Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
Document Document And Entity Information Abstract | ||
Entity Registrant Name | AEMETIS, INC. | |
Entity Central Index Key | 738,214 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 20,345,437 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 68 | $ 428 |
Accounts receivable | 1,494 | 2,219 |
Inventories | 7,682 | 5,737 |
Prepaid expenses | 882 | 2,435 |
Other current assets | 619 | 643 |
Total current assets | 10,745 | 11,462 |
Property, plant and equipment, net | 76,812 | 78,837 |
Other assets | 4,173 | 4,032 |
Total assets | 91,730 | 94,331 |
Current liabilities: | ||
Accounts payable | 13,348 | 10,457 |
Current portion of long term debt | 1,847 | 2,039 |
Short term borrowings | 17,555 | 13,586 |
Mandatorily redeemable Series B convertible preferred stock | 3,022 | 2,946 |
Accrued property taxes | 2,999 | 3,677 |
Other current liabilities | 4,487 | 3,311 |
Total current liabilities | 43,258 | 36,016 |
Long term liabilities: | ||
Senior secured notes | 86,282 | 73,986 |
EB-5 notes | 35,000 | 34,000 |
GAFI secured and revolving notes | 25,018 | 24,351 |
Long term subordinated debt | 5,936 | 5,824 |
Other long term liabilities | 0 | 15 |
Total long term liabilities | 152,236 | 138,176 |
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; 20,345 and 20,088 shares issued and outstanding each period, respectively | 20 | 20 |
Additional paid-in capital | 85,719 | 84,679 |
Accumulated deficit | (181,778) | (160,188) |
Accumulated other comprehensive loss | (3,871) | (2,904) |
Total stockholders' deficit attributable to Aemetis, Inc. | (99,909) | (78,392) |
Non-controlling interest - GAFI | (3,855) | (1,469) |
Total stockholders' deficit | (103,764) | (79,861) |
Total liabilities and stockholders' deficit | $ 91,730 | $ 94,331 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Series B Preferred stock, par value | $ 0.001 | $ 0.001 |
Series B Preferred stock, authorized | 7,235 | 7,235 |
Series B Preferred stock, shares issued | 1,323 | 1,323 |
Series B Preferred stock, shares outstanding | 1,323 | 1,323 |
Aggregate liquidation preference | $ 3,969 | $ 3,969 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000 | 40,000 |
Common stock, shares issued | 20,345 | 20,088 |
Common stock, shares outstanding | 20,345 | 20,088 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenues | $ 44,635 | $ 38,935 | $ 132,681 | $ 111,273 |
Cost of goods sold | 41,967 | 36,980 | 125,379 | 108,200 |
Gross profit | 2,668 | 1,955 | 7,302 | 3,073 |
Research and development expenses | 74 | 1,876 | 191 | 2,072 |
Selling, general and administrative expenses | 3,893 | 3,182 | 11,289 | 9,739 |
Operating loss | (1,299) | (3,103) | (4,178) | (8,738) |
Interest expense | ||||
Interest rate expense | 4,692 | 3,867 | 13,395 | 9,873 |
Debt related fees and amortization expense | 719 | 1,265 | 6,395 | 4,112 |
Other (income) expense | (61) | (18) | 2 | 2 |
Loss before income taxes | (6,649) | (8,217) | (23,970) | (22,725) |
Income tax expense | 0 | 0 | 6 | 6 |
Net loss | (6,649) | (8,217) | (23,976) | (22,731) |
Less: Net loss attributable to non-controlling interest | (792) | (707) | (2,386) | (707) |
Net loss attributable to Aemetis, Inc. | (5,857) | (7,510) | (21,590) | (22,024) |
Other comprehensive income (loss) | ||||
Foreign currency translation gain (loss) | (423) | (87) | (967) | 311 |
Comprehensive loss | $ (7,072) | $ (8,304) | $ (24,943) | $ (22,420) |
Net loss per common share attributable to Aemetis, Inc. | ||||
Basic | $ (0.29) | $ (0.38) | $ (1.07) | $ (1.11) |
Diluted | $ (0.29) | $ (0.38) | $ (1.07) | $ (1.11) |
Weighted average shares outstanding | ||||
Basic | 20,252 | 19,804 | 20,220 | 19,760 |
Diluted | 20,252 | 19,804 | 20,220 | 19,760 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities: | ||
Net loss | $ (23,976) | $ (22,731) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 783 | 800 |
Stock issued for services | 22 | 0 |
Depreciation | 3,457 | 3,471 |
Debt related amortization expense | 6,395 | 4,112 |
Intangibles and other amortization expense | 105 | 98 |
Change in fair value of warrant liability/SARs | (44) | 3 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 670 | (932) |
Inventories | (2,588) | (2,456) |
Prepaid expenses | 1,551 | 89 |
Other current assets and other assets | (344) | (41) |
Accounts payable | 2,999 | 1,507 |
Accrued interest expense and fees, net of payments | 8,451 | 8,091 |
Other liabilities | (835) | 1,633 |
Net cash used in operating activities | (3,354) | (6,356) |
Investing activities: | ||
Capital expenditures | (2,498) | (681) |
Net cash used in investing activities | (2,498) | (681) |
Financing activities: | ||
Proceeds from borrowings | 16,484 | 13,146 |
Repayments of borrowings | (12,449) | (8,889) |
GAFI proceeds from borrowings | 1,500 | 2,810 |
Net cash provided by financing activities | 5,535 | 7,067 |
Effect of exchange rate changes on cash and cash equivalents | (43) | 233 |
Net cash and cash equivalents increase (decrease) for period | (360) | 263 |
Cash and cash equivalents at beginning of period | 428 | 1,486 |
Cash and cash equivalents at end of period | 68 | 1,749 |
Supplemental disclosures of cash flow information, cash paid: | ||
Interest paid | 4,700 | 1,875 |
Income taxes paid | 6 | 6 |
Supplemental disclosures of cash flow information, non-cash transactions: | ||
Subordinated debt extension fees added to debt | 680 | 680 |
Fair value of warrants issued to subordinated debt holders | 235 | 321 |
Repurchase of common stock added to TEC promissory note | 0 | 451 |
TEC promissory notes fees added to notes | 204 | 1,169 |
Senior debt extension and waiver fees added to debt | 4,051 | 4,446 |
GAFI plant, property & equipment acquired with debt | 0 | 15,431 |
Payment of TEC bridge loan added to GAFI Revolving loan | 0 | 3,669 |
Debt exchanged for prepaid interest on GAFI Term loan | 0 | 2,250 |
Stock Appreciation Rights issued for GAFI Amendment No. 1 | $ 1,277 | $ 0 |
1. Nature of Activities and Sum
1. Nature of Activities and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
1. Nature of Activities and Summary of Significant Accounting Policies | Nature of Activities Basis of Presentation and Consolidation In July 2017, Goodland Advanced Fuels, Inc. (GAFI) acquired a partially completed ethanol plant in Goodland, Kansas, and as part of the transaction, GAFI entered into a note purchase agreement (GAFI Note Purchase Agreement) for a revolving loan (GAFI Revolving Loan) and term loan (GAFI Term Loan, and together with the GAFI Revolving Loan, the GAFI Loans) with Third Eye Capital Corporation (Third Eye Capital). The transaction provided Aemetis with both an option agreement (GAFI Option Agreement) to acquire all of the outstanding stock from GAFI at $0.01 per share, as well as the ability for Aemetis, and its subsidiary Aemetis Advanced Products Keyes, Inc. (AAPK), to borrow portions of the GAFI Revolving Loan. In exchange, Aemetis and AAPK each provided a limited guaranty (GAFI Limited Guaranty). GAFI is thinly capitalized by its sole shareholders, and dependent on the terms of the agreements with Third Eye Capital and Aemetis to support its own activities. Additionally, the combination of the GAFI Limited Guaranty and the GAFI Option Agreement provide sufficient basis for Aemetis to direct the activities of GAFI. Upon application of the consolidation guidance in ASC 810 Consolidation The accompanying consolidated condensed balance sheet as of September 30, 2018, the consolidated condensed statements of operations and comprehensive loss for the three and nine months ended September 30, 2018 and 2017, and the consolidated condensed statements of cash flows for the nine months ended September 30, 2018 and 2017 are unaudited. The consolidated condensed balance sheet as of December 31, 2017 was derived from the 2017 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the 2017 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017. 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 management, the unaudited interim consolidated condensed financial statements for the three and nine months ended September 30, 2018 and 2017 have been prepared on the same basis as the audited consolidated statements as of December 31, 2017 and reflect all adjustments, consisting primarily of normal recurring adjustments, necessary for the fair presentation of its statement of financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the operating results for any subsequent quarter, for the full fiscal year or any future periods. Use of Estimates Revenue Recognition We derive revenue primarily from sales of ethanol and related co-products in North America, and biodiesel and refined glycerin in India based on the supply agreements and purchase order contracts. We assessed the following criteria under the 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. In North America, we sell the majority of our production to one customer under a supply contract, with individual sales transactions occurring under this contract. Given the similarity of these transactions, we have assessed them as a portfolio of similar contracts. The performance obligation is satisfied by delivery of the physical product to the tank of J.D. Heiskell & Co. (J.D. Heiskell) or to one of their contracted trucking companies. At this point in time, 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 