Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

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

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

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Results of Operations. An analysis of our financial results comparing the three months ended March 31, 2026 and 2025.

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

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

The following discussion should be read in conjunction with our consolidated condensed financial statements and accompanying notes included in Item 1 of Part I of this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report and in other reports we file with the SEC. All references to years relate to the calendar year ended December 31 of the particular year.

Overview

Founded in 2006 and headquartered in Cupertino, California, we are a renewable natural gas and biofuels company focused on the operation, acquisition, development, and commercialization of innovative technologies that lower fuel costs and reduce emissions. We operate in three reportable segments consisting of "California Ethanol," "California Dairy Renewable Natural Gas," and "India Biodiesel." We have other operating segments determined not to be separately reportable that are collectively represented by the "All Other" category. Our mission is to produce innovative renewable fuel solutions that benefit communities and improve the environment. We are executing our mission by building a circular bioeconomy using agricultural products and waste to produce low carbon renewable fuels that create jobs, reduce greenhouse gas ("GHG") emissions, and improve air quality. For revenue and other information regarding our operating segments, see Note 13 Segment Information, of the Notes to Consolidated Financial Statements of this Form 10-Q.

Our California Ethanol segment consists of a 65 million gallon per year capacity ethanol production facility located in Keyes, California (the "Keyes Plant") that we own and operate. In addition to low carbon renewable fuel ethanol, the Keyes Plant produces alcohol for other uses, Wet Distillers Grains ("WDG"), Distillers Corn Oil ("DCO"), and Condensed Distillers Solubles ("CDS"). WDG, DCO, and CDS are sold as animal feed to more than 80 local dairies and feedlots. We also capture the Carbon Dioxide ("CO2") generated by our fermenters and sell it to an industrial gas company that liquifies the CO₂ to sell to food, beverage, and industrial customers. We are implementing several energy efficiency initiatives focused on lowering the carbon intensity ("CI") of our ethanol, primarily by decreasing the use of fossil natural gas. Recently completed energy efficiency projects include high efficiency heat exchangers and a solar micro grid. A significant energy efficiency project in progress is the Mechanical Vapor Recompression ("MVR") system that will use low carbon electricity instead of natural gas. These changes will reduce our energy costs, lower the CI of the ethanol we produce, and generate increased cash flows from LCFS and tax credits. We have already begun procuring MVR equipment and expect the system to be operational in 2026.

Our California Dairy Renewable Natural Gas segment operates anaerobic digesters at local dairies near the Keyes Plant (many of whom also purchase WDG produced by the Keyes Plant as animal feed) to produce biogas from dairy waste, transports the biogas by pipeline to the Keyes Plant site, and converts the biogas to Renewable Natural Gas ("RNG") that is delivered to customers through the utility natural gas pipeline. We currently operate twelve digesters that produce biogas from manure waste received from fifteen dairies, and we are actively growing with additional digesters under construction. We have constructed 36 miles of biogas collection pipeline and have received environmental approval to construct an additional 24 miles of pipeline. We currently have agreements to build digesters and receive waste from over 50 dairies and are seeking to sign agreements with additional dairies.

Our India Biodiesel segment includes a biodiesel production plant in Kakinada, India ("Kakinada Plant") with a production capacity of about 80 million gallons per year. The plant produces high quality distilled biodiesel and refined glycerin for customers in India. We believe the Kakinada Plant is one of the highest capacity biodiesel production facilities in India. The Kakinada Plant is capable of processing a variety of vegetable and animal oil waste feedstocks into biodiesel that meets applicable product standards. Our Kakinada Plant also distills the crude glycerin coproduct from the biodiesel refining process into refined glycerin, which is sold to the pharmaceutical, personal care, paint, adhesive, and other industries.

Our "All Other" segment consists of our projects that are under development, including our planned Carbon Capture and Underground Sequestration ("CCUS") operations and the planned sustainable aviation fuel ("SAF") and renewable diesel ("RD") plant in Riverbank, California. The All Other segment also includes our research and development facility in Minneapolis, Minnesota, operation of the Riverbank Industrial Complex, and our corporate offices in Cupertino, California.

We are developing an SAF/RD production plant that is currently designed to produce 90 million gallons per year of combined SAF/RD or 78 million gallons per year of SAF from feedstocks consisting of renewable waste vegetable and animal oils. Our project is located at the Riverbank Industrial Complex in Riverbank, California. We signed a lease with an option to purchase the Riverbank Industrial Complex in 2021 and took possession of the site in 2022. In 2023, we received a Use Permit and the California Environmental Quality Act ("CEQA") approval for the SAF/RD plant, and in 2024 we received Authority to Construct air permits for the plant. We are continuing with development activities, including engineering and financing. The Riverbank site has access to low carbon hydroelectric power, and our plant is designed to use renewable hydrogen that will be produced from byproducts of the SAF/RD production process.

