UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~———————~~

FORM 10-Q

~~———————~~

☑

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

For the quarterly period ended:September 30, ~~2020~~

2021

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

ACT OF 1934

For the transition period from~~_____________~~to~~____________~~

Commission File Number:001-36475

~~———————~~

~~AEMETIS, INC.~~

~~(Exact name of registrant as specified in its charter)~~

~~———————~~

~~Nevada~~	~~26-1407544~~ AEMETIS, INC.
(Exact name of registrant as specified in its charter)

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

20400 Stevens Creek Blvd., Suite 700

Cupertino, CA 95014

~~(Address~~

(Address of Principal Executive Offices, including zip code)

(408) 213-0940

(Registrant’s telephone number, including area code)

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

~~———————~~

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

Yes ☑☒ No ☐

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

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

~~Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☑~~

~~Emerging growth company ☐~~

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☒

Emerging growth company ☐

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

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

☒

The number of shares outstanding of the registrant’s Common Stock on October 31, ~~2020~~2021 was ~~21,815,654~~33,250,807 shares.

AEMETIS, INC.

FORM 10-Q

Quarterly Period Ended September 30, ~~2020~~

2021

INDEX

PART I--FINANCIAL INFORMATION

~~PART I--FINANCIAL INFORMATION~~ Item 1	Financial Statements		4
~~Item 1~~	~~Financial Statements.~~	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of ~~Operations.~~Operations	33	34

Item 3.	Quantitative and Qualitative Disclosures about Market ~~Risk.~~Risk	44	45

Item 4.	Controls and ~~Procedures.~~Procedures	44	46

PART II--OTHER INFORMATION

Item 1.	Legal Proceedings		47
~~PART II--OTHER INFORMATION~~
Item 1.1A.	~~Legal Proceedings~~Risk Factors	45	47
~~Item 1A.~~	~~Risk Factors.~~	45
Item 2.	Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~Proceeds	45	47

Item 3.	Defaults Upon Senior ~~Securities.~~Securities	45	47

Item 4.	Mine Safety ~~Disclosures.~~Disclosures	45	47
~~Item 5.~~	~~Other Information.~~	45
Item 6.5.	~~Exhibits.~~Other Information	46	47

Item 6.	Exhibits		48

	Signatures		49

472

Table of Contents

SPECIAL NOTE REGARDING FORWARD—LOOKING STATEMENTS

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

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1 - Financial ~~Statements.~~

Statements.

AEMETIS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands except for par value)

September 30,
2020

December 31,
2019

Assets

(unaudited)

Current assets:

Cash and cash equivalents
$79
$656
Accounts receivable, net of allowance for doubtful accounts of $647 and $0 as of September 30, 2020 and December 31, 2019
  3,243
  2,036
Notes receivable
  3,746
  -
Inventories
  4,816
  6,518
Prepaid expenses
  727
  794
Other current assets
  936
  2,572
Total current assets
  13,547
  12,576



Property, plant and equipment, net
  103,050
  84,226
Operating lease right-of-use assets
  2,843
  557
Other assets
  2,730
  2,537
Total assets
$122,170
$99,896



Liabilities and stockholders' deficit


Current liabilities:


Accounts payable
$15,023
$15,968
Current portion of long term debt
  41,979
  5,792
Short term borrowings
  17,357
  16,948
Mandatorily redeemable Series B convertible preferred stock
  3,226
  3,149
Accrued property taxes
  5,356
  4,095
Accrued contingent litigation fees
  6,200
  6,200
Current portion of operating lease liability
  286
  377
Other current liabilities
  6,398
  5,290
Total current liabilities
  95,825
  57,819
Long term liabilities:


Senior secured notes and revolving notes
  120,781
  107,205
EB-5 notes
  34,500
  36,500
GAFI secured and revolving notes
  -
  29,856
Other long term debt
  11,729
  6,124
Series A preferred units
  28,494
  14,077
Operating lease liability
  2,662
  200
Other long term liabilities
  3,742
  2,487
Total long term liabilities
  201,908
  196,449



Stockholders' deficit:


Series B convertible preferred stock, $0.001 par value; 7,235 authorized; 1,323 shares issued and outstanding each period, respectively (aggregate liquidation preference of $3,969 for each period respectively)
  1
  1
Common stock, $0.001 par value; 40,000 authorized; 21,027 and 20,570 shares issued and outstanding each period, respectively
  21
  21
Additional paid-in capital
  88,119
  86,852
Accumulated deficit
  (259,498)
  (237,421)
Accumulated other comprehensive loss
  (4,206)
  (3,825)
Total stockholders' deficit
  (175,563)
  (154,372)
Total liabilities and stockholders' deficit
$122,170
$99,896

	September 30, 2021			December 31, 2020
Assets	(unaudited)
Current assets:
Cash and cash equivalents ($45 and $235 respectively from VIE)	$	6,389		$	592
Accounts receivable, net of allowance for doubtful accounts of $1,404 and $1,260 as of September 30, 2021 and December 31, 2020		1,621			1,821
Inventories		4,862			3,969
Prepaid expenses ($153 and $192 respectively from VIE)		3,596			750
Other current assets ($0 and $741 respectively from VIE)		545			1,551
Total current assets		17,013			8,683

Property, plant and equipment, net ($33,402 and $22,628 respectively from VIE)		124,915			109,880
Operating lease right-of-use assets ($14 and $28 respectively from VIE)		2,572			2,889
Other assets ($24 and $24 respectively from VIE)		2,479			3,687
Total assets	$	146,979		$	125,139

Liabilities and stockholders' deficit
Current liabilities:
Accounts payable ($4,829 and $6,271 respectively from VIE)	$	13,887		$	20,739
Current portion of long term debt		9,962			44,974
Short term borrowings		13,901			14,541
Mandatorily redeemable Series B convertible preferred stock		3,328			3,252
Accrued property taxes		6,801			5,674
Accrued contingent litigation fees		6,200			6,200
Current portion of operating lease liability ($13 and $10 respectively from VIE)		286			316
Current portion of Series A preferred units ($8,660 and $2,015 respectively from VIE)		8,660			2,015
Other current liabilities ($393 and $129 respectively from VIE)		11,580			4,524
Total current liabilities		74,605			102,235
Long term liabilities:
Senior secured notes and revolving notes		117,197			125,624
EB-5 notes		32,500			32,500
Other long term debt ($42 and $0 respectively from VIE)		11,418			11,980
Series A preferred units ($38,257 and $32,022 respectively from VIE)		38,257			32,022
Operating lease liability ($0 and $11 respectively from VIE)		2,381			2,578
Other long term liabilities ($0 and $74 respectively from VIE)		2,714			2,944
Total long term liabilities		204,467			207,648

Stockholders' deficit:
Series B convertible preferred stock, $0.001 par value; 7,235 authorized; 1,285 and 1,323 shares issued and outstanding each period, respectively (aggregate liquidation preference of $3,855 and $3,969 respectively)		1			1
Common stock, $0.001 par value; 40,000 authorized; 32,564 and 22,830 shares issued and outstanding each period, respectively		33			23
Additional paid-in capital		192,520			93,426
Accumulated deficit		(320,346	)		(274,080	)
Accumulated other comprehensive loss		(4,301	)		(4,114	)
Total stockholders' deficit		(132,093	)		(184,744	)
Total liabilities and stockholders' deficit	$	146,979		$	125,139

The accompanying notes are an integral part of the financial statements.

Table of Contents

AEMETIS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE

~~LOSS~~

(LOSS)

(Unaudited, in thousands except for earnings per share)

For the three months ended
September 30,

For the nine months ended
September 30,

2020

2019

2020

2019

Revenues
$40,923
$57,389
$128,227
$149,896
Cost of goods sold
  40,152
  53,407
  113,830
  142,992
Gross profit
  771
  3,982
  14,397
  6,904





Research and development expenses
  37
  37
  175
  160
Selling, general and administrative expenses
  4,563
  4,529
  12,548
  12,715
Operating income (loss)
  (3,829)
  (584)
  1,674
  (5,971)





Other (income) expense:




Interest expense




Interest rate expense
  5,796
  5,396
  16,956
  15,572
Debt related fees and amortization expense
  674
  946
  2,578
  3,565
Accretion of Series A preferred units
  1,765
  589
  4,087
  1,509
Loss contingency on litigation
  -
  -
  -
  6,200
Other (income) expense
  153
  (289)
  393
  (1,001)
Loss before income taxes
  (12,217)
  (7,226)
  (22,340)
  (31,816)
Income tax expense (benefit)
  -
  -
  (263)
  7
Net loss
$(12,217)
$(7,226)
$(22,077)
$(31,823)





Less: Net loss attributable to non-controlling interest
  -
  (900)
  -
  (2,832)
Net loss attributable to Aemetis, Inc.
$(12,217)
$(6,326)
$(22,077)
$(28,991)





Other comprehensive income (loss)




Foreign currency translation gain (loss)
  314
  (254)
  (381)
  (139)
Comprehensive loss
$(11,903)
$(7,480)
$(22,458)
$(31,962)





Net loss per common share




Basic
$(0.59)
$(0.31)
$(1.06)
$(1.42)
Diluted
$(0.59)
$(0.31)
$(1.06)
$(1.42)





Weighted average shares outstanding




Basic
  20,861
  20,554
  20,732
  20,433
Diluted
  20,861
  20,554
  20,732
  20,433

	For the three months ended September 30,						For the nine months ended September 30,
	2021			2020			2021			2020
Revenues	$	49,895		$	40,923		$	147,586		$	128,227
Cost of goods sold		54,680			40,152			152,333			113,830
Gross profit (loss)		(4,785	)		771			(4,747	)		14,397

Research and development expenses		22			37			66			175
Selling, general and administrative expenses		5,087			4,563			16,222			12,548
Operating income (loss)		(9,894	)		(3,829	)		(21,035	)		1,674

Other expense (income):
Interest expense
Interest rate expense		4,408			5,796			14,902			16,956
Debt related fees and amortization expense		1,140			674			3,045			2,578
Accretion and other expenses of Series A preferred units		2,185			1,765			7,928			4,087
Gain on debt extinguishment		0			0			(1,134	)		0
Other expense (income)		(30	)		153			483			393
Loss before income taxes		(17,597	)		(12,217	)		(46,259	)		(22,340	)
Income tax expense (benefit)		0			0			7			(263	)
Net loss	$	(17,597	)	$	(12,217	)	$	(46,266	)	$	(22,077	)

Other comprehensive (loss)
Foreign currency translation gain (loss)		22			314			(187	)		(381	)
Comprehensive loss	$	(17,575	)	$	(11,903	)	$	(46,453	)	$	(22,458	)

Net loss per common share
Basic	$	(0.55	)	$	(0.59	)	$	(1.55	)	$	(1.06	)
Diluted	$	(0.55	)	$	(0.59	)	$	(1.55	)	$	(1.06	)

Weighted average shares outstanding
Basic		31,857			20,861			29,818			20,732
Diluted		31,857			20,861			29,818			20,732

The accompanying notes are an integral part of the financial statements.

Table of Contents

AEMETIS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

~~(Unaudited,~~

(Unaudited, in thousands)

For the nine months ended September 30,

2020

2019

Operating activities:

Net loss
$(22,077)
$(31,823)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:


Share-based compensation
  826
  630
Depreciation
  3,515
  3,337
Debt related fees and amortization expense
  2,578
  3,565
Intangibles and other amortization expense
  36
  36
Accretion of Series A preferred units
  4,087
  1,509
Deferred tax benefit
  (263)
  -
Provision for bad debts
  647
  -
Change in fair value of stock appreciation rights
  -
  (80)
Changes in operating assets and liabilities:


Accounts receivable
  (1,902)
  (4,359)
Inventories
  1,542
  2,563
Prepaid expenses
  66
  384
Other assets
  1,684
  (154)
Accounts payable
  330
  3,429
Accrued interest expense and fees
  16,011
  13,272
Other liabilities
  (24)
  6,565
Net cash provided by (used in) operating activities
  7,056
  (1,126)



Investing activities:


Capital expenditures
  (14,921)
  (5,053)
Note receivable
  (3,687)
  -
Net cash used in investing activities
  (18,608)
  (5,053)



Financing activities:


Proceeds from borrowings
  12,135
  39,246
Repayments of borrowings
  (11,792)
  (35,886)
TEC debt renewal and waiver fee payments
  (300)
  (530)
Grant proceeds received for capital expenditures
  256
  1,364
Payments on finance leases
  (1,137)
  -
Proceeds from the exercise of stock options
  260
  -
Proceeds from Series A preferred units financing
  11,564
  1,725
Net cash provided by financing activities
  10,986
  5,919



Effect of exchange rate changes on cash and cash equivalents
  (11)
  (9)
Net change in cash and cash equivalents for period
  (577)
  (269)
Cash and cash equivalents at beginning of period
  656
  1,188
Cash and cash equivalents at end of period
$79
$919



Supplemental disclosures of cash flow information, cash paid:


Cash paid for interest, net of capitalized interest of $291 and $231 for the nine months ended September 30, 2020 and 2019, respectively
$702
$1,836
Income taxes paid
  8
  -
Supplemental disclosures of cash flow information, non-cash transactions:


Subordinated debt extension fees added to debt
  680
  680
Fair value of warrants issued to subordinated debt holders
  181
  162
TEC debt extension, waiver fees, promissory notes fees added to debt
  1,793
  1,102
Capital expenditures in accounts payable
  1,182
  1,443
Operating lease liabilities arising from obtaining right of use assets
  2,688
  1,181
Financing lease liabilities arising from obtaining right of use assets
  2,988
  -
Stock Appreciation Rights issued for GAFI Amendment No. 1
  -
  1,050
Capital expenditures purchased on financing
  5,652
  -

	For the nine months ended September 30,
	2021			2020
Operating activities:
Net loss		(46,266	)	$	(22,077	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Share-based compensation		1,401			826
Depreciation		4,106			3,515
Debt related fees and amortization expense		3,045			2,578
Intangibles and other amortization expense		35			36
Accretion and other expenses of Series A preferred units		7,928			4,087
Gain on debt extinguishment		(1,134	)		0
Deferred tax benefit		0			(263	)
Provision for bad debts		144			647
Changes in operating assets and liabilities:
Accounts receivable		50			(1,902	)
Inventories		(902	)		1,542
Prepaid expenses		(2,847	)		66
Other assets		2,475			1,684
Accounts payable		(4,624	)		330
Accrued interest expense and fees		9,256			16,011
Other liabilities		7,340			(24	)
Net cash (used in) provided by operating activities		(19,993	)		7,056

Investing activities:
Capital expenditures		(18,771	)		(14,921	)
Grant proceeds received for capital expenditures		1,224			0
Note receivable		0			(3,687	)
Net cash used in investing activities		(17,547	)		(18,608	)

Financing activities:
Proceeds from borrowings		0			12,135
Repayments of borrowings		(53,523	)		(11,792	)
TEC debt renewal and waiver fee payments		(1,008	)		(300	)
Grant proceeds received for capital expenditures		115			256
Payments on finance leases		(373	)		(1,137	)
Proceeds from issuance of common stock in equity offering		94,203			0
Proceeds from the exercise of stock options		1,104			260
Proceeds from Series A preferred units financing		3,130			11,564
Series A preferred financing redemption		(300	)		0
Net cash provided by financing activities		43,348			10,986

Effect of exchange rate changes on cash and cash equivalents		(11	)		(11	)
Net change in cash and cash equivalents for period		5,797			(577	)
Cash and cash equivalents at beginning of period		592			656
Cash and cash equivalents at end of period		6,389		$	79

Supplemental disclosures of cash flow information, cash paid:
Cash paid for interest	$	5,646		$	702
Income taxes paid		7			8
Supplemental disclosures of cash flow information, non-cash transactions:
Subordinated debt extension fees added to debt		680			680
Fair value of warrants issued to subordinated debt holders		1,546			181
TEC debt extension, waiver fees, promissory notes fees added to debt		608			1,793
Capital expenditures in accounts payable		4,695			1,182
Operating lease liabilities arising from obtaining right of use assets		0			2,688
Financing lease liabilities arising from obtaining right of use assets		113			2,988
Capital expenditures purchased on financing		55			5,652
Issuance of equity to pay off accounts payable		893			0

The accompanying notes are an integral part of the financial ~~statements~~.

statements.

Table of Contents

AEMETIS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited, in thousands)

For the three and nine months ended September 30, 2020

Series B Preferred Stock

Common Stock

Additional

Accumulated

Accumulated Other
Comprehensive

Total Stockholders'

Description

Shares

Dollars

Shares

Dollars

Paid-in Capital

Deficit

Income/(Loss)

deficit

Balance at December 31, 2019
  1,323
$1
  20,570
$21
$86,852
$(237,421)
$(3,825)
$(154,372)









Stock-based compensation
  -
  -
  -
  -
  310
  -
  -
  310
Issuance and exercise of warrants
  -
  -
  113
  -
  93
  -
  -
  93
Foreign currency translation loss
  -
  -
  -
  -
  -
  -
  (668)
  (668)
Net loss
  -
  -
  -
  -
  -
  (12,052)
  -
  (12,052)









Balance at March 31, 2020
  1,323
$1
  20,683
$21
$87,255
$(249,473)
$(4,493)
$(166,689)









Stock-based compensation
  -
  -
  -
  -
  325
  -
  -
  325
Foreign currency translation loss
  -
  -
  -
  -
  -
  -
  (27)
  (27)
Net income
  -
  -
  -
  -
  -
  2,192
  -
  2,192









Balance at June 30, 2020
  1,323
$1
  20,683
$21
$87,580
$(247,281)
$(4,520)
$(164,199)









Stock options exercised
  -
  -
  232
  -
  260
  -
  -
  260
Stock-based compensation
  -
  -
  -
  -
  191
  -
  -
  191
Issuance and exercise of warrants
  -
  -
  112
  -
  88
  -
  -
  88
Foreign currency translation gain
  -
  -
  -
  -
  -
  -
  314
  314
Net loss
  -
  -
  -
  -
  -
  (12,217)
  -
  (12,217)









Balance at September 30, 2020
  1,323
$1
  21,027
$21
$88,119
$(259,498)
$(4,206)
$(175,563)

For the three and nine months ended September 30, 2019

Series B Preferred Stock

Common Stock

Additional

Accumulated

Accumulated Other
Comprehensive

Noncontrolling

Total Stockholders'

Description

Shares

Dollars

Shares

Dollars

Paid-in Capital

Deficit

Income/(Loss)

Interest

deficit

Balance at December 31, 2018
  1,323
$1
  20,345
$20
$85,917
$(193,204)
$(3,576)
$(4,740)
$(115,582)










Stock-based compensation
  -
  -
  -
  -
  290
  -
  -
  -
  290
Issuance and exercise of warrants
  -
  -
  30
  -
  67
  -
  -
  -
  67
Foreign currency translation gain
  -
  -
  -
  -
  -
  -
  58
  -
  58
Net loss
  -
  -
  -
  -
  -
  (9,729)
  -
  (938)
  (10,667)










Balance at March 31, 2019
  1,323
$1
  20,375
$20
$86,274
$(202,933)
$(3,518)
$(5,678)
$(125,834)










Stock-based compensation
  -
  -
  -
  -
  196
  -
  -
  -
  196
Foreign currency translation gain
  -
  -
  -
  -
  -
  -
  57
  -
  57
Net loss
  -
  -
  -
  -
  -
  (12,936)
  -
  (994)
  (13,930)










Balance at June 30, 2019
  1,323
$1
  20,375
$20
$86,470
$(215,869)
$(3,461)
$(6,672)
$(139,511)










Stock-based compensation
  -
  -
  -
  -
  144
  -
  -
  -
  144
Issuance and exercise of warrants
  -
  -
  195
  1
  94
  -
  -
  -
  95
Foreign currency translation loss
  -
  -
  -
  -
  -
  -
  (254)
  -
  (254)
Net loss
  -
  -
  -
  -
  -
  (6,326)
  -
  (900)
  (7,226)










Balance at September 30, 2019
  1,323
$1
  20,570
$21
$86,708
$(222,195)
$(3,715)
$(7,572)
$(146,752)

~~AEMETIS, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS~~

~~(Unaudited, tabular data in thousands except par value and per share data)~~

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

Balance at December 31, 2020	$	1,323		$	1	$	22,830	$	23	$	93,426	$	(274,080	)	$	(4,114	)	$	(184,744	)

Issuance of common stock		-			0		5,682		6		62,389		0			0			62,395
Stock options exercised		-			0		1,226		1		1,002		0			0			1,003
Stock-based compensation		-			0		-		0		835		0			0			835
Issuance and exercise of warrants		-			0		113		0		281		0			0			281
Foreign currency translation loss		-			0		-		0		0		0			(25	)		(25	)
Net loss		-			0		-		0		0		(18,112	)		0			(18,112	)
Balance at March 31, 2021		1,323		$	1		29,851	$	30	$	157,933	$	(292,192	)	$	(4,139	)	$	(138,367	)

Issuance of common stock		-			0		976		1		24,773		0			0			24,774
Stock options exercised		-			0		745		1		28		0			0			29
Stock-based compensation		-			0				0		281		0			0			281
Foreign currency translation loss		-			0				0		0		0			(184	)		(184	)
Net loss		-			0				0		0		(10,557	)		0			(10,557	)
Balance at June 30, 2021		1,323		$	1		31,572	$	32	$	183,015	$	(302,749	)	$	(4,323	)	$	(124,024	)

Issuance of common stock							576		1		7,883		0			0			7,884
Sereis B conversion to common stock		(38	)		0		4		0		0		0			0			0
Stock options exercised							299		0		72		0			0			72
Stock-based compensation							-		0		285		0			0			285
Issuance and exercise of warrants							113		0		1,265		0			0			1,265
Foreign currency translation gain							-		-		0		0			22			22
Net loss							-		-		0		(17,597	)		0			(17,597	)
Balance at September 30, 2021		1,285		$	1		32,564	$	33	$	192,520	$	(320,346	)	$	(4,301	)	$	(132,093	)

For the nine months ended September 30, 2020
	Series B Preferred Stock				Common Stock				Additional		Accumulated			Accumulated Other Comprehensive			Total Stockholders'
Description	Shares		Amount		Shares		Amount		Paid-in Capital		Deficit			Loss			deficit

Balance at December 31, 2019		1,323	$	1		20,570	$	21	$	86,852	$	(237,421	)	$	(3,825	)	$	(154,372	)

Stock-based compensation		-		0		-		0		310		0			0			310
Issuance and exercise of warrants		-		0		113		0		93		0			0			93
Foreign currency translation loss		-		0		-		0		0		0			(668	)		(668	)
Net loss		-		0		-		0		0		(12,052	)		0			(12,052	)
Balance at March 31, 2020		1,323	$	1		20,683	$	21	$	87,255	$	(249,473	)	$	(4,493	)	$	(166,689	)

Stock-based compensation		-		0		-		0		325		0			0			325
Issuance and exercise of warrants		-		0		-		0		0		0			0			0
Foreign currency translation loss		-		0		-		0		0		0			(27	)		(27	)
Net income		-		0		-		0		0		2,192			0			2,192
Balance at June 30, 2020		1,323	$	1		20,683	$	21	$	87,580	$	(247,281	)	$	(4,520	)	$	(164,199	)

Stock options exercised		-		0		232		0		260		0			0			260
Stock-based compensation		-		0		-		0		191		0			0			191
Issuance and exercise of warrants		-		0		112		0		88		0			0			88
Foreign currency translation gain		-		0		-		0		0		0			314			314
Net loss		-		0		-		0		0		(12,217	)		0			(12,217	)
Balance at September 30, 2020		1,323	$	1		21,027	$	21	$	88,119	$	(259,498	)	$	(4,206	)	$	(175,563	)

The accompanying notes are an integral part of the financial statements.

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1. Nature of Activities and Summary of Significant Accounting Policies

Nature of ~~Activities.~~Activities. Headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis, “Aemetis,” the “Company,” “we,” “our” or “us”) is an ~~advanced~~international renewable natural gas, renewable fuels and ~~biochemicals~~byproducts company focused on the acquisition, development and commercialization of innovative negative carbon intensity products and technologies that replace traditional petroleum-based products ~~through the conversion of second-generation ethanol~~ and ~~biodiesel plants into advanced biorefineries.~~ reduce greenhouse gas emissions.

