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Welcome to the Aemetis Second Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. Joining us on today's call is Eric McAfee, the Chairman and CEO of Aemetis; Andy Foster, the President of Aemetis Advanced Fuels; and Todd Waltz, the Chief Financial Officer of Aemetis. It is now my pleasure to introduce your host, Mr. Todd Waltz, the Executive Vice President and Chief Financial Officer of Aemetis, Inc. Mr. Waltz, you may begin.

Thank you, Matthew, and welcome, everyone. Before we begin, I'd like to remind everyone that during this call, we'll be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, but are not limited to, those factors discussed in our earnings release issued today and in our most recent Form 10-K and Form 10-Q filings with the Securities and Exchange Commission under the caption Risk Factors and Management Discussion and Analysis of Financial Condition and Results of Operations as well as in our other filings with the SEC. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law. Please refer to our earnings release and our SEC filings for a more detailed discussion of these risks and uncertainties. Full financial details can be found in our second quarter 2025 earnings release and Form 10-Q available on the Aemetis website and EDGAR. I'll briefly highlight the key items. Revenues were $52.2 million, up by $9.3 million from the first quarter revenue, primarily due to the fulfillment of biodiesel orders with oil marketing companies in India. California Ethanol saw a slightly lower production rate of 13.8 million gallons to maximize margins during the quarter. California Dairy Renewable Natural Gas recognized $3.1 million of revenue from 11 operating digesters during Q2 using the CARB-approved LCFS pathway for 7 of the digesters. As we will discuss later, Section 45

Thanks, Todd. I'll start with the business segment update, followed by updates on future projects and supportive regulations. In our dairy RNG business, we are steadily scaling up gas production with a new multi-dairy digester coming online this month that is expected to increase RNG production by 30%. As planned, we expect to reach 550,000 MMBtus of renewable natural gas production capacity this year and grow to a 1 million MMBtu annual run rate by the end of 2026. We are now operating or building digesters at 18 dairies funded by equity and $50 million of USDA guaranteed financing with 20- year repayment terms and attractive interest rates. 7 of our dairy pathways were approved by CARB during the second quarter at a blended negative 384 carbon intensity score, unlocking about 120% more LCFS credit revenue for those dairies starting this quarter compared to digesters with the negative 150 default pathway score. Four more pathways are currently under review with CARB and are expected to be approved under the faster Tier 1 pathway process that was adopted by CARB last month. Additionally, these dairy RNG facilities qualify for federal Section 48 investment tax credits. To date, we have sold $83 million in investment tax credits related to our RNG facilities and received approximately $70 million in cash. We monetize the production of dairy RNG in multiple ways. Until this year, we have generated revenues primarily through the sale of the gas molecule, the sale of California low carbon fuel standard credits and the sale of federal D3 renewable identification numbers. Since January 1, 2025, we've been generating transferable Section 45

[Operator Instructions] Your first question is coming from Matthew Blair from TPH.

Congrats on getting the CARB approval for the 7 dairies at the end of the second quarter. I think you mentioned that, that did not flow into your financial results. Could you talk about at current LCFS prices around $60, what kind of EBITDA impact that might have for Aemetis? And are you currently waiting any other LCFS pathway approvals?

Sure. Thanks, Matt. We have 7 dairies already effective. We have 4 more pending right now, and then have additional ones that we'll be filing in the fourth quarter that are currently in the 90-day testing period. So we would be expected to exit the year with a total of 7-plus another 5 minimum. So at least 12 dairies either granted or soon to be granted. The new process, by the way, Tier 1 is significantly shorter than the 2-year process we went with Tier 2. So the financial impact, I think I'm going to get back to you on that one because it's highly correlated with the price of the credits. So when we were at 42, it was 1/3 less revenue than it is at $60. I think we cited it's roughly $19 per MMBtu, if I recall correctly. But we -- let's get back to you with a memo on this. The formula is well known, but the price is moving quickly. So we're trying to give investors a range of values per MMBtu for the LCFS. So we'll also endeavor to see if we can include that in some press releases, so people can see the impact as those prices change.

Sounds good. And then could I get your view on the D3 RIN supply-demand outlook? This year, I think we're tracking for around like 1.6 billion D3 RINs generated. You're looking at RVO for 2025 around 1.1 billion for '26 and '27, I think the proposal is around like 1.3 billion, 1.4 billion. Do you have any hope that the EPA may revise up those initial 2026 and 2027 D3 RVOs?

As you know, we're in a comment period that ends tomorrow, and there is a universal opinion in biofuels that the D3 RIN is being understated. There was a mistake by the EPA, and it was filed in the Federal Register, so it was printed for everybody to read that through no fault of their own, the oil industry is being forced to buy DJ RINs. As I think everybody knows, that's exactly opposite of what the renewable fuel standard was written to do. As George Bush, the President, who signed the Renewable Fuel Standard said, if you left up to the oil companies, we would all just be buying oil from the Middle East. So the point of the entire Renewable Fuel Standard is to cause the adoption and to be focused on the availability of production, not on the amount of consumption. So those comments, which you can read as public filings, you'll see ours as well are focusing on what the actual renewable fuel standard regulation requires. Andy, do you want to make a comment on that?

