Aemetis Biorefining Innovating Below Zero Carbon Renewable Fuels - - PowerPoint PPT Presentation

April 2018

Aemetis Biorefining

Innovating Below Zero Carbon Renewable Fuels

(NASDAQ: AMTX) Eric McAfee – Chairman/CEO

INNOVATING BELOW ZERO CARBON RENEWABLE FUELS

Eric McAfee Chairman/CEO – Aemetis (Nasdaq: AMTX)

Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based

• n management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results,

performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward- looking by reason of context, the words “may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue” and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those projected in such statements due to, without limitation: (i) general economic conditions, (ii) ethanol and gasoline prices, (iii) commodity prices, (iv) distillers grain markets, (v) supply and demand factors, (vi) transportation rates for rail/trucks, (vii) interest rate levels, (viii) ethanol imports, (ix) changing levels of competition, (x) changes in laws and regulations, including govt. support/incentives for biofuels, (xi) changes in process technologies, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures and (xiv) general competitive factors on a local, regional, national and/or global basis, (xv) natural gas prices, and (xvi) chemicals and enzyme prices. The matters discussed herein may also involve risks and uncertainties described from time to time in the company’s annual reports and/or auditors’ financial statements. The company assumes no obligation to update any forward-looking information contained herein, and assumes no liability for the accuracy of any of the information presented herein as of a future date. Non-GAAP Financial Information We have provided non-GAAP measures as a supplement to financial results based on GAAP. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is included in the accompanying supplemental data. Adjusted EBITDA is defined as net income/(loss) plus (to the extent deducted in calculating such net income) interest expense, loss on extinguishment, income tax expense, intangible and other amortization expense, depreciation expense, and share-based compensation expense. Adjusted EBITDA is not calculated in accordance with GAAP and should not be considered as an alternative to net income/(loss), operating income or any other performance measures derived in accordance with GAAP or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA is presented solely as a supplemental disclosure because management believes that it is a useful performance measure that is widely used within the industry in which we operate. In addition, management uses Adjusted EBITDA for reviewing financial results and for budgeting and planning purposes. EBITDA measures are not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparison.

Disclaimer

Aemetis Mission

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G1 G3

PAST PRESENT FUTURE

G2

Traditional Corn Ethanol and Vegetable Oil Biodiesel Advanced Biofuels

(Purpose-Grown Feedstocks)

Low Carbon, Low Land Use (Waste Orchard/Forest/Oils)

Aemetis is an international renewable fuels and biochemicals company using patented industrial biotechnology for the conversion of first- generation ethanol and biodiesel plants into advanced biorefineries

Aemetis Overview

▪ Founded in 2006 by biofuels industry veteran (co-founder Pacific Ethanol; EPM) ▪ $150 million revenue in 2016; 110 million gallons per year biofuels capacity ▪ Own/operate 60+ million gallon ethanol plant in California

• Largest biofuels refinery in California
• Plan to increase profits using low carbon biogas from local dairies

▪ Expanding 50 million gallon Biodiesel and Glycerin refinery in India

• Signed 3-year BP supply agreement and begin deliveries Q2 2018

▪ Building $158 million Cellulosic Ethanol plant (waste orchard wood feedstock)

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Management and Board of Directors

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Eric McAfee - Chairman and CEO

▪ Founder of Aemetis (NASDAQ: AMTX) and co-founder of Pacific Ethanol (NASDAQ: PEIX) ▪ Founding shareholder of oil production company Evolution Petroleum (NYSE: EPM) ▪ Founded seven public companies and funded twenty-five private companies as principal investor

Andy Foster - EVP and President, Aemetis Advanced Fuels

▪ Joined Aemetis in 2006 ▪ Senior executive at three Silicon Valley tech companies ▪ Served in the George H.W. Bush White House (1989-1992) as Associate Director - Office of Political Affairs and as Deputy Chief of Staff for Illinois Governor Edgar for five years

Todd Waltz - EVP and CFO

▪ Joined Aemetis in 2007 ▪ Served in senior financial management roles with Apple, Inc. for 12 years ▪ Ernst & Young CPA

Sanjeev Gupta - EVP and President, Aemetis International

▪ Joined Aemetis in 2007 ▪ Manages India biodiesel and glycerin business ▪ Previously head of petrochemical trading company with about $250 million revenues and offices on several continents

