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

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

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):

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 July 31, ~~2021~~2022 was ~~31,689,517~~34,584,207 shares.

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 extend or refinance our senior debt on 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 fund, develop, build, maintain and operate digesters, facilities and pipelines for our Diary Renewable Natural Gas segment; our ability to fund, develop and operate our CCS projects, including obtaining required permits; our ability to receive awarded grants by meeting all of the required conditions, including meeting the minimum contributions; 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,” “could,” “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.

	June 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents ($117 and $235 respectively from VIE)	$	7,175		$	592
Accounts receivable, net of allowance for doubtful accounts of $1,404 and $1,260 as of June 30, 2021 and December 31, 2020		1,743			1,821
Inventories		4,570			3,969
Prepaid expenses ($78 and $192 respectively from VIE)		5,142			750
Other current assets ($0 and $741 respectively from VIE)		328			1,551
Cash and cash equivalents ($18 and $19 respectively from VIE)							$	3,558		$	7,751
Accounts receivable, net of allowance for doubtful accounts of $0 and $1,404 as of June 30, 2022 and December 31, 2021, respectively								1,278			1,574
Inventories, net of allowance for excess and obsolete inventory of $1,040 as of June 30, 2022 and December 31, 2021, respectively								4,905			5,126
Prepaid expenses ($184 and $335 respectively from VIE)								4,752			5,598
Other current assets								552			644
Total current assets		18,958			8,683			15,045			20,693

Property, plant and equipment, net ($29,481 and $22,628 respectively from VIE)		119,158			109,880
Operating lease right-of-use assets ($19 and $28 respectively from VIE)		2,679			2,889
Other assets ($24 and $24 respectively from VIE)		2,492			3,687
Property, plant and equipment, net ($54,992 and $39,625 respectively from VIE)								156,790			135,101
Operating lease right-of-use assets ($0 and $10 respectively from VIE)								2,294			2,462
Other assets ($537 and $38 respectively from VIE)								4,323			2,575
Total assets	$	143,287		$	125,139		$	178,452		$	160,831

Liabilities and stockholders' deficit
Current liabilities:
Accounts payable ($7,005 and $6,271 respectively from VIE)	$	16,048		$	20,739
Accounts payable ($6,942 and $4,950 respectively from VIE)							$	19,138		$	16,415
Current portion of long term debt		9,910			44,974			9,003			8,192
Short term borrowings		14,107			14,541
Short term borrowings ($9 and $9 respectively from VIE)								15,856			14,586
Mandatorily redeemable Series B convertible preferred stock		3,302			3,252			3,915			3,806
Accrued property taxes		6,371			5,674
Accrued property taxes ($0 and $121 respectively from VIE)								984			6,830
Accrued contingent litigation fees		6,200			6,200			0			6,200
Current portion of operating lease liability ($16 and $10 respectively from VIE)		310			316
Current portion of Series A preferred units ($1,566 and $2,015 respectively from VIE)		1,566			2,015
Other current liabilities ($506 and $129 respectively from VIE)		5,090			4,524
Current portion of operating lease liability ($5 and $11 respectively from VIE)								258			260
Current portion of Series A preferred units ($4,608 and $3,169 respectively from VIE)								4,608			3,169
Other current liabilities ($777 and $306 respectively from VIE)								6,600			5,872
Total current liabilities		62,904			102,235			60,362			65,330
Long term liabilities:
Senior secured notes and revolving notes		112,970			125,624			140,084			121,451
EB-5 notes		32,500			32,500			32,000			32,500
Other long term debt ($45 and $0 respectively from VIE)		11,461			11,980
Series A preferred units ($42,210 and $32,022 respectively from VIE)		42,210			32,022
Operating lease liability ($0 and $11 respectively from VIE)		2,443			2,578
Other long term liabilities ($127 and $74 respectively from VIE)		2,823			2,944
Other long term debt ($36 and $40 respectively from VIE)								11,665			12,038
Series A preferred units ($50,280 and $44,978 respectively from VIE)								50,280			44,978
Operating lease liability								2,191			2,318
Other long term liabilities								4,583			2,454
Total long term liabilities		204,407			207,648			240,803			215,739

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; 31,572 and 22,830 shares issued and outstanding each period, respectively		32			23
Series B convertible preferred stock, $0.001 par value; 7,235 authorized; 1,270 and 1,275 shares issued and outstanding each period, respectively (aggregate liquidation preference of $3,810 and $3,825 respectively)								1			1
Common stock, $0.001 par value; 80,000 authorized; 34,582 and 33,461 shares issued and outstanding each period, respectively								35			33
Additional paid-in capital		183,015			93,426			221,915			205,305
Accumulated deficit		(302,749	)		(274,080	)		(339,730	)		(321,227	)
Accumulated other comprehensive loss		(4,323	)		(4,114	)		(4,934	)		(4,350	)
Total stockholders' deficit		(124,024	)		(184,744	)		(122,713	)		(120,238	)
Total liabilities and stockholders' deficit	$	143,287		$	125,139		$	178,452		$	160,831

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE ~~INCOME~~

	For the three months ended June 30,						For the six months ended June 30,						For the three months ended June 30,						For the six months ended June 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Revenues	$	54,884		$	47,824		$	97,691		$	87,304		$	65,901		$	54,884		$	117,950		$	97,691
Cost of goods sold		51,238			33,765			97,653			73,678			66,115			51,238			121,249			97,653
Gross profit		3,646			14,059			38			13,626

Gross profit (loss)														(214	)		3,646			(3,299	)		38
Research and development expenses		21			21			44			138			51			21			87			44
Selling, general and administrative expenses		5,753			4,049			11,135			7,985			7,061			5,753			14,367			11,135
Operating income (loss)		(2,128	)		9,989			(11,141	)		5,503

Other operating expense														360			0			360			0
Operating loss														(7,686	)		(2,128	)		(18,113	)		(11,141	)
Other expense (income):
Interest expense
Interest rate expense		4,529			5,574			10,494			11,160			4,928			4,529			9,363			10,494
Debt related fees and amortization expense		690			614			1,905			1,904			1,740			690			3,566			1,905
Accretion and other expenses of Series A preferred units		3,800			1,362			5,743			2,322			1,506			3,800			3,146			5,743
Gain on debt extinguishment		(1,134	)		0			(1,134	)		0			0			(1,134	)		0			(1,134	)
Gain on litigation														(1,400	)		0			(1,400	)		0
Other expense (income)		544			303			513			240			(14,254	)		544			(14,295	)		513
Income (loss) before income taxes		(10,557	)		2,136			(28,662	)		(10,123	)
Income tax expense (benefit)		0			(56	)		7			(263	)
Net income (loss)	$	(10,557	)	$	2,192		$	(28,669	)	$	(9,860	)
Loss before income taxes														(206	)		(10,557	)		(18,493	)		(28,662	)
Income tax expense														3			0			10			7
Net loss													$	(209	)	$	(10,557	)	$	(18,503	)	$	(28,669	)

Other comprehensive income (loss)
Other comprehensive loss
Foreign currency translation loss		(184	)		(27	)		(209	)		(695	)		(390	)		(184	)		(584	)		(209	)
Comprehensive income (loss)	$	(10,741	)	$	2,165		$	(28,878	)	$	(10,555	)
Comprehensive loss													$	(599	)	$	(10,741	)	$	(19,087	)	$	(28,878	)

Net income (loss) per common share
Net loss per common share
Basic	$	(0.34	)	$	0.11		$	(1.00	)	$	(0.48	)	$	(0.01	)	$	(0.34	)	$	(0.54	)	$	(1.00	)
Diluted	$	(0.34	)	$	0.10		$	(1.00	)	$	(0.48	)	$	(0.01	)	$	(0.34	)	$	(0.54	)	$	(1.00	)

Weighted average shares outstanding
Basic		30,924			20,683			28,781			20,668			34,536			30,924			34,128			28,781
Diluted		30,924			21,152			28,781			20,668			34,536			30,924			34,128			28,781

	For the six months ended June 30,						For the six months ended June 30,
	2021			2020			2022			2021
Operating activities:
Net loss	$	(28,669	)	$	(9,860	)	$	(18,503	)	$	(28,669	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation		1,116			635			3,389			1,116
Depreciation		2,764			2,262			2,661			2,764
Debt related fees and amortization expense		1,905			1,904			3,566			1,905
Intangibles and other amortization expense		24			24			23			24
Accretion and other expenses of Series A preferred units		5,743			2,322			3,146			5,743
Loss on asset disposals								47			0
Gain on debt extinguishment		(1,134	)		0			0			(1,134	)
Deferred tax benefit		0			(263	)
Gain on litigation								(1,400	)		0
Loss on lease termination								736			0
Provision for bad debts		144			0			0			144
Changes in operating assets and liabilities:
Accounts receivable		(70	)		(3,233	)		294			(70	)
Inventories		(610	)		(1,016	)		187			(610	)
Prepaid expenses		(4,393	)		(339	)		2,138			(4,393	)
Other assets		2,588			1,570			(1,647	)		2,588
Accounts payable		(2,711	)		721			392			(2,711	)
Accrued interest expense and fees		4,361			10,433			8,542			4,361
Other liabilities		729			(302	)		(10,054	)		729
Net cash (used in) provided by operating activities		(18,213	)		4,858
Net cash used in operating activities								(6,483	)		(18,213	)

Investing activities:
Capital expenditures		(12,935	)		(8,621	)		(22,518	)		(12,935	)
Grant proceeds received for capital expenditures		1,224			0
Grant proceeds and other reimbursements received for capital expenditures								6,147			1,224
Net cash used in investing activities		(11,711	)		(8,621	)		(16,371	)		(11,711	)

Financing activities:
Proceeds from borrowings		0			6,861			30,622			0
Repayments of borrowings		(53,523	)		(7,524	)		(16,191	)		(53,523	)
Lender debt renewal and waiver fee payments								(869	)		0
Grant proceeds received for capital expenditures		115			0			0			115
Payments on finance leases		(247	)		(702	)		(182	)		(247	)
Proceeds from issuance of common stock in equity offering		86,319			0			5,124			86,319
Proceeds from the exercise of stock options		1,032			0			201			1,032
Proceeds from Series A preferred units financing		3,130			7,902			0			3,130
Series A preferred financing redemption		(300	)		0			0			(300	)
Net cash provided by financing activities		36,526			6,537			18,705			36,526

Effect of exchange rate changes on cash and cash equivalents		(19	)		(20	)		(44	)		(19	)
Net change in cash and cash equivalents for period		6,583			2,754			(4,193	)		6,583
Cash and cash equivalents at beginning of period		592			656			7,751			592
Cash and cash equivalents at end of period	$	7,175		$	3,410		$	3,558		$	7,175

Supplemental disclosures of cash flow information, cash paid:
Cash paid for interest	$	5,425		$	539		$	14,270		$	5,425
Income taxes paid		7			8			10			7
Supplemental disclosures of cash flow information, non-cash transactions:
Subordinated debt extension fees added to debt		340			340			340			340
Debt fees added to revolving lines								500			0
Fair value of warrants issued to subordinated debt holders		281			93			1,393			281
TEC debt extension, waiver fees, promissory notes fees added to debt		1,215			1,076
Fair value of warrants issued for guarantee fees								2,012			0
Fair value of warrants issued to lender for debt issuance costs								3,158			0
Fair value of stock issued to lender								1,335			0
Lender debt extension, waiver, and other fees added to debt								583			1,215
Capital expenditures in accounts payable		4,948			2,132			10,230			4,948
Operating lease liabilities arising from obtaining right of use assets		0			2,632
Payment of debt added to revolving lines								16,266			0
Financing lease liabilities arising from obtaining right of use assets		0			2,881			2,932			0
Capital expenditures purchased on financing		55			5,652			0			55
Issuance of RSAs to pay off accounts payable		893			0
Issuance of equity to pay off accounts payable								0			893

For the six months ended June 30, 2020
									Additional					Accumulated Other			Total
	Series B Preferred Stock				Common Stock				Paid-in		Accumulated			Comprehensive			Stockholders'			Series B Preferred Stock					Common Stock				Additional		Accumulated			Accumulated Other Comprehensive			Total Stockholders'
Description	Shares		Dollars		Shares		Dollars		Capital		Deficit			Loss			deficit			Shares			Dollars		Shares		Dollars		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	)
Balance at December 31, 2021																					1,275		$	1		33,461	$	33	$	205,305	$	(321,227	)	$	(4,350	)	$	(120,238	)
Issuance of common stock																					-			0		341		1		3,348		0			0			3,349
Series B conversion to common stock																					(5	)		0		1		0		0		0			0			0
Stock options exercised																					-			0		263		0		196		0			0			196
Stock-based compensation		-		0		-		0		310		0			0			310			-			0		-		0		2,040		0			0			2,040
Issuance and exercise of warrants		-		0		113		0		93		0			0			93			-			0		113		0		4,550		0			0			4,550
Foreign currency translation loss		-		0		-		0		0		0			(668	)		(668	)		-			0		-		0		0		0			(194	)		(194	)
Net loss		-		0		-		0		0		(12,052	)		0			(12,052	)		-			0		-		0		0		(18,294	)		0			(18,294	)

Balance at March 31, 2020		1,323	$	1		20,683	$	21	$	87,255	$	(249,473	)	$	(4,493	)	$	(166,689	)
Balance at March 31, 2022																					1,270		$	1		34,179	$	34	$	215,439	$	(339,521	)	$	(4,544	)	$	(128,591	)
Issuance of common stock																					-			0		400		1		5,123		0			0			5,124
Stock options exercised																					-			0		3		0		4		0			0			4
Stock-based compensation		-		0		-		0		325		0			0			325			-			0		-		0		1,349		0			0			1,349
Issuance and exercise of warrants		-		0		-		0		0		0			0			0
Foreign currency translation loss		-		0		-		0		0		0			(27	)		(27	)		-			0		-		0		0		0			(390	)		(390	)
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	)
Net loss																					-			0		-		0		0		(209	)		0			(209	)
Balance at June 30, 2022																					1,270		$	1		34,582	$	35	$	221,915	$	(339,730	)	$	(4,934	)	$	(122,713	)

Nature of ~~Activities~~~~. Headquartered~~Activities. Founded in 2006 and headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis, “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas and renewable fuels ~~and byproducts~~ company focused on the acquisition, development and commercialization of innovative ~~negative carbon intensity products and~~ technologies that replace traditional petroleum-based products.

~~Founded in 2006, we~~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, the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), and Condensed Distillers Solubles (“CDS”), all of which are sold as animal feed to local dairies and ~~feedlots~~feedlots. In the fourth quarter of 2021, an ethanol zeolite membrane dehydration system was installed at the Keyes Plant and is in the process of being commissioned, a key first step in the electrification of the Keyes Plant.

During 2018, Aemetis Biogas, LLC (“ABGL”) was formed to 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 an underground private pipeline owned by ABGL to a gas cleanup and compression unit being built at the Keyes Plant to produce dairy renewable natural gas (“RNG”). Upon receiving the bio-methane from the dairies, impurities are removed, and the bio-methane is converted to negative carbon intensity RNG that will either be injected into the statewide PG&E gas utility pipeline, supplied as ~~animal feed. We also own~~compressed RNG that will service local trucking fleets, or used as renewable process energy at the Keyes Plant. Our Dairy Renewable Natural Gas segment, comprised of ABGL, has completed Phase 1 of our California biogas digester network and ~~operate~~pipeline system that converts waste dairy methane gas into RNG, including two operational dairies and seven miles of pipeline. ABGL is now executing Phase 2 construction with the completion of sixteen miles of pipeline and the commissioning of the biogas-to-RNG upgrade unit at the Keyes Plant as well as beginning construction of additional dairy digesters.

