AEMETIS INC

1. Nature of Activities and Summary of Significant Accounting Policies

Nature of Activities. These consolidated financial statements include the accounts of Aemetis, Inc. (formerly AE Biofuels, Inc.), a Delaware corporation, and its subsidiaries (collectively, “Aemetis” or the “Company”):

Founded in2006 and headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis referred to herein as, “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas and renewable fuels company focused on the operation, acquisition, development, and commercialization of innovative low and negative carbon intensity products and technologies that replace traditional petroleum-based products. We operate inthree reportable segments consisting of “California Ethanol,” “California Dairy Renewable Natural Gas,” and “India Biodiesel.” We have other operating segments determinednot to be reportable segments and are collectively represented by the “All Other” category. Our mission is to generate sustainable and innovative renewable fuel solutions that benefit communities and restore our environment. We do this by building a local circular bioeconomy utilizing agricultural waste to produce low and negative carbon, advanced renewable fuels that reduce greenhouse gas ("GHG") emissions and improve air quality by replacing traditional petroleum-based products.

***Basis of Presentation and Consolidation.*These consolidated financial statements include the accounts of Aemetis, Inc. and its subsidiaries. We consolidate all entities in which we have a controlling financial interest. A controlling financial interest is usually obtained through ownership of a majority of the voting interests. However, an enterprise must consolidate a variable interest entity (“VIE”) if the enterprise is the primary beneficiary of the VIE, even if the enterprise doesnot own a majority of the voting interests. The primary beneficiary is the party that has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. ABGL was assessed to be a VIE and through the Company's ownership interest in all of the outstanding common stock, the Company has been determined to be the primary beneficiary and accordingly, the assets, liabilities, and operations of ABGL are consolidated into those of the Company.

All intercompany balances and transactions have been eliminated in consolidation.

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 and revenues and expenses during the reporting period. To the extent there are material differences between these estimates and actual results, the Company’s consolidated financial statements will be affected.** **

Revenue Recognition. We derive revenue primarily from sales of ethanol and related co-products in California Ethanol segment, renewable natural gas for California Dairy Renewable Natural Gas segment, and biodiesel in India Biodiesel segment pursuant to supply agreements and purchase order contracts. We assess the following criteria under the ASC606 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.

California Ethanol: From2022 until thesecond quarter of2023, we sold our ethanol production to Murex who marketed it to oil companies as a gasoline blend stock. Starting in thesecond quarter of2023, we began selling all our ethanol to J.D. Heiskell who sells it to customers designated by us, and we have designated Murex, who continues to market the product. J.D. Heiskell doesnot charge a fee for reselling the ethanol but they receive the payments from the ultimate customer. We also buy our corn feedstock from J.D. Heiskell, and J.D. Heiskell pays us the net balance between ethanol and other product sales and our corn purchases. Our accounting (i) treats us as the purchaser/customer for corn purchases from J.D. Heiskell and we record the full purchase cost in cost-of-good sold, and (ii) treats us as the seller for ethanol and other product sales, so we treat all sales as revenue.

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Given the similarity of the individual sales transactions with J.D. Heiskell, we have assessed them as a portfolio of similar contracts. Prior to* May 25, 2023,the performance obligation was satisfied by delivery of the physical product from our finished goods tank to our customer’s contracted trucks. Effective on May 25, 2023,the performance obligation is satisfied by delivery of the physical product to our finished goods tank leased by J.D. Heiskell. The transaction price is determined based on daily market prices and quarterly contract pricing negotiated by Murex for its customers for ethanol and based on dry distillers' market and local demand by our marketing partner A.L. Gilbert Company (“A.L. Gilbert”) for WDG. The transaction price is allocated toone* performance obligation.

During the lasttwo weeks of* December 2022,we undertook an extended maintenance cycle and accelerated the implementation of several important ethanol plant energy efficiency upgrades. Our decision was partly driven by the high natural gas prices in California during the period. Furthermore, after monitoring natural gas pricing and margin profitability, we decided to extend the maintenance cycle into thefirst* andsecond quarters of2023 and restarted the plant at the end of* May 2023.*

The following table shows our sales in California Ethanol by product category:

California Dairy Renewable Natural Gas: Our facilities as of* December 31, 2023,consist ofseven* anaerobic digesters that process feedstock from dairies into biogas, a26-mile collection pipeline leading to a central upgrading hub, and an interconnect to inject the RNG into the utility natural gas pipeline for delivery to customers for use as transportation fuel. During2023, Renewable Natural Gas ("RNG") produced at ourseven operating dairy digesters was delivered to the regional natural gas pipeline. In connection with dispensing the RNG, we also began generating and inventorying sellable credits under the federal Renewable Fuel Standard (referred to as*"D3* RINs") and the California Low Carbon Fuel Standard credits ("LCFS"). We began sellingD3 RINs in thethird quarter of2023 and began selling LCFS credits in thefirst quarter of2024. We recognize revenue from sales of RNG concurrent with our production and injection into the transportation pipeline. We recognize revenue from sales ofD3 RINs and LCFS credits at the time we sell the credits.

India Biodiesel: We sell products pursuant to purchase orders (written or verbal) or by contract with governmental or international parties, in which performance is satisfied by delivery and acceptance of the physical product. Given that the contracts are sufficiently similar in nature, we have assessed these contracts as a portfolio of similar contracts as allowed under the practical expedient. Doing so doesnot result in a materially different outcome compared to individually accounting for each contract. All domestic and international deliveries are subject to certain specifications as identified in contracts. The transaction price is determined based on reference market prices for biodiesel, refined glycerin, and PFAD net of taxes. Transaction price is allocated toone performance obligation.

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

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 from Januaryto May**2023,* costs otherwise charged to cost of goods sold are reclassified to selling, general and administrative expense.

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

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

Cash, Cash Equivalents, and Restricted Cash. The Company considers all highly liquid investments with an original maturity ofthree months or less to be cash equivalents. The Company maintains cash balances at various financial institutions domestically and abroad. The Federal Deposit Insurance Corporation insures domestic cash accounts. The Company’s accounts at these institutions* mayat times exceed federally insured limits. The Company hasnot* experienced any losses in such accounts. Amounts included in restricted cash represent those required to be set aside by theAB1 andAB2 Loan Agreements with Greater Nevada Credit Union ("GNCU") and Magnolia Bank, respectively, and will be released at times specified in each agreement.

The following table reconciles cash, cash equivalents, and restricted cash reported in the Consolidated Balance Sheet to the total of the same such amounts shown in the statement of cash flows.

Accounts Receivable. * *** The Company sells all of its products to J.D. Heiskell under the J.D. Heiskell Purchasing Agreement. Ourthird-party marketing partners arrange to buy ethanol and WDG generally without requiring collateral and sell directly to customers on a variety of terms including advanced payment terms, based on the size and creditworthiness of the customer. DCO and CDS are marketed and sold to various customers under the J.D. Heiskell Purchasing Agreement. The Company sells biodiesel, glycerin, and processed natural oils to a variety of customers and* mayrequire advanced payment based on the size and creditworthiness of the customer. Usually, invoices are due within30* days on net terms. Accounts receivable mostly 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 and estimates an allowance for expected credit losses. 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.

Inventories. Finished goods, raw materials, and work-in-process inventories are valued using methods that 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. The company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold.

Other current assets. The other current assets contain input tax credits of $1.6 million, employee advance receivables of $69 thousand, and advances to customers of $1.2 million by our India biodiesel segment.

Variable Interest Entities. We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other interests in is considered a variable interest entity (VIE). We consolidate VIEs when we are the primary beneficiary. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, we assess whether any changes in our interest or relationship with the entity affect our determination of whether the entity is still a VIE and, if so, whether we are the primary beneficiary. If we arenot the primary beneficiary in a VIE, we account for the investment or other interests in a VIE in accordance with applicable GAAP.

Property, Plant and Equipment. Property, plant, and equipment are carried at cost less accumulated depreciation after assets are placed in service and are comprised primarily of buildings, furniture, machinery, equipment, land, biogas dairy digesters, and the Keyes Plant, Goodland Plant and Kakinada Plant. 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 Subtopic360-10-35 Property Plant and Equipment –Subsequent Measurement, which requires recognition of impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of asset groups* maynot* be recoverable. When events or changes in circumstances indicate that the carrying amount of an asset group* maynot* be recoverable, based on estimated undiscounted cash flows, the impairment loss would be measured as the difference between the carrying amount of the asset group and its estimated fair value. The Company hasnot recorded any impairment as of* December 31, 2023and2022*.

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Grants Received.

