Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 31, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | AEMETIS, INC. | |
Entity Central Index Key | 0000738214 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
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 Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | NV | |
Entity File Number | 001-36475 | |
Entity Common Stock, Shares Outstanding | 21,815,654 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 79 | $ 656 |
Accounts receivable, net of allowance for doubtful accounts of $647 and $0 as of September 30, 2020 and December 31, 2019 | 3,243 | 2,036 |
Note receivable | 3,746 | 0 |
Inventories | 4,816 | 6,518 |
Prepaid expenses | 727 | 794 |
Other current assets | 936 | 2,572 |
Total current assets | 13,547 | 12,576 |
Property, plant and equipment, net | 103,050 | 84,226 |
Operating lease right-of-use assets | 2,843 | 557 |
Other assets | 2,730 | 2,537 |
Total assets | 122,170 | 99,896 |
Current liabilities: | ||
Accounts payable | 15,023 | 15,968 |
Current portion of long term debt | 41,979 | 5,792 |
Short term borrowings | 17,357 | 16,948 |
Mandatorily redeemable Series B convertible preferred stock | 3,226 | 3,149 |
Accrued property taxes | 5,356 | 4,095 |
Accrued contingent litigation fees | 6,200 | 6,200 |
Current portion of operating lease liability | 286 | 377 |
Other current liabilities | 6,398 | 5,290 |
Total current liabilities | 95,825 | 57,819 |
Long term liabilities: | ||
Senior secured notes and revolving notes | 120,781 | 107,205 |
EB-5 notes | 34,500 | 36,500 |
GAFI secured and revolving notes | 0 | 29,856 |
Other long term debt | 11,729 | 6,124 |
Series A preferred units | 28,494 | 14,077 |
Operating lease liability | 2,662 | 200 |
Other long term liabilities | 3,742 | 2,487 |
Total long term liabilities | 201,908 | 196,449 |
Stockholders' deficit: | ||
Series B convertible preferred stock, $0.001 par value; 7,235 authorized; 1,323 shares issued and outstanding each period, respectively (aggregate liquidation preference of $3,969 for each period respectively) | 1 | 1 |
Common stock, $0.001 par value; 40,000 authorized; 21,027 and 20,570 shares issued and outstanding each period, respectively | 21 | 21 |
Additional paid-in capital | 88,119 | 86,852 |
Accumulated deficit | (259,498) | (237,421) |
Accumulated other comprehensive loss | (4,206) | (3,825) |
Total stockholders' deficit | (175,563) | (154,372) |
Total liabilities and stockholders' deficit | $ 122,170 | $ 99,896 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 647 | $ 0 |
Series B preferred stock, par value | $ .001 | $ .001 |
Series B preferred stock, authorized (in thousands) | 7,235 | 7,235 |
Series B preferred stock, shares issued (in thousands) | 1,323 | 1,323 |
Series B preferred stock, shares outstanding (in thousands) | 1,323 | 1,323 |
Aggregate liquidation preference | $ 3,969 | $ 3,969 |
Common stock, par value | $ .001 | $ 0.001 |
Common stock, shares authorized (in thousands) | 40,000 | 40,000 |
Common stock, shares issued (in thousands) | 21,027 | 20,570 |
Common stock, shares outstanding (in thousands) | 21,027 | 20,570 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 40,923 | $ 57,389 | $ 128,227 | $ 149,896 |
Cost of goods sold | 40,152 | 53,407 | 113,830 | 142,992 |
Gross profit | 771 | 3,982 | 14,397 | 6,904 |
Research and development expenses | 37 | 37 | 175 | 160 |
Selling, general and administrative expenses | 4,563 | 4,529 | 12,548 | 12,715 |
Operating income loss | (3,829) | (584) | 1,674 | (5,971) |
Interest expense | ||||
Interest rate expense | 5,796 | 5,396 | 16,956 | 15,572 |
Debt related fees and amortization expense | 674 | 946 | 2,578 | 3,565 |
Accretion of Series A preferred units | 1,765 | 589 | 4,087 | 1,509 |
Loss contingency on litigation | 0 | 0 | 0 | 6,200 |
Other (income) expense | 153 | (289) | 393 | (1,001) |
Loss before income taxes | (12,217) | (7,226) | (22,340) | (31,816) |
Income tax expense (benefit) | 0 | 0 | (263) | 7 |
Net loss | (12,217) | (7,226) | (22,077) | (31,823) |
Less: net loss attributable to non-controlling interest | 0 | (900) | 0 | (2,832) |
Net loss attributable to Aemetis, Inc. | (12,217) | (6,326) | (22,077) | (28,991) |
Other comprehensive income (loss) | ||||
Foreign currency translation gain (loss) | 314 | (254) | (381) | (139) |
Comprehensive loss | $ (11,903) | $ (7,480) | $ (22,458) | $ (31,962) |
Net loss per common share attributable to Aemetis, Inc. | ||||
Basic | $ (0.59) | $ (0.31) | $ (1.06) | $ (1.42) |
Diluted | $ (0.59) | $ (0.31) | $ (1.06) | $ (1.42) |
Weighted average shares outstanding | ||||
Basic (in thousands) | 20,861 | 20,554 | 20,732 | 20,433 |
Diluted (in thousands) | 20,861 | 20,554 | 20,732 | 20,433 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities: | ||
Net loss | $ (22,077) | $ (31,823) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Share-based compensation | 826 | 630 |
Depreciation | 3,515 | 3,337 |
Debt related fees and amortization expense | 2,578 | 3,565 |
Intangibles and other amortization expense | 36 | 36 |
Accretion of Series A preferred units | 4,087 | 1,509 |
Deferred tax benefit | (263) | 0 |
Provision for bad debts | 647 | 0 |
Change in fair value of stock appreciation rights | 0 | (80) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,902) | (4,359) |
Inventories | 1,542 | 2,563 |
Prepaid expenses | 66 | 384 |
Other assets | 1,684 | (154) |
Accounts payable | 330 | 3,429 |
Accrued interest expense and fees | 16,011 | 13,272 |
Other liabilities | (24) | 6,565 |
Net cash provided by (used in) operating activities | 7,056 | (1,126) |
Investing activities: | ||
Capital expenditures | (14,921) | (5,053) |
Note receivable | (3,687) | 0 |
Net cash used in investing activities | (18,608) | (5,053) |
Financing activities: | ||
Proceeds from borrowings | 12,135 | 39,246 |
Repayments of borrowings | (11,792) | (35,886) |
TEC debt renewal and waiver fee payments | (300) | (530) |
Grant proceeds received for capital expenditures | 256 | 1,364 |
Payments on finance leases | (1,137) | 0 |
Proceeds from the exercise of stock options | 260 | 0 |
Proceeds from Series A preferred units financing | 11,564 | 1,725 |
Net cash provided by financing activities | 10,986 | 5,919 |
Effect of exchange rate changes on cash and cash equivalents | (11) | (9) |
Net cash and cash equivalents for period | (577) | (269) |
Cash and cash equivalents at beginning of period | 656 | 1,188 |
Cash and cash equivalents at end of period | 79 | 919 |
Supplemental disclosures of cash flow information, cash paid: | ||
Cash paid for interest, net of capitalized interest of $291 and $231 for the nine months ended September 30, 2020 and 2019, respectively | 702 | 1,836 |
Income taxes paid | 8 | 0 |
Supplemental disclosures of cash flow information, non-cash transactions: | ||
Subordinated debt extension fees added to debt | 680 | 680 |
Fair value of warrants issued to subordinated debt holders | 181 | 162 |
TEC debt extension, waiver fees, promissory notes fees added to debt | 1,793 | 1,102 |
Capital expenditures in accounts payable | 1,182 | 1,443 |
Operating lease liabilities arising from obtaining right-of-use assets | 2,688 | 1,181 |
Financing lease liabilities arising from obtaining right of use assets | 2,988 | 0 |
Stock Appreciation Rights issued for GAFI Amendment No. 1 | 0 | 1,050 |
Capital expenditures purchased on financing | $ 5,652 | $ 0 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Capitalized interest | $ 291 | $ 231 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) $ in Thousands | Series B Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income/(Loss) | Noncontrolling Interest | Total |
Beginning balance, shares (in thousands) at Dec. 31, 2018 | 1,323 | 20,345 | |||||
Beginning balance, amount at Dec. 31, 2018 | $ 1 | $ 20 | $ 85,917 | $ (193,204) | $ (3,576) | $ (4,740) | $ 115,582 |
Stock-based compensation | 290 | 290 | |||||
Issuance and exercise of warrants, shares (in thousands) | 30 | ||||||
Issuance and exercise of warrants, amount | $ 0 | 67 | 67 | ||||
Foreign currency translation (loss) gain | 58 | 58 | |||||
Net income (loss) | (9,729) | (938) | (10,667) | ||||
Ending balance, shares (in thousands) at Mar. 31, 2019 | 1,323 | 20,375 | |||||
Ending balance, amount at Mar. 31, 2019 | $ 1 | $ 20 | 86,274 | (202,933) | (3,518) | (5,678) | (125,834) |
Beginning balance, shares (in thousands) at Dec. 31, 2018 | 1,323 | 20,345 | |||||
Beginning balance, amount at Dec. 31, 2018 | $ 1 | $ 20 | 85,917 | (193,204) | (3,576) | (4,740) | 115,582 |
Stock-based compensation | 630 | ||||||
Net income (loss) | (31,823) | ||||||
Ending balance, shares (in thousands) at Sep. 30, 2019 | 1,323 | 20,570 | |||||
Ending balance, amount at Sep. 30, 2019 | $ 1 | $ 20 | 86,708 | (222,195) | (3,715) | (7,572) | (146,752) |
Beginning balance, shares (in thousands) at Mar. 31, 2019 | 1,323 | 20,375 | |||||
Beginning balance, amount at Mar. 31, 2019 | $ 1 | $ 20 | 86,274 | (202,933) | (3,518) | (5,678) | (125,834) |
Stock-based compensation | 196 | 196 | |||||
Foreign currency translation (loss) gain | 57 | 57 | |||||
Net income (loss) | (12,936) | (994) | (13,930) | ||||
Ending balance, shares (in thousands) at Jun. 30, 2019 | 1,323 | 20,375 | |||||
Ending balance, amount at Jun. 30, 2019 | $ 1 | $ 20 | 86,470 | (215,869) | (3,461) | (6,672) | (139,511) |
Stock-based compensation | 144 | 144 | |||||
Issuance and exercise of warrants, shares (in thousands) | 195 | ||||||
Issuance and exercise of warrants, amount | $ 1 | 94 | 95 | ||||
Foreign currency translation (loss) gain | (254) | (254) | |||||
Net income (loss) | (6,326) | (900) | (7,226) | ||||
Ending balance, shares (in thousands) at Sep. 30, 2019 | 1,323 | 20,570 | |||||
Ending balance, amount at Sep. 30, 2019 | $ 1 | $ 20 | 86,708 | (222,195) | (3,715) | (7,572) | (146,752) |
Beginning balance, shares (in thousands) at Dec. 31, 2019 | 1,323 | 20,570 | |||||
Beginning balance, amount at Dec. 31, 2019 | $ 1 | $ 21 | 86,852 | (237,421) | (3,825) | 0 | (154,372) |
Stock-based compensation | 310 | 310 | |||||
Issuance and exercise of warrants, shares (in thousands) | 113 | ||||||
Issuance and exercise of warrants, amount | $ 0 | 93 | 93 | ||||
Foreign currency translation (loss) gain | (668) | (668) | |||||
Net income (loss) | (12,052) | (12,052) | |||||
Ending balance, shares (in thousands) at Mar. 31, 2020 | 1,323 | 20,683 | |||||
Ending balance, amount at Mar. 31, 2020 | $ 1 | $ 21 | 87,255 | (249,473) | (4,493) | 0 | (166,689) |
Beginning balance, shares (in thousands) at Dec. 31, 2019 | 1,323 | 20,570 | |||||
Beginning balance, amount at Dec. 31, 2019 | $ 1 | $ 21 | 86,852 | (237,421) | (3,825) | 0 | $ (154,372) |
Stock options exercised, shares | 0 | ||||||
Stock-based compensation | $ 826 | ||||||
Net income (loss) | (22,077) | ||||||
Ending balance, shares (in thousands) at Sep. 30, 2020 | 1,323 | 21,027 | |||||
Ending balance, amount at Sep. 30, 2020 | $ 1 | $ 21 | 88,119 | (259,498) | (4,206) | 0 | (175,563) |
Beginning balance, shares (in thousands) at Mar. 31, 2020 | 1,323 | 20,683 | |||||
Beginning balance, amount at Mar. 31, 2020 | $ 1 | $ 21 | 87,255 | (249,473) | (4,493) | 0 | (166,689) |
Stock-based compensation | 325 | 325 | |||||
Foreign currency translation (loss) gain | (27) | (27) | |||||
Net income (loss) | 2,192 | 2,192 | |||||
Ending balance, shares (in thousands) at Jun. 30, 2020 | 1,323 | 20,683 | |||||
Ending balance, amount at Jun. 30, 2020 | $ 1 | $ 21 | 87,580 | (247,281) | (4,520) | 0 | (164,199) |
Stock options exercised, shares | 232 | ||||||
Stock options exercised, amount | $ 0 | 260 | 260 | ||||
Stock-based compensation | 191 | 191 | |||||
Issuance and exercise of warrants, shares (in thousands) | 112 | ||||||
Issuance and exercise of warrants, amount | $ 0 | 88 | 88 | ||||
Foreign currency translation (loss) gain | 314 | 314 | |||||
Net income (loss) | (12,217) | (12,217) | |||||
Ending balance, shares (in thousands) at Sep. 30, 2020 | 1,323 | 21,027 | |||||
Ending balance, amount at Sep. 30, 2020 | $ 1 | $ 21 | $ 88,119 | $ (259,498) | $ (4,206) | $ 0 | $ (175,563) |
1. Nature of Activities and Sum
1. Nature of Activities and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