During the second quarter of 2022, Aemetis has completed construction of a ~~50 million gallon per year renewable chemical~~third dairy digester and ~~advanced~~commissioning of the centralized gas cleanup facility and utility gas interconnect located at the Keyes Plant where dairy biogas will be upgraded to RNG and injected into the utility pipeline. Upon receiving pathway certification from the California Air Resources Board (CARB), the fuel is expected to be delivered into the Northern California gas delivery system.

Our ‘Carbon Zero’ biofuels 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 operate a research and development laboratory to develop efficient conversion technologies using waste feedstocksplants are designed to produce biofuels, including sustainable aviation fuel (“SAF”) and ~~biochemicals. Additionally,~~diesel fuel utilizing renewable hydrogen and non-edible renewable oils sourced from existing Aemetis biofuels plants and other sources. The first plant to be built, in Riverbank, California, “Carbon Zero 1”, is expected to utilize hydroelectric and other renewable power available onsite to produce 90 million gallons per year of SAF, renewable diesel, and other byproducts. The plant is expected to supply the aviation and truck markets with ultra-low carbon renewable fuels to reduce GHG emissions and other pollutants associated with conventional petroleum-based fuels. By producing ultra-low carbon renewable fuels, the Company expects to capture higher value D3 Renewable Identification Numbers (“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 Environmental Protection Agency (“EPA”).

On April 1, 2021, we ~~own~~established Aemetis Carbon Capture, Inc. to build Carbon Capture and Sequestration (CCS) 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. The CCS projects are expected to capture and sequester up to two million metric tons per year of CO₂ at the two Aemetis biofuels plant sites in Keyes and Riverbank, California. In July 2022, Aemetis purchased 24 acres, on the Riverbank Industrial Complex site in Riverbank, California, to develop a ~~partially completed plant in Goodland, Kansas (the “Goodland Plant”) through our subsidiary Goodland Advanced Fuels, Inc., (“GAFI”), which was formed~~CCS injection well. The Company plans to ~~acquire~~construct a characterization well to obtain both the ~~Goodland Plant.~~data and well design information required for the EPA Class VI CO₂ injection well permit application. The well is expected to sequester up to one million metric tons per year of CO₂.

We also own and operate a production facility on the ~~Kakinada Plant~~East Coast of India (the “Kakinada Plant”) with a nameplate capacity of 150 thousand metric tons per year, or about 50 million gallons per ~~year. We believe the Kakinada Plant is one of the largest~~year, producing high quality distilled biodiesel ~~production facilities~~and refined glycerin for customers in India ~~on a nameplate capacity basis.~~and Europe. 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 the pharmaceutical, personal care, paint, adhesive and other industries.

During 2018, Aemetis Biogas, LLC (“ABGL”) was formed to 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, impurities are removed, and the bio-methane is converted to RNG where it will be either injected into the local gas utility pipeline, supplied to a renewable compressed natural gas (“RCNG”) that will service local trucking fleets, or used as renewable energy at the Keyes Plant.

During the first quarter of 2021, Aemetis announced its “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 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.

On April 1, 2021, Aemetis established a new subsidiary named 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.

During the second quarter of 2021, Aemetis has opened negotiations for the supply of 1.6 million metric tonnes (“MT”) per year of CO₂ for Carbon Capture and Sequestration (“CCS”) to be located at or near the two Aemetis renewable fuels plant sites in Central California near Modesto. It is anticipated that the capacity of each injection well site will be approximately one million metric tonnes per year, for a combined total of two million MT of CO₂ sequestration per year.

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.~~financial 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. ABGL was assessed to be a VIE and through the Company’s ownership interest in all of the outstanding common stock, the Company has been determined to be the primary beneficiary and accordingly, the assets, liabilities, and operations of ABGL are consolidated into those of the Company.

All intercompany balances and transactions have been eliminated in consolidation.

The accompanying consolidated condensed balance sheet as of June 30, ~~2021,~~2022, the consolidated condensed statements of operations and comprehensive income (loss) for the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the consolidated condensed statements of cash flows for the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, and the consolidated condensed statements of stockholders’ deficit for the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 are unaudited. The consolidated condensed balance sheet as of December 31, ~~2020~~2021 was derived from the ~~2020~~2021 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the ~~2020~~2021 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, ~~2020.~~2021. 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 as of and for the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 have been prepared on the same basis as the audited consolidated statements as of and for the year ended December 31, ~~2020~~2021 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 six months ended June 30, ~~2021~~2022 are not necessarily indicative of the operating results for any subsequent quarter, for the full fiscal year or any future periods.

Use of 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. We derive revenue primarily from sales of ethanol 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 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:~~California Ethanol: ~~In North America, until~~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 buy all corn from J.D. Heiskell and sell all WDG and corn oil we produce to J.D. Heiskell. Following May 13, 2020 and until October, 2021, we sold the majority of our fuel ethanol production to one customer, Kinergy Marketing, LLC (“Kinergy”), through individual sales transactions. 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 (“Murex”), in which we sell all our ethanol to Murex. Given the similarity of the individual sales transactions with Kinergy and Murex, we have assessed them as a portfolio of similar contracts. The performance obligation is satisfied by delivery of the physical product to one of 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 and Murex for ethanol and by our marketing partner A.L. Gilbert Company (“A.L. Gilbert”) for WDG. ~~There is no~~The transaction price ~~allocation needed.~~

The below table shows our sales in ~~North America~~our California Ethanol segment by product category:

*North America (in thousands)*
	For the three months ended June 30,				For the six months ended June 30,				For the three months ended June 30,				For the six months ended June 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Ethanol and high-grade alcohol sales	$	42,169	$	36,240	$	72,089	$	61,562	$	47,656	$	42,169	$	85,551	$	72,089
Wet distiller's grains sales		10,630		7,466		21,665		15,840		15,150		10,630		26,666		21,665
Other sales		1,931		1,517		3,304		3,693		3,085		1,931		5,715		3,304
	$	54,730	$	45,223	$	97,058	$	81,095	$	65,891	$	54,730	$	117,932	$	97,058

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.

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,~~For our California Ethanol segment, we buy corn as feedstock for the production of ethanol, from our working capital partner J.D. Heiskell. Prior to May 13, 2020, we sold all our ethanol, WDG, and corn oil to J.D. Heiskell and we bought all our corn to process into ethanol from J.D. Heiskell. ~~Subsequent to~~After May 13, 2020, we sold most of our fuel ethanol to one customer, Kinergy, and sold all WDG and corn oil to J.D. Heiskell. During the second quarter ~~the Company~~of 2021, we signed a biofuels offtake agreement with Murex, ~~LLC,~~ and beginning on October 1, 2021 ~~the Company will sell~~we sold all of our fuel ethanol to ~~that customer.~~Murex. We only have customer relationships with Kinergy and Murex, hence the principal and agent criteria are not applied. However, we are still buying corn and selling WDG and corn oil to J.D.Heiskell. We analyzed the principal versus agent relationship criteria below.

We consider the purchase of corn as a cost of goods sold and the sale of ~~ethanol,~~WDG and, corn oil, upon ~~transfer to~~trucks leaving the ~~common carrier,~~Keyes Plant, 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 WDG and corn ~~and ethanol~~oil is set independently. Revenues from ~~sales of ethanol~~WDG and ~~its co-products~~corn oil are billed net of the related transportation and marketing charges. The transportation component is accounted for in cost of goods sold and the marketing 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~~We have elected 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~~California Ethanol segment where our customer and vendor may be the same.

~~We have a contract liability~~Dairy Renewable Natural Gas: All of ~~$0.2 million as of~~our Dairy Renewable Natural Gas segment revenues during the three and six months ended June 30, 2022 and 2021 were from sales of biogas to the Keyes Plant for use in boilers. This resulted in lowering the carbon intensity of the Keyes Plant and ~~December 31, 2020, in connection with a contract with a customer~~increased revenues on ethanol sold through the California Ethanol segment. These revenues have been eliminated once consolidated. Refer to ~~sell carbon credit allowances.~~Note 10 Segment Information for the unconsolidated revenue of our Dairy Renewable Natural Gas segment.

~~India:~~India Biodiesel: ~~In India, we~~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 ~~PFAD~~palm fatty acid distillate net of taxes. Transaction price ~~allocation~~ is ~~not needed.~~allocated to one performance obligation.

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

*India (in thousands)*
	For the three months ended June 30,				For the six months ended June 30,				For the three months ended June 30,				For the six months ended June 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Biodiesel sales	$	107	$	2,149	$	465	$	4,942	$	0	$	107	$	0	$	465
Refined glycerin sales		9		370		125		460		0		9		0		125
PFAD sales		0		62		0		774
Other sales		38		20		43		33		10		38		18		43
	$	154	$	2,601	$	633	$	6,209	$	10	$	154	$	18	$	633

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.

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.

Shipping and Handling Costs. Shipping and handling costs are classified as a component of cost of goods sold in the accompanying consolidated statements of operations.

Research and Development. Research and development costs are expensed as incurred, unless they have alternative future uses to the Company.

Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances at various financial institutions domestically and abroad. The Federal Deposit Insurance Corporation insures domestic cash accounts. The Company’s accounts at these institutions may at times exceed federally insured limits. The Company has not experienced any losses in such accounts.

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 $1.4 million ~~and $1.3 million~~ in the allowances for doubtful accounts as of ~~June 30,~~December 31, 2021 and ~~December 31, 2020, respectively.~~wrote off the balances as uncollectible during the second quarter of 2022.

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 fair values (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 June 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~~affects 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 U.S. GAAP.

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 biogas dairy digesters. Capital expenses for in-process project are accumulated in construction in progress and will be capitalized and depreciated once the capital projects are finished and are in service. The Company’s plant in Goodland, ~~Plant~~Kansas (the “Goodland Plant”) is partially completed and is not ready for operation. 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 360-10-35 Property Plant and ~~Equipment-Subsequent~~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. The Company has not recorded any impairment during the three and six months ended June 30, ~~2021~~2022 and ~~2020.~~2021.

California Energy Commission Low-Carbon Fuel Production Program. The Company has been awarded $4.2 million in matching grants from the California Energy Commission Low-Carbon Fuel Production Program (“LCFPP”). The LCFPP grant reimburses the Company for costs to design, procure, and install processing facility to clean-up, measure and verify negative-carbon intensity dairy renewable natural gas fuel at the production facility in Keyes, California. The Company has received ~~$875 thousand~~$3.8 million from the LCFPP as of June 30, ~~2021~~2022, as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company ~~recognizes~~recognized the grant as a reduction of ~~the~~ costs in the period when ~~approval~~payment is received.

California Department of Food and Agriculture Dairy Digester Research and Development Grant. In 2019, the Company 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 ~~has~~ received all the awarded grant proceeds as of ~~June 30,~~the second quarter of 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~~$1.6 million from the CDFA 2020 grant program as of June 30, ~~2021~~2022, as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company ~~recognizes~~recognized the grant as a reduction of ~~the~~ costs in the period when ~~approval~~payment is received.

California Energy Commission Low Carbon Advanced Ethanol Grant Program. In May 2019, the Company was awarded the right to receive reimbursements from the 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. The Company receives 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 ~~$115 thousand received during the first quarter of 2021, and~~ $1.7 million ~~from prior years were recorded as other~~is presented with long-term liabilities as of June 30, 2022, and December 31, 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.

U.S. Department of Food and Agriculture Forest Service Grant. Aemetis Advanced Products Keyes (“AAPK”) has been awarded $245 thousand in matching grants from the U.S. Department of Food and Agriculture Forest Service (“US Forest Service”) under the Wood Innovation and Community Wood program. The grant reimburses the Company for continued development of technologies and processes to valorize forest waste for the production of cellulosic ethanol. AAPK has received $73 thousand from the US Forest Service as reimbursement for actual allowable program costs incurred through June 30, 2022.

California Energy Commission Grant for Solar Microgrid, DSC and Battery Backup System. Aemetis Advanced Fuels Keyes (“AAFK”) has been awarded an $8.0 million grant to design, construct and commission a grid-connected 1.56 MW photovoltaic microgrid and 1.25MW/2.5MWh Battery Energy Storage System integrated with an artificial intelligence-driven distributed control system (DCS). The grant requires $1.55 million in matching contribution. AAFK received $3.3 million in grant funds from this program as reimbursement for actual expenditures incurred through June 30, 2022. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

California Department of Forestry and Fire Protection Grant. AAPK has been awarded $2 million in matching grants from the CAL FIRE Business and Workforce Development Grant Program (“CAL Fire”) in May 2022. This CAL Fire grant program reimburses AAPK for costs to design, construct, and commission a 2 million gallon per year cellulosic ethanol facility that will convert conifer biomass from forested regions of the Sierra Nevada into an ultra‐low carbon biofuel derived from 100% forest biomass (“CAL Fire Conversion Program”). AAPK must contribute $5.8 million in cost share contributions to the project to receive grant proceeds. AAPK has received no grant funds from the CAL Fire Conversion Program as reimbursement for actual costs through June 30, 2022.

California Department of Forestry and Fire Protection Grant. AAPK has been awarded $500 thousand in grants from CAL Fire in May 2022. This CAL Fire grant program reimburses AAPK for costs to advance a new‐to‐the world technology that circumvents current limitations surrounding the extraction of cellulosic sugars by pioneering a novel route for deconstructing woody biomass using ionic liquids (“CAL Fire Extraction Program”). AAPK has received no grant funds from the CAL Fire Extraction Program as reimbursement for actual costs through June 30, 2022.

U.S Forest Service Community Wood Grant. Aemetis Advanced Products Riverbank (“AAPR”) has been awarded $642 thousand in matching grants from the U.S Forest Service Wood Innovations Program (“USFS”) in May 2022. The USFS grant program reimburses AAPR for costs to design, construct, and commission a plant to produce cellulosic ethanol using preliminary research and development in partnership with the Joint Bioenergy Institute (JBEI). USFS grant funds will be used to complete the FEL-3 design phase of the entire process, construct a biomass pretreatment unit to extract sugars at the Aemetis Riverbank site and ferment sugars into ethanol at the Keyes Plant. AAPR must contribute $2.4 million in cost share contributions to the project to receive grant proceeds. AAPK has received no grant funds from the USFS grant program as reimbursement for actual costs through June 30, 2022.

USDA’s Biofuel Producer Program Grant. During the second quarter of 2022, a grant in the amount of $14.2 million was received from the USDA’s Biofuel Producer Program, created as part of the CARES Act, to compensate biofuel producers who experienced market losses due to the COVID-19 pandemic. This was recorded in other expense (income) on the Consolidated Statements of Operations and Comprehensive Loss.

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 six months ended June 30, ~~2021~~2022 and, ~~the six months ended June 30, 2020,~~2021, potentially dilutive securities have been excluded from the diluted net loss per share computations as their effect would be anti-dilutive. As the Company incurred net income for the three months ended June 30, 2020, potentially dilutive securities have been included in the diluted net income per share computations and any potentially anti-dilutive shares have been excluded and are shown below.