Founded in 2006, we have completed Phase 1 and are expanding a California biogas digester network and pipeline system to convert dairy waste gas into Renewable Natural Gas (RNG). We own and operate a 65 million gallon per year ethanol production facility located in Keyes, California (the “Keyes Plant”). In addition to low carbon renewable fuel ethanol, ~~facility (“~~the Keyes ~~Plant”) in California’s Central Valley, near Modesto, where we manufacture and produce ethanol, high-grade alcohol, wet distillers’ grains~~Plant produces Wet Distillers Grains (“WDG”), ~~condensed distillers solubles~~Distillers Corn Oil (“DCO”), and Condensed Distillers Solubles (“CDS”), all of which are sold to local dairies and ~~distillers’ corn oil~~feedlots as animal feed. In the fourth quarter of 2021, an ethanol membrane dehydration system was commissioned at the Keyes Plant, a key part of increasing the electrification and decreasing natural gas usage at the facility. This project reduces greenhouse gas (“~~DCO”~~GHG”). emissions and decreases the carbon intensity of fuel produced at the Keyes Plant, allowing us to realize a higher price for the ethanol produced and sold.

We also own and operate a 50 million gallon per year renewable chemical and advanced fuel production facility (“Kakinada Plant”) on the East Coast of India that produces high quality distilled biodiesel and refined glycerin for customers in India and Europe. We are developing the Carbon Zero sustainable aviation fuel (SAF) and renewable diesel fuel biorefineries in California to utilize distillers corn oil and other renewable oils to produce low carbon intensity renewable jet and diesel fuel using cellulosic hydrogen from waste orchard and forest wood, while pre-extracting cellulosic sugars from the waste wood to be processed into high value cellulosic ethanol at the Keyes plant. Additionally, we operate a research and development laboratory to develop efficient conversion technologies using waste feedstocks to produce biofuels and biochemicals. ~~Additionally, we~~We hold a portfolio of patents and exclusive technology licenses to produce renewable fuels and biochemicals. We own a partially completed plant in Goodland, Kansas (the “Goodland Plant”) through our subsidiary Goodland Advanced Fuels, Inc., (“GAFI”), which was formed to acquire the Goodland Plant. On December 31, 2019 we exercised an option to acquire all capital stock of GAFI for $10 and consolidated assets, liabilities, and equity of GAFI as a wholly-owned subsidiary from December 31, 2019. Prior to December 31, 2019, GAFI activity is shown as non-controlling interest in the consolidated statements of operations.

We also lease a site in Riverbank, California, near the Keyes Plant, where we plan to utilize biomass-to-fuel technology that we have licensed from LanzaTech Technology (“LanzaTech”) and InEnTec Technology (“InEnTec”) to build a cellulosic ethanol production facility (the “Riverbank Cellulosic Ethanol Facility”) capable of converting local California surplus biomass – principally agricultural orchard waste – into ultra-low carbon renewable cellulosic ethanol (the “Riverbank Project”). By producing ultra-low carbon renewable cellulosic ethanol, we expect to capture higher value D3 cellulosic renewable identification numbers (“RINs”) and California Low Carbon Fuel Standard (“LCFS”) credits.

~~In December~~

During 2018, we acquired a 5.2-acre parcel of land for the construction of a gas-to-liquid CO2 production facility by Messer. Aemetis sells carbon dioxide (“CO2”) produced at the Keyes Plant (the “CO2 Project”) to Messer for conversion and sale into the food processing, beverage, and technology sectors. The Aemetis portion of the CO2 Project construction was completed in January 2020, and Messer completed construction on their portion in April 2020. We commenced operations in late April 2020, and started recognizing revenue from this project in the second quarter of 2020.

~~In 2018, we formed~~ Aemetis Biogas, LLC (“ABGL”) was formed to construct ~~a cluster of~~bio-methane anaerobic ~~biogas~~ digesters at local dairies near the Keyes Plant, ~~(the “Biogas Project”)~~many of whom also purchase WDG produced at the Keyes Plant. The digesters are connected via a pipeline owned by ABGL to a gas cleanup and compression unit being built at the Keyes Plant to produce ~~ultra-low carbon renewable natural gas~~Renewable Natural Gas (“RNG”) ~~for use as transportation fuel. Construction~~. During the third quarter of 2020, ABGL completed construction on the first two dairy digesters ~~and~~along with the pipeline ~~in the cluster were completed and commissioned during the third quarter of 2020. ABGL has signed participation agreements or fully executed leases with 17 local~~that carries bio-methane from these dairies ~~near~~to the Keyes ~~Plant~~Plant. Upon receiving the bio-methane from the dairies, impurities are removed, and the bio-methane is converted to ~~build anerobic digesters to capture methane gas from manure lagoons at such dairies, which would otherwise~~RNG where it will be released into the atmosphere. We plan to capture methane-rich biogas from multiple dairies and convey the gas via a private underground pipeline to a centralized location at our Keyes Plant, where we will remove impurities in the gas and convert it into RNG for any number of applications including injectingeither injected into the local gas utility pipeline, ~~operated by PG&E, operating a~~supplied as renewable compressed natural gas (“RCNG”) ~~truck loading station~~ that will service local trucking fleets, or used as renewable energy at the Keyes Plant.

During the first quarter of 2021, we announced our “Carbon Zero” biofuels production plants designed to ~~displace~~produce biofuels, including renewable jet and diesel fuel utilizing cellulosic hydrogen and non-edible renewable oils sourced from our existing biofuels plants and other sources. The first plant, in Riverbank, California, “Carbon Zero 1”, is expected to utilize hydroelectric and other renewable power available onsite to produce 45 million gallons per year of jet fuel, renewable diesel, and other byproducts. The plant is expected to supply the aviation and truck markets with ultra-low carbon renewable fuels to reduce greenhouse gas (“GHG”) emissions and other pollutants associated with conventional petroleum-based fuels.

The Company is continuing to develop a biomass-to-fuel technology to build a carbon zero production facility. By producing ultra-low carbon renewable fuels, the Company expects to capture higher value D3 RINs and California’s LCFS credits. D3 RINs have a higher value in the marketplace than D6 RINs due to D3 RINs’ relative scarcity and mandated pricing formula from the United States EPA.

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On April 1, 2021, we established Aemetis Carbon Capture, Inc. to build carbon sequestration projects to generate LCFS and IRS 45Q credits by injecting CO₂ into wells which are monitored for emissions to ensure the long-term sequestration of carbon underground. California’s Central Valley is well established as a major region for large-scale natural gas production and CO₂ injection projects due to the subsurface geologic formation that retains gases.

We also own and operate the Kakinada Plant with a nameplate capacity of 150 thousand metric tons per year, or ~~converting to clean electricity. The biogas can also be used as energy~~about 50 million gallons per year, producing high quality distilled biodiesel and refined glycerin for customers in ~~our Keyes Plant to displace petroleum-based natural gas.~~India and Europe. We believe the ~~environmental and economic benefits~~Kakinada Plant is one of the ~~Biogas Project are potentially significant due~~largest biodiesel production facilities in India on a nameplate capacity basis. The Kakinada Plant is capable of processing a variety of vegetable oils and animal fat waste feedstocks into biodiesel that meet international product standards. The Kakinada Plant also distills the crude glycerin byproduct from the biodiesel refining process into refined glycerin, which is sold to ~~dairy biogas having a negative carbon intensity (“CI”) under~~ the ~~California LCFS. The biogas produced by ABGL is expected to also receive D3 RINs under the federal Renewable Fuel Standard (“RFS”).~~

On March 18, 2020, in order to address a supply shortage of hand sanitizer during the worldwide COVID-19 pandemic, the US Treasury Tobacco and Alcohol Tax and Trade Bureau (“TTB”) provided emergency waivers allowing fuel ethanol plants to produce high-grade alcohol for use in the production of hand sanitizer. Concurrently, during the first week of April 2020, Aemetis applied for and was approved by the TTB as a Distilled Spirits Producer (“DSP”), which would allow the Company to produce, in addition to fuel ethanol, high-grade alcohol for sanitizerpharmaceutical, personal care, paint, adhesive and other ~~health care and sanitary products, as well as industrial alcohol and potable alcohol for beverage spirits once the temporary waiver period expires.~~

Accordingly, Aemetis began supplying high-grade alcohol for the production of hand sanitizer. Aemetis has also implemented a series of capital projects at the Keyes facility that will ultimately enable the production of US Pharmacopeia (“USP”) grade alcohol for sale into these key consumer and industrial markets. During June 2020, Aemetis renamed Biofuels Marketing, Inc. as Aemetis Health Products, Inc., and began a sales and marketing strategy of blending, bottling and selling hand sanitizer into bulk, retail branded, and white label markets. Additionally, Aemetis Health Products, Inc. is developing sales and marketing channels for other personal protective equipment, where and when those opportunites arise.

industries.

Basis of Presentation and ~~Consolidation.~~Consolidation. These consolidated financial statements include the accounts of Aemetis. Additionally, we consolidate all entities in which we have a controlling financial ~~interest either directly or by option to acquire the~~ interest. A controlling financial interest is usually obtained through ownership of a majority of the voting interests. However, an enterprise must consolidate a variable interest entity (“VIE”) if the enterprise is the primary beneficiary of the VIE, even if the enterprise does not own a majority of the voting interests. The primary beneficiary is the party that has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. ~~Prior~~ABGL was assessed to ~~December 31, 2019, GAFI was consolidated into~~be a VIE and through the ~~financial statements as a VIE. On December 31, 2019, we exercised an option~~Company's ownership interest in all of the outstanding common stock, the Company has been determined to ~~acquire all capital stock of GAFI for $10~~be the primary beneficiary and ~~consolidated~~accordingly, the assets, liabilities, and ~~equity~~operations of ~~GAFI~~ABGL are consolidated into those of the ~~accounts of Aemetis from December 31, 2019 forward.~~

Company. All intercompany balances and transactions have been eliminated in consolidation.

The accompanying consolidated condensed balance sheet as of September 30, ~~2020,~~2021, the consolidated condensed statements of operations and comprehensive ~~loss~~(loss) for the three and nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the consolidated condensed statements of cash flows for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, and the consolidated condensed statements of stockholders’ deficit for the three and nine months ended September 30, ~~2020~~2021 and ~~2019~~2020 are unaudited. The consolidated condensed balance sheet as of December 31, ~~2019~~2020 was derived from the ~~2019~~2020 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the ~~2019~~2020 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, ~~2019.~~2020. The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of Company’s management, the unaudited interim consolidated condensed financial statements for the three and nine months ended September 30, ~~2020~~2021 and ~~2019~~2020 have been prepared on the same basis as the audited consolidated statements as of December 31, ~~2019~~2020 and reflect all adjustments, consisting primarily of normal recurring adjustments, necessary for the fair presentation of its statement of financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, ~~2020~~2021 are not necessarily indicative of the operating results for any subsequent quarter, for the full fiscal year or any future periods.

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

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

North America:In North America, until May 13, 2020, we sold all our ethanol to J.D. Heiskell & Co. (“J.D. Heiskell”) under the Working Capital and Purchasing Agreement (the “J.D. Heiskell Purchasing Agreement”). On May 13, 2020, we entered into an amendment to the Corn Procurement and Working Capital Agreement with J.D. Heiskell (the “Corn Procurement and Working Capital”), under the terms of which we ~~will~~ buy all corn from ~~J.D.Heiskell~~J.D. Heiskell and sell all WDG and corn oil we produce to ~~J.D.Heiskell.~~J.D. Heiskell. Following May 13, 2020, we sold the majority of our fuel ethanol production to one customer, Kinergy Marketing, LLC (“Kinergy”), ~~under a supply contract, with~~through individual sales ~~transactions occurring under such contract.~~transactions. Given the similarity of ~~these~~the individual sales transactions with Kinergy, we have assessed them as a portfolio of similar contracts. The performance obligation is satisfied by delivery of the physical product to one of ~~Kinergy’s~~our customer’s contracted trucking companies. Upon delivery, the customer has the ability to direct the use of the product and receive substantially all of its benefits. The transaction price is determined based on daily market prices negotiated by Kinergy for ethanol and by our marketing partner A.L. Gilbert Company (“A.L. Gilbert”) for WDG. There is no transaction price allocation needed.

During the first quarter of 2020, Aemetis began selling high-grade alcohol for consumer applications directly to customers on the West Coast and Midwest using a variety of payment terms. These agreements and terms were evaluated according to ASC 606 guidance and such revenue is recognized upon satisfaction of the performance obligation by delivery of the product based on the terms of the agreement. Sales of high-grade alcohol were minimal for the third quarter and year to date revenue for 2021 and were aggregated with ethanol sales for the three and nine months ended September 30, 2021. Sales of high-grade alcohol represented 2% and 18% of revenue for the three and nine months ended September 30, 2020, respectively.

The below table shows our sales in North America by product category:

North America (in thousands)

For the three months ended
September 30,

For the nine months ended
September 30,

2020

2019

2020

2019

Ethanol and high-grade alcohol sales
$24,825
$27,456
$86,387
$84,453
Wet distiller's grains sales
  7,143
  8,783
  22,983
  26,119
Other sales
  1,163
  1,581
  4,856
  3,370

$33,131
$37,820
$114,226
$113,942

	For the three months ended September 30,				For the nine months ended September 30,
	2021		2020		2021		2020
Ethanol and high-grade alcohol sales	$	39,131	$	24,825	$	111,220	$	86,387
Wet distiller's grains sales		8,919		7,143		30,584		22,983
Other sales		1,782		1,163		5,086		4,856
	$	49,832	$	33,131	$	146,890	$	114,226

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

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

In North America, ~~we assessed principal versus agent criteria as~~ we buy corn as feedstock ~~in producing~~for the production of ethanol, from our working capital partner J.D. ~~Heiskell~~Heiskell. Prior to May 13, 2020, we sold all our ethanol, WDG, and ~~sell~~corn oil to J.D. Heiskell. Subsequent to May 13, 2020, we sold most of our fuel ethanol to one customer, Kinergy, and sold all WDG and corn oil ~~produced in this process~~ to J.D. ~~Heiskell through A.L. Gilbert. We sold~~Heiskell. During the second quarter, the Company signed a biofuels offtake agreement with Murex, LLC, and beginning on October 1, 2021 the Company will sell all of our fuel ethanol ~~we produced~~ to ~~J.D.Heiskell until May 13, 2020.~~ that customer.

We consider the purchase of corn as a cost of goods sold and the sale of ethanol, upon transfer to the common carrier, as revenue on the basis that (i) we control and bear the risk of gain or loss on the processing of corn which is purchased at market prices into ethanol and (ii) we have legal title to the goods during the processing time. The pricing for both corn and ethanol is set independently. Revenues from sales of ethanol and its co-products are billed net of the related transportation and marketing charges. ~~Transportation charges are~~The transportation component is accounted for in cost of goods sold and the marketing ~~charges are~~component is accounted for in sales, general and administrative expense. Transportation and marketing charges are known within days of the transaction and are recorded at the actual amounts. The Company has elected ~~to adopt~~ an accounting policy under which these charges have been treated as fulfillment activities provided after control has transferred. As a result, these charges are recognized in cost of goods sold and selling, general and administrative expenses, respectively, when revenue is recognized. Revenues are recorded at the gross invoiced amount. Hence, we are the principal in North America sales scenarios where our customer and vendor may be the same.

India:In India, we sell products pursuant to purchase orders (written or verbal) or by contract with governmental or international parties, in which performance is satisfied by delivery and acceptance of the physical product. Given that the contracts are sufficiently similar in nature, we have assessed these contracts as a portfolio of similar contracts as allowed under the practical expedient. Doing so does not result in a materially different outcome compared to individually accounting for each contract. All domestic and international deliveries are subject to certain specifications as identified in the contracts. The transaction price is determined daily based on reference market prices for biodiesel, refined glycerin, and ~~Palm Fatty Acid Distillers~~palm fatty acid distillate (“PFAD”) net of taxes. ~~There is no transaction~~Transaction price allocation is not needed.

The below table shows our sales in India by product category:

India (in thousands)

For the three months ended
September 30,

For the nine months ended
September 30,

2020

2019

2020

2019

Biodiesel sales
$7,325
$17,057
$12,267
$32,201
Refined glycerin sales
  449
  951
  909
  2,186
PFAD sales
  -
  -
  774
  -
Other sales
  18
  1,561
  51
  1,567

$7,792
$19,569
$14,001
$35,954

	For the three months ended September 30,				For the nine months ended September 30,
	2021		2020		2021		2020
Biodiesel sales	$	0	$	7,325	$	465	$	12,267
Refined glycerin sales		0		449		125		909
PFAD sales		0		0		0		774
Other sales		63		18		106		51
	$	63	$	7,792	$	696	$	14,001

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

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

Accounts Receivable.The Company sells ethanol and WDG through third-party marketing arrangements generally without requiring collateral and high-grade alcohol directly to customers on a variety of terms including advanced payment terms, based on the size and creditworthiness of the customer. DCO is marketed and sold to A.L. Gilbert and other customers under the J.D. Heiskell Purchasing Agreement. The Company sells CDS directly to customers on standard 30 day payment terms. The Company sells biodiesel, glycerin, and processed natural oils to a variety of customers and may require advanced payment based on the size and creditworthiness of the customer. Usually, invoices are due within ~~30 days~~30-days on net terms. Accounts receivables consist of product sales made to large creditworthy customers. Trade accounts receivable are presented at original invoice amount, net of any allowance for doubtful accounts.

The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivables are charged against the allowance for doubtful accounts once un-collectability has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate, additional allowances may be required. We reserved ~~$647 thousand~~$1.4 million and ~~none~~$1.3 million in the allowances for doubtful accounts as of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

~~Notes Receivable.~~During the third quarter, the India subsidiary provided an interest bearing short-term note, with an interest rate of 12% per annum, to a working capital partner. The balance was recorded on the balance sheet under notes receivable for $3.7 million as of September 30, 2020.

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

Investments. The Company follows ASC 325-20, Cost Method Investments, to account for its ownership interest in noncontrolled entities. Under ASC 325-20, equity securities that do not have readily determinable guarants (i.e., non-marketable equity securities) and are not required to be accounted for under the equity method are typically carried at cost (i.e., cost method investments). Investments of this nature are initially recorded at cost. Income is recorded for dividends received that are distributed from net accumulated earnings of the noncontrolled entity subsequent to the date of investment. Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions in the cost of the investment. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. During 2020, the Company received 489,716 preferred stock shares and 5,000,000 common stock shares in Nevo Motors, a privately held company, in exchange for conversion of its existing debt, carried at zero value, into equity. Due to the lack of operations, the carrying amount of our investment is zero at September 30, 2021 and December 31, 2020.

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

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Property, Plant and Equipment. Property, plant, and equipment are carried at cost less accumulated depreciation after assets are placed in service and are comprised primarily of plant and buildings, furniture, machinery, equipment, land, and ~~the Keyes Plant, Goodland Plant and Kakinada Plant.~~biogas dairy digesters. The Goodland Plant is partially completed and is not ready for operation. The first two dairy digesters and pipeline in the Biogas Project were completed, commissioned and began to be depreciated during the third quarter of 2020. The CO2 Project was completed and commenced operations in the second quarter of 2020. Accordingly, any assets under the CO2 Project began being depreciated starting in May 2020. It is the Company’s policy to depreciate capital assets over their estimated useful lives using the straight-line method.

The Company evaluates the recoverability of long-lived assets with finite lives in accordance with ASC Subtopic 360-10-35Property Plant and Equipment—Subsequent Measurements,which requires recognition of impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, based on estimated undiscounted cash flows, the impairment loss would be measured as the difference between the carrying amount of the assets and its estimated fair value. ~~Additionally,~~The Company has not recorded any impairment during the ~~impact of the COVID-19 pandemic was assessed,~~three and ~~based upon this assessment, there is no impairment of assets needed.~~

nine months ended September 30, 2021 and 2020.

California Energy Commission ~~Technology Demonstration Grant~~Low-Carbon Fuel Production Program. The Company has been awarded ~~and completed the demonstration project associated with the $825 thousand~~$4.2 million in matching ~~grant program~~grants from the California Energy Commission Low-Carbon Fuel Production Program (“~~CEC”~~LCFPP”) ~~Natural Resources Agency~~. The LCFPP grant reimburses the Company for costs to ~~optimize~~design, procure, and install processing facility to clean-up, measure and verify negative-carbon intensity dairy renewable natural gas fuel at the ~~effectiveness of technologies to break down biomass to produce cellulosic ethanol.~~production facility in Keyes, California. The Company has received ~~all of~~$877 thousand from the ~~awarded grant proceeds~~LCFPP as of September 30, ~~2020. The project focused on the deconstruction and conversion of sugars liberated from California-relevant feedstocks and then converting the sugars to ethanol. The Company receives these funds~~2021 as reimbursement for actual ~~expenses~~costs incurred. Due to the uncertainty associated with the ~~expense~~ approval process under the grant program, the Company recognizes the grant as a reduction of the ~~expenses~~costs in the period when approval is received.

California Department of Food and Agriculture Dairy Digester Research and Development Grant. ~~The~~In 2019, the Company ~~has been~~was awarded $3.2 million in matching grants from the California Department of Food and Agriculture (“CDFA”) Dairy Digester Research and Development program. The CDFA grant reimburses the Company for costs required to permit and construct two of the Company’s biogas capture systems under contract with central California dairies. The Company received ~~$2.7~~all the awarded grant proceeds as of the second quarter 2021.

In October 2020, the Company was awarded $7.8 million in matching grants from the CDFA Dairy Digester Research and Development program. The CDFA grant reimburses the Company for costs required to permit and construct six of the Company’s biogas capture systems under contract with central California dairies. The Company has received $33 thousand from the CDFA 2020 grant program as of September 30, ~~2020~~2021 as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognizes the grant as a reduction of the costs in the period when approval is received.

California Energy Commission Low Carbon Advanced Ethanol Grant ~~Program~~.Program. In May 2019, the Company was awarded the right to receive reimbursements from the ~~CEC~~California Energy Commission Community-Scale and Commercial-Scale Advanced Biofuels Production Facilities grant under the Alternative and Renewable Fuel and Vehicle Technology Program in an amount up to $5.0 million (the “CEC Reimbursement Program”) in connection with the Company’s expenditures toward the development of the Riverbank Cellulosic Ethanol Facility. To comply with the guidelines of the CEC Reimbursement Program, the Company must make a minimum of $7.9 million in matching contributions to the Riverbank ~~Project.~~project. The Company receives ~~the CEC~~ funds under the CEC Reimbursement Program for actual expenses incurred up to $5.0 million as long as the Company makes the minimum matching contribution. Given that the Company has not made the minimum matching contribution, the grant for reimbursement of capital expenditures of ~~$256~~$115 thousand received during the ~~third~~first quarter of ~~2020~~2021, and ~~of $1.36~~$1.7 million ~~received during the third quarter of 2019~~from prior years were recorded as other ~~long term~~long-term liabilities as of September 30, ~~2020 and December 31, 2019.~~

2021. Due to the uncertainty associated with meeting the minimum matching contribution, the reimbursement will be recognized when the Company makes the minimum matching contribution.

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Basic and Diluted Net Loss per Share.Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share reflects the dilution of common stock equivalents such as options, convertible preferred stock, debt, and warrants to the extent the impact is dilutive. As the Company incurred net losses for the three and nine months ended September 30, ~~2020~~2021 and, ~~2019,~~2020, potentially dilutive securities have been excluded from the diluted net loss per share computations as their effect would be anti-dilutive.