Marketing for ethanol and by A.L. Gilbert on WDG and DCO. There is no transaction price allocation needed. The below table shows our sales in North America by product category: North America For the three months ended September 30, For the nine months ended September 30, 2018 2017 2018 2017 Ethanol sales $ 29,661 $ 27,996 $ 88,002 $ 79,672 Wet distiller's grains sales 8,116 6,938 24,443 18,975 Other sales 799 1,078 2,935 2,783 $ 38,576 $ 36,012 $ 115,380 $ 101,430 In India where we sell product on purchase orders (written or verbal) or by contract with governmental or international parties, the performance obligation is satisfied by delivery and acceptance of the physical product. When 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 contracts. The transaction price is determined based on reference market prices for biodiesel and refined glycerin every day net of taxes. There is no transaction price allocation needed. The below table shows our sales in India by product category: India For the three months ended September 30, For the nine months ended September 30, 2018 2017 2018 2017 Biodiesel sales $ 5,207 $ 2,526 $ 13,548 $ 7,460 Refined Glycerin sales 852 397 3,753 2,383 $ 6,059 $ 2,923 $ 17,301 $ 9,843 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 some contractual agreements. In North America, we buy corn as feedstock in producing ethanol from our working capital partner J.D. Heiskell and we sell all ethanol, WDG, and corn oil produced in this process to J.D. Heiskell. Our finished goods tank is leased by J.D. Heiskell and they require us to transfer legal title to the product upon transfer of our finished ethanol to this location. We consider the purchase of corn as a cost of goods sold and the sale of ethanol upon transfer to the finished goods tank 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 a legal title to the goods during the processing time. Revenues from sales of ethanol and its co-products 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 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, & administrative expenses, respectively, when revenue is recognized. Revenues are recorded at the gross invoiced amount. In India, we occasionally enter into contracts where we purchase feedstock from the customer, process the feedstock into biodiesel, and sell to the same customer. 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 as long as it resides on our premises. Hence, we are the principal in both North America and India sales scenarios where our customer and vendor are the same. Based upon the timing of the transfer of control of our products to our customers, there are no contract assets or liabilities as of September 30, 2018. 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. Cost of Goods Sold Accounts Receivable. 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 it 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 receivable 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 did not reserve any balance for allowances for doubtful accounts as of September 30, 2018 and December 31, 2017. Inventories Property, Plant and Equipment 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 Measurements, Basic and Diluted Net Loss per Share. The following table shows the number of potentially dilutive shares excluded from the diluted net loss per share calculation as of September 30, 2018 and 2017: As of September 30, 2018 September 30, 2017 Series B preferred (post split basis) 132 132 Common stock options and warrants 2,990 2,554 Debt with conversion feature at $30 per share of common stock 1,228 1,194 SARs conversion if stock issued at $1.11 per shares to cover $2.1 million 1,893 - Total number of potentially dilutive shares excluded from the diluted net loss per share calculation 6,243 3,880 Comprehensive Loss. Comprehensive Income Foreign Currency Translation/Transactions. Operating Segments. The “North America” operating segment includes the Company’s 60 million gallons per year capacity Keyes plant in Keyes, California, the GAFI plant in Goodland, Kansas and the research and development facility in St. Paul, Minnesota. The “India” operating segment encompasses the Company’s 50 million gallon per year capacity Kakinada plant in Kakinada, India, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. Share-Based Compensation. Stock Compensation, Commitments and Contingencies. Contingencies Debt Modification Accounting Debt – Modification and Extinguishments Convertible Instruments Recently Issued Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees, with certain exceptions. ASU 2018-07 supersedes the guidance in ASC 505-50, Equity-Based Payments to Non-Employees, which previously included the accounting for non-employee awards. The standard is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company does not intend to early adopt and is in the process of determining the impact of adoption of this standard on its financial statements. For a complete summary of the Company’s significant accounting policies, please refer to Note 1, “Nature of Activities and Summary of Significant Accounting Policies,” included with the Company’s audited financial statements and notes thereto for the years ended December 31, 2017 and 2016, filed with the Securities and Exchange Commission on March 29, 2018. |
2. Inventory
2. Inventory | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
2. Inventory | Inventory consists of the following: September 30, 2018 December 31, 2017 Raw materials $ 4,201 $ 2,829 Work-in-progress 2,697 1,605 Finished goods 784 1,303 Total inventories $ 7,682 $ 5,737 |
3. Property, Plant and Equipmen
3. Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
3. Property, Plant and Equipment | Property, plant and equipment consist of the following: September 30, 2018 December 31, 2017 Land $ 2,680 $ 2,747 Plant and buildings 81,974 82,652 Furniture and fixtures 1,049 1,003 Machinery and equipment 3,860 3,972 Construction in progress 2,545 941 GAFI property, plant & equipment 15,408 15,408 Total gross property, plant & equipment 107,516 106,723 Less accumulated depreciation (30,704 ) (27,886 ) Total net property, plant & equipment $ 76,812 $ 78,837 Depreciation on the components of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows: Years Plant and Buildings 20-30 Machinery & Equipment 5-7 Furniture & Fixtures 3-5 For the three months ended September 30, 2018 and 2017, the Company recorded depreciation expense of $1.2 million for each period. For the nine months ended September 30, 2018 and 2017, the Company recorded depreciation expense of $3.5 million for each period. 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 of long-lived assets during the three and nine months ended September 30, 2018 and 2017. |
4. Debt
4. Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
4. Debt | Debt consists of the following: September 30, 2018 December 31, 2017 Third Eye Capital term notes $ 7,022 $ 6,931 Third Eye Capital revolving credit facility 43,807 35,371 Third Eye Capital revenue participation term notes 11,792 11,636 Third Eye Capital acquisition term notes 23,661 20,048 Third Eye Capital promissory note 2,080 - Cilion shareholder seller notes payable 5,936 5,824 Subordinated notes 9,640 8,725 EB-5 long term promissory notes 36,847 36,039 Unsecured working capital loans 5,835 4,861 GAFI Term and Revolving loans 25,018 24,351 Total debt 171,638 153,786 Less current portion of debt 19,402 15,625 Total long term debt $ 152,236 $ 138,161 On July 6, 2012, Aemetis, Inc. and Aemetis Advanced Fuels Keyes, Inc. (AAFK), entered into an Amended and Restated Note Purchase Agreement with Third Eye Capital (the Note Purchase Agreement). Pursuant to the Note Purchase Agreement, Third Eye Capital extended credit in the form of (i) senior secured term loans in an aggregate principal amount of approximately $7.2 million to replace existing notes held by Third Eye Capital (the Term Notes); (ii) senior secured revolving loans in an aggregate principal amount of $18.0 million (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 (Revenue Participation Term Notes); and (iv) senior secured term loans in an aggregate principal amount of $15.0 million (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 January 4, 2018, a Promissory Note (the January 2018 Note) for $160 thousand was advanced by Third Eye Capital to Aemetis, Inc., as a short-term credit facility for working capital and other general corporate purposes with an interest rate of 14% per annum maturing on the earlier of (a) receipt of proceeds from any financing, refinancing, or other similar transaction, (b) extension of credit by payee, as lender or as agent on behalf of certain lenders, to the Company or its affiliates, or (c) April 1, 2018. In consideration of the January 2018 Note, $10 thousand of the total proceeds were paid to Third Eye Capital as financing charges. On April 1, 2018, the January 2018 Note was paid in full. On February 27 2018, a Promissory Note (the February 2018 Note, together with the Original Third Eye Capital Notes, the Third Eye Capital Notes) for $2.1 million was advanced by Third Eye Capital to Aemetis, Inc., as a short-term credit facility for working capital and other general corporate purposes with an interest rate of 14% per annum maturing on the earlier of (a) receipt of proceeds from any financing, refinancing, or