California Energy Commission Low-Carbon Fuel Production Program. The Company has been awarded $4.2 million in matching grants from the California Energy Commission Low-Carbon Fuel Production Program (“LCFPP”). The LCFPP grant reimburses the Company for costs to design, procure, and install processing facility to clean-up, measure and verify negative-carbon intensity dairy renewable natural gas fuel at the production facility in Keyes, California. The Company has received $3.8 million from the LCFPP as of* December 31, 2023*, as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

California Department of Food and Agriculture Dairy Digester Research and Development Grant. In2019, the Company was awarded $3.2 million in matching grants from the California Department of Food and Agriculture (“CDFA”) Dairy Digester Research and Development program. The CDFA grant reimburses the Company for costs required to permit and constructtwo of the Company’s biogas capture systems under contract with central California dairies. The Company received all the awarded grant proceeds as of thesecond quarter of2021. In* October 2020,the Company was awarded $7.8 million in matching grants from the CDFA Dairy Digester Research and Development program. The CDFA grant reimburses the Company for costs required to permit and constructsix* of the Company’s biogas capture systems under contract with central California dairies. The Company has received $6.2 million from the CDFA2020 grant program as of* December 31, 2023*, as reimbursement for actual costs incurred. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

California Energy Commission Low Carbon Advanced Ethanol Grant Program. In* May 2019,the Company was awarded the right to receive reimbursements from the California Energy Commission Community-Scale and Commercial-Scale Advanced Biofuels Production Facilities grant under the Alternative and Renewable Fuel and Vehicle Technology Program in an amount up to $5.0 million (the “CEC Reimbursement Program”) in connection with the Company’s expenditures toward the development of the Riverbank Cellulosic Ethanol Facility. To comply with the guidelines of the CEC Reimbursement Program, the Company must make a minimum of $7.9 million in matching contributions to the Riverbank project. The Company receives funds under the CEC Reimbursement Program for actual expenses incurred up to $5.0 million as long as the Company makes the minimum matching contribution. Given that the Company hasnot* made the minimum matching contribution, the California Energy Commission didnot extend the due date and wouldnot move forward with this grant program. Given the nature of the project, the grant for reimbursement of capital expenditures of $1.7 million is presented with other current liabilities as of* December 31, 2023and2022*

U.S. Department of Food and Agriculture Forest Service Grant. Aemetis Advanced Products Keyes (“AAPK”) has been awarded $245 thousand in matching grants from the U.S. Department of Food and Agriculture Forest Service (“US Forest Service”) under the Wood Innovation and Community Wood program. The grant reimburses the Company for continued development of technologies and processes to valorize forest waste for the production of cellulosic ethanol. AAPK has received $166 thousand from the US Forest Service as reimbursement for actual allowable program costs incurred through* December 31, 2023*.

California Energy Commission Grant for Solar Microgrid, DSC and Battery Backup System. Aemetis Advanced Fuels Keyes (“AAFK”) has been awarded an $8.0 million grant to design, construct and commission a grid-connected1.56 MW photovoltaic microgrid and1.25MW/2.5MWh Battery Energy Storage System integrated with an artificial intelligence-driven distributed control system (DCS). The grant requires $1.6 million in matching contribution in which the Company has made. AAFK received $4.4 million in grant funds from this program as reimbursement for actual expenditures incurred through* December 31, 2023*. Due to the uncertainty associated with the approval process under the grant program, the Company recognized the grant as a reduction of costs in the period when payment is received.

California Department of Forestry and Fire Protection Grant. AAPK has been awarded $2 million in matching grants from the CAL FIRE Business and Workforce Development Grant Program (“CAL Fire”) in* May 2022.This CAL Fire grant program reimburses AAPK for costs to design, construct, and commission a2* million gallon per year cellulosic ethanol facility that will convert conifer biomass from forested regions of the Sierra Nevada into an ultra‐low carbon biofuel derived from100% forest biomass (“CAL Fire Conversion Program”). AAPK must contribute $5.8 million in cost share contributions to the project to receive grant proceeds. AAPK has receivedno grant funds from the CAL Fire Conversion Program as reimbursement for actual costs through* December 31, 2023*.

California Department of Forestry and Fire Protection Grant. AAPK has been awarded $500 thousand in grants from CAL Fire in* May 2022.This CAL Fire grant program reimburses AAPK for costs to advance a new‐to‐the world technology that circumvents current limitations surrounding the extraction of cellulosic sugars by pioneering a novel route for deconstructing woody biomass using ionic liquids (“CAL Fire Extraction Program”). AAPK has receivedno grant funds from the CAL Fire Extraction Program as reimbursement for actual costs through December 31, 2023*.

U.S. Forest Service Community Wood Grant. Aemetis Advanced Products Riverbank (“AAPR”) has been awarded $642 thousand in matching grants from the U.S Forest Service Wood Innovations Program (“USFS”) in* May 2022.The USFS grant program reimburses AAPR for costs to design, construct, and commission a plant to produce cellulosic ethanol using preliminary research and development in partnership with the Joint Bioenergy Institute (JBEI). USFS grant funds will be used to complete the FEL-3 design phase of the entire process, construct a biomass pretreatment unit to extract sugars at the Aemetis Riverbank site and ferment sugars into ethanol at the Keyes Plant. AAPR must contribute $2.4 million in cost share contributions to the project to receive grant proceeds. AAPK has receivedno* grant funds from the USFS grant program as reimbursement for actual costs through* December 31, 2023*.

USDA* Biofuel Producer Program Grant.* During thesecond quarter of2022, a grant in the amount of $14.2 million was received from the USDA’s Biofuel Producer Program, created as part of the CARES Act, to compensate biofuel producers who experienced market losses due to the COVID-19 pandemic. This was recorded in the other expense (income) section of the Consolidated Statements of Operations and Comprehensive Loss.

California Energy Commission Grant for Mechanical Vapor Recompression System. Aemetis Advanced Fuels Keyes (“AAFK”) has been awarded a $6.0 million grant to design, construct and commission a mechanical vapor recompression (MVR) system. The additional evaporation stages will eliminate natural gas consumption and related greenhouse gas emissions in the evaporation portion of the process by installing metering equipment and software to monitor and optimize the plant’s energy consumption. The MVR system will compress vapor to a higher pressure and temperature so that it can be recycled multiple times as steam heat in the evaporation process, which will dramatically reduce natural gas use. The grant requires $5.3 million in matching contributions. AAFK has receivedno grant funds from this program as reimbursement for actual expenditures incurred through* December 31, 2023*. Due to the uncertainty associated with the approval process under the grant program, the Company will recognize future grant proceeds received as a reduction of costs in the period when payment is received.

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PG&EA2313* Pipeline Interconnection Recovery Grant.* In* February 2023,*Aemetis Biogas received $5 million from Pacific Gas and Electric (PG&E) as part of qualification under a California Public Utility Commission Biomethane incentive program reimbursing actual Aemetis Biogas costs to interconnect biogas cleanup hub with PG&E utility pipeline. Incentive payment earned after validating renewable natural gas flowed into PG&E interconnect successfully for required period of time.

Pacific Gas and Electric SEM Manufacturer’s Incentive Program. During thefourth quarter of2022, AAFK received $374 thousand in PG&E SEM Incentive Program reimbursements for installing more efficient beer feed heat exchangers. Third party consultants verified the reduction in natural gas usages from the new heat exchangers to obtain the incentive program funds.

Investment Tax Credits. **In thethird quarter of2023, the Company sold to athird-party purchaser certain transferrable Investment Tax Credits (ITCs) that had been generated by the Company from its investments in the California Dairy Renewable Natural Gas segment. The Company accounted for the ITC sale in accordance with ASC740 by electing the flow-through method. The net value of the tax credits sale of $55.2 million is recorded as an income tax benefit in the income statement for the period ending* December 31, 2023.The cash was received in October 2023,*and it was used to make certain principal and interest payments on revolving notes and Series A preferred financing.

Income Taxes.*** The Company recognizes income taxes in accordance with ASC740 Income Taxesusing an asset and liability approach. This approach requires the recognition of taxes payable or refundable for the current year and deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns. The measurement of current and deferred taxes is based on provisions of enacted tax law. ASC740* provides for recognition of deferred tax assets if the realization of such assets is more likely thannot to occur. Otherwise, a valuation allowance is established for the deferred tax assets, which* may**not* be realized. As of* December 31, 2023and2022*, the Company recorded a full valuation allowance against its U.S. federal and state net deferred tax assets due to operating losses incurred since inception. Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets were fully offset by a valuation allowance.

The Company is subject to income tax audits by the respective tax authorities in all of the jurisdictions in which it operates. The determination of tax liabilities in each of these jurisdictions requires the interpretation and application of complex and sometimes uncertain tax laws and regulations. The recognition and measurement of current taxes payable or refundable and deferred tax assets and liabilities requires that the Company make certain estimates and judgments. Changes to these estimates or a change in judgment* may*have a material impact on the Company’s tax provision in a future period.

In2018, the Company adopted certain tax accounting policies related to the new global intangible low-taxed income (“GILTI”) provisions under the Tax Cuts and Jobs Act such that the Company will: (1) account for all GILTI related book-tax differences as period costs and (2) use the Incremental Cash Tax Savings approach in evaluating its valuation allowance assessment related to the GILTI inclusion.

Basic and Diluted Net Income (Loss) per Share. Basic net loss per share is computed by dividing net income or loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share reflects the dilution of common stock equivalents such as options, convertible preferred stock, debt and warrants to the extent the impact is dilutive. As the Company incurred a net loss for the years ended* December 31, 2023and2022*, potentially dilutive securities have been excluded from the diluted net loss per share computations as their effect would be anti-dilutive.

The following table shows the number of potentially dilutive shares excluded from the diluted net loss per share calculation as of* December 31, 2023and2022*:

Comprehensive Loss. ASC220 Comprehensive Incomerequires that an enterprise report, by major components and as a single total, the change in its net assets from non-owner sources. The Company’s other comprehensive loss and accumulated other comprehensive loss consists solely of cumulative currency translation adjustments resulting from the translation of the financial statements of our India subsidiary. The investment in this subsidiary is considered indefinitely invested overseas, and as a result, deferred income taxes arenot recorded related to the currency translation adjustments.