The following table shows the number of potentially dilutive shares excluded from the diluted net loss per share calculation as of September 30, ~~2020~~2021 and ~~2019:~~

As of

September 30,
2020

September 30,
2019

Series B preferred (post split basis)
  132
  132
Common stock options and warrants
  5,846
  3,910
Debt with conversion feature at $30 per share of common stock
  1,294
  1,255
Total number of potentially dilutive shares excluded from the diluted net income (loss) per share calculation
  7,272
  5,297

2020:

	As of
	September 30, 2021		September 30, 2020

Series B preferred (post split basis)		129		132
Common stock options and warrants		3,929		5,846
Debt with conversion feature at $30 per share of common stock		1,280		1,294
Total number of potentially dilutive shares excluded from the diluted net (loss) per share calculation		5,338		7,272

Comprehensive ~~Loss.~~Income (Loss).ASC 220 Comprehensive Income (Loss) requires that an enterprise report, by major components and as a single total, the change in its net assets from non-owner sources. The Company’s other comprehensive ~~income (loss)~~loss and accumulated other comprehensive loss consists solely of cumulative currency translation adjustments resulting from the translation of the financial statements of its foreign subsidiary.

The investment in this subsidiary is considered indefinitely invested overseas, and as a result, deferred income taxes are not recorded related to the currency translation adjustments.

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

Operating Segments.Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Aemetis recognized two reportable geographic segments: “North America” and “India.”

The “North America” operating segment includes the Company’s 65 million gallons per year capacity Keyes Plant in California, the ultra-low carbon renewable fuel project in Riverbank, ~~Cellulosic Ethanol Facility,~~ the ~~Biogas Project,~~biogas digesters on dairies near Keyes, California, the Goodland Plant in Kansas and the research and development facility in Minnesota.

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

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

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

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

Debt Modification ~~Accounting.~~Accounting. The Company evaluates amendments to its debt in accordance with ASC 470-50 Debt–Modification and Extinguishments for modification and extinguishment accounting. This evaluation includes comparing the net present value of cash flows of the new debt to the old debt to determine if changes greater than 10 percent occurred. In instances where the net present value of future cash flows changed more than 10 percent, the Company applies extinguishment accounting and determines the fair value of its debt based on factors available to the Company.

We have evaluated the 1% extension fee for extending the maturity date of the Third Eye Capital Notes to April 1, 2021 and Amendment No. 17 providing an option to extend to April 1, 2022 and certain waivers for financial covenants, in accordance with ASC 470-60 Troubled Debt Restructuring. For additional information regarding the 1% extension fee and Amendment No. 17, please see “Part I, Item 1. Financial Statements – Note 4. Debt.”

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

Recently Issued Accounting ~~Pronouncements.~~

Pronouncements.

ASU 2016-13: Measurement of Credit Losses on Financial Instruments. This ASU requires the use of an expected loss model for certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. For trade receivables, loans and held-to-maturity debt securities, an estimate of lifetime expected credit losses is required. For available-for-sale debt securities, an allowance for credit losses will be required rather than a reduction to the carrying value of the asset. This standard is effective for fiscal years beginning after December 15, 2022. We are assessing the impact of adopting this standard on our consolidated financial statements and related disclosures.

For a complete summary of the Company’s significant accounting policies, please refer to the Company’s audited financial statements and notes thereto for the years ended December 31, ~~2019~~2020 and ~~2018~~2019 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March ~~12, 2020. There were no new accounting pronouncements issued applicable to the Company during the three and nine months ended September 30, 2020.~~

15, 2021.

2. Inventories

Inventories consist of the following:

As of

September 30, 2020

December 31, 2019

Raw materials
$1,678
$2,566
Work-in-progress
  1,365
  1,455
Finished goods
  1,773
  2,497
Total inventories
$4,816
$6,518

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	September 30, 2021		December 31, 2020
Raw materials	$	1,363	$	1,382
Work-in-progress		1,274		1,266
Finished goods		2,225		1,321
Total inventories	$	4,862	$	3,969

As of September 30, ~~2020~~2021, and December 31, ~~2019,~~2020, the Company recognized a lower of cost or net realizable value impairment of ~~$0.3~~none and ~~$0.1~~$0.7 million respectively, related to inventory.

3. Property, Plant and Equipment

Property, plant and equipment consist of the following:

September 30,
2020

December 31,
2019

Land
$4,088
$4,104
Plant and buildings
  96,089
  83,139
Furniture and fixtures
  1,166
  1,094
Machinery and equipment
  4,389
  4,252
Construction in progress
  18,612
  12,571
Property held for development
  15,408
  15,408
Finance lease right of use assets
  2,988
  -
Total gross property, plant & equipment
  142,740
  120,568
Less accumulated depreciation
  (39,690)
  (36,342)
Total net property, plant & equipment
$103,050
$84,226

	As of
	September 30, 2021			December 31, 2020
Land	$	4,084		$	4,092
Plant and buildings		97,168			97,398
Furniture and fixtures		1,305			1,195
Machinery and equipment		5,298			5,188
Construction in progress		44,322			25,397
Property held for development		15,414			15,408
Finance lease right of use assets		2,317			2,308
Total gross property, plant & equipment		169,908			150,986
Less accumulated depreciation		(44,993	)		(41,106	)
Total net property, plant & equipment	$	124,915		$	109,880

For the three months ended September 30, 2021 and 2020, interest capitalized in property, plant, and equipment was $1.4 million and $0.1 million, respectively. For the nine months ended September 30, 2021 and 2020, interest capitalized in property, plant, and equipment was $2.9 million and $0.3 million, respectively.

Construction in progress contains incurred costs for the ~~Biogas Project,~~ABGL biogas project, Riverbank ~~Project,~~project, and ~~Zebrex equipment installation~~energy efficient upgrades at the Keyes Plant. In the second quarter of 2020, CO2the CO₂ Project commenced operations and was placed in service at that time. In the third quarter of 2020, two ~~diary~~dairy digesters commenced operations and were placed in service at that time. Spending for ongoing capital projects is accumulated in construction in progress and will be capitalized with subsequent depreciation once the capital projects are finished and are in service. Depreciation on the components of property, plant and equipment is calculated using the straight-line method ~~to allocate their depreciable amounts~~ over their estimated useful lives as follows:

	Years
Plant and buildings		20 - 30
Machinery and equipment		5 - 1015
Furniture and fixtures		3 - 5

For the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Company recorded depreciation expense of $1.3 ~~million and $1.1~~ million for each period. For the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Company recorded depreciation expense of $4.1 and $3.5 million, ~~and $3.3 million,~~ respectively.

Management is required to evaluate these long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Management determined there was no impairment on the long-lived assets during the three and nine months ended September 30, ~~2020~~2021 and ~~2019.~~

2020.

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4. Debt

Debt consists of the ~~notes from our senior lender,~~ following:

	September 30, 2021		December 31, 2020
Third Eye Capital term notes	$	7,093	$	7,066
Third Eye Capital revolving credit facility		71,732		80,310
Third Eye Capital revenue participation term notes		11,914		11,864
Third Eye Capital acquisition term notes		26,457		26,384
Third Eye Capital promissory note		0		1,444
Cilion shareholder seller notes payable		6,386		6,274
Subordinated notes		13,229		12,745
EB-5 promissory notes		42,462		43,120
GAFI Term and Revolving loans		0		33,626
Term loans on capital expenditures		5,705		5,652
PPP loans		0		1,134
Total debt		184,978		229,619
Less current portion of debt		23,863		59,515
Total long term debt	$	161,115	$	170,104

Third Eye Capital ~~other working capital lenders and subordinated lenders as follows:~~

September 30,
2020

December 31,
2019

Third Eye Capital term notes
$7,039
$7,024
Third Eye Capital revolving credit facility
  75,605
  62,869
Third Eye Capital revenue participation term notes
  11,824
  11,794
Third Eye Capital acquisition term notes
  26,313
  25,518
Third Eye Capital promissory note
  1,840
  2,815
Cilion shareholder seller notes payable
  6,236
  6,124
Subordinated notes
  12,315
  11,502
Term loan on Equipment purchase
  5,652
  -
EB-5 promissory notes
  42,965
  41,932
PPP loans
  1,134
  -
Unsecured working capital loans
  2,540
  2,631
GAFI Term and Revolving loans
  32,883
  30,216
Total debt
  226,346
  202,425
Less current portion of debt
  59,336
  22,740
Total long term debt
$167,010
$179,685

Note Purchase Agreement

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

On March 27, 2018, Third Eye Capital agreed to Limited Waiver and Amendment No. 14 to the Note Purchase Agreement (“Amendment No. 14”) to: (i) extend the maturity date of the Third Eye Capital Notes by two years to April 1, 2020 in exchange for an amendment fee consisting of 6% (3% per year) of the outstanding note balance in the form of an increase in the fee payable in the event of a redemption of the Third Eye Capital Notes (as defined in the Note Purchase Agreement); (ii) provide that the maturity date may be further extended at our election to April 1, 2021 in exchange for an extension fee of 5%; (iii) provide for an optional waiver of the ratio of note indebtedness covenant until January 1, 2019 with the payment of a waiver fee of $0.25 million; and (iv) remove the redemption fee described in (i) above from the calculation of the ratio of note indebtedness covenant. In addition to the fee discussed in (i), as consideration for such amendment and waiver, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.5 million to be added to the outstanding principal balance of the Revolving Credit Facility.

On March 11, 2019, Third Eye Capital agreed to Limited Waiver and Amendment No. 15 to the Note Purchase Agreement (“Amendment No. 15”), to waive the ratio of note indebtedness covenant through December 31, 2019. As a consideration for this amendment, the Company also agreed to pay Third Eye Capital an amendment fee of $1.0 million to be added to the redemption fee which is due upon redemption of the Notes.

On November 11, 2019, Third Eye Capital agreed to Limited Waiver and Amendment No. 16 to the Note Purchase Agreement (“Amendment No. 16”), to waive the ratio of note indebtedness covenant for the quarters ended March 31, 2020, September 30, 2020, September 30, 2020 and December 31, 2020. As a consideration for this amendment, the Company also agreed to pay Third Eye Capital an amendment fee of $0.5 million to be added to the redemption fee which is due upon redemption of the Notes.

Based on Amendment No. 16, the ratio of note indebtedness covenant is waived for the quarters ended September 30, 2020 and December 31, 2020. Based on the Amendment No. 17, the ratio of note indebtedness covenant is waived for the quarters ended March 31, 2021 and June 30, 2021. On November 5, 2020, Third Eye Capital agreed to Amendment No. 18 to waive the ratio of note indebtedness covenant for the quarter ended September 30, 2021 for a fee of $50 thousand. According to ASC 470-10-45 debt covenant classification guidance, if it is probable that the Company will not be able to cure the default at measurement dates within the next 12 months, the related debt needs to be classified as current. As the Amendment No. 16 , Amendment No. 17, and Amendment No.18 waived the ratio of the note indebtedness covenant over the next four quarters, the notes are classified as long-term debt.

On February 27, 2019, a Promissory Note (the “February 2019 Note”, together with the Original Third Eye Capital Notes, the “Third Eye Capital Notes”) for $2.1 million was advanced by Third Eye Capital to Aemetis, Inc., as a short-term credit facility for working capital and other general corporate purposes with an interest rate of 14% per annum maturing on the earlier of (a) receipt of proceeds from any financing, refinancing, or other similar transaction, (b) extension of credit by payee, as lender or as agent on behalf of certain lenders, to the Company or its affiliates, or (c) April 30, 2019. In consideration of the February 2019 Note, $0.1 million of the total proceeds were paid to Third Eye Capital as financing charges. On April 30, 2019, the February 2019 Note was modified to remove the stated maturity date and instead will be due on demand by Third Eye Capital. In third quarter of 2019, the February 2019 Note was modified to include additional borrowings of $0.7 million. In first quarter of 2020, the February 2019 Note was modified to include additional borrowings of $0.6 million. As of September 30, 2020, the outstanding balance of principal and interest on the February 2019 Note was $1.8 million.

On April 1, 2020, the Company exercised the option to extend the maturity of Third Eye Capital Notes to April 1, 2021 for a fee of 1% of the outstanding note balance instead of agreed fee of 5% in Amendment No.14 to the ~~Amendment No.14.~~Note Purchase Agreement. We have evaluated the reduction in extension fee to 1% in accordance with ASC 470-60 Troubled Debt Restructuring. According to the guidance, we considered the 1% extension fee to be a troubled debt restructuring. We assessed all the terms to confirm if there is a concession granted by the creditor. The maturity date of the Third Eye Capital Notes was extended to April 1, 2021 for a 1% fee, which was lower than the extension fee of 5% provided by Amendment No. 14 for a one-year extension.

On August 11, 2020, Third Eye Capital agreed to Limited Waiver and Amendment No. 17 to the Note Purchase Agreement (“Amendment No. 17”), to (i) provide that the maturity date of the Third Eye Capital Notes may be further extended at our election to April 1, 2022 in exchange for an extension fee equal to 1% of the Note Indebtedness in respect to each Note, provided that such fee may be added to the outstanding principal balance of each Note on the effective date of each such extension, (ii) provide for a waiver of the ratio of note indebtedness covenant for the quarters ended March 31, 2021 and June 30, 2021. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.3 million in cash (the “Amendment No. 17 Fee”). On November 5, 2020, Third Eye Capital agreed to Limited Waiver and Amendment No. 18 to the Note Purchase Agreement (“Amendment No. 18”) to provide for a waiver of the ratio of note indebtedness covenant for the quarter ended September 30, 2021. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment fee of $50 thousand. We have evaluated the ~~1% extension~~$0.3 million waiver fee ~~and~~in Amendment No. 17 and the $50 thousand waiver fee in Amendment No. 18 in accordance with ASC 470-60 Troubled Debt ~~Restructuring.~~ Restructuring.

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According to the guidance, we considered ~~1% extension and~~the $0.3 million fee in Amendment No.17 ~~Fee~~and the $50 thousand waiver fee in Amendment No. 18 to be a troubled debt ~~restructuring.~~restructurings. In order to assess whether the creditor granted a concession, we calculated the post-restructuring effective interest rate by projecting cash flows on the new terms and calculated a discount rate equal to the carrying amount of pre-restructuring of debt, and by comparing this calculation to the terms of Amendment No. 15, we determined that Third Eye Capital provided a concession in accordance with the provisions of ASC 470-60 ~~Troubled Debt Restructuring~~ and thus applied troubled debt restructuring accounting, resulting in no gain or loss from the application of this accounting. Using the effective interest method of amortization, the ~~1% extension fee of $1.0 million and the~~ Amendment No. 17 ~~Fee~~waiver fee of $0.3 million ~~will be~~is being amortized over the stated remaining life of the Third Eye Capital Notes.

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

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

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

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

As Amendments No. 19, No. 20, and No 21 waived certain covenants over the next four quarters, the notes are classified as long-term debt.

On March 6, 2020, we and a subsidiary entered into a one-year reserve liquidity facility governed by a promissory note, payable to Third Eye Capital, in the principal amount of $18 million. On March 14, 2021, Third Eye agreed to increase the amount available under the reserve liquidity facility to $70.0 million and extend the maturity date to April 1, 2022. Borrowings under the facility are available from March 14, 2021 until maturity on April 1, 2022. Interest on borrowed amounts accrues at a rate of 30% per annum, paid monthly in arrears and may be capitalized and due upon maturity, or 40% if an event of default has occurred and continues. The outstanding principal balance of the indebtedness evidenced by the promissory note, plus any accrued but unpaid interest and any other sums due thereunder, shall be due and payable in full at the earlier to occur of (a) receipt by the Company or its affiliates of proceeds from any sale, merger, equity or debt financing, refinancing or other similar transaction from any third party and (b) April 1, 2022. Any amounts may be re-borrowed up to repaid amounts up until the maturity date of April 1, 2022. The promissory note is secured by liens and security interests upon the property and assets of the Company. In return, the Company will pay a non-refundable standby fee at 2% per annum of the difference between the aggregate principal amount outstanding and the commitment, payable monthly in cash. In addition, if any initial advances are drawn under the facility, the Company will pay a non-refundable one-time fee in the amount of $0.5 million provided that such fee may be added to the principal amount of the promissory note on the date of such initial advance. On August 9, 2021, Third Eye Capital agreed to decrease the amount available under the reserve liquidity notes governed by a promissory note to $40.0 million.

On August 9, 2021, Third Eye Capital agreed to decrease the amount available under the reserve liquidity facility notes governed by a promissory note to $40.0 million. Interest on borrowed amounts accrues at a rate of 30% per annum, paid monthly in arrears and may be capitalized and due upon maturity, or 40% if an event of default has occurred and continues. The outstanding principal balance of the indebtedness evidenced by the promissory note, plus any accrued but unpaid interest and any other sums due thereunder, shall be due and payable in full at the earlier to occur of (a) receipt by the Company or its affiliates of proceeds from any sale, merger, equity or debt financing, refinancing or other similar transaction from any third party and (b) April 1, 2022. Any amounts may be re-borrowed up to repaid amounts up until the maturity date of April 1, 2022. The promissory note is secured by liens and security interests upon the property and assets of the Company. In return, the Company will pay a non-refundable standby fee at 2% per annum of the difference between the aggregate principal amount outstanding and the commitment, payable monthly in cash. In addition, if any initial advances are drawn under the facility, the Company will pay a non-refundable one-time fee in the amount of $0.5 million provided that such fee may be added to the principal amount of the promissory note on the date of such initial advance.

Terms of Third Eye Capital Notes

~~Term Notes~~.~~As of September 30, 2020,~~

A.	Term Notes. As of September 30, 2021, the Company had $7.1 million in principal and interest outstanding net of $36 thousand unamortized debt issuance costs under the Term Notes. The Term Notes accrue interest at 14% per annum. The Term Notes mature on April 1, 2022*.

B	Revolving Credit Facility. The Revolving Credit Facility accrues interest at the prime rate plus 13.75% (17.00% as of September 30, 2021) payable monthly in arrears. The Revolving Credit Facility matures on April 1, 2022*. As of September 30, 2021, AAFK had $72.4 million in principal and interest and waiver fees outstanding net of $671 thousand unamortized debt issuance costs under the Revolving Credit Facility.

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C.	Revenue Participation Term Notes. The Revenue Participation Term Note bears interest at 5% per annum and matures on April 1, 2022*. As of September 30, 2021, AAFK had $12.0 million in principal and interest outstanding net of $56 thousand unamortized debt issuance costs on the Revenue Participation Term Notes.

D.	Acquisition Term Notes. The Acquisition Term Notes accrue interest at the prime rate plus 10.75% (14.00% per annum as of September 30, 2021) and mature on April 1, 2022*. As of September 30, 2021, Aemetis Facility Keyes, Inc. had $26.6 million in principal and interest and redemption fees outstanding net of $95 thousand unamortized debt issuance costs. The outstanding principal balance includes a total of $7.5 million in redemption fees.

E.	Reserve Liquidity Notes. The Reserve Liquidity Notes, with available borrowing capacity in the amount of $40.0 million, accrues interest at the rate of 30% per annum and are due and payable upon the earlier of receipt by the Company or its affiliates of proceeds from any sale, merger, equity or debt financing, refinancing or other similar transaction from any third party and April 1, 2022. We have no borrowings outstanding under the Reserve Liquidity Notes as of September 30, 2021.

*The note maturity date can be extended by the Company ~~had $7.0 million~~to April 2023. As a condition to any such extension, the Company would be required to pay a fee of 1% of the carrying value of the debt which can be paid 50% in cash or stock and 50% can be added to the outstanding ~~under~~debt. As a result of this ability to extend the ~~Term Notes net of $53 thousand unamortized discount issuance costs. The Term Notes accrue interest at 14% per annum and mature on April 1, 2021*.~~

~~Revolving Credit Facility~~.~~The Revolving Credit Facility accrues interest~~maturity at the ~~prime rate plus 13.75% (17.00%~~Company’s will, the Third Eye Capital Notes are classified as of September 30, 2020), payable monthly in arrears. The Revolving Credit Facility matures on April 1, 2021*. As of September 30, 2020, AAFK had $75.6 million outstanding under the Revolving Credit Facility net of $0.5 million unamortized discount issuance costs.

~~Revenue Participation Term Notes~~.The Revenue Participation Term Note bears interest at 5% per annum and matures on April 1, 2021*. As of September 30, 2020, AAFK had $11.8 million outstanding on the Revenue Participation Term Notes net of $87 thousand unamortized discount issuance costs.

~~Acquisition Term Notes~~.The Acquisition Term Notes accrue interest at the prime rate plus 10.75% (14.00% per annum as of September 30, 2020) and mature on April 1, 2021*. As of September 30, 2020, Aemetis Facility Keyes, Inc. had $26.3 million outstanding net of unamortized discount issuances costs of $0.1 million. The outstanding balance includes a total of $7.5 million in non-interest bearing redemption fees.

~~Reserve Liquidity Notes~~.The Reserve Liquidity Notes, with available borrowing capacity in the amount of $18.0 million, accrue interest at the rate of 30% per annum and are due and payable upon the earlier of: (i) the closing of new debt or equity financings, (ii) receipt from any sale, merger, debt or equity financing, or (iii) April 1, 2021. We have no borrowings outstanding under the Reserve Liquidity Notes as of September 30, 2020.

non-current debt.

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

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

*The note maturity date can be extended by the Company to April 2022. As a condition to any such extension, the Company would be required to pay a fee of 1% of the carrying value of the debt which can be paid in cash or added to the outstanding debt. As a result of this ability to extend the maturity at the Company’s will, the Third Eye Capital Notes are classified as non-current debt.

Cilion shareholder seller notes payable. In connection with the Company’s merger with Cilion, Inc., (“Cilion”) on July 6, 2012, the Company issued $5.0 million in notes payable to Cilion shareholders as merger compensation subordinated to the senior secured Third Eye Capital Notes. The liability bears interest at 3% per annum and is due and payable after the Third Eye Capital Notes have been paid in full. As of September 30, ~~2020,~~2021, Aemetis Facility Keyes, Inc. had ~~$6.2~~$6.4 million in principal and interest outstanding under the Cilion shareholder seller notes payable.

Subordinated Notes. On January 6 and January 9, 2012, AAFK entered into Note and Warrant Purchase Agreements with two accredited investors ~~(the “Note and Warrant Purchase Agreements”)~~ pursuant to which it issued $0.9 million and $2.5 million in original notes to the investors ~~(the “Subordinated~~(“Subordinated Notes”). The Subordinated Notes mature every six months. Upon maturity, the Subordinated Notes are generally extended with a fee of 10% added to the balance outstanding plus issuance of warrants exercisable at $0.01 with a two-year term. Interest accrues at 10% and is due at maturity. Neither AAFK nor Aemetis may make any principal payments under the Subordinated Notes until all loans made by Third Eye Capital to AAFK are paid in full.

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On July 1, ~~2020,~~2021, the Subordinated Notes were amended to extend the maturity date until the earlier of (i) December 31, ~~2020;~~2021; (ii) completion of an equity financing by AAFK or Aemetis, Inc. in an amount of not less than $25.0 million; or (iii) after the occurrence of an Event of Default, ~~(as defined in the Note and Warrant Purchase Agreements),~~ including failure to pay interest or principal when due and breaches of note covenants. A 10% cash extension fee was paid by adding the fee to the balance of the new note and warrants to purchase 113 thousand shares of common stock were granted with a term of two years and an exercise price of $0.01 per share. WeThe Company evaluated the July 1, ~~2020~~2021 amendment and the refinancing terms of the ~~Subordinated~~ Notes and ~~applied modification accounting~~determined in accordance with ASC 470-50 Debt – Modification and ~~Extinguishment.~~

Extinguishment that the loans were extinguished, however, the Company was not required to record a gain or loss on the debt extinguishment.

At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had, in aggregate, ~~$12.3~~the amount of $14.1 million and ~~$11.5~~$12.7 million in principal and interest outstanding net of discount issuance costs of ~~$0.2~~$0.8 million and none, respectively, under the Subordinated Notes.