The following table shows the number of potentially dilutive shares excluded from the diluted net loss per share calculation as of June 30, ~~2021~~2022 and ~~2020:~~2021:

	As of				As of
	June 30, 2021		June 30, 2020		June 30, 2022		June 30, 2021

Series B preferred (post split basis)		132		-		127		132
Common stock options and warrants		4,252		2,950		4,748		4,252
Debt with conversion feature at $30 per share of common stock		1,273		1,271		1,228		1,273

Total number of potentially dilutive shares excluded from the diluted net income (loss) per share calculation		5,657		4,221
Total number of potentially dilutive shares excluded from the diluted net (loss) per share calculation						6,103		5,657

Comprehensive 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 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,~~expense, 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. The Company further evaluates its operating segments to determine its reportable segments. Aemetis ~~recognized two~~recognizes three reportable ~~geographic segments: “North America”~~segments “California Ethanol”, “Dairy Renewable Natural Gas”, and ~~“India.~~“India Biodiesel.”

The ~~“North America” operating~~“California Ethanol” reportable segment includes the Company’s 65 million ~~gallons~~gallon per year ~~capacity~~ Keyes ~~Plant in California,~~plant and the ~~ultra-low carbon renewable fuel project in Riverbank,~~adjacent land leased for the production of CO₂.

The “Dairy Renewable Natural Gas” reportable segment include, the dairy digesters, pipeline and gas condition hub for the production of biogas ~~digesters on~~from dairies near Keyes, ~~California, the Goodland Plant in Kansas and the research and development facility in Minnesota.~~California.

The ~~“India” operating~~“India Biodiesel” reportable segment includes the Company’s 50 million gallon per year nameplate capacity biodiesel manufacturing 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.

The Company has additional operating segments that were determined not to be reportable segments, including the Carbon Zero 1 facility in Riverbank, the Goodland Plant in Kansas and the research and development facility in Minnesota. Refer to the “All Other” category.

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~~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. 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. The Company evaluates amendments to its debt in accordance with ASC 470-50 ~~Debt-Modification~~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.

~~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, ~~2020~~2021 and ~~2019~~2020 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March ~~15, 2021.~~10, 2022.

	As of				As of
	June 30, 2021		December 31, 2020		June 30, 2022		December 31, 2021
Raw materials	$	1,326	$	1,382	$	903	$	727
Work-in-progress		2,121		1,266		2,522		2,083
Finished goods		1,123		1,321		1,480		2,316
Total inventories	$	4,570	$	3,969	$	4,905	$	5,126

As of June 30, ~~2021~~2022, and December 31, ~~2020,~~2021, the Company recognized a lower of cost or ~~market~~net realizable value impairment of ~~none~~$165 thousand and ~~$0.7 million~~none respectively, related to inventory.

	As of						As of
	June 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Land	$	4,083		$	4,092		$	6,156		$	4,082
Plant and buildings		97,035			97,398			122,165			97,110
Furniture and fixtures		1,276			1,195			1,504			1,334
Machinery and equipment		5,259			5,188			5,203			5,294
Tenant improvements								56			0
Construction in progress		37,524			25,397			51,279			55,859
Property held for development		15,408			15,408			15,437			15,437
Finance lease right of use assets		2,204			2,308			3,152			2,317
Total gross property, plant & equipment		162,789			150,986			204,952			181,433
Less accumulated depreciation		(43,631	)		(41,106	)		(48,162	)		(46,332	)
Total net property, plant & equipment	$	119,158		$	109,880		$	156,790		$	135,101

For the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, interest capitalized in property, plant, and equipment was ~~$0.9~~$2.6 million and ~~$0.1~~$0.9 million, respectively. For the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, interest capitalized in property, plant, and equipment was $4.7 million and $1.5 million, respectively.

Construction in progress includes costs for the biogas construction projects (dairy digesters and ~~$0.2~~pipeline), Riverbank projects (sustainable aviation fuel and renewable diesel plant as well as carbon capture characterization well), and energy efficiency projects at the Keyes Plant. 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:

For the three months ended June 30, 2022 and 2021, the Company recorded depreciation expense of $1.3 million and $1.4 million, respectively. For the six months ended June 30, 2022 and 2021, the Company recorded depreciation expense of $2.7 million and $2.8 million, respectively.

Construction in progress contains incurred costs for the ABGL biogas project, Riverbank project, and Zebrex equipment installation at the Keyes Plant. In the second quarter of 2020, the CO₂ Project commenced operations and was placed in service at that time. In the third quarter of 2020, two diary 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 over their estimated useful lives as follows:

For the three months ended June 30, 2021 and 2020, the Company recorded depreciation expense of $1.4 and $1.2 million, respectively. For the six months ended June 30, 2021 and 2020, the Company recorded depreciation expense of $2.8 and $2.3 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 six months ended June 30, 2021 and 2020.

	June 30, 2021		December 31, 2020		June 30, 2022		December 31, 2021
Third Eye Capital term notes	$	7,077	$	7,066	$	7,089	$	7,095
Third Eye Capital revolving credit facility		67,592		80,310		54,039		75,980
Third Eye Capital revenue participation term notes		11,887		11,864		11,912		11,915
Third Eye Capital acquisition term notes		26,414		26,384		26,464		26,461
Third Eye Capital promissory note		0		1,444
Third Eye Capital Fuels Revolving Line						18,393		0
Third Eye Capital Carbon Revolving Line						22,187		0
Cilion shareholder seller notes payable		6,349		6,274		6,718		6,619
Subordinated notes		13,512		12,745		15,105		14,304
EB-5 promissory notes						41,004		40,692
Term loans on capital expenditures		5,707		5,652		5,697		5,701
EB-5 promissory notes		42,410		43,120
PPP loans		0		1,134
GAFI Term and Revolving loans		0		33,626
Total debt		180,948		229,619		208,608		188,767
Less current portion of debt		24,017		59,515		24,859		22,778
Total long term debt	$	156,931	$	170,104	$	183,749	$	165,989

On July 6, 2012, Aemetis, Inc. and Aemetis Advanced Fuels Keyes, Inc. (“AAFK”), entered into an Amended and Restated Note Purchase Agreement (the “Note Purchase Agreement”) with Third Eye Capital ~~(the “Note Purchase Agreement”~~Corporation (“Third Eye Capital”).

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 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 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.

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 fee in Amendment No. 17, and the $50 thousand waiver fee in Amendment No. 18 in accordance with ASC 470-60 ~~Troubled Debt Restructuring~~.

According to the guidance, we considered the 1% extension fee in Amendment No.17 and the $50 thousand waiver fee in Amendment No. 18 to be troubled debt 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 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 Amendment No. 17 Fee of $0.3 million are 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,~~Third Eye Capital, 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. In the first quarter of 2022, the Company exercised the option to extend the maturity of Third Eye Capital Notes to April 1, 2023.

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.20~~No.21 in accordance with ASC 470-50 Debt -– Modification and Extinguishment.

~~Based on prior amendments~~On March 8, 2022, Third Eye Capital agreed to the Limited Waiver and Amendment No. ~~20,~~22 to the Note Purchase Agreement (“Amendment No. 22”) to: (i) provide a waiver for the Blocked Account Agreement Violation in which the Borrowers failed to deliver Blocked Account Control Agreements by December 31, 2021, (ii) provide for a waiver for the Subordinated Debt Violation, in which the Company made a repayment to a Subordinated Debt lender, and (iii) provide for a waiver of the consolidated unfunded capital expenditures covenant for the quarters through December 31, 2021. As consideration for such waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million in cash.

On May 11, 2022, Third Eye Capital agreed to the Limited Waiver and Amendment No. 23 to the Note Purchase Agreement (“Amendment No. 23”) to: (i) provide a waiver for the Blocked Account Agreement Violation in which the Borrowers failed to deliver Blocked Account Control Agreements by March 31, 2022, (ii) provide for a waiver of the ratio of note indebtedness covenant isfor the quarter ended March 31, 2023 and (iii) provide for a waiver of the unfunded capital expenditures covenant for the quarter ended March 31, 2022 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 $0.1 million.

As Amendments No. 19, No. 20, No. 21, No. 22, and No. 23 waived certain covenants for the quarters ended June 30, ~~2021 through~~2022, September 30, 2022, December 31, ~~2022.~~2022, and March 31, 2023. According to ASC 470-10-45 ~~Debt-Other~~Debt–Other Presentation Matters, 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 Amendment No. 20 waived~~To assess this guidance, the Company performed ratio and cash flow analysis using its cash flow forecast and debt levels. The Company forecasted sufficient cash flows over the next 12 months to reduce debt levels of Third Eye Capital and meet operations of the Company. Based on this analysis, the Company believes that it is reasonably possible that through a combination of cash flows from operations, sales from EB-5 investments, and proceeds from the sale of common stock, it will be able to meet the ratio of the note indebtedness covenant over the next ~~four quarters,~~12 months. As such, 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 Capital agreed to increase the amount available under the reserve liquidity facility to $70.0 ~~million and extend the maturity date to April 1, 2022.~~million. Borrowings under the reserve liquidity facility are available from March 14, 2021 until maturity on April 1, ~~2022.~~2023. 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.~~2023. Any amounts may be re-borrowed up to repaid amounts up until the maturity date of April 1, ~~2022.~~2023. 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.

*The note maturity date can be extended by the Company 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 common stock and 50% can be 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.

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 on the Company, such as any change in the business, operations, or financial condition. The Company has evaluated the likelihood of such an acceleration event and determined such an event to not be probable in the next twelve months. 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 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.

GAFI Term Loan and Revolving Loan. On July 10, 2017, GAFI entered into a Note Purchase Agreement (“Note Purchase Agreement”) with Third Eye Capital. See further discussion regarding GAFI in Note 6. Pursuant to the Note Purchase Agreement, Third Eye Capital agreed, subject to the terms and conditions of the 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 (“Term Loan”) and (ii) revolving advances not to exceed $10 million dollars in the aggregate (the “Revolving Loans”). The interest rate applicable to the Term Loan is equal to 10% per annum. The interest rate applicable to the Revolving Loans is the greater of prime rate plus 7.75% and 12.00% per annum. The maturity date of the loans was extended to July 10, 2021 by exercising an option to extend the GAFI Loan Maturity Date for a fee of $0.5 million. The Company fully repaid the GAFI notes in the first quarter of 2021 and replaced the Note Purchase Agreement with the New Credit Facility, as described below.

Third Eye Capital Revolving Credit Facility for Fuels and Carbon Lines. On March 2, 2022, GAFI and Aemetis Carbon Capture, Inc. (“ACCI”) entered into an Amended and Restated Credit Agreement (“Credit Agreement”) with Third Eye Capital , as administrative agent and collateral agent, and the lender party thereto (the “New Credit Facility”). The New Credit Facility provides for two credit facilities with aggregate availability of up to $100 million, consisting of a revolving credit facility with GAFI for up to $50 million (the “Fuels Revolving Line”) and a revolving credit facility with ACCI for up to $50 million (the “Carbon Revolving Line” and together with the Fuels Revolving Line, the “Revolving Lines”). The revolving loans made under the Fuels Revolving Line have a maturity date of March 1, 2025 and will accrue a rate of interest per annum equal to the greater of (i) the prime rate plus 6.00% and (ii) ten percent (10.0%), and the revolving loans made under the Carbon Revolving Line will have a maturity date of March 1, 2026 and accrue a rate of interest per annum equal to the greater of (i) the prime rate plus 4.00% and (ii) eight percent (8.0%). The revolving loans made under the Fuels Revolving Line are available for working capital purposes and the revolving loans made under the Carbon Revolving Line are available for projects that reduce, capture, use or sequester carbon with the objective of reducing carbon dioxide emissions. In connection with the New Credit Facility, the Company agreed to issue to the lender under the New Credit Facility: (i) warrants entitling the lender to purchase 50,000 shares of common stock of the Company at an exercise price equal to $10.20 per share, exercisable for a five-year period from March 2, 2022; and (ii) warrants entitling holders thereof to purchase 250,000 shares of common stock of the Company, at an exercise price equal to $20.00 per share, exercisable for a ten-year period from March 2, 2022. In addition, under the Fuels Revolving Line, we issued 100,000 shares of common stock to existing note holders under the GAFI note purchase agreement. The shares were accounted at fair value and are being amortized over the life of the Fuels Revolving Line. Upon closing of the New Credit Facility, the Company drew on the revolving lines to repay $16.0 million on the higher interest rate AAFK Revolving Credit Facility, $6.1 million in property taxes, and to fund the capital projects and working capital projects.

As of June 30, 2022, GAFI had $20.2 million in principal and interest outstanding net of $1.9 million unamortized debt issuance costs. As of June 30, 2022, ACCI had $25.1 million in principal and interest outstanding net of $2.9 million in unamortized debt issuance costs.

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 June 30, ~~2021,~~2022, Aemetis Facility Keyes, Inc. had ~~$6.3~~$6.7 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 pursuant to which it issued $0.9 million and $2.5 million in original notes to the investors (“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% per annum 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.

On ~~July~~January 1, ~~2021, the Subordinated Notes were amended to extend~~2022, the maturity ~~date~~on two Subordinated Notes’ was extended until the earlier of (i) ~~December 31, 2021;~~June 30, 2022; (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, including failure to pay interest or principal when due and breaches of note covenants. A ~~10%~~$90 thousand and $250 thousand cash extension fee was paid by adding the fee to the balance of the new ~~note~~Subordinated Notes and ~~warrants to purchase~~ 113 thousand ~~shares of~~ common stock warrants were granted with a term of two years and an exercise price of $0.01 per share. ~~We will evaluate~~

The Company evaluated the ~~July~~January 1, ~~2021~~2022 amendment and the refinancing terms of the ~~Subordinated Notes~~notes and applied modification accounting treatment in accordance with ASC 470-50 Debt -– Modification and ~~Extinguishment~~.Extinguishment.

At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had, in aggregate, the amount of ~~$13.5~~$15.1 million and ~~$12.7~~$14.3 million in principal and interest outstanding, 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” 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- 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. Given the COVID-19 pandemic and processing delays for immigration process, Advanced BioEnergy, LP extended the maturity dates for debt repayment based on their projected processing timings as long as the investors do not give notice of withdrawal or an I-829 gets approved. Accordingly, the notes have been recognized as long-term debt while ~~the six early~~ investor notes ~~and several investors~~ who obtained 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 June 30, ~~2021,~~2022, $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 months ended June 30, 2021, the Company paid principal amount of one of the EB-5 investors who obtained green card approval under the program. During the three and six months ended June 30, 2021 the Company repaid $0.5 million and $1.0 million, respectively, of the EB-5 Phase I funding. As of June 30, 2022 and December 31, 2021, ~~$34.5~~$32.5 million in principal and ~~$3.7~~$4.3 million in accrued interest and $32.5 million in principal and $4.1 million in accrued interest was outstanding, respectively, 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 (the “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”~~Goodland Advanced Fuels Inc., (“GAFI”). 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, sowith 52 new EB-5 Phase II funding investors ~~are~~remaining eligible at the new $0.9 million per ~~investor~~investors amount under the current offering. Job creation studies show it may be possible to add additional investors and increase the total offering amount in the future. Each ~~new~~EB-5 note will be issued in the principal amount ~~of $0.9 million~~ and due and payable five years from the date of each EB-5 note, for a total aggregate principal amount of up to $50.8 million.