1. Nature of Activities and Summary of Significant Accounting Policies | Nature of Activities. Headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis, “Aemetis,” the “Company,” “we,” “our” or “us”) is an advanced renewable fuels and biochemicals company focused on the acquisition, development and commercialization of innovative technologies that replace traditional petroleum-based products through the conversion of second-generation ethanol and biodiesel plants into advanced biorefineries. Founded in 2006, we own and operate a 65 million gallon per year renewable ethanol facility (“Keyes Plant”) in California’s Central Valley, near Modesto, where we manufacture and produce ethanol, high-grade alcohol, wet distillers’ grains (“WDG”), condensed distillers solubles (“CDS”), and distillers’ corn oil (“DCO”). We also own and operate a 50 million gallon per year renewable chemical and advanced fuel production facility (“Kakinada Plant”) on the East Coast of India that produces high quality distilled biodiesel and refined glycerin for customers in India and Europe. We operate a research and development laboratory to develop efficient conversion technologies using waste feedstocks to produce biofuels and biochemicals. Additionally, we own a partially completed plant in Goodland, Kansas (the “Goodland Plant”) through our subsidiary Goodland Advanced Fuels, Inc., (“GAFI”), which was formed to acquire the Goodland Plant. On December 31, 2019 we exercised an option to acquire all capital stock of GAFI for $10 and consolidated assets, liabilities, and equity of GAFI as a wholly-owned subsidiary from December 31, 2019. Prior to December 31, 2019, GAFI activity is shown as non-controlling interest in the consolidated statements of operations. We also lease a site in Riverbank, California, near the Keyes Plant, where we plan to utilize biomass-to-fuel technology that we have licensed from LanzaTech Technology (“LanzaTech”) and InEnTec Technology (“InEnTec”) to build a cellulosic ethanol production facility (the “Riverbank Cellulosic Ethanol Facility”) capable of converting local California surplus biomass – principally agricultural orchard waste – into ultra-low carbon renewable cellulosic ethanol (the “Riverbank Project”). By producing ultra-low carbon renewable cellulosic ethanol, we expect to capture higher value D3 cellulosic renewable identification numbers (“RINs”) and California Low Carbon Fuel Standard (“LCFS”) credits. In December 2018, we acquired a 5.2-acre parcel of land for the construction of a gas-to-liquid CO2 production facility by Messer. Aemetis sells carbon dioxide (“CO2”) produced at the Keyes Plant (the “CO2 Project”) to Messer for conversion and sale into the food processing, beverage, and technology sectors. The Aemetis portion of the CO2 Project construction was completed in January 2020, and Messer completed construction on their portion in April 2020. We commenced operations in late April 2020, and started recognizing revenue from this project in the second quarter of 2020. In 2018, we formed Aemetis Biogas, LLC (“ABGL”) to construct a cluster of anaerobic biogas digesters at local dairies near the Keyes Plant (the “Biogas Project”) to produce ultra-low carbon renewable natural gas (“RNG”) for use as transportation fuel. Construction of the first two dairy digesters and pipeline in the cluster were completed and commissioned during the third quarter of 2020. ABGL has signed participation agreements or fully executed leases with 17 local dairies near the Keyes Plant to build anerobic digesters to capture methane gas from manure lagoons at such dairies, which would otherwise be released into the atmosphere. We plan to capture methane-rich biogas from multiple dairies and convey the gas via a private underground pipeline to a centralized location at our Keyes Plant, where we will remove impurities in the gas and convert it into RNG for any number of applications including injecting into the local utility pipeline operated by PG&E, operating a renewable compressed natural gas (“RCNG”) truck loading station that will service local trucking fleets to displace diesel fuel, or converting to clean electricity. The biogas can also be used as energy in our Keyes Plant to displace petroleum-based natural gas. We believe the environmental and economic benefits of the Biogas Project are potentially significant due to dairy biogas having a negative carbon intensity (“CI”) under the California LCFS. The biogas produced by ABGL is expected to also receive D3 RINs under the federal Renewable Fuel Standard (“RFS”). On March 18, 2020, in order to address a supply shortage of hand sanitizer during the worldwide COVID-19 pandemic, the US Treasury Tobacco and Alcohol Tax and Trade Bureau (“TTB”) provided emergency waivers allowing fuel ethanol plants to produce high-grade alcohol for use in the production of hand sanitizer. Concurrently, during the first week of April 2020, Aemetis applied for and was approved by the TTB as a Distilled Spirits Producer (“DSP”), which would allow the Company to produce, in addition to fuel ethanol, high-grade alcohol for sanitizer and other health care and sanitary products, as well as industrial alcohol and potable alcohol for beverage spirits once the temporary waiver period expires. Accordingly, Aemetis began supplying high-grade alcohol for the production of hand sanitizer. Aemetis has also implemented a series of capital projects at the Keyes facility that will ultimately enable the production of US Pharmacopeia (“USP”) grade alcohol for sale into these key consumer and industrial markets. During June 2020, Aemetis renamed Biofuels Marketing, Inc. as Aemetis Health Products, Inc., and began a sales and marketing strategy of blending, bottling and selling hand sanitizer into bulk, retail branded, and white label markets. Additionally, Aemetis Health Products, Inc. is developing sales and marketing channels for other personal protective equipment, where and when those opportunites arise. Basis of Presentation and Consolidation. These consolidated financial statements include the accounts of Aemetis. Additionally, we consolidate all entities in which we have a controlling financial interest either directly or by option to acquire the interest. A controlling financial interest is usually obtained through ownership of a majority of the voting interests. However, an enterprise must consolidate a variable interest entity (“VIE”) if the enterprise is the primary beneficiary of the VIE, even if the enterprise does not own a majority of the voting interests. The primary beneficiary is the party that has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Prior to December 31, 2019, GAFI was consolidated into the financial statements as a VIE. On December 31, 2019, we exercised an option to acquire all capital stock of GAFI for $10 and consolidated assets, liabilities, and equity of GAFI into the accounts of Aemetis from December 31, 2019 forward. The accompanying consolidated condensed balance sheet as of September 30, 2020, the consolidated condensed statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and 2019, the consolidated condensed statements of cash flows for the nine months ended September 30, 2020 and 2019, and the consolidated condensed statements of stockholders’ deficit for the three and nine months ended September 30, 2020 and 2019 are unaudited. The consolidated condensed balance sheet as of December 31, 2019 was derived from the 2019 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the 2019 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2019. The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of Company’s management, the unaudited interim consolidated condensed financial statements for the three and nine months ended September 30, 2020 and 2019 have been prepared on the same basis as the audited consolidated statements as of December 31, 2019 and reflect all adjustments, consisting primarily of normal recurring adjustments, necessary for the fair presentation of its statement of financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, 2020 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, high-grade alcohol and related co-products in North America, and biodiesel and refined glycerin in India pursuant to supply agreements and purchase order contracts. We assessed the following criteria under the ASC 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: During the first quarter of 2020, Aemetis began selling high-grade alcohol for consumer applications directly to customers on the West Coast and Midwest using a variety of payment terms. These agreements and terms were evaluated according to ASC 606 guidance and such revenue is recognized upon satisfaction of the performance obligation by delivery of the product based on the terms of the agreement. Sales of high-grade alcohol represented 2% and 18% of revenue for three and nine months ended September 30, 2020, respectively. The below table shows our sales in North America by product category: North America (in thousands) For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Ethanol and high-grade alcohol sales $ 24,825 $ 27,456 $ 86,387 $ 84,453 Wet distiller's grains sales 7,143 8,783 22,983 26,119 Other sales 1,163 1,581 4,856 3,370 $ 33,131 $ 37,820 $ 114,226 $ 113,942 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, we assessed principal versus agent criteria as we buy corn as feedstock in producing ethanol from our working capital partner J.D. Heiskell and sell all WDG and corn oil produced in this process to J.D. Heiskell through A.L. Gilbert. We sold all ethanol we produced to J.D.Heiskell until May 13, 2020. We consider the purchase of corn as a cost of goods sold and the sale of ethanol upon transfer to the common carrier as revenue on the basis that (i) we control and bear the risk of gain or loss on the processing of corn which is purchased at market prices into ethanol and (ii) we have legal title to the goods during the processing time. The pricing for both corn and ethanol is set independently. Revenues from sales of ethanol and its co-products are billed net of the related transportation and marketing charges. Transportation charges are accounted for in cost of goods sold and marketing charges are accounted for in sales, general and administrative expense. Transportation and marketing charges are known within days of the transaction and are recorded at the actual amounts. The Company has elected to adopt an accounting policy under which these charges have been treated as fulfillment activities provided after control has transferred. As a result, these charges are recognized in cost of goods sold and selling, general and administrative expenses, respectively, when revenue is recognized. Revenues are recorded at the gross invoiced amount. Hence, we are the principal in North America sales scenarios where our customer and vendor may be the same. India: The below table shows our sales in India by product category: India (in thousands) For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Biodiesel sales $ 7,325 $ 17,057 $ 12,267 $ 32,201 Refined glycerin sales 449 951 909 2,186 PFAD sales - - 774 - Other sales 18 1,561 51 1,567 $ 7,792 $ 19,569 $ 14,001 $ 35,954 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 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 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 requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivables are charged against the allowance for doubtful accounts once un-collectability has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate, additional allowances may be required. We reserved $647 thousand and none in the allowances for doubtful accounts as of September 30, 2020 and December 31, 2019, respectively. Notes Receivable. 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, California Energy Commission Technology Demonstration Grant California Department of Food and Agriculture Dairy Digester Research and Development Grant California Energy Commission Low Carbon Advanced Ethanol Grant Program 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, 2020 and 2019: As of September 30, 2020 September 30, 2019 Series B preferred (post split basis) 132 132 Common stock options and warrants 5,846 3,910 Debt with conversion feature at $30 per share of common stock 1,294 1,255 Total number of potentially dilutive shares excluded from the diluted net income (loss) per share calculation 7,272 5,297 Comprehensive Loss. Foreign Currency Translation/Transactions. Operating Segments. The “North America” operating segment includes the Keyes Plant, the Riverbank Cellulosic Ethanol Facility, the Biogas Project, the Goodland Plant and the research and development facility in Minnesota. The “India” operating segment includes the Company’s 50 million gallon per year capacity Kakinada Plant in India, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. Fair Value of Financial Instruments. Share-Based Compensation. Commitments and Contingencies. Debt Modification Accounting. We have evaluated the 1% extension fee for extending the maturity date of the Third Eye Capital Notes to April 1, 2021 and Amendment No. 17 providing an option to extend to April 1, 2022 and certain waivers for financial covenants, in accordance with ASC 470-60 Troubled Debt Restructuring. For additional information regarding the 1% extension fee and Amendment No. 17, please see “Part I, Item 1. Financial Statements – Note 4. Debt.” Convertible Instruments. Recently Issued Accounting Pronouncements. For a complete summary of the Company’s significant accounting policies, please refer to the Company’s audited financial statements and notes thereto for the years ended December 31, 2019 and 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 12, 2020. There were no new accounting pronouncements issued applicable to the Company during the three and nine months ended September 30, 2020. |
2. Inventories
2. Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
2. Inventories | Inventories consist of the following: As of September 30, 2020 December 31, 2019 Raw materials $ 1,678 $ 2,566 Work-in-progress 1,365 1,455 Finished goods 1,773 2,497 Total inventories $ 4,816 $ 6,518 As of September 30, 2020 and December 31, 2019, the Company recognized a lower of cost or net realizable value impairment of $0.3 and $0.1 million respectively, related to inventory. |
3. Property, Plant and Equipmen
3. Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
3. Property, Plant and Equipment | Property, plant and equipment consist of the following: September 30, 2020 December 31, 2019 Land $ 4,088 $ 4,104 Plant and buildings 96,089 83,139 Furniture and fixtures 1,166 1,094 Machinery and equipment 4,389 4,252 Construction in progress 18,612 12,571 Property held for development 15,408 15,408 Finance lease right of use assets 2,988 - Total gross property, plant & equipment 142,740 120,568 Less accumulated depreciation (39,690 ) (36,342 ) Total net property, plant & equipment $ 103,050 $ 84,226 Construction in progress contains incurred costs for the Biogas Project, Riverbank Project, and Zebrex equipment installation at the Keyes Plant. In the second quarter of 2020, 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. Depreciation on the components of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows: Years Plant and buildings 20 - 30 Machinery and equipment 5 - 10 Furniture and fixtures 3 - 5 For the three months ended September 30, 2020 and 2019, the Company recorded depreciation expense of $1.3 million and $1.1 million for each period. For the nine months ended September 30, 2020 and 2019, the Company recorded depreciation expense of $3.5 million and $3.3 million, respectively. Management is required to evaluate these long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Management determined there was no impairment on the long-lived assets during the three and nine months ended September 30, 2020 and 2019. |