EB-5 promissory notes. EB-5 is a U.S. government program authorized by the Immigration and Nationality Act designed to foster employment-based visa preference for immigrant investors to encourage the flow of capital into the U.S. economy and to promote employment of U.S. workers. The Company entered into a Note Purchase Agreement dated March 4, 2011 (as further amended on January 19, 2012 and July 24, 2012) with Advanced BioEnergy, LP, a California limited partnership authorized as a ~~Regional Center~~“Regional Center” to receive EB-5 investments, for the issuance of up to 72 subordinated convertible promissory notes (the “EB-5 Notes”) bearing interest at 2-3%. Each note was issued in the principal amount of $0.5 million and due and payable four years from the date of each note, for a total aggregate principal amount of up to $36.0 million (the “EB-5 Phase I funding”). The original maturity date on the promissory notes can be extended automatically for a ~~one~~one- or two-year period initially and is eligible for further one-year automatic extensions as long as there is no notice of non-extension from investors and the investors’ immigration process is in progress. On February 27, 2019, Advanced BioEnergy, LP, and the Company entered into an Amendment to the EB-5 Notes which restated the original maturity date on the promissory notes with automatic six-month extensions as long as the investors’ immigration processes are in progress. Except for six early investor EB-5 Notes, the Company was granted 12 months from the date of the completion of immigration process to redeem these EB-5 Notes. Accordingly, the notes have been recognized as long-term debt while the ~~five~~six early investor notes and ~~one investor~~several investors who obtained ~~the Green Card~~green card approval have been classified as current debt. The EB-5 Notes are convertible after three years at a conversion price of $30 per share.

Advanced BioEnergy, LP arranges investments with foreign investors, who each make loans to the Keyes Plant in increments of $0.5 million. The Company has sold an aggregate principal amount of $36.0 million of EB-5 Notes under the EB-5 Phase I funding since 2012 to the date of this filing. As of September 30, ~~2020,~~2021, $35.5 million has been released from the escrow amount to the Company, with $0.5 million remaining to be funded to escrow. During the three and nine months ended September 30, 2021 the Company repaid two investors who obtained green card approval under the program, none and $1.0 million, respectively, of the EB-5 Phase I funding. As of September 30, ~~2020, $35.5~~2021, $34.5 million in principal and ~~$3.3~~$3.9 million in accrued interest was outstanding on the EB-5 Notes sold under the EB-5 Phase I funding.

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

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Advanced BioEnergy II, LP arranges investments with foreign investors, who each make loans to the Riverbank ~~Cellulosic Ethanol~~ Facility in increments of $0.9 million after November 21, 2019. The Company has sold an aggregate principal amount of $4.0 million of EB-5 Notes under the EB-5 Phase II funding since 2016 to the date of this filing. As of September 30, ~~2020,~~2021, $4.0 million has been released from escrow to the Company and $46.8 million remains to be funded to escrow. As of September 30, ~~2020, $4.2~~2021, $4.1 million was outstanding on the EB-5 Notes under the EB-5 Phase II funding.

~~Working~~

Unsecured working capital loans. On April 16, 2017, the Company entered into an operating agreement with Gemini Edibles and Fats India Private Limited (“Gemini”). Under this agreement, Gemini agreed to provide the Company with working capital, on an as needed basis, to fund the purchase of feedstock and other raw materials for the Kakinada Plant. Working capital cash advances bear interest at 12% and working capital can be induced through trading of feedstock or finished goods by Gemini, which does not have any interest accrual. In return, the Company agreed to pay Gemini an amount equal to 30% of the plant’s monthly net operating profit and recognized these as operational support charges in the financials. In the event that the Company’s biodiesel facility operates at a loss, Gemini owes the Company 30% of the losses as operational support charges. Either party can terminate the agreement at any time without penalty. Additionally, Gemini received a first priority lien on the assets of the Kakinada Plant. During the three and nine months ended September 30, 2021 and 2020, ~~we have~~the Company has accrued no interest on ~~Gemini balance as the investment was for feedstock purchase and finished goods trade.~~Gemini. During the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Company made principal payments to Gemini of ~~approximately~~none and $8.5 ~~million and $35.6~~ million, respectively. As of September 30, ~~2020~~2021, and December 31, ~~2019,~~2020, the Company had ~~none and $2.0 million~~no outstanding balance under this ~~agreement, respectively.~~

agreement.

In November 2008, the Company entered into an operating agreement with Secunderabad Oils Limited (“Secunderabad Oils”). The 2008 agreement provided the working capital and had the first priority lien on assets in return for 30% of the plant’s monthly net operating profit. These expenses were recognized as selling, general, and administrative expenses by the Company in the financials. All terms of the 2008 agreement with Secunderabad Oils were terminated to amend the agreement as below. On July 15, 2017, the agreement with Secunderabad Oils was amended to provide the working capital funds for British Petroleum business operations only in the form of inter-corporate deposit for an amount of approximately $2.3 million over a 95 ~~days~~day period at the rate of 14.75% per annum interest rate. The term of the agreement continues until either party terminates it. Secunderabad Oils has a second priority lien on the assets of the Company’s Kakinada Plant after this agreement. On April 15, 2018, the agreement was amended to purchase the raw material for business operations at 12% per annum interest rate. During the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Company made principal and interest payments to Secunderabad Oils of none and approximately $0.9 ~~million and $0.5~~ million, respectively. As of September 30, ~~2020~~2021, and December 31, ~~2019,~~2020 the Company had ~~$2.5 million and $0.6 million~~no outstanding balance under this ~~agreement, respectively.~~

agreement.

GAFI Term loan and Revolving loan.On July 10, 2017, GAFI entered into a Note Purchase Agreement (“~~GAFI~~ Note Purchase Agreement”) with Third Eye ~~Capital (“Noteholders”).~~Capital. See further discussion regarding GAFI in Note 6. Pursuant to the ~~GAFI~~ Note Purchase Agreement, ~~the Noteholders~~Third Eye Capital agreed, subject to the terms and conditions of the ~~GAFI~~ Note Purchase Agreement and relying on each of the representations and warranties set forth therein, to make (i) a single term loan to GAFI in an aggregate amount of $15 million (“~~GAFI~~ Term Loan”) and (ii) revolving advances not to exceed ~~ten~~$10 million dollars in the aggregate ~~(“GAFI Revolving Loan”~~(the “Revolving Loans”). The interest rate ~~per annum~~ applicable to the ~~GAFI~~ Term Loan is equal to ~~ten percent (10%).~~10% per annum. The interest rate ~~per annum~~ applicable to the ~~GAFI~~ Revolving Loans is the greater of ~~Prime Rate~~prime rate plus ~~seven~~7.75% and ~~three quarters percent (7.75%) and twelve percent (12.00%). The applicable interest rate as of September 30, 2020 was~~ 12.00%. per annum. The maturity date of the ~~GAFI Term Loan and GAFI Revolving Loan (“GAFI Loan Maturity Date”)~~loans was extended to July 10, 2020, provided that the GAFI Loan Maturity Date may be extended at the option of Aemetis for up to one-year period upon prior written notice and upon satisfaction of certain conditions and the payment of a renewal fee for such extension. The Company exercised the2021 by exercising an option to extend the GAFI Loan Maturity Date for a fee of $0.5 million and the current GAFI Loan Maturity Date is July 10, 2021. We evaluated the extension fee and applied modification accounting in accordance with ASC 470-50 Debt – Modification and Extinguishment.

~~On June 28, 2018, GAFI entered into Amendment No. 1 to~~million.

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The Company fully repaid the GAFI Term Loan with Third Eye Capital for an additional amount of $1.5 million with a fee of $75 thousand added to the loan from Third Eye Capital at a 10% interest rate. On December 20, 2018, $1.6 million from Amendment No. 1 was repaid. Pursuant to Amendment No. 1, Aemetis, Inc. entered into a Stock Appreciation Rights Agreement to issue 1,050,000 Stock Appreciation Rights (“SARs”) to Third Eye Capital on August 23, 2018, with an exercise date of one year from the issuance date with a call option for the Company at $2.00 per share duringnotes in the first ~~11 months~~quarter of the agreement either to pay $2.1 million in cash or issue common stock worth $2.1 million based on the 30-day weighted average price of the stock on the call date, and a put option for Third Eye Capital at $1.00 per share during the 11th month of the agreement where the Company can redeem the SARs for $1.1 million in cash. In the event that none of the above options is exercised, the SARs will be automatically exercised one year from the issuance date based upon the 30-day weighted average stock price and paid in cash and cash equivalents. On July 22, 2019, Third Eye Capital exercised the put option at $1.00 per share for $1.1 million. The exercise value of the SARs of $1.1 million was added to the GAFI Term Loan and the SARs fair value liability was released.

On December 3, 2018, GAFI entered into Amendment No. 2 to the GAFI Term Loan with Third Eye Capital for an additional amount of $3.5 million from Third Eye Capital at a 10% interest rate. GAFI borrowed $1.8 million against this Amendment No. 2 with a $175 thousand fee added to the loan and $0.2 million was withheld from the $1.8 million for interest payments. $1.5 million is available to draw under GAFI Amendment No. 2 for the CO2 Project (“CO2 Term Loan”). Among other requirements, the Company is also required to make the following mandatory repayments of the CO2 Term Loan: (i) on a monthly basis, an amount equal to 75% of any payments received by the Company for CO2 produced by Messer, (ii) an amount equal to 100% of each monthly payment received by the Company for land use by Linde for CO2 plant, (iii) on a monthly basis, an amount equal to the product of: $0.01 multiplied by the number of bushels of corn grain used in the ethanol production at the Keyes Plant. Based on the mandatory payments, an amount of $1.0 million is estimated to be paid in the next 12 months and is classified as current debt as of September 30, 2020.

2021. As of September 30, 2021, and December 31, 2020, GAFI had ~~$21.5~~none and $22.2 million net of ~~discount~~debt issuance costs of ~~$0.6~~none and $0.4 million outstanding on the ~~GAFI~~ Term Loan and ~~$11.4~~none and $11.8 million on the ~~GAFI~~ Revolving Loan respectively, classified as current portion of long-term debt.

Payroll Protection Program.On May 5, 2020, certain wholly owned subsidiaries of the Company received loan proceeds of approximately $1.1 ~~million,~~million; (“PPP Loans”) under the Paycheck Protection Program (“PPP”). ~~The PPP, established as part~~In the second quarter of 2021, the ~~Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides loans to qualifying businesses for payroll expenses of~~Company received notification from the ~~qualifying business. The PPP Loan and accrued interest are forgivable after twenty-four weeks if the borrower uses the~~Small Business Administration that all loan proceeds ~~for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if~~received by the ~~borrower terminates employees or reduces salaries during~~Company were forgiven. Due to the twenty-four-week period. The Company anticipates that it will utilize the proceeds in accordance with the PPP guidelines and repay amounts that are not forgiven or utilized. In order to obtain full or partial forgiveness of the ~~PPP Loan,~~loan, the Company ~~must request forgiveness~~recorded a gain on debt extinguishment in the statements of operations and ~~must provide satisfactory documentation~~comprehensive loss in ~~accordance with applicable Small Business Administration (“SBA”) guidelines.~~

The PPP Loans are evidenced by promissory notes, dated May 1, 2020 and April 30, 2020 (the “Notes”), between the Company, as Borrower, and Bank of America, N.A., as Lender (the “Lender”). The interest rate on the Note is 1.00% per annum. No payments of principal or interest are due during the six-month period beginning on the funding date (the “Deferral Period”). If the SBA does not confirm forgiveness or only partly confirms forgiveness of the PPP Loans, or Borrower fails to apply for loan forgiveness, the Borrower will be obligated to repay to the Bank the total outstanding balance remaining due under the PPP Loans, including principal and interest and in such case, the Lender will establish the terms for repayment of the Loan in a separate letter to be provided to the Borrower in which the letter will set forth the loan balance, the amount of ~~each monthly payment,~~approximately $1.1 million during the nine months ended September 30, 2021. For the three months ended September 30, 2021 and 2020, the company recorded no gain or loss on extinguishment.

Financing Agreement for capital expenditures. The Company entered into an agreement with Mitsubishi Chemical America, Inc. (“Mitsubishi”) to purchase membrane dehydration equipment to save energy used in the Keyes Plant. The Company also entered into a financing agreement with Mitsubishi for $5.7 million for this equipment. Payments pursuant to the financing transaction will commence after the installation date and interest ~~rate (not in excess of a fixed rate of one percent (1.00%) per annum),~~will be charged based on the ~~term~~certain performance metrics after operation of the ~~PPP Loans,~~equipment. The equipment was delivered in March 2020; however, the installation has been delayed due to the COVID-19 pandemic. Hence, we recorded the asset in property, plant and equipment, net and the ~~maturity date, which, if not established by~~related liability of $0.7 million in short term borrowings and $5.0 million in other long-term debt, respectively as of September 30, 2021. In the ~~Lender, shall be two (2) years from~~fourth quarter of 2021, the ~~funding date of the PPP Loans.~~

dehydration equipment was commissioned.

Scheduled debt repayments for the Company’s loan obligations follow:

Twelve months ended September 30,

Debt Repayments

2021
$59,336
2022
  145,530
2023
  13,435
2024
  5,172
2025
  2,436
Thereafter
  1,247
Total debt
  227,156
Debt issuance costs
  (810)
Total debt, net of debt issuance costs
$226,346

Twelve months ended September 30,	Debt Repayments
2022	$	23,863
2023		147,749
2024		7,445
2025		4,581
2026		945
There after		1,253
Total debt		185,836
Debt issuance costs		(858	)
Total debt, net of debt issuance costs	$	184,978

5. Commitments and Contingencies

Leases

We have identified assets as the corporate office, warehouse, monitoring equipment and laboratory facilities over which we have control and obtain economic benefits fully. We classified these identified assets as operating leases after assessing the terms under classification guidance. We have entered into several leases for trailers and carbon units with purchase option at the end of the term. We have concluded that it is reasonably certain that we would exercise the purchase option at the end of the term, hence the leases were classified as finance leases. All of our leases have remaining term of less than a year to 87 years.

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

The components of lease expense and sublease income ~~follow:~~

Three months ended
September 30,

Nine months ended
September 30,

2020

2019

2020

2019

Operating lease cost

Operating lease expense
$201
$219
$561
$543
Short term lease expense
  75
  18
  104
  71
Variable lease expense
  29
  31
  89
  80
Sub lease income
  -
  (50)
  -
  (118)
Total operating lease cost
$305
$218
$754
$576





Finance lease cost




Amortization of right-of-use assets
$94
$-
$155
$-
   Interest on lease liabilities
  26
  -
  44
  -
Total finance lease cost
$120
$-
$199
$-

was as follows:

	Three Months ended September 30,				Nine Months ended September 30,
	2021		2020		2021		2020
Operating lease cost
Operating lease expense	$	204	$	201	$	612	$	561
Short term lease expense		28		75		138		104
Variable lease expense		30		29		84		89
Total operating lease cost	$	262	$	305	$	834	$	754

Finance lease cost
Amortization of right-of-use assets	$	58	$	94	$	168	$	155
Interest on lease liabilities		20		26		61		44
Total finance lease cost	$	78	$	120	$	229	$	199

Cash paid for amounts included in the measurement of lease liabilities:

Three months ended
September 30,

Nine months ended
September 30,

2020

2019

2020

2019

Operating cash flows used in operating leases
$131
  185
$448
$517
Operating cash flows used in finance leases
  26
  -
  44
  -
Financing cash flows used in finance leases
  435
  -
$1,137
  -

	Three Months ended September 30,				Nine Months ended September 30,
	2021		2020		2021		2020
Operating cash flows used in operating leases	$	179	$	131	$	519	$	448
Operating cash flows used in finance leases		20		26		61		44
Financing cash flows used in finance leases	$	126		435	$	374		1,137

Supplemental non-cash flow information related to ~~the operating~~ ROU asset and lease liabilities was as follows for the three and nine months ended September 30, ~~2020~~2021 and ~~2019:~~

Three months ended
September 30,

Nine months ended
September 30,

2020

2019

2020

2019

Operating leases

      Accretion of the lease liability
$101
$31
$160
$107
      Amortization of right-of-use assets
  100
  151
  402
  438

2020:

	Three Months ended September 30,					Nine Months ended September 30,
	2021		2020			2021		2020
Operating leases
Accretion of the lease liability	$	93	$	101		$	288	$	160
Amortization of right-of-use assets		111		100			324		402

Weighted Average Remaining Lease Term
Operating leases			6.4 years
Finance leases			2.6 years

Weighted Average Discount Rate
Operating leases				14.0	%
Finance leases				5.9	%

~~Weighted Average Remaining Lease Term~~
~~Operating leases~~	~~7.1 years~~ 24
~~Finance leases~~	~~3.2 years~~
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~~Weighted Average Discount Rate~~
~~Operating leases~~	~~13.9~~%
~~Finance leases~~	~~5.2~~%

Supplemental balance sheet information related to leases was as follows:

As of

September 30,
2020

December 31,
2019

Operating leases

Operating lease right-of-use assets
$2,843
$557



Current portion of operating lease liability
  286
  377
Long term operating lease liability
  2,662
  200
Total operating lease liabilities
$2,948
$577



Finance leases


Property and equipment, at cost
$2,988
$-
Accumulated depreciation
  (155)
  -
Property and equipment, net
$2,833
$-



Other current liability
  621
  -
Long term other liability
  1,270
  -
Total finance lease liabilities
$1,891
$-

	September 30, 2021			December 31, 2020
Operating leases
Operating lease right-of-use assets	$	2,572		$	2,889

Current portion of operating lease liability		286			316
Long term operating lease liability		2,381			2,578
Total operating lease liabilities		2,667			2,894

Finance leases
Property and equipment, at cost	$	2,317		$	2,308
Accumulated depreciation		(313	)		(249	)
Property and equipment, net		2,004			2,059

Other current liability		541			417
Other long term liabilities		840			1,164
Total finance lease liabilities		1,381			1,581

Maturities of operating ~~and finance~~ lease liabilities were as follows:

Twelve months ended September 30,

Operating leases

Finance leases

2021
$666
$704
2022
  613
  577
2023
  569
  494
2024
  586
  290
2025
  603
  -
Thereafter
  1,698
  -
Total lease payments
  4,735
  2,065
Less imputed interest
  (1,787)
  (174)



Total lease liability
$2,948
$1,891

~~Other Commitments~~

The Company entered into an agreement with Mitsubishi Chemical America, Inc. to purchase certain equipment to save energy used in the Keyes Plant. We also entered into a financing agreement with the seller for $5.7 million for this equipment. Payments pursuant to the financing transaction will commence after the installation date and interest will be charged based on the certain performance metrics after operation of the equipment. The equipment was delivered in March 2020; however the installation has been delayed due to the COVID-19 pandemic. Hence, we recorded the asset in construction in progress and related liability in the short and long term debt of $0.7 million and $5 million, respectively as of September 30, 2020.

Twelve Months ended September 30,	Operating leases			Finance leases

2021	$	632		$	611
2022		572			528
2023		586			324
2024		603			31
2025		622			0
There after		1,076			0
Total lease payments		4,091			1,494
Less imputed interest		(1,424	)		(113	)

Total lease liability	$	2,667		$	1,381

Property taxes

The Company entered into a payment plan with Stanislaus County for unpaid property taxes for the Keyes Plant site on June 28, 2018 by paying $1.5 million as a first payment. Under the annual payment plan, the Company was set to pay 20% of the outstanding redemption amount, in addition to the current year property taxes and any interest incurred on the unpaid balance to date annually, on or before April 10 starting in 2019. After making one payment, the Company defaulted on the payment plan and as of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the balance in property tax accrual was ~~$5.4~~$6.8 million and ~~$4.1~~$5.7 million, respectively. Stanislaus County agreed not to enforce collection actions and we are now in discussions with Stanislaus County regarding a payment plan.

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Legal Proceedings

On August 31, 2016, the Company filed a lawsuit in Santa Clara County Superior Court against defendant EdenIQ, Inc. (“EdenIQ”). The lawsuit was based on EdenIQ’s wrongful termination of a merger agreement that would have effectuated the merger of EdenIQ into a new entity that would be primarily owned by Aemetis. The lawsuit asserted that EdenIQ had fraudulently induced the Company into assisting EdenIQ to obtain EPA approval for a new technology that the Company would not have done but for the Company’s belief that the merger would occur. The relief sought included EdenIQ’s specific performance of the merger, monetary damages, as well as punitive damages, attorneys’ fees, and costs. In response to the lawsuit, EdenIQ filed a cross-complaint asserting causes of action relating to the Company’s alleged inability to consummate the merger, the Company’s interactions with EdenIQ’s business partners, and the Company’s use of EdenIQ’s name and trademark in association with publicity surrounding the merger. Further, EdenIQ named Third Eye Capital Corporation (“TEC”) as a defendant in a second amended cross-complaint alleging that TEC had failed to disclose that its financial commitment to fund the merger included terms that were not disclosed. Finally, EdenIQ claimed that TEC and the Company concealed material information surrounding the financing of the merger. By way of its cross-complaint, EdenIQ sought monetary damages, punitive damages, injunctive relief, attorneys’ fees and costs. In November 2018, the claims asserted by the Company were dismissed on summary judgment and the Company filed a motion to amend its claims, which remains pending. In December 2018, EdenIQ dismissed all of its claims prior to trial. In February 2019, the Company and EdenIQ each filed motions seeking reimbursement of attorney fees and costs associated with the litigation. On July 24, 2019, the court awarded EdenIQ a portion of the fees and costs it had sought in the amount of approximately $6.2 million. The Company recorded the $6.2 million as loss contingency on litigation during the year ended December 31, 2019. The Company’s ability to amend its claims and present its claims to the court or a jury could materially affect the court’s decision to award EdenIQ its fees and costs. In addition to further legal motions and a potential appeal of the Court’s summary judgment order, the Company plans to appeal the court’s award of EdenIQ’s fees and costs. The Company intends to continue to vigorously pursue its legal claims and defenses against EdenIQ.

6. Biogas LLC – Series A Preferred Financing

and Variable Interest Entity

On December 20, 2018, ~~Aemetis Biogas LLC~~ABGL entered into a Series A Preferred Unit Purchase Agreement ~~(the “Preferred Unit Agreement”) by selling~~for the sale of Series A Preferred Units to Protair-X Americas, Inc. ~~(the “Purchaser”)~~, with Third Eye Capital acting as an agent for the purchaser (the “Agent”). ABGL plans to construct and collect biogas from dairies located near the Keyes Plant. Biogas is a blend of methane along with CO2 and other impurities that can be captured from dairies, landfills and other sources. After a gas cleanup and compression process, biogas can be converted into bio-methane, which is a direct replacement of petroleum natural gas and can be transported in existing natural gas pipelines.

agent.

ABGL is authorized to issue 11,000,000 common units, and up to 6,000,000 convertible, redeemable, secured, preferred membership units (the “Series A Preferred Units”). ABGL issued 6,000,000 common units to the ~~Company. ABGL also issued 1,660,000 Series A Preferred Units to the Purchaser for $8,300,000 with the ability to issue an additional 4,340,000 Series A Preferred Units~~Company at $5.00 per ~~Unit~~common unit for a total of ~~up to~~ $30,000,000 in funding. Additionally, 5,000,000 common units of ABGL are held in reserve as potential conversion units issuable to the Purchaser upon certain triggering events discussed below.

The Preferred Unit Agreement includes (i) preference payments of $0.50 per unit on the outstanding Series A Preferred Units commencing on the second anniversary, with any outstanding preference payments shall have an interest per annum rate equal to ten percent (ii) conversion rights for up to 1,200,000 common units or up to maximum number of 5,000,000 common units (also at a one Series A Preferred Unit to one common unit basis) if certain triggering events occur, (iv) one board seat of the three available to be elected by Series A Preferred Unit holders, (iii) mandatory redemption value at $15 per unit payable at an amount equal to 75% of free cash flow generated by ABGL, up to $90 million in the aggregate (if all units are issued), (iv) full redemption of the units on the sixth anniversary, (v) minimum cash flow requirements from each digester, and (vi) $0.9 million paid as fees to the Agent from the proceeds.

Until paid, the obligations of ABGL under the Preferred Unit Agreement are secured by the assets of ABGL in an amount not to exceed the sum of (i) $30,000,000, plus (ii) all interest, fees, charges, expenses, reimbursement obligations and indemnification obligations of ABGL.