~~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 June 30, ~~2021,~~2022, $4.0 million has been released from escrow to the Company and $46.8 million remains to be funded to escrow. As of June 30, ~~2021,~~2022, $4.2 million was outstanding on the EB-5 Notes under the EB-5 Phase II funding.

~~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 six months ended June 30, 2021 and 2020, we have accrued no interest on Gemini. During the six months ended June 30, 2021 and 2020, the Company made principal payments to Gemini of none and $5.7 million, respectively. As of June 30, 2021 and December 31, 2020, the Company had no outstanding balance under this agreement.

Secunderabad Oils Operating 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 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 six months ended June 30, 2021 and 2020, the Company made principal and interest payments to Secunderabad Oils of none and approximately $0.6 million, respectively. As of June 30, ~~2021 and December 31, 2020~~2022, the Company had no balance outstanding ~~balance~~ under this agreement.

~~GAFI Term loan and Revolving loan.~~ On July 10, 2017, GAFI entered into a Note Purchase Agreement (“Note Purchase Agreement”) with Third Eye Capital. See further discussion regarding GAFI in Note 6. Pursuant to the Note Purchase Agreement, Third Eye Capital agreed, subject to the terms and conditions of the 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 (“Term Loan”) and (ii) revolving advances not to exceed $10 million dollars in the aggregate (the “Revolving Loans”). The interest rate applicable to the Term Loan is equal to 10% per annum. The interest rate applicable to the Revolving Loans is the greater of prime rate plus 7.75% and 12.00% per annum. The maturity date of the loans was extended to July 10, 2021 by exercising an option to extend the GAFI Loan Maturity Date for a fee of $0.5 million.

On June 28, 2018, GAFI entered into Amendment No. 1 to 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 during the first 11 months 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.

The Company fully repaid the GAFI notes in the first quarter of 2021. As of June 30, 2021 and December 31, 2020, GAFI had none and $22.2 million net of debt issuance costs of none and $0.4 million outstanding on the Term Loan and none and $11.8 million on the 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; (“PPP Loans”) under the Paycheck Protection Program (“PPP”). In the second quarter of 2021, the Company received notification from the Small Business Administration that all loan proceeds received by the Company were forgiven. Due to the forgiveness of the loan, the Company recorded a gain on debt extinguishment in the statements of operations and comprehensive loss in the amount of approximately $1.1 million during the three and six months ended June 30, 2021.

Financing Agreement for capital expenditures. The Company entered into an agreement with Mitsubishi Chemical America, Inc. (“Mitsubishi”) to purchase ~~certain~~membrane dehydration equipment to save energy used in the Keyes Plant. WeThe 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 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~~was delayed due to the COVID-19 pandemic. In the fourth quarter of 2021, installation of dehydration equipment occurred allowing for the recording of the asset in property, plant and equipment, net. Hence, we recorded the asset in property, plant and equipment, net and the related liability of ~~$0.6~~$0.7 million in short term borrowings and ~~$5.1~~$4.9 million in other ~~long term~~long-term debt, respectively as of June 30, ~~2021.~~2022.

Scheduled debt repayments for the Company’s loan obligations ~~follow:~~by year are as follows:

Twelve months ended June 30,	Debt Repayments
2022	$	24,017
Twelve Months ended June 30,				Debt Repayments
2023		141,856		$	24,859
2024		7,945			132,218
2025		5,793			26,191
2026		945			29,473
2027					944
There after		1,333			1,169
Total debt		181,889			214,854
Debt issuance costs		(941	)		(6,246	)
Total debt, net of debt issuance costs	$	180,948		$	208,608

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 815 years.

We made an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations as we incur the expenses.

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.

On December 14, 2021, we entered into a real estate purchase agreements and lease disposition and development agreement with the City of Riverbank. We plan to utilize the purchased and leased properties, located at 5300 Claus Road in the city of Riverbank, California, for the construction of the Carbon Zero 1 Facility. The lease commenced on April 1, 2022. The Company evaluated the lease in accordance with ASC 842 – Lease Accounting and classified the lease as a finance lease.

	Three Months ended June 30,				Six Months ended June 30,				Three Months ended June 30,				Six Months ended June 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Operating lease cost
Operating lease expense	$	204	$	183	$	408	$	360	$	159	$	204	$	347	$	408
Short term lease expense		71		15		110		29		75		71		102		110
Variable lease expense		21		26		54		60		23		21		46		54
Total operating lease cost	$	296	$	224	$	572	$	449	$	257	$	296	$	495	$	572

Finance lease cost
Amortization of right-of-use assets	$	55	$	61	$	110	$	61	$	28	$	55	$	89	$	110
Interest on lease liabilities		20		18		41		18		99		20		119		41
Total finance lease cost	$	75	$	79	$	151	$	79	$	127	$	75	$	208	$	151

	Three Months ended June 30,				Six Months ended June 30,				Three Months ended June 30,				Six Months ended June 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Operating cash flows used in operating leases	$	173	$	138	$	340	$	317	$	174	$	173	$	338	$	340
Operating cash flows used in finance leases		20		18		41		18		99		20		118		41
Financing cash flows used in finance leases		124		702		248		702		50		124	$	182		248

Supplemental non-cash flow information related to ROU asset and lease liabilities was as follows for the three and six months ended June 30, ~~2021~~2022 and ~~June 30, 2020:~~2021:

	Three Months ended June 30,					Six Months ended June 30,				Three Months ended June 30,					Six Months ended June 30,
	2021		2020			2021		2020		2022		2021			2022		2021
Operating leases
Accretion of the lease liability	$	96	$	42		$	195	$	59	$	85	$	96		$	179	$	195
Amortization of right-of-use assets		108		142			213		302		74		108			168		213

Weighted Average Remaining Lease Term
Operating leases			6.6 years									5.9 years
Finance leases			2.8 years									14.1 years

Weighted Average Discount Rate
Operating leases				14.0	%								14.0	%
Finance leases				5.6	%								13.4	%

	As of
	June 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Operating leases
Operating lease right-of-use assets	$	2,679		$	2,889		$	2,294		$	2,462

Current portion of operating lease liability		310			316			258			260
Long term operating lease liability		2,443			2,578			2,191			2,318
Total operating lease liabilities		2,753			2,894			2,449			2,578

Finance leases
Property and equipment, at cost	$	2,204		$	2,308		$	3,152		$	2,317
Accumulated depreciation		(255	)		(249	)		(72	)		(376	)
Property and equipment, net		1,949			2,059			3,080			1,941

Other current liability		426			417			196			550
Other long term liabilities		949			1,164			2,849			720
Total finance lease liabilities		1,375			1,581			3,045			1,270

Twelve Months ended June 30,	Operating leases			Finance leases
Twelve months ended June 30,							Operating leases			Finance leases

2021	$	666		$	494
2022		572			577
2023		581			414		$	572		$	561
2024		599			0			581			279
2025		617			0			599			179
2026								617			151
2027								636			145
There after		1,236			0			606			11,000
Total lease payments		4,271			1,485			3,611			12,315
Less imputed interest		(1,518	)		(110	)		(1,162	)		(9,270	)
Total lease liability	$	2,753		$	1,375		$	2,449		$	3,045

The Company acts as sublessor in certain leasing arrangements, primarily related to land and buildings. Fixed sublease payments received are recognized on a straight-line basis over the sublease term. Sublease income and head lease expense for these transactions are recognized on a gross basis on the consolidated financial statements. This was recorded in the other operating income section of the Consolidated Statements of Operations and Comprehensive Loss.

The components of lease income for the three and six months ended June 30, 2022 and June 30, 2021 were as follows:

Future lease commitments to be received by the Company as of June 30, 2022 were as follows:

~~The~~On March 3, 2022, the Company ~~entered into a payment plan with~~paid $6.1 million to 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, Company defaulted on the payment plan and as of June 30, 2021 and December 31, 2020, the balance in property tax accrual was $6.4 million and $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.past due.

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~~million and the Company recorded these fees based on the ~~$6.2~~court order. On May 6, 2022 the parties settled the dispute for $4.8 million ~~as loss contingency~~by entering into a settlement agreement. The settlement was paid and a gain on litigation ~~during~~of $1.4 million was recognized on the ~~year ended December 31, 2019. The Company’s ability to amend its claims and present its claims to~~income statement in 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~~second quarter 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.2022.

6. Aemetis Biogas LLC -– Series A Preferred Financing and Variable Interest Entity

On December 20, 2018, ABGL entered into a Series A Preferred Unit Purchase Agreement for the sale of Series A Preferred Units to Protair-X Americas, Inc., with Third Eye Capital acting as an 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 at $5.00 per common unit for a total of $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 June 30, ~~2021,~~2022, 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.

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 2,800,000 of Series A Preferred Units on second tranche for a value of $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 $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 June 30, ~~2021~~2022 and December 31, ~~2020~~2021 based on the evaluation of the other conditions included inIn the agreement.

In the three months ended ~~June 30,~~March 31, 2021, ABGL issued no626,000 of Series A Preferred ~~Units. The~~Units for incremental proceeds of $3.1 million as part of the second tranche of the Preferred Unit Agreement and redeemed 20,000 of Series A Preferred Units for $0.3 million. Consistent with the previous issuances which were treated as a liability as the conversion option was deemed to be non-substantive, the current issuances are treated as a liability as the conversion option was still deemed to 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 current portion of Series A Preferred Units, of ~~$1.6~~$4.6 million and ~~$2.0~~$3.2 million, and long-term liabilities of ~~$42.2~~$50.3 million and ~~$32.0~~$45.0 million as of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

For the three months ended June 30, 2021 and 2020 the Company recorded Series A Preferred Units accretion expense of $2.9 million and $1.4 million and accrued preference payments expense of $1.6 million and none. This was partially offset by capitalized interest of $682 thousand.

For the six months ended June 30, 2021 and 2020 the Company recorded Series A Preferred Units accretion expense of $5.3 million and $2.3 million and accrued preference payments expense of $1.6 million and none. This was partially offset by capitalized interest of $1.2 million.

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 as of June 30, 2022 were ~~$30.5~~$57.8 million primarily related to biodigesters at ~~two~~three dairies, the gas conditioning hub, and a pipeline which serve as collateral for the Series A Preferred Unit totaling ~~$43.8~~$54.9 million. The Series A Preferred Units are not collateralized by any other assets or guarantees from Aemetis or its subsidiaries.

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 of 2019 Stock plan~~Administrator 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~~transferring and ~~grant of~~granting any available and unissued or expired options under the ~~prior~~ Amended and Restated 2007 Stock Plan in an amount up to 177,246 ~~options.~~shares of common stock.

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,~~(collectively, 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~~will be available to ~~the Prior Plans can be granted~~grant under the 2019 Stock Plan.

~~On January 7,~~During the year ended December 31, 2021, ~~945,000 incentive~~120,000 restricted stock awards and 1,140,000 stock option grants were issued and approved by the Company’s board of directors (“Board”) for employees and directors under the 2019 Stock Plan with 10-year terms and vesting terms ranging from immediately to 3 years.

In January 2022, the company issued 932,800 incentive stock option for employees under the 2019 Stock Plan. In addition, ~~5,200~~60,300 restricted stock award grants, with a fair value on date of ~~$3.09~~grant of $11.31 per award, were issued to the ~~Company's board of directors (“Board”) with the restriction that this grant would satisfy board compensation fees.~~Board.

	Shares Available for Grant			Number of Shares Outstanding			Weighted-Average Price		Shares Available for Grant			Number of Shares Outstanding			Weighted-Average Exercise Price

Balance as of December 31, 2020		380			5,327		$	1.14
Balance as of December 31, 2021										142			3,763		$	2.29
Authorized		816			-			-		1,338			-			-
Options Granted		(975	)		975			3.40		(939	)		939			11.31
RSAs Granted		(39	)		-			-		(60	)		-			-
Exercised		-			(1,929	)		1.45		-			(266	)		0.91
Forfeited/expired		176			(176	)		1.79		43			(43	)		11.55
Balance as of June 30, 2021		358			4,197		$	1.49
Balance as of June 30, 2022										524			4,393		$	4.21

As of June 30, ~~2021,~~2022, there were ~~2.4~~2.6 million options vested under the Stock Plans.

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.

For the three months ended June 30, 2021 and 2020, the Company recorded stock compensation expense in the amount of $281 thousand and $325 thousand, respectively. For the six months ended June 30, 2021 and 2020, the Company recorded stock compensation expense in the amount of $1.1 million and $635 thousand, respectively.

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. Under ASU 2016-09 Improvements to Employee Share-Based Payments Accounting, we have elected to recognize forfeitures as 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.

During the three months ended June 30, 2022 and 2021, the company granted 0 and ~~2020,~~ 30,000 ~~and 460,000~~ options, ~~were granted~~ respectively. The weighted average fair value calculations for the options granted during ~~the three months ended June 30, 2021 and 2020~~these periods are based on the following assumptions:

	For the three months ended June 30,						For the three months ended June 30,
Description	2021			2020			2022			2021
Dividend-yield		0	%		0	%	-		%		0	%
Risk-free interest rate		1.30	%		0.39	%	-		%		1.30	%
Expected volatility		122.81	%		87.09	%	-		%		122.81	%
Expected life (years)		7			5			-			7
Market value per share on grant date	$	13.09		$	0.60		$	-		$	13.09
Fair value per share on grant date	$	11.79		$	0.41
Fair value per option on grant date							$	-		$	11.79

As of June 30, ~~2021,~~2022, the Company had ~~$2.4~~$10.4 million of total unrecognized compensation expense for employees, which the Company will amortize over the ~~2.3~~2.4 years of weighted average remaining term.

The weighted average fair value calculations for warrants granted are based on the following weighted average assumptions:

All of the above outstanding warrants are vested and exercisable as of June 30, 2022. As of June 30, 2022 and 2021, the Company had no unrecognized compensation expense related to warrants, respectively.

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, ~~2021~~2022 and the term can be automatically renewed for additional one-year terms. ~~J.D. Heiskell further agrees~~WDG continues to ~~sell all WDG the Company produces~~be sold to ~~A.L. Gilbert. The Company markets~~A.L.Gilbert and ~~sells~~ DCO is sold to ~~A.L. Gilbert and~~ other ~~third parties~~customers under the ~~J.D. Heiskell Purchasing~~J.D.Heiskell Purchase 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.

As of June 30, 2022 and December 31, 2021, Aemetis had prepayments to J.D. Heiskell of $1.7 million and $4.0 million, respectively.

The J.D. Heiskell sales and purchases activity associated with the J.D. Heiskell Purchase Agreement and J.D. Heiskell Procurement Agreement during the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 were as follows:

	As of and for the three months ended June 30,				As of and for the six months ended June 30,				As of and for the three months ended June 30,				As of and for the six months ended June 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Ethanol sales	$	0	$	1,666	$	0	$	26,049
Wet distiller's grains sales		10,630		7,466		21,665		15,840	$	15,150	$	10,630		26,666		21,665
Corn oil sales		1,695		1,051		2,737		1,979		2,812		1,695		5,150		2,737
Corn purchases		42,166		22,541		80,159		51,755		54,352		42,166		98,362		80,159
Accounts receivable		65		55		65		55		232		65		232		65
Accounts payable		509		250		509		250		612		509		612		509

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, ~~2021~~2022 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. Under the terms of the agreement, the initial term matures on October 31, 2023 with automatic one-year renewals thereafter.

Accounts receivable associated with our marketing partners was $0.6 million and $1.2 million as of June 30, 2022 and December 31, 2021.