other similar transaction, (b) extension of credit by payee, as lender or as agent on behalf of certain lenders, to the Company or its affiliates, or (c) April 30, 2018. In consideration of the February 2018 Note, $0.1 million of the total proceeds were paid to Third Eye Capital as financing charges. The maturity date of the note was September 30, 2018 with $84 thousand in fees due and payable at the time of the redemption of the Note. As of September 30, 2018, the outstanding balance of principal and interest on the February 2018 note was $2.1 million. On March 27, 2018, Third Eye Capital agreed to Limited Waiver and Amendment No. 14 to the Note Purchase Agreement (Amendment No. 14), to: (i) extend the maturity date of the Third Eye Capital Notes two years to April 1, 2020 in exchange for an amendment fee consisting of 6% (3% per year) of the outstanding note balance in the form of an increase in the fee payable in the event of a redemption of the Third Eye Capital Notes (as defined in the Note Purchase Agreement); (ii) provide that the maturity date may be further extended at our election to April 1, 2021 in exchange for an extension fee of 5%; (iii) provide for an optional quarterly waiver of the ratio of note indebtedness covenant until January 1, 2019 with the payment of a waiver fee of $0.25 million; and (iv) remove the redemption fee described in (i) above from the calculation of the ratio of note indebtedness covenant. In addition to the fee discussed in (i), as consideration for such amendment and waiver, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.5 million to be added to the outstanding principal balance of the Revolving Credit Facility. We evaluated Amendment No. 14 in accordance with ASC 470-60 Troubled Debt Restructuring. Troubled Debt Restructuring On September 30, 2018, the Company requested and received an optional waiver of the ratio of note indebtedness covenant with the payment of a waiver fee of $0.25 million, which was added to the Revolving Credit Facility for the quarter ended September 30, 2018. The Company may request additional optional waiver of the ratio of note indebtedness covenant for the quarter ended December 31, 2018, but there are no waivers available for the quarters ended March 31, 2019, June 30, 2019 and September 30, 2019. According to ASC 470-10-45 debt covenant classification guidance, if it is probable that the Company will not be able to cure the default at measurement dates within the next 12 months, the related debt needs to be classified as current. To assess this guidance, the Company performed ratio and cash flow analysis using the forecast and debt levels. Based on this analysis, the Company believes that it is reasonably possible that through a combination of cash flow from operations, new projects that provide additional liquidity, and sales of EB-5 investments, it will be able to meet the ratio of the note indebtedness covenant over the next 12 months, hence the notes are classified as long term debt. On March 27, 2018, Third Eye Capital agreed to a one-year reserve liquidity facility governed by a promissory note, payable in the principal amount of up to $6.0 million dollars. Borrowings under the facility are available from March 27, 2018 until maturity on April 1, 2019. Interest on borrowed amounts accrues at a rate of 30% per annum, paid monthly in arrears, 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) the closing of any new debt or equity financing, refinancing or other similar transaction between Third Eye Capital or any fund or entity arranged by them and the Company or its affiliates, (b) 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 (c) April 1, 2019. The promissory note is secured by liens and security interests upon the property and assets of the Company. If any amounts are drawn under the facility, the Company will pay a non-refundable fee in the amount of $0.2 million payable from the proceeds of the first drawing under the facility. As of September 30, 2018, no draws were outstanding on this Note. Terms of Third Eye Capital Notes A. Term Notes B. Revolving Credit Facility C. Revenue Participation Term Notes D. Acquisition Term Notes The Third Eye Capital Notes contain various covenants, including but not limited to, debt to plant value ratio, minimum production requirements, and restrictions on capital expenditures. The terms of the Third Eye Capital Notes allow the lender to accelerate the maturity in the occurrence of any event that could reasonably be expected to have a material adverse effect, such as any change in the business, operations, or financial condition. The 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 Aemetis, Inc. 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. Cilion shareholder seller notes payable Subordinated Notes On July 1, 2018, the Subordinated Notes were amended to extend the maturity date until the earlier of (i) December 31, 2018; (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, including failure to pay interest or principal when due and breaches of note covenants. A 10% cash extension fee was paid by adding the fee to the balance of the new note and warrants to purchase 113 thousand shares of common stock were granted with a term of two years and an exercise price of $0.01 per share. We evaluated the July 1, 2018 amendment and the refinancing terms of the Subordinated Notes and applied modification accounting treatment in accordance with ASC 470-50 Debt – Modification and Extinguishment At September 30, 2018 and December 31, 2017, the Company had, in aggregate, $9.6 million net of unamortized of discount costs of $0.3 million and $8.7 million in principal and interest outstanding, respectively, under the Subordinated Notes. EB-5 long-term promissory notes Advanced BioEnergy, LP arranges investments with foreign investors, who each make loans to the Keyes plant in increments of $0.5 million. The Company has sold an aggregate principal amount of $36.0 million of EB-5 Notes under the EB-5 Phase I funding since 2012 to the date of this filing. As of September 30, 2018, $35.0 million has been released from the escrow amount to the Company. As of September 30, 2018, $0.5 million is remaining in escrow and $0.5 million is to be funded to escrow. As of September 30, 2018, $35.0 million in principal and $1.8 million in accrued interest was outstanding on the EB-5 Notes. Out of the $36.8 million total outstanding, $1.8 million will be due within a year. On October 16, 2016, the Company launched its EB-5 Phase II funding, with plans to issue $50.0 million in additional EB-5 Notes on substantially similar terms and conditions as those issued under the Company’s EB-5 Phase I funding to refinance indebtedness and for capital expenditures of Aemetis, Inc. and Goodland Advanced Fuels, Inc. Unsecured working capital loans 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 operational support charges 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 (“BP Operations”) only in the form of inter-corporate deposit for an amount of approximately $2.3 million over a 95 days period at the rate of 14.75% per annum interest rate. The term of the agreement continues until the either party terminates it. Secunderabad Oils has a second priority lien on the assets of the Company’s Kakinada plant after this agreement. On April 15, 2018, the agreement was amended to purchase the raw material for business operations at 12% per annum interest rate. During the nine months ended September 30, 2018 and 2017, the Company made principal and interest payments to Secunderabad Oils of approximately $3.0 million and $2.3 million, respectively. As of September 30, 2018 and December 31, 2017, the Company had $1.1 million and $1.3 million outstanding under this agreement, respectively. Variable Interest Entity (GAFI) Term loan and Revolving loan 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. The fee of $75 thousand was recognized as expense on the Amendment date. 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 of $2.1 million based on 30-day weighted average price of the stock on the call date, and a put option for the 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 date of the issuance date based upon the 30-day weighted average price of the stock price and paid in cash and cash equivalents. We used an outside valuation expert to value the SARs using the Monte Carlo method. We recorded the fair value of the SARs of $1.3 million as fees on Amendment No. 1 and will be amortized over the term of the loan according to ASC 470-50 Debt – Modification and Extinguishment. As of September 30, 2018 and December 31, 2017, GAFI had $16.6 million outstanding on the term loan and $10.0 million outstanding on the revolving loan with $0.1 million in interest paid in arrears. GAFI, the Company and its subsidiary Aemetis Advanced Products Keyes, Inc. (AAPK) also entered into separate intercompany revolving promissory notes (the GAFI Intercompany Notes), dated July 10, 2017, pursuant to which GAFI may, from time to time, lend a portion of the proceeds of the GAFI Revolving Loan borrowed under the Amended GAFI Note Purchase Agreement to the Company. The Company borrowed $1.5 million on June 28, 2018. As of September 30, 2018 and December 31, 2017, the Company and AAPK had $6.5 million and $5.7 million outstanding on the GAFI Intercompany Notes. The outstanding balances are eliminated upon consolidation. Debt repayments for the Company’s loan obligations follow: Twelve months ended September 30, Debt Repayments 2019 $ 19,402 2020 140,108 2021 12,500 2022 2,686 Total debt 174,696 Debt issuance costs (3,058 ) Total debt $ 171,638 |
