Aemetis(AMTX) - 2022 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents the company's unaudited financial statements, management's analysis, market risks, and internal controls Item 1. Financial Statements This section presents the company's unaudited consolidated condensed financial statements, including balance sheets, statements of operations and comprehensive loss, cash flows, and stockholders' deficit, along with detailed notes explaining significant accounting policies, financial instrument details, and segment information for the quarter ended March 31, 2022 Consolidated Condensed Balance Sheets The balance sheet shows an increase in total assets driven by property, plant, and equipment, while current assets decreased. Total liabilities increased, and the stockholders' deficit deepened from December 31, 2021, to March 31, 2022 | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :---------------------------- | :----------------------------- | | Total Current Assets | $16,153 | $20,693 | | Property, Plant and Equipment, net | $145,223 | $135,101 | | Total Assets | $166,486 | $160,831 | | Total Current Liabilities | $62,730 | $65,330 | | Total Long Term Liabilities | $232,347 | $215,739 | | Total Stockholders' Deficit | $(128,591) | $(120,238) | Consolidated Condensed Statements of Operations and Comprehensive (Loss) For the three months ended March 31, 2022, revenues increased compared to the prior year, but the company continued to report a net loss, with operating loss also increasing. Basic and diluted net loss per common share improved slightly | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | Revenues | $52,049 | $42,807 | | Gross Loss | $(3,085) | $(3,608) | | Operating Loss | $(10,427) | $(9,013) | | Net Loss | $(18,294) | $(18,112) | | Basic Net Loss per Common Share | $(0.54) | $(0.69) | Consolidated Condensed Statements of Cash Flows Net cash used in operating activities decreased, while net cash used in investing activities increased. Net cash provided by financing activities significantly declined year-over-year, resulting in a net decrease in cash and cash equivalents for the period | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net Cash Used in Operating Activities | $(8,152) | $(14,073) | | Net Cash Used in Investing Activities | $(7,992) | $(5,369) | | Net Cash Provided by Financing Activities | $13,878 | $34,631 | | Net Change in Cash and Cash Equivalents | $(2,280) | $15,195 | | Cash and Cash Equivalents at End of Period | $5,471 | $15,787 | Consolidated Statements of Stockholders' Deficit The company's total stockholders' deficit increased from December 31, 2021, to March 31, 2022, primarily due to the net loss incurred during the period, partially offset by issuances of common stock and stock-based compensation | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :---------------------------- | :----------------------------- | | Total Stockholders' Deficit | $(128,591) | $(120,238) | | Net Loss | $(18,294) | $(18,112) | | Issuance of Common Stock | $3,349 | $62,395 | | Stock-based Compensation | $2,040 | $835 | Notes to Consolidated Condensed Financial Statements The notes provide detailed disclosures on the company's business activities, significant accounting policies, and specific financial statement line items, including inventories, property, plant and equipment, debt, commitments, related party transactions, and management's plans 1. Nature of Activities and Summary of Significant Accounting Policies Aemetis is an international renewable natural gas, renewable fuels, and byproducts company operating a California ethanol plant, developing a dairy renewable natural gas segment, planning 'Carbon Zero' biofuels plants, and operating an India biodiesel facility. The section also outlines key accounting policies for revenue recognition, inventory, and segment reporting - Aemetis is an international renewable natural gas, renewable fuels, and byproducts company focused on the acquisition, development, and commercialization of innovative negative carbon intensity products and technologies[18][146] - Operates a 65 million gallon per year ethanol production facility in Keyes, California, producing ethanol, Wet Distillers Grains (WDG), Distillers Corn Oil (DCO), and Condensed Distillers Solubles (CDS)[19][147] - Developing a Dairy Renewable Natural Gas (RNG) segment, converting waste dairy methane gas into RNG, with Phase 1 completed and Phase 2 construction underway[20][148] - Planning 'Carbon Zero' biofuels production plants (e.g., Carbon Zero 1 in Riverbank, California) to produce sustainable aviation