4. Debt
4. Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
4. Debt | Debt consists of the notes from our senior lender, Third Eye Capital, other working capital lenders and subordinated lenders as follows: September 30, 2020 December 31, 2019 Third Eye Capital term notes $ 7,039 $ 7,024 Third Eye Capital revolving credit facility 75,605 62,869 Third Eye Capital revenue participation term notes 11,824 11,794 Third Eye Capital acquisition term notes 26,313 25,518 Third Eye Capital promissory note 1,840 2,815 Cilion shareholder seller notes payable 6,236 6,124 Subordinated notes 12,315 11,502 Term loan on Equipment purchase 5,652 - EB-5 promissory notes 42,965 41,932 PPP loans 1,134 - Unsecured working capital loans 2,540 2,631 GAFI Term and Revolving loans 32,883 30,216 Total debt 226,346 202,425 Less current portion of debt 59,336 22,740 Total long term debt $ 167,010 $ 179,685 On July 6, 2012, Aemetis, Inc. and Aemetis Advanced Fuels Keyes, Inc. (“AAFK”), entered into an Amended and Restated Note Purchase Agreement with Third Eye Capital (the “Note Purchase Agreement”). Pursuant to the Note Purchase Agreement, Third Eye Capital extended credit in the form of (i) senior secured term loans in an aggregate principal amount of approximately $7.2 million to replace existing notes held by Third Eye Capital (the “Term Notes”); (ii) senior secured revolving loans in an aggregate principal amount of $18.0 million (the “Revolving Credit Facility”); (iii) senior secured term loans in the principal amount of $10.0 million to convert the prior revenue participation agreement to a note (the “Revenue Participation Term Notes”); and (iv) senior secured term loans in an aggregate principal amount of $15.0 million (the “Acquisition Term Notes”) used to fund the cash portion of the acquisition of Cilion, Inc. (the Term Notes, Revolving Credit Facility, Revenue Participation Term Notes and Acquisition Term Notes are referred to herein collectively as the “Original Third Eye Capital Notes”). On March 27, 2018, Third Eye Capital agreed to Limited Waiver and Amendment No. 14 to the Note Purchase Agreement (“Amendment No. 14”) to: (i) extend the maturity date of the Third Eye Capital Notes by two years to April 1, 2020 in exchange for an amendment fee consisting of 6% (3% per year) of the outstanding note balance in the form of an increase in the fee payable in the event of a redemption of the Third Eye Capital Notes (as defined in the Note Purchase Agreement); (ii) provide that the maturity date may be further extended at our election to April 1, 2021 in exchange for an extension fee of 5%; (iii) provide for an optional waiver of the ratio of note indebtedness covenant until January 1, 2019 with the payment of a waiver fee of $0.25 million; and (iv) remove the redemption fee described in (i) above from the calculation of the ratio of note indebtedness covenant. In addition to the fee discussed in (i), as consideration for such amendment and waiver, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.5 million to be added to the outstanding principal balance of the Revolving Credit Facility. On March 11, 2019, Third Eye Capital agreed to Limited Waiver and Amendment No. 15 to the Note Purchase Agreement (“Amendment No. 15”), to waive the ratio of note indebtedness covenant through December 31, 2019. As a consideration for this amendment, the Company also agreed to pay Third Eye Capital an amendment fee of $1.0 million to be added to the redemption fee which is due upon redemption of the Notes. On November 11, 2019, Third Eye Capital agreed to Limited Waiver and Amendment No. 16 to the Note Purchase Agreement (“Amendment No. 16”), to waive the ratio of note indebtedness covenant for the quarters ended March 31, 2020, September 30, 2020, September 30, 2020 and December 31, 2020. As a consideration for this amendment, the Company also agreed to pay Third Eye Capital an amendment fee of $0.5 million to be added to the redemption fee which is due upon redemption of the Notes. Based on Amendment No. 16, the ratio of note indebtedness covenant is waived for the quarters ended September 30, 2020 and December 31, 2020. Based on the Amendment No. 17, the ratio of note indebtedness covenant is waived for the quarters ended March 31, 2021 and June 30, 2021. On November 5, 2020, Third Eye Capital agreed to Amendment No. 18 to waive the ratio of note indebtedness covenant for the quarter ended September 30, 2021 for a fee of $50 thousand. According to ASC 470-10-45 debt covenant classification guidance, if it is probable that the Company will not be able to cure the default at measurement dates within the next 12 months, the related debt needs to be classified as current. As the Amendment No. 16 , Amendment No. 17, and Amendment No.18 waived the ratio of the note indebtedness covenant over the next four quarters, the notes are classified as long-term debt. On February 27, 2019, a Promissory Note (the “February 2019 Note”, together with the Original Third Eye Capital Notes, the “Third Eye Capital Notes”) for $2.1 million was advanced by Third Eye Capital to Aemetis, Inc., as a short-term credit facility for working capital and other general corporate purposes with an interest rate of 14% per annum maturing on the earlier of (a) receipt of proceeds from any financing, refinancing, or other similar transaction, (b) extension of credit by payee, as lender or as agent on behalf of certain lenders, to the Company or its affiliates, or (c) April 30, 2019. In consideration of the February 2019 Note, $0.1 million of the total proceeds were paid to Third Eye Capital as financing charges. On April 30, 2019, the February 2019 Note was modified to remove the stated maturity date and instead will be due on demand by Third Eye Capital. In third quarter of 2019, the February 2019 Note was modified to include additional borrowings of $0.7 million. In first quarter of 2020, the February 2019 Note was modified to include additional borrowings of $0.6 million. As of September 30, 2020, the outstanding balance of principal and interest on the February 2019 Note was $1.8 million. On April 1, 2020, the Company exercised the option to extend the maturity of Third Eye Capital Notes to April 1, 2021 for a fee of 1% of the outstanding note balance instead of agreed fee of 5% in the Amendment No.14. We have evaluated the reduction in extension fee to 1% in accordance with ASC 470-60 Troubled Debt Restructuring. According to the guidance, we considered the 1% extension fee to be a troubled debt restructuring. We assessed all the terms to confirm if there is a concession granted by the creditor. The maturity date of the Third Eye Capital Notes was extended to April 1, 2021 for a 1% fee, which was lower than the extension fee of 5% provided by Amendment No. 14 for a one-year extension. On August 11, 2020, Third Eye Capital agreed to Limited Waiver and Amendment No. 17 to the Note Purchase Agreement (“Amendment No. 17”), to (i) provide that the maturity date of the Third Eye Capital Notes may be further extended at our election to April 1, 2022 in exchange for an extension fee equal to 1% of the Note Indebtedness in respect to each Note, provided that such fee may be added to the outstanding principal balance of each Note on the effective date of each such extension, (ii) provide for a waiver of the ratio of note indebtedness covenant for the quarters ended March 31, 2021 and June 30, 2021. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.3 million in cash (the “Amendment No. 17 Fee”). We have evaluated the 1% extension fee and Amendment No. 17 in accordance with ASC 470-60 Troubled Debt Restructuring. According to the guidance, we considered 1% extension and Amendment No.17 Fee to be a troubled debt restructuring. In order to assess whether the creditor granted a concession, we calculated the post-restructuring effective interest rate by projecting cash flows on the new terms and calculated a discount rate equal to the carrying amount of pre-restructuring of debt, and by comparing this calculation to the terms of Amendment No. 15, we determined that Third Eye Capital provided a concession in accordance with the provisions of ASC 470-60 Troubled Debt Restructuring and thus applied troubled debt restructuring accounting, resulting in no gain or loss from the application of this accounting. Using the effective interest method of amortization, the 1% extension fee of $1.0 million and the Amendment No. 17 Fee of $0.3 million will be amortized over the stated remaining life of the Third Eye Capital Notes. Terms of Third Eye Capital Notes A. Term Notes B . Revolving Credit Facility C. Revenue Participation Term Notes D. Acquisition Term Notes E. Reserve Liquidity 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 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. *The note maturity date can be extended by the Company to April 2022. As a condition to any such extension, the Company would be required to pay a fee of 1% of the carrying value of the debt which can be paid in cash or added to the outstanding debt. As a result of this ability to extend the maturity at the Company’s will, the Third Eye Capital Notes are classified as non-current debt. Cilion shareholder seller notes payable Subordinated Notes On July 1, 2020, the Subordinated Notes were amended to extend the maturity date until the earlier of (i) December 31, 2020; (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 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, 2020 amendment and the refinancing terms of the Subordinated Notes and applied modification accounting in accordance with ASC 470-50 Debt – Modification and Extinguishment. At September 30, 2020 and December 31, 2019, the Company had, in aggregate, $12.3 million and $11.5 million outstanding net of discount issuance costs of $0.2 million and none, respectively, under the Subordinated Notes. EB-5 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, 2020, $35.5 million has been released from the escrow amount to the Company, with $0.5 million remaining to be funded to escrow. As of September 30, 2020, $35.5 million in principal and $3.3 million in accrued interest was outstanding on the EB-5 Notes sold under the EB-5 Phase I funding. On October 16, 2016, the Company launched its EB-5 Phase II funding, with plans to issue $50.0 million in additional EB-5 Notes on substantially similar terms and conditions as those issued under the Company’s EB-5 Phase I funding, to refinance indebtedness and capital expenditures of Aemetis, Inc. and GAFI (the “EB-5 Phase II funding”). On November 21, 2019, the minimum investment was raised from $0.5 million per investor to $0.9 million per investor. The Company entered into a Note Purchase Agreement dated with Advanced BioEnergy II, LP, a California limited partnership authorized as a Regional Center to receive EB-5 Phase II funding investments, for the issuance of up to 100 EB-5 Notes bearing interest at 3%. On May 1, 2020 Supplement No. 3 amended the offering documents and lowered the total eligible new EB-5 Phase II funding investors to 60. Eight EB-5 investors have funded at the $0.5 million per investor amount, so 52 new EB-5 Phase II funding investors are eligible at the new $0.9 million per investor amount under the current offering. Job creation studies show additional investors may be possible to increase the total offering amount in the future. Each new note will be issued in the principal amount of $0.9 million and due and payable five years from the date of each note, for a total aggregate principal amount of up to $50.8 million. Advanced BioEnergy II, LP arranges investments with foreign investors, who each make loans to the Riverbank Cellulosic Ethanol Facility in increments of $0.9 million after November 21, 2019. The Company has sold an aggregate principal amount of $4.0 million of EB-5 Notes under the EB-5 Phase II funding since 2016 to the date of this filing. As of September 30, 2020, $4.0 million has been released from escrow to the Company and $46.8 million remains to be funded to escrow. As of September 30, 2020, $4.2 million was outstanding on the EB-5 Notes under the EB-5 Phase II funding. Working capital loans In November 2008, the Company entered into an operating agreement with Secunderabad Oils Limited (“Secunderabad Oils”). On July 15, 2017, the agreement with Secunderabad Oils was amended to provide the working capital funds for British Petroleum business operations only in the form of inter-corporate deposit for an amount of approximately $2.3 million over a 95 days period at the rate of 14.75% per annum interest rate. The term of the agreement continues until either party terminates it. Secunderabad Oils has a second priority lien on the assets of the Company’s Kakinada Plant after this agreement. On April 15, 2018, the agreement was amended to purchase the raw material for business operations at 12% per annum interest rate. During the nine months ended September 30, 2020 and 2019, the Company made principal and interest payments to Secunderabad Oils of approximately $0.9 million and $0.5 million, respectively. As of September 30, 2020 and December 31, 2019, the Company had $2.5 million and $0.6 million outstanding under this agreement, respectively. 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. 