For the three months ended June ~~30,~~31, 2022 and 2021, ~~and 2020,~~ the Company expensed marketing costs of $0.8 million and $0.7 million, respectively, and ~~$0.5 million~~ for ~~each period respectively, under the terms of each agreement. For~~ the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the Company expensed marketing costs of ~~$1.4~~$1.5 million and ~~$1.1~~$1.4 million, ~~for each period~~ respectively, under the terms of ~~each agreement.~~

~~There were no ethanol sales to J.D. Heiskell for~~both the ~~three~~Ethanol Marketing Agreement and ~~six months ended June 30, 2021. There were ethanol sales to J.D. Heiskell for $1.7 million~~the Wet Distillers Grains Marketing Agreement. These marketing costs are and ~~$26.0 million for the three~~are presented as a part of Selling, General, and ~~six months ended June 30, 2020.~~Administration expense.

Aemetis recognizes ~~two~~three reportable ~~geographic segments: “North America”~~segments “California Ethanol”, “Dairy Renewable Natural Gas”, and ~~“India.~~“India Biodiesel.”

The ~~“North America” operating~~“California Ethanol” reportable segment includes the Company’s 65 million ~~gallons~~gallon per year ~~capacity~~ Keyes Plant, ~~in California,~~and the ~~ultra-low carbon renewable fuel project in Riverbank,~~adjacent land leased for the production of CO₂.

The “Dairy Renewable Natural Gas” reportable segment includes, the dairy digesters, pipeline and gas condition hub for the production of biogas ~~digesters on~~from dairies near Keyes, ~~California, the Goodland Plant in Kansas and the research and development facility in Minnesota.~~California.

The Company has additional operating segments that were determined not to be reportable segments, including the Carbon Zero 1 facility in Riverbank, the Goodland Plant, and the research and development facility in Minnesota. Refer to the “All Other” category.

Summarized financial information by reportable segment for the three months ended June 30, 2022 and 2021 follows:

A reconciliation of reportable segment revenues to total consolidated revenue for the three months ended June 30, 2022 and 2021 follow:

Summarized financial information by reportable segment for the ~~three and~~ six months ended June 30, ~~2021~~2022 and ~~2020~~2021 follows:

A reconciliation of reportable segment revenues to total consolidated revenues for the six months ended June 30, 2022 and 2021 follow:

~~North America.~~California Ethanol: 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. Sales of ethanol, WDG, corn oil to two customers accounted for 72% and 27% of the Company’s California Ethanol segment revenues for the three months ended June 30, 2022. Sales of ethanol, WDG, and corn oil to two customers accounted for 77% and 23% of the Company’s ~~North America~~California Ethanol segment revenues for the three months ended June 30, 2021. Sales of ethanol, WDG, corn oil to two customers accounted for 72% and 27% of the Company’s California Ethanol segment revenues for the six months ended June 30, 2022. Sales of ethanol, WDG, and corn oil to two customers accounted for 74% and 25% of the Company’s ~~North America~~California Ethanol segment revenues for the six months ended June 30, 2021.

~~Sales~~Dairy Renewable Natural Gas: Substantially all of ~~ethanol, WDG, and corn oil to two customers accounted for 28% and 22% of the North America~~our Dairy Renewable Natural Gas segment revenues ~~for~~during the three ~~months ended June 30, 2020. Sales of high-grade alcohol to one customer accounted for 27% of the North America segment revenues for the three months ended June 30, 2020. Sales of ethanol, WDG,~~ and ~~corn oil to two customers accounted for 54% and 16% of the North America segment revenues for the~~ six months ended June 30, ~~2020. Sales~~2022 and 2021 were from sales of ~~high-grade alcohol~~biogas to ~~one customer accounted~~the Keyes Plant for ~~15%~~use in boilers, which allowed qualification of ~~the North America segment revenues~~carbon credits for the ~~six months ended June 30, 2020.~~ethanol produced in the Keyes Plant.

~~India~~. One biodiesel customer accounted for 70% of the Company’s consolidated India segment revenues while one other sales customer accounted for 25% of the Company’s consolidated India segment revenues for the three months ended June 30, 2021. One biodiesel customer accounted for 73% of the Company’s consolidated India segment revenues while one refined glycerin customer accounted for 18% of such revenues for the six months ended June 30, 2021.

Three biodiesel customers accounted for 28%, 23%, and 16% of the Company’s consolidated India segment revenues for the three months ended June 30, 2020, while none of the refined glycerin customers accounted for more than 10% of such revenues for the three months ended June 30, 2020. Four biodiesel customers accounted for 28%, 23%, 11% and 10% of the Company’s consolidated India segment revenues while none of the refined glycerin customers accounted for more than 10% of such revenues for the six months ended June 30, 2020.

The Company owes Eric McAfee, the Company’s Chairman and CEO, and McAfee Capital LLC (“McAfee Capital”), owned by Eric McAfee, ~~$0.6~~$0.4 million in connection with employment agreements and expense reimbursements previously accrued as salaries expense and accrued liabilities. 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 June 30, ~~2021,~~2022, $0.1 million remained as a prepaid expense.

On ~~May 7, 2020,~~November 4, 2021, the Audit Committee of the Company approved a ~~guaranty~~guarantee fee of ~~0.1% quarterly on the outstanding balance of Third Eye Capital Notes for 2020 annual fee.~~$0.4 million to Mr. McAfee. The balance of ~~$0.5~~$0.1 million and ~~$0.8~~$0.3 million, for guaranty fees, remained as an accrued liability as of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. On January 12, 2022, the Audit Committee of the Company approved a one-time guarantee fee of $2.0 million to McAfee Capital in connection with McAfee Capital’s extension of certain guarantees of the Company’s indebtedness with Third Eye Capital. The Company paid this fee by issuing 180,000 shares of common stock of the Company.

The Company owes various members of the Board amounts totaling ~~$0.1 million and $1.2~~$0.2 million as of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, for each period, in connection with board compensation fees, which are included in accounts payable on the balance sheet. For the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the Company expensed $0.1 million respectively, in connection with board compensation ~~fees during each period.~~fees. For the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the Company expensed $0.2 million during each period, in connection with board compensation fees. ~~During the three months ended June 30, 2021 the company issued $0.9 million of restricted stock awards to pay off outstanding accounts payable owed to members of the Board.~~

On July 1, ~~2021,~~2022, the Subordinated Notes with two accredited investors were amended to extend the maturity date until the earlier of (i) December 31, ~~2021;~~2022; (ii) completion of an equity financing by AAFK or Aemetis 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 in connection with the amendment 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. Accounting for the July 1, ~~2021~~2022 amendments and the refinancing terms of the Subordinated Notes will be evaluated in accordance with ASC 470-50 ~~Debt~~ Debt–- Modification and Extinguishment.

On August ~~9, 2021,~~8th, 2022, Third Eye Capital agreed to ~~the~~ Limited Waiver and Amendment No. 2024 to the Note Purchase Agreement (“("Amendment No. ~~20”~~24") to: (i) provide that ~~upon written notice to~~the maturity date of the Third Eye Capital ~~the maturity date~~Notes may be further extended at our election to April 1, ~~2023~~2024 in exchange for an extension fee equal to 1% of the Note Indebtedness in respect ofto each Note, ~~where half of~~provided that such fee may be added to the outstanding principal balance of each Note on the effective date of each such extension, and (ii) provide for a waiver ~~of the ratio of note indebtedness~~for certain 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.defaults. 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.~~cash (the "Amendment No. 24 Fee").

~~Third Eye Reserve Liquidity Facility~~Waiver and Amendment to Series A Preferred Unit Purchase Agreement

On August ~~9, 2021,~~8th, 2022, ABGL, Protair-X America, Inc. (“Protair”), and Third Eye Capital ~~agreed~~entered into a Waiver and Amendment to ~~decrease~~Series A Preferred Unit Purchase Agreement (“PUPA Amendment") which amends that certain Series A Preferred Unit Purchase Agreement (“PUPA”) dated as of December 20, 2018. The PUPA Amendment provides for: (i) a waiver of certain covenants prohibiting the ~~amount available~~internal reorganization of ABGL subsidiaries and the incurrence of indebtedness by ABGL and its subsidiaries pursuant to a USDA loan, provided that, among other things, Third Eye Capital shall have received a repayment of at least $[7.3] million to be applied to the Carbon Revolving Line contemporaneously with the closing of the USDA loan; (ii) a waiver of certain operational defaults under the ~~reserve liquidity facility notes governed by a promissory note~~PUPA; and (iii) an amendment which (a) requires ABGL 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 balanceredeem all of the ~~indebtedness evidenced~~outstanding Series A Preferred Units by December 31, 2022 (the “Final Redemption Date”) for $116 million; and (b) provides ABGL the right to redeem all of the outstanding Series A Preferred Units by September 30, 2022 for $106 million. The PUPA Amendment further provides that the failure to redeem the Series A Preferred Units by the ~~promissory note, plus any accrued but unpaid interest~~Final Redemption Date would constitute a triggering event requiring ABGL to enter into a credit agreement with Protair and ~~any other sums due thereunder, shall be due and payable~~Third Eye Capital in ~~full at~~substantially 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 addedform attached to the ~~principal amount of the promissory note on the date of such initial advance.~~

The accompanying financial statements have been prepared contemplating the realization of assets and satisfaction of liabilities in the normal course of business. As a result of negative capital and negative operating results, and collateralization of substantially all of the company assets, the Company has been reliant on its senior secured lender to provide additional funding and has been required to remit substantially all excess cash from operations to the senior secured lender. In order to meet its obligations during the next twelve months, the Company will need to either refinance the Company’s debt or receive the continued cooperation 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.

For the Keyes ~~plant,~~Plant, we plan to operate the plant and continue to improve financial performance by adopting new technologies or process changes that allow for energy efficiency, cost reduction or revenue enhancements, execute upon awarded grants that improve energy and operational efficiencies resulting in lower cost, lower carbon demands and overall margin improvement.

For the ABGL ~~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. 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.

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 that generate federal and state carbon credits available for ultra-low carbon fuels utilizing lower cost, non-food advanced feedstocks to significantly increase margins.

For the ~~India plant,~~Kakinada Plant, we plan to ~~secure higher volumes of shipments of fuels at the India plant by developing the~~develop sales channels for domestic products as the costs of feedstock normalize against the price of diesel, as recently announced governmental incentives take effect to promote the blending of biodiesel, and ~~expanding~~as feedstocks such as refined animal tallow are used domestically and exported. Additionally, we are in the ~~existing domestic markets.~~process of obtaining approval to export refined animal tallow and biodiesel produced using animal tallow into international markets as the use of refined animal tallow received approval from the Pollution Control Board of India for production of biodiesel.

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 bonds in the taxable and tax-exempt markets, selling equity through the ATM and otherwise, selling the current EB-5 Phase II offering, or by vendor financing arrangements.

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

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

The following discussion should be read in conjunction with our consolidated condensed financial statements and accompanying notes included elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. 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. All references to years relate to the calendar year ended December 31 of the particular year.

~~Headquartered~~Founded in 2006 and headquartered in Cupertino, California, ~~Aemetis is~~we are an international renewable natural gas and renewable fuels ~~and byproducts~~ company focused on the acquisition, development and commercialization of innovative negative carbon intensity products and technologies that replace traditional petroleum-based products. We operate in ~~two~~three reportable ~~geographic segments: “North America”~~segments “California Ethanol”, “Dairy Renewable Natural Gas”, and ~~“India.”~~“India Biodiesel”. We have other operating segments determined not to be reportable segments, and are collectively represented by the “All Other” category. At Aemetis, our mission is to generate sustainable and innovative renewable fuel solutions that benefit communities and restore our environment. We do this through leading the low-carbon fuels industry by building a circular bioeconomy utilizing agricultural waste to produce advanced renewable fuels that produce less greenhouse gas emissions and thereby improve air quality.

~~Founded in 2006, we own and operate~~Our California Ethanol segment consists of a 65 million gallon per year ethanol production facility ~~in the California Central Valley~~located in Keyes, California ~~where~~(the “Keyes Plant”) that we ~~manufacture~~own and ~~produce~~operate. In addition to low carbon renewable fuel ethanol, ~~WDG, CDS,~~the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), and ~~DCO,~~Condensed Distillers Solubles (“CDS”), all of which are sold as animal feed to local dairies and ~~feedlots as animal feed. We operate a research~~feedlots. In the fourth quarter of 2021, we installed and development laboratory to develop efficient conversion technologies using waste feedstocks 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 entered into~~are commissioning an ~~agreement to purchase Zebrex~~ethanol zeolite membrane dehydration ~~equipment from Mitsubishi on August 24, 2018, to improve process efficiency and reduce greenhouse gas emissions (“GHG”)~~system at the Keyes Plant. ~~We began initial equipment~~The installation in the first quarter of 2020. The agreement allowed for deferred payments of the equipment until the unit begins operations. Due to COVID-19 shelter in place restrictions, construction of the project was halted late in the first quarter of 2020. Ongoing restrictions and contractor availability further delayed work toward completion until the third quarter of 2021. The Mitsubishi Zebrex ethanol dehydration system is a key ~~part of increasing~~first step in the electrification of the Keyes Plant, ~~and decreasing~~which will significantly reduce the use of petroleum based natural gas ~~usage at~~as process energy. The electrification, along with the ~~facility. This project~~future installation of a two-megawatt zero carbon intensity solar microgrid system and a mechanical vapor recompression (MVR) system will greatly reduce GHG emissions and decreases the carbon intensity of fuel produced at the Keyes Plant, allowing ~~Aemetis~~us to realize a higher price for the ethanol produced and sold.

Our Dairy Renewable Natural Gas segment consists of our subsidiary, Aemetis Biogas, LLC (“ABGL”), which was formed to 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 an underground private pipeline owned by ABGL to a gas cleanup and compression unit being built at the Keyes Plant to produce RNG. Upon receiving the bio-methane from the dairies, impurities are removed, and the bio-methane is converted to negative carbon intensity RNG where it will be either injected into the statewide PG&E gas utility pipeline, supplied as compressed RNG that will service local trucking fleets, or used as renewable process energy at the Keyes Plant. ABGL has completed Phase 1 of our California biogas digester network and pipeline system that converts waste dairy methane gas into Dairy Renewable Natural Gas (“RNG”), including two operational dairy’s and seven miles of pipeline. ABGL is now executing Phase 2 construction with the completion of sixteen miles of pipeline and the commissioning of the biogas-to-RNG upgrade unit at the Keyes plant as well as beginning construction of additional dairy digesters.

~~We also own~~During the second quarter of 2022, Aemetis has completed construction of a third dairy digester and ~~operate~~commissioning of the centralized gas cleanup facility and utility gas interconnect located at the Keyes Plant where dairy biogas will be upgraded to RNG and injected into the utility pipeline. Upon receiving pathway certification from the California Air Resources Board (CARB), the fuel is scheduled to be delivered into the Northern California gas delivery system.

Our “Carbon Zero” biofuels production plants are designed to produce biofuels, including sustainable aviation fuel (“SAF”) and diesel fuel utilizing renewable hydrogen and non-edible renewable oils sourced from existing Aemetis biofuels plants and other sources. The first plant to be built, in Riverbank, California, “Carbon Zero 1”, is expected to utilize hydroelectric and other renewable power available onsite to produce 90 million gallons per year of SAF, renewable diesel, and other byproducts. The plant is expected to supply the aviation and truck markets with ultra-low carbon renewable fuels to reduce GHG emissions and other pollutants associated with conventional petroleum-based fuels. By producing ultra-low carbon renewable fuels, the Company expects to capture higher value D3 Renewable Identification Numbers (“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 Environmental Protection Agency (“EPA”).

