country[28] - The company is also developing a Sustainable Aviation Fuel (SAF)/Renewable Diesel (RD) plant and a Carbon Capture and Underground Sequestration (CCUS) facility[29][30] Note 5: Debt The company's significant debt, primarily with Third Eye Capital, includes a substantial current portion and a detailed repayment schedule Total Debt Composition (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total debt | $336,291 | $338,061 | | Less current portion | $(119,547) | $(90,534) | | Total long term debt | $216,744 | $247,527 | - A significant portion of the company's debt is with Third Eye Capital, secured by first-priority liens on nearly all North American assets. The debt facilities contain various covenants and cross-default provisions[48] Debt Repayment Schedule (in thousands) | Twelve Months ended March 31, | Repayments | | :--- | :--- | | 2026 | $119,547 | | 2027 | $167,263 | | 2028 | $4,412 | | 2029 | $3,579 | | 2030 | $1,406 | | Thereafter | $42,688 | Note 7: Revenue Total revenue declined significantly due to a sharp drop in India Biodiesel sales, partially offset by a slight increase in California Ethanol Revenue by Segment (in thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | California Ethanol | $37,748 | $36,089 | | California Dairy RNG | $2,443 | $3,792 | | India Biodiesel | $2,695 | $32,753 | | Total | $42,886 | $72,634 | - India Biodiesel revenue plummeted from $32.8 million to $2.7 million YoY due to a pause in purchases by government-owned Oil Marketing Companies. Sales in this segment for Q1 2025 consisted of glycerin and raw materials[62][114] - California Ethanol revenue increased slightly due to higher ethanol prices, while California Dairy RNG revenue decreased due to lower sales of D3 RINs and LCFS credits[62] Note 11 & 15: Biogas Preferred Financing & Subsequent Events An amendment requires Aemetis Biogas LLC to redeem all outstanding Series A Preferred Units for $116.8 million by August 31, 2025, or convert to a new credit agreement - In May 2025, an amendment to the Series A Preferred Unit Purchase Agreement requires Aemetis Biogas LLC (ABGL) to redeem all outstanding units by August 31, 2025[79][94] - The total redemption price is $116.8 million. If not redeemed, the obligation will convert into a new credit agreement maturing August 31, 2026, with an interest rate of the greater of prime + 10% or 16%[79][94] Note 16: Liquidity and Going Concern Substantial doubt exists about the company's ability to continue as a going concern due to negative capital and operating losses, necessitating debt refinancing or lender cooperation - The financial statements were prepared assuming the company will continue as a going concern, but negative capital, operating losses, and reliance on its senior lender raise substantial doubt about this ability[95][99] - To meet obligations over the next twelve months, the company needs to refinance debt or receive continued cooperation from its senior lender[95] - Management's strategies to improve liquidity include improving Keyes Plant efficiency, expanding the RNG business, a potential public offering of its India subsidiary, and raising additional debt and equity[95][96][97][98] Management's Discussion and Analysis (MD&A) MD&A highlights a 41% revenue decline due to India Biodiesel sales halt, widened gross loss, severe liquidity constraints, and ongoing going concern doubts Results of Operations Revenue declined 41% driven by India Biodiesel, while gross loss widened and operating expenses increased due to higher interest and SG&A Revenue Change by Segment (Q1 2025 vs Q1 2024, in thousands) | Segment | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | California Ethanol | $37,748 | $36,089 | $1,659 | 4.6% | | California Dairy RNG | $2,443 | $3,792 | $(1,349) | (35.6)% | | India Biodiesel | $2,695 | $32,753 | $(30,058) | (91.8)% | | Total | $42,886 | $72,634 | $(29,748) | (41.0)% | Gross Profit (Loss) by Segment (Q1 2025 vs Q1 2024, in thousands) | Segment | Q1 2025 | Q1 2024 | Change ($) | | :--- | :--- | :--- | | California Ethanol | $(4,938) | $(5,658) | $720 | | California Dairy RNG | $305 | $2,210 | $(1,905) | | India Biodiesel | $(447) | $2,836 | $(3,283) | | Total | $(5,080) | $(612) | $(4,468) | - The decrease in India Biodiesel gross profit was due to a pause in production and sales to government OMCs. Shipments resumed in April 2025[114][127] - Selling, general and administrative (SG&A) expenses increased 18.4% to $10.5 million, primarily due to higher taxes, insurance, rent, utilities, and professional fees[128] - Interest expense and related fees increased significantly due to higher variable interest rates and larger debt balances[129] Liquidity and Capital Resources The company faces severe liquidity constraints with a low current ratio, relying heavily on its senior lender, despite positive operating cash flow from a tax credit sale Key Liquidity Metrics (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $499 | $898 | | Current assets | $28,493 | $44,696 | | Current liabilities | $174,601 | $143,968 | | Current Ratio | 0.16 | 0.31 | - The company is reliant on its senior lender, Third Eye Capital, for extensions on debt maturities, with significant amounts due in 2025 and 2026[133][138][140] - During Q1 2025, the company sold 2.4 million shares through its at-the-market (ATM) stock sales program, generating net proceeds of $5.1 million[146] - Cash from operations was positive $0.2 million, a significant improvement from a $10.3 million use of cash in Q1 2024. This was primarily driven by a $12.3 million decrease in tax credit sale receivable (i.e., receipt of cash)[142][143] Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, due to material weaknesses in IT general controls and documentation, with remediation ongoing - The CEO and CFO concluded that disclosure controls and procedures were not effective as of March 31, 2025[151] - The ineffectiveness is due to material weaknesses related to IT general controls and documentation, which were identified in the 2024 Form 10-K. Remediation plans are in progress[151][153] PART II - OTHER INFORMATION Other Disclosures The company reported no new legal proceedings or defaults, disclosed unregistered equity issuance, and a significant subsequent event regarding a $116.8 million biogas subsidiary redemption - No new legal proceedings were reported during the quarter[154] - The company issued warrants for 113,000 shares to two subordinated lenders as part of a debt extension, which were subsequently exercised. This was exempt from registration as a non-public offering[156] - A subsequent event was filed regarding the Ninth Amendment to the Series A Preferred Unit Purchase Agreement, requiring Aemetis Biogas LLC to redeem all outstanding units for $116.8 million by August 31, 2025[160]