**Foreign Currency Translation/Transactions. **The Company’s India subsidiary operates in a local currency environment where the local currency is the functional currency used for transactions and accounting. Assets and liabilities of that subsidiary 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.

Fair Value of Financial Instruments. **Financial instruments include accounts receivable, accounts payable, accrued liabilities, current and non-current portion of subordinated debt, notes payable, Series A preferred units, and long-term debt. Due to the unique terms of our notes payable and long-term debt and the financial condition of the Company, the fair value of the debt isnot readily determinable. The fair value determined using level3 inputs of all other current financial instruments is estimated to approximate carrying value due to the short-term nature of these instruments.

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Share Based Compensation. We recognize share-based compensation expense in accordance with ASC718 *Stock Compensation,*which requires the Company to recognize expenses related to the estimated fair value of the Company’s share-based compensation awards over the vesting period, adjusted to reflect only those shares that are expected to vest.

Commitments and Contingencies. **We record and/or disclose commitments and contingencies in accordance with ASC450* Contingencies*. ASC450 applies to an existing condition, situation, or set of circumstances involving uncertainty as to possible loss that will ultimately be resolved whenone or more future events occur or fail to occur.

**Convertible Instruments. ** The Company evaluates the impacts of convertible instruments based on the underlying conversion features. Convertible Instruments are evaluated for treatment as derivatives that could be bifurcated and recorded separately.

***Debt Issuance Costs.***The Company records debt issuance costs related to specific incremental costs directly attributable to issuing, modifying, or extending a debt instrument. The debt issuance costs are reported as an adjustment to the carrying amount of the debt. The debt issuance costs are amortized using the interest rate method over the life of the debt instrument.

**Troubled Debt Restructuring Accounting. **The evaluation for troubled debt restructuring includes assessing whether the creditor granted a concession. To determine this, we calculate the post-restructuring effective interest rate by projecting cash flows on the new terms and calculating a discount rate equal to the carrying amount of pre-restructuring debt and comparing this calculation to the terms of prior amendments. If the post restructuring effective interest rate is less than the prior terms effective interest rate, we assess this as having been granted a concession. We then apply troubled debt restructuring accounting to any debt in which the creditor granted a concession.

Debt Modification Accounting.**The Company evaluates amendments to its debt in accordance with ASC540-50 Debt–* Modification and Extinguishments* for modification and extinguishment accounting. This evaluation includes comparing the net present value of cash flows of the new debt to the old debt to determine if changes greater than10 percent occurred. In instances where the net present value of future cash flows changed more than10 percent, the Company applies extinguishment accounting and determines the fair value of its debt based on factors available to the Company.

Recently Adopted Accounting Pronouncements.

In* November 2023,the FASB issued ASU2023*-07, Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose significant segment expenses that are regularly provided to the CODM. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC280 on an interim and annual basis. The amendments are effective for the Company’s annual periods beginning* January 1, 2024,and for interim periods within fiscal years beginning January 1, 2025.Retrospective application is required, with early adoption permitted. The Company is currently evaluating the impact ASU2023*-07 will have on its consolidated financial statements.

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for the Company’s annual periods beginning* January 1, 2025,with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is currently evaluating the impact ASU2023*-09 will have on its consolidated financial statements.

There wereno other recently issued and effective authoritative guidance that are expected to have a material impact on the Company’s Consolidated Financial Statements through the reporting date.

2. Inventories

Inventories consist of the following:

As of* December 31, 2023* and* December 31, 2022*, the Company recognized a lower of cost or net realizable valueof $58 thousand and $0.1 million respectively, related to inventory.

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3. Property, Plant and Equipment

Property, plant and equipment consist of the following:

Interest capitalized in property, plant, and equipment was $5.6 million and $11.1 million for the years ended* December 31, 2023and2022*, respectively.

Construction in progress includes costs for the biogas construction projects (dairy digesters andpipeline), Riverbank projects (sustainable aviation fuel and renewable diesel plant as well as carbon capture characterization well), and energy efficiency projects at the Keyes Plant. Property held for development is the partially completed Goodland Plant which isnot ready for operation. Depreciation will begin for each project when the project is finalized and placed into service. Depreciation on the components of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:

The Company recorded depreciation expense of approximately $6.9 million and $5.5 million respectively, for the years ended* December 31, 2023and2022*.

4. Debt

Debt consists of the notes from the Company’s senior lender, Third Eye Capital, acting as Agent for the Purchasers (Third Eye Capital), other working capital lenders and subordinated lenders as follows:

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Third Eye Capital Note Purchase Agreement

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

On* March 8, 2022,Third Eye Capital agreed to the Limited Waiver and AmendmentNo.* 22 to the Note Purchase Agreement (“AmendmentNo. 22”) to: (i) provide a waiver for the Blocked Account Agreement Violation in which the Borrowers failed to deliver Blocked Account Control Agreements by* December 31, 2021, (ii) provide for a waiver for the Subordinated Debt Violation, in which the Company made a repayment to a Subordinated Debt lender, and (iii) provide for a waiver of the consolidated unfunded capital expenditures covenant for the quarters through December 31, 2021.*As consideration for such waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million in cash.

On* May 11, 2022,Third Eye Capital agreed to the Limited Waiver and AmendmentNo.* 23 to the Note Purchase Agreement (“AmendmentNo. 23”) to: (i) provide a waiver for the Blocked Account Agreement Violation in which the Borrowers failed to deliver Blocked Account Control Agreements by* March 31, 2022, (ii) provide for a waiver of the ratio of note indebtedness covenant for the quarter ended March 31, 2023and (iii) provide for a waiver of the unfunded capital expenditures covenant for the quarter ended March 31, 2022*in which the Company exceeded the $100,000 capital expenditures limit. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million.

On* August**8,* 2022, Third Eye Capital agreed to Limited Waiver and AmendmentNo. 24 to the Note Purchase Agreement ("AmendmentNo. 24") to: (i) provide that the maturity date of the Third Eye Capital Notes* maybe further extended at our election to April 1, 2024in exchange for an extension fee equal to 1% of the Note Indebtedness in respect to each Note, provided that such fee maybe added to the outstanding principal balance of each Note on the effective date of each such extension, and (ii) provide for a waiver for certain covenant defaults. As consideration for such amendment and waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.3 million in cash (the "AmendmentNo.* 24 Fee").

On* March 6, 2023,Third Eye Capital agreed to the Limited Waiver and AmendmentNo.* 25 to the Note Purchase Agreement (“AmendmentNo. 25”) to: provide a waiver for the Keyes Plant Minimum Quarterly Production violation for the quarter ended* March**31,* 2023, in which the Borrowers didnot meet the10-million-gallon production requirement. As consideration for such waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million in cash.

On* May 4, 2023,Third Eye Capital agreed to the Limited Waiver and AmendmentNo.* 26 to the Note Purchase Agreement (“AmendmentNo. 26”) to: provide a waiver for (i) the Keyes Plant Minimum Quarterly Production violation for the quarter ended* June**30,* 2023, in which the Borrowers didnot meet the minimum production of 10 million gallons requirement and (ii) the lender agrees to waive the cash payment of certain fees which are required by the Third Eye Capital Notes and allowed these fees to be added to the outstanding balance of the Revolving Notes. As consideration for such waivers, the borrowers also agreed to pay Third Eye Capital an amendment and waiver fee of $0.1 million. We evaluated the terms of AmendmentNo. 26 and the maturity date extension in accordance with ASC470-50 Debt – Modification and Extinguishment and ASC470-60 Troubled Debt Restructuring and applied modification accounting treatment.

On* May 16, 2023,Third Eye Capital agreed to the Limited Waiver and AmendmentNo.* 27 to the Note Purchase Agreement (“AmendmentNo. 27”) to: (i) provide that the maturity date of the Third Eye Capital Notes* maybe further extended at our election to April 1, 2025in exchange for an extension fee equal to 1% of the Note Indebtedness in respect to each Note, provided that such fee maybe added to the outstanding principal balance of each Note on the effective date of each such extension, (ii) create a new series of Revolving Notes ("Revolving Notes Series B"), and (iii) provide for the issuance of new Revolving Notes Series B to facilitate the funding. As consideration for such waivers, the borrowers also agreed to pay Third Eye Capital an amendment fee of $0.5 million, by adding the balance to the Revolving Notes Series B and issued a warrant exercisable for 80,000 shares of the Company's common stock with an exercise price of $2.00 per each share issuable under the warrant. We evaluated the terms of AmendmentNo.* 27 in accordance with ASC470-50 Debt – Modification and Extinguishment and ASC470-60 Troubled Debt Restructuring and applied modification accounting treatment.

According to ASC470-10-45 Debt–Other Presentation Matters, if it is probable that the Company willnot be able to cure the default at measurement dates within12 months, the related debt needs to be classified as current. To assess this guidance, the Company performed ratio and cash flow analysis using its cash flow forecast and debt levels for plant to debt ratio covenant over the nextfour quarters. The Company forecasted sufficient cash flows to reduce debt levels of Third Eye Capital and meet the operations of the Company. Based on this analysis, the Company believes that it is reasonably possible that through a combination of cash flows from operations, EB-5 investments, and proceeds from the sale of common stock, it will be able to meet the ratio of the note indebtedness covenant during the relevant period. In addition, in* February 2024,Aemetis extended the maturity date byone* year to* April 1, 2025.As such, the notes are classified as long-term debt as of December 31, 2023.*

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On* March**25,* 2024, the Company and Third Eye Capital Corporation entered into a “Limited Waiver and AmendmentNo. 28 to Amended and Restated Note Purchase Agreement” (“AmendmentNo. 28”) that (i) revised the loan covenant related to Keyes plant note indebtedness to exclude certain draws on Third Eye credit facilities and to exclude the "Redemption Fee," as defined in the Amended and Restated Note Purchase Agreement, and (ii) changed the maximum ratio of Note Indebtedness to the Keyes Plant market value to120%. As consideration for AmendmentNo. 28, the Company agreed to pay Third Eye Capital an amendment fee of $0.1 million. We will evaluate the terms of AmendmentNo. 28 in accordance with ASC470-50 Debt – Modification and Extinguishment.