On April 1, 2021, Aemetis Carbon Capture, Inc. was established to build Carbon Capture and Sequestration (CCS) projects that 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 has been identified as the state’s most favorable region for large-scale CO₂ injection projects due to the subsurface geologic formation that absorbs and retains gases. The CCS projects are expected to capture and sequester up to two million metric tons per year of CO₂ at the two Aemetis biofuels plant sites in Keyes and Riverbank, California. In July 2022, Aemetis purchased 24 acres, on the Riverbank Industrial Complex site in Riverbank, California, to develop a CCS injection well. The Company plans to construct a characterization well to obtain both the data and well design information required for the EPA Class VI CO₂ injection well permit application. The well is expected to sequester up to one million metric tons per year of CO.

Our India Biodiesel segment consist of the Kakinada Plant with a nameplate capacity of 150 thousand metric tons per year, or about 50 million gallons per ~~year.~~year, producing high quality distilled biodiesel and refined glycerin for customers in India and Europe. We believe the Kakinada Plant is one of the 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 the pharmaceutical, personal care, paint, adhesive and other industries.

During 2018, Aemetis Biogas, LLC (“ABGL”) was formed to 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 2020, ABGL completed construction on the first two dairy digesters and the pipeline that carries bio-methane from these dairies to the Keyes Plant. The next phase of the project involves the construction of 15 additional dairies, for a total of 17 dairies. With plans to build digesters at more than 30 dairies, ABGL continues to negotiate and sign participation agreements with local dairies and convert those agreements into fully executed leases to capture dairy bio-methane from manure wastewater lagoons where the bio-methane would otherwise be released into the atmosphere. Upon receiving the bio-methane from the dairies, impurities will be removed and converted to RNG where it will be either injected into the local gas utility pipeline, supplied to a renewable compressed natural gas.

During the second quarter of 2021, Aemetis has opened negotiations for the supply of 1.6 million metric tonnes (“MT”) per year of CO₂ for Carbon Capture and Sequestration (“CCS”) to be located at or near the two Aemetis renewable fuels plant sites in Central California near Modesto. It is anticipated that the capacity of each injection well site will be approximately one million MT per year, for a combined total of two million MT of CO₂ sequestration per year.

Our revenue development strategy ~~in North America has historically relied on~~for our California Ethanol segment relies upon supplying 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~~California Ethanol segment, including the development of the ~~Riverbank project,~~Carbon Zero Plants, the expansion of ~~bio-methane digesters at local dairies near~~ the ~~Keyes Plant,~~biogas project, and the implementation of the ~~Aemetis Integrated~~Solar Microgrid System, the ~~Food Emission and Energy Efficiency Delivery Initiative,~~installation of the ~~Mitsubishi~~membrane dehydration system and other 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.

During the ~~first~~second quarter of ~~2021,~~2022, we produced five products at the Keyes Plant: denatured fuel ethanol, WDG, DCO, CO₂, and CDS. During the first quarter of 2020, we ~~started transitioning~~transitioned from selling ~~100% of~~ the ethanol we produce to J.D. Heiskell pursuant to the J.D. Heiskell Purchase Agreement, to a model where ~~100% of~~ the ethanol is sold directly to our fuel marketing customers. ~~The~~We own the ethanol stored in our finished goods ~~tank is 100% owned by Aemetis.~~tank. WDG continues to be sold to A.L. Gilbert and DCO is sold to other ~~customer~~customers under the J.D. Heiskell Purchase Agreement. Smaller amounts of CDS were sold to various local third parties. We began selling CO₂ to Messer Gas in the second quarter of 2020. We began selling high-grade alcohol in March 2020 directly to various customers throughout the West Coast and we also produced and sold Aemetis hand sanitizer under the Aemetis Health Products, Inc. subsidiary in the fourth quarter of 2020. North American

California Ethanol revenue is dependent on the price of ethanol, WDG, high-grade alcohol, ~~WDG,~~ and DCO.

Ethanol pricing is influenced by local and national inventory levels, local and national ethanol production, imported ethanol, corn prices and gasoline demand, and is determined pursuant to a marketing agreement with 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 (“OPIS”), as well as quarterly contracts negotiated by our marketing customer with local fuel blenders. The price for 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 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. ~~North American~~Our 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 isfurther influenced by the price of corn, the supply and price of distillers dried grains, and demand from the local dairy and feed markets. High-grade alcohol pricing is based on the supply and demand restrictions in the current market. Our revenue is further influenced bynatural gas, our decision to operate the Keyes Plant at various capacity levels, conduct required maintenance, and respond to biological processes affecting output.

In December 2018, we utilized our relationships with California’s Central Valley dairy farmers by signing leases and raising funds to construct dairy digesters, a 40 mile pipeline, and a biogas-to-RNG facility to initially use biogas to power our Keyes Plant and later deliver fuels for sale to utility gas pipeline. We are currently producing RNG from three digesters connected to 20 miles of pipeline, then flowing this gas to our RNG cleanup and compression hub at the Keyes Plant. The RNG upgrade unit at the Keyes Plant is designed to enable the production and delivery of utility-grade RNG for sale as transportation fuel to California customers via pipeline delivery.

In addition to the existing and operating dairy digesters, we currently have three additional dairy digesters that are under construction. We have 24 signed agreements with additional dairies to construct dairy digesters. Our revenue development strategy for the Dairy Renewable Natural Gas segment relies upon continuing to collect bio-methane gas from the existing dairy digesters, continuing to build out the network of dairy digesters, extending the pipeline in Northern California to grow the supply of RNG available for sale and utilizing the biogas-to-RNG upgrade unit to distribute utility-grade RNG to customers statewide. We plan to store the RNG until the LCFS credit pathway for each dairy has been established, after which we will sell the stored gas by delivering it into the utility gas pipeline.

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~~in 2021 the format was changed ~~in format~~ to allow for monthly bidding on volumes at a price set by the ~~OMC on an annual basis.~~OMCs. The Company ~~plans~~did not participate in tenders during 2021 due to low OMC offer prices. Recently, the government of India updated the national biofuels policy and adopted a new tax on diesel to promote biodiesel blending. As a result, the OMC’s are pricing the tenders at economically viable levels, allowing for biodiesel producers in India to begin production.

Going forward, the Company expects to participate in ~~these tenders~~offers made by the OMCs on economically reasonable terms.

To further promote the use of biodiesel in India, the India government implemented a program of imposing a penalty on blenders who fail to blend biodiesel into diesel product. This program is scheduled to take effect during ~~2021 when~~ the ~~price~~fourth quarter of ~~feedstock allows for profitable operation at the OMC set bid price.~~2022.

During the ~~first~~second 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~~2022, a grant in the ~~region. The arrangement is expected~~amount of $14.2 million was received from the USDA’s Biofuel Producer Program, created as part of the CARES Act, to ~~be ongoing to meet the needs of APSRTC, however it has been delayed~~compensate biofuel producers who experienced market losses due to ~~COVID-19.~~the COVID-19 pandemic.

Three Months Ended June 30, ~~2021~~2022, Compared to Three Months Ended June 30, ~~2020~~2021

Our revenues are derived primarily from sales of ethanol and WDG ~~in North America and~~for our California Ethanol segment, renewable natural gas for our Dairy Renewable Natural Gas segment, biodiesel and refined glycerin ~~in India.~~for our India Biodiesel, and sublease rental income from All Other.

California Ethanol. For the three months ended June 30, 2022, the Company generated 72% of revenue from sales of ethanol, 23% from sales of WDG, and 5% from sales of corn oil, CDS, CO₂, and other sales. Plant production averaged 111% of the 55 million gallon per year nameplate capacity. The increase in revenues ~~during~~was due to the increase in price of ethanol per gallon sold to $3.13 for the three months ended June 30, 2022, compared to $2.78 for the same period ended June 30, 2021, while volume of ethanol gallons sold remained consistent at 15.2 million gallons. The average price of WDG increased by 39% to $145.74 per ton for the three months ended June 30, 2022 while WDG sales volume increased by 3% to 104 thousand tons in the three months ended June 30, 2022 compared to 101 thousand tons in the three months ended June 30, 2021.

Dairy Renewable Natural Gas. During the three months ended June 30, 2022 and 2021, we recognized revenue of $297 thousand and $694 thousand, respectively, to an intercompany party. The decrease in the three months ended June 30, 2022 revenue compared to the three months ended June 30, 2021 was due to ~~an 88% increase~~LCFS pathway being approved in ~~average price~~the second quarter of ~~ethanol to $2.78 per gallon, compared to $1.48 per gallon~~2021, which applied retroactively since the inception of the first two dairy digesters. For revenue on a comparable basis the dairy digesters produced and sold MMBTU of 14.9 thousand and 13.1 thousand in the three months ended June 30, 2020, while the gallons of ethanol sold increased to 15.2 million gallons from 9.8 million gallons. In the three months ended June 30, 2020, ethanol revenues included revenues from high grade alcohol. WDG sales volume increased to 101 thousand tons during the three months ended June 30, 2021, compared to 91 thousand tons in the three months ended June 30, 2020,2022 and the average price of WDG increased by 28% to $105 per ton in the three months ended June 30, 2021, compared to $82 per ton in the three months ended June 30, 2020. During the three months ended June 30, 2021, plant production averaged 110% of the 55 million gallon per year nameplate capacity, compared to 100% for the three months ended June 30, 2020. 2021.

India Biodiesel. For the three months ended June 30, ~~2021,~~2022, we generated ~~77%~~100% of our ~~North America~~ revenues from the other sales, ~~of ethanol, 19% from sales of WDG, and 4% from sales of DCO, CO₂, and CDS,~~ compared to ~~48% of our North America revenues from sales of high grade alcohol, 32% from sales of ethanol, 17% from sales of WDG, and 3% from sales of DCO, CO₂, and CDS for the three months ended June 30, 2020.~~

~~India.~~ The decrease in revenues was primarily attributable to the COVID-19 shutdown, higher costs of stearin in India causing lower production, and higher feedstock costs making conversion to biodiesel unviable. Biodiesel sales volume decreased by 96% to 105 metric tons in the three months ended June 30, 2021 compared to 2.6 thousand metric tons in the three months ended June 30, 2020, partially offset by a 22% increase in average price of biodiesel to $1,017 per metric ton in the three months ended June 30, 2021, compared to $835 per metric ton in the three months ended June 30, 2020. In addition, refined glycerin sales volume decreased by 98% to 9 metric tons in the three months ended June 30, 2021, compared to 411 metric tons in the three months ended June 30, 2020, partially offset by an average price per metric ton increase of 7% to $967 in the three months ended June 30, 2021, compared to $901 per metric ton in the three months ended June 30, 2020. For the three months ended June 30, 2021, we generated 70% of our revenues from the sale of biodiesel, 5% of our revenues from the sale of refined glycerin, and 25% of our sales from other sales ~~compared to 83% of our revenues from the sale of biodiesel, 14% of our revenues from the sale of refined glycerin and 3% of our revenues from other sales,~~ for the three months ended June 30, ~~2020.~~2021. The decrease in revenues was primarily attributable to the Kakinada Plant not bidding on the Indian government tenders due to higher feedstock costs making conversion to biodiesel unviable. Biodiesel sales volume decreased by 100% to 0 metric tons in the three months ended June 30, 2022 compared to 105 metric tons in the three months ended June 30, 2021. Refined glycerin sales volume decreased by 100% to 0 metric tons in the three months ended June 30, 2022, compared to 9 metric tons in the three months ended June 30, 2021.

~~North America.~~ California Ethanol.We ground ~~5.2~~5.3 million and ~~4.9~~5.2 million bushels of corn in the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Our average cost of feedstock per bushel increased to ~~$8.04~~$10.21 per bushel during the three months ended June 30, ~~2021~~2022 compared to ~~$4.55~~$8.04 per bushel for the three months ended June 30, ~~2020.~~2021. In addition, for the three months ended June 30, 2022, we incurred $1.5 million more in natural gas costs, $0.1 million more in chemical costs, and $0.6 million more in transportation costs compared to the same period in 2021.

~~India.~~ Dairy Renewable Natural Gas. Cost of Goods Sold expenses relate to dairy manure payments, maintenance on the dairy digesters, production bonuses, and depreciation.

India Biodiesel.The decrease in costs of goods sold was attributable to the decrease in biodiesel feedstock volume ~~by 96% to 105 metric tons~~ in the three months ended June 30, 2021, compared to 2.5 thousand metric tons in the three months ended June 30, 2020, coupled with a decrease in the average price of biodiesel feedstock to $565 per metric ton in the three months ended June 30, 2021, compared to $659 per metric ton in the three months ended June 30, 2020. Refined glycerin feedstock volumes remained decreased to 8 metric tons in the three months ended June 30, 2021, compared to 406 metric tons in the three months ended June 30, 2020, while the average price of refined glycerin feedstock increased to $608 per metric ton in the three months ended June 30, 2021 compared to $643 per metric ton in the corresponding period in 2020.2022.

~~North America.~~California Ethanol. Gross profit decreased ~~due to decrease~~by 106% in ~~demand for high-grade alcohol, which had a higher gross margin per gallon sold than traditional ethanol. This was partially offset by an increase in volume of ethanol sold to 15.2 million gallons for~~ the three months ended June 30, ~~2021, compared~~2022 primarily due to ~~9.8 million gallons for the corresponding period in 2020 coupled with an increase~~increases in the prices of corn, natural gas and transportation costs partially offset by price ofincreases in ethanol and WDG. ~~In addition, our average cost of feedstock per bushel increased by 77% for~~

Dairy Renewable Natural Gas. Gross loss in the three months ended June 30, ~~2021.~~

2022 relates to increase in expenses in connection with ramp up of our Dairy Renewable Natural Gas business.

~~India.~~ ~~The decrease in gross profit was attributable to the decrease of biodiesel metric tons sold by 96% coupled with a 98% decrease of refined glycerin metric tons sold.~~

~~R&D~~Substantially all of our research and development expenses were related to research and development activities in Minnesota.

~~R&D expense remained consistent for the three months ended June 30, 2021~~Selling, general, and ~~2020.~~

administrative (“SG&A&A”) expenses consist primarily of salaries and related expenses for employees, marketing expenses related to sales of ethanol and WDG in ~~North America~~California Ethanol and biodiesel and other products in India Biodiesel, 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 June 30, 2021 was due to increases in~~Other operating income consists of sublease rental income and a loss on lease signing bonuses of $0.2 million, marketing expenses of $0.3 million, professional fees of $0.7 million, insurance of $0.3 million, and salaries of $0.1 million. SG&A expenses as a percentage of revenue in the three months ended June 30, 2021 increased to 10% as compared to 8% in the corresponding period of 2020.termination.

~~India~~. SG&A expenses as a percentage of revenue in the three months ended June 30, 2021 increased to 256% as compared to 12% in the corresponding period of 2020 due to the decrease in revenue in the three months ended June 30, 2020.

~~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 June 30, 2021 due to principal debt payments made to Third Eye Capital. The increase in accretion and other expenses of the Series A Preferred Units was due to the issuance of additional units from June 30, 2020 to June 30, 2021, coupled with accrued preference payments. Other income from the gain on debt extinguishment was due to the PPP loan being forgiven. Other expense increased due to project termination charges.