Our planned CCUS projects will compress and inject CO₂ into deep wells that are monitored to ensure the long-term sequestration of carbon underground. California's Central Valley has been identified as one of the world's most favorable regions for large-scale CO₂ injection projects due to the subsurface geologic formations that absorb and contain CO₂ gas. The two initial Aemetis CCUS injection projects are being designed to capture and sequester more than two million metric tons per year of CO₂ at the Aemetis biofuels plant sites in Keyes and Riverbank, California. Once operational, these projects will generate revenue by selling California LCFS credits and federal Internal Revenue Code Section 45Q tax credits.

Our Minneapolis, Minnesota research and development laboratory evaluates and develops technologies that would use low carbon intensity and waste feedstocks to produce low or below zero carbon intensity biofuels and biochemicals. We are focused on processes that extract sugar from cellulosic feedstocks and produce low carbon ethanol, renewable hydrogen, SAF, and RD.

Results of Operations

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

Revenues

Our revenues are derived primarily from sales of ethanol and WDG at our California Ethanol segment, renewable natural gas ("RNG") environmental attributes at our California Dairy Renewable Natural Gas segment, and biodiesel at our India Biodiesel segment. We also generate IRA Section 45Z Production Tax Credits at the California Ethanol and RNG segments, which we recognize as revenue.

		2026				2025				Inc/(dec)				% change
California Ethanol		$	38,825			$	37,748			$	1,077				2.9	%
California Dairy Renewable Natural Gas			5,255				2,443				2,812				115.1	%
India Biodiesel			10,539				2,695				7,844				291.1	%
Total		$	54,619			$	42,886			$	11,733				27.4	%

California Ethanol. For the three months ended March 31, 2026, this segment generated 70% of its revenue from sales of ethanol, and the rest from sales of WDG, Corn Oil, CDS, and CO₂. It also generated and recognized $2.6 million in Section 45Z PTC income during the three months ended March 31, 2026; the revenue recognized during same period in 2025 does not include PTC income, as we recognized Section 45Z PTC income for calendar year 2025 in the fourth quarter of 2025, after establishing qualification for the PTCs under the applicable statute and guidance. For the three months ended March 31, 2026, the Keyes Plant sold 13.7 million gallons of ethanol at an average price of $1.97 per gallon and 91.0 thousand tons of WDG at an average price of $84.46 per ton, compared to sales during the three months ended March 31, 2025, when the Keyes Plant sold 14.1 million gallons of ethanol at an average price of $1.98 per gallon and 93.0 thousand tons of WDG at an average price of $86.00 per ton.

California Dairy Renewable Natural Gas. During the three months ended March 31, 2026, we sold 109.5 thousand MMBtu ("million British thermal units") of RNG at an average price of 1.98 per MMBtu, compared to the three months ended March 31, 2025, when we sold 70.9 thousand MMBtu of RNG at an average price of $3.65 per MMBtu. During the three months ended March 31, 2026, we sold 801.3 thousand D3 RINs at an average price of $2.41 per D3 RIN, compared to the three months ended March 31, 2025, when we sold 388 thousand D3 RINs at an average price of $2.64 per RIN. During the period ended March 31, 2026, we sold 30.3 thousand LCFS credits at an average price of $55.00 each, compared to 16.0 thousand LCFS credits at an average price of $72.50 each during the period ended March 31, 2025. The RNG segment also generated $1.4 million of Section 45Z PTC income during the three months ended March 31, 2026; the revenue recognized during same period in 2025 does not include PTC income, as we recognized Section 45Z PTC income for calendar year 2025 in the fourth quarter of 2025, after establishing qualification for the PTCs under the applicable statute and guidance.

India Biodiesel. In 2025 and 2026, all our India sales of biodiesel were to government owned Oil Marketing Companies ("OMCs") pursuant to the OMC tender and allocation process. For the three months ended March 31, 2026, we generated 90% of our India segment revenues from the sale of biodiesel and 10% from other sales. The increase in revenues was primarily due to delivery on the OMC contracts during the quarter. We sold 9.2 thousand metric tons of biodiesel during the three months ended March 31, 2026, compared to no biodiesel sales during the three months ended March 31, 2025.

Cost of Goods Sold

Cost of goods sold consists primarily of feedstock, energy, chemicals, direct costs (principally labor and labor related costs), and overhead. Depending on the costs of these inputs in comparison to the sales price of our end products, our gross margins at any given time can vary from positive to negative. Overhead includes direct and indirect costs associated with plant operations, including the cost of repairs and maintenance, consumables, on-site security, insurance, and depreciation.