Triggering events occur upon ABGL’s failure to redeem units, comply with covenants, any other defaults or cross defaults, or to perform representations or warranties. Upon a triggering event: (i) the obligation of the Purchaser to purchase additional Series A Preferred Units is terminated, (ii) cash flow payments for redemption payments increases from 75% to 100% of free cash flows, and (iii) total number of common units into which preferred units may be converted increases from 1,200,000 common units to 5,000,000 common units on a one for one basis. As of September 30, ~~2020,~~2021, ABGL has not generated minimum quarterly operating cash flows by operating the dairies. As a result of the violation of this covenant, free cash flows, when they occur, may be applied for redemption payments at the increased rate of 100% instead of the initial rate of 75% of free cash flows.

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From inception of the agreement to date, ABGL issued 3,200,000 Series A Preferred Units on first tranche for a value of $16.0 million and also issued ~~1,735,833~~2,800,000 of Series A Preferred Units on second tranche for a value of ~~$8.7~~$14.0 million, reduced by a redemption of 20,000 Series A Preferred Units for $0.3 million. The Company is accreting these two tranches to the redemption value of ~~$74~~$89.7 million over the estimated future cash flow periods of six years using the effective interest method. In addition, the Company identified freestanding future tranche rights and the accelerated redemption feature related to a change in control provision as derivatives which required bifurcation. These derivative features were assessed to have minimal value as of September 30, ~~2020~~2021 and December 31, ~~2019~~2020 based on the evaluation of the other conditions included in the agreement.

During the ~~quarter~~three months ended September 30, ~~2020,~~2021, ABGL issued ~~732,372~~no Series A Preferred Units. During the nine months ended September 30, 2021, ABGL issued 626,000 of Series A Preferred Units for incremental proceeds of ~~$3.7~~$3.1 million as part of the second tranche of the Preferred Unit ~~Agreement.~~Agreement and redeemed 20,000 of Series A Preferred Units for $0.3 million. Consistent with the previous issuances ~~the units are~~which were treated as a liability as the conversion option was deemed to be ~~non-substantive. The Company is accreting up~~non-substantive, the current issuances are treated as a liability as the conversion option was still deemed to ~~the redemption value of $11.0 million over the estimated future cash flow periods of six years from the original anniversary date using the effective interest method.~~

be non-substantive.

The Company recorded Series A Preferred Unit liabilities, net of unit issuance costs and inclusive of accretive preference pursuant to this agreement, and accrued preference payments, classified as ~~other~~ current ~~liabilities,~~portion of ~~$1.2~~Series A Preferred Units, of $8.7 million and ~~none,~~$2.0 million, and long-term liabilities of ~~$28.5~~$38.3 million and ~~$14.1~~$32.0 million as of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

For the three months ended September 30, 2021 and 2020 the Company recorded Series A Preferred Units accretion expense of $2.3 million and $1.8 million and accrued preference payments expense of $0.8 million and none. This was partially offset by capitalized interest of $1.0 million.

For the nine months ended September 30, 2021 and 2020 the Company recorded Series A Preferred Units accretion expense of $7.7 million and $4.1 million and accrued preference payments expense of $2.4 million and none. This was partially offset by capitalized interest of $2.1 million.

Variable interest entity assessment

After consideration of ABGL’s operations and the above agreement, we concluded that ABGL did not have enough equity to finance its activities without additional subordinated financial support. ABGL is capitalized with Series A Preferred Units that are recorded as liabilities under U.S. GAAP. Hence, we concluded that ABGL is a VIE. Through the Company's ownership interest in all of the outstanding common stock, its current ability to control the board of directors, the management fee paid to Aemetis and control of subordinated financing decisions, Aemetis has been determined to be the primary beneficiary and accordingly, the assets, liabilities, and operations of ABGL are consolidated into those of the Company. Total assets, before intercompany eliminations, of ABGL were $34.8 million primarily related to biodigesters at two dairies and a pipeline which serve as collateral for the Series A Preferred Unit totaling $46.9 million. The Series A Preferred Units are not collateralized by any other assets or guarantees from Aemetis or its subsidiaries.

7. Stock-Based Compensation

2019 Stock Plan

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

Employee grants have a general vesting term of 1/12th every three months and are exercisable at any time after vesting subject to continuation of employment. Option grants for directors have immediate vesting with a 10-year term expiration.

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With the approval of the 2019 Stock Plan, the Zymetis 2006 Stock Plan and the Amended and Restated 2007 Stock Plan (the “Prior Plans,” and together with the 2019 Stock Plan, the “Stock Plans”) are terminated for granting any options under either plan. However, any options granted before the 2019 Stock Plan was approved will remain outstanding and can be exercised, and any expired options issued pursuant to the Prior Plans can be granted under the 2019 Stock Plan.

During the year ended December 31, 2020, 2,320,000 stock option grants were issued and approved by the Board for employees and directors under the 2019 Stock Plan with 10-year terms and vesting terms from immediately to 3 years.

On January ~~9, 2020, 771,500~~7, 2021, 945,000 incentive stock option grants were issued for employees and directors under the 2019 Stock Plan. In addition, 5,200 restricted stock award grants, with a fair value of $3.09 per award, were issued to the Company’s board of directors (“Board”) with the restriction that this grant would satisfy board compensation fees.

On ~~March 28, 2020, 1,075,500~~April 8, 2021, 34,114 restricted stock ~~options grant~~award grants, with a fair value of $26.19 per award, were ~~approved by~~issued to the Board ~~for employees~~with the restriction that this grant would pay off outstanding accounts payable owed to the Board members and ~~directors under~~was included in the ~~2019 Stock Plan.~~

~~On April 3, 2020, 450,000 stock option grants were issued for employees under the 2019 Stock Plan with 10 year term and immediate vesting.~~

summary of awards granted.

On June ~~4, 2020, 10,000 stock option grants were approved by the Board for a director under the 2019 Stock Plan with 10 year term and 2 year vesting.~~

~~On August 27, 2020, 13,000~~3, 2021, 30,000 stock option grants were approved by the Board for new employees under the 2019 Stock Plan with ~~10 year~~10-year term and ~~3 year~~3-year vesting.

As of September 30, ~~2020, 5.8~~2021, 3.9 million options are outstanding under the Stock Plans.

Common Stock Reserved for Issuance

The following is a summary of ~~options~~awards granted under the Stock Plans:

Shares Available for Grant

Number of Shares Outstanding

Weighted-Average Exercise Price

Balance as of December 31, 2019
  147
  3,746
$1.38
Authorized
  2,342
  -
  -
Granted
  (2,320)
  2,320
  0.69
Exercised
  -
  (232)
  1.27
Forfeited/expired
  83
  (83)
  0.76




Balance as of September 30, 2020
  252
  5,751
$1.12

	Shares Available for Grant			Number of Shares Outstanding			Weighted- Average Exercise Price
Balance as of December 31, 2020		380			5,327		$	1.14
Authorized		816			-			-
Options Granted		(975	)		975			3.40
RSAs Granted		(39	)		-			-
Exercised		-			(2,228	)		1.42
Forfeited/expired		200			(200	)		1.78
Balance as of September 30, 2021		382			3,874		$	1.49

As of September 30, ~~2020,~~2021, there were ~~3.9~~2.4 million options vested under ~~all~~ the Stock Plans.

Stock-based compensation for employees

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

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For the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Company recorded stock compensation expense in the amount of ~~$191~~$285 thousand and ~~$144~~$191 thousand, respectively. For the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Company recorded stock compensation expense in the amount of $1.4 million and $826 thousand, ~~and $630 thousand,~~ respectively.

Valuation and Expense Information

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

participants.

During the ~~nine~~three months ended September 30, 2021 and 2020, none and ~~2019, 2,320,000 and 399,000~~13,000 options were granted respectively. The weighted average fair value calculations for the options granted during the nine months ended September 30, ~~2020~~2021 and ~~2019~~2020 are based on the following assumptions:

For the nine months ended
September 30,

Description

2020

2019

Dividend-yield
  0%
  0%
Risk-free interest rate
  0.94%
  2.38%
Expected volatility
  88.15%
  88.54%
Expected life (years)
  6.55
  6.55
Market value per share on grant date
$0.69
$0.78
Fair value per share on grant date
$0.52
$0.59

	For the nine months ended September 30,
Description	2021			2020
Dividend-yield		0	%		0	%
Risk-free interest rate		0.68	%		0.94	%
Expected volatility		98.23	%		88.15	%
Expected life (years)		6.53			6.55
Market value per share on grant date	$	3.40		$	0.69
Fair value per share on grant date	$	2.72		$	0.52

As of September 30, ~~2020,~~2021, the Company had ~~$1.1~~$2.1 million of total unrecognized compensation expense for employees, which the Company will amortize over the ~~2.0~~2.1 years of weighted average remaining term.

8. Agreements

Working Capital Arrangement.Pursuant to a Corn Procurement and Working Capital Agreement with J.D. Heiskell, the Company agreed to procure whole yellow corn and grain sorghum, primarily from J.D. Heiskell. The Company has the ability to obtain grain from other sources subject to certain conditions; however, in the past all the Company’s grain purchases have been from J.D. Heiskell. Title and risk of loss of the corn pass to the Company when the corn is deposited into the Keyes Plant weigh bin. The term of the Corn Procurement and Working Capital Agreement expires on December 31, ~~2020~~2021 and the term can be automatically renewed for additional one-year terms. J.D. Heiskell further agrees to sell all WDG the Company produces to A.L. Gilbert. The Company markets and sells DCO to A.L. Gilbert and other third parties under the J.D. Heiskell Purchasing Agreement. The Company’s relationships with J.D. Heiskell, and A.L. Gilbert are well established, and the Company believes that the relationships are beneficial to all parties involved in utilizing the distribution logistics, reaching out to widespread customer base, managing inventory, and building working capital relationships. These agreements are ordinary purchase and sale agency agreements for the Keyes Plant. On May 13, 2020, J.D. Heiskell and the Company entered into Amendment No.1 to the J.D. Heiskell Purchasing Agreement to remove J.D. Heiskell’s obligations to purchase ethanol from the Company under the J.D. Heiskell Purchasing Agreement.

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The J.D. ~~Heiskell’s~~Heiskell sales and purchases activity associated with the ~~Corn~~J.D. Heiskell Purchase Agreement and J.D. Heiskell Procurement ~~and Working Capital~~ Agreement ~~for~~during the three and nine months ended September 30, 2021 and 2020 ~~and 2019 are~~were as follows:

As of and for the three months ended
September 30,

As of and for the nine months ended
September 30,

2020

2019

2020

2019

Ethanol sales
$-
$27,456
$26,049
$84,453
Wet distiller's grains sales
  7,143
  8,783
  22,983
  26,119
Corn oil sales
  827
  934
  2,806
  2,586
Corn purchases
  25,513
  30,446
  77,268
  90,426
Accounts receivable
  161
  1,066
  161
  1,066
Accounts payable
  1,978
  2,484
  1,978
  2,484

	As of and for the three months ended September 30,				As of and for the nine months ended September 30,
	2021		2020		2021		2020
Ethanol sales	$	0	$	0	$	0	$	26,049
Wet distiller's grains sales		8,919		7,143		30,584		22,983
Corn oil sales		1,515		827		4,252		2,806
Corn purchases		39,058		25,513		119,217		77,268
Accounts receivable		88		161		88		161
Accounts payable		307		1,978		307		1,978

Ethanol and Wet Distillers Grains Marketing Arrangement.The Company entered into an Ethanol Marketing Agreement with Kinergy and a Wet Distillers Grains Marketing Agreement with A.L. Gilbert. Under the terms of the agreements ~~subject to certain conditions, the Ethanol Marketing Agreement matures on August 31, 2021 and~~ the Wet Distillers Grains Marketing Agreement matures on December 31, ~~2020~~2021 with automatic one-year renewals thereafter. We terminated the Ethanol Marketing Agreement with Kinergy as of September 30, 2021. Effective October 1, 2021, we entered into Fuel Ethanol Purchase and Sale Agreement with Murex LLC. Under the terms of the agreement, the initial term matures on October 31, 2023 with automatic one-year renewals thereafter. For the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Company expensed marketing costs of $0.7 million and $0.6 million ~~for each period~~respectively, under the terms of ~~both the Ethanol Marketing Agreement and the Wet Distillers Grains Marketing Agreement.~~each agreement. For the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Company expensed marketing costs of $2.1 million and $1.7 million ~~and $1.9 million, respectively.~~

for each period respectively, under the terms of each agreement.

As of September 30, 2021, the Company has no forward sales commitments.

9. Segment Information

Aemetis recognizes two reportable geographic segments: “North America” and “India.” The “North America” operating segment includes the Company’s 65 million gallons per year capacity Keyes Plant in California, the ultra-low carbon renewable fuel project in Riverbank, ~~Cellulosic Ethanol Facility,~~ the ~~Biogas Project,~~biogas digesters on dairies near Keyes, California, the Goodland Plant in Kansas and the research and development facility in Minnesota.

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

Summarized financial information by reportable segment for the three and nine months ended September 30, 2021 and 2020 follows:

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		For the three months ended September 30, 2021									For the three months ended September 30, 2020
		North America			India			Total Consolidated			North America			India			Total Consolidated

Revenues		$	49,832		$	63		$	49,895		$	33,131		$	7,792		$	40,923
Cost of goods sold			54,664			16			54,680			33,534			6,618			40,152
Gross profit (loss)			(4,832	)		47			(4,785	)		(403	)		1,174			771

Other expenses (income)
Research and development expenses			22			0			22			37			0			37
Selling, general and administrative expenses			4,637			450			5,087			4,340			223			4,563
Interest expense			5,548			0			5,548			6,461			9			6,470
	Accretion and other expenses of Series A preferred units		2,185			0			2,185			1,765			0			1,765
Gain on debt extinguishment			0			0			0			0			0			0
Other expense (income)			(1	)		(29	)		(30	)		155			(2	)		153
Income (loss) before income taxes		$	(17,223	)	$	(374	)	$	(17,597	)	$	(13,161	)	$	944		$	(12,217	)

Capital expenditures		$	5,815		$	21		$	5,836		$	6,187		$	113		$	6,300
Depreciation			1,187			155			1,342			1,085			168			1,253

	For the nine months ended September 30, 2021									For the nine months ended September 30, 2020
	North America			India			Total Consolidated			North America			India			Total Consolidated

Revenues	$	146,890		$	696		$	147,586		$	114,226		$	14,001		$	128,227
Cost of goods sold		151,614			719			152,333			101,231			12,599			113,830
Gross profit (loss)		(4,724	)		(23	)		(4,747	)		12,995			1,402			14,397

Other expenses (income)
Research and development expenses		66			0			66			175			0			175
Selling, general and administrative expenses		15,016			1,206			16,222			11,206			1,342			12,548
Interest expense		17,947			0			17,947			19,490			44			19,534
Accretion and other expenses of Series A preferred units		7,928			0			7,928			4,087			0			4,087
Gain on debt extinguishment		(1,134	)		0			(1,134	)		0			0			0
Other (income) expense		561			(78	)		483			416			(23	)		393
Income (loss) before income taxes	$	(45,108	)	$	(1,151	)	$	(46,259	)	$	(22,379	)	$	39		$	(22,340	)

Capital expenditures	$	18,632			139			18,771		$	13,571		$	1,350		$	14,921
Depreciation		3,593			513			4,106			3,030			485			3,515

North America. Sales of ethanol, WDG, and ~~2019 follows:~~

Three months ended
September 30, 2020

Three months ended
September 30, 2019

North America

India

Total Consolidated

North America

India

Total Consolidated

Revenues
$33,131
$7,792
$40,923
$37,820
$19,569
$57,389
Cost of goods sold
  33,534
  6,618
  40,152
  37,990
  15,417
  53,407







Gross (loss) profit
  (403)
  1,174
  771
  (170)
  4,152
  3,982







Other Expenses






Research and development expenses
  37
  -
  37
  37
  -
  37
Selling, general and administrative expenses
  4,340
  223
  4,563
  2,716
  1,813
  4,529
Interest expense
  6,461
  9
  6,470
  6,293
  49
  6,342
Accretion of Series A preferred units
  1,765
  -
  1,765
  589
  -
  589
Other (income) expense
  155
  (2)
  153
  (265)
  (24)
  (289)







Income (loss) before income taxes
$(13,161)
$944
$(12,217)
$(9,540)
$2,314
$(7,226)







Capital expenditures
$6,187
$113
$6,300
$3,664
$351
$4,015
Depreciation
  1,085
  168
  1,253
  942
  161
  1,103

For the nine months ended
September 30, 2020

For the nine months ended
September 30, 2019

North America

India

Total Consolidated

North America

India

Total Consolidated

Revenues
$114,226
$14,001
$128,227
$113,942
$35,954
$149,896
Cost of goods sold
  101,231
  12,599
  113,830
  113,440
  29,552
  142,992







Gross profit
  12,995
  1,402
  14,397
  502
  6,402
  6,904







Other Expenses






Research and development expenses
  175
  -
  175
  160
  -
  160
Selling, general and administrative expenses
  11,206
  1,342
  12,548
  9,972
  2,743
  12,715
Interest expense
  19,490
  44
  19,534
  18,805
  332
  19,137
Accretion of Series A preferred units
  4,087
  -
  4,087
  1,509
  -
  1,509
Loss contingency on litigation
  -
  -
  -
  6,200
  -
  6,200
Other expense (income)
  416
  (23)
  393
  (228)
  (773)
  (1,001)







Income (loss) before income taxes
$(22,379)
$39
$(22,340)
$(35,916)
$4,100
$(31,816)

Capital expenditures
$13,571
  1,350
  14,921
$4,249
$804
$5,053
Depreciation
  3,030
  485
  3,515
  2,883
  454
  3,337

corn oil to two customers accounted for 77% and 21% of the Company’s North ~~America:During~~America segment revenues for the three months ended September 30, 2021. Sales of ethanol, WDG, and corn oil to two customers accounted for 75% and 24% of the Company’s North America segment revenues for the nine months ended September 30, 2020, the Company amended the Corn Procurement and Working Capital Agreement and the J.D. Heiskell Purchasing Agreement to procure corn from J.D. Heiskell and sell all WDG and corn oil the Company produces to J.D. Heiskell. 2021.

Sales of ethanol, WDG, corn oil, and high-grade alcohol to two customers accounted for 72% and 24% of the Company’s North America segment revenues for the three months ended September 30, 2020. Sales to three customers accounted for 45%, 32% and 11% of the Company’s North America segment revenues for the nine months ended September 30, 2020.

During the three and nine months ended September 30, 2019, the Company’s revenues from ethanol, WDG, and corn oil were made pursuant to the Corn Procurement and Working Capital Agreement. Sales of ethanol, WDG, and corn oil to J.D. Heiskell

India. Two other sales customers accounted for ~~98.3%~~71% and ~~99.3%~~23% of the Company’s ~~North America~~consolidated India segment revenues for ~~the three and nine months ended September 30, 2019, respectively.~~

~~India.During~~ the three months ended September 30, ~~2020, two~~2021. One biodiesel customer accounted for 66% of the Company’s consolidated India segment revenues while one refined glycerin customer accounted for 16% of such revenues for the nine months ended September 30, 2021.

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Two biodiesel customers accounted for 56% and 26% of the Company’s consolidated India segment revenues for the three months ended September 30, 2020, while none of the refined glycerin customers accounted for more than 10%~~, compared to three biodiesel customers accounting for 41%, 16% and 15% of the Company’s consolidated India segment revenues and none of the refined glycerin customers accounting for more than 10%~~ of such revenues ~~during~~for the three months ended September 30, ~~2019.~~

~~During the nine months ended September 30, 2020, two~~2020. Two biodiesel customers accounted for 51% and 33%, of the Company’s consolidated India segment revenues while none of the refined glycerin customers accounted for more than 10% of such revenues ~~compared to three biodiesel customers accounted~~ for ~~29%, 18% and 15% of the Company’s consolidated India segment revenues while none of the refined glycerin customers accounted for more than 10% of such revenues during~~ the nine months ended September 30, ~~2019.~~

2020.

Total assets by segment consist of the following:

As of

September 30,

December 31,

2020

2019

North America
$105,619
$82,990
India
  16,551
  16,906
    Total Assets
$122,170
$99,896

	As of
	September 30,		December 31,
	2021		2020

North America	$	135,720	$	112,312
India		11,259		12,827
Total Assets	$	146,979	$	125,139

10. Related Party Transactions

The Company owes Eric McAfee, the Company’s Chairman and CEO, and McAfee Capital LLC (“McAfee Capital”), owned by Eric McAfee, ~~$0.4~~$0.5 million in connection with employment agreements and expense reimbursements previously accrued as salaries expense and accrued liabilities. The balance accrued related to these employment agreements was $0.4 million as of September 30, 2020 and December 31, 2019. For the three months ended September 30, 2020 and 2019, the Company expensed $7 thousand and $1 thousand, respectively, to reimburse actual expenses incurred by McAfee Capital and related entities. For the nine months ended September 30, 2020 and 2019, the Company expensed $7 and $22 thousand, respectively, to reimburse actual expenses incurred by McAfee Capital and related entities. The Company previously prepaid $0.2 million to Redwood Capital, a company controlled by Eric McAfee, for the Company’s use of flight time on a corporate jet. As of September 30, ~~2020,~~2021, $0.1 million remained as a prepaid expense.

As consideration for the reaffirmation of guaranties required by Amendment No. 13 and 14 to the Note Purchase Agreement which the Company entered into with Third Eye Capital on March 1, 2017 and March 27, 2018 respectively, the Company also agreed to pay $0.2 million annually in consideration to McAfee Capital in exchange for its willingness to provide the guaranties.

On May 7, 2020, the Audit Committee of the Company approved a ~~guarantee~~guaranty fee to Eric McAfee of ~~0.4%~~0.1% quarterly on the outstanding balance of Third Eye Capital Notes ~~annually. Based on this approval, we accrued $0.5 million in guarantee fee as of September 30, 2020.~~for 2020 annual fee. The balance of ~~$627 thousand~~$0.2 million and ~~$304 thousand~~$0.8 million, for guaranty ~~fee~~fees, remained as an accrued liability as of September 30, ~~2020~~2021 and December 31, ~~2019~~2020, respectively.

The Company owes various members of the Board amounts totaling $0.1 million and $1.2 million as of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, for each period, in connection with board compensation fees, which are included in accounts payable on the balance sheet. For the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Company expensed ~~$94 thousand and $96 thousand respectively,~~$0.1 million, in connection with board compensation ~~fees.~~fees during each period. For the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Company expensed ~~$256 thousand and $294 thousand respectively,~~$0.3 million during each period, in connection with board compensation fees.

During the nine months ended September 30, 2021 the company issued $0.9 million of restricted stock awards to pay off outstanding accounts payable owed to members of the Board.

11. Subsequent Events

Third Eye Capital Limited Waiver and Amendment No. 18

On November 5, ~~2020,~~2021, Third Eye Capital agreed to the Limited Waiver and Amendment No. 1821 to the Note Purchase Agreement (“Amendment No. ~~18”~~21”) to: (i) provide a waiver for the Blocked Account Agreement Violation in which the Borrowers failed to deliver Blocked Account Control Agreements by August 31, 2021 and (ii) provide for a waiver ~~of the ratio of note indebtedness covenant~~ for the ~~quarter ended September 30, 2021.~~Subordinated Debt Violation, in which the Company made a repayment to a Subordinated Debt lender. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of ~~$50 thousand~~$0.1 million in cash.

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12. Management’s ~~Plan~~

Plans

The accompanying financial statements have been prepared contemplating the realization of assets and satisfaction of liabilities in the normal course of business. ~~The~~ As a result of negative capital and negative operating results, and collateralization of substantially all of the company assets, the Company has ~~a working capital deficit, which includes approximately $59.3 million of debt maturing within the next 12 months,~~been reliant on its senior secured lender to provide additional funding and ~~the Company~~ has been required to remit substantially all excess cash from operations to ~~its~~the senior ~~lender and is therefore reliant on its senior lender to provide additional funding when required.~~ secured lender. In order to meet its obligations during the next 12twelve months, the Company will need to either refinance the Company’s debt or receive the continued cooperation ~~from~~of its senior lender. This dependence on the senior lender raises substantial doubt about the Company’s ability to continue as a going concern. The Company plans to pursue the following strategies to improve the course of the ~~business:~~

●

~~Operate~~business.