~~India~~~~. Interest expense decreased as working capital lines have been repaid.~~

~~Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020~~

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

~~North America.~~ For the six months ended June 30, 2021, the Company generated 74% of revenue from sales of ethanol, 22% from sales of WDG, and 4% from sales of corn oil, CDS, and CO₂. During the six months ended June 30, 2021, plant production averaged 112% of the 55 million gallon per year nameplate capacity. The increase in revenues for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was due to the increase in volume of ethanol sold to 30.8 million gallons for the six months ended June 30, 2021 compared to 25.5 million gallons sold for the six months ended June 30, 2020 coupled with an increase in the price of ethanol per gallon to $2.34 for the six months ended June 30, 2021, compared to $1.53 for the six months ended June 30, 2020. In the six months ended June 30, 2020, 28% of revenue was from sales of high grade alcohol which was included in ethanol revenues. The average price of WDG increased by 32% to $106 per ton while WDG sales volume also increased by 4% to 205 thousand tons in the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

~~India.~~ For the six months ended June 30, 2021, the Company generated 74% of revenue from sales of biodiesel, 20% of sales from refined glycerin, and 6% from other sales compared to 80% of sales from biodiesel, 7% from sales of refined glycerin, and 13% from other sales during the six months ended June 30, 2020. The decrease in revenues for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was due to a 93% 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 six months ended June 30, 2021 compared to $786 per metric ton in the same period in 2020. The sales volume of refined glycerin decreased by 78% to 130 metric tons while the average price of glycerin increased by 24% to $956 per metric ton in the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

~~North America.~~ We grounded 10.7 million bushels of corn during the six months ended June 30, 2021 compared to 10.6 million bushels in the same period in 2020. Our average cost of corn per bushel increased by 52% to $7.44 per bushel in the six months ended June 30, 2021 compared to the same period in 2020.

~~India.~~ The decrease in cost of goods sold during the six months ended June 30, 2021 compared to June 30, 2020 was attributable to a decrease in the volume of biodiesel feedstock by 92% to 455 metric tons compared to 5,692 metric tons during the six months ended June 30, 2020 coupled with a decrease in the average price of biodiesel feedstock by 4% to $634 compared to $658 in the same period in 2020. In addition, the volume of refined glycerin feedstock decreased by 77% to 117 metric tons, partially offset by an increase in the average price of the refined glycerin feedstock by 23% to $619 per metric ton in the six months ended June 30, 2021 compared to the same period in 2020.

~~North America.~~ Gross profit for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 decreased due to the decrease in demand for high-grade alcohol as a result of COVID-19 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 91% to 585 metric tons.~~

~~R&D expenses decreased in the six months ended June 30, 2021 due to decreases in expenses related to research subcontract work of $80 thousand and lab supplies of $10 thousand.~~

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.~~ SG&A expenses as a percentage of revenue in the six months ended June 30, 2021 increased to 11% from 8% in the six months ended June 30, 2020. The increase in SG&A expenses was primarily due to an increase in salaries and wages of $0.8 million, supplies and services of $0.1 million, insurance of $0.5 million, professional fees of $1.2 million, lease signing bonuses of $0.2 million, bad debt expense of $0.1 million, and marketing fees of $0.3 million compared to the six months ended June 30, 2020.

~~India.~~ SG&A expenses as a percentage of revenue in the six months ended June 30, 2021 increased to 119% as compared to 18% in the corresponding period of 2020. The decrease in SG&A was due to a decrease in salaries and office maintenance of $213 thousand, in rent and other utilities of $102 thousand, and professional fees of $257 thousand, partially offset by an increase of miscellaneous expenses and change in operational support services of $210 thousand during the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

~~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 The Industrial Company.~~accretion of our Series A preferred units. 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.~~expense.

The increase in SG&A expenses for the ~~six~~three months ended June 30, ~~2021~~2022 was principally due to increases in salaries and wages of $1.3 million, as part of the development of our ultra-low carbon initiatives. SG&A expenses as a percentage of revenue in the three months ended June 30, 2022 remained consistent compared to the comparable period in 2021 at 10%.

Other operating expense is related to a loss on lease termination caused by the termination of two finance leases, partially offset by Riverbank sublease rental income.

Interest expense increased in the three months ended June 30, 2022 due to obtaining and drawing on the Revolving Loans, partially offset by principal debt payments made to Third Eye ~~Capital.~~Capital in the first and second quarter of 2022, coupled with capitalizing interest on our capital projects. Debt related fees and amortization increased due to debt issuance costs and extension fees being incurred in 2022 related to extending the Third Eye Capital debt and obtaining the Revolving Loans. The ~~increase~~decrease in accretion and other expenses of the Series A Preferred Units was due to capitalized interest related to the ~~issuance of additional units from~~ABGL project increasing and offsetting accretion expense. For the three months ended June 30, ~~2020 to June 30,~~2022 and 2021 ~~coupled with accrued preference payments. Other income related to gain~~capitalized interest was $2.0 million and $0.7 million, respectively. Gain on debt extinguishment was ~~due~~related to the PPP loan being ~~forgiven.~~forgiven in the 2021. Gain on litigation arose from the settlement of the EdenIQ lawsuit in the three months ended June 30, 2022. Other expense (income) change is related to a grant in the amount of $14.2 million received from the USDA's Biofuel Producer Program, created as part of the CARES Act, to compensate biofuel producers who experienced market losses due to the COVID-19 pandemic.

California Ethanol. For the six months ended June 30, 2022, the Company generated 73% of revenue from sales of ethanol, 23% from sales of WDG, and 4% from sales of corn oil, CDS, CO₂, and other sales. Plant production averaged 109% of the 55 million gallon per year nameplate capacity. The increase in revenues was due to an increase in price of ethanol to $2.86 per gallon for the six months ended June 30, 2022, compared to $2.34 per gallon for the same period ended June 30, 2021, which was partially offset by the decrease in volume of ethanol gallons sold from 30.8 million gallons for the six months ended June 30, 2021 to 29.9 million gallons for the six months ended June 30, 2022. The average price of WDG increased by 24% to $130 per ton for the six months ended June 30, 2022 while WDG sales volume decreased to 204 thousand tons in the six months ended June 30, 2022 compared to 205 thousand tons in the six months ended June 30, 2021.

Dairy Renewable Natural Gas. During the six months ended June 30, 2022 and 2021, we recognized revenue of $632 thousand and $735 thousand, respectively to an intercompany party.

India Biodiesel. For the six months ended June 30, 2022, we generated 100% of our revenues from the other sales, compared to 74% of our revenues from the sale of biodiesel, 20% of our revenues from the sale of refined glycerin, and 6% of our sales from other sales for the three months ended June 30, 2021. The decrease in revenues was primarily attributable to the Kakinada Plant not receiving orders from the Indian government due to higher feedstock costs making conversion to biodiesel unviable. Biodiesel sales volume decreased by 100% to 0 metric tons in the six months ended June 30, 2022 compared to 455 metric tons in the six months ended June 30, 2021. Refined glycerin sales volume decreased by 100% to 0 metric tons in the six months ended June 30, 2022, compared to 130 metric tons in the six months ended June 30, 2021.

California Ethanol. We ground 10.4 million and 10.7 million bushels of corn in the six months ended June 30, 2022 and 2021, respectively. Our average cost of feedstock per bushel increased to $9.50 per bushel during the six months ended June 30, 2022 compared to $7.44 per bushel for the six months ended June 30, 2021. In addition, for the six months ended June 30, 2022, we incurred $2.4 million more in natural gas costs, $0.3 million more in chemical costs, and $0.9 million more in transportation costs.

Dairy Renewable Natural Gas. Cost of Goods Sold expenses relate to dairy manure payments, maintenance on the dairy digesters, production bonuses, and depreciation.

India Biodiesel. The decrease in costs of goods sold was attributable to the decrease in biodiesel feedstock volume in the six months ended June 30, 2022.

California Ethanol. Gross profit decreased in the six months ended June 30, 2022 primarily due to increases in the prices of corn, natural gas, chemical costs, and transportation costs.

Dairy Renewable Natural Gas. Gross loss increased in the six months ended June 30, 2022 primarily due to increase in expenses in connection with ramp up of our Dairy Renewable Natural Gas business.

The increase in SG&A expenses for the six months ended June 30, 2022 was due to increases in salaries and wages of $2.7 million, as part of the development of our ultra-low carbon initiatives. SG&A expenses as a percentage of revenue in the six months ended June 30, 2022 increased to 12% as compared to 11% in the corresponding period of 2021.

Other operating expense is related to a loss on lease termination caused by the termination of two finance leases, partially offset by Riverbank sublease rental income.

Interest expense decreased in the six months ended June 30, 2022 due to principal debt payments made to Third Eye Capital in the first and second quarter of 2022, coupled with capitalizing interest on our capital projects. Debt related fees and amortization increased due to ~~termination charges.~~debt issuance costs and extension fees being incurred in 2022 related to extending the Third Eye Capital debt and obtaining the Revolving Loans. The decrease in accretion and other expenses of the Series A Preferred Units was due to capitalized interest related to the ABGL project increasing and offsetting accretion. For the six months ended June 30, 2022 and 2021 capitalized interest was $3.6 million $1.2 million, respectively. Gain on debt extinguishment was related to the PPP loan being forgiven in the 2021. Gain on litigation arose from the settlement of the EdenIQ lawsuit in the three months ended June 30, 2022. Other expense (income) change is related to a grant in the amount of $14.2 million received from the USDA's Biofuel Producer Program, created as part of the CARES Act, to compensate biofuel producers who experienced market losses due to the COVID-19 pandemic.

Cash and cash equivalents were ~~$7.2~~$3.6 million at June 30, ~~2021,~~2022, of which ~~$5.1~~$3.1 million was held in North America and the rest was held at our Indian subsidiary. Our current ratio at June 30, ~~2021~~2022 was ~~0.30,~~0.25, compared to a current ratio of ~~0.08~~0.32 at December 31, ~~2020.~~2021. We expect that our future available liquidity resources will consist primarily of cash generated from operations, 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 equity. The use of proceeds from all equity raises and debt financings are subject to approval by our senior lender.

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

Our principal sources of liquidity have been cash provided by the sale of equity, operations, and borrowings under various debt arrangements.

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 $0.5 million per investor to $0.9 million per investor. As of June 30, ~~2021,~~2022, 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, 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 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.

As a result of negative capital and negative operating results, and collateralization of substantially all of the company assets, the Company has been reliant on its senior secured lender to provide additional funding and has been required to remit substantially all excess cash from operations to the senior secured lender. In order to meet its obligations during the next twelve months, the ~~Company~~company will need to either refinance the ~~Company’s~~company’s debt or receive the continued cooperation of its senior lender. This dependence on the senior lender raises substantial doubt about the ~~Company’s~~company’s ability to continue as a going concern. The Company plans to pursue the following strategies to improve the course of the business.

For the ABGL ~~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. 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.

At June 30, ~~2021,~~2022, the outstanding balance of principal, interest and fees, net of discounts, on all Third Eye Capital Notes equaled ~~$113.0~~$140 million. The ~~current~~ maturity ~~date~~dates for ~~all of~~ the Third Eye Capital financing arrangements isare April 1, ~~2022, however,~~2023, for $100 million with the ~~Company has the right~~ability to extend ~~the maturity date of the Third Eye Capital Notes~~ to April 1, ~~2023 upon notice~~2024, March 1, 2025, for $18 million and ~~payment~~March 1, 2026, for $22 million.

As of ~~a 1% extension fee, pursuant to Amendment No. 20. The GAFI notes were fully repaid in the first quarter of 2021.~~June 30, 2022, we have $4.9 million available under our revolving credit lines.

As of the date of this report, the Company has $40.0 million additional borrowing capacity to fund future cash flow requirements under the Reserve Liquidity Notes due on April 1, ~~2022.~~2023.

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 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.

The below table (in thousands) describes the changes in current and long-term debt during the six months ended June 30, ~~2021:~~2022:

Working capital changes resulted in (i) a $0.6 million increase in inventories due to a $1.1 million increase in North America inventory, partially offset by a decrease of $0.5 million in India, (ii) a $0.1 million decrease in accounts receivable due a $0.7 million decrease in India’s accounts receivable, partially offset by a $0.6 million increase in Norther America’s accounts receivable, (iii) a $4.4 million increase in prepaid expenses mainly due to $4.0 million dollar prepayment to J.D. Heiskell coupled with a $0.5 million prepayment for natural gas, offset by $0.1 million dollar decrease in prepaid insurance , (iv) a decrease in other current assets in India operations of $0.6 million coupled with a decrease of $0.6 million in North America operations, and (v) a $6.6 million increase in cash due to funds raised through the at-the-market offering program.

Working capital changes resulted in (i) a $0.2 million decrease in inventories, (ii) a $0.3 million decrease in accounts receivable due to repayments of Murex accounts receivable, (iii) a $0.8 million decrease in prepaid expenses mainly due to the use of a $2.5 million J.D. Heiskell pre-payment, partially offset by an increase in prepaid guarantee fees of $1.7 million, (iv) a decrease in other current assets of $0.1, and (v) a $4.2 million decrease in cash.

Net cash used in operating activities during the six months ended June 30, ~~2021~~2022, was ~~$18.2~~$6.5 million, consisting of non-cash charges of ~~$10.6~~$12.2 million, net cash used ~~in in~~by operating assets and liabilities of ~~$0.1~~$0.3 million, and net loss of ~~$28.7~~$18.5 million. The non-cash charges consisted of: (i) ~~$1.9~~$3.6 million in amortization of debt issuance costs and other intangible assets, (ii) ~~$2.8~~$2.7 million in depreciation expenses, (iii) ~~$1.1~~$3.4 million in stock-based compensation expense, (iv) ~~$5.7~~$3.1 million in preferred unit accretion and other expenses of Series A preferred units, (v) a ~~gain~~loss on ~~debt extinguishment~~lease termination of ~~$1.1~~$0.7 million, and (vi) ~~an increase in the provision for bad debts~~a gain on litigation of ~~$0.1~~$1.4 million. Net changes in operating assets and liabilities consisted primarily of ~~an increase~~a decrease in (i) inventories of ~~$0.6~~$0.2 million, (ii) prepaid expenses of ~~$4.4~~$2.1 million, (iii) an increase in accounts ~~receivable~~payable of ~~$0.1~~$0.4 million, ~~and~~ (iv) a decrease in accounts ~~payable~~receivable of ~~$2.7~~$0.3 million, ~~partially offset by and~~ (v) ~~an increase in other liabilities of $0.7 million, (vi) a decrease in other assets of $2.6 million, and (vii)~~ an increase in accrued interest of ~~$4.4 million.~~$8.5 million, partially offset by (vi) an increase in other assets of $1.6 million, and (vii) a decrease in other liabilities of $10.1.

Cash used by investing activities was ~~$11.7~~$16.4 million, of which ~~$13.0~~$22.5 million were used by capital ~~projects. This was~~projects, partially offset by ~~North America~~ grant proceeds ~~received~~and other reimbursements of ~~$1.2~~$6.1 million.