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. On December 3, 2018, GAFI entered into Amendment No. 2 to the GAFI Term Loan with Third Eye Capital for an additional amount of $3.5 million from Third Eye Capital at a 10% interest rate. GAFI borrowed $1.8 million against this Amendment No. 2 with a $175 thousand fee added to the loan and $0.2 million was withheld from the $1.8 million for interest payments. $1.5 million is available to draw under GAFI Amendment No. 2 for the CO2 Project (“CO2 Term Loan”). Among other requirements, the Company is also required to make the following mandatory repayments of the CO2 Term Loan: (i) on a monthly basis, an amount equal to 75% of any payments received by the Company for CO2 produced by Messer, (ii) an amount equal to 100% of each monthly payment received by the Company for land use by Linde for CO2 plant, (iii) on a monthly basis, an amount equal to the product of: $0.01 multiplied by the number of bushels of corn grain used in the ethanol production at the Keyes Plant. Based on the mandatory payments, an amount of $1.0 million is estimated to be paid in the next 12 months and is classified as current debt as of September 30, 2020. As of September 30, 2020, GAFI had $21.5 million net of discount issuance costs of $0.6 million outstanding on the GAFI Term Loan and $11.4 million on the GAFI Revolving Loan respectively, classified as current portion of long-term debt. Payroll Protection Program. The PPP Loans are evidenced by promissory notes, dated May 1, 2020 and April 30, 2020 (the “Notes”), between the Company, as Borrower, and Bank of America, N.A., as Lender (the “Lender”). The interest rate on the Note is 1.00% per annum. No payments of principal or interest are due during the six-month period beginning on the funding date (the “Deferral Period”). If the SBA does not confirm forgiveness or only partly confirms forgiveness of the PPP Loans, or Borrower fails to apply for loan forgiveness, the Borrower will be obligated to repay to the Bank the total outstanding balance remaining due under the PPP Loans, including principal and interest and in such case, the Lender will establish the terms for repayment of the Loan in a separate letter to be provided to the Borrower in which the letter will set forth the loan balance, the amount of each monthly payment, the interest rate (not in excess of a fixed rate of one percent (1.00%) per annum), the term of the PPP Loans, and the maturity date, which, if not established by the Lender, shall be two (2) years from the funding date of the PPP Loans. Scheduled debt repayments for the Company’s loan obligations follow: Twelve months ended September 30, Debt Repayments 2021 $ 59,336 2022 145,530 2023 13,435 2024 5,172 2025 2,436 Thereafter 1,247 Total debt 227,156 Debt issuance costs (810 ) Total debt, net of debt issuance costs $ 226,346 |
5. Commitments and Contingencie
5. Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
5. Commitments and Contingencies | Leases We have identified assets as the corporate office, warehouse, monitoring equipment and laboratory facilities over which we have control and obtain economic benefits fully. We classified these identified assets as operating leases after assessing the terms under classification guidance. We have entered into several leases for trailers and carbon units with purchase option at the end of the term. We have concluded that it is reasonably certain that we would exercise the purchase option at the end of the term, hence the leases were classified as finance leases. All of our leases have remaining term of less than a year to 8 years. When discount rates implicit in leases cannot be readily determined, the Company uses the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and measure lease liabilities and right-of-use (“ROU”) assets. The incremental borrowing rate used by the Company was based on weighted average baseline rates commensurate with the Company’s secured borrowing rate over a similar term. At each reporting period, when there is a new lease initiated, the rates established for that quarter will be used. The components of lease expense and sublease income follow: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Operating lease cost Operating lease expense $ 201 $ 219 $ 561 $ 543 Short term lease expense 75 18 104 71 Variable lease expense 29 31 89 80 Sub lease income - (50 ) - (118 ) Total operating lease cost $ 305 $ 218 $ 754 $ 576 Finance lease cost Amortization of right-of-use assets $ 94 $ - $ 155 $ - Interest on lease liabilities 26 - 44 - Total finance lease cost $ 120 $ - $ 199 $ - Cash paid for amounts included in the measurement of lease liabilities: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Operating cash flows used in operating leases $ 131 185 $ 448 $ 517 Operating cash flows used in finance leases 26 - 44 - Financing cash flows used in finance leases 435 - $ 1,137 - Supplemental non-cash flow information related to the operating ROU asset and lease liabilities was as follows for the three and nine months ended September 30, 2020 and 2019: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Operating leases Accretion of the lease liability $ 101 $ 31 $ 160 $ 107 Amortization of right-of-use assets 100 151 402 438 Weighted Average Remaining Lease Term Operating leases 7.1 years Finance leases 3.2 years Weighted Average Discount Rate Operating leases 13.9 % Finance leases 5.2 % Supplemental balance sheet information related to leases was as follows: As of September 30, 2020 December 31, 2019 Operating leases Operating lease right-of-use assets $ 2,843 $ 557 Current portion of operating lease liability 286 377 Long term operating lease liability 2,662 200 Total operating lease liabilities $ 2,948 $ 577 Finance leases Property and equipment, at cost $ 2,988 $ - Accumulated depreciation (155 ) - Property and equipment, net $ 2,833 $ - Other current liability 621 - Long term other liability 1,270 - Total finance lease liabilities $ 1,891 $ - Maturities of operating and finance lease liabilities were as follows: Twelve months ended September 30, Operating leases Finance leases 2021 $ 666 $ 704 2022 613 577 2023 569 494 2024 586 290 2025 603 - Thereafter 1,698 - Total lease payments 4,735 2,065 Less imputed interest (1,787 ) (174 ) Total lease liability $ 2,948 $ 1,891 Other Commitments The Company entered into an agreement with Mitsubishi Chemical America, Inc. to purchase certain equipment to save energy used in the Keyes Plant. We also entered into a financing agreement with the seller for $5.7 million for this equipment. Payments pursuant to the financing transaction will commence after the installation date and interest will be charged based on the certain performance metrics after operation of the equipment. The equipment was delivered in March 2020; however the installation has been delayed due to the COVID-19 pandemic. Hence, we recorded the asset in construction in progress and related liability in the short and long term debt of $0.7 million and $5 million, respectively as of September 30, 2020. Property taxes The Company entered into a payment plan with Stanislaus County for unpaid property taxes for the Keyes Plant site on June 28, 2018 by paying $1.5 million as a first payment. Under the annual payment plan, the Company was set to pay 20% of the outstanding redemption amount, in addition to the current year property taxes and any interest incurred on the unpaid balance to date annually, on or before April 10 starting in 2019. After making one payment, Company defaulted on the payment plan and as of September 30, 2020 and December 31, 2019, the balance in property tax accrual was $5.4 million and $4.1 million, respectively. Stanislaus County agreed not to enforce collection actions and we are now in discussions with Stanislaus County regarding a payment plan. Legal Proceedings On August 31, 2016, the Company filed a lawsuit in Santa Clara County Superior Court against defendant EdenIQ, Inc. (“EdenIQ”). The lawsuit was based on EdenIQ’s wrongful termination of a merger agreement that would have effectuated the merger of EdenIQ into a new entity that would be primarily owned by Aemetis. The lawsuit asserted that EdenIQ had fraudulently induced the Company into assisting EdenIQ to obtain EPA approval for a new technology that the Company would not have done but for the Company’s belief that the merger would occur. The relief sought included EdenIQ’s specific performance of the merger, monetary damages, as well as punitive damages, attorneys’ fees, and costs. In response to the lawsuit, EdenIQ filed a cross-complaint asserting causes of action relating to the Company’s alleged inability to consummate the merger, the Company’s interactions with EdenIQ’s business partners, and the Company’s use of EdenIQ’s name and trademark in association with publicity surrounding the merger. Further, EdenIQ named Third Eye Capital Corporation (“TEC”) as a defendant in a second amended cross-complaint alleging that TEC had failed to disclose that its financial commitment to fund the merger included terms that were not disclosed. Finally, EdenIQ claimed that TEC and the Company concealed material information surrounding the financing of the merger. By way of its cross-complaint, EdenIQ sought monetary damages, punitive damages, injunctive relief, attorneys’ fees and costs. In November 2018, the claims asserted by the Company were dismissed on summary judgment and the Company filed a motion to amend its claims, which remains pending. In December 2018, EdenIQ dismissed all of its claims prior to trial. In February 2019, the Company and EdenIQ each filed motions seeking reimbursement of attorney fees and costs associated with the litigation. On July 24, 2019, the court awarded EdenIQ a portion of the fees and costs it had sought in the amount of approximately $6.2 million. The Company recorded the $6.2 million as loss contingency on litigation during the year ended December 31, 2019. The Company’s ability to amend its claims and present its claims to the court or a jury could materially affect the court’s decision to award EdenIQ its fees and costs. In addition to further legal motions and a potential appeal of the Court’s summary judgment order, the Company plans to appeal the court’s award of EdenIQ’s fees and costs. The Company intends to continue to vigorously pursue its legal claims and defenses against EdenIQ. |
6. Biogas LLC - Series A Prefer
6. Biogas LLC - Series A Preferred Financing | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' deficit: | |
6. Biogas LLC - Series A Preferred Financing | On December 20, 2018, Aemetis Biogas LLC entered into a Series A Preferred Unit Purchase Agreement (the “Preferred Unit Agreement”) by selling Series A Preferred Units to Protair-X Americas, Inc. (the “Purchaser”), with Third Eye Capital acting as an agent for the purchaser (the “Agent”). ABGL plans to construct and collect biogas from dairies located near the Keyes Plant. Biogas is a blend of methane along with CO2 and other impurities that can be captured from dairies, landfills and other sources. After a gas cleanup and compression process, biogas can be converted into bio-methane, which is a direct replacement of petroleum natural gas and can be transported in existing natural gas pipelines. ABGL is authorized to issue 11,000,000 common units, and up to 6,000,000 convertible, redeemable, secured, preferred membership units (the “Series A Preferred Units”). ABGL issued 6,000,000 common units to the Company. ABGL also issued 1,660,000 Series A Preferred Units to the Purchaser for $8,300,000 with the ability to issue an additional 4,340,000 Series A Preferred Units at $5.00 per Unit for a total of up to $30,000,000 in funding. Additionally, 5,000,000 common units of ABGL are held in reserve as potential conversion units issuable to the Purchaser upon certain triggering events discussed below. The Preferred Unit Agreement includes (i) preference payments of $0.50 per unit on the outstanding Series A Preferred Units commencing on the second anniversary, (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. Triggering events occur upon ABGL’s failure to redeem units, comply with covenants, any other defaults or cross defaults, or to perform representations or warranties. Upon a triggering event: (i) the obligation of the Purchaser to purchase additional Series A Preferred Units is terminated, (ii) cash flow payments for redemption payments increases from 75% to 100% of free cash flows, and (iii) total number of common units into which preferred units may be converted increases from 1,200,000 common units to 5,000,000 common units on a one for one basis. As of September 30, 2020, 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 1,735,833 Series A Preferred Units on second tranche for a value of $8.7 million. The Company is accreting these two tranches to the redemption value of $74 million over the estimated future cash flow periods of six years using the effective interest method. In addition, the Company identified freestanding future tranche rights and the accelerated redemption feature related to a change in control provision as derivatives which required bifurcation. These derivative features were assessed to have minimal value as of September 30, 2020 and December 31, 2019 based on the evaluation of the other conditions included in the agreement. During the quarter ended September 30, 2020, ABGL issued 732,372 of Series A Preferred Units for incremental proceeds of $3.7 million as part of the second tranche of the Preferred Unit Agreement. Consistent with the previous issuances, the units are treated as a liability as the conversion option was deemed to be non-substantive. The Company is accreting up to the redemption value of $11.0 million over the estimated future cash flow periods of six years from the original anniversary date using the effective interest method. The Company recorded Series A Preferred Unit liabilities, net of unit issuance costs and inclusive of accretive preference pursuant to this agreement, classified as other current liabilities, of $1.2 million and none, and long-term liabilities of $28.5 million and $14.1 million as of September 30, 2020 and December 31, 2019, respectively. |