fuel (SAF) and renewable diesel utilizing renewable hydrogen and non-edible renewable oils[21][149] - Owns and operates a 150 thousand metric tons per year biodiesel production facility in Kakinada, India, producing high-quality distilled biodiesel and refined glycerin[22][150][151] 2. Inventories Inventories, valued at the lower of cost or net realizable value, consisted of raw materials, work-in-process, and finished goods. The company recognized a $919 thousand impairment related to inventory as of March 31, 2022 | Inventory Category | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------- | :---------------------------- | :----------------------------- | | Raw materials | $1,057 | $727 | | Work-in-progress | $1,907 | $2,083 | | Finished goods | $1,896 | $2,316 | | Total inventories | $4,860 | $5,126 | | Impairment | $919 | $0 | 3. Property, Plant and Equipment Property, plant, and equipment, net, increased to $145.2 million as of March 31, 2022. Construction in progress, including biogas, Riverbank, and energy efficiency projects, saw significant interest capitalization of $2.1 million during the quarter | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :---------------------------- | :----------------------------- | | Property, Plant and Equipment, net | $145,223 | $135,101 | | Construction in progress | $65,383 | $55,859 | | Interest capitalized (Q1) | $2,100 | $600 | | Depreciation expense (Q1) | $1,300 | $1,400 | 4. Debt Total debt increased to $203.2 million as of March 31, 2022, primarily due to new revolving credit facilities and accrued interest. The company extended the maturity of Third Eye Capital Notes to April 1, 2023, and secured new Fuels and Carbon Revolving Lines totaling up to $100 million | Debt Category | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :---------------------------- | :----------------------------- | | Third Eye Capital Term Notes | $7,071 | $7,095 | | Third Eye Capital Revolving Credit Facility | $59,524 | $75,980 | | Third Eye Capital Fuels Revolving Line | $8,741 | $0 | | Third Eye Capital Carbon Revolving Line | $22,096 | $0 | | EB-5 Promissory Notes | $40,829 | $40,692 | | Total Debt | $203,223 | $188,767 | | Total Long Term Debt | $180,059 | $165,989 | - Third Eye Capital Notes maturity date extended to April 1, 2023, with various waivers and amendment fees (chunk 72)[72] - New Credit Facility with Third Eye Capital provides up to $100 million across Fuels Revolving Line (up to $50M, matures March 1, 2025) and Carbon Revolving Line (up to $50M, matures March 1, 2026)[84] | Scheduled Debt Repayments | Amount (in thousands) | | :------------------------ | :-------------------- | | Three months ended March 31, 2022 | $23,164 | | 2023 | $139,961 | | 2024 | $17,598 | | 2025 | $26,951 | | 2026 | $945 | | Thereafter | $1,407 | | Total Debt | $210,026 | 5. Commitments and Contingencies The company settled a legal dispute with EdenIQ, Inc. for $4.8 million in May 2022. Lease liabilities for operating and finance leases are detailed, and $6.1 million in past-due property taxes were paid in March 2022 - Settled a lawsuit with EdenIQ, Inc. for $4.8 million on May 6, 2022, resolving a dispute over a terminated merger agreement[105][191] - Paid $6.1 million to Stanislaus County for past-due property taxes on March 3, 2022[105] | Lease Liabilities | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :---------------------------- | :----------------------------- | | Total Operating Lease Liabilities | $2,501 | $2,578 | | Total Finance Lease Liabilities | $1,156 | $1,270 | 6. Aemetis Biogas LLC – Series A Preferred Financing and Variable Interest Entity Aemetis Biogas LLC (ABGL) is classified as a Variable Interest Entity (VIE) and consolidated, with Aemetis as the primary beneficiary. ABGL's Series A Preferred Units, totaling $51.4 million in liabilities, are being accreted to their redemption value, and a covenant violation has increased redemption payments to 100% of free cash flows - Aemetis Biogas LLC (ABGL) is a Variable Interest Entity (VIE) and is consolidated into Aemetis's financial statements, with Aemetis determined to be the primary beneficiary[111] | Series A Preferred Units Liability | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :---------------------------- | :----------------------------- | | Current Portion | $3,698 | $3,169 | | Long-Term Liabilities | $47,701 | $44,978 | | Total | $51,399 | $48,147 | - ABGL's failure to generate minimum quarterly operating cash flows resulted in a covenant violation, increasing redemption payments to 100% of free cash flows[108] 7. Stock-Based