No, I think that's -- you hit it exactly right, Eric. I think the -- it's a -- maybe not quite a mistake by some forces within the industry to skew in that direction, but the law is the law, and we're going to emphasize that in our comments as well as many other biofuel producers around the country.

Your next question is coming from Derrick Whitfield from Texas Capital.

Eric, could you update us on the progress of 45

We are in the thick of it right now. And there is an update to the GREET model that has been presented to the DOE. And if accepted and adopted, it could matter -- be a matter of a few weeks at most, maybe even a 1-week span that they could update the GREET model. They've already updated twice a year after the initial filing in January. So this would be a third update. That update would allow us to then generate 45

And not to belabor the point, Eric, and we've had conversations on it because it could be a material number for you guys for your dairy business. But as you kind of think about where you stand or Aemetis stands today as it relates to attending the registrations and tax ID numbers, and whether you would expect the credit to be retroactive for first half sales, I'd love your perspective on that. And again, we're still thinking about this as potentially a $60 to $80 per MMBtu type metric that we could see. Is that a reasonable range as well?

The current calculation should be about $82 per MMBtu. And what we're missing is the DOE GREET model that allows the foreground cells to be input to site to put in what state you're in, et cetera, if you're an anaerobic digester in order to put out the emissions rate that would generate that number. So we expect that the DOE will put out a model for 2025. That is not their current process. Currently, they're focusing on January 2026. Industry in general is having to motivate them to see the value of putting out an amended model for 2025. But the values when we're done with it, between the combination of the model plus the provisional emissions rate process, which is an opportunity for us to say, we're not happy with the total numbers come out of the model, let's go ahead and get some project-specific information from them. Between the 2 of them, we should end up at roughly $82. That goes up, by the way, by the rate of inflation. So next year, it will be actually larger in the year after that, larger. But current target is in the $82 per MMBtu range.

And Eric, just one part of that question I wanted to have you comment on too, is just where you or Aemetis stands in attaining the registrations and tax ID numbers?

We're fully registered. Andy, do you have any comment on this? Ethanol plant is fully registered. Our RNG production facility. I would disclose to people that you don't have to register each one of the digesters because they're not producers of renewable natural gas, they produce biogas. So it's just our RNG production facility that's required to be registered. So we're fully registered and have acknowledgments from IRS of that registration. That was also done on a timely basis. So we don't have any issues there.

Your next question is coming from Amit Dayal from H.C. Wainwright.

Just a question on the monetization strategy for your production tax credits going forward. It's been a little lumpy in the past. But going forward, with this regulatory backdrop, do you think we can see a little bit more consistent monetization going forward?

Yes. The Section 48 investment tax credits, as we, I think, commented probably a year ago, were expected to be lumpy as we do investments, and we go through a several quarter cycle of putting them all together and then selling them. And we are in the process of doing another Section 48 tax credit sale, which we would hope to close this quarter. But 45

Understood. With respect to the India IPO, is there -- I'm just trying to see if there's an official process that has already begun? Or is this just preparation on your end that you will soon sort of get into sort of a formal mode of going public for that business over there?

We have our new CFO on site. He joined us in July. So we're not even, I think, a month into having him on board. I think it was about July 15. And so we're well into the process. There's not a public filing early in the process. The public filing comes after some review of documentation by the investment banking firm and some other parties. So we would expect to see sometime this fall that there would be public filing documents that people would be able to read. I don't think we're going to press release that, but it will certainly become known. We'll mention it on our earnings calls, et cetera. But it will be an administrative process with SEBI, which is the regulator in India.

Understood. And then the use of proceeds, if this comes through within that time line, like what are you thinking, Eric? Is it to pay down debt or any other strategic initiatives?

We definitely have an ability to transfer money to the parent company. The exact amount will be determined largely at market conditions. But we are in a scenario in which some amount of money would be transferred to the parent. I do expect that probably would be invested in debt repayment. But as Todd mentioned at the end of his conversation, we are working on significant refinancing. So it's possible we won't actually have any obligations for current pay because we're reamortizing our senior debt in these refinancings over quite a long period of time, 20 and 30 years. So if that were to be the case, it would just be -- it's basically strengthening the cash position of the parent company and giving us a little more flexibility for development some of these projects. But I would not anticipate that we're talking about the majority of the funds, I would anticipate probably 25% of the IPO proceeds would be for the parent company and the balance will be for development of the India assets. I should mention because we did talk about it a bit, the ethanol industry in India is very rapidly growing. It's increasing by another 50% over the next 60 months. And we're in the middle of what the India government is looking to implement to strengthen their agricultural sector, while at the same time, lowering cost of the pump and having environmental benefits. So the ethanol industry in India is just very strongly supported. They set the price of the ethanol. They set the price of the corn. It is a very attractive business. And so we are very actively involved with the development of 2 sites for ethanol production and a core part of our IPO in India is that we have a base biodiesel business that's expanding, but frankly, we are aggressively moving into ethanol. Even the recent news about heavy tariffs on India is being interpreted by Bloomberg and others as a negotiating tool to bring India to the table. And one of the open doors that India has talked about is India does not allow genetically modified corn. And therefore, their yields are about 3.3 per acre and American yields are in the 11 bushels per acre. So they're less than 1/3 of the yield per acre, which means that U.S. corn is frankly less expensive. And so we'll see how these trade negotiations go. It's a very uncertain environment for a lot of parties. But one of the outcomes very possibly could be that India becomes a market for U.S. corn, but restricted to ethanol use. Very big issue was they do not want the population there eating genetically modified corn. So restricting it just to ethanol use would be of great value to Aemetis. We would be uniquely positioned to have an excellent ethanol business supplied, frankly, by U.S. corn, but then providing distilled grain and low-cost fuel and environmental benefits to the Indian economy. So we'll see how that plays out, but that was kind of an upside. The domestic environment for ethanol in India is very attractive.