7. Stock-Based Compensation
7. Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
7. Stock Based Compensation | 2019 Plan On April 29, 2019, the Aemetis 2019 Stock Plan (the “2019 Stock Plan”) was approved by stockholders of the Company. This plan permits the grant of Incentive Stock Options, Non-Statutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and other stock or cash awards as the Administrator of the plan may determine in its discretion. The 2019 Stock Plan’s term is 10 years and supersedes all prior plans. The 2019 Stock Plan authorized the issuance of 200,000 shares of common stock for the 2019 calendar year, in addition to permitting the transfer and grant of any available and unissued or expired options under the prior Amended and Restated 2007 Stock Plan in an amount up to 177,246 options. Employee grants have a general vesting term of 1/12th every three months and are exercisable at any time after vesting subject to continuation of employment. Option grants for directors have immediate vesting with a 10-year term expiration. With the approval of the 2019 Stock Plan, the Zymetis 2006 Stock Plan and the Amended and Restated 2007 Stock Plan (the “Prior Plans,” and together with the 2019 Stock Plan, the “Stock Plans”) are terminated for granting any options under either plan. However, any options granted before the 2019 Stock Plan approved will remain outstanding and can be exercised, and any expired options issued pursuant to the Prior Plans can be granted under the 2019 Stock Plan. On January 9, 2020, 771,500 stock option grants were issued for employees and directors under the 2019 Stock Plan. On March 28, 2020, 1,075,500 stock options grant were approved by the Board for employees and directors under the 2019 Stock Plan. On April 3, 2020, 450,000 stock option grants were issued for employees under the 2019 Stock Plan with 10 year term and immediate vesting. On June 4, 2020, 10,000 stock option grants were approved by the Board for a director under the 2019 Stock Plan with 10 year term and 2 year vesting. On August 27, 2020, 13,000 stock option grants were approved by the Board for new employees under the 2019 Stock Plan with 10 year term and 3 year vesting. As of September 30, 2020, 5.8 million options are outstanding under the Stock Plans. Common Stock Reserved for Issuance The following is a summary of options granted under the Plans: Shares Available for Grant Number of Shares Outstanding Weighted-Average Exercise Price Balance as of December 31, 2019 147 3,746 $ 1.38 Authorized 2,342 - - Granted (2,320 ) 2,320 0.69 Exercised - (232 ) 1.27 Forfeited/expired 83 (83 ) 0.76 Balance as of September 30, 2020 252 5,751 $ 1.12 As of September 30, 2020, there were 3.9 million options vested under all the Plans. Stock-based compensation for employees Stock-based compensation is accounted for in accordance with the provisions of ASC 718, Compensation-Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. We estimate the fair value of stock-based awards on the date of grant using the Black-Scholes option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. For the three months ended September 30, 2020 and 2019, the Company recorded stock compensation expense in the amount of $191 thousand and $144 thousand, respectively. For the nine months ended September 30, 2020 and 2019, the Company recorded stock compensation expense in the amount of $826 thousand and $630 thousand, respectively. Valuation and Expense Information All issuances of stock options or other issuances of equity instruments to employees as the consideration for services received by us are accounted for based on the fair value of the equity instrument issued. The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for stock based compensation expense requires us to make assumptions and judgments about the variables used in the calculation, including the fair value of our common stock, the expected term (the period of time that the options granted are expected to be outstanding), the volatility of our common stock, a risk-free interest rate, and expected dividends. We also estimate forfeitures of unvested stock options. To the extent actual forfeitures differ from our estimates, the difference will be recorded as a cumulative adjustment in the period estimates are revised. Compensation cost is recorded only for vested options. We use the simplified calculation of expected life described in the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, and volatility is based on an average of the historical volatilities of the common stock of four entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. We use an expected dividend yield of zero, as we do not anticipate paying any dividends in the foreseeable future. Expected forfeitures are assumed to be zero due to the small number of plan participants and the plan. During the nine months ended September 30, 2020 and 2019, 2,320,000 and 399,000 options were granted respectively. The weighted average fair value calculations for options granted during the nine months ended September 30, 2020 and 2019 are based on the following assumptions: For the nine months ended September 30, Description 2020 2019 Dividend-yield 0 % 0 % Risk-free interest rate 0.94 % 2.38 % Expected volatility 88.15 % 88.54 % Expected life (years) 6.55 6.55 Market value per share on grant date $ 0.69 $ 0.78 Fair value per share on grant date $ 0.52 $ 0.59 As of September 30, 2020, the Company had $1.1 million of total unrecognized compensation expense for employees, which the Company will amortize over the 2.0 years weighted average remaining term. |
8. Agreements
8. Agreements | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
8. Agreements | Working Capital Arrangement. The J.D. Heiskell’s sales activity associated with the Corn Procurement and Working Capital Agreement for the three and nine months ended September 30, 2020 and 2019 are as follows: As of and for the three months ended September 30, As of and for the nine months ended September 30, 2020 2019 2020 2019 Ethanol sales $ - $ 27,456 $ 26,049 $ 84,453 Wet distiller's grains sales 7,143 8,783 22,983 26,119 Corn oil sales 827 934 2,806 2,586 Corn purchases 25,513 30,446 77,268 90,426 Accounts receivable 161 1,066 161 1,066 Accounts payable 1,978 2,484 1,978 2,484 Ethanol and Wet Distillers Grains Marketing Arrangement. |
9. Segment Information
9. Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
9. Segment Information | Aemetis recognizes two reportable geographic segments: “North America” and “India.” The “North America” operating segment includes the Keyes Plant, the Riverbank Cellulosic Ethanol Facility, the Biogas Project, the Goodland Plant and the research and development facility in Minnesota. The “India” operating segment includes the Kakinada Plant, 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, 2020 and 2019 follows: Three months ended September 30, 2020 Three months ended September 30, 2019 North America India Total Consolidated North America India Total Consolidated Revenues $ 33,131 $ 7,792 $ 40,923 $ 37,820 $ 19,569 $ 57,389 Cost of goods sold 33,534 6,618 40,152 37,990 15,417 53,407 Gross (loss) profit (403 ) 1,174 771 (170 ) 4,152 3,982 Other Expenses Research and development expenses 37 - 37 37 - 37 Selling, general and administrative expenses 4,340 223 4,563 2,716 1,813 4,529 Interest expense 6,461 9 6,470 6,293 49 6,342 Accretion of Series A preferred units 1,765 - 1,765 589 - 589 Other (income) expense 155 (2 ) 153 (265 ) (24 ) (289 ) Income (loss) before income taxes $ (13,161 ) $ 944 $ (12,217 ) $ (9,540 ) $ 2,314 $ (7,226 ) Capital expenditures $ 6,187 $ 113 $ 6,300 $ 3,664 $ 351 $ 4,015 Depreciation 1,085 168 1,253 942 161 1,103 For the nine months ended September 30, 2020 For the nine months ended September 30, 2019 North America India Total Consolidated North America India Total Consolidated Revenues $ 114,226 $ 14,001 $ 128,227 $ 113,942 $ 35,954 $ 149,896 Cost of goods sold 101,231 12,599 113,830 113,440 29,552 142,992 Gross profit 12,995 1,402 14,397 502 6,402 6,904 Other Expenses Research and development expenses 175 - 175 160 - 160 Selling, general and administrative expenses 11,206 1,342 12,548 9,972 2,743 12,715 Interest expense 19,490 44 19,534 18,805 332 19,137 Accretion of Series A preferred units 4,087 - 4,087 1,509 - 1,509 Loss contingency on litigation - - - 6,200 - 6,200 Other expense (income) 416 (23 ) 393 (228 ) (773 ) (1,001 ) Income (loss) before income taxes $ (22,379 ) $ 39 $ (22,340 ) $ (35,916 ) $ 4,100 $ (31,816 ) Capital expenditures $ 13,571 $ 1,350 $ 14,921 $ 4,249 $ 804 $ 5,053 Depreciation 3,030 485 3,515 2,883 454 3,337 North America: During the three and nine months ended September 30, 2019, the Company’s revenues from ethanol, WDG, and corn oil were made pursuant to the Corn Procurement and Working Capital Agreement. Sales of ethanol, WDG, and corn oil to J.D. Heiskell accounted for 98.3% and 99.3% of the Company’s North America segment revenues for the three and nine months ended September 30, 2019, respectively. India. During the nine months ended September 30, 2020, two biodiesel customers accounted for 51% and 33%, of the Company’s consolidated India segment revenues while none of the refined glycerin customers accounted for more than 10% of such revenues, compared to three biodiesel customers accounted for 29%, 18% and 15% of the Company’s consolidated India segment revenues while none of the refined glycerin customers accounted for more than 10% of such revenues during the nine months ended September 30, 2019. Total assets by segment consist of the following: As of September 30, December 31, 2020 2019 North America $ 105,619 $ 82,990 India 16,551 16,906 Total Assets $ 122,170 $ 99,896 |
10. Related Party Transactions
10. Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
10. Related Party Transactions | The Company owes Eric McAfee, the Company’s Chairman and CEO, and McAfee Capital LLC (“McAfee Capital”), owned by Eric McAfee, $0.4 million in connection with employment agreements and expense reimbursements previously accrued as salaries expense and accrued liabilities. The balance accrued related to these employment agreements was $0.4 million as of September 30, 2020 and December 31, 2019. For the three months ended September 30, 2020 and 2019, the Company expensed $7 thousand and $1 thousand, respectively, to reimburse actual expenses incurred by McAfee Capital and related entities. For the nine months ended September 30, 2020 and 2019, the Company expensed $7 and $22 thousand, respectively, to reimburse actual expenses incurred by McAfee Capital and related entities. The Company previously prepaid $0.2 million to Redwood Capital, a company controlled by Eric McAfee, for the Company’s use of flight time on a corporate jet. As of September 30, 2020, $0.1 million remained as a prepaid expense. As consideration for the reaffirmation of guaranties required by Amendment No. 13 and 14 to the Note Purchase Agreement which the Company entered into with Third Eye Capital on March 1, 2017 and March 27, 2018 respectively, the Company also agreed to pay $0.2 million annually in consideration to McAfee Capital in exchange for its willingness to provide the guaranties. On May 7, 2020 the Audit Committee of the Company approved a guarantee fee of 0.4% on the outstanding balance of Third Eye Capital Notes annually. Based on this approval, we accrued $0.5 million in guarantee fee as of September 30, 2020. The balance of $627 thousand and $304 thousand for guaranty fee remained as an accrued liability as of September 30, 2020 and December 31, 2019 respectively. The Company owes various members of the Board amounts totaling $1.2 million as of September 30, 2020 and December 31, 2019, for each period, in connection with board compensation fees, which are included in accounts payable on the balance sheet. For the three months ended September 30, 2020 and 2019, the Company expensed $94 thousand and $96 thousand respectively, in connection with board compensation fees. For the nine months ended September 30, 2020 and 2019, the Company expensed $256 thousand and $294 thousand respectively, in connection with board compensation fees. |
11. Subsequent Events
11. Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
11. Subsequent Events | Third Eye Capital Limited Waiver and Amendment No. 18 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 in cash. |
12. Management's Plan
12. Management's Plan | 9 Months Ended |
Sep. 30, 2020 | |
Cilion shareholder Seller note payable | |
12. 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 a working capital deficit, which includes approximately $59.3 million of debt maturing within the next 12 months, and the Company has been required to remit substantially all excess cash from operations to its senior lender and is therefore reliant on its 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 from its senior lender. This dependence on the senior lender raises substantial doubt about the Company’s ability to continue as a going concern. The Company plans to pursue the following strategies to improve the course of the business: ● Operate the Keyes Plant and continue to improve operational performance at the Plant, including the expansion into new products, new markets for existing products, and adoption of new technologies or process changes that allow for energy efficiency, cost reduction or revenue enhancements. ● Continue to develop and expand the markets for high-grade alcohol by extending the value chain to allow for higher margin sales to consumers. ● Execute upon awarded grants at the Keyes Plant that improve operational efficiencies resulting in lower cost, lower carbon demands, and overall margin improvement. ● Operate the existing biogas digesters to capture and monetize RNG as well as continue to build new dairy digesters and extend the existing pipeline in order to capture high value California LCFS credits and RFS RINs. ● Raise the funds necessary to construct and operate the Riverbank Cellulosic Ethanol Facility using the licensed technology from LanzaTech and InEnTec Technology to generate federal and state carbon credits available for ultra-low carbon fuels utilizing lower cost, non-food advanced feedstocks to significantly increase margins. ● Secure higher fuel shipment volumes from 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 offering for $50.8 million from the EB-5 Phase II funding, or by vendor financing arrangements. |