On* March 6, 2020,we entered into aone-year reserve liquidity facility governed by a promissory note, payable to Third Eye Capital Corporation, in the principal amount of $18 million. On March 14, 2021,Third Eye Capital agreed to increase the amount available under the reserve liquidity facility to $70.0 million. On August 9, 2021,Third Eye Capital agreed to decrease the amount available under the reserve liquidity notes governed by a promissory note to $40.0 million. On March 25, 2024,the Company and Third Eye Capital entered into a "Seventh Amended and Restated Promissory Note" that increased the amount available under the Company's reserve liquidity facility to $85 million and extended the maturity date to April 1, 2025.Borrowings under the Note are available until maturity on April 1, 2025.Interest on borrowed amounts accrues at a rate of 30% per annum, to be paid monthly in arrears, or 40% if an event of default has occurred and continues. Interest payments due maybe capitalized into the principal balance of the Note. The Company will pay a standby fee of 2% per annum of the difference between the aggregate principal outstanding under the Note and the commitment, payable monthly arrears in either cash or stock. The Note also requires the Company to pay a fee in the amount of $0.5 million in connection with a request for an advance on the Note, provided that such fee maybe added to the principal amount of the Note. The outstanding principal balance of the indebtedness evidenced by the Note, plus any accrued but unpaid interest and any other sums due thereunder, is due and payable in full on April 1, 2025.*In addition, the Company must make payments on the Note with funds received from the closing of certain new debt or equity financing or transactions, as described in the Note. The Note is secured by liens and security interests upon the property and assets of the Company.

Terms of Third Eye Capital Notes

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The Third Eye Capital Notes contain various covenants, including butnot limited to, debt to plant value ratio, minimum production requirements, and restrictions on capital expenditures. The terms of the Notes allow the lender to accelerate the maturity in the event of default that could reasonably be expected to have a material adverse effect, such as any change in the business, operations, or financial condition. The Company has evaluated the likelihood of such an acceleration event and determined such an event tonot be probable in the nexttwelve months.

The Third Eye Capital Notes are secured byfirst 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.

Third Eye Capital Revolving Credit Facility for Fuels and Carbon Lines. On* March 2, 2022,GAFI and Aemetis Carbon Capture, Inc. (“ACCI”) entered into an Amended and Restated Credit Agreement (“Credit Agreement”) with Third Eye Capital , as administrative agent and collateral agent, and the lender party thereto (the “New Credit Facility”). The New Credit Facility provides fortwo* credit facilities with aggregate availability of up to $100 million, consisting of a revolving credit facility with GAFI for up to $50 million (the “Fuels Revolving Line”) and a revolving credit facility with ACCI for up to $50 million (the “Carbon Revolving Line” and together with the Fuels Revolving Line, the “Revolving Lines”). The revolving loans made under the Fuels Revolving Line have a maturity date of* March 1, 2025and will accrue a rate of interest per annum equal to the greater of (i) the prime rate plus 6.00% and (ii)ten percent (10.0%) (14.50% per annum as of December 31, 2023*, and the revolving loans made under the Carbon Revolving Line will have a maturity date of* March 1, 2026and accrue a rate of interest per annum equal to the greater of (i) the prime rate plus 4.00% and (ii)eight percent (8.0%) (12.50% per annum as of December 31, 2023*. The revolving loans made under the Fuels Revolving Line are available for working capital purposes and the revolving loans made under the Carbon Revolving Line are available for projects that reduce, capture, use or sequester carbon with the objective of reducing carbon dioxide emissions. In connection with the New Credit Facility, the Company agreed to issue to the lender under the New Credit Facility: (i) warrants entitling the lender to purchase 50,000 shares of common stock of the Company at an exercise price equal to $10.20 per share, exercisable for afive-year period from* March 2, 2022;and (ii) warrants entitling holders thereof to purchase 250,000 shares of common stock of the Company, at an exercise price equal to $20.00 per share, exercisable for aten*-year period from* March 2, 2022.*In addition, under the Fuels Revolving Line, we issued 100,000 shares of common stock to existing note holders under the GAFI note purchase agreement. The shares were accounted at fair value and are being amortized over the life of the Fuels Revolving Line. Upon closing of the New Credit Facility, the Company drew on the revolving lines to repay $16.0 million on the higher interest rate AAFK Revolving Credit Facility, $6.1 million in property taxes, and to fund the capital projects and working capital projects.

As of* December 31, 2023*., GAFI had $33.9 million in principal and interest outstanding and $1.3 million unamortized debt issuance costs. As of* December 31, 2023*, ACCI had $25.2 million in principal and interest outstanding and $1.7 million in unamortized debt issuance costs.

Cilion shareholder seller notes payable. In connection with the Company’s merger with Cilion, Inc., (Cilion) on* July 6, 2012,the Company issued $5.0 million in notes payable to Cilion shareholders (Cilion Notes) as merger compensation, subordinated to the Third Eye Capital Notes. The Cilion Notes bear interest at 3% per annum and are due and payable after the Third Eye Capital Notes have been paid in full. As of December 31, 2023*, Aemetis Facility Keyes, Inc. had $7.0 million in principal and interest outstanding on the Cilion Notes.

Subordinated Notes. On* January 6and January 9, 2012,AAFK entered into Note and Warrant Purchase Agreements withtwo* accredited investors pursuant to which it issued $0.9 million and $2.5 million in original notes to the investors (Subordinated Notes). The Subordinated Notes mature everysix months. Upon maturity, the Subordinated Notes are renewable automatically at the Company's election forsix month periods with a fee of 10% added to the balance outstanding plus issuance of warrants exercisable at $0.01 with atwo-year term. Interest accrues at 10% per annum and is due at maturity. Neither AAFK nor Aemetis* may*make any principal payments under the Subordinated Notes until all loans made by Third Eye Capital to AAFK are paid in full.

On* January 1, 2023,the maturity ontwo* Subordinated Notes was extended until the earlier of (i)** June 30, 2023; (ii) after the occurrence of an Event of Default, including failure to pay interest or principal when due and breaches of note covenants. A $90 thousand and $250 thousand cash extension fee was paid by adding the fee to the balance of the new Subordinated Notes and 113 thousand common stock warrants were granted with a term oftwo years and an exercise price of $0.01 per share. On July1,* 2023, the maturity ontwo Subordinated Notes was extended until the earlier of (i)* December 31, 2023; (ii) after the occurrence of an Event of Default, including failure to pay interest or principal when due and breaches of note covenants. A $90 thousand and $250 thousand cash extension fee was paid by adding the fee to the balance of the new Subordinated Notes and 113 thousand common stock warrants were granted with a term oftwo years and an exercise price of $0.01 per share. The Company evaluated the January 1, 2023and July 1 2023*amendments and the refinancing terms of the notes and applied modification accounting treatment in accordance with ASC470*-50 Debt – Modification and Extinguishment.

On* January 1, 2024,the maturity ontwo* Subordinated Notes was extended until the earlier of (i)* June 30, 2024; (*ii) after the occurrence of an Event of Default, including failure to pay interest or principal when due and breaches of note covenants. A $90 thousand and $250 thousand cash extension fee was paid by adding the fee to the balance of the new Subordinated Notes and 113 thousand common stock warrants were granted with a term oftwo years and an exercise price of $0.01 per share.

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At* December 31, 2023and2022*, the Company had, in aggregate, the amount of $17.6 million and $15.9 million in principal and interest outstanding, respectively, under the Subordinated Notes.

EB-5 promissory notes. EB-5 is a U.S. government program authorized by the Immigration and Nationality Act designed to foster employment-based visa preference for immigrant investors to encourage the flow of capital into the U.S. economy and to promote employment of U.S. workers. The Company entered into a Note Purchase Agreement dated* March 4, 2011 (as further amended on January 19, 2012and July 24, 2012)with Advanced BioEnergy, LP, a California limited partnership authorized as a Regional Center to receive EB-5 investments, for the issuance of up to72* subordinated convertible promissory notes (the “EB-5 Notes”) bearing interest at2-3%. Each note was issued in the principal amount of $0.5 million and due and payable four years from the date of each note, for a total aggregate principal amount of up to $36.0 million (the “EB-5 Phase I funding”). The original maturity date on the promissory notes can be extended automatically for aone ortwo-year period initially and is eligible for furtherone-year automatic extensions as long as there isno notice of non-extension from investors and the investors’ immigration process is in progress. On* February 27, 2019,Advanced BioEnergy, LP, and the Company entered into an Amendment to the EB-5 Notes which restated the original maturity date on the promissory notes with automaticsix*-month extensions as long as the investors’ immigration processes are in progress. Except forsix early investor EB-5 Notes, the Company was granted12 months from the date of the completion of immigration process to redeem these EB-5 Notes. Given the COVID-19 situation and processing delays for immigration process, Advanced BioEnergy, LP extended the maturity dates for debt repayment based on their projected processing timings as long as the investors don’t give notice of withdrawal or I-829 gets approved. Accordingly, the notes have been recognized as long-term debt while investor notes who obtained green card approval have been classified as current debt. The EB-5 Notes are convertible afterthree years at a conversion price of $30 per share.