Cash provided by financing activities was ~~$36.5~~$18.7 million, consisting primarily of ~~$86.3 million raised from issuance of common stock in equity offerings, $3.1 million received for issuing Series A Preferred Units, $1.0~~$0.2 million from exercises of stock options, $5.1 million from issuance of common stock and ~~$0.1~~$30.6 million ~~received for grant matching program~~from proceeds from borrowings, partially offset by repayments of ~~borrowing on TEC~~borrowings of $16.2 million, debt renewal and waiver fee payments of ~~$53.5~~$0.9 million, ~~$0.3 million for Series A Preferred Units redemption,~~ and ~~$0.2 million related to~~ payments on finance ~~leases.~~leases of $0.2 million.

Our discussion and analysis of 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 of our 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 are: revenue recognition; recoverability of long-lived assets, 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~~Operations—Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

None reported beyond those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

We had no off-balance sheet arrangements during the three months ended June 30, ~~2021.~~2022.

Management (with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), ~~carried out~~conducted 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). Based on this evaluation, our CEO and CFO concluded that, although remediation plans were initiated to address the material ~~weakness~~weaknesses over financial reporting as identified in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, 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~~compiled and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

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, ~~2020,~~2021, we initiated a remediation plan to address the material ~~weakness~~weaknesses 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~~weaknesses in internal control over financial reporting identified by management as of December 31, ~~2020,~~2021, and the remedial measures undertaken to address ~~this~~these material ~~weakness,~~weaknesses, investors are encouraged to review Item 9A, Controls and Procedures, in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

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. On May 6, 2022, the parties settled the dispute for $4.8 million by entering into a settlement agreement. The ~~Company’s ability to amend its claims and present its claims to~~settlement gain of $1.4 million was recognized on the ~~court or a jury could materially affect~~income statement in the ~~court’s decision to award EdenIQ its fees and costs. In addition to further legal motions and a potential appeal~~second quarter 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.2022.

~~No change in~~Except as described below, there are no material changes to the risk factors since the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 filed with the SEC on March ~~15, 2021.~~10, 2022. We urge you to read the risk factors contained therein.

Inflation, including as a result of commodity price inflation or supply chain constraints due to the war in Ukraine, may adversely impact our results of operations.

We have experienced inflationary impacts on key production inputs, feedstock, wages and other costs of labor, equipment, services, and other business expenses. Commodity prices and transportation costs in particular have risen significantly over the past year. Inflation and its negative impacts could escalate in future periods. In addition, inflation is often accompanied by higher interest rates.

Ukraine is the third largest exporter of grain in the world. Russia is one of the largest producers of natural gas and oil. The commodity price impact of the war in Ukraine has been a sharp rise in grain and energy prices, including corn and natural gas, two of our primary production input commodities. In addition, the war in Ukraine has and may continue to adversely affect global supply chains resulting in further commodity price inflation for our production inputs. Also, given high global grain prices, U.S. farmers may prefer to lock in prices and export additional volumes, reducing domestic grain supplies and resulting in further inflationary pressures.

In an inflationary environment, such as the current economic environment, depending on other economic conditions, we may be unable to raise prices of our fuels or products to keep up with the rate of inflation, which would reduce our profit margins. As a result, inflation may have a material adverse effect on our results of operations and financial condition.

No unresolved defaults on senior securities occurred during the ~~three~~six months ended June 30, ~~2021.~~2022.

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.None.

The foregoing description of Amendment No. 20 is only a summary and does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 20, which is filed as Exhibit 10.1 hereto, and is incorporated by reference herein.

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.

The foregoing description of Promissory Note is only a summary and does not purport to be complete and is qualified in its entirety by reference to the full text of Promissory Note, which is filed as Exhibit 10.2 hereto, and is incorporated by reference herein.

* The schedule to this agreement has been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of the omitted schedule will be furnished to the Securities and Exchange Commission upon request.

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.

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

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

Large accelerated filer	☐	~~Non-accelerated filer~~Accelerated Filer	☐☒
~~Accelerated~~Non-accelerated filer	☐	Smaller reporting company	☒☐
		Emerging growth company	☐

	Years
Plant and buildings		20 - 30
Machinery and equipment		5 - 15
Furniture and fixtures		3 - 5

	~~Years~~
~~Plant and buildings~~		~~20 - 30~~
~~Machinery and equipment~~		~~5 - 15~~
~~Furniture and fixtures~~		~~3 - 5~~

~~PART I--FINANCIAL INFORMATION~~

Item 1	Financial Statements.	4
		4
Item 2.	~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.	35
		33
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	46
		44
Item 4.	Controls and Procedures.	47
~~PART II--OTHER INFORMATION~~44

PART II--OTHER INFORMATION

Item 1.	Legal Proceedings	48
		45
Item 1A.	Risk Factors.	48
		45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	48
		45
Item 3.	Defaults Upon Senior Securities.	48
		45
Item 4.	Mine Safety Disclosures.	48
		45
Item 5.	Other Information.	48
		45
Item 6.	Exhibits.	50
		46
Signatures			51	47

For the six months ended June 30, 2021
									Additional					Accumulated Other			Total
	Series B Preferred Stock				Common Stock				Paid-in		Accumulated			Comprehensive			Stockholders'
Description	Shares		Dollars		Shares		Dollars		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	)

	Three months ended					Six months ended
	June 30, 2021			June 30, 2020		June 30, 2021			June 30, 2020
	(In thousands, except per share amounts)					(In thousands, except per share amounts)

Net income (loss)	$	(10,557	)	$	2,192	$	(28,669	)	$	(9,860	)

Shares:
Weighted average shares outstanding-basic		30,924			20,683		28,781			20,668
Weighted average dilutive share equivalents from preferred shares		-			132		-			-
Weighted average dilutive share equivalents from stock options		-			337		-			-

Weighted average shares outstanding-diluted		30,924			21,152		28,781			20,668

Income (loss) per share-basic	$	(0.34	)	$	0.11	$	(1.00	)	$	(0.48	)

Income (loss) per share-diluted	$	(0.34	)	$	0.10	$	(1.00	)	$	(0.48	)

A.	Term ~~Notes~~Notes.. As of June 30, ~~2021,~~2022, the Company had ~~$7.1~~$7.2 million in principal and interest outstanding net of ~~$52~~$76 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, 20222023. ~~Fifty percent of the Amendment No. 19 extension fee of $71 thousand was paid in cash, hence $35 thousand was added to the outstanding balance as of June 30, 2021.~~

B.	Revolving Credit Facility. The Revolving Credit Facility accrues interest at the prime rate plus 13.75% ~~(17.00%~~(18.50% as of June 30, ~~2021)~~2022) payable monthly in arrears. The Revolving Credit Facility matures on April 1, 20222023. As of June 30, ~~2021,~~2022, AAFK had ~~$68.3~~$55.2 million in principal and interest and waiver fees outstanding net of ~~$669 thousand~~$1.1 million unamortized debt issuance costs under the Revolving Credit Facility. ~~$518 thousand of the Amendment No. 19 extension fee of $926 thousand was paid in cash, hence $418 thousand was added to the outstanding balance as of June 30, 2021.~~
	��
C.	Revenue Participation Term Notes. The Revenue Participation Term Note bears interest at 5% per annum and matures on April 1, 20222023. As of June 30, ~~2021,~~2022, AAFK had $12.0 million in principal and interest outstanding net of ~~$83~~$119 thousand unamortized debt issuance costs on the Revenue Participation Term Notes. ~~Fifty percent of the Amendment No. 19 extension fee of $119 thousand was paid in cash, hence $60 thousand was added to the outstanding balance as of June 30, 2021.~~

D.	Acquisition Term Notes. The Acquisition Term Notes accrue interest at the prime rate plus 10.75% ~~(14.00%~~(15.50% per annum as of June 30, ~~2021)~~2022) and mature on April 1, 20222023. As of June 30, ~~2021,~~2022, Aemetis Facility Keyes, Inc. had ~~$26.6~~$26.7 million in principal and interest and redemption fees outstanding net of ~~$138~~$202 thousand unamortized debt issuance costs. The outstanding principal balance includes a total of $7.5 million in redemption fees. ~~Fifty percent of the Amendment No. 19 extension fee of $191 thousand was paid in cash, hence $95 thousand was added to the outstanding balance as of June 30, 2021.~~

E.	Reserve Liquidity Notes. The Reserve Liquidity Notes, with available borrowing capacity in the amount of ~~$70.0~~$40.0 million, accrues interest at the rate of 30% per annum and are due and payable upon the earlier of: (i) the closing of ~~receipt by the Company~~new debt or ~~its affiliates of proceeds~~equity financings, (ii) receipt from any sale, merger, debt or equity financing, or ~~debt financing, refinancing or other similar transaction from any third party and~~(iii) April 1, ~~2022.~~2023. We have no borrowings outstanding under the Reserve Liquidity Notes as of June 30, ~~2021. On August 9, 2021,~~2022.

*	The note maturity date can be extended by the Company to April 2024. 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 of which 50% can be paid in cash and 50% can be added to the outstanding debt. As a result of this ability to extend the maturity at the Company’s will, the Third Eye ~~agreed to decrease the amount available under the reserve liquidity notes governed by a promissory note to $40.0 million.~~ Capital Notes are classified as non-current debt.

	Warrants Outstanding & Exercisable			Weighted - Average Exercise Price		Average Remaining Term in Years
Outstanding December 31, 2020		95		$	2.59		4.95
Granted		292			0.01
Exercised		(332	)		0.32
Outstanding December 31, 2021		55		$	2.59		3.95
Granted		413			13.33
Exercised		(113	)		0.01
Outstanding June 30, 2022		355		$	15.92		7.99

	For the three months ended June 30, 2022
	California Ethanol			Dairy Renewable Natural Gas			India Biodiesel		All other			Total

Revenues from external customers	$	65,891		$	-		$	10	$	-		$	65,901
Intersegment revenues		-			297			-		-			297
Gross profit (loss)		(152	)		(68	)		10		(4	)		(214	)

Interest expense		4,869			7			-		1,792			6,668
Accretion and other expenses of Series A preferred units		-			1,506			-		-			1,506
Capital expenditures		5,366			6,696			69		928			13,059
Depreciation		977			154			164		30			1,325
Total Assets		66,580			55,731			9,324		46,817			178,452

	2022			2021
Total revenues for reportable segments	$	66,198		$	55,578
Elmination of intersegment revenues		(297	)		(694	)
Total consolidated revenues	$	65,901		$	54,884

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

Revenues	$	54,730		$	154		$	54,884		$	45,223	$	2,601		$	47,824
Cost of goods sold		51,069			169			51,238			31,284		2,481			33,765
Gross profit (loss)		3,661			(15	)		3,646			13,939		120			14,059

Other expenses (income)
Research and development expenses		21			0			21			21		0			21
Selling, general and administrative expenses		5,358			395			5,753			3,746		303			4,049
Interest expense		5,219			0			5,219			6,172		16			6,188
Accretion and other expenses of Series A preferred units		3,800			0			3,800			1,362		0			1,362
Gain on debt extinguishment		(1,134	)		0			(1,134	)		0		0			0
Other expense (income)		572			(28	)		544			314		(11	)		303
Income (loss) before income taxes	$	(10,175	)	$	(382	)	$	(10,557	)	$	2,324	$	(188	)	$	2,136

Capital expenditures	$	6,374		$	1		$	6,375		$	6,086	$	163		$	6,249
Depreciation		1,204			174			1,378			1,012		160			1,172

	For the six months ended June 30, 2022
	California Ethanol			Dairy Renewable Natural Gas			India Biodiesel		All other			Total

Revenues from external customers	$	117,932		$	-		$	18	$	-		$	117,950
Intersegment revenues		-			632			-		-			632
Gross profit (loss)		(3,032	)		(275	)		18		(10	)		(3,299	)

Interest expense		10,514			11			-		2,404			12,929
Accretion and other expenses of Series A preferred units		-			3,146			-		-			3,146
Capital expenditures		7,169			12,145			136		3,068			22,518
Depreciation		1,988			300			332		41			2,661
Total Assets		66,580			55,731			9,324		46,817			178,452

	As of
	June 30,		December 31,
	2021		2020

North America	$	131,570	$	112,312
India		11,717		12,827
Total Assets	$	143,287	$	125,139

	·	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 six months ended June 30, ~~2021~~2022 and ~~2020.~~2021.

	·	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.

	2021		2020		Inc/(dec)			% change

North America	$	54,730	$	45,223	$	9,507			21	%
India		154		2,601		(2,447	)		-94	%
Total	$	54,884	$	47,824	$	7,060			15	%

	2021			2020			Inc/dec			% change
North America
Interest rate expense	$	4,529		$	5,558		$	(1,029	)		-19	%
Debt related fees and amortization expense		690			614			76			12	%
Accretion and other expenses of Series A preferred units		3,800			1,362			2,438			179	%
Gain on debt extinguishment		(1,134	)		-			(1,134	)		-100	%
Other expense		572			314			258			-82	%
India
Interest rate expense		-			16			(16	)		-100	%
Other income		(28	)		(11	)		(17	)		-155	%
Total	$	8,429		$	7,853		$	576			7	%

Increases to debt:
Accrued interest	$	10,510
Maturity date extension fee added to senior debt and waiver fees		1,315
Sub debt extension fees		340
Financing for equipment term loan		55
Total increases to debt				$	12,220
Decreases to debt:
Principal, fees, and interest payments to senior lender	$	(23,559	)
Principal and interest payments to EB-5 investors		(1,252	)
GAFI interest and principal payments		(34,846	)
PPP loan forgiveness		(1,134	)
Change in debt issuance costs, net of amortization		(100	)
Total decreases to debt				$	(60,891	)
	Change in total debt			$	(48,671	)

Increases to debt:
Accrued interest		$	9,883
Maturity date extension fee and other fees added to senior debt			1,937
Sub debt extension fees			340
Fuels Revolving Line draw			19,954
Carbon Revolving Line draw			27,226
	Total increases to debt				$	59,340
Decreases to debt:
Principal, fees, and interest payments to senior lender		$	(34,580	)
Principal and interest payments to EB-5 investors			(104	)
Change in debt issuance costs, net of amortization			(4,811	)
Term loan payments			(4	)
	Total decreases to debt				$	(39,499	)
	Change in total debt				$	19,841

~~3.1~~		~~Amended and Restated Articles of Incorporation filed on March 16, 2017.~~

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.

10.1		Limited Waiver and Amendment No. 2024 to Amended and Restated Note Purchase Agreement, dated as of August ~~9, 2021~~8, 2022 by and among Aemetis, Inc.; Aemetis Advanced Fuels Keyes, Inc.; Aemetis Facility Keyes, Inc.; and Third Eye Capital Corporation, an Ontario corporation, as agent for Ninepoint - TEC Private Credit Fund and Third Eye Capital Credit Opportunities Fund - Insight ~~Fund, and Ninepoint Third Eye Capital Private Credit~~ Fund.

~~10.2~~10.2*		~~Fourth Amended~~Waiver and ~~Restated Promissory Note,~~Amendment to Series A Preferred Unit Purchase Agreement, dated as of August ~~9, 2021~~8, 2022 by and among Aemetis Biogas LLC, Protair-X Americas, Inc.~~; Aemetis Advanced Fuels Keyes, Inc.; Aemetis Facility Keyes, Inc.;~~, and Third Eye Capital ~~Corporation including Third Eye Capital Management Inc.~~Corporation.

	AEMETIS, INC.

	By:	/s/ Eric A. McAfee
		Eric A. McAfee Chief Executive Officer (Principal Executive Officer)

	~~AEMETIS, INC.~~

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