Aemetis(AMTX) - 2025 Q2 - Quarterly Report

PART I Financial Statements Aemetis, Inc.'s Q2 2025 unaudited financials reflect decreased assets, increased current liabilities from debt reclassification, an improved net loss, and a 'going concern' warning due to significant debt and lender reliance Consolidated Condensed Balance Sheets As of June 30, 2025, total assets were $240.0 million, a decrease from $259.3 million at year-end 2024, with current liabilities sharply rising to $321.9 million from $144.0 million due to debt reclassification, worsening the total stockholders' deficit to $289.3 million Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $20,086 | $44,696 | | Total Assets | $240,016 | $259,302 | | Total Current Liabilities | $321,927 | $143,968 | | Total Liabilities | $529,271 | $523,230 | | Total Stockholders' Deficit | $(289,255) | $(263,928) | Consolidated Condensed Statements of Operations For the three months ended June 30, 2025, revenues decreased to $52.2 million from $66.6 million year-over-year, resulting in a worsening gross loss of $3.4 million, though the net loss improved to $23.4 million, or ($0.41) per share, primarily due to lower SG&A expenses Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $52,243 | $66,561 | | Gross Loss | $(3,355) | $(1,806) | | Operating Loss | $(10,674) | $(13,606) | | Net Loss | $(23,395) | $(29,174) | | Net Loss Per Share (Basic) | $(0.41) | $(0.66) | Six Months 2025 vs 2024 Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenues | $95,129 | $139,195 | | Gross Loss | $(8,435) | $(2,418) | | Operating Loss | $(26,229) | $(23,068) | | Net Loss | $(47,924) | $(53,405) | | Net Loss Per Share (Basic) | $(0.87) | $(1.24) | Consolidated Condensed Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities significantly improved to $5.6 million, while net cash provided by financing activities was $11.3 million, primarily from stock sales and new borrowings, leading to an overall increase of $0.8 million in cash and cash equivalents Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(5,577) | $(15,372) | | Net Cash Used in Investing Activities | $(4,939) | $(5,935) | | Net Cash Provided by Financing Activities | $11,268 | $18,743 | | Net Change in Cash | $759 | $(2,538) | Notes to Consolidated Condensed Financial Statements The notes detail the company's operational segments, accounting policies, and financial position, including significant debt obligations and a critical disclosure on liquidity and going concern, highlighting substantial operational and financial risks - The company operates in three main segments: California Ethanol, California Dairy Renewable Natural Gas (RNG), and India Biodiesel, while also developing projects in Sustainable Aviation Fuel (SAF), Renewable Diesel (RD), and Carbon Capture and Underground Sequestration (CCUS)[25][26][27] - Total debt stood at $344.2 million as of June 30, 2025, with a significant portion of $270.6 million due within the next twelve months, highlighting near-term refinancing risk[45][58] - The company has concluded that there is substantial doubt about its ability to continue as a going concern due to its significant debt, reliance on its senior lender, and expected near-term cash flow shortfalls[112] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses a 21.5% decrease in Q2 2025 revenue, primarily from India Biodiesel, offset by strong California Dairy RNG growth, while liquidity remains a critical concern due to debt and lender reliance, despite outlined strategies for cash flow improvement - The company is focused on building a circular bioeconomy using agricultural products and waste to produce low-carbon renewable fuels[115] - Key strategic initiatives to improve liquidity include constructing a Mechanical Vapor Recompression (MVR) system to reduce natural gas use, building new dairy digesters for RNG production, and monetizing new Section 45Z tax credits for both ethanol and RNG[101][105][102] - Despite plans to improve liquidity, management reiterates that substantial doubt exists about the company's ability to continue as a going concern due to its debt levels and reliance on its senior lender[112] Results of Operations Comparing Q2 2025 to Q2 2024, total revenues fell by $14.3 million (21.5%) to $52.2 million, driven by a $12.9 million decrease in India Biodiesel sales, while California Dairy RNG revenue grew by $1.5 million (90.9%), and the total gross loss increased to $3.4 million Revenues by Segment - Q2 2025 vs Q2 2024 (in thousands) | Segment | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | California Ethanol | $37,288 | $40,132 | (7.1)% | | California Dairy RNG | $3,051 | $1,598 | 90.9% | | India Biodiesel | $11,904 | $24,831 | (52.1)% | | Total | $52,243 | $66,561 | (21.5)% | Gross Profit (Loss) by Segment - Q2 2025 vs Q2 2024 (in thousands) | Segment | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | California Ethanol | $(3,806) | $(3,921) | (2.9)% | | California Dairy RNG | $855 | $(136) | (728.7)% | | India Biodiesel | $(404) | $2,251 | (117.9)% | | Total | $(3,355) | $(1,806) | 85.8% | - The decrease in SG&A expense was primarily due to a one-time $3.6 million loss on an asset write-off in Q2 2024, which was not repeated in Q2 2025[140] Liquidity and Capital Resources The company's liquidity position is precarious, with cash and cash equivalents at only $1.6 million and a current ratio of 0.06 as of June 30, 2025, relying heavily on equity sales and debt, including $225.7 million with its senior lender, Third Eye Capital, with significant maturities in 2026 - Cash and cash equivalents were $1.6 million at June 30, 2025, with a current ratio of 0.06, indicating severe short-term liquidity pressure[152] - The company is highly dependent on its senior lender, Third Eye Capital, for continued financing and amendments to its debt facilities, with debt totaling $225.7 million as of June 30, 2025, including $45.6 million due on demand and $152.4 million due in April 2026[157][159] - During the six months ended June 30, 2025, the company sold 10.0 million shares of common stock for net proceeds of $18.0 million through its at-the-market offering[164] Quantitative and Qualitative Disclosures about Market Risk This item is marked as 'Not applicable' in the report, indicating no new or materially changed information to disclose regarding market risk compared to the last annual report - The company has indicated that this section is not applicable for this reporting period[168] Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to previously identified material weaknesses in IT general controls and financial reporting systems, with remediation plans currently in progress - The CEO and CFO concluded that disclosure controls and procedures were not effective as of the end of the period[169] - The ineffectiveness is due to material weaknesses related to IT general controls and financial reporting systems, as identified in the 2024 Form 10-K[169][171] - Remediation plans to address the material weaknesses are in progress[171] PART II Legal Proceedings The company reported no legal proceedings for the period - None reported[172] Risk Factors This item is marked as 'Not applicable,' indicating no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K - Not applicable[173] Unregistered Sales of Equity Securities and Use of Proceeds During the second quarter of 2025, the company issued warrants to two subordinated lenders to purchase 113,000 shares of common stock at $0.01 per share in connection with debt extensions, and also issued 29,240 shares to a vendor for services, with these issuances exempt from registration under Section 4(2) of the Securities Act of 1933 - Issued warrants to purchase 113,000 shares to subordinated lenders as part of debt extension agreements[174] - Issued 29,240 shares of common stock to a vendor for services[175] Defaults Upon Senior Securities The company reported no unresolved defaults on its senior securities during the six months ended June 30, 2025 - No unresolved defaults on senior securities occurred during the period[176] Signatures - The report was signed on August 7, 2025, by Eric A. McAfee, Chairman and CEO, and Todd A. Waltz, Executive Vice President and CFO[183]