1. Nature of Activities and S_2
1. Nature of Activities and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of Activities | Headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis, “Aemetis,” the “Company,” “we,” “our” or “us”) is an advanced renewable fuels and biochemicals company focused on the acquisition, development and commercialization of innovative technologies that replace traditional petroleum-based products through the conversion of second-generation ethanol and biodiesel plants into advanced biorefineries. Founded in 2006, we own and operate a 65 million gallon per year renewable ethanol facility (“Keyes Plant”) in California’s Central Valley, near Modesto, where we manufacture and produce ethanol, high-grade alcohol, wet distillers’ grains (“WDG”), condensed distillers solubles (“CDS”), and distillers’ corn oil (“DCO”). We also own and operate a 50 million gallon per year renewable chemical and advanced fuel production facility (“Kakinada Plant”) on the East Coast of India that produces high quality distilled biodiesel and refined glycerin for customers in India and Europe. We operate a research and development laboratory to develop efficient conversion technologies using waste feedstocks to produce biofuels and biochemicals. Additionally, we own a partially completed plant in Goodland, Kansas (the “Goodland Plant”) through our subsidiary Goodland Advanced Fuels, Inc., (“GAFI”), which was formed to acquire the Goodland Plant. On December 31, 2019 we exercised an option to acquire all capital stock of GAFI for $10 and consolidated assets, liabilities, and equity of GAFI as a wholly-owned subsidiary from December 31, 2019. Prior to December 31, 2019, GAFI activity is shown as non-controlling interest in the consolidated statements of operations. We also lease a site in Riverbank, California, near the Keyes Plant, where we plan to utilize biomass-to-fuel technology that we have licensed from LanzaTech Technology (“LanzaTech”) and InEnTec Technology (“InEnTec”) to build a cellulosic ethanol production facility (the “Riverbank Cellulosic Ethanol Facility”) capable of converting local California surplus biomass – principally agricultural orchard waste – into ultra-low carbon renewable cellulosic ethanol (the “Riverbank Project”). By producing ultra-low carbon renewable cellulosic ethanol, we expect to capture higher value D3 cellulosic renewable identification numbers (“RINs”) and California Low Carbon Fuel Standard (“LCFS”) credits. In December 2018, we acquired a 5.2-acre parcel of land for the construction of a gas-to-liquid CO2 production facility by Messer. Aemetis sells carbon dioxide (“CO2”) produced at the Keyes Plant (the “CO2 Project”) to Messer for conversion and sale into the food processing, beverage, and technology sectors. The Aemetis portion of the CO2 Project construction was completed in January 2020, and Messer completed construction on their portion in April 2020. We commenced operations in late April 2020, and started recognizing revenue from this project in the second quarter of 2020. In 2018, we formed Aemetis Biogas, LLC (“ABGL”) to construct a cluster of anaerobic biogas digesters at local dairies near the Keyes Plant (the “Biogas Project”) to produce ultra-low carbon renewable natural gas (“RNG”) for use as transportation fuel. Construction of the first two dairy digesters and pipeline in the cluster were completed and commissioned during the third quarter of 2020. ABGL has signed participation agreements or fully executed leases with 17 local dairies near the Keyes Plant to build anerobic digesters to capture methane gas from manure lagoons at such dairies, which would otherwise be released into the atmosphere. We plan to capture methane-rich biogas from multiple dairies and convey the gas via a private underground pipeline to a centralized location at our Keyes Plant, where we will remove impurities in the gas and convert it into RNG for any number of applications including injecting into the local utility pipeline operated by PG&E, operating a renewable compressed natural gas (“RCNG”) truck loading station that will service local trucking fleets to displace diesel fuel, or converting to clean electricity. The biogas can also be used as energy in our Keyes Plant to displace petroleum-based natural gas. We believe the environmental and economic benefits of the Biogas Project are potentially significant due to dairy biogas having a negative carbon intensity (“CI”) under the California LCFS. The biogas produced by ABGL is expected to also receive D3 RINs under the federal Renewable Fuel Standard (“RFS”). On March 18, 2020, in order to address a supply shortage of hand sanitizer during the worldwide COVID-19 pandemic, the US Treasury Tobacco and Alcohol Tax and Trade Bureau (“TTB”) provided emergency waivers allowing fuel ethanol plants to produce high-grade alcohol for use in the production of hand sanitizer. Concurrently, during the first week of April 2020, Aemetis applied for and was approved by the TTB as a Distilled Spirits Producer (“DSP”), which would allow the Company to produce, in addition to fuel ethanol, high-grade alcohol for sanitizer and other health care and sanitary products, as well as industrial alcohol and potable alcohol for beverage spirits once the temporary waiver period expires. Accordingly, Aemetis began supplying high-grade alcohol for the production of hand sanitizer. Aemetis has also implemented a series of capital projects at the Keyes facility that will ultimately enable the production of US Pharmacopeia (“USP”) grade alcohol for sale into these key consumer and industrial markets. During June 2020, Aemetis renamed Biofuels Marketing, Inc. as Aemetis Health Products, Inc., and began a sales and marketing strategy of blending, bottling and selling hand sanitizer into bulk, retail branded, and white label markets. Additionally, Aemetis Health Products, Inc. is developing sales and marketing channels for other personal protective equipment, where and when those opportunites arise. |
Basis of Presentation and Consolidation | These consolidated financial statements include the accounts of Aemetis. Additionally, we consolidate all entities in which we have a controlling financial interest either directly or by option to acquire the interest. A controlling financial interest is usually obtained through ownership of a majority of the voting interests. However, an enterprise must consolidate a variable interest entity (“VIE”) if the enterprise is the primary beneficiary of the VIE, even if the enterprise does not own a majority of the voting interests. The primary beneficiary is the party that has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Prior to December 31, 2019, GAFI was consolidated into the financial statements as a VIE. On December 31, 2019, we exercised an option to acquire all capital stock of GAFI for $10 and consolidated assets, liabilities, and equity of GAFI into the accounts of Aemetis from December 31, 2019 forward. The accompanying consolidated condensed balance sheet as of September 30, 2020, the consolidated condensed statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and 2019, the consolidated condensed statements of cash flows for the nine months ended September 30, 2020 and 2019, and the consolidated condensed statements of stockholders’ deficit for the three and nine months ended September 30, 2020 and 2019 are unaudited. The consolidated condensed balance sheet as of December 31, 2019 was derived from the 2019 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the 2019 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2019. The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of Company’s management, the unaudited interim consolidated condensed financial statements for the three and nine months ended September 30, 2020 and 2019 have been prepared on the same basis as the audited consolidated statements as of December 31, 2019 and reflect all adjustments, consisting primarily of normal recurring adjustments, necessary for the fair presentation of its statement of financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, 2020 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, high-grade alcohol and related co-products in North America, and biodiesel and refined glycerin in India pursuant to supply agreements and purchase order contracts. We assessed the following criteria under the ASC 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: During the first quarter of 2020, Aemetis began selling high-grade alcohol for consumer applications directly to customers on the West Coast and Midwest using a variety of payment terms. These agreements and terms were evaluated according to ASC 606 guidance and such revenue is recognized upon satisfaction of the performance obligation by delivery of the product based on the terms of the agreement. Sales of high-grade alcohol represented 2% and 18% of revenue for three and nine months ended September 30, 2020, respectively. The below table shows our sales in North America by product category: North America (in thousands) For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Ethanol and high-grade alcohol sales $ 24,825 $ 27,456 $ 86,387 $ 84,453 Wet distiller's grains sales 7,143 8,783 22,983 26,119 Other sales 1,163 1,581 4,856 3,370 $ 33,131 $ 37,820 $ 114,226 $ 113,942 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, we assessed principal versus agent criteria as we buy corn as feedstock in producing ethanol from our working capital partner J.D. Heiskell and sell all WDG and corn oil produced in this process to J.D. Heiskell through A.L. Gilbert. We sold all ethanol we produced to J.D.Heiskell until May 13, 2020. We consider the purchase of corn as a cost of goods sold and the sale of ethanol upon transfer to the common carrier as revenue on the basis that (i) we control and bear the risk of gain or loss on the processing of corn which is purchased at market prices into ethanol and (ii) we have legal title to the goods during the processing time. The pricing for both corn and ethanol is set independently. Revenues from sales of ethanol and its co-products are billed net of the related transportation and marketing charges. Transportation charges are accounted for in cost of goods sold and marketing charges are accounted for in sales, general and administrative expense. Transportation and marketing charges are known within days of the transaction and are recorded at the actual amounts. The Company has elected to adopt an accounting policy under which these charges have been treated as fulfillment activities provided after control has transferred. As a result, these charges are recognized in cost of goods sold and selling, general and administrative expenses, respectively, when revenue is recognized. Revenues are recorded at the gross invoiced amount. Hence, we are the principal in North America sales scenarios where our customer and vendor may be the same. India: The below table shows our sales in India by product category: India (in thousands) For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Biodiesel sales $ 7,325 $ 17,057 $ 12,267 $ 32,201 Refined glycerin sales 449 951 909 2,186 PFAD sales - - 774 - Other sales 18 1,561 51 1,567 $ 7,792 $ 19,569 $ 14,001 $ 35,954 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 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. |
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 on net terms. Accounts receivables consist of product sales made to large creditworthy customers. Trade accounts receivable are presented at original invoice amount, net of any allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivables are charged against the allowance for doubtful accounts once un-collectability has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate, additional allowances may be required. We reserved $647 thousand and none in the allowances for doubtful accounts as of September 30, 2020 and December 31, 2019, respectively. |
Notes Receivable | Notes Receivable. |
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. |
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 buildings, furniture, machinery, equipment, land, and the Keyes Plant, Goodland Plant and Kakinada Plant. The Goodland Plant is partially completed and is not ready for operation. The first two dairy digesters and pipeline in the Biogas Project were completed, commissioned and began to be depreciated during the third quarter of 2020. The CO2 Project was completed and commenced operations in the second quarter of 2020. Accordingly, any assets under the CO2 Project began being depreciated starting in May 2020. It is the Company’s policy to depreciate capital assets over their estimated useful lives using the straight-line method. The Company evaluates the recoverability of long-lived assets with finite lives in accordance with ASC Subtopic 360-10-35 Property Plant and Equipment—Subsequent Measurements, |