For the Keyes ~~Plant~~plant, we plan to operate the plant and continue to improve ~~operational~~financial performance ~~at the Plant, including the expansion into new products, new markets for existing products, and adoption of~~by adopting new technologies or process changes that allow for energy efficiency, cost reduction or revenue ~~enhancements.~~

●

~~Continue to develop and expand the markets for high-grade alcohol by extending the value chain to allow for higher margin sales to consumers.~~

●

~~Execute~~enhancements, execute upon awarded grants ~~at the Keyes Plant~~ that improve energy and operational efficiencies resulting in lower cost, lower carbon demands and overall margin improvement.

●

~~Operate~~

For the ~~existing~~ABGL biogas project, we plan to operate the biogas digesters to capture and monetize ~~RNG~~biogas as well as continue to build new dairy digesters and extend the existing pipeline in order to capture ~~high value California LCFS~~the higher carbon credits available in California. Funding for continued construction is based upon extending the existing Preferred Unit Purchase Agreement, obtaining government guaranteed loans and ~~RFS RINs.~~

●

~~Raise~~executing on existing and new state grant programs.

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

●

~~Secure~~

For the India plant, we plan to secure higher ~~fuel shipment~~ volumes ~~from~~of shipments of fuels at the India plant by developing the sales channels and expanding the existing domestic markets or exporting to North America markets.

●

~~Continue~~

In addition to the above we plan to continue to locate funding for existing and new business opportunities through a combination of working with our senior lender, restructuring existing loan agreements, selling equity through the ATM and otherwise, selling the current ~~offering for $50.8 million from the~~ EB-5 Phase II ~~funding,~~offering, or by vendor financing arrangements.

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

Operations

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

●

~~Overview. Discussion of our business and overall analysis of financial and other highlights affecting us to provide context for the remainder of MD&A.~~

●

~~Results of Operations. An analysis of our financial results comparing the three and nine months ended September 30, 2020 to the three and nine months ended September 30, 2019.~~

●

~~Liquidity and Capital Resources. An analysis of changes in our balance sheets and cash flows and discussion of our financial condition.~~

●

~~Critical Accounting Estimates. Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.~~

	·	Overview. Discussion of our business and overall analysis of financial and other highlights affecting us, to provide context for the remainder of MD&A.

	·	Results of Operations. An analysis of our financial results comparing the three and nine months ended September 30, 2021 and 2020.

	·	Liquidity and Capital Resources. An analysis of changes in our balance sheets and cash flows and discussion of our financial condition.

	·	Critical Accounting Estimates. Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.

The following discussion should be read in conjunction with our consolidated financial statements and accompanying notes included elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. ~~As discussed in further detail above, the~~Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, particularly under “Part II, Item 1A. Risk Factors,” and in other reports we file with the ~~SEC, specifically our most recent Annual Report on Form 10-K.~~SEC. All references to years relate to the calendar year ended December 31 of the particular year.

Overview

Headquartered in Cupertino, California, ~~Aemetis is~~we are an international ~~advanced~~renewable natural gas, renewable fuels and ~~biochemicals~~byproducts company focused on the acquisition, development and commercialization of innovative negative carbon intensity products and technologies that replace traditional petroleum-based ~~products through the conversion of second-generation ethanol and biodiesel plants into advanced biorefineries.~~products. We operate in two reportable geographic segments: “North America” and “India.”

Founded in 2006, we have completed Phase 1 and are expanding a California biogas digester network and pipeline system to convert dairy waste gas into Renewable Natural Gas (RNG). We own and operate a 65 million gallon per year ethanol production facility ~~in California’s Central Valley~~located in Keyes, California ~~where we manufacture and produce~~(the “Keyes Plant”). In addition to low carbon renewable fuel ethanol, ~~high-grade alcohol, WDG, CDS~~the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), and ~~DCO. We operate~~Condensed Distillers Solubles (“CDS”), all of which are sold to local dairies and feedlots as animal feed. In the fourth quarter of 2021, an ethanol membrane dehydration system was commissioned at the Keyes Plant, a ~~research~~key part of increasing the electrification and ~~development laboratory~~decreasing natural gas usage at the facility. This project reduces greenhouse gas (“GHG”) emissions and decreases the carbon intensity of fuel produced at the Keyes Plant, allowing us to ~~develop efficient conversion technologies using waste feedstocks~~realize a higher price for the ethanol produced and sold.

During 2018, Aemetis Biogas, LLC (“ABGL”) was formed to produce biofuels and biochemicals. We also own and operate a 50 million gallon per year renewable chemical and advanced fuel production facility on the East Coast of India producing high quality distilled biodiesel and refined glycerin for customers in India and Europe.

~~We also lease a site in Riverbank, California,~~construct bio-methane anaerobic digesters at local dairies near the Keyes Plant, many of whom also purchase WDG produced at the Keyes Plant. The digesters are connected via a pipeline owned by ABGL to a gas cleanup and compression unit being built at the Keyes Plant to produce Renewable Natural Gas (“RNG”). During the third quarter of 2020, ABGL completed construction on the first two dairy digesters along with the pipeline that carries bio-methane from these dairies to the Keyes Plant. Upon receiving the bio-methane from the dairies, we remove the impurities and convert it to RNG where it will be either injected into the local gas utility pipeline, supplied as renewable compressed natural gas (“RCNG”) that will service local trucking fleets, or used as renewable energy at the Keyes Plant.

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During the first quarter of 2021, we ~~plan~~announced our “Carbon Zero” biofuels production plants designed to produce biofuels, including renewable jet and diesel fuel utilizing cellulosic hydrogen and non-edible renewable oils sourced from existing Aemetis biofuels plants and other sources. The first plant, in Riverbank, California, “Carbon Zero 1”, is expected to utilize ~~biomass-to-fuel technology that we have licensed from LanzaTech~~hydroelectric and ~~InEnTec~~other renewable power available onsite to ~~build~~produce 45 million gallons per year of jet fuel, renewable diesel, and other byproducts. The plant is expected to supply the ~~Riverbank Cellulosic Ethanol Facility capable of converting local California surplus biomass–principally orchard waste–into~~aviation and truck markets with ultra-low carbon renewable ~~cellulosic ethanol.~~fuels to reduce GHG emissions and other pollutants associated with conventional petroleum-based fuels.

The Company is continuing to develop a biomass-to-fuel technology to build a carbon zero production facility. By producing ultra-low carbon renewable ~~cellulosic ethanol, we expect~~fuels, the Company expects to capture higher value D3 ~~cellulosic~~ RINs and California’s LCFS credits. D3 RINs have a higher value in the marketplace than D6 RINs due to D3 RINs’ relative scarcity and mandated pricing formula from the United States EPA.

~~In December 2018,~~

On April 1, 2021, we ~~acquired~~established Aemetis Carbon Capture, Inc. to build carbon sequestration projects to generate LCFS and IRS 45Q credits by injecting CO₂ into wells which are monitored for emissions to ensure the long-term sequestration of carbon underground. California’s Central Valley is well established as a ~~5.2-acre parcel of land~~major region for large-scale natural gas production and CO₂ injection projects due to the ~~construction of~~subsurface geologic formation that retains gases.

We operate a ~~gas-to-liquid CO2 facility by Messer,~~research and development laboratory to ~~sell CO2 produced at the Keyes Plant, which will add incremental income for the North America segment.~~develop efficient conversion technologies using waste feedstocks to produce biofuels and biochemicals. We ~~commenced operations~~are continuing to develop a biomass-to-fuel technology to build a carbon zero production facility. By producing ultra-low carbon renewable fuels, we expect to capture higher value D3 RINs and ~~began recognizing revenue from this project~~California’s LCFS credits. D3 RINs have a higher value in the ~~second quarter~~marketplace than D6 RINs due to D3 RINs’ relative scarcity and mandated pricing formula from the United States EPA.

We also own and operate the Kakinada Plant with a nameplate capacity of ~~2020.~~

~~In 2018, we formed ABGL to construct biogas digesters at local dairies near~~150 thousand metric tons per year, or about 50 million gallons per year, producing high quality distilled biodiesel and refined glycerin for customers in India and Europe. We believe the ~~Keyes~~Kakinada Plant ~~many of whom are already customers~~is one of the ~~WDG produced at~~largest biodiesel production facilities in India on a nameplate capacity basis. The Kakinada Plant is capable of processing a variety of vegetable oils and animal fat waste feedstocks into biodiesel that meet international product standards. The Kakinada Plant also distills the Keyes Plant. The digesters are connected by a pipeline to a gas cleanup and compression facility to produce RNG. ABGL currently has signed participation agreements with 17 local dairies and fully executed leases with 3 dairies nearcrude glycerin byproduct from the ~~Keyes Plant in order to capture their methane,~~biodiesel refining process into refined glycerin, which would otherwise be released into the atmosphere, primarily from manure wastewater lagoons. We plan to capture methane from multiple dairies and pipe the gas to a centralized location at our Keyes Plant. The impurities of the methane will then be removed and cleaned into bio-methane for any number of applications including injecting into the local utility pipeline, operating a RCNG truck loading station that will service local trucking fleets to displace diesel fuel, or converting to clean electricity.

The bio-methane can also be used in our Keyes Plant to displace petroleum-based natural gas. The environmental benefits of the Biogas Project are potentially significant because dairy biogas has a negative CI under the California LCFS and will also receive D3 RINs under the federal RFS. ABGL has constructed and commenced operations of the first two digesters during the third quarter of 2020.

~~Additionally, we own the Goodland Plant through GAFI where we plan to deploy a cellulosic ethanol technology~~is sold to the ~~Goodland Plant.~~

pharmaceutical, personal care, paint, adhesive and other industries.

North America Revenue

Our revenue development strategy in North America has historically relied on supplying ~~renewable~~ ethanol into the transportation fuel market in Northern California and supplying feed products to dairy and other animal feed operations in Northern California. We are actively seeking higher value markets for our ethanol in an effort to improve our overall margins and to add incremental income to the North America segment, including the development of the ~~Riverbank Cellulosic Ethanol Facility,~~Carbon Zero Plants, the ~~sale~~expansion of ~~CO2 produced at~~ the ~~Keyes Plant to Messer, the construction of biogas digesters at local dairies near the Keyes Plant to produce RNG,~~Biogas Project, and the implementation of the ~~Aemetis Integrated~~Solar Microgrid System, the ~~Emission and Energy Efficiency Delivery Initiative,~~installation of the ~~Mitsubishi~~membrane dehydration system and other ~~technologies at our plants.~~technologies. We are also actively working with local dairy and feed potential customers to promote the value of our WDG product in an effort to strengthen demand for this product.

~~On March 18, 2020 the US Treasury Tobacco and Alcohol Tax and Trade Bureau (“TTB”) provided waivers allowing ethanol plants to produce high-grade alcohol for use in hand sanitizer.~~

During the first week of April 2020, Aemetis received its permanent permit allowing for sales of fuel ethanol, industrial alcohol and spirits for potable alcohol beyond the waiver period. Accordingly, Aemetis began supplying alcohol as a component of hand sanitizer. During June 2020, Aemetis renamed Biofuels Marketing, Inc. to Aemetis Health Products, Inc., and began a sales and marketing strategy of blending, bottling and selling hand sanitizer into retail branded and white label markets. During the second quarter of 2020, the initial demand for high-grade alcohol as a component of hand sanitizer experienced a significant spike in demand from COVID-19 pandemic due to severe supply shortages, and accordingly, Aemetis was able to produce and supply high volumes of high-grade alcohol product. Market normalization will be dependent on external developments associated with the COVID-19 pandemic; however, management believes qualified procedures will continue to see opportunities for ongoing consumer demand beyond the pandemic’s timeframe. As a producer of high-grade alcohol, with plans to increase product quality to US Pharmacopeia (“USP”) grade, and with the necessary permits to permanently supply into this market, Aemetis expects to emerge well positioned to produce a high-quality product and develop marketing channels that close the gap between suppliers and end customers, albeit at lower volumes than experienced during the second quarter of 2020.

~~We produce~~2021, we produced five products at the Keyes Plant: denatured fuel ethanol, ~~high-grade alcohol,~~ WDG, DCO, CO₂, and CDS. During the first quarter of 2020, we ~~transitioned~~started transitioning from selling ~~100% of~~ the ethanol we produce to J.D. Heiskell pursuant to ~~a purchase agreement with J.D. Heiskell (“~~the J.D. Heiskell Purchase ~~Agreement”),~~Agreement, to a model where ~~100% of~~ the ethanol is sold directly to ~~Kinergy Marketing LLC (“Kinergy”).The~~our fuel marketing customers. We own the ethanol stored in our finished goods ~~tank is 100% owned by Aemetis.~~tank. WDG ~~and DCO continue~~continues to be sold to ~~A.L.Gilbert~~A.L. Gilbert and DCO is sold to other customers under the ~~J.D.Heiskell Purchasing~~J.D. Heiskell Purchase Agreement. Smaller amounts of CDS were sold to various local third parties. We began selling CO₂ to Messer in the second quarter of 2020. We began selling high-grade alcohol in March 2020 directly to various customers throughout the West ~~Coast.~~Coast and we also produced and sold Aemetis hand sanitizer through our Aemetis Health Products, Inc. subsidiary in the fourth quarter of 2020.

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

India Revenue

Our revenue strategy in India is based on continuing to sell biodiesel to our bulk fuel customers, fuel station customers, mining customers, industrial customers and tender offers placed by Government Oil Marketing Companies (“OMCs”) for bulk purchases of fuels. In 2020, the tenders were delayed due to COVID-19, and ultimately changed in format to allow for monthly bidding on volumes at a price set by the OMCs on an annual basis. The Company plans to participate in these tenders during 2021 when the price of feedstock allows for profitable operation at the OMCs set bid price.

During the first quarter of 2021, the Company was approved by the Andhra Pradesh State Road Transport Corp. (“APSRTC”), of India, to supply approximately 800,000 gallons per month of biodiesel to fuel public transport buses in the region. The arrangement is expected to be ongoing to meet the needs of APSRTC, however it has been delayed due to COVID-19.

Results of Operations

Three Months Ended September 30, ~~2020~~2021, Compared to Three Months Ended September 30, ~~2019~~

2020

Revenues

Our revenues are derived primarily from sales of ethanol ~~high-grade alcohol,~~ and WDG in North America and biodiesel and refined glycerin in India.

Three Months Ended September 30, (in thousands)

2020

2019

Inc/(dec)

% change

North America
$33,131
$37,820
$(4,689)
  -12%
India
  7,792
  19,569
  (11,777)
  -60%





Total
$40,923
$57,389
$(16,466)
  -29%

	2021		2020		Inc/(dec)			% change

North America	$	49,832	$	33,131	$	16,701			50	%
India		63		7,792		(7,729	)		-99	%
Total	$	49,895	$	40,923	$	8,972			22	%

Table of Contents

North America.The ~~decrease~~increase in revenues during the three months ended September 30, ~~2020~~2021, was ~~mainly~~ due to a ~~decrease~~79% increase in ~~sales~~average price of ethanol ~~and WDG. Gallons of ethanol sold decreased~~ to ~~15.0 million gallons during~~$2.84 per gallon, compared to $1.59 per gallon in the three months ended September 30, 2020, ~~compared~~while the gallons of ethanol sold decreased to ~~15.8~~13.8 million gallons ~~during the three months ended September 30, 2019. The average price of ethanol decreased by 9% to $1.59 per gallon during~~from 15.0 million gallons. In the three months ended September 30, 2020, ~~compared to $1.74 per gallon during the three months ended September 30, 2019, primarily due to change in demand~~ethanol revenues included revenues from ~~COVID-19 shelter-in-place orders that reduced demand of gasoline. In addition, the~~high grade alcohol. WDG sales volume ~~of WDG~~ decreased ~~by 11%~~ to 9493 thousand tons during the three months ended September 30, ~~2020~~2021, compared to ~~106~~94 thousand tons ~~during~~in the three months ended September 30, ~~2019 while~~2020, and the average ~~sales~~ price ~~decreased~~of WDG increased by 8%26% to ~~$75.81~~$96 per ~~ton.~~ton in the three months ended September 30, 2021, compared to $76 per ton in the three months ended September 30, 2020. During the three months ended September 30, 2021, plant production averaged 100% of the 55 million gallon per year nameplate capacity, compared to 111% for the three months ended September 30, 2020. For the three months ended September 30, ~~2020,~~2021, we generated 79% of our North America revenues from sales of ethanol, 18% from sales of WDG, and 3% from sales of DCO, CO₂, and CDS, compared to 72% of our North America revenues from sales of ethanol, 22% from sales of WDG, and 6% from sales of ~~industrial alcohol, corn oil, CDS, and CO2 compared to 73% of our revenues from sales of ethanol, 23% from sales of WDG, and 4% from sales of corn oil~~DCO, CO₂, and CDS for the three months ended September 30, ~~2019. During~~2020.

India. The decrease in revenues was primarily attributable to the COVID-19 shutdown and higher feedstock costs making conversion to biodiesel unviable. Biodiesel sales volume decreased to zero as no metric tons were sold in the three months ended September 30, ~~2020, plant production averaged 111% of the 55 million gallon per year nameplate capacity~~2021, compared to ~~115% during~~8.1 thousand metric tons sold in the three months ended September 30, ~~2019.~~

~~India.~~2020. In addition, refined glycerin sales volume decreased to zero as no metric tons were sold in the three months ended September 30, 2021, compared to 556 metric tons sold in the three months ended September 30, 2020. For the three months ended September 30, ~~2020,~~2021, we generated 100% of our revenues from other sales compared to 94% of our revenues from the sales ~~from~~of biodiesel and 6% of our ~~sales~~revenues from the sale of refined glycerin ~~compared to 87% of our sales from biodiesel, 5% of our sales from refined glycerin, and 8% from other sales~~ for the three months ended September 30, ~~2019. The decrease~~2020.

Cost of Goods Sold

Three Months Ended September 30, (in thousands)

	2021		2020		Inc/(dec)			% change

North America	$	54,664	$	33,534	$	21,130			63	%
India		16		6,618		(6,602	)		-100	%
Total	$	54,680	$	40,152	$	14,528			36	%

North America. We ground 4.8 million and 5.2 million bushels of corn in revenues was due to delay in the government tender contracts bidding and general slowness of sales due to COVID-19. The decrease in revenues of 60% was due to a decrease in biodiesel volumes by 58% to 8,133 metric tons during the three months ended September 30, 2021 and 2020, ~~compared to 19,343 metric tons during the three months ended September 30, 2019. The~~respectively. Our average price of biodiesel increased to $901 per metric ton during the three months ended September 30, 2020 compared to $882 per metric during the three months ended September 30, 2019. In addition, the refined glycerin volumes decreased by 72% to 556 metric tons during the three months ended September 30, 2020 compared to 2,023 metric tons during the three months ended September 30, 2019 while the average price increased by 72% to $807 per metric ton during the three months ended September 30, 2020 compared to $470 per metric ton in the same period in 2019.

~~Cost of Goods Sold~~

~~Three Months Ended September 30 (in thousands)~~

2020

2019

Inc/(dec)

% change

North America
$33,534
$37,990
$(4,456)
  -12%
India
  6,618
  15,417
  (8,799)
  -57%





Total
$40,152
$53,407
$(13,255)
  -25%

~~North America.We ground 5.2 million bushels of corn during the three months ended September 30, 2020 compared to 5.6 million bushels during the three months ended September 30, 2019. Our~~ cost of feedstock per bushel ~~decreased by 11%~~increased to ~~an average of $4.92~~$7.99 per bushel during the three months ended September 30, ~~2020~~2021 compared to ~~$5.53~~$4.92 per bushel ~~during~~for the three months ended September 30, ~~2019.~~

2020. In addition, for the three months ended September 30, 2021, we incurred $1.0 million more in natural gas costs, and $0.5 million more in chemical costs.

India.The decrease in ~~cost~~costs of goods sold was attributable to the decrease in ~~revenues from biodiesel. The~~biodiesel and refined glycerin sales as production of these products became unviable. Biodiesel feedstock volume ~~of biodiesel feedstock we consumed decreased by 52% to 7,783 metric tons~~was none in the three months ended September 30, 2021, compared to ~~16,374~~7.8 thousand metric tons in the ~~same period last year.~~three months ended September 30, 2020. The average price of biodiesel feedstock ~~decreased by 13% to~~was $621 per metric ton during the three months ended September 30, ~~2020 compared~~2020. Refined glycerin feedstock volumes decreased to ~~$717 per metric ton during~~none in the three months ended September 30, ~~2019. In addition, the volume of refined glycerin we consumed decreased by 64%~~2021, compared to 632 metric tons ~~during~~in the three months ended September 30, 2020, while the average price of refined glycerin feedstock was $589 per metric ton in the three months ended September 30, 2020.

Table of Contents

Gross profit (loss)

Three Months Ended September 30, (in thousands)

	2021			2020			Inc/(dec)			% change

North America	$	(4,832	)	$	(403	)	$	(4,429	)		-1099	%
India		47			1,174			(1,127	)		-96	%
Total	$	(4,785	)	$	771		$	(5,556	)		-721	%

North America. Gross profit decreased due a decrease in the volume of ethanol sold from 15.0 million gallons in the three months ended September 30, 2020, compared to ~~1,777 metric tons in~~13.8 million gallons for the same period in ~~2019 while the average price also decreased by 44% to $589 per metric ton compared to $408 per metric ton during the three months ended September 30, 2019.~~

~~Gross Profit~~

~~Three Months Ended September 30 (in thousands)~~

2020

2019

Inc/(dec)

% change

North America
$(403)
$(170)
$(233)
  137%
India
  1,174
  4,152
  (2,978)
  -72%





Total
$771
$3,982
$(3,211)
  -81%

~~North America.Gross profit decreased due to lower prices and volumes sold of ethanol and WDG compared to the same period in 2019.~~

~~India.~~Gross profit decreased by 72% due to decreased volume of sales primarily due to COVID-19 delays for bidding of the OMC tender and decreased general demand by 58% to 8,133 metric tons, during the three months ended September 30, 2020 compared to 19,343 metric tons during the same period in 2019.

~~Operating Expenses~~

~~R&D~~

~~Three Months Ended September 30 (in thousands)~~

2020

2019

Inc/(dec)

% change

North America
$37
$37
$-
  0%
India
  -
  -
  -
  0%





Total
$37
$37
$-
  0%

~~R&D expenses remained consistent during the three months ended September 30, 2020 and 2019.~~

~~Selling, General and Administrative Expenses (SG&A)~~

~~Three Months Ended September 30 (in thousands)~~

2020

2019

Inc/(dec)

% change

North America
$4,340
$2,716
$1,624
  60%
India
  223
  1,813
  (1,590)
  -88%





Total
$4,563
$4,529
$34
  1%

SG&A expenses consist primarily of salaries and related expenses for employees, marketing expenses related to product sales, as well as professional fees, other corporate expenses, and related facilities expenses.

~~North America.SG&A expenses as a percentage of revenue during the three months ended September 30, 2020 and 2019 increased to 13% compared to 7%. The increase was due to~~2021 coupled with an increase in professional fees of $672 thousand, an increase in bad debt expense of $647 thousand, an increase in insurance, taxes, and penalties of $131 thousand, an increase in salaries and wages of $67 thousand, an increase of $49 thousand in supplies and services, and other expenses of $58 thousand during the three months ended September 30, 2020.

~~India. SG&A expenses as a percentage of revenue during the three months ended September 30, 2020 decreased to 3%~~feedstock cost per bushel from 9% compared to the corresponding period in 2019. The 88% decrease in SG&A expenses during the three months ended September 30, 2020 compared to the same period of 2019 was due to decrease in operation support charges of $984 thousand, a decrease in gas and electric of $221 thousand, a decrease in office maintenance of $213 thousand, a decrease in salaries of $155 thousand, and a decrease in water costs of $26 thousand.