Advanced BioEnergy, LP arranges investments with foreign investors, who each make loans to the Keyes Plant in increments of $0.5 million. The Company has sold an aggregate principal amount of $36.0 million of EB-5 Notes under the EB-5 Phase I funding since2012 to the date of this filing. As of* December 31, 2023*, $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* December 31, 2023*, $37.9 million in principal and 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 to100* EB-5 Notes bearing interest at 3%. On* May 1, 2020SupplementNo.* 3 amended the offering documents and lowered the total eligible new EB-5 Phase II funding investors to60. Eight EB-5 investors have funded at the $0.5 million per investor amount, while52 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* maybe 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 payablefive* years from the date of each note, for a total aggregate principal amount of up to $50.8 million.

The Company has sold an aggregate principal amount of $4.0 million of EB-5 Notes under the EB-5 Phase II funding since2016 to the date of this filing. As of* December 31, 2023*,$4.0 million has been released from escrow to the Company and $46.8 million remains to be funded to escrow. As of* December 31, 2023*, $4.3 million was outstanding on the EB-5 Notes under the EB-5 Phase II funding.

Working capital loans. On* July 26, 2022,the Company entered into a short-term loan with Secunderabad Oils Limited in an amountnot* to exceed $1.88 million. On* August 1, 2022,the Company entered into a short-term loan with Leo Edibles & Fats Limited in an amountnot* to exceed $1.27 million. The loans bears interest at 18% and are payable monthly. The loans are repayable on demand by the lender or withinone year from the date of issuance. The loans are renewable, and the Company can obtain the loan to the extent they paid back. As of* December 31, 2023* and2022, the Company had $3.8 million andnone, respectively, under these agreements.

Secured loans. In thefirst quarter of2023, the Company entered into several short-term loans with IndusInd Bank and HDFC Bank. The loans are secured by fixed deposits made by the Company. The loans bear interest at rates that range from 6% to 8%. The loans mature between* November 15, 2023and May 3, 2024.As of December 31, 2023*, and* December 31, 2022,*the Company hadno balance, respectively, under these agreements.

Aemetis Biogas1 LLC Construction and Term Loans.** On* October 4, 2022,the Company entered into a Construction Loan Agreement (“AB1* Construction Loan”) with Greater Nevada Credit Union (“GNCU”). Pursuant to theAB1 Construction Loan, the lender made available an aggregate principal of $25 million, secured by all personal property collateral and real property collateral of Aemetis Biogas1 LLC. TheAB1 Construction Loan contained certain financial covenants to be measured as of the last day of each fiscal year end, and annually for the term of the loan. Effective as of* December 22, 2023,theAB1* Construction Loan was refinanced and replaced with a term loan ("AB1 Term Loan"). TheAB1 Term Loan is secured by all personal property collateral and real property collateral of Aemetis Biogas1 LLC. It bears interest at a rate of 9.25% per annum, to be adjusted everyfive years thereafter to equal thefive-year Treasury Constant Maturity Rate, as published by the Board of Governors of the Federal Reserve System as of the adjustment date, plus 5.00% or (ii) the index floor. Other material terms of the loan include: (i) payments of interest only to be paid in monthly installments beginning* January 22, 2024, (ii) payments of equal combined monthly installments of principal and interest beginning on January 22, 2025,and (iii) a maturity date of December 22, 2042,at which time the entire unpaid principal amount, together with accrued and unpaid interest thereon, shall become due and payable.AB1 Term Loan contains certain financial covenants to be measured as of the last day of each fiscal year beginning fiscal year end2025,* and annually for the term of the loan. TheAB1 Term Loan also contains other affirmative and negative covenants, representations and warranties and events of default customary for loan agreements of this nature. As of* December 31, 2023and December 31, 2022,the Company had $25.1 million andnone, respectively, outstanding under theAB1* Term Loan.

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Aemetis Biogas2 Construction Loan.** On* July 28,* 2023, the Company entered into asecond Construction and Term Loan Agreement (“AB2 Loan") with Magnolia Bank, Incorporated. Pursuant to theAB2 Loan, the lender has made available an aggregate principal amountnot to exceed $25 million. The loan is secured by all personal property collateral and real property collateral of Aemetis Biogas2 LLC. The loan bears interest at a rate of 8.75% per annum, to be adjusted everyfive years thereafter to equal thefive-year Treasury Constant Maturity Rate, as published by the Board of Governors of the Federal Reserve System as of the adjustment date, plus 5.00%. Other material terms of theAB2 Loan include: (i) payments of interest only to be paid in monthly installments beginning* August 15, 2023, (ii) payments of equal combined monthly installments of principal and interest beginning on August 15, 2025,and (iii) a maturity date of July 28, 2043,at which time the entire unpaid principal amount, together with accrued and unpaid interest thereon, shall become due and payable. TheAB2* Loan contains certain financial covenants to be measured as of the last day of each fiscal year beginning fiscal year end2025, and annually for the term of the loan. TheAB2 Loan also contains other affirmative and negative covenants, representations and warranties and events of default customary for loan agreements of this nature. As of* December 31, 2023and December 31, 2022,the Company had $16.8 million andnone, respectively, outstanding and unamortized discount issuances costs of $0.8 million andnone, respectively, under theAB2* Loan.

Financing Agreement for capital expenditures. The Company entered into an agreement with Mitsubishi Chemical America, Inc. (“Mitsubishi”) to purchase ZEBREXTM membrane dehydration equipment to conserve energy and improve operating efficiencies at the Keyes Plant. The Company also entered into a financing agreement with Mitsubishi for $5.7 million for this equipment. Payments pursuant to the financing transaction will commence after the installation date and interest will be charged based on the certain performance metrics after operation of the equipment. After an initial start-up process, process bottlenecks were encountered, and operations were suspended pending further examination and optimization.

We recorded the asset in property, plant and equipment, net and recorded the related liability of $2.0 million in short term borrowings and $3.8 million in other long-term debt, respectively as of* December 31, 2023*.

Debt repayments for the Company’s loan obligations follow:

5. Commitments and Contingencies

Leases

The Company is a party to operating leases for the Company's corporate office in Cupertino, modular offices, and laboratory facilities. We have also entered into several finance leases for mobile equipment and for the Riverbank Industrial Complex. These finance leases have a purchase option at the end of the term that we are reasonably certain we will exercise, so the leases are classified as finance leases. All of our leases have remaining term ofone year to 13 years. We made an accounting policy election to keep leases with an initial term of12 months or less off the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations as we incur the expenses.

The Company evaluates leases in accordance with ASC842 – Lease Accounting. When discount rates implicit in leases cannot be readily determined, we use the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and to measure lease liabilities and right of use (ROU) assets. The incremental borrowing rate used by the Company is 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 are used.

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The components of lease expense and sublease income is as follows:

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

Supplemental non-cash flow information related to the operating ROU asset and lease liabilities for the year ended* December 31, 2023and2022*:

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Supplemental balance sheet information related to leases was as follows:

Maturities of operating lease liabilities were as follows:

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

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The components of lease income for the years ended* December 31, 2023and2022* were as follows:

Future lease commitments to be received by the Company as of* December 31, 2023*, are as follows:

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. On July 24, 2019,the court awarded EdenIQ a portion of the fees and costs it had sought in the amount of approximately $6.2 million and the Company recorded these fees based on the court order. On May 6, 2022the parties settled the dispute for $4.8 million by entering into a settlement agreement. The settlement was paid and a gain on litigation of $1.4 million was recognized on the income statement in thesecond* quarter of2022.

The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. While the ultimate outcome of these matters isnot presently determinable, it is in the opinion of management that the resolution of outstanding claims willnot have a material adverse effect on the financial position or results of operations of the Company. Due to the uncertainties in the litigation and settlement process, it is at least reasonably possible that management's view of outcomes will change in the near term.

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

On* December 20, 2018,*ABGL entered into a Series A Preferred Unit Purchase Agreement for the sale of Series A Preferred Units to Protair-X Americas, Inc. (Purchaser), with Third Eye Capital acting as an agent for the sale of 6,000,000 preferred units of ABGL.

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

Prior to* August 8, 2022,the Preferred Unit Purchase Agreement included (i) preference payments of $0.50 per unit on the outstanding Series A Preferred Units commencing on thesecond* anniversary, with any outstanding preference payments subject to interest at10 percent per annum (ii) conversion rights for up to 1,200,000 common units or up to maximum number of 5,000,000 common units (also at aone Series A Preferred Unit toone common unit basis) if certain triggering events occur, (iii)one board seat of thethree available to be elected by Series A Preferred Unit holders, (iv) 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), (v) full redemption of the units on thesixth anniversary, (vi) minimum cash flow requirements from each digester, and (vii) $0.9 million paid as fees to the Agent from the proceeds. Until paid, the obligations of ABGL under the Preferred Unit Agreement are secured by the assets of ABGL in an amountnot to exceed the sum of (i) $30,000,000, plus (ii) all interest, fees, charges, expenses, reimbursement obligations and indemnification obligations of ABGL.