We purchase feedstock for the California Ethanol segment from J.D. Heiskell based on daily market prices for corn plus costs of rail transportation, local basis, and a handling fee paid to J.D. Heiskell. The credit term for the corn purchased from J.D. Heiskell is one day, netted from our product sales. Cost of goods sold also includes the cost of electricity and natural gas, chemicals, maintenance, direct labor, depreciation, and freight.

We obtain the feedstock for producing RNG from dairy operators who lease us their land for construction of our digesters and supply our digesters with manure in liquid form. Our cost of feedstock is established by manure supply agreements based on the value of the environmental attributes and the number of cows at each dairy.

We utilize several different feedstocks for the Kakinada Plant, including stearin, a non-edible feedstock, from neighboring natural oil processing plants. Raw material is received by truck and loaded at our vendor's nearby facilities. Credit terms vary by vendor. However, we generally receive 15 days of credit for the purchases. We purchase crude glycerin in the international market on letters of credit or advance payment terms as market prices become viable.

		2026				2025				Inc/(dec)				% change
California Ethanol		$	38,253			$	42,686			$	(4,433	)			(10.4	)%
California Dairy Renewable Natural Gas			3,181				2,138				1,043				48.8	%
India Biodiesel			10,429				3,142				7,287				231.9	%
Total		$	51,863			$	47,966			$	3,897				8.1	%

California Ethanol. We ground 4.7 million bushels of corn at an average cost of $5.93 per bushel during the three months ended March 31, 2026, compared to 4.8 million bushels of corn at an average cost of $6.63 per bushel during the three months ended March 31, 2025. The decrease in cost of goods sold for the three months ended March 31, 2026, is mainly due to the planned reduction in the quantity of corn ground during the first two months of the quarter, along with an 11% decrease in the average corn price per bushel.

California Dairy Renewable Natural Gas. Cost of goods sold increased as a result of the increased manure costs, digester maintenance expenses, and depreciation from additional digesters placed into service.

India Biodiesel. The increase in cost of goods sold during the three months ended March 31, 2026, compared to March 31, 2025, was attributable to an increase in biodiesel sales.

Gross Profit (Loss)

		2026				2025				Inc/(dec)				% change
California Ethanol		$	572			$	(4,938	)		$	5,510				(111.6	)%
California Dairy Renewable Natural Gas			2,074				305				1,769				580.0	%
India Biodiesel			110				(447	)			557				(124.6	)%
Total		$	2,756			$	(5,080	)		$	7,836				(154.3	)%

California Ethanol. The gross profit during the three months ended March 31, 2026, compared to a gross loss during the same period in 2025, was attributable primarily to reduced volumes and reduced corn costs, as well as the $2.6 million of Section 45Z PTC income recognized during the three months ended March 31, 2026, but not during the three months ended March 31, 2025.

California Dairy Renewable Natural Gas. The increase in gross profit for the three months ended March 31, 2026, compared to the same period in 2025, is due to the increase in RNG production and associated environmental attributes, as well as the $1.4 million of Section 45Z PTC income recognized during the three months ended March 31, 2026, but not during the three months ended March 31, 2025.

India Biodiesel. The gross profit for the three months ended March 31, 2026, compared to the loss during same period in 2025, reflects the resumption of sales of biodiesel and refined glycerin.

Operating Expenses and Other Expenses

		2026				2025				Inc/(dec)				% change
Selling, general and administrative			9,091				10,475				(1,384	)			(13.2	)%
Other expense (income):
Interest expense
Interest rate expense		$	12,403			$	11,018			$	1,385				12.6	%
Debt related fees and amortization expense			1,971				2,675				(704	)			(26.3	)%
Accretion and other expenses of Series A preferred units			1,613				2,279				(666	)			(29.2	)%
Other income			(478	)			(215	)			(263	)			122.3	%

SG&A expenses consist primarily of salaries and related expenses for employees, marketing expenses related to sales of ethanol and WDG in California Ethanol and biodiesel and other products in India Biodiesel, as well as professional fees, insurance, other corporate expenses, and related facility expenses. SG&A expenses as a percentage of revenue were 17% in the three months ended March 31, 2026, compared to 24% in the three months ended March 31, 2025. SG&A expense decreased compared to the same period in the prior year, while revenue increased during the three months ended March 31, 2026.

Liquidity and Capital Resources

Cash and Cash Equivalents

Cash and cash equivalents were $4.8 million at March 31, 2026, with $4.3 million held in our North American entities and $0.5 million in our India entity. We expect that our future available cash resources will be generated from operations, sales of equity, sales of tax credits, and new debt. Incurrence of new debt and the associated use of proceeds from future debt financings are subject to approval by our senior lender.