California Energy Commission Technology Demonstration Grant | The Company has been awarded and completed the demonstration project associated with the $825 thousand matching grant program from the California Energy Commission (“CEC”) Natural Resources Agency to optimize the effectiveness of technologies to break down biomass to produce cellulosic ethanol. The Company has received all of the awarded grant proceeds as of September 30, 2020. The project focused on the deconstruction and conversion of sugars liberated from California-relevant feedstocks and then converting the sugars to ethanol. The Company receives these funds as reimbursement for actual expenses incurred. Due to the uncertainty associated with the expense approval process under the grant program, the Company recognizes the grant as a reduction of the expenses in the period when approval is received. |
California Department of Food and Agriculture Dairy Digester Research and Development Grant | The Company has been awarded $3.2 million in matching grants from the California Department of Food and Agriculture (“CDFA”) Dairy Digester Research and Development program. The CDFA grant reimburses the Company for costs required to permit and construct two of the Company’s biogas capture systems under contract with central California dairies. The Company received $2.7 million as of September 30, 2020 as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognizes the grant as a reduction of the costs in the period when approval is received. |
California Energy Commission Low Carbon Advanced Ethanol Grant Program | In May 2019, the Company was awarded the right to receive reimbursements from the CEC 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 the CEC funds under the CEC Reimbursement Program for actual expenses incurred up to $5.0 million as long as the Company makes the minimum matching contribution. Given that the Company has not made the minimum matching contribution, the grant for reimbursement of capital expenditures of $256 thousand received during the third quarter of 2020 and of $1.36 million received during the third quarter of 2019 were recorded as other long term liabilities as of September 30, 2020 and December 31, 2019. |
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, 2020 and 2019: As of September 30, 2020 September 30, 2019 Series B preferred (post split basis) 132 132 Common stock options and warrants 5,846 3,910 Debt with conversion feature at $30 per share of common stock 1,294 1,255 Total number of potentially dilutive shares excluded from the diluted net income (loss) per share calculation 7,272 5,297 |
Comprehensive Loss | ASC 220 Comprehensive Income requires that an enterprise report, by major components and as a single total, the change in its net assets from non-owner sources. The Company’s other comprehensive income (loss) and accumulated other comprehensive loss consists solely of cumulative currency translation adjustments resulting from the translation of the financial statements of its foreign subsidiary. |
Foreign Currency Translation/Transactions | Assets and liabilities of the Company’s non-U.S. subsidiary that operates in a local currency environment, where that local currency is the functional currency, are translated into U.S. dollars at exchange rates in effect at the balance sheet date and the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at average exchange rates during the year. Transactional gains and losses from foreign currency transactions are recorded in other (income) loss, net. |
Operating Segments | Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Aemetis recognized two reportable geographic segments: “North America” and “India.” The “North America” operating segment includes the Keyes Plant, the Riverbank Cellulosic Ethanol Facility, the Biogas Project, the Goodland Plant and the research and development facility in Minnesota. The “India” operating segment includes the Company’s 50 million gallon per year capacity Kakinada Plant in India, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. |
Fair Value of Financial Instruments | Financial instruments include accounts receivable, accounts payable, accrued liabilities, current and non-current portion of subordinated debt, notes payable, 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. |
Debt Modification Accounting | We have evaluated the 1% extension fee for extending the maturity date of the Third Eye Capital Notes to April 1, 2021 and Amendment No. 17 providing an option to extend to April 1, 2022 and certain waivers for financial covenants, in accordance with ASC 470-60 Troubled Debt Restructuring. For additional information regarding the 1% extension fee and Amendment No. 17, please see “Part I, Item 1. Financial Statements – Note 4. Debt.” |
Convertible Instruments | The Company evaluates the impacts of convertible instruments based on the underlying conversion features. Convertible instruments are evaluated for treatment as derivatives that could be bifurcated and recorded separately. Any beneficial conversion feature is recorded based on the intrinsic value difference at the commitment date. |
Recently Issued Accounting Pronouncements | For a complete summary of the Company’s significant accounting policies, please refer to the Company’s audited financial statements and notes thereto for the years ended December 31, 2019 and 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 12, 2020. There were no new accounting pronouncements issued applicable to the Company during the three and nine months ended September 30, 2020. |
1. Nature of Activities and S_3
1. Nature of Activities and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Disaggregation of revenue | The below table shows our sales in North America by product category: North America (in thousands) For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Ethanol and high-grade alcohol sales $ 24,825 $ 27,456 $ 86,387 $ 84,453 Wet distiller's grains sales 7,143 8,783 22,983 26,119 Other sales 1,163 1,581 4,856 3,370 $ 33,131 $ 37,820 $ 114,226 $ 113,942 The below table shows our sales in India by product category: India (in thousands) For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Biodiesel sales $ 7,325 $ 17,057 $ 12,267 $ 32,201 Refined glycerin sales 449 951 909 2,186 PFAD sales - - 774 - Other sales 18 1,561 51 1,567 $ 7,792 $ 19,569 $ 14,001 $ 35,954 |
Schedule of dilutive securities | As of September 30, 2020 September 30, 2019 Series B preferred (post split basis) 132 132 Common stock options and warrants 5,846 3,910 Debt with conversion feature at $30 per share of common stock 1,294 1,255 Total number of potentially dilutive shares excluded from the diluted net income (loss) per share calculation 7,272 5,297 |
2. Inventories (Tables)
2. Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | As of September 30, 2020 December 31, 2019 Raw materials $ 1,678 $ 2,566 Work-in-progress 1,365 1,455 Finished goods 1,773 2,497 Total inventories $ 4,816 $ 6,518 |
3. Property, Plant and Equipm_2
3. Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | September 30, 2020 December 31, 2019 Land $ 4,088 $ 4,104 Plant and buildings 96,089 83,139 Furniture and fixtures 1,166 1,094 Machinery and equipment 4,389 4,252 Construction in progress 18,612 12,571 Property held for development 15,408 15,408 Finance lease right of use assets 2,988 - Total gross property, plant & equipment 142,740 120,568 Less accumulated depreciation (39,690 ) (36,342 ) Total net property, plant & equipment $ 103,050 $ 84,226 |
Depreciation of property, plant, and equipment | Years Plant and buildings 20 - 30 Machinery and equipment 5 - 10 Furniture and fixtures 3 - 5 |
4. Debt (Tables)
4. Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of debt | September 30, 2020 December 31, 2019 Third Eye Capital term notes $ 7,039 $ 7,024 Third Eye Capital revolving credit facility 75,605 62,869 Third Eye Capital revenue participation term notes 11,824 11,794 Third Eye Capital acquisition term notes 26,313 25,518 Third Eye Capital promissory note 1,840 2,815 Cilion shareholder seller notes payable 6,236 6,124 Subordinated notes 12,315 11,502 Term loan on Equipment purchase 5,652 - EB-5 promissory notes 42,965 41,932 PPP loans 1,134 - Unsecured working capital loans 2,540 2,631 GAFI Term and Revolving loans 32,883 30,216 Total debt 226,346 202,425 Less current portion of debt 59,336 22,740 Total long term debt $ 167,010 $ 179,685 |
Maturities of long-term debt | Twelve months ended September 30, Debt Repayments 2021 $ 59,336 2022 145,530 2023 13,435 2024 5,172 2025 2,436 Thereafter 1,247 Total debt 227,156 Debt issuance costs (810 ) Total debt, net of debt issuance costs $ 226,346 |
5. Commitments and Contingenc_2
5. Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease expense and sublease income | Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Operating lease cost Operating lease expense $ 201 $ 219 $ 561 $ 543 Short term lease expense 75 18 104 71 Variable lease expense 29 31 89 80 Sub lease income - (50 ) - (118 ) Total operating lease cost $ 305 $ 218 $ 754 $ 576 Finance lease cost Amortization of right-of-use assets $ 94 $ - $ 155 $ - Interest on lease liabilities 26 - 44 - Total finance lease cost $ 120 $ - $ 199 $ - |
Cash paid for amounts included in the measurement of lease liabilities | Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Operating cash flows used in operating leases $ 131 185 $ 448 $ 517 Operating cash flows used in finance leases 26 - 44 - Financing cash flows used in finance leases 435 - $ 1,137 - |
Supplemental non-cash flow information related to right-of-use asset and lease liabilities | Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Operating leases Accretion of the lease liability $ 101 $ 31 $ 160 $ 107 Amortization of right-of-use assets 100 151 402 438 Weighted Average Remaining Lease Term Operating leases 7.1 years Finance leases 3.2 years Weighted Average Discount Rate Operating leases 13.9 % Finance leases 5.2 % |
Supplemental balance sheet information | As of September 30, 2020 December 31, 2019 Operating leases Operating lease right-of-use assets $ 2,843 $ 557 Current portion of operating lease liability 286 377 Long term operating lease liability 2,662 200 Total operating lease liabilities $ 2,948 $ 577 Finance leases Property and equipment, at cost $ 2,988 $ - Accumulated depreciation (155 ) - Property and equipment, net $ 2,833 $ - Other current liability 621 - Long term other liability 1,270 - Total finance lease liabilities $ 1,891 $ - |
Maturities of operating and finance lease liabilities | Twelve months ended September 30, Operating leases Finance leases 2021 $ 666 $ 704 2022 613 577 2023 569 494 2024 586 290 2025 603 - Thereafter 1,698 - Total lease payments 4,735 2,065 Less imputed interest (1,787 ) (174 ) Total lease liability $ 2,948 $ 1,891 |
7. Stock-Based Compensation (Ta
7. Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
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, 2019 147 3,746 $ 1.38 Authorized 2,342 - - Granted (2,320 ) 2,320 0.69 Exercised - (232 ) 1.27 Forfeited/expired 83 (83 ) 0.76 Balance as of September 30, 2020 252 5,751 $ 1.12 |
Schedule of weighted average fair value calculations for options | For the nine months ended September 30, Description 2020 2019 Dividend-yield 0 % 0 % Risk-free interest rate 0.94 % 2.38 % Expected volatility 88.15 % 88.54 % Expected life (years) 6.55 6.55 Market value per share on grant date $ 0.69 $ 0.78 Fair value per share on grant date $ 0.52 $ 0.59 |
8. Agreements (Tables)
8. Agreements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [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, 2020 2019 2020 2019 Ethanol sales $ - $ 27,456 $ 26,049 $ 84,453 Wet distiller's grains sales 7,143 8,783 22,983 26,119 Corn oil sales 827 934 2,806 2,586 Corn purchases 25,513 30,446 77,268 90,426 Accounts receivable 161 1,066 161 1,066 Accounts payable 1,978 2,484 1,978 2,484 |
9. Segment Information (Tables)
9. Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment information | Three months ended September 30, 2020 Three months ended September 30, 2019 North America India Total Consolidated North America India Total Consolidated Revenues $ 33,131 $ 7,792 $ 40,923 $ 37,820 $ 19,569 $ 57,389 Cost of goods sold 33,534 6,618 40,152 37,990 15,417 53,407 Gross (loss) profit (403 ) 1,174 771 (170 ) 4,152 3,982 Other Expenses Research and development expenses 37 - 37 37 - 37 Selling, general and administrative expenses 4,340 223 4,563 2,716 1,813 4,529 Interest expense 6,461 9 6,470 6,293 49 6,342 Accretion of Series A preferred units 1,765 - 1,765 589 - 589 Other (income) expense 155 (2 ) 153 (265 ) (24 ) (289 ) Income (loss) before income taxes $ (13,161 ) $ 944 $ (12,217 ) $ (9,540 ) $ 2,314 $ (7,226 ) Capital expenditures $ 6,187 $ 113 $ 6,300 $ 3,664 $ 351 $ 4,015 Depreciation 1,085 168 1,253 942 161 1,103 For the nine months ended September 30, 2020 For the nine months ended September 30, 2019 North America India Total Consolidated North America India Total Consolidated Revenues $ 114,226 $ 14,001 $ 128,227 $ 113,942 $ 35,954 $ 149,896 Cost of goods sold 101,231 12,599 113,830 113,440 29,552 142,992 Gross profit 12,995 1,402 14,397 502 6,402 6,904 Other Expenses Research and development expenses 175 - 175 160 - 160 Selling, general and administrative expenses 11,206 1,342 12,548 9,972 2,743 12,715 Interest expense 19,490 44 19,534 18,805 332 19,137 Accretion of Series A preferred units 4,087 - 4,087 1,509 - 1,509 Loss contingency on litigation - - - 6,200 - 6,200 Other expense (income) 416 (23 ) 393 (228 ) (773 ) (1,001 ) Income (loss) before income taxes $ (22,379 ) $ 39 $ (22,340 ) $ (35,916 ) $ 4,100 $ (31,816 ) Capital expenditures $ 13,571 $ 1,350 $ 14,921 $ 4,249 $ 804 $ 5,053 Depreciation 3,030 485 3,515 2,883 454 3,337 Total assets by segment consist of the following: As of September 30, December 31, 2020 2019 North America $ 105,619 $ 82,990 India 16,551 16,906 Total Assets $ 122,170 $ 99,896 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Sales | $ 40,923 | $ 57,389 | $ 128,227 | $ 149,896 |