Prior to* August 8, 2022,triggering events would be deemed to 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 maybe converted increases from 1,200,000 common units to 5,000,000 common units on aone* forone basis. As of* December 31, 2023*, ABGL hasnot 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,* maybe applied for redemption payments at the increased rate of100%* instead of the initial rate of75% of free cash flows.

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From inception of the agreement to* August 8, 2022,ABGL issued 3,200,000 Series A Preferred Units in thefirst* tranche for a value of $16.0 million and also issued 2,800,000 of Series A Preferred Units in asecond tranche for a value of $14.0 million, reduced by a redemption of 20,000 Series A Preferred Units for $0.3 million.

On* August**8th,* 2022, ABGL entered into a Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Amendment") providing for: (i) a waiver of certain covenants prohibiting the internal reorganization of ABGL subsidiaries and the incurrence of indebtedness by ABGL and its subsidiaries pursuant to a USDA loan; (ii) a waiver of certain operational defaults under the PUPA; and (iii) an amendment which (a) requires ABGL to redeem all of the outstanding Series A Preferred Units by* December 31, 2022, (the “Final Redemption Date”) for $116 million; and (b) provides ABGL the right to redeem all of the outstanding Series A Preferred Units by September 30, 2022,for $106 million. The PUPA Amendment further provides the failure to redeem the Series A Preferred Units by the Final Redemption Date would constitute a triggering event requiring ABGL to enter into a credit agreement with Protair and Third Eye Capital effective as of January 1, 2023.We evaluated the terms of the PUPA Amendment and applied extinguishment accounting treatment in accordance with ASC470*-50 Debt – Modification and Extinguishment and recorded a loss on extinguishment of $49.4 million.

On* January1,* 2023, ABGL entered into the Second Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Second Amendment") providing for: (i) a waiver fornot redeeming all Series A Preferred Units by* December 31, 2022,and (ii) the right by ABGL to redeem all of the outstanding Series A Preferred Units by May31,* 2023, for an aggregate redemption price of $125 million. The PUPA Second Amendment further provides that failure to redeem the Series A Preferred Units by the redemption date, ABGL is required to enter into a credit agreement with Protair and Third Eye Capital effective as of* June1,* 2023 and maturing on* May 31, 2024,in substantially the form attached to the PUPA Second Amendment. We determined that Third Eye Capital provided a concession to redeem the preferred shares at lower effective borrowing rate than the credit agreement interest rate or prior amendment rate. In accordance with the provisions of ASC470*-60 Troubled Debt Restructuring, we applied troubled debt restructuring accounting, resulting inno gain or loss from the application of this accounting. In addition, given that the Company could turn the agreement into a credit agreement, the Company began accreting the redemption price from an initial carrying value at* December 31, 2022,of $116.0 million to $159.0 million over theseventeen* months ending* May31,* 2024.

On* May 31,2023, ABGL entered into the Third Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Third Amendment") providing: (i) a waiver to ABGL fornot redeeming all Series A Preferred Units by May31,* 2023 and (ii) the right by ABGL to redeem all of the outstanding Series A Preferred Units by* August31,* 2023, for an aggregate redemption price of $135 million. The PUPA Third Amendment further provides that failure to redeem the Series A Preferred Units by the redemption date, ABGL is required to enter into a credit agreement with Protair and Third Eye Capital effective, as of* September1,* 2023 and maturing on* August31,* 2024, in substantially the form attached to the PUPA Third Amendment. We determined that Third Eye Capital provided a concession to redeem the preferred shares at lower effective borrowing rate than the credit agreement interest rate or prior amendment rate. In accordance with the provisions of ASC470-60 Troubled Debt Restructuring, we applied troubled debt restructuring accounting, resulting inno gain or loss from the application of this accounting. In addition, given that the Company could turn the agreement into a credit agreement, the Company is accreting these tranches from a carrying value at* May31,* 2023 of $127.2 million to $171.7 million over thefifteen months ending* August31,* 2024. .

On* October 6, 2023,*ABGL partially repaid $30 million of Series A Preferred Units using the partial proceeds from tax credit sale of $55.2 million.

On* November 8, 2023,ABGL entered into the Fourth Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Fourth Amendment") providing: (i) a waiver to ABGL fornot* redeeming all Series A Preferred Units by* August 31, 2023and (ii) the right by ABGL to redeem all of the outstanding Series A Preferred Units by December 31, 2023,for an aggregate redemption price of $108 million which included $5.5 million closing fee. The PUPAfourth* Amendment further provides that failure to redeem the Series A Preferred Units by the redemption date, ABGL is required to enter into a credit agreement with Protair and Third Eye Capital effective, as of* January**1,* 2024 and maturing on* December 31, 2024,in substantially the form attached to the PUPAfourth* Amendment. We determined that Third Eye Capital provided a concession to redeem the preferred shares at lower effective borrowing rate than the credit agreement interest rate or prior amendment rate. In accordance with the provisions of ASC470-60 Troubled Debt Restructuring, we applied troubled debt restructuring accounting, resulting inno gain or loss from the application of this accounting. In addition, given that the Company could turn the agreement into a credit agreement, the Company began accreting the redemption price from a carrying value at* November 8, 2023of $110.6 million to $130.0 million over the period ending December 31, 2024.*

On* February 8, 2024,ABGL entered into the Fifth Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Fourth Amendment") providing: (i) a waiver to ABGL fornot* redeeming all Series A Preferred Units by* December 31, 2023and (ii) the right by ABGL to redeem all of the outstanding Series A Preferred Units by April 30,2024, for an aggregate redemption price of $111.0 million which includes a closing fee of $5.5 million. The PUPA Fifth Amendment further provides that if ABGL doesnot redeem the Series A Preferred Units by the redemption date, ABGL will enter into a credit agreement with Protair and Third Eye Capital effective as of May 1,2024 and maturing April 30, 2025,in substantially the form attached to the PUPAfifth* Amendment. We will evaluate the PUPAfifth amendment according to ASC470. Based on the terms of the PUPA Fifth Amendment, the deferred PUPA redemption balance is classified as long term liability as of* December 31, 2023.*

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The Company recorded carrying value of Series A Preferred Unit liabilities as long-term liabilities of $113.2 million and $116.0 million as of* December 31, 2023and2022*, respectively.

Variable interest entity assessment

After consideration of ABGL’s operations and the above agreement, we concluded that ABGL didnot have enough equity to finance its activities without additional subordinated financial support. ABGL is capitalized with Series A Preferred Units that are recorded as liabilities under U.S. GAAP. Hence, we concluded that ABGL is a VIE. Through the Company's ownership interest in all of the outstanding common stock, its current ability to control the board of directors, the management fee paid to Aemetis and control of subordinated financing decisions, Aemetis has been determined to be the primary beneficiary and accordingly, the assets, liabilities, and operations of ABGL are consolidated into those of the Company. Total assets, before intercompany eliminations, of ABGL as of* December 31, 2023*were $90.3 million which serve as collateral for the Series A Preferred Units.

7. Stockholders’** Equity**

Common Stock

The Company is authorized to issue 80 million shares of common stock, $0.001 par value per share.

Convertible Preferred Stock

The company is authorized to issue up to 65 million shares of preferred stock, $0.001 par value per share.

Effective as of* December 12, 2023,the Company converted all of its outstanding Preferred Stock into by issuingone* share of common stock for each 10 shares of preferred stock outstanding. As a result, as of* December 31, 2023,*the Company hasno outstanding shares of preferred stock. The following table shows the number of preferred shares authorized and outstanding:

8. Warrants to Purchase Common Stock

During2023, the Company granted the following warrants:

● A warrant issued to a vendor exercisable for the purchase of 100,000 shares at an exercise price of $2.50 per share with atwo-year term. This warrant was exercised in2023 using cashless exercise resulting in the issuance of 62,293 shares of common stock.

● Warrants issued to the Company's senior lender exercisable for 160,000 shares of the Company's common stock at an exercise price of $2.00 per share with afive-year term. These warrants are outstanding as of* December 31, 2023.*

● In connection with a credit line increase, a warrant issued to the Company's senior lender was automatically modified to increase the number of shares that* may*be purchased by 25,000 shares. The warrant has an exercise price of $10.20 per share and a remaining term of about 3 years.

● Warrants issued to subordinated lenders exercisable for 226,666 at an exercise price of $0.01 per share and a term oftwo years. These warrants were exercised in2023 with a combination of cashless exercise and cash payments.

The following table shows the weighted average fair value calculations for warrants granted based on the listed weighted average assumptions:

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A summary of historical warrant activity for the years ended* December 31, 2023and2022* follows:

All of the above outstanding warrants are vested and exercisable as of* December 31, 2023*.

9. Stock-Based Compensation

2019 Stock Plan

On* August 26, 2021,the stockholders of the Company approved the Aemetis, Inc. Amended and Restated2019* Stock Plan (the*“2019* Stock Plan”). This plan allows our Board or delegated Board committee to grant 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 to employees, Directors, and consultants. The2019 Stock Plan has a term of 10 years from the original version adoption date of* April 25, 2019,and supersedes all prior stockholder approved plans with respect to new grants. Options issued under prior plans and the prior version of the2019* stock plan remain outstanding and exercisable according to their terms. The2019 Stock Plan authorizes a total pool of 4,558,621 shares as of* July 1, 2021,including all outstanding option grants under all plans and all shares then available for issuance under the2019* Stock Plan as of that date. Shares within this pool that expire or terminate unused become available for a subsequent grant. In addition, the number of shares available for issuance automatically increases on* January 1of each year by an amount equal to 4% of the sum of total common stock outstanding on January 1*and 2,541,823 shares.