5. Variable Interest Entity
5. Variable Interest Entity | 9 Months Ended |
Sep. 30, 2018 | |
Variable Interest Entity | |
5. Variable Interest Entity | GAFI was formed to acquire the partially completed Goodland ethanol plant in Goodland, Kansas. GAFI entered into the GAFI Note Purchase Agreement with Third Eye Capital to acquire the plant. GAFI, the Company and its subsidiary AAPK also entered into separate GAFI Intercompany Notes, pursuant to which GAFI may, from time to time, lend a portion of the proceeds of the GAFI Revolving Loan incurred under the GAFI Note Purchase Agreement to the Company. Aemetis, Inc. and AAPK (in such capacity, the GAFI Guarantors) also agreed to enter into a limited guaranty (the GAFI Limited Guaranty). Pursuant to the GAFI Limited Guaranty, the GAFI Guarantors agreed to guarantee the prompt payment and performance of all unpaid principal and interest on the GAFI Loans and all other obligations and liabilities of GAFI to the GAFI Noteholders in connection with the GAFI Note Purchase Agreement. The obligations of the GAFI Guarantors pursuant to the GAFI Limited Guaranty are secured by a first priority lien over all assets of the GAFI Guarantors pursuant to separate general security agreements entered into by each GAFI Guarantor. The aggregate obligations and liabilities of each GAFI Guarantor is limited to the sum of (i) the aggregate amount advanced by GAFI to such GAFI Guarantor under and in accordance with the GAFI Intercompany Notes and (ii) the obligation of the GAFI Guarantor pursuant to its indemnity and expense obligations under the GAFI Limited Guaranty prior to the date on which the option under the GAFI Option Agreement is exercised. Additionally, on July 10, 2017, the Company entered into the GAFI Option Agreement by and between GAFI and the sole shareholder of GAFI, pursuant to which the Company was granted an irrevocable option to purchase all, but not less than all, of the capital stock of GAFI for an aggregate purchase price equal to $0.01 per share for a total purchase price of $10.00 (such option, the GAFI Option). The GAFI Option provides for automatic triggering in the event of certain default circumstances. After the automatic exercise upon default, the GAFI Limited Guaranty no longer applies and the GAFI Guarantors are responsible for the outstanding balances of the GAFI Term Loan and the GAFI Revolving Loan. Additionally, Third Eye Capital was granted a warrant for the purchase of 250 shares, representing 20% of the outstanding shares of GAFI, for a period of 10 years at an exercise price of $0.01 per share. The sole shareholder of GAFI received 100,000 common stock of the Company as consideration. On July 10, 2017, the Company issued the 100,000 shares and recognized $0.1 million of stock compensation expense during the year ended December 31, 2017. After consideration of the above agreements, we concluded that GAFI did not have sufficient equity to finance its activities without additional subordinated financial support. Additionally, GAFI’s shareholder did not have a controlling financial interest in the entity. Hence, we concluded that GAFI is a VIE. The primary beneficiary of a VIE is the party that has both the power to direct the activities that most significantly affect the economic performance of the VIE and the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. In determining whether the Company is the primary beneficiary, a number of factors are considered, including the structure of the entity, contractual provisions that grant any additional rights to influence or control the economic performance of the VIE, and obligation to absorb significant losses. Through providing the GAFI Limited Guaranty and signing the GAFI Option Agreement, the Company took the risks related to operations, financing the Goodland plant, and agreed to meet the financial covenants for GAFI to be in existence. Based upon this assessment, the Company has the power to direct the activities of GAFI and has been determined to be the primary beneficiary of GAFI and accordingly, the assets, liabilities, and operations of GAFI are consolidated into those of the Company. The following are the Balance Sheets and Statements of Operations of GAFI: Goodland Advanced Fuels, Inc. As of September 30, 2018 December 31, 2017 Assets Current assets: Cash and cash equivalents $ 2 $ 184 Prepaid expenses 409 1,581 Total current assets 411 1,765 Property, plant and equipment 15,408 15,408 Promissory note receivable from Aemetis 6,494 5,709 Total assets $ 22,313 $ 22,882 Liabilities and stockholder deficit Accounts payable $ 7 $ - Secured and revolving notes 26,161 24,351 Total liabilities 26,168 24,351 Accumulated deficit (3,855 ) (1,469 ) Total liabilities and stockholder deficit $ 22,313 $ 22,882 Goodland Advanced Fuels, Inc. Statements of Operations Three months ended Nine months ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Selling, general and administrative expenses $ 89 $ 131 $ 321 $ 131 Operating loss (89 ) (131 ) (321 ) (131 ) Interest expense Interest rate expense 739 584 2,106 584 Debt related fees and amortization expense 168 125 493 125 Other income (204 ) (133 ) (534 ) (133 ) Net loss $ (792 ) $ (707 ) $ (2,386 ) $ (707 ) |
6. Stock-Based Compensation
6. Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' deficit: | |
6. Stock Based Compensation | Plan Stock Options Aemetis authorized the issuance of 3.2 million shares of common stock under its Zymetis 2006 Stock Plan and Amended and Restated 2007 Stock Plan (together, the “Company Stock Plans”), which include both incentive and non-statutory stock options. These options generally expire five to ten years from the date of grant with a general vesting term of 1/12th every three months and are exercisable at any time after vesting subject to continuation of employment. On January 18, 2018 and May 17, 2018, 725 and 423 thousand stock option grants were issued to employees and directors under the Company Stock Plans respectively. As of September 30, 2018, 2.9 million options are outstanding under the Company Stock Plans. Inducement Equity Plan Options In March 2016, the Board of Directors of the Company approved an Inducement Equity Plan authorizing the issuance of 100 thousand non-statutory stock options to purchase common stock. As of September 30, 2018, 12 thousand options were outstanding. Common Stock Reserved for Issuance The following is a summary of options granted under the Company Stock Plans: Shares Available for Grant Number of Shares Outstanding Weighted-Average Exercise Price Balance as of December 31, 2017 196 2,189 $ 2.70 Authorized 655 - - Granted (1,148 ) 1,148 1.07 Exercised - (2 ) 0.67 Forfeited/expired 440 (440 ) 4.35 Balance as of September 30, 2018 143 2,895 $ 1.80 As of September 30, 2018, there were 1.8 million options vested under all the Company Stock Plans. Stock-based compensation for employees Stock-based compensation is accounted for in accordance with the provisions of ASC 718, Compensation-Stock Compensation For the three months ended September 30, 2018 and 2017, the Company recorded stock compensation expense in the amount of $202 thousand and $196 thousand, respectively. For the nine months ended September 30, 2018 and 2017, the Company recorded stock compensation expense in the amount of $783 thousand and $800 thousand, respectively. Valuation and Expense Information All issuances of stock options or other issuances of equity instruments to employees as the consideration for services received by us are accounted for based on the fair value of the equity instrument issued. The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for stock based compensation expense requires us to make assumptions and judgments about the variables used in the calculation, including the fair value of our common stock, the expected term (the period of time that the options granted are expected to be outstanding), the volatility of our common stock, a risk-free interest rate, and expected dividends. We also estimate forfeitures of unvested stock options. To the extent actual forfeitures differ from the estimates, the difference will be recorded as a cumulative adjustment in the period estimates are revised. No compensation cost is recorded for options that do not vest. 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 zero due to the small number of plan participants and the plan. There were no stock options granted during the three months ended September 30, 2018. As of September 30, 2018, the Company had $1.0 million of total unrecognized compensation expense for employees that the Company will amortize over the 1.84 years of weighted average remaining term. The Company entered into a Stock Appreciation Rights Agreement to issue 1,050,000 Stock Appreciation Rights (SARs) to Third Eye Capital on August 23, 2018 as part of Amendment No.1 to GAFI Note Purchase Agreement with an exercise date of one year from the issuance date. The SARs Agreement contains a call option for the Company at $2.00 per share during the 11 months of the agreement either pay $2.1 million in cash or issue common stock worth of $2.1 million based on 30-day weighted average price of the stock on the call date, and a put option for the Third Eye Capital at $1.00 per share during the 11th month of the agreement where TEC can redeem the SARs for $1.1 million in cash and cash equivalents. None of the above options is exercised, SARs are automatically exercised for cash and cash equivalents one year from the date of the issuance date at a 30-day weighted average price of the Company’s stock price. We used outside valuation expert to value the SARs using the Monte Carlo method. This valuation model requires us to make assumptions and judgments about the variables used in the calculation, such assumptions include the following: the fair value of our common stock, which was at $1.28 and $1.on August 23, 2018, the volatility of our common stock for a year at 127%, and a risk-free interest rate for one year at 2.43%. Based on this valuation, we recorded a fair value of the SARs of $1.28 million as fees on Amendment No. 1 to the GAFI term loan and these fees are amortized over the term of the loan according to ASC 470-50 Debt – Modification and Extinguishment. |