~~Other Income and Expense~~

~~Three Months Ended September 30 (in thousands)~~

2020

2019

Inc/dec

% change

North America

Interest rate expense
$5,787
$5,347
$440
  8%
Debt related fees and amortization expense
  674
  946
  (272)
  -29%
Accretion of Series A preferred units
  1,765
  589
  1,176
  200%
Other (income)/expense
  155
  (265)
  420
  158%





India




Interest rate expense
  9
  49
  (40)
  -82%
Other income
  (2)
  (24)
  22
  92%





Total
$8,388
$6,642
$1,746
  26%

~~Other (Income)/Expense.~~Other (income) expense consists primarily of interest rate and amortization expenses attributable to our debt facilities and those of our subsidiaries, and interest accrued on the judgments and accretion of Series A Preferred Units preference payments. The debt facilities include stock or warrants issued as fees. The fair value of stock and warrants is amortized as amortization expense, except when the extinguishment accounting method is applied, in which case refinanced debt costs are recorded as extinguishment loss or gain.

~~North America.Interest rate expense was higher during the three months ended September 30, 2020 due to higher debt balances. The decrease in amortization expense~~$4.92 in the three months ended September 30, 2020, ~~was mainly due~~ to amortization of fees added during prior periods and reduction in extension fees added during the three months ended September 30, 2020 compared to the same period in 2019. Increase in accretion on the Series A Preferred Unit was due to issuance of additional shares. Guarantee fee of $0.2 million was added during the three months ending September 30, 2020.

~~Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019~~

~~Revenues~~

~~Our revenues are derived primarily from sales of ethanol, high-grade alcohol, and WDG in North America and biodiesel and glycerin in India.~~

~~Nine Months Ended September 30 (in thousands)~~

2020

2019

Inc/(dec)

% change

North America
$114,226
$113,942
$284
  0.2%
India
  14,001
  35,954
  (21,953)
  -61%





Total
$128,227
$149,896
$(21,669)
  -14%

~~North America.~~For the nine months ended September 30, 2020, we generated 55% of our revenue from sales of ethanol, 21% from sales of high-grade alcohol, 20% from sales of WDG, and 4% from sales of corn oil, CCA credits and CDS. During the nine months ended September 30, 2020, plant production averaged 112% of the 55 million gallon per year nameplate capacity. The slight increase in revenues for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 was due to the initial spike in demand that occurred when we entered into high-grade alcohol market. The increase in revenues was offset by a decrease in the average ethanol price of 11% to $1.55 while the ethanol sales volume decreased to 40.5 million gallons compared to 48.1 million gallons$7.99 in the same period in 2019. The average price of WDG decreased by 4% to $79 per ton while WDG sales volume also decreased by 9% to 292 thousand tons in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

2021.

India.For the nine months ended September 30, 2020, we generated 88% of our sales from biodiesel, 6% of our sales from refined glycerin, and 6% from PFAD and other sales compared to 90% of our sales from biodiesel, 6% of our sales from refined glycerin and 4% from PFAD and other sales during the nine months ended September 30, 2019. The decrease in revenues for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 was due to a 61% decrease in the sales volume of biodiesel to 14,346 metric tons. The decrease in biodiesel volumes was due to delay in obtaining and supplying production quantities under the OMCs tender contract. The average sales price of biodiesel decreased by 1% to $855 per metric ton during the nine months ended September 30, 2020 compared to $868 per metric ton in the same period in 2019. The sales volume of refined glycerin decreased by 72% to 1,112 metric tons while the average price of glycerin increased by 48% to $817 per metric ton in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

~~Cost of Goods Sold~~

~~Nine Months Ended September 30 (in thousands)~~

2020

2019

Inc/(dec)

% change

North America
$101,231
$113,440
$(12,209)
  -11%
India
  12,599
  29,552
  (16,953)
  -57%





Total
$113,830
$142,992
$(29,162)
  -20%

~~North America.~~We ground 15.8 million bushels of corn during the nine months ended September 30, 2020 compared to 16.9 million bushels in the same period in 2019. Our average cost of corn per bushel decreased by 9% to $4.87 per bushel in the nine months ended September 30, 2020 compared to the same period in 2019.

~~India.~~The decrease in cost of goods sold during the nine months ended September 30, 2020 compared to September 30, 2019 was attributable to a decrease in the volume of biodiesel feedstock we ground by 58% to 13,474 metric tons compared to 31,936 metric tons during the nine months ended September 30, 2019 coupled with an decrease in the average price of biodiesel feedstock by 7% to $637 compared to $683 in the same period in 2019. In addition, the volume of refined glycerin feedstock we ground decreased by 67% to 1,146 metric tons and the average price of the refined glycerin feedstock also decreased by 6% to $551 per metric ton in the nine months ended September 30, 2020 compared to the same period in 2019.

~~Gross Profit~~

~~Nine Months Ended September 30 (in thousands)~~

2020

2019

Inc/(dec)

% change

North America
$12,995
$502
$12,493
  2489%
India
  1,402
  6,402
  (5,000)
  -78%





Total
$14,397
$6,904
$7,493
  109%

~~North America.~~Gross profit for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 increased due to entering the high-grade alcohol market coupled with the decreased price of corn.

~~India.~~The decrease in gross profit was attributable to the decrease ~~in the sales volume~~ of ~~all products of 62% to 15,458~~biodiesel and refined glycerin metric tons ~~and due to decreases in the biodiesel price per metric ton for the nine months ended September 30, 2020.~~

sold as production of these products became unviable.

Operating Expenses

R&D

~~Nine~~

Three Months Ended September 30, (in thousands)

2020

2019

Inc/(dec)

% change

North America
$175
$160
$15
  9%
India
  -
  -
  -
  0%





Total
$175
$160
$15
  10%

	2021		2020		Inc/(dec)			% change

North America	$	22	$	37	$	(15	)		-41	%
India		-		-		-			0	%
Total	$	22	$	37	$	(15	)		-41	%

R&D ~~expenses increased in~~expense remained consistent for the ~~nine~~three months ended September 30, ~~2020 due to increases in professional fees of $23 thousand, offset by decrease in lab supplied~~2021 and ~~other of $8 thousand.~~

2020.

Selling, General and Administrative Expenses (SG&A)

~~Nine~~

Three Months Ended September 30, (in thousands)

2020

2019

Inc/(dec)

% change

North America
$11,206
$9,972
$1,234
  12%
India
  1,342
  2,743
  (1,401)
  -51%





Total
$12,548
$12,715
$(167)
  -1%

	2021		2020		Inc/(dec)		% change

North America	$	4,637	$	4,340	$	297		7	%
India		450		223		227		102	%
Total	$	5,087	$	4,563	$	524		11	%

SG&A expenses consist primarily of salaries and related expenses for employees, marketing expenses related to sales of ethanol and WDG in North America and biodiesel and other products in India, as well as professional fees, other corporate expenses, and related facilities expenses.

North America. The increase in SG&A expenses for the three months ended September 30, 2021 was due to increases in salaries and wages of $0.2 million, in insurance expense of $0.3 million, in other taxes, interest and penalties of $0.1 million, in professional fees of $0.1 million, and in marketing costs and other of $0.2 million. This was partially offset by a decrease in bad debt expense of $0.6 million. SG&A expenses as a percentage of revenue in the three months ended September 30, 2021 decreased to 9% as compared to 13% in the corresponding period of 2020.

India. SG&A expenses increased as result of an increase in exempt labor of $0.2 million. SG&A as a percentage of revenue in the three months ended September 30, 2021 increased to 714% as compared to 3% in the corresponding period of 2020 due to the decrease in revenue caused by the COVID-19 pandemic and unfavorable feedstock pricing in the three months ended September 30, 2021.

Table of Contents

Other Income and Expense

Three Months Ended September 30, (in thousands)

	2021			2020			Inc/dec			% change
North America
Interest rate expense	$	4,408		$	5,787		$	(1,379	)		-24	%
Debt related fees and amortization expense		1,140			674			466			69	%
Accretion and other expenses of Series A preferred units		2,185			1,765			420			24	%
Other expense		(1	)		155			(156	)		101	%
India
Interest rate expense		-			9			(9	)		-100	%
Other income		(29	)		(2	)		(27	)		-1350	%
Total	$	7,703		$	8,388		$	(685	)		-8	%

Other (Income)/Expense. Other (income) expense consists primarily of interest and amortization expense attributable to debt facilities acquired by our parent company and our subsidiaries. When the debt facilities include stock or warrants issued as fees, the fair value of stock and warrants is amortized as amortization expense, except when the extinguishment accounting method is applied, in which case refinanced debt costs are recorded as extinguishment expense.

North America. Interest expense decreased in the three months ended September 30, 2021 due to principal debt payments made to Third Eye Capital in the second quarter of 2021. Debt related fees and amortization increased as the Subordinated Notes were extended in July of 2021 and were amortized during the third quarter. The increase in accretion and other expenses of the Series A Preferred Units was due to the issuance of additional units from September 30, 2020 to September 30, 2021, coupled with accrued preference payments. Other expenses decreased due to a non-recurring guarantee fee of $0.2 million during the three months ending September 30, 2020.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Revenues

Our revenues are derived primarily from sales of ethanol and WDG in North America and biodiesel and glycerin in India.

Nine Months Ended September 30, (in thousands)

	2021		2020		Inc/(dec)			% change

North America	$	146,890	$	114,226	$	32,664			29	%
India		696		14,001		(13,305	)		-95	%
Total	$	147,586	$	128,227	$	19,359			15	%

North America. For the nine months ended September 30, 2021, the Company generated 76% of revenue from sales of ethanol, 21% from sales of WDG, and 3% from sales of corn oil, CDS, CO₂, and other sales. During the nine months ended September 30, 2021, plant production averaged 108% of the 55 million gallon per year nameplate capacity. The increase in revenues for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was due to the increase in volume of ethanol sold to 44.6 million gallons for the nine months ended September 30, 2021, compared to 40.5 million gallons sold for the nine months ended September 30, 2020 coupled with an increase in the price of ethanol per gallon to $2.49 for the nine months ended September 30, 2021, compared to $1.55 for the nine months ended September 30, 2020. In the nine months ended September 30, 2020, 21% of revenue was from sales of high-grade alcohol which was included in ethanol revenues. The average price of WDG increased by 30% to $102 per ton for the nine months ended September 30, 2021 while WDG sales volume also increased by 2% to 299 thousand tons in the nine months ended September 30, 2021 compared to 292 thousand tons in the nine months ended September 30, 2020.

Table of Contents

India. For the nine months ended September 30, 2021, the Company generated 67% of revenue from sales of biodiesel, 18% of sales from refined glycerin, and 15% from other sales, compared to 88% of sales from biodiesel, 6% from sales of refined glycerin, and 6% from other sales during the nine months ended September 30, 2020. The decrease in revenues for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was due to a 97% decrease in the sales volume of biodiesel to 455 metric tons. The decrease in biodiesel volumes was due to the COVID-19 pandemic and unfavorable feedstock pricing. The average sales price of biodiesel increased to $1,024 per metric ton during the nine months ended September 30, 2021 compared to $855 per metric ton in the same period in 2020. The sales volume of refined glycerin decreased by 88% to 130 metric tons while the average price of glycerin increased by 17% to $956 per metric ton in the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Cost of Goods Sold

Nine Months Ended September 30, (in thousands)

	2021		2020		Inc/(dec)			% change

North America	$	151,614	$	101,231	$	50,383			50	%
India		719		12,599		(11,880	)		-94	%
Total	$	152,333	$	113,830	$	38,503			34	%

North America. We grounded 15.6 million bushels of corn during the nine months ended September 30, 2021 compared to 15.8 million bushels in the same period in 2020. Our average cost of corn per bushel increased by 56% to $7.62 per bushel in the nine months ended September 30, 2021 compared to the same period in 2020. In addition, for the nine months ended September 30, 2021, we incurred $2.1 million more in natural gas costs, and $1.2 million more in more chemical costs.

India. The decrease in cost of goods sold during the nine months ended September 30, 2021 compared to September 30, 2020 was attributable to a decrease in the volume of biodiesel feedstock by 97% to 465 metric tons during the nine months ended September 30, 2021 compared to 13.5 thousand tons during the nine months ended September 30, 2020 coupled with a decrease in the average price of biodiesel feedstock by 3% to $619 compared to $637 in the same period in 2020. In addition, the volume of refined glycerin feedstock decreased by 90% to 117 metric tons in the nine months ended September 30, 2021, partially offset by an increase in the average price of the refined glycerin feedstock by 12% to $619 per metric ton in the nine months ended September 30, 2021 compared to the same period in 2020.

Gross Profit (loss)

Nine Months Ended September 30, (in thousands)

	2021			2020		Inc/(dec)			% change

North America	$	(4,724	)	$	12,995	$	(17,719	)		-136	%
India		(23	)		1,402		(1,425	)		-102	%
Total	$	(4,747	)	$	14,397	$	(19,144	)		-133	%

Table of Contents

North America. Gross profit for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 decreased due to the decrease in demand for high-grade alcohol coupled with the increased price of corn.

India. The decrease in gross profit was attributable to decrease in the sales volume of all products of 96% to 584 metric tons.

Operating Expenses

R&D

Nine Months Ended September 30, (in thousands)

	2021		2020		Inc/(dec)			% change

North America	$	66	$	175	$	(109	)		-62	%
India		-		-		-			0	%
Total	$	66	$	175	$	(109	)		-62	%

R&D expenses decreased in the nine months ended September 30, 2021 due to decreases in expenses related to research subcontract work of $84 thousand and lab supplies of $19 thousand.

Selling, General and Administrative Expenses (SG&A)

Nine Months Ended September 30, (in thousands)

	2021		2020		Inc/(dec)			% change

North America	$	15,016	$	11,206	$	3,810			34	%
India		1,206		1,342		(136	)		-10	%
Total	$	16,222	$	12,548	$	3,674			29	%

North America.SG&A expenses as a percentage of revenue in the nine months ended September 30, ~~2020 increased to~~2021 remained consistent at 10% ~~from 9%~~ in the nine months ended September 30, ~~2019.~~2021 and 2020. The increase in SG&A expenses ~~during~~in the nine months ended September 30, ~~2020 increased~~2021 was primarily due to an increase in salaries and stock compensation of $1.0 million, supplies, services and utilities of $0.1 million, insurance of $0.8 million, other taxes and penalties of $0.1 million, professional fees of $1.2 million, termination charges of $0.6 million and marketing fees of $0.4 million, which was partially offset by ~~12%~~a decrease in bad debt expense of $0.5 million as compared to the SG&A expenses during nine months ended September 30, 2019. The increase in SG&A expenses was primarily due to increases in salaries, stock compensation and supplies of $515 thousand and utilities, penalties, and insurance of $554 thousand and provision for bad debt expense and other expenses of $682 thousand, offset by a decrease in professional fees of $517 thousand for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

2020.

India.SG&A expenses as a percentage of revenue in the nine months ended September 30, ~~2020~~2021 increased to ~~10%~~173% as compared to 8%10% in the corresponding period of ~~2019.~~2020, due to the COVID-19 pandemic causing a slowdown in sales. The decrease in SG&A expenses on an absolute level was due to decreases in utilities and other of $119 thousand and professional fees of $260 thousand, partially offset by an increases in salaries and wages of $139 thousand and in miscellaneous expense and other of $231 thousand during the nine months ended September 30, ~~2020 decreased by 51%~~2021 compared to the nine months ended September 30, 2019. The decrease was due to decrease in operating support charges of $1.4 million, utilities, insurance and other expenses of $260 thousand, offset by an increase in salaries of $61 thousand and professional fees of $244 thousand during the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

2020.

Table of Contents

Other Income and Expense

Nine Months Ended September 30, (in thousands)

2020

2019

Inc/dec

% change

North America

Interest rate expense
$16,912
$15,240
$1,672
  11%
Debt related fees and amortization expense
  2,578
  3,565
  (987)
  -28%
Accretion of Series A preferred units
  4,087
  1,509
  2,578
  171%
Loss contingency on litigation
  -
  6,200
  (6,200)
  -100%
Other (income)/expense
  416
  (228)
  644
  282%





India




Interest rate expense
  44
  332
  (288)
  -87%
Other income
  (23)
  (773)
  750
  97%





Total
$24,014
$25,845
$(1,831)
  -7%

	2021			2020			Inc/dec			% change
North America
Interest rate expense	$	14,902		$	16,912		$	(2,010	)		-12	%
Debt related fees and amortization expense		3,045			2,578			467			18	%
Accretion and other expenses of Series A preferred units		7,928			4,087			3,841			94	%
Gain on debt extinguishment		(1,134	)		-			(1,134	)		-100	%
Other expense		561			416			145			35	%
India
Interest rate expense		-			44			(44	)		-100	%
Other income		(78	)		(23	)		(55	)		239	%
Total	$	25,224		$	24,014		$	1,210			5	%

Other (Income)/Expense.Other (income) expense consists primarily of interest rate and amortization expenses attributable to our debt facilities and those of our subsidiaries, and interest accrued on the judgments obtained by Cordillera Fund and ~~accretion of Series A Preferred Units preference payments.~~The Industrial Company. The debt facilities include stock or warrants issued as fees. The fair value of stock and warrants are amortized as amortization expense, except when the extinguishment accounting method is applied, in which case refinanced debt costs are recorded as extinguishment loss or gain.

North America.Interest ~~rate~~ expense ~~was higher during the nine months ended September 30, 2020 due to an increase in principal and interest on our senior notes and subordinated notes. The decrease in amortization expense~~decreased in the nine months ended September 30, ~~2020 was mainly~~2021 due to principal debt payments made to Third Eye Capital in the second quarter of 2021. Debt related fees and amortization ~~of fees added during prior periods~~increased due to debt and ~~reduction in~~ extension fees ~~added for nine months ended September 30, 2020 compared to the same period~~being incurred in ~~2019. Increase~~2021. The increase in accretion onand other expenses of the Series A Preferred ~~Unit~~Units was due to the issuance of additional ~~units. Guarantee~~units from September 30, 2020 to September 30, 2021, coupled with accrued preference payments. Other income related to gain on debt extinguishment was due to the PPP Loans being forgiven. Other expense increased due to termination charges recognized during the nine months ending September 2021, while guarantee fees of $0.5 million were added during the ~~first~~ nine months ending September 30, 2020.

~~India.~~

India. Interest ~~rate~~ expense decreased ~~due to accruing on only one~~as working capital ~~line while the other line was treated as feedstock provider for working capital without interest accrual during the nine months ended September 30, 2020. The decrease in~~lines have been repaid and other income increased because of ~~$0.7 million was caused primarily by release of long-standing accounts payable and~~ interest ~~on these payables as matters closed legally during the nine months ended September 30, 2019.~~

income.

Liquidity and Capital Resources

Cash and Cash Equivalents

Cash and cash equivalents were ~~$0.1~~$6.4 million at September 30, ~~2020, all~~2021, of which $4.6 million were held in North America and the rest was held at our Indian subsidiary. Our current ratio at September 30, ~~2020~~2021 was ~~0.14~~0.23, compared to a current ratio of ~~0.22~~0.08 at December 31, ~~2019.~~2020. We expect that our future available ~~capital~~liquidity resources will consist primarily of cash generated from operations, ~~Liquidity Reserve Notes, EB-5 program~~remaining cash balances, borrowings available, if any, under our senior debt facilities and our subordinated debt facilities, and any additional funds raised through sales of ~~preferred units.~~

equity. The use of proceeds from all equity raises and debt financings are subject to approval by our senior lender.

Liquidity

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

September 30,
2020

December 31,
2019

Cash and cash equivalents
$79
$656
Current assets (including cash, cash equivalents, and deposits)
  13,547
  12,576
Current and long term liabilities (excluding all debt)
  71,387
  51,843
Current & long term debt
  226,346
  202,425

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	As of
	September 30, 2021		December 31, 2020
Cash and cash equivalents	$	6,389	$	592
Current assets (including cash, cash equivalents, and deposits)		17,013		8,683
Current and long term liabilities (excluding all debt)		94,094		80,264
Current & long term debt		184,978		229,619

Our principal sources of liquidity have been cash provided by the sale of equity, operations, and borrowings under various debt arrangements. ~~During the three months ended September 30, 2020, $0.5 million from one investor was released to the Company from the EB-5 escrow account, which completed the funding of Phase I under this program.~~

We launched an EB-5 Phase II funding in 2016, under which we expect to issue $50.8 million in additional EB-5 Notes on substantially similar terms and conditions as those issued under our EB-5 Phase I funding. On November 21, 2019, the minimum investment amount was raised from ~~$500,000~~$0.5 million per investor to ~~$900,000~~$0.9 million per investor. As of September 30, ~~2020,~~2021, EB-5 Phase II funding in the amount of $4.0 million had been released from escrow to ~~the Company.~~us. Our principal uses of cash have been to refinance indebtedness, fund operations, and for capital expenditures. We anticipate these uses will continue to be our principal uses of cash in the future. Global financial and credit markets have been volatile in recent years, and future adverse conditions of these markets could negatively affect our ability to secure funds or raise capital at a reasonable cost, or at all.

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

~~Management believes that through~~

As a result of negative capital and negative operating results, and collateralization of substantially all of the ~~following actions,~~company assets, the Company has been reliant on its senior secured lender to provide additional funding. In order to meet its obligations during the next twelve months, the Company will ~~have~~need to either refinance the Company’s debt or receive the continued cooperation of senior lender. This dependence on the senior lender raises substantial doubt about the Company’s ability to ~~generate capital liquidity~~continue as a going concern. The Company plans to ~~carry out~~pursue the ~~business plan:~~

●

~~Operate~~following strategies to improve the course of the business.

For the Keyes Plant, we plan to operate the plant and continue to improve ~~operational~~financial performance ~~at the Plant, including the expansion into new products, new markets for existing products, and adoption of~~by adopting new technologies or process changes that allow for energy efficiency, cost reduction or revenue ~~enhancements.~~

●

~~Continue to develop and expand the markets for high-grade alcohol by extending the value chain to allow for higher margin sales to consumers.~~

●

~~Operate~~

For the ~~existing~~Biogas Project, we plan to operate the biogas digesters to capture and monetize biogas as well as continue to build new dairy digesters and extend the existing pipeline in order to capture the higher carbon credits available in California.

●

~~Raise~~ Funding for continued construction is based upon extending the existing Preferred Unit Purchase Agreement, obtaining government guaranteed loans and executing on existing and new state grant programs.

●

~~Secure~~

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For the India plant, we plan to secure higher volumes of shipments of fuels at the India plant by developing the sales channels and expanding the existing domestic markets or exporting to North America markets.

●

~~Continue~~

At September 30, ~~2020,~~2021, the outstanding balance of principal, interest and fees, net of discounts, on all Third Eye Capital Notes equaled ~~$155.5 million including the GAFI debt.~~$117 million. The current maturity date for all of the Third Eye Capital financing arrangements ~~except the GAFI financing arrangements,~~ is April 1, ~~2021; provided,~~2022, however, ~~that pursuant to Amendment No. 17, we have~~the Company has the right to extend the maturity date of the Third Eye Capital Notes to April 1, ~~2022~~2023 upon notice and payment of a 1% extension fee, ~~which can be paid or added~~pursuant to ~~senior debt.~~Amendment No. 20. The ~~current maturity date for all~~GAFI notes were fully repaid in the first quarter of 2021.

As of the ~~Third Eye Capital GAFI financing arrangements is July 10, 2021. GAFI intends to repay its Third Eye Capital Notes obligations through proceeds from the issuance~~date of a GAFI EB-5 offering or other debt/equity offerings by an Aemetis subsidiary. We intend to repay rest of the Third Eye Capital Notes through operational cash flow, proceeds from the issuance of the EB-5 Notes and/or a senior debt refinancing and/or an equity financing.

~~As of September 30, 2020,~~this report, the Company has ~~$18.0~~$40.0 million additional borrowing capacity to fund future cash flow requirements under the Reserve Liquidity Notes due on April 1, ~~2021.~~

~~Our senior lender has provided a series of accommodating amendments to the existing and previous loan facilities as described in further detail inNote 4. Debt~~of the Notes to Consolidated Financial Statements of this Form 10-Q. However, there can be no assurance that our senior lender will continue to provide further amendments or accommodations or will fund additional amounts in the future.