I really appreciate that additional color, Eric. It looks like you guys are positioned well on multiple fronts from this point.

Your next question is coming from Dave Storms from Stonegate.

I just want to -- could you remind us with your RNGs that are expected to get approval by the end of this year, are those approvals backwards looking? Will you be able to take advantage of those higher credits?

No. We have 7 that are already approved, the 4 that are pending would be expected to be approved next year and pack back to best case scenario is probably the fourth quarter of this year.

Yes.

Yes, probably the fourth quarter this year. So we might have some impact this year. The way they do it is sort of a 6-month look back kind of a situation. So if we get approved by March of next year, then it could be effective in the fourth quarter of this year. So currently, though, I would say we've taken a conservative view, which is probably first quarter next year is the first time we'd see those 4 additional pathways have an impact. We hope to see an upside, but I think that would be our projection right now.

Understood. And then maybe just a little more commentary about -- around the refinancing. How far along in that process are you? Maybe if you're looking at any unique options and maybe an anticipated time line to getting that completed? Anything like that would be very helpful.

We are very deep in a refinancing process with a counterparty. And I would say by the end of August, we'll be through most of the due diligence and documentation work. The dependence we have on that refinancing, and I would say almost all refinancings will be for us to prove out our 45

Your next question is coming from Ed Woo from Ascendiant Capital.

Congratulations on all your progress. Thanks for the update in terms of California and possibly allowing usage of E15 gasoline. If it gets passed, how quickly do you think it will get implemented? And how quickly will you see the increase in demand for your ethanol?

The implementation will not be immediate at every one of the stations in California. But because we're selling a commodity, it's that last gallon that really prices everything. So 600 million gallons of additional demand is actually enough to push the entire country from oversupply to a sort of a more balanced environment. And then with E15 and 49 other states, there is certainly the expectation that we're just going to be short ethanol. We currently export almost 2 billion gallons of ethanol to foreign countries. And if E15 becomes adopted in California this year, which is a better than 75% chance that's going to happen. And if Congress picks it up and gets approved this year, which is better than 50% chance, you're just going to be short. It's going to end up getting the value it should be getting, which is more on par with gasoline. And since we're replacing aromatics, and aromatics are typically $0.20 to $0.50 a gallon more expensive than gasoline, and we're doing 113 octane versus 84 octane, which is gasoline-based octane. We have a very valuable molecule that's been undervalued because of this 10% limitation, too much supply, not enough demand. That is expected to move to the opposite, which would be excessive demand because of how valuable the molecule is, and that should generate additional value per gallon for us. I do think it's a gradual trend, though. It's probably an 18-month cycle before you're going to see significant need for additional construction of facilities, but that's certainly what's coming. If we add 5 billion gallons of demand to the U.S. ethanol industry, that's far in excess of capacity in the industry. The entire industry's production capacity today is about 17 billion gallons, and that's going to increase to over 20 billion in rather short order with E15. So it's just a question of when. Does it happen earlier or later, but sometime over the next -- by the end of 2026, I think you're going to see people proposing new facilities because of how profitable the industry is and a need for more of the molecule. Andy, do you have any comments on that?

No. I think from an implementation perspective, it's really up to the blenders, how fast they want to go with this in terms of putting it out. There's no physical change that needs to take place. It's just a question of what they -- how fast they want to implement it. And I believe that the CEQA reform also allows for an expedited price process on building additional storage facilities, which has been a big issue in California. California does not have enough fuel storage facilities. And so a lot of times, it's the trade-offs between things like ethanol and RD and sort of what's driving the demand for those things. But I believe that the CEQA reform that the governor just recently signed will help streamline the process of building some additional tankage in California, which is desperately needed. So that should help as well.

Thank you. That concludes our Q&A session. I will now hand the conference back to Eric McAfee, Chairman and CEO, for closing remarks. Please go ahead.

Thank you to Aemetis stockholders, analysts and others for joining us today. We look forward to talking with you about participating in the growth opportunities at Aemetis.

Thank you for attending today's Aemetis earnings conference call. Please visit the Investors section of the Aemetis website where we'll post a written version and audio version of this Aemetis earnings review and business update. Matthew?