Compensation The company recognized $2.0 million in stock-based compensation expense for Q1 2022, primarily from options granted under the 2019 Stock Plan. As of March 31, 2022, $12.0 million of unrecognized compensation expense remains | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | Stock-based Compensation Expense | $2,040 | $835 | | Options Granted | 932,800 | 945,000 | | Weighted Average Fair Value per Option | $9.89 | $2.44 | - As of March 31, 2022, the company had $12.0 million of total unrecognized compensation expense for employees, to be amortized over a weighted average remaining term of 2.6 years[121] 8. Outstanding Warrants As of March 31, 2022, the company had 355 thousand outstanding warrants with a weighted average exercise price of $15.92. During Q1 2022, 413 thousand warrants were granted with a fair value of $11.01 per warrant | Metric | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Warrants Outstanding | 355 thousand | 55 thousand | | Weighted Average Exercise Price | $15.92 | $2.59 | | Warrants Granted (Q1) | 413 thousand | 292 thousand | | Fair Value per Warrant on Grant Date (Q1) | $11.01 | $2.48 | 9. Agreements The company maintains a Corn Procurement and Working Capital Agreement with J.D. Heiskell and transitioned its ethanol marketing from Kinergy to Murex LLC in October 2021. Ethanol sales to marketing partners increased to $37.9 million in Q1 2022 - Maintains a Corn Procurement and Working Capital Agreement with J.D. Heiskell for corn feedstock and sales of WDG and corn oil[125] - Terminated Ethanol Marketing Agreement with Kinergy and entered into a Fuel Ethanol Purchase and Sale Agreement with Murex LLC effective October 1, 2021[126] | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | Sales to Ethanol Marketing Partners | $37,900 | $29,900 | | Marketing Costs Expensed | $700 | $700 | 10. Segment Information Aemetis operates in three reportable segments: California Ethanol, Dairy Renewable Natural Gas, and India Biodiesel. California Ethanol generated the vast majority of external revenues, which increased significantly year-over-year, while India Biodiesel revenues declined sharply - Aemetis recognizes three reportable segments: California Ethanol, Dairy Renewable Natural Gas, and India Biodiesel[128] | Segment | Revenues from External Customers (Q1 2022, in thousands) | Revenues from External Customers (Q1 2021, in thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | | California Ethanol | $52,041 | $42,328 | | Dairy Renewable Natural Gas | $0 | $0 | | India Biodiesel | $8 | $479 | | Total | $52,049 | $42,807 | | Segment | Intersegment Revenues (Q1 2022, in thousands) | Intersegment Revenues (Q1 2021, in thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | | Dairy Renewable Natural Gas | $335 | $41 | 11. Related Party Transactions The company disclosed a $2.0 million guarantee fee paid to McAfee Capital (owned by the CEO) in Q1 2022, settled by issuing 180,000 common shares. Board compensation fees of $0.1 million were expensed for the quarter - Approved a one-time guarantee fee of $2.0 million to McAfee Capital (owned by CEO Eric McAfee) on January 12, 2022, paid by issuing 180,000 shares of common stock[135][136] | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :---------------------------- | :----------------------------- | | Accrued Guaranty Fees | $200 | $300 | | Board Compensation Fees Expensed (Q1) | $100 | $100 | 12. Subsequent Events Subsequent to the quarter end, Third Eye Capital agreed to Amendment No. 23 to the Note Purchase Agreement, waiving certain covenants for Q1 2023 and Q1 2022 in exchange for a $0.1 million fee - On May 11, 2022, Third Eye Capital agreed to Limited Waiver and Amendment No. 23, waiving the note indebtedness covenant for Q1 2023 and the unfunded capital expenditures covenant for Q1 2022, in exchange for a $0.1 million fee[137][196] 13. Management's Plan Management outlines strategies to address going concern doubts, focusing on improving Keyes Plant performance, expanding the biogas project, funding the Riverbank Carbon Zero 1 plant, developing Kakinada Plant sales, and securing additional funding through various means - The company's ability to continue as a going concern raises substantial doubt due to negative capital, operating results, and reliance on its senior secured lender[138][174] - Plans to improve Keyes Plant financial performance through energy efficiency, cost reduction, revenue enhancements, and grant execution[139][175] - Strategies include expanding the ABGL biogas project to capture higher carbon credits, raising funds for the Riverbank