2022.

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

Change in Working Capital and Cash Flows

The below table (in thousands) describes the changes in current and ~~long term~~long-term debt during the nine months ended September 30, ~~2020:~~

~~Increases to debt:~~
~~Accrued interest~~	$~~16,920~~
~~Maturity date extension fee added to senior debt and waiver fees~~	~~2,047~~
~~Feb 2019 Promissory note advances including fees~~	~~1,265~~
~~Sub debt extension fees~~	~~680~~
~~India working capital draws and changes due to foreign currency~~	~~9,227~~
~~Mitsubishi financing for Zebrex equipment term loan~~	~~5,652~~
~~PPP loan received~~	~~1,134~~
~~EB-5 Investment received~~	~~500~~
	~~Total increases to debt~~	$~~37,425~~
~~Decreases to debt:~~
~~Principal, fees, and interest payments to senior lender~~	$~~(2,800~~)
~~Interest payments to sub debtors~~	~~(250~~)
~~Interest payments to EB-5 investors~~	~~(288~~)
~~Principal, fees and interest payments on working capital loans in India~~	~~(9,414~~)
~~GAFI interest and principal payments~~	~~(362~~)
~~Change in debt issuance costs, net of amortization~~	~~(390~~)
	~~Total decreases to debt~~	$~~(13,504~~)

	~~Change in total debt~~	$~~23,921~~

2021:

Increases to debt:
Accrued interest	$	15,187
Maturity date extension fee added to senior debt and waiver fees		1,615
Sub debt extension fees		680
Financing for equipment term loan		55
Total increases to debt				$	17,537
Decreases to debt:
Principal, fees, and interest payments to senior lender	$	(23,859	)
Principal and interest payments to EB-5 investors		(1,472	)
GAFI interest and principal payments		(34,846	)
PPP loan forgiveness		(1,134	)
Term loan payments		(2	)
Change in debt issuance costs, net of amortization		(865	)
Total decreases to debt				$	(62,178	)

Change in total debt				$	(44,641	)

Working capital changes resulted in (i) a ~~$1.2~~$0.9 million increase in ~~accounts receivable~~inventories due to a $1.3 million increase ~~in alcohol sales~~ in North America ~~which caused the receivable balance to increase by $1.7 million,~~inventory, partially offset by a decrease of ~~$0.5~~$0.4 million in India, ~~operations,~~ (ii) a ~~$1.7~~$0.2 million decrease in ~~inventories mainly~~accounts receivable due ~~to increase of~~a $0.7 million decrease in India’s accounts receivable, partially offset by a $0.5 ~~million in finished goods due to an amendment to the J.D. Heiskell Purchasing Agreement, whereby we are no longer obligated to sell certain inventory we produce to J.D. Heiskell, and $0.7~~ million increase in ~~raw materials which are used in the alcohol and hand sanitizer production in~~ North ~~America entities offset by decreases of $0.3 million in work in process inventory in North America and $2.7 million in inventory in India operations,~~America’s accounts receivable, (iii) a ~~$67 thousand decrease~~$2.8 million increase in prepaid expenses mainly due to ~~regular amortization of prepaid insurance,~~$2.0 million dollar prepayment to J.D. Heiskell coupled with a $0.8 million prepayment for natural gas, (iv) a ~~$1.6 million~~ decrease in other current assets ~~consisting~~in India operations of $0.6 million coupled with a ~~$0.2~~decrease of $0.4 million ~~decrease~~ in North America ~~entities and a $1.4 million decrease in India~~ operations, and (v) a ~~$3.7~~$5.8 million increase in ~~notes receiveable in India operations~~cash due to ~~short-term loans made to a working capital partner.~~

funds raised through the at-the-market offering program.

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Net cash ~~provided by~~used in operating activities during the nine months ended September 30, ~~2020~~2021 was ~~$7.0~~$20.0 million, consisting of non-cash charges of ~~$11.4~~$15.5 million, net ~~changes~~cash used in in operating assets and liabilities of ~~$17.7~~$10.7 million, and net loss of ~~$22.1~~$46.3 million. The non-cash charges consisted of: (i) ~~$2.6~~$3.1 million in amortization of debt ~~related fees~~issuance costs and other ~~amortization,~~intangible assets, (ii) ~~$3.5~~$4.1 million in depreciation expenses, (iii) ~~$0.8~~$1.4 million in stock-based compensation expense, (iv) ~~$0.3 million of deferred tax benefit, (v) $4.1~~$7.9 million in preferred unit accretion and other expenses of Series A preferred units, (v) a gain on debt extinguishment of $1.1 million, and (vi) ~~$0.6 million~~an increase in the provision for bad ~~debts.~~debts of $0.1 million. Net changes in operating assets and liabilities consisted primarily of an increase in (i) inventories of $0.9 million, (ii) prepaid expenses of $2.8 million, and (iii) a decrease in accounts ~~receivable~~payable of ~~$1.9~~$4.6 million, partially offset ~~by: (i)~~by (iv) an increase in other liabilities of $7.3 million, (v) a decrease in other assets of ~~$1.7~~$2.5 million, ~~(ii) a $1.5 million increase in inventories, (iii) a $0.3 million increase in accounts payable, (iv) a $66 thousand decrease in prepaid expenses,~~ and ~~(v) a $16.0 million~~(vi) an increase in accrued ~~interest.~~

interest of $9.3 million.

Cash used by investing activities ~~consisted~~was $17.5 million, of which $18.7 million were used by capital ~~expenditures~~projects. This was partially offset by North America grant proceeds received of ~~$13.6 million from U.S. operations, capital expenditures of $1.3 million from our India operations, and a note receivable of $3.7~~$1.2 million.

Cash provided by financing activities was ~~$11.0~~$43.3 million, consisting primarily of ~~$11.6~~$94.2 million raised from issuance of common stock in equity offerings, $3.1 million received ~~from the~~for issuing Series A Preferred ~~Unit issuance, $1.2~~Units, $1.1 million from exercises of stock options, and $0.1 million received ~~from Third Eye Capital promissory note, $1.1 million received from PPP Loans, $0.5 million from EB-5 Phase I investors, $0.3 million~~ for ~~issuance of stock to option holders, $0.3 from~~ grant ~~proceeds received for capital expenditures, and $9.3 million from working capital partners in India for their operations,~~matching program partially offset by ~~payments~~repayments of ~~$9.3~~borrowings of $53.5 million, ~~in principal to working capital partners in India for their operations, $2.2 million on Third Eye Capital promissory note,~~Series A Preferred Units redemption of $0.3 million, ~~on Third Eye Capital~~debt renewal and waiver ~~fees, $0.3~~fee payments of $1.0 million, ~~on GAFI Third Eye Capital notes,~~ and ~~$1.1 million~~ payments on finance ~~lease assets.~~

leases of $0.4 million.

Critical Accounting Policies

Our discussion and analysis of ~~our~~ financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of net sales and expenses for each period. We believe that ~~the following represents~~of our ~~critical~~most significant accounting policies, defined as those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently ~~uncertain:~~uncertain are: revenue recognition; recoverability of long-lived assets, ~~convertible notes,~~and debt modification and extinguishment accounting. These significant accounting principles are more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

2020.

Recently Issued Accounting Pronouncements

None reported beyond those disclosed in our Annual Report on ~~form~~Form 10-K for the year ended December 31, ~~2019.~~

2020.

Off Balance Sheet Arrangements

We had no ~~off balance~~off-balance sheet arrangements during the three months ended September 30, ~~2020.~~

2021.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not Applicable.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

Management (with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ~~"Exchange Act")~~Exchange Act). Based on this evaluation, our CEO and CFO concluded that, although remediation plans were initiated to address the material weakness over financial reporting as identified in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, the disclosure controls and procedures along with the related internal controls over financial reporting were not effective to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

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

As discussed in greater detail under Item 9A, Controls and Procedures, in our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, we initiated a remediation plan to address the material weakness in our internal control over financial reporting identified as of the fiscal year then ended. Our efforts to improve our internal controls are ongoing.

For a more comprehensive discussion of the material weakness in internal control over financial reporting identified by management as of December 31, ~~2019,~~2020, and the remedial measures undertaken to address this material weakness, investors are encouraged to review Item 9A, Controls and Procedures, in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

2020.

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PART II -- OTHER INFORMATION

Item 1. Legal Proceedings

On August 31, 2016, the Company filed a lawsuit in Santa Clara County Superior Court against defendant EdenIQ, Inc. (“EdenIQ”). The lawsuit was based on EdenIQ’s wrongful termination of a merger agreement that would have effectuated the merger of EdenIQ into a new entity that would be primarily owned by Aemetis. The lawsuit asserted that EdenIQ had fraudulently induced the Company into assisting EdenIQ to obtain EPA approval for a new technology that the Company would not have done but for the Company’s belief that the merger would occur. The relief sought included EdenIQ’s specific performance of the merger, monetary damages, as well as punitive damages, attorneys’ fees, and costs. In response to the lawsuit, EdenIQ filed a cross-complaint asserting causes of action relating to the Company’s alleged inability to consummate the merger, the Company’s interactions with EdenIQ’s business partners, and the Company’s use of EdenIQ’s name and trademark in association with publicity surrounding the merger. Further, EdenIQ named Third Eye Capital Corporation (“TEC”) as a defendant in a second amended cross-complaint alleging that TEC had failed to disclose that its financial commitment to fund the merger included terms that were not disclosed. Finally, EdenIQ claimed that TEC and the Company concealed material information surrounding the financing of the merger. By way of its cross-complaint, EdenIQ sought monetary damages, punitive damages, injunctive relief, attorneys’ fees and costs. In November 2018, the claims asserted by the Company were dismissed on summary judgment and the Company filed a motion to amend its claims, which remains pending. In December 2018, EdenIQ dismissed all of its claims prior to trial. In February 2019, the Company and EdenIQ each filed motions seeking reimbursement of attorney fees and costs associated with the litigation. On July 24, 2019, the court awarded EdenIQ a portion of the fees and costs it had sought in the amount of approximately $6.2 million and the Company recorded these fees based on the court order. The Company’s ability to amend its claims and present its claims to the court or a jury could materially affect the court’s decision to award EdenIQ its fees and costs. In addition to further legal motions and a potential appeal of the Court’s summary judgment order, the Company plans to appeal the court’s award of EdenIQ’s fees and costs. The Company intends to continue to vigorously pursue its legal claims and defenses against EdenIQ.

Item 1A. Risk ~~Factors.~~

Factors.

No change in risk factors since the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 filed with the SEC on March ~~12, 2020 and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.~~

15, 2021.

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

~~During the third quarter of 2020, we issued 112thousand shares of our common stock to certain subordinated promissory note holders pursuant to the note holders’ warrant exercise at an exercise price of $0.01 per share.~~

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

None.

Item 3. Defaults Upon Senior Securities.

No unresolved defaults on senior securities occurred during the three months ended September 30, ~~2020.~~

2021.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

~~Item 6.Exhibits.~~

~~99.1~~	Limited Waiver and Amendment No. 18 to Amended and Restated Note Purchase Agreement, dated as of November 5, 2020 by and among Aemetis, Inc.; Aemetis Advanced Fuels Keyes, Inc.; Aemetis Facility Keyes, Inc.; Third Eye Capital Corporation, an Ontario corporation, as agent for Third Eye Capital Credit Opportunities Fund - Insight Fund, and Ninepoint - TEC Private Credit Fund.
47

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Item 6. Exhibits.

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

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

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

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

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SIGNATURES

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

AEMETIS, INC.

By:
~~By:~~	/s/ E~~ricA. M~~cA~~fee~~
	Eric A. McAfee
	Eric A. McAfee	Eric A. McAfee Chief Executive Officer (Principal Executive Officer)

Date: November 12, ~~2020~~

2021

	~~AEMETIS, INC.~~
By:

	~~By:~~	/s/ Todd Waltz
		Todd Waltz Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date: November 12, ~~2020~~

2021

	September 30, 2020	December 31, 2019
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$79	$656
Accounts receivable, net of allowance for doubtful accounts of $647 and $0 as of September 30, 2020 and December 31, 2019	3,243	2,036
Notes receivable	3,746	-
Inventories	4,816	6,518
Prepaid expenses	727	794
Other current assets	936	2,572
Total current assets	13,547	12,576

Property, plant and equipment, net	103,050	84,226
Operating lease right-of-use assets	2,843	557
Other assets	2,730	2,537
Total assets	$122,170	$99,896

Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$15,023	$15,968
Current portion of long term debt	41,979	5,792
Short term borrowings	17,357	16,948
Mandatorily redeemable Series B convertible preferred stock	3,226	3,149
Accrued property taxes	5,356	4,095
Accrued contingent litigation fees	6,200	6,200
Current portion of operating lease liability	286	377
Other current liabilities	6,398	5,290
Total current liabilities	95,825	57,819
Long term liabilities:
Senior secured notes and revolving notes	120,781	107,205
EB-5 notes	34,500	36,500
GAFI secured and revolving notes	-	29,856
Other long term debt	11,729	6,124
Series A preferred units	28,494	14,077
Operating lease liability	2,662	200
Other long term liabilities	3,742	2,487
Total long term liabilities	201,908	196,449

Stockholders' deficit:
Series B convertible preferred stock, $0.001 par value; 7,235 authorized; 1,323 shares issued and outstanding each period, respectively (aggregate liquidation preference of $3,969 for each period respectively)	1	1
Common stock, $0.001 par value; 40,000 authorized; 21,027 and 20,570 shares issued and outstanding each period, respectively	21	21
Additional paid-in capital	88,119	86,852
Accumulated deficit	(259,498)	(237,421)
Accumulated other comprehensive loss	(4,206)	(3,825)
Total stockholders' deficit	(175,563)	(154,372)
Total liabilities and stockholders' deficit	$122,170	$99,896

	For the three months ended September 30,		For the nine months ended September 30,
	2020	2019	2020	2019
Revenues	$40,923	$57,389	$128,227	$149,896
Cost of goods sold	40,152	53,407	113,830	142,992
Gross profit	771	3,982	14,397	6,904

Research and development expenses	37	37	175	160
Selling, general and administrative expenses	4,563	4,529	12,548	12,715
Operating income (loss)	(3,829)	(584)	1,674	(5,971)

Other (income) expense:
Interest expense
Interest rate expense	5,796	5,396	16,956	15,572
Debt related fees and amortization expense	674	946	2,578	3,565
Accretion of Series A preferred units	1,765	589	4,087	1,509
Loss contingency on litigation	-	-	-	6,200
Other (income) expense	153	(289)	393	(1,001)
Loss before income taxes	(12,217)	(7,226)	(22,340)	(31,816)
Income tax expense (benefit)	-	-	(263)	7
Net loss	$(12,217)	$(7,226)	$(22,077)	$(31,823)

Less: Net loss attributable to non-controlling interest	-	(900)	-	(2,832)
Net loss attributable to Aemetis, Inc.	$(12,217)	$(6,326)	$(22,077)	$(28,991)

Other comprehensive income (loss)
Foreign currency translation gain (loss)	314	(254)	(381)	(139)
Comprehensive loss	$(11,903)	$(7,480)	$(22,458)	$(31,962)

Net loss per common share
Basic	$(0.59)	$(0.31)	$(1.06)	$(1.42)
Diluted	$(0.59)	$(0.31)	$(1.06)	$(1.42)

Weighted average shares outstanding
Basic	20,861	20,554	20,732	20,433
Diluted	20,861	20,554	20,732	20,433

	For the nine months ended September 30,
	2020	2019
Operating activities:
Net loss	$(22,077)	$(31,823)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Share-based compensation	826	630
Depreciation	3,515	3,337
Debt related fees and amortization expense	2,578	3,565
Intangibles and other amortization expense	36	36
Accretion of Series A preferred units	4,087	1,509
Deferred tax benefit	(263)	-
Provision for bad debts	647	-
Change in fair value of stock appreciation rights	-	(80)
Changes in operating assets and liabilities:
Accounts receivable	(1,902)	(4,359)
Inventories	1,542	2,563
Prepaid expenses	66	384
Other assets	1,684	(154)
Accounts payable	330	3,429
Accrued interest expense and fees	16,011	13,272
Other liabilities	(24)	6,565
Net cash provided by (used in) operating activities	7,056	(1,126)

Investing activities:
Capital expenditures	(14,921)	(5,053)
Note receivable	(3,687)	-
Net cash used in investing activities	(18,608)	(5,053)

Financing activities:
Proceeds from borrowings	12,135	39,246
Repayments of borrowings	(11,792)	(35,886)
TEC debt renewal and waiver fee payments	(300)	(530)
Grant proceeds received for capital expenditures	256	1,364
Payments on finance leases	(1,137)	-
Proceeds from the exercise of stock options	260	-
Proceeds from Series A preferred units financing	11,564	1,725
Net cash provided by financing activities	10,986	5,919

Effect of exchange rate changes on cash and cash equivalents	(11)	(9)
Net change in cash and cash equivalents for period	(577)	(269)
Cash and cash equivalents at beginning of period	656	1,188
Cash and cash equivalents at end of period	$79	$919

Supplemental disclosures of cash flow information, cash paid:
Cash paid for interest, net of capitalized interest of $291 and $231 for the nine months ended September 30, 2020 and 2019, respectively	$702	$1,836
Income taxes paid	8	-
Supplemental disclosures of cash flow information, non-cash transactions:
Subordinated debt extension fees added to debt	680	680
Fair value of warrants issued to subordinated debt holders	181	162
TEC debt extension, waiver fees, promissory notes fees added to debt	1,793	1,102
Capital expenditures in accounts payable	1,182	1,443
Operating lease liabilities arising from obtaining right of use assets	2,688	1,181
Financing lease liabilities arising from obtaining right of use assets	2,988	-
Stock Appreciation Rights issued for GAFI Amendment No. 1	-	1,050
Capital expenditures purchased on financing	5,652	-

For the three and nine months ended September 30, 2020
	Series B Preferred Stock		Common Stock		Additional	Accumulated	Accumulated Other Comprehensive	Total Stockholders'
Description	Shares	Dollars	Shares	Dollars	Paid-in Capital	Deficit	Income/(Loss)	deficit

Balance at December 31, 2019	1,323	$1	20,570	$21	$86,852	$(237,421)	$(3,825)	$(154,372)

Stock-based compensation	-	-	-	-	310	-	-	310
Issuance and exercise of warrants	-	-	113	-	93	-	-	93
Foreign currency translation loss	-	-	-	-	-	-	(668)	(668)
Net loss	-	-	-	-	-	(12,052)	-	(12,052)

Balance at March 31, 2020	1,323	$1	20,683	$21	$87,255	$(249,473)	$(4,493)	$(166,689)

Stock-based compensation	-	-	-	-	325	-	-	325
Foreign currency translation loss	-	-	-	-	-	-	(27)	(27)
Net income	-	-	-	-	-	2,192	-	2,192

Balance at June 30, 2020	1,323	$1	20,683	$21	$87,580	$(247,281)	$(4,520)	$(164,199)

Stock options exercised	-	-	232	-	260	-	-	260
Stock-based compensation	-	-	-	-	191	-	-	191
Issuance and exercise of warrants	-	-	112	-	88	-	-	88
Foreign currency translation gain	-	-	-	-	-	-	314	314
Net loss	-	-	-	-	-	(12,217)	-	(12,217)

Balance at September 30, 2020	1,323	$1	21,027	$21	$88,119	$(259,498)	$(4,206)	$(175,563)

North America (in thousands)
	For the three months ended September 30,		For the nine months ended September 30,
	2020	2019	2020	2019
Ethanol and high-grade alcohol sales	$24,825	$27,456	$86,387	$84,453
Wet distiller's grains sales	7,143	8,783	22,983	26,119
Other sales	1,163	1,581	4,856	3,370
	$33,131	$37,820	$114,226	$113,942

India (in thousands)
	For the three months ended September 30,		For the nine months ended September 30,
	2020	2019	2020	2019
Biodiesel sales	$7,325	$17,057	$12,267	$32,201
Refined glycerin sales	449	951	909	2,186
PFAD sales	-	-	774	-
Other sales	18	1,561	51	1,567
	$7,792	$19,569	$14,001	$35,954

	As of
	September 30, 2020	September 30, 2019

Series B preferred (post split basis)	132	132
Common stock options and warrants	5,846	3,910
Debt with conversion feature at $30 per share of common stock	1,294	1,255
Total number of potentially dilutive shares excluded from the diluted net income (loss) per share calculation	7,272	5,297

	As of
	September 30, 2020	December 31, 2019
Raw materials	$1,678	$2,566
Work-in-progress	1,365	1,455
Finished goods	1,773	2,497
Total inventories	$4,816	$6,518

Twelve months ended September 30,	Debt Repayments
2021	$59,336
2022	145,530
2023	13,435
2024	5,172
2025	2,436
Thereafter	1,247
Total debt	227,156
Debt issuance costs	(810)
Total debt, net of debt issuance costs	$226,346

	Three months ended September 30,		Nine months ended September 30,
	2020	2019	2020	2019
Operating lease cost
Operating lease expense	$201	$219	$561	$543
Short term lease expense	75	18	104	71
Variable lease expense	29	31	89	80
Sub lease income	-	(50)	-	(118)
Total operating lease cost	$305	$218	$754	$576

Finance lease cost
Amortization of right-of-use assets	$94	$-	$155	$-
Interest on lease liabilities	26	-	44	-
Total finance lease cost	$120	$-	$199	$-

	Shares Available for Grant	Number of Shares Outstanding	Weighted-Average Exercise Price
Balance as of December 31, 2019	147	3,746	$1.38
Authorized	2,342	-	-
Granted	(2,320)	2,320	0.69
Exercised	-	(232)	1.27
Forfeited/expired	83	(83)	0.76

Balance as of September 30, 2020	252	5,751	$1.12

	As of and for the three months ended September 30,		As of and for the nine months ended September 30,
	2020	2019	2020	2019
Ethanol sales	$-	$27,456	$26,049	$84,453
Wet distiller's grains sales	7,143	8,783	22,983	26,119
Corn oil sales	827	934	2,806	2,586
Corn purchases	25,513	30,446	77,268	90,426
Accounts receivable	161	1,066	161	1,066
Accounts payable	1,978	2,484	1,978	2,484

	Three months ended September 30, 2020			Three months ended September 30, 2019
	North America	India	Total Consolidated	North America	India	Total Consolidated

Revenues	$33,131	$7,792	$40,923	$37,820	$19,569	$57,389
Cost of goods sold	33,534	6,618	40,152	37,990	15,417	53,407

Gross (loss) profit	(403)	1,174	771	(170)	4,152	3,982

Other Expenses
Research and development expenses	37	-	37	37	-	37
Selling, general and administrative expenses	4,340	223	4,563	2,716	1,813	4,529
Interest expense	6,461	9	6,470	6,293	49	6,342
Accretion of Series A preferred units	1,765	-	1,765	589	-	589
Other (income) expense	155	(2)	153	(265)	(24)	(289)

Income (loss) before income taxes	$(13,161)	$944	$(12,217)	$(9,540)	$2,314	$(7,226)

Capital expenditures	$6,187	$113	$6,300	$3,664	$351	$4,015
Depreciation	1,085	168	1,253	942	161	1,103


Capital expenditures	$13,571	1,350	14,921	$4,249	$804	$5,053
Depreciation	3,030	485	3,515	2,883	454	3,337

	As of
	September 30,	December 31,
	2020	2019

North America	$105,619	$82,990
India	16,551	16,906
Total Assets	$122,170	$99,896

	2020	2019	Inc/(dec)	% change

North America	$33,131	$37,820	$(4,689)	-12%
India	7,792	19,569	(11,777)	-60%

Total	$40,923	$57,389	$(16,466)	-29%

	2020	2019	Inc/dec	% change
North America
Interest rate expense	$5,787	$5,347	$440	8%
Debt related fees and amortization expense	674	946	(272)	-29%
Accretion of Series A preferred units	1,765	589	1,176	200%
Other (income)/expense	155	(265)	420	158%

India
Interest rate expense	9	49	(40)	-82%
Other income	(2)	(24)	22	92%

Total	$8,388	$6,642	$1,746	26%