Pursuant to the2019 Stock Plan, the company issued stock options to employees exercisable for 1.3 million and 1.3 million shares during the years ended* December 31, 2023and2022,* each with a 10 year term and 3 year vesting schedule. The Company issued restricted stock award grants with immediate vesting to directors for 244 thousand shares and 89 thousand shares during the years ended* December 31, 2023and2022,* respectively, with a weighted average fair value on date of grant of $3.75 and $10.92 per share, respectively for those same time periods.

The following table summarizes activity under the2019 Stock Plan during2022 and2023:

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The following table summarizes vested and unvested option awards outstanding as of* December 31, 2023and2022*:

**(1)Intrinsic value based on the $5.24 and $3.96 closing price of Aemetis, Inc. common stock on December 31, 2023and2022 respectively, as reported on the NASDAQ Exchange.

Inducement Equity Plan Options

In* March 2016,the Board of Directors of the Company approved an Inducement Equity Plan authorizing the issuance of 100,000 non-statutory stock options to purchase common stock. As of December 31, 2023*, no options were outstanding under the Inducement Equity Plan. This plan wasnot approved by stockholders so is available only for grants to prospective employees.

Stock-based Compensation Expense

Stock-based compensation is accounted for in accordance with ASC718, Compensation - Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees, directors, and consultants based on estimated fair value on the grant date. We estimate the fair value using the Black-Scholes option pricing model and recognize that fair value as an expense over the vesting period of each grant using the straight-line method. We only record compensation cost for vested options. The Black-Scholes valuation model for stock based compensation expense requires us to make assumptions and judgments about the variables used in the calculation, including 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, expected dividends, and expected forfeitures. We use the simplified calculation of expected term described in SEC Staff Accounting BulletinNo. 107, Share-Based Payment. Volatility is based on an average of the historical volatility of Aemetis, Inc. common stock during the period of time preceding the date of option issuance that matches the term of the option grant. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the treasury maturity term corresponding with the expected life of the option. We use an expected dividend yield of zero, as we donot anticipate paying any dividends in the foreseeable future. Expected forfeitures are assumed to bezero due to the small number of plan participants. To the extent actual forfeitures occur, the difference is recorded as an adjustment in the scheduled expense during the period of the forfeiture.

The weighted average fair value for options granted during the years ended2023 and2022 are based on the following assumptions:

For the years ended* December 31, 2023and2022*, the Company recorded stock-based compensation expense in the amount of$7.7 million, and $6.4 million, respectively. As of* December 31, 2023*, the Company had $7.3 million of total unrecognized compensation expense for employees that the Company will amortize over the remaining vesting period of each individual option grant. The outstanding unvested options have a remaining weighted average vesting term of 1.5 years.

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10. Agreements

***Working Capital Arrangement.**Pursuant to a Corn Procurement and Working Capital Agreement with J.D. Heiskell, the Company procures whole yellow corn from J.D. Heiskell. The Company has the ability to obtain grain from other sources subject to certain conditions; however, in the past all the Company’s grain purchases have been from J.D. Heiskell. Title and risk of loss of the corn pass to the Company when the corn is deposited into the Keyes Plant weigh bin. Pursuant to a separate agreement entered in May 2023,*J.D. Heiskell also purchases all of our ethanol and other products under separate agreements and sells them to customers designated by us. We have designated Murex to purchase ethanol and WDG and corn oil are sold to A.L Gilbert. The Company’s relationships with J.D. Heiskell, and A.L. Gilbert are well established, and the Company believes that the relationships are beneficial to all parties involved in utilizing the distribution logistics, reaching out to widespread customer base, managing inventory, and providing working capital relationships.

As of* December 31, 2023and2022*, Aemetis made prepayments to J.D. Heiskell ofnone and $2.4 million, respectively. The J. D. Heiskell purchases and sales activity associated with the Purchasing Agreement, Corn Procurement and Working Capital Agreements during the years ended* December 31, 2023and2022* were as follows:

Ethanol and Wet Distillers Grains Marketing Arrangement.

The Company entered into a Fuel Ethanol Purchase and Sale Agreement with Murex, which matures on* October 31, 2023,with automaticone*-year renewals thereafter. On* May 30, 2023the Company entered into AmendmentNo.* 1 to the Fuel Ethanol Purchase and Sale Agreement that provides (i) the Company temporarily suspend the agreement for the duration of the Company's Working Capital Agreement with J.D. Heiskell, and (ii) the initial term shall be automatically renewed beginning on* October 1, 2023and ending on March 31, 2025.The Company also entered into a Wet Distillers Grains Marketing Agreement with A.L. Gilbert, with a maturity date of December 31, 2024,with automaticone*-year renewals thereafter.

For the years ended* December 31, 2023and2022*, the Company expensed marketing costs of $1.5 million and $2.9 million, respectively, under the terms of both the Ethanol Marketing Agreement and the Wet Distillers Grains Marketing Agreement and are presented in Selling, General, and Administration expense.

For the years ended* December 31, 2023and2022*, the Company expensed shipping and handling costs related to sales of ethanol $1.7 million and $3.3 million for each period and expensed transportation costs related to sales of WDG of $3.3 million and $5.3 million.

Supply Trade Agreement. On* July**1,* 2022, the Company entered into an operating agreement with Gemini Edibles and Fats India Private Limited (“Gemini”). Under this agreement, Gemini agreed to provide the Company with a supply of feedstock up to a credit limit of $12.7 million. If the Company fails to pay the invoice within theten-day credit period, the outstanding amount will bear interest at 12%. The term of the agreement is forone year. Either party can terminate the agreement by givingone month notice in writing. The agreement was terminated. As of* December 31, 2023and2022*, the Company hadno outstanding balance under this agreement.

As of* December 31, 2023*, the Company hasno forward sales commitments.

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11. Segment Information

Aemetis recognizes three reportable segments “California Ethanol,” “California Dairy Renewable Natural Gas,” and “India Biodiesel.”

The “California Ethanol” reportable segment includes the Company’s 65 million gallon per year ethanol plant in Keyes, California, and the adjacent land leased for the production of CO₂.

The “California Dairy Renewable Natural Gas” reportable segment including the production and sale of Renewable Natural Gas and associated environmental attributes, consisting of anaerobic digesters located at diaries, at36 mile biogas collection pipeline, and biogas upgrading hub and pipeline interconnect that produces Renewable Natural Gas from the biogas.

The “India Biodiesel” reportable segment includes the Company’s 60 million gallon per year nameplate capacity biodiesel manufacturing plant in Kakinada India, and administrative offices in Hyderabad, India.

The Company has additional operating segments that were determinednot to be reportable segments, including our key projects under development which consists of sustainable aviation fuel and renewable diesel production in Riverbank and Carbon Capture and Underground Sequestration wells in California. Additionally, our corporate offices, Goodland Plant in Kansas, and the research and development facility in Minnesota are included in the “All Other” category.

Summarized financial information by reportable segment for the years ended* December 31, 2023and2022* follow:

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A reconciliation of reportable segment revenues to consolidated totals for the years2023 and2022 follow:

California Ethanol: During the year ended* December 31, 2023and2022*, the Company amended the Corn Procurement and Working Capital Agreement and the J.D. Heiskell Purchasing Agreement to procure corn from J.D. Heiskell and sell all ethanol, WDG, CDO, and CDS the Company produces to J.D. Heiskell. Sales of ethanol, WDG, CDO, and CDS toone customer accounted for 100% of the California Ethanol segment’s revenue for the year ended* December 31, 2023*. Sales of ethanol toone customer accounted for 73% of the California Ethanol segment’s revenue for the year ended* December 31, 2022*. Sales of WDG, and corn oil toone customer accounted for 26% of the Company’s California Ethanol segment revenues for the year ended* December 31, 2022*.

California Dairy Renewable Natural Gas:100% of our sales of renewable natural gas during thetwelve months ended* December 31, 2023were from sales toone customer. In thethird* quarter of2023, we started sellingD3 RINs andone customer accounted for 98% of the2023 sales. For thetwelve months ended* December 31, 2022,*all sales were associated with intercompany sales to the Keyes Plant for use in boilers.

India Biodiesel: During the year ended* December 31, 2023*,three biodiesel customers accounted for 47%,25% and 23% of the Company’s India Biodiesel segment revenues. During the year ended* December 31, 2022*,three biodiesel customers accounted for 48%,29%,12% of the Company’s India Biodiesel segment revenues.

12. Related Party Transactions

The Company owes Eric McAfee, the Company’s Chairman and CEO, and McAfee Capital LLC (“McAfee Capital”), owned by Eric McAfee and his wife, $0.4 million in connection with employment agreements and expense reimbursements. The balance accrued related to these employment agreements was $0.4 million as of* December 31, 2023.On February 28, 2023,the Audit Committee of the Company approved aone*-time fee of $350 thousand payable to McAfee Capital in connection with McAfee Capital’s guarantees of the Company’s indebtedness with Third Eye Capital. As of* December 31, 2023,*the outstanding balance is $175 thousand.

The Company owes various members of its Board of Directors amounts totaling $0.3 million as of* December 31, 2023* and* December 31, 2022*, for each period, in connection with board compensation fees, which are included in accounts payable on the balance sheet. For the years ended* December 31, 2023and2022* the Company expensed $0.4 million, and $0.4 million, respectively, in connection with board compensation fees.