Carbon Zero 1 plant, and developing sales channels for the Kakinada Plant[139][140][141][175][176][177] - Seeks additional funding through working with its senior lender, restructuring existing loan agreements, selling equity, and vendor financing arrangements[142][177] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, results of operations, and cash flows for the three months ended March 31, 2022, highlighting revenue drivers, cost changes, liquidity challenges, and strategic plans Overview Aemetis is an international renewable natural gas, renewable fuels, and byproducts company operating in three reportable segments: California Ethanol, Dairy Renewable Natural Gas, and India Biodiesel, focusing on innovative negative carbon intensity products and technologies - Aemetis is an international renewable natural gas, renewable fuels, and byproducts company focused on innovative negative carbon intensity products and technologies[146] - Operates a 65 million gallon per year ethanol production facility in Keyes, California, producing ethanol and co-products, with ongoing electrification efforts to reduce GHG emissions[147] - Developing a Dairy Renewable Natural Gas segment (ABGL) to convert dairy methane into RNG, with Phase 1 completed and Phase 2 construction underway[148] - Planning 'Carbon Zero' biofuels plants (e.g., Carbon Zero 1 in Riverbank) to produce sustainable aviation fuel (SAF) and renewable diesel, aiming for ultra-low carbon fuels and higher value credits[149] - Operates a 150 thousand metric tons per year biodiesel production facility in Kakinada, India, producing biodiesel and refined glycerin for Indian and European markets[150][151] Results of Operations Total revenues increased by 22.0% year-over-year, primarily driven by higher ethanol prices in California Ethanol, despite a significant decline in India Biodiesel revenue. Gross loss decreased, but operating expenses, particularly SG&A and debt-related fees, increased Revenues Total revenues increased by 22.0% to $52.0 million, mainly due to a 22.9% increase in California Ethanol revenue driven by higher ethanol prices. India Biodiesel revenue decreased by 98.3% due to high feedstock costs making production unviable | Segment | Q1 2022 (in thousands) | Q1 2021 (in thousands) | Inc/(dec) (in thousands) | % Change | | :-------------------------- | :--------------------- | :--------------------- | :----------------------- | :------- | | California Ethanol | $52,041 | $42,328 | $9,713 | 22.9% | | Dairy Renewable Natural Gas* | $335 | $41 | $294 | 717.1% | | India Biodiesel | $8 | $479 | $(471) | -98.3% | | Eliminations | $(335) | $(41) | $(294) | 717.1% | | Total | $52,049 | $42,807 | $9,242 | 22.0% | *All Dairy Renewable Natural Gas revenue is intercompany. - California Ethanol revenue increase was driven by an increase in ethanol price per gallon to $2.58 (Q1 2022) from $1.91 (Q1 2021), partially offset by a decrease in volume sold[159] - India Biodiesel sales volume decreased by 100% to 0 metric tons (Q1 2022) from 349 metric tons (Q1 2021) due to high feedstock costs[161] Cost of Goods Sold Total cost of goods sold increased by 19% to $55.1 million, primarily due to a 20.8% increase in California Ethanol's costs, driven by higher corn feedstock prices ($8.75/bushel vs. $6.87/bushel) and increased natural gas, chemical, and transportation costs. India Biodiesel's costs decreased by 100% due to reduced production | Segment | Q1 2022 (in thousands) | Q1 2021 (in thousands) | Inc/(dec) (in thousands) | % Change | | :-------------------------- | :--------------------- | :--------------------- | :----------------------- | :------- | | California Ethanol | $54,921 | $45,459 | $9,462 | 20.8% | | Dairy Renewable Natural Gas | $542 | $453 | $89 | 19.6% | | India Biodiesel | $0 | $534 | $(534) | -100.0% | | All other | $6 | $10 | $(4) | -40.0% | | Eliminations | $(335) | $(41) | $(294) | 717.1% | | Total | $55,134 | $46,415 | $8,719 | 19% | - Average cost of feedstock (corn) per bushel increased to $8.75 (Q1 2022) from $6.87 (Q1 2021)[162] - California Ethanol incurred $1.0 million more in natural gas costs, $0.4 million more in chemical costs, and $0.3 million more in transportation costs compared to Q1 2021[162] Gross profit (loss) The total gross loss decreased by 14% to $(3.1) million, primarily due to an 8% decrease in gross loss for the California Ethanol segment, driven by improved ethanol and WDG prices, partially offset by higher corn prices | Segment | Q1 2022 (in thousands) | Q1 2021 (in thousands) | Inc/(dec) (in thousands) | % Change | | :-------------------------- | :--------------------- | :--------------------- | :----------------------- | :------- | | California Ethanol | $(2,880) | $(3,131) | $251 | 8.0% | | Dairy Renewable Natural Gas | $(207) | $(412) | $205 | 49.8% | | India Biodiesel | $8 | $(55) | $63 | 114.5% | | All other | $(6) | $(10) | $4 | 40.0% | | Total | $(3,085) | $(3,608) | $523 | -14% | Operating Expenses Selling, general, and administrative (SG&A) expenses increased by 35.7% due to higher salaries, stock-based compensation, and professional fees. Interest expense decreased, but debt-related fees and amortization increased by 50.3% due to debt issuance and extension costs | Expense Category | Q1 2022 (in thousands) | Q1 2021 (in thousands) | Inc/(dec) (in thousands) | % Change | | :----------------------------------- | :--------------------- | :--------------------- | :----------------------- | :------- | | Research and Development Expenses | $36 | $23 | $13 | 56.5% | | Selling, General and Administrative Expenses | $7,306 | $5,382 | $1,924 | 35.7% | | Interest Rate Expense | $4,435 | $5,965 | $(1,530) | -25.6% | | Debt Related Fees and Amortization Expense | $1,826 | $1,215 | $611 | 50.3% | | Accretion and Other Expenses of Series A Preferred Units | $1,640 | $1,943 | $(303) | -15.6% | - Increase in SG&A expenses was primarily due to a $1.4 million increase in salaries and wages (mostly stock-based compensation), $0.2 million in professional fees, and $0.3 million in miscellaneous expenses[168] Liquidity and Capital Resources The company's cash and cash equivalents decreased, and its current ratio remains low, indicating liquidity challenges. Dependence on its senior secured lender and negative operating results raise substantial doubt about its going concern ability, necessitating debt refinancing or continued lender cooperation Cash and Cash Equivalents Cash and cash equivalents decreased to $5.5 million as of March 31, 2022, from $7.8 million at December 31, 2021, with a current ratio of 0.26, indicating limited short-term liquidity | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :---------------------------- | :----------------------------- | | Cash and Cash Equivalents | $5,471 | $7,751 | | Current Ratio | 0.26 | 0.32 | Liquidity The company's reliance on its senior secured lender, coupled with negative capital and operating results, raises substantial doubt about its ability to continue as a going concern. Management plans to refinance debt or secure continued lender cooperation to meet obligations - The company's dependence on its senior secured lender and negative capital/operating results raise substantial doubt about its ability to continue as a going concern[174] - Available liquidity resources include cash from operations, remaining cash balances, borrowings under senior and subordinated debt facilities, and additional funds from equity sales[170] | Available Borrowing Capacity | Amount (in thousands) | | :--------------------------- | :-------------------- | | Revolving Credit Lines | $14,200 | | Reserve Liquidity Notes | $40,000 | | Total | $54,200 | Change in Working Capital and Cash Flows Net cash used in operating activities decreased to $8.2 million, while cash used in investing activities increased to $8.0 million. Cash provided by financing activities significantly declined to $13.9 million, primarily due to lower proceeds from borrowings and equity offerings compared to the prior year | Cash Flow Activity | Q1 2022 (in thousands) | Q1 2021 (in thousands) | | :----------------------------------- | :--------------------- | :--------------------- | | Net Cash Used in Operating Activities | $(8,152) | $(14,073) | | Net Cash Used in Investing Activities | $(7,992) | $(5,369) | | Net Cash Provided by Financing Activities | $13,878 | $34,631 | - Total debt increased by $14.5 million during Q1 2022, driven by accrued interest, debt extension fees, and draws on Fuels and Carbon Revolving Lines, partially offset by principal payments[181] Critical Accounting Policies The company's critical accounting policies, including revenue recognition, recoverability of long-lived assets, and debt modification and extinguishment accounting, are consistent with those disclosed in its 2021 Annual Report on Form 10-K - Critical accounting policies include revenue recognition, recoverability of long-lived assets, and debt modification and extinguishment accounting[186] Recently Issued Accounting Pronouncements No new accounting pronouncements were reported beyond those disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 - No new accounting pronouncements reported beyond those disclosed in the 