7. Agreements
7. Agreements | 9 Months Ended |
Sep. 30, 2018 | |
Agreements | |
7. Agreements | Working Capital Arrangement. The J.D. Heiskell sales activity associated with the Purchasing Agreement, Corn Procurement and Working Capital Agreements during the three and nine months ended September 30, 2018 and 2017 are as follows: As of and for the three months ended September 30, As of and for the nine months ended September 30, 2018 2017 2018 2017 Ethanol sales $ 29,661 $ 27,996 $ 88,002 $ 79,672 Wet distiller's grains sales 8,116 6,938 24,443 18,975 Corn oil sales 714 1,043 2,530 2,693 Corn purchases 27,786 26,338 84,291 49,727 Accounts receivable 1,079 776 1,079 776 Accounts payable 2,416 1,976 2,416 1,976 Ethanol and Wet Distillers Grains Marketing Arrangement. As of September 30, 2018, the Company has forward sales commitments for approximately 97 thousand tons of WDG. These committed sales will be expected through December 2018. |
8. Segment Information
8. Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
8. Segment Information | Aemetis recognizes two reportable geographic segments: “North America” and “India.” The “North America” operating segment includes the Company’s owned ethanol plant in Keyes, California, Goodland plant, Kansas and its technology research and development lab. As the Company’s technology gains market acceptance, this business segment will initially include its domestic commercial application of cellulosic ethanol technology, its plant construction projects and any acquisitions of ethanol or ethanol related technology facilities in North America. The “India” operating segment includes the Company’s 50 million gallon per year nameplate capacity biodiesel manufacturing plant in Kakinada, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. The Company’s biodiesel is marketed and sold primarily to customers in India through brokers and by the Company directly. Summarized financial information by reportable segment for the three and nine months ended September 30, 2018 and 2017 follows: Three months ended September 30, 2018 Three months ended September 30, 2017 North America India Total Consolidated North America India Total Consolidated Revenues $ 38,576 $ 6,059 $ 44,635 $ 36,012 $ 2,923 $ 38,935 Cost of goods sold 36,147 5,820 41,967 33,995 2,985 36,980 Gross profit (loss) 2,429 239 2,668 2,017 (62 ) 1,955 Expenses Research and development expenses 74 - 74 1,876 - 1,876 Selling, general and administrative expenses 3,645 248 3,893 2,941 241 3,182 Interest expense 5,261 150 5,411 4,978 154 5,132 Other expense (income) (55 ) (6 ) (61 ) -5 (13 ) (18 ) Loss before income taxes $ (6,496 ) $ (153 ) $ (6,649 ) $ (7,773 ) $ (444 ) $ (8,217 ) Capital expenditures $ 703 $ 24 $ 727 $ 65 $ 105 $ 170 Depreciation 992 166 1,158 1,014 159 1,173 Nine months ended September 30, 2018 Nine months ended September 30, 2017 North America India Total Consolidated North America India Total Consolidated Revenues $ 115,380 $ 17,301 $ 132,681 $ 101,430 $ 9,843 $ 111,273 Cost of goods sold 109,208 16,171 125,379 99,003 9,197 108,200 Gross profit 6,172 1,130 7,302 2,427 646 3,073 Expenses Research and development expenses 191 - 191 2,072 - 2,072 Selling, general and administrative expenses 10,580 709 11,289 8,832 907 9,739 Interest rate expense 19,344 446 19,790 13,806 179 13,985 Other expense (12 ) 14 2 33 (31 ) 2 Loss before income taxes $ (23,931 ) (39 ) (23,970 ) $ (22,316 ) (409 ) (22,725 ) Capital expenditures $ 1,760 $ 738 $ 2,498 $ 448 $ 233 $ 681 Depreciation 2,976 481 3,457 3,009 462 3,471 North America. During the three and nine months ended September 30, 2017, the Company’s revenues from ethanol, WDG, and corn oil were earned pursuant to the Corn Procurement and Working Capital Agreement established between the Company and J.D. Heiskell. Sales of ethanol, WDG, and corn oil to J.D. Heiskell accounted for 99.9% and 99.9% of the Company’s North America segment revenues for the three and nine months ended September 30, 2017, respectively. India During the nine months ended September 30, 2018, two biodiesel customers accounted for 55% and 13% and no refined glycerin customers accounted for more than 10% of consolidated India segment revenues, compared to two biodiesel customers accounted for 47% and 12% and no refined glycerin customers accounted for more than 10% of consolidated India segment revenues during the nine months ended September 30, 2017. Total assets consist of the following: As of September 30, December 31, 2018 2017 North America $ 77,172 $ 80,479 India 14,558 13,852 Total Assets $ 91,730 $ 94,331 |
9. Related Party Transactions
9. Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
9. Related Party Transactions | The Company owes Eric McAfee, the Company’s Chairman and CEO, and McAfee Capital, owned by Eric McAfee, $0.4 million in connection with employment agreements and expense reimbursements previously accrued as salaries expense and accrued liabilities. The balance accrued related to these employment agreements was $0.4 million as of September 30, 2018 and December 31, 2017. For the three months ended September 30, 2018 and 2017, the Company expensed $13 thousand and $5 thousand, respectively, to reimburse actual expenses incurred by McAfee Capital and related entities. For the nine months ended September 30, 2018 and 2017, the Company expensed $38 thousand and $28 thousand, respectively, to reimburse actual expenses incurred by McAfee Capital and related entities. The Company previously prepaid $0.2 million to Redwood Capital, a company controlled by Eric McAfee, for the Company’s use of flight time on a corporate jet. As of September 30, 2018, $0.1 million remained as a prepaid expense. As consideration for the reaffirmation of guaranties required by Amendment No. 13 to the Note Purchase Agreement which the Company entered into with Third Eye Capital on March 1, 2017, the Company also agreed to pay $0.2 million in consideration to McAfee Capital in exchange for their willingness to provide the guaranties. The balance of $246 thousand and $342 thousand for guaranty fee remained as accrued liability as of September 30, 2018 and December 31, 2017 respectively. |
10. Management's Plan
10. Management's Plan | 9 Months Ended |
Sep. 30, 2018 | |
Outstanding accrued interest | |
10. Management's Plan | The accompanying financial statements have been prepared contemplating the realization of assets and satisfaction of liabilities in the normal course of business. The Company has been required to remit substantially all excess cash from operations to the senior lender and it is therefore reliant on the senior lender to provide additional funding when required. In order to meet its obligations during the next 12 months, the Company will need to either refinance the Company’s debt or receive the continued cooperation of the senior lender. This dependence on the senior lender raises substantial doubt about the entity’s ability to continue as a going concern. The Company plans to pursue the following strategies to improve the course of the business: ● Operate the Keyes plant and continue to improve operational performance, including the adoption of new technologies or process changes that allow for energy efficiency, cost reduction or revenue enhancements to the current operations. ● Expand the ethanol sold at the Keyes plant to include the cellulosic ethanol to be generated at a cellulosic ethanol production facility in nearby Riverbank, California (the Riverbank Cellulosic Ethanol Facility), and to utilize lower cost, non-food advanced feedstocks to significantly increase margins by 2020. ● Monetize the carbon dioxide (CO2) produced at the Keyes plant by executing on the agreement with Linde for the delivery of gas to their neighboring facility to be built during 2018 and 2019. ● Rely on the approval of a $125M U.S. Department of Agriculture loan guarantee to raise the funds necessary to construct and operate the Riverbank Cellulosic Ethanol Facility using the licensed technology from LanzaTech Technology (LanzaTech) and InEnTec Technology (InEnTec) to generate federal and state carbon credits available for ultra-low carbon fuels. ● Secure higher volumes of shipments of fuels at the India plant by developing the sales channels and expanding the existing domestic markets. ● Continue to locate funding for existing and new business opportunities through a combination of working with our senior lender, restructuring existing loan agreements, selling the current debt offering for $50 million from the Phase II EB-5 program, or by vendor financing arrangements. Management believes that through the above actions, the Company will have the ability to generate capital liquidity to carry out the business plan for next 12 months. |