North America | ||||
Sales | 33,131 | 37,820 | 114,226 | 113,942 |
North America | Ethanol and high-grade alcohol sales | ||||
Sales | 24,825 | 27,456 | 86,387 | 84,453 |
North America | Wet distiller's grains sales | ||||
Sales | 7,143 | 8,783 | 22,983 | 26,119 |
North America | Other sales | ||||
Sales | 1,163 | 1,581 | 4,856 | 3,370 |
India | ||||
Sales | 7,792 | 19,569 | 14,001 | 35,954 |
India | Other sales | ||||
Sales | 18 | 1,561 | 51 | 1,567 |
India | Biodiesel sales | ||||
Sales | 7,325 | 17,057 | 12,267 | 32,201 |
India | Refined Glycerin sales | ||||
Sales | 449 | 951 | 909 | 2,186 |
India | PFAD sales | ||||
Sales | $ 0 | $ 0 | $ 774 | $ 0 |
1. Nature of Activities and S_5
1. Nature of Activities and Summary of Significant Accounting Policies (Details 1) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Total number of potentially dilutive shares excluded from the basic and diluted net loss per share calculation (in thousands) | 7,272 | 5,297 |
Series B preferred (post split basis) | ||
Total number of potentially dilutive shares excluded from the basic and diluted net loss per share calculation (in thousands) | 132 | 132 |
Common stock options and warrants | ||
Total number of potentially dilutive shares excluded from the basic and diluted net loss per share calculation (in thousands) | 5,846 | 3,910 |
Debt with conversion feature at $30 per share of common stock | ||
Total number of potentially dilutive shares excluded from the basic and diluted net loss per share calculation (in thousands) | 1,294 | 1,255 |
2. Inventories (Details)
2. Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,678 | $ 2,566 |
Work-in-progress | 1,365 | 1,455 |
Finished goods | 1,773 | 2,497 |
Total inventories | $ 4,816 | $ 6,518 |
2. Inventories (Details Narrati
2. Inventories (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | ||
Lower cost of market impairment | $ 300 | $ 100 |
3. Property, Plant and Equipm_3
3. Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 4,088 | $ 4,104 |
Plant and buildings | 96,089 | 83,139 |
Furniture and fixtures | 1,166 | 1,094 |
Machinery and equipment | 4,389 | 4,252 |
Construction in progress | 18,612 | 12,571 |
Property held for development | 15,408 | 15,408 |
Finance lease right of use assets | 2,988 | 0 |
Total gross property, plant & equipment | 142,740 | 120,568 |
Less accumulated depreciation | (39,690) | (36,342) |
Total net property, plant & equipment | $ 103,050 | $ 84,226 |
3. Property, Plant and Equipm_4
3. Property, Plant and Equipment (Details 1) | 9 Months Ended |
Sep. 30, 2020 | |
Plant and Buildings | Minimum | |
Depreciation (years) | 20 years |
Plant and Buildings | Maximum | |
Depreciation (years) | 30 years |
Machinery and Equipment | Minimum | |
Depreciation (years) | 5 years |
Machinery and Equipment | Maximum | |
Depreciation (years) | 7 years |
Furniture and Fixtures | Minimum | |
Depreciation (years) | 3 years |
Furniture and Fixtures | Maximum | |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 1,253 | $ 1,103 | $ 3,515 | $ 3,337 |
4. Debt (Details)
4. Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Total debt | $ 226,346 | $ 202,425 |
Less current portion of debt | 59,336 | 22,740 |
Total long term debt | 167,010 | 179,685 |
Third Eye Capital Term Notes | ||
Total debt | 7,039 | 7,024 |
Third Eye Capital Revolving Credit Facility | ||
Total debt | 75,605 | 62,869 |
Third Eye Capital Revenue Participation Term Notes | ||
Total debt | 11,824 | 11,794 |
Third Eye Capital Acquisition Term Notes | ||
Total debt | 26,313 | 25,518 |
Third Eye Capital Promissory Note | ||
Total debt | 1,840 | 2,815 |
Cilion Shareholder Seller Notes Payable | ||
Total debt | 6,236 | 6,124 |
Subordinated Notes | ||
Total debt | 12,315 | 11,502 |
Term Loan on Equipment Purchase | ||
Total debt | 5,652 | 0 |
EB-5 Promissory Notes | ||
Total debt | 42,965 | 41,932 |
PPP Loans | ||
Total debt | 1,134 | 0 |
Unsecured Working Capital Loans | ||
Total debt | 2,540 | 2,631 |
GAFI Term and Revolving Loans | ||
Total debt | $ 32,883 | $ 30,216 |
4. Debt (Details 1)
4. Debt (Details 1) $ in Thousands | Sep. 30, 2020USD ($) |
Twelve months ended June 30, | |
2021 | $ 59,336 |
2022 | 145,530 |
2023 | 13,435 |
2024 | 5,172 |
2025 | 2,436 |
Thereafter | 1,247 |
Total debt | 227,156 |
Debt issuance costs | (810) |
Total debt, net of debt issuance costs | $ 226,346 |
4. Debt (Details Narrative)
4. Debt (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
February 2019 Note | ||
Principal and interest outstanding | $ 1,800 | |
Third Eye Capital Term Notes | ||
Principal outstanding | 7,000 | |
Third Eye Capital Revolving Credit Facility | ||
Principal outstanding | 75,600 | |
Third Eye Capital Revenue Participation Term Note | ||
Principal outstanding | 11,800 | |
Third Eye Capital Acquisition Term Notes | ||
Principal outstanding | 26,300 | |
Third Eye Capital Reserve Liquidity Notes | ||
Principal outstanding | 0 | |
Cilion Shareholder Seller Notes Payable | ||
Principal outstanding | 6,200 | |
Subordinated Notes | ||
Principal and interest outstanding | 12,300 | $ 11,500 |
EB-5 Phase I Notes | ||
Principal outstanding | 35,500 | |
Interest outstanding | 3,300 | |
EB-5 Phase II Notes | ||
Principal outstanding | 4,200 | |
Unsecured Working Capital Loans | ||
Principal and interest outstanding | 0 | 2,000 |
Secunderabad Oils | ||
Principal and interest outstanding | 0 | $ 600 |
GAFI Term Loan | ||
Principal and interest outstanding | 20,700 | |
GAFI Revolving Loan | ||
Principal and interest outstanding | $ 11,400 |
5. Commitments and Contingenc_3
5. Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Lease Cost | ||||
Operating lease expense | $ 201 | $ 219 | $ 561 | $ 543 |
Short term lease expense | 75 | 18 | 104 | 71 |
Variable lease expense | 29 | 31 | 89 | 80 |
Sub lease income | 0 | (50) | 0 | (118) |
Total operating lease cost | 305 | 218 | 754 | 576 |
Finance lease cost | ||||
Amortization of right-of-use-assets | 94 | 0 | 155 | 0 |
Interest on lease liabilities | 26 | 0 | 44 | 0 |
Total finance lease cost | $ 120 | $ 0 | $ 199 | $ 0 |
5. Commitments and Contingenc_4
5. Commitments and Contingencies (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating cash flows used in operating leases | $ 131 | $ 185 | $ 448 | $ 517 |
Operating cash flows used in finance leases | 26 | 0 | 44 | 0 |
Financing cash flows used in finance leases | $ 435 | $ 0 | $ 1,137 | $ 0 |
5. Commitments and Contingenc_5
5. Commitments and Contingencies (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Accretion of the lease liability | $ 101 | $ 31 | $ 160 | $ 107 | |
Amortization of right-of-use assets | $ 100 | $ 151 | $ 402 | $ 438 | |
Weighted Average Remaining Lease Term | |||||
Operating leases | 7 years 1 month 6 days | 7 years 1 month 6 days | |||
Finance leases | 3 years 2 months 12 days | 3 years 2 months 12 days | |||
Weighted Average Discount Rate | |||||
Operating leases | 13.90% | 13.90% | |||
Finance leases | 5.20% | 5.20% | |||
Operating leases | |||||
Operating lease right-of-use assets | $ 2,843 | $ 2,843 | $ 557 | ||
Current portion of operating lease liability | 286 | 286 | 377 | ||
Long term operating lease liability | 2,662 | 2,662 | 200 | ||
Total operating lease liabilities | 2,948 | 2,948 | 577 | ||
Finance leases | |||||
Property and equipment, at cost | 2,988 | 2,988 | 0 | ||
Accumulated depreciation | (155) | (155) | 0 | ||
Property and equipment, net | 2,833 | 2,833 | 0 | ||
Other current liability | 621 | 621 | 0 | ||
Long term other liability | 1,270 | 1,270 | 0 | ||
Total finance lease liabilities | $ 1,891 | $ 1,891 | $ 0 |
5. Commitments and Contingenc_6
5. Commitments and Contingencies (Details 3) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2021 | $ 666 | |
2022 | 613 | |
2023 | 569 | |
2024 | 586 | |
2025 | 603 | |
Thereafter | 1,698 | |
Total lease payments | 4,735 | |
Less: imputed interest | (1,787) | |
Total operating lease liability | 2,948 | $ 577 |
2021 | 704 | |
2022 | 577 | |
2023 | 494 | |
2024 | 290 | |
2025 | 0 | |
Thereafter | 0 | |
Total lease payments | 2,065 | |
Less: imputed interest | (174) | |
Total finance lease liability | $ 1,891 | $ 0 |
7. Stock-Based Compensation (De
7. Stock-Based Compensation (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | ||
Shares available for grant, beginning (in thousands) | 147 | |
Shares available for grant, authorized (in thousands) | 2,342 | |
Shares available for grant, granted (in thousands) | (2,320) | (399) |
Shares available for grant, exercised (in thousands) | 0 | |
Shares available for grant, forfeited/expired (in thousands) | 83 | |
Shares available for grant, ending (in thousands) | 252 | |
Number of outstanding, beginning (in thousands) | 3,746 | |
Number of shares, granted (in thousands) | 2,320 | |
number of shares, exercised (in thousands) | (232) | |
Number of shares, forfeited/expired (in thousands) | (83) | |
Number of outstanding, ending (in thousands) | 5,751 | |
Weighted average exercise price outstanding, beginning | $ 1.38 | |
Weighted average exercise price, granted | .69 | |
Weighted average exercise price, exercised | 1.27 | |
Weighted average exercise price, forfeited/expired | .76 | |
Weighted average exercise price outstanding, ending | $ 1.12 |
7. Stock-Based Compensation (_2
7. Stock-Based Compensation (Details 1) - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | ||
Dividend-yield | 0.00% | 0.00% |
Risk-free interest rate | 0.94% | 2.38% |
Expected volatility | 88.15% | 88.54% |
Expected life (years) | 6 years 6 months 18 days | 6 years 6 months 18 days |
Market value per share on grant date | $ .6900 | $ .78 |
Weighted average fair value per share of common stock | $ .5200 | $ .5200 |
7. Stock-Based Compensation (_3
7. Stock-Based Compensation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||
Options outstanding | 5,751 | 5,751 | 3,746 | ||||||
Options vested | 3,900 | ||||||||
Stock compensation expense | $ 191 | $ 325 | $ 310 | $ 144 | $ 196 | $ 290 | $ 826 | $ 630 | |
Options granted | (2,320) | (399) | |||||||
Unrecognized compensation expense | $ 1,100 | $ 1,100 | |||||||
Unrecognized compensation expense, recognition period | 2 years |
8. Agreements (Details)
8. Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Ethanol sales | $ 0 | $ 27,456 | $ 26,049 | $ 84,453 |
Wet distiller's grains sales | 7,143 | 8,783 | 22,983 | 26,119 |
Corn oil sales | 827 | 934 | 2,806 | 2,586 |
Corn purchases | 25,513 | 30,446 | 77,268 | 90,426 |
Accounts receivable | 161 | 1,066 | 161 | 1,066 |
Accounts payable | $ 1,978 | $ 2,484 | $ 1,978 | $ 2,484 |
8. Agreements (Details Narrativ
8. Agreements (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Marketing costs | $ 600 | $ 600 | $ 1,700 | $ 1,900 |
9. Segment Information (Details
9. Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | $ 40,923 | $ 57,389 | $ 128,227 | $ 149,896 |
Cost of goods sold | 40,152 | 53,407 | 113,830 | 142,992 |
Gross (loss) profit | 771 | 3,982 | 14,397 | 6,904 |
Other Expenses | ||||
Research and development expenses | 37 | 37 | 175 | 160 |
Selling, general and administrative expenses | 4,563 | 4,529 | 12,548 | 12,715 |
Interest expense | 6,470 | 6,342 | 19,534 | 19,137 |
Accretion of Series A preferred units | 1,765 | 589 | 4,087 | 1,509 |
Loss contingency on litigation | 0 | 0 | 0 | 6,200 |
Other (income) expense | 153 | (289) | 393 | (1,001) |
Income (loss) before income taxes | (12,217) | (7,226) | (22,340) | (31,816) |
Capital expenditures | 6,300 | 4,015 | 14,921 | 5,053 |
Depreciation | 1,253 | 1,103 | 3,515 | 3,337 |
North America | ||||
Revenues | 33,131 | 37,820 | 114,226 | 113,942 |
Cost of goods sold | 33,534 | 37,990 | 101,231 | 113,440 |
Gross (loss) profit | (403) | (170) | 12,995 | 502 |
Other Expenses | ||||
Research and development expenses | 37 | 37 | 175 | 160 |
Selling, general and administrative expenses | 4,340 | 2,716 | 11,206 | 9,972 |
Interest expense | 6,461 | 6,293 | 19,490 | 18,805 |
Accretion of Series A preferred units | 1,765 | 589 | 4,087 | 1,509 |
Loss contingency on litigation | 0 | 0 | 0 | 6,200 |
Other (income) expense | 155 | (265) | 416 | (228) |
Income (loss) before income taxes | (13,161) | (9,540) | (22,379) | (35,916) |
Capital expenditures | 6,187 | 3,664 | 13,571 | 4,249 |
Depreciation | 1,085 | 942 | 3,030 | 2,883 |
India | ||||
Revenues | 7,792 | 19,569 | 14,001 | 35,954 |
Cost of goods sold | 6,618 | 15,417 | 12,599 | 29,552 |
Gross (loss) profit | 1,174 | 4,152 | 1,402 | 6,402 |
Other Expenses | ||||
Research and development expenses | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | 223 | 1,813 | 1,342 | 2,743 |
Interest expense | 9 | 49 | 44 | 332 |
Accretion of Series A preferred units | 0 | 0 | 0 | 0 |
Loss contingency on litigation | 0 | 0 | 0 | 0 |
Other (income) expense | (2) | (24) | (23) | (773) |
Income (loss) before income taxes | 944 | 2,314 | 39 | 4,100 |
Capital expenditures | 113 | 351 | 1,350 | 804 |
Depreciation | $ 168 | $ 161 | $ 485 | $ 454 |
9. Segment Information (Detai_2
9. Segment Information (Details 1) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | $ 122,170 | $ 99,896 |
North America | ||
Assets | 105,619 | 82,990 |
India | ||
Assets | $ 16,551 | $ 16,906 |
10. Related Party Transactions
10. Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Eric McAfee and McAfee Capital | |||||
Related party debt | $ 400 | $ 400 | $ 400 | ||
Related party transaction | 7 | $ 1 | 7 | $ 22 | |
Various Board Members | |||||
Related party debt | 1,200 | 1,200 | $ 1,200 | ||
Related party transaction | $ 94 | $ 96 | $ 256 | $ 294 |