2021 Annual Report on Form 10-K[187] Off Balance Sheet Arrangements The company had no off-balance sheet arrangements during the three months ended March 31, 2022 - No off-balance sheet arrangements during the three months ended March 31, 2022[187] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section is not applicable for the current quarterly report - Not Applicable[187] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of March 31, 2022, due to an identified material weakness in financial reporting, with ongoing remediation efforts. No material changes in internal controls over financial reporting occurred during the quarter Evaluation of Disclosure Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and procedures, along with related internal controls over financial reporting, were not effective as of March 31, 2022, due to a material weakness identified in the prior annual report - Disclosure controls and procedures, along with related internal controls over financial reporting, were not effective as of March 31, 2022, due to a material weakness identified in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021[188] Changes in Internal Control over Financial Reporting There were no material changes in internal controls over financial reporting during the most recently completed fiscal quarter, and remediation efforts for the previously identified material weakness are ongoing - No material changes in internal controls over financial reporting during the most recently completed fiscal quarter[189] - Remediation plan to address the material weakness in internal control over financial reporting identified as of December 31, 2021, is ongoing[189] PART II – OTHER INFORMATION This section addresses legal proceedings, risk factors, equity sales, defaults, and other relevant disclosures Item 1. Legal Proceedings The company settled a lawsuit with EdenIQ, Inc. for $4.8 million on May 6, 2022, resolving a dispute over a terminated merger agreement - Settled a lawsuit with EdenIQ, Inc. for $4.8 million on May 6, 2022, regarding a wrongful termination of a merger agreement[191] Item 1A. Risk Factors New risk factors include the adverse impact of inflation, particularly commodity price inflation (corn, natural gas) and supply chain constraints due to the war in Ukraine, which could reduce profit margins if the company cannot raise product prices accordingly - Inflation, including commodity price inflation (corn, natural gas) and supply chain constraints due to the war in Ukraine, may adversely impact the company's results of operations[192][193] - In an inflationary environment, the company may be unable to raise product prices to keep up with the rate of inflation, which would reduce profit margins[194] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the first quarter of 2022, the company issued 113 thousand shares of common stock to subordinated promissory note holders upon warrant exercise, which was exempt from registration - Issued 113 thousand shares of common stock to certain subordinated promissory note holders pursuant to warrant exercise at an exercise price of $0.01 per share in Q1 2022[195] Item 3. Defaults Upon Senior Securities No unresolved defaults on senior securities occurred during the three months ended March 31, 2022 - No unresolved defaults on senior securities occurred during the three months ended March 31, 2022[195] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[195] Item 5. Other Information Subsequent to the quarter end, Third Eye Capital agreed to Amendment No. 23 to the Note Purchase Agreement, waiving certain covenants for Q1 2023 and Q1 2022 in exchange for a $0.1 million fee - On May 11, 2022, Third Eye Capital agreed to Limited Waiver and Amendment No. 23, waiving the note indebtedness covenant for Q1 2023 and the unfunded capital expenditures covenant for Q1 2022, in exchange for a $0.1 million fee[196] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications pursuant to the Sarbanes-Oxley Act and the Limited Waiver and Amendment No. 23 to the Amended and Restated Note Purchase Agreement - Includes certifications (31.1, 31.2, 32.1, 32.2) and Limited Waiver and Amendment No. 23 to Amended and Restated Note Purchase Agreement (10.1)[197][198] Signatures The Form 10-Q report was duly signed on behalf of Aemetis, Inc. by Eric A. McAfee, Chief Executive Officer, and Todd Waltz, Executive Vice President and Chief Financial Officer, on May 13, 2022 - The report was signed by Eric A. McAfee (Chief Executive Officer) and Todd Waltz (Executive Vice President and Chief Financial Officer) on May 13, 2022[198]