1. Nature of Activities and S_2
1. Nature of Activities and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Proceeds from borrowing under secured debt facilities | |
Nature of Activities | Nature of Activities |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation In July 2017, Goodland Advanced Fuels, Inc. (GAFI) acquired a partially completed ethanol plant in Goodland, Kansas, and as part of the transaction, GAFI entered into a note purchase agreement (GAFI Note Purchase Agreement) for a revolving loan (GAFI Revolving Loan) and term loan (GAFI Term Loan, and together with the GAFI Revolving Loan, the GAFI Loans) with Third Eye Capital Corporation (Third Eye Capital). The transaction provided Aemetis with both an option agreement (GAFI Option Agreement) to acquire all of the outstanding stock from GAFI at $0.01 per share, as well as the ability for Aemetis, and its subsidiary Aemetis Advanced Products Keyes, Inc. (AAPK), to borrow portions of the GAFI Revolving Loan. In exchange, Aemetis and AAPK each provided a limited guaranty (GAFI Limited Guaranty). GAFI is thinly capitalized by its sole shareholders, and dependent on the terms of the agreements with Third Eye Capital and Aemetis to support its own activities. Additionally, the combination of the GAFI Limited Guaranty and the GAFI Option Agreement provide sufficient basis for Aemetis to direct the activities of GAFI. Upon application of the consolidation guidance in ASC 810 Consolidation The accompanying consolidated condensed balance sheet as of September 30, 2018, the consolidated condensed statements of operations and comprehensive loss for the three and nine months ended September 30, 2018 and 2017, and the consolidated condensed statements of cash flows for the nine months ended September 30, 2018 and 2017 are unaudited. The consolidated condensed balance sheet as of December 31, 2017 was derived from the 2017 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the 2017 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017. 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 management, the unaudited interim consolidated condensed financial statements for the three and nine months ended September 30, 2018 and 2017 have been prepared on the same basis as the audited consolidated statements as of December 31, 2017 and reflect all adjustments, consisting primarily of normal recurring adjustments, necessary for the fair presentation of its statement of financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the operating results for any subsequent quarter, for the full fiscal year or any future periods. |
Use of Estimates | Use of Estimates |
Revenue Recognition | Revenue Recognition We derive revenue primarily from sales of ethanol and related co-products in North America, and biodiesel and refined glycerin in India based on the supply agreements and purchase order contracts. We assessed the following criteria under the 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. In North America, we sell the majority of our production to one customer under a supply contract, with individual sales transactions occurring under this contract. Given the similarity of these transactions, we have assessed them as a portfolio of similar contracts. The performance obligation is satisfied by delivery of the physical product to the tank of J.D. Heiskell & Co. (J.D. Heiskell) or to one of their contracted trucking companies. At this point in time, 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 Marketing for ethanol and by A.L. Gilbert on WDG and DCO. There is no transaction price allocation needed. The below table shows our sales in North America by product category: North America For the three months ended September 30, For the nine months ended September 30, 2018 2017 2018 2017 Ethanol sales $ 29,661 $ 27,996 $ 88,002 $ 79,672 Wet distiller's grains sales 8,116 6,938 24,443 18,975 Other sales 799 1,078 2,935 2,783 $ 38,576 $ 36,012 $ 115,380 $ 101,430 In India where we sell product on purchase orders (written or verbal) or by contract with governmental or international parties, the performance obligation is satisfied by delivery and acceptance of the physical product. When 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 contracts. The transaction price is determined based on reference market prices for biodiesel and refined glycerin every day net of taxes. There is no transaction price allocation needed. The below table shows our sales in India by product category: India For the three months ended September 30, For the nine months ended September 30, 2018 2017 2018 2017 Biodiesel sales $ 5,207 $ 2,526 $ 13,548 $ 7,460 Refined Glycerin sales 852 397 3,753 2,383 $ 6,059 $ 2,923 $ 17,301 $ 9,843 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 some contractual agreements. In North America, we buy corn as feedstock in producing ethanol from our working capital partner J.D. Heiskell and we sell all ethanol, WDG, and corn oil produced in this process to J.D. Heiskell. Our finished goods tank is leased by J.D. Heiskell and they require us to transfer legal title to the product upon transfer of our finished ethanol to this location. We consider the purchase of corn as a cost of goods sold and the sale of ethanol upon transfer to the finished goods tank 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 a legal title to the goods during the processing time. Revenues from sales of ethanol and its co-products 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 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, & administrative expenses, respectively, when revenue is recognized. Revenues are recorded at the gross invoiced amount. In India, we occasionally enter into contracts where we purchase feedstock from the customer, process the feedstock into biodiesel, and sell to the same customer. 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 as long as it resides on our premises. Hence, we are the principal in both North America and India sales scenarios where our customer and vendor are the same. Based upon the timing of the transfer of control of our products to our customers, there are no contract assets or liabilities as of September 30, 2018. 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. |
Cost of Goods Sold | Cost of Goods Sold |
Accounts Receivable | Accounts Receivable. 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 it 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 receivable 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 did not reserve any balance for allowances for doubtful accounts as of September 30, 2018 and December 31, 2017. |
Inventories | Inventories |
Property, Plant and Equipment | Property, Plant and Equipment 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 Measurements, |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share. The following table shows the number of potentially dilutive shares excluded from the diluted net loss per share calculation as of September 30, 2018 and 2017: As of September 30, 2018 September 30, 2017 Series B preferred (post split basis) 132 132 Common stock options and warrants 2,990 2,554 Debt with conversion feature at $30 per share of common stock 1,228 1,194 SARs conversion if stock issued at $1.11 per shares to cover $2.1 million 1,893 - Total number of potentially dilutive shares excluded from the diluted net loss per share calculation 6,243 3,880 |
Comprehensive Loss | Comprehensive Loss. Comprehensive Income |
Foreign Currency Translation/Transactions | Foreign Currency Translation/Transactions. |
Operating Segments | Operating Segments. The “North America” operating segment includes the Company’s 60 million gallons per year capacity Keyes plant in Keyes, California, the GAFI plant in Goodland, Kansas and the research and development facility in St. Paul, Minnesota. The “India” operating segment encompasses the Company’s 50 million gallon per year capacity Kakinada plant in Kakinada, India, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. |
Share-Based Compensation | Share-Based Compensation. Stock Compensation, |
Commitments and Contingencies | Commitments and Contingencies. Contingencies |
Debt Modification Accounting | Debt Modification Accounting Debt – Modification and Extinguishments |
Convertible Instruments | Convertible Instruments |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees, with certain exceptions. ASU 2018-07 supersedes the guidance in ASC 505-50, Equity-Based Payments to Non-Employees, which previously included the accounting for non-employee awards. The standard is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company does not intend to early adopt and is in the process of determining the impact of adoption of this standard on its financial statements. For a complete summary of the Company’s significant accounting policies, please refer to Note 1, “Nature of Activities and Summary of Significant Accounting Policies,” included with the Company’s audited financial statements and notes thereto for the years ended December 31, 2017 and 2016, filed with the Securities and Exchange Commission on March 29, 2018. |