13. Income Tax

The Company files a consolidated federal income tax return including all its domestic subsidiaries except for Aemetis Biogas LLC, which files its own returns. State tax returns are filed on a consolidated, combined or separate basis depending on the applicable laws relating to the Company and its subsidiaries.

Components of tax expense consist of the following:

The Company records deferred tax liability in other long term liabilities in the Consolidated Balance Sheets. The deferred tax liability resulted as India subsidiary had income for the year ended* December 31, 2023*. U.S. loss and foreign income (loss) before income taxes are as follows:

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Income tax benefit differs from the amounts computed by applying the statutory U.S. federal income tax rate (21%) to loss before income taxes as a result of the following:

The components of the net deferred tax asset or (liability) are as follows:

Based on the Company’s evaluation of current and anticipated future taxable income, the Company believes it is more likely thannot that insufficient taxable income will be generated to realize the net deferred tax assets, and accordingly, a valuation allowance has been set against these net deferred tax assets. The $0.8 million deferred tax liability is recorded in other long-term liabilities on the balance sheet.

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We donot provide for U.S. income taxes for any undistributed earnings of the Company’s foreign subsidiaries, as the Company considers these to be permanently reinvested in the operations of such subsidiaries and have a cumulative foreign loss. At* December 31, 2023and2022* these undistributed earnings totaled $1.3 million compared to undistributed losses of $2.5 million for* December 31, 2022.If any earnings were distributed, some countries mayimpose withholding taxes. However, due to the Company’s overall deficit in foreign cumulative earnings and its U.S. loss position, the Company doesnot* believe a material net unrecognized U.S. deferred tax liability exists.

ASC740 Income Taxes provides that the tax effects from an uncertain tax position can be recognized in the Company’s financial statements only if the position is more-likely-than-not of being sustained on audit, based on the technical merits of the position. Tax positions that meet the recognition threshold are reported at the largest amount that is more-likely-than-not to be realized. This determination requires a high degree of judgment and estimation. The Company periodically analyzes and adjusts amounts recorded for the Company’s uncertain tax positions, as events occur to warrant adjustment, such as when the statutory period for assessing tax on a given tax return or period expires or if tax authorities provide administrative guidance or a decision is rendered in the courts. The Company doesnot reasonably expect the total amount of uncertain tax positions to significantly increase or decrease within the next12 months. As of* December 31, 2023*, the Company’s uncertain tax positions werenot significant for income tax purposes.

The following describes the open tax years, by major tax jurisdiction, as of* December 31, 2023*:

As of* December 31, 2023*, the Company had U.S. federal NOL carryforwards of approximately $253.0 million and state NOL carryforwards of approximately $336.0 million. The Company also has approximately $1.5 million of alcohol and cellulosic biofuel credit and $6.7 million of carbon oxide sequestration credit carry forwards. The federal net operating loss and other tax credit carryforwards expire on various dates between 2027 and 2043. The state net operating loss carryforwards expire on various dates between 2027 through 2042. Under the current tax law, net operating loss and credit carryforwards available to offset future income in any given year* maybe limited by US or India statute regarding net operating loss carryovers and timing of expirations or upon the occurrence of certain events, including significant changes in ownership interests. As of December 31, 2023*, the Company's India subsidiary hadno loss carryforwards.

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14. Parent Company Financial Statements (Unaudited)

We conduct substantially all of our operations through subsidiaries and are dependent on cash distributions, dividends and other intercompany transfers of funds from our operations. Our subsidiaries havenot made significant distributions to us and* may**not* have funds available for dividends or distributions in the future. The ability of our subsidiaries to transfer funds to us will be dependent upon their respective abilities to achieve sufficient cash flows after satisfying their respective cash requirements, including subsidiary level debt service on their respective credit agreements. The following is a summary of the Parent Company Financial statements.

Balance Sheets

As of* December 31, 2023and2022*

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Statements of Operations and Comprehensive Loss

For the Years Ended* December 31, 2023and2022*

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Statements of Cash Flows

For the years ended* December 31, 2023and2022*

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15. Subsequent Events

Subordinated Notes

On* January 1, 2024,the maturity ontwo* accredited investor's Subordinated Notes was extended until the earlier of (i)* June 30, 2024; (ii) completion of an equity financing by AAFK or Aemetis in an amount ofnot* less than $25 million; (iii) the completion of an Initial Public Offering by AAFK or Aemetis; or (iv) after the occurrence of an Event of Default, including failure to pay interest or principal when due and breaches of note covenants. A $90 thousand and $250 thousand extension fee was paid by adding the fee to the balance of the new Subordinated Note and Aemetis issued the lenders warrants exercisable for 113 thousand shares of common stock with a term oftwo years and an exercise price of $0.01 per share. The warrants have been fully exercised.

Series A Preferred Unit Purchase Agreement

On* February 8, 2024,ABGL entered into a Fifth Waiver and Amendment to Series A Preferred Unit Purchase Agreement (“PUPA Fifth Amendment"). The PUPA Fifth Amendment: (i) provides an extension of time for ABGL to redeem all of the outstanding Series A Preferred Units until April 30, 2024,and changes the redemption price to $111 million, including fees, (ii) requires ABGL to enter into atwelve-month credit agreement in the amount of $111 million with the lenders if the Series A Preferred Units arenot* redeemed by such date, and specifies that entry of the credit agreement will satisfy the obligation to redeem the units; and (iii) provides ABGL with a waiver of the obligations of prior agreements to redeem the Series A Preferred Units by any prior dates.

Third Eye Capital Reserve Liquidity Facility

On* March 25, 2024,the Company and Third Eye Capital Corporation entered into a "Seventh Amended and Restated Promissory Note" that increased the amount available under the Company's reserve liquidity facility to$85* million and extended the maturity date to* April 1, 2025.Borrowings under the Note are available until maturity on April 1, 2025.Interest on borrowed amounts accrues at a rate of30%* per annum, to be paid monthly in arrears, or40% if an event of default has occurred and continues. Interest payments due* maybe capitalized into the principal balance of the Note. The Company will pay a standby fee of2%* per annum of the difference between the aggregate principal outstanding under the Note and the commitment, payable monthly arrears in either cash or stock. The Note also requires the Company to pay a fee in the amount of $0.5 million in connection with a request for an advance on the Note, provided that such fee* maybe added to the principal amount of the Note. The outstanding principal balance of the indebtedness evidenced by the Note, plus any accrued but unpaid interest and any other sums due thereunder, is due and payable in full on April 1, 2025.*In addition, the Company must make payments on the Note with funds received from the closing of certain new debt or equity financing or transactions, as described in the Note. The Note is secured by liens and security interests upon the property and assets of the Company.

Third Eye Capital Limited Waiver and AmendmentNo.* *28

On* March**25,* 2024, the Company and Third Eye Capital Corporation entered into a “Limited Waiver and AmendmentNo. 28 to Amended and Restated Note Purchase Agreement” (“AmendmentNo. 28”) that (i) revised the loan covenant related to Keyes plant note indebtedness to exclude certain draws on Third Eye credit facilities and to exclude the "Redemption Fee," as defined in the Amended and Restated Note Purchase Agreement, and (ii) changed the maximum ratio of Note Indebtedness to the Keyes Plant market value to120%. As consideration for AmendmentNo. 28, the Company agreed to pay Third Eye Capital an amendment fee of $0.1 million.

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16. Liquidity

The accompanying financial statements have been prepared contemplating the realization of assets and satisfaction of liabilities in the normal course of business. As a result of negative capital, negative operating results, and collateralization of substantially all of the Company assets, the Company has been reliant on its senior secured lender to provide additional funding and has been required to remit substantially all excess cash from operations to the senior secured lender. In order to meet our obligations during the nexttwelve months, we have extended our reserve liquidity credit facility through* April 1, 2025,at an amount of up to $85 million, and we plan to refinance debt with our senior lender for amounts becoming due in the nexttwelve* months and sell equity through our at-the-market registration at levels consistent with the year ended* December 31, 2023.*We believe these plans alleviate substantial doubt about our ability to continue as a going concern. While the Company believes we will be able to implement these plans to provide sufficient liquidity, there are inherent risks and uncertainties regarding our ability to execute our plans. In addition, we plan to pursue the following strategies to improve liquidity:

Operations and Project Development

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

For Aemetis Biogas, we plan to operate our existing biogas digesters to produce and sell Renewable Natural Gas (RNG) and the associated FederalD3 RINs and California LCFS credits. We are continuing to build new dairy digesters and pipeline extensions. We began generating revenue from biogas operations in2023 and this revenue will continue for the full year2024, as well as increase as we build new digesters. We also expect revenue to increase when the California Air Resource Board processes our LCFS pathway applications and approves a provisional carbon intensity that is lower than the temporary carbon intensity we currently use to calculate the quantity of LCFS credits that we generate. We are seeking debt from a variety of sources to accelerate the construction of additional digesters.

For the Kakinada Plant, we plan to continue to sell our biodiesel to OMCs pursuant to cost-plus contracts. We are also continuing to upgrade the plant to increase feedstock flexibility (and thereby lower feedstock costs), increase production capacity, and produce new products. Additionally, we are in the process of obtaining approval and contractual arrangements for the export of refined animal tallow into international markets.

Financing

We plan to continue to locate funding for existing and new business opportunities through a combination of working with our senior lender, restructuring existing loan agreements, entering into additional debt agreements for specific projects, obtaining project specific equity and debt for development projects, and obtaining additional debt from the current EB-5 Phase II offering.