John Block - Former Secretary of Agriculture from 1981-86 under President Reagan Fran Barton - Former CFO of five high tech companies with revenues above $1 billion

• Dr. Steven Hutcheson - Molecular genetics founder of Zymetis, acquired in 2011 by Aemetis

Lydia Beebe – Former 20-year Chevron corporate officer (38 years at Chevron) Board of Directors

Onboard, Dense, Low Carbon, Renewable Fuels Needed

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▪ Biodiesel power for high torque diesel engines ▪ Future: Electric drivetrains will require dense biofuel to produce electricity in high volumes onboard ▪ Ethanol blend of 25% to 40% enables higher efficiency gasoline engines ▪ Future: Electric drivetrains will require dense onboard biofuel with low emissions

Solar, Wind, Hydro and Nuclear power merely reduce emissions of new greenhouse gases and do not consume CO2 from the atmosphere Renewable fuels and biogas from plant materials consume CO2 and can reverse Climate Change by the use of waste cellulosic and renewable oil feedstocks

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Unique Attribute of Biofuels: Can Reverse Climate Change

Biofuels 85% of Carbon Reduction in California under LCFS

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Expanding US Federal Renewable Fuel Standard Mandate

In order to meet the federal Renewable Fuel Standard, obligated parties are required to blend biofuels in increasing quantities each year

▪ “Conventional Biofuels” reduce greenhouse gas emissions by 20% relative to gasoline/diesel ▪ “Advanced Biofuels” reduce greenhouse gas emissions by 50% relative to gasoline/diesel ▪ Higher ethanol blends (E15 and E85), ASTM approval of 100 octane gasoline and expanding export markets expected to drive favorable supply/demand for biofuels

10 Mandated Starch Ethanol Demand 2018

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Biodiesel and Renewable Diesel

India Biofuels Market – Emerging Rapidly

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Significant air quality problems: 13 of 20 worst polluted cities 100% Biodiesel Fuel approved by India Govt

• Only country in the world with 100% biodiesel fuel
• Replacement of Diesel for large fleet customers of Universal Biofuels
• Sold at a discount to diesel (improved margins with higher crude prices)

25 billion gallon diesel market with 20 billion gallons imported

• Policies to support biodiesel production
• Goods and Services Tax (GST) reduced from 18% to 12% (January 2018)

Three year Supply Agreement signed with BP (May 2017)

• India plant production of distilled biodiesel from waste feedstocks

India Biodiesel and Glycerin Plant: Universal Biofuels subsidiary

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Built 2008 on India East Coast by Aemetis (75%) and Wilmar JV (25%)

• Desmet Engineering (Belgium) design and construction
• Aemetis bought out Wilmar in 2009 and Aemetis now owns 100%
• 82 staff in India

Upgraded with Distilled Biodiesel and Refined Glycerin units

• Feedstock supplied from India, Argentina, Greece, etc.

Feedstocks/Products

• Tallow biodiesel
• Stearine biodiesel
• Refined Glycerin
• Waste oil production pretreatment unit for BP and domestic use

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Ethanol Market Growth

Ethanol Molecule: High Octane, High Oxygen, Replace BTEX

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Unique Properties of Ethanol Molecule ▪ Ethanol is 113 octane = prevents pre-ignition of fuel and lost power under high compression

• Higher octane = higher compression engines = better fuel efficiency
• Replace benzene and other harmful BTEX additives

▪ Ethanol is 34% oxygen by weight

• Cleaner burning gasoline
• Reduce air pollution

Ethanol Market in California: E15 and E85 Expansion

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California Annual Gasoline Consumption (BOE 2016) 15.5 billion gallons Existing ethanol market 1.5 billion gallons mandated 10% blend

Automobiles 24,487,807

Motorcycles 884,665

Commercial Trucks/Coml. Vehicles 5,092,390

Trailers 2,234,270 Trailer Coach/CCH 399,713 CA Based IRP Trucks 80,604

• Misc. Vehicles

113,725 Fee-Paid Registered 33,768,367 Exempt Registered 577,958

Total Registered: 34,346,325 Foreign Based IRP Trucks 1,549,000

Electric/Plug-in/Fuel Cell Vehicles in California and Projected (CARB Oct 2016)

Low Carbon Ethanol in California: E15 and Blender Pumps Needed

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E15 Approval by CARB Creates 700 million gallons of New Ethanol Demand in CA

▪