Liquidity

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

		As of
		March 31, 2026				December 31, 2025
Cash and cash equivalents		$	4,797			$	4,894
Current assets (including cash, cash equivalents, and deposits)			34,687				26,872
Current and long-term liabilities (excluding all debt)			186,787				184,908
Current & long-term debt			404,680				381,764

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

We operate in a volatile market in which we have limited control over major components of input costs and product revenues. We are making investments in future facilities and facility upgrades that improve overall margins while lessening the impact of volatile markets. As such, we expect cash provided by operating activities to fluctuate in future periods primarily because of changes in the prices for corn, ethanol, WDG, DCO, CDS, biodiesel, waste fats and oils, glycerin, non-refined palm oil, natural gas, LCFS credits, and D3 RINs. To the extent that we experience periods in which the spread between ethanol prices and corn and energy costs narrow or the value of environmental attributes or tax credits is reduced, we require additional working capital to fund operations.

The India Biodiesel segment utilized its receivables financing facility during the quarter to support short-term liquidity needs. Although the facility was fully repaid by quarter-end, it remains available for future use. We believe this arrangement provides flexibility in managing cash flows while maintaining prudent risk oversight.

We are implementing several strategies to improve our cash flow from operations, as described in more detail in Note 16 Liquidity of the Notes to our Consolidated Financial Statements in this Form 10-Q.

Senior Secured Debt

As of March 31, 2026, the outstanding balance of principal, interest and fees, net of discounts, on all Third Eye Capital Notes totals $262.2 million, which is all due on demand by the lender. Third Eye Capital has provided a series of accommodating amendments to our debt facilities as described in further detail in Note 5 Debt of the Notes to Consolidated Financial Statements in this Form 10-Q. However, future amendments or accommodations will continue to be at the discretion of the lender. In the event our senior lender demands the debt in full, we would likely not have sufficient cash to pay the debt when due unless we are able to obtain alternative financing.

Change in Debt, Working Capital and Cash Flows

The following table describes the changes in current and long-term debt (in thousands) during the three months ended March 31, 2026:

Increases to debt:
Accrued interest		$	12,846
Maturity date extension fee and other fees added to senior debt			1,700
Change in debt issuance costs, net of amortization			933
Secured loans and Working capital loan draw			10,896
TEC short term promissory note			1,800
Construction loan short term borrowings			3,945
Total increases to debt						$	32,120
Decreases to debt:
Principal and interest payments and reductions to EB-5 promissory note			(6	)
Term Loan Payments			(8	)
Construction Term Loan Payments			(1,418	)
Secured loans and Working capital loans payments			(7,756	)
Payments on Term loans for capital expenditures			(14	)
Reclass to accounts payable for payment			(2	)
Total decreases to debt						$	(9,204	)
Change in total debt						$	22,916

Cash used in operating activities was $10.6 million, derived from a net loss of $21.7 million, non-cash changes of $8.2 million, and changes in operating assets and liabilities of $3.0 million. The non-cash changes primarily consisted of: (i) $1.7 million in stock-based compensation expense, (ii) $2.5 million in depreciation expenses, (iii) $2.0 million in amortization of debt issuance costs and other intangible assets, (iv) $1.6 million in preferred unit accretion and other expenses of Series A Preferred Units. Cash increases related to changes in operating assets and liabilities consisted primarily of (i) a decrease in inventory of $0.8 million primarily due to the India biodiesel segment selling biodiesel inventory, and (ii) a $1.2 million increase in accounts payable. This was offset by (i) a $6.6 million increase in accounts receivable, and (ii) a $3.7 million increase in the balance of other current assets primarily from earning Section 45Z PTCs.

Cash used in investing activities was $5.1 million, of which $6.5 million was primarily used for capital projects associated with production of RNG and energy efficiency projects in California offset by $1.4 million grants received.

Cash provided by financing activities was $14.7 million, consisting primarily of (i) $16.0 million proceeds from borrowings, and (ii) $6.6 million from sales of common stock, offset by $7.9 million in repayments of borrowings.

Our ongoing at-the-market stock sales registration allows us to sell shares of common stock into the publicly traded market. During the three months ended March 31, 2026, we sold 2.6 million shares of common stock for proceeds of $6.6 million net of commissions.

Critical Accounting Policies and Estimates

Our discussion and analysis of financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported net sales and expenses for each period. We believe that of our most significant accounting policies and estimates, defined as those policies and estimates that we believe are the most important to the portrayal of our financial condition and results of operations and that require management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain are: liquidity; debt covenant forecast; and recoverability of long-lived assets. These significant accounting principles are more fully described in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies" in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recently Issued Accounting Pronouncements

None reported beyond those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Off Balance Sheet Arrangements

None.