1. Nature of Activities and S_3
1. Nature of Activities and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Proceeds from sale of land | |
Disaggregation of revenue | North America For the three months ended September 30, For the nine months ended September 30, 2018 2017 2018 2017 Ethanol sales $ 29,661 $ 27,996 $ 88,002 $ 79,672 Wet distiller's grains sales 8,116 6,938 24,443 18,975 Other sales 799 1,078 2,935 2,783 $ 38,576 $ 36,012 $ 115,380 $ 101,430 India For the three months ended September 30, For the nine months ended September 30, 2018 2017 2018 2017 Biodiesel sales $ 5,207 $ 2,526 $ 13,548 $ 7,460 Refined Glycerin sales 852 397 3,753 2,383 $ 6,059 $ 2,923 $ 17,301 $ 9,843 |
Schedule of dilutive securities | As of September 30, 2018 September 30, 2017 Series B preferred (post split basis) 132 132 Common stock options and warrants 2,990 2,554 Debt with conversion feature at $30 per share of common stock 1,228 1,194 SARs conversion if stock issued at $1.11 per shares to cover $2.1 million 1,893 - Total number of potentially dilutive shares excluded from the diluted net loss per share calculation 6,243 3,880 |
2. Inventory (Tables)
2. Inventory (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory, Net [Abstract] | |
Schedule of Inventory | September 30, 2018 December 31, 2017 Raw materials $ 4,201 $ 2,829 Work-in-progress 2,697 1,605 Finished goods 784 1,303 Total inventories $ 7,682 $ 5,737 |
3. Property, Plant and Equipm_2
3. Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Statement of Operations Data | |
Schedule of Property, plant and equipment | September 30, 2018 December 31, 2017 Land $ 2,680 $ 2,747 Plant and buildings 81,974 82,652 Furniture and fixtures 1,049 1,003 Machinery and equipment 3,860 3,972 Construction in progress 2,545 941 GAFI property, plant & equipment 15,408 15,408 Total gross property, plant & equipment 107,516 106,723 Less accumulated depreciation (30,704 ) (27,886 ) Total net property, plant & equipment $ 76,812 $ 78,837 |
Depreciation of property, plant, and equipment | Years Plant and Buildings 20-30 Machinery & Equipment 5-7 Furniture & Fixtures 3-5 |
4. Debt (Tables)
4. Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure 4.Notes Payable Tables Abstract | |
Schedule of Notes Payable | September 30, 2018 December 31, 2017 Third Eye Capital term notes $ 7,022 $ 6,931 Third Eye Capital revolving credit facility 43,807 35,371 Third Eye Capital revenue participation term notes 11,792 11,636 Third Eye Capital acquisition term notes 23,661 20,048 Third Eye Capital promissory note 2,080 - Cilion shareholder seller notes payable 5,936 5,824 Subordinated notes 9,640 8,725 EB-5 long term promissory notes 36,847 36,039 Unsecured working capital loans 5,835 4,861 GAFI Term and Revolving loans 25,018 24,351 Total debt 171,638 153,786 Less current portion of debt 19,402 15,625 Total long term debt $ 152,236 $ 138,161 |
Maturities of Long-term Debt | Twelve months ended September 30, Debt Repayments 2019 $ 19,402 2020 140,108 2021 12,500 2022 2,686 Total debt 174,696 Debt issuance costs (3,058 ) Total debt $ 171,638 |
5. Variable Interest Entity (Ta
5. Variable Interest Entity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Variable Interest Entity Tables Abstract | |
Variable interest entity, balance sheet and operations | Goodland Advanced Fuels, Inc. As of September 30, 2018 December 31, 2017 Assets Current assets: Cash and cash equivalents $ 2 $ 184 Prepaid expenses 409 1,581 Total current assets 411 1,765 Property, plant and equipment 15,408 15,408 Promissory note receivable from Aemetis 6,494 5,709 Total assets $ 22,313 $ 22,882 Liabilities and stockholder deficit Accounts payable $ 7 $ - Secured and revolving notes 26,161 24,351 Total liabilities 26,168 24,351 Accumulated deficit (3,855 ) (1,469 ) Total liabilities and stockholder deficit $ 22,313 $ 22,882 Goodland Advanced Fuels, Inc. Statements of Operations Three months ended Nine months ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Selling, general and administrative expenses $ 89 $ 131 $ 321 $ 131 Operating loss (89 ) (131 ) (321 ) (131 ) Interest expense Interest rate expense 739 584 2,106 584 Debt related fees and amortization expense 168 125 493 125 Other income (204 ) (133 ) (534 ) (133 ) Net loss $ (792 ) $ (707 ) $ (2,386 ) $ (707 ) |
6. Stock-Based Compensation (Ta
6. Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Third Eye Capital Revenue Participation Term Notes | |
Schedule of options granted under employee stock plans | Shares Available for Grant Number of Shares Outstanding Weighted-Average Exercise Price Balance as of December 31, 2017 196 2,189 $ 2.70 Authorized 655 - - Granted (1,148 ) 1,148 1.07 Exercised - (2 ) 0.67 Forfeited/expired 440 (440 ) 4.35 Balance as of September 30, 2018 143 2,895 $ 1.80 |
7. Agreements (Tables)
7. Agreements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure 7.Agreements Tables Abstract | |
Schedule of working capital agreement activity | As of and for the three months ended September 30, As of and for the nine months ended September 30, 2018 2017 2018 2017 Ethanol sales $ 29,661 $ 27,996 $ 88,002 $ 79,672 Wet distiller's grains sales 8,116 6,938 24,443 18,975 Corn oil sales 714 1,043 2,530 2,693 Corn purchases 27,786 26,338 84,291 49,727 Accounts receivable 1,079 776 1,079 776 Accounts payable 2,416 1,976 2,416 1,976 |
8. Segment Information (Tables)
8. Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information | |
Schedule of segment information | Three months ended September 30, 2018 Three months ended September 30, 2017 North America India Total Consolidated North America India Total Consolidated Revenues $ 38,576 $ 6,059 $ 44,635 $ 36,012 $ 2,923 $ 38,935 Cost of goods sold 36,147 5,820 41,967 33,995 2,985 36,980 Gross profit (loss) 2,429 239 2,668 2,017 (62 ) 1,955 Expenses Research and development expenses 74 - 74 1,876 - 1,876 Selling, general and administrative expenses 3,645 248 3,893 2,941 241 3,182 Interest expense 5,261 150 5,411 4,978 154 5,132 Other expense (income) (55 ) (6 ) (61 ) -5 (13 ) (18 ) Loss before income taxes $ (6,496 ) $ (153 ) $ (6,649 ) $ (7,773 ) $ (444 ) $ (8,217 ) Capital expenditures $ 703 $ 24 $ 727 $ 65 $ 105 $ 170 Depreciation 992 166 1,158 1,014 159 1,173 Nine months ended September 30, 2018 Nine months ended September 30, 2017 North America India Total Consolidated North America India Total Consolidated Revenues $ 115,380 $ 17,301 $ 132,681 $ 101,430 $ 9,843 $ 111,273 Cost of goods sold 109,208 16,171 125,379 99,003 9,197 108,200 Gross profit 6,172 1,130 7,302 2,427 646 3,073 Expenses Research and development expenses 191 - 191 2,072 - 2,072 Selling, general and administrative expenses 10,580 709 11,289 8,832 907 9,739 Interest rate expense 19,344 446 19,790 13,806 179 13,985 Other expense (12 ) 14 2 33 (31 ) 2 Loss before income taxes $ (23,931 ) (39 ) (23,970 ) $ (22,316 ) (409 ) (22,725 ) Capital expenditures $ 1,760 $ 738 $ 2,498 $ 448 $ 233 $ 681 Depreciation 2,976 481 3,457 3,009 462 3,471 |
Schedule of segment assets | As of September 30, December 31, 2018 2017 North America $ 77,172 $ 80,479 India 14,558 13,852 Total Assets $ 91,730 $ 94,331 |
1. Nature of Activities and S_4
1. Nature of Activities and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Sales | $ 44,635 | $ 38,935 | $ 132,681 | $ 111,273 |
North America | ||||
Sales | 38,576 | 36,012 | 115,380 | 101,430 |
North America | Ethanol sales | ||||
Sales | 29,661 | 27,996 | 88,002 | 79,672 |
North America | Wet distiller's grains sales | ||||
Sales | 8,116 | 6,938 | 24,443 | 18,975 |
North America | Other sales | ||||
Sales | 799 | 1,078 | 2,935 | 2,783 |
India | ||||
Sales | 6,059 | 2,923 | 17,301 | 9,843 |
India | Biodiesel sales | ||||
Sales | 5,207 | 2,526 | 13,548 | 7,460 |
India | Refined Glycerin sales | ||||
Sales | $ 852 | $ 397 | $ 3,753 | $ 2,383 |
1. Nature of Activities and S_5
1. Nature of Activities and Summary of Significant Accounting Policies (Details 1 - shares | Sep. 30, 2018 | Sep. 30, 2017 |
Accounting Policies [Abstract] | ||
Series B preferred (post split basis) | 132 | 132 |
Common stock options and warrants | 2,990 | 2,554 |
Debt with conversion feature at $30 per share of common stock | 1,228 | 1,194 |
SARs conversion if stock issued at $1.11 per shares to cover $2.1 million | 1,893 | 0 |
Total number of potentially dilutive shares excluded from the diluted net loss per share calculation | 6,243 | 3,880 |
2. Inventory (Details)
2. Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory, Net [Abstract] | ||
Raw materials | $ 4,201 | $ 2,829 |
Work-in-progress | 2,697 | 1,605 |
Finished goods | 784 | 1,303 |
Total inventories | $ 7,682 | $ 5,737 |
3. Property, Plant and Equipm_3
3. Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Property Plant And Equipment | ||
Land | $ 2,680 | $ 2,747 |
Plant and Buildings | 81,974 | 82,652 |
Furniture and fixtures | 1,049 | 1,003 |
Machinery and equipment | 3,860 | 3,972 |
Construction in progress | 2,545 | 941 |
GAFI property, plant & equipment | 15,408 | 15,408 |
Total gross property, plant & equipment | 107,516 | 106,723 |
Less accumulated depreciation | (30,704) | (27,886) |
Total net property, plant & equipment | $ 76,812 | $ 78,837 |
3. Property, Plant and Equipm_4
3. Property, Plant and Equipment (Details 1) | 9 Months Ended |
Sep. 30, 2018 | |
Plant and Buildings | Minimum | |
Depreciation (years) | 20 years |
Plant and Buildings | Maximum [Member] | |
Depreciation (years) | 30 years |
Machinery and Equipment | Minimum | |
Depreciation (years) | 5 years |
Machinery and Equipment | Maximum [Member] | |
Depreciation (years) | 7 years |
Furniture and Fixtures | Minimum | |
Depreciation (years) | 3 years |
Furniture and Fixtures | Maximum [Member] | |
Depreciation (years) | 5 years |
3. Property, Plant and Equipm_5
3. Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property Plant And Equipment Details Narrative Abstract | ||||
Depreciation expense | $ 1,158 | $ 1,173 | $ 3,457 | $ 3,471 |
4. Debt (Details)
4. Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt | ||
Third Eye Capital term notes | $ 7,022 | $ 6,931 |
Third Eye Capital revolving credit facility | 43,807 | 35,371 |
Third Eye Capital revenue participation term notes | 11,792 | 11,636 |
Third Eye Capital acquisition term notes | 23,661 | 20,048 |
Third Eye Capital promissory note | 2,080 | 0 |
Cilion shareholder Seller note payable | 5,936 | 5,824 |
Subordinated notes | 9,640 | 8,725 |
EB-5 long term promissory notes | 36,847 | 36,039 |
Unsecured working capital loans | 5,835 | 4,861 |
GAFI Term and Revolving loans | 25,018 | 24,351 |
Total debt | 171,638 | 153,786 |
Less current portion of debt | 19,402 | 15,625 |
Total long term debt | $ 152,236 | $ 138,161 |
4. Debt (Details 1)
4. Debt (Details 1) $ in Thousands | Sep. 30, 2018USD ($) |
Twelve months ended June 30, | |
2,019 | $ 19,402 |
2,020 | 140,108 |
2,021 | 12,500 |
2,022 | 2,686 |
Total debt | 174,696 |
Debt issuance costs | (3,058) |
Total debt, net of debt issuance costs | $ 171,638 |
4. Debt (Details Narrative)
4. Debt (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Third Eye Capital Term Notes | |||
Principal and interest outstanding | $ 7,000 | ||
Third Eye Capital Revolving Credit Facility | |||
Principal and interest outstanding | 43,800 | ||
Third Eye Capital Revenue Participation Term Note | |||
Principal and interest outstanding | 11,800 | ||
Third Eye Capital Acquisition Term Notes | |||
Principal and interest outstanding | 23,700 | ||
Cilion shareholder Seller notes payable | |||
Principal and interest outstanding | 5,900 | ||
Subordinated Notes | |||
Principal and interest outstanding | 9,600 | $ 8,700 | |
EB-5 long-term promissory notes | |||
Principal and interest outstanding | 35,000 | ||
Outstanding accrued interest | 1,800 | ||
Unsecured working capital loans | |||
Principal and interest outstanding | 1,100 | 1,300 | |
Principal and interest payments made | 3,000 | $ 2,300 | |
Unsecured working capital loans - Gemini | |||
Principal and interest outstanding | 4,700 | $ 3,500 | |
Principal and interest payments made | $ 10,400 | $ 6,200 |
5. Variable Interest Entity (De
5. Variable Interest Entity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current assets: | ||||||
Cash and cash equivalents | $ 68 | $ 1,749 | $ 68 | $ 1,749 | $ 428 | $ 1,486 |
Prepaid expenses | 882 | 882 | 2,435 | |||
Total current assets | 10,745 | 10,745 | 11,462 | |||
Property, plant and equipment, net | 76,812 | 76,812 | 78,837 | |||
Total assets | 91,730 | 91,730 | 94,331 | |||
Liabilities and stockholder deficit | ||||||
Accumulated deficit | (181,778) | (181,778) | (160,188) | |||
Total liabilities and stockholder's deficit | 91,730 | 91,730 | 94,331 | |||
Selling, general and administrative expenses | 3,893 | 3,182 | 11,289 | 9,739 | ||
Operating loss | (1,299) | (3,103) | (4,178) | (8,738) | ||
Interest expense | ||||||
Interest rate expense | 4,692 | 3,867 | 13,395 | 9,873 | ||
Debt related fees and amortization expense | 719 | 1,265 | 6,395 | 4,112 | ||
Other income | (61) | (18) | 2 | 2 | ||
Net loss | (23,976) | (22,731) | ||||
GAFI | ||||||
Current assets: | ||||||
Cash and cash equivalents | 2 | 2 | 184 | |||
Prepaid expenses | 409 | 409 | 1,581 | |||
Total current assets | 411 | 411 | 1,765 | |||
Property, plant and equipment, net | 15,408 | 15,408 | 15,408 | |||
Promissory note receivable from Aemetis | 6,494 | 6,494 | 5,709 | |||
Total assets | 22,313 | 22,313 | 22,882 | |||
Liabilities and stockholder deficit | ||||||
Accounts payable | 7 | 7 | 0 | |||
Secured and revolving notes | 26,161 | 26,161 | 24,351 | |||
Total liabilities | 26,168 | 26,168 | 24,351 | |||
Accumulated deficit | (3,855) | (3,855) | (1,469) | |||
Total liabilities and stockholder's deficit | 22,313 | 22,313 | $ 22,882 | |||
Selling, general and administrative expenses | 89 | 131 | 321 | 131 | ||
Operating loss | (89) | (131) | (321) | (131) | ||
Interest expense | ||||||
Interest rate expense | 739 | 584 | 2,106 | 584 | ||
Debt related fees and amortization expense | 168 | 125 | 493 | 125 | ||
Other income | (204) | (133) | (534) | (133) | ||
Net loss | $ (792) | $ (707) | $ (2,386) | $ (707) |
6. Stock-Based Compensation (De
6. Stock-Based Compensation (Details) - Employee Stock Plan | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Shares Available for Grant, Beginning | 196 |
Shares Available for Grant, Authorized | 655 |
Shares Available for Grant, Granted | (1,148) |
Shares Available for Grant, Exercised | 0 |
Shares Available for Grant, Forfeited/Expired | 440 |
Shares Available for Grant, Ending | 143 |
Number of Shares Outstanding, Beginning | 2,189 |
Number of Shares Authorized | 0 |
Number of Shares Granted | 1,148 |
Number of Shares Exercised | (2) |
Number of Shares Forfeited/Expired | (440) |
Number of Shares Outstanding, Ending | 2,895 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 2.70 |
Weighted Average Exercise Price Authorized | $ / shares | .00 |
Weighted Average Exercise Price Granted | $ / shares | 1.07 |
Weighted Average Exercise Price Exercised | $ / shares | .67 |
Weighted Average Exercise Price Forfeited/Expired | $ / shares | 4.35 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 1.80 |
6. Stock-Based Compensation (_2
6. Stock-Based Compensation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-based Compensation | ||||
Stock compensation expense | $ 202 | $ 196 | $ 783 | $ 800 |
Unrecognized compensation expense | $ 1,000 | $ 1,000 | ||
Unrecognized compensation expense, recognition period | 1 year 10 months 2 days |
7. Agreements (Details)
7. Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Agreements Details Abstract | ||||
Ethanol sales | $ 29,661 | $ 27,996 | $ 88,002 | $ 79,672 |
Wet distiller's grains sales | 8,116 | 6,938 | 24,443 | 18,975 |
Corn oil sales | 714 | 1,043 | 2,530 | 2,693 |
Corn/Milo purchases | 27,786 | 26,338 | 84,291 | 49,727 |
Accounts receivable | 1,079 | 776 | 1,079 | 776 |
Accounts payable | $ 2,416 | $ 1,976 | $ 2,416 | $ 1,976 |
7. Agreements (Details Narrativ
7. Agreements (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Agreements Details Narrative Abstract | ||||
Marketing costs | $ 700 | $ 600 | $ 2,100 | $ 1,800 |
8. Segment Information (Details
8. Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | $ 44,635 | $ 38,935 | $ 132,681 | $ 111,273 |
Cost of goods sold | 41,967 | 36,980 | 125,379 | 108,200 |
Gross profit (loss) | 2,668 | 1,955 | 7,302 | 3,073 |
Expenses | ||||
Research and development expenses | 74 | 1,876 | 191 | 2,072 |
Selling, general and administrative expenses | 3,893 | 3,182 | 11,289 | 9,739 |
Interest rate expense | 5,411 | 5,132 | 19,790 | 13,985 |
Other expense | (61) | (18) | 2 | 2 |
Loss before income taxes | (6,649) | (8,217) | (23,970) | (22,725) |
Capital expenditures | 727 | 170 | 2,498 | 681 |
Depreciation | 1,158 | 1,173 | 3,457 | 3,471 |
North America | ||||
Revenues | 38,576 | 36,012 | 115,380 | 101,430 |
Cost of goods sold | 36,147 | 33,995 | 109,208 | 99,003 |
Gross profit (loss) | 2,429 | 2,017 | 6,172 | 2,427 |
Expenses | ||||
Research and development expenses | 74 | 1,876 | 191 | 2,072 |
Selling, general and administrative expenses | 3,645 | 2,941 | 10,580 | 8,832 |
Interest rate expense | 5,261 | 4,978 | 19,344 | 13,806 |
Other expense | (55) | (5) | (12) | 33 |
Loss before income taxes | (6,496) | (7,773) | (23,931) | (22,316) |
Capital expenditures | 703 | 65 | 1,760 | 448 |
Depreciation | 992 | 1,014 | 2,976 | 3,009 |
India | ||||
Revenues | 6,059 | 2,923 | 17,301 | 9,843 |
Cost of goods sold | 5,820 | 2,985 | 16,171 | 9,197 |
Gross profit (loss) | 239 | (62) | 1,130 | 646 |
Expenses | ||||
Research and development expenses | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | 248 | 241 | 709 | 907 |
Interest rate expense | 150 | 154 | 446 | 179 |
Other expense | (6) | (13) | 14 | (31) |
Loss before income taxes | (153) | (444) | (39) | (409) |
Capital expenditures | 24 | 105 | 738 | 233 |
Depreciation | $ 166 | $ 159 | $ 481 | $ 462 |
8. Segment Information (Detai_2
8. Segment Information (Details 1) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | $ 91,730 | $ 94,331 |
North America | ||
Assets | 77,172 | 80,479 |
India | ||
Assets | $ 14,558 | $ 13,852 |
9. Related Party Transactions (
9. Related Party Transactions (Details Narrative) - Eric McAfee and McAfee Capital - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Related party debt | $ 400 | $ 400 | $ 400 | ||
Related party transaction | $ 13 | $ 5 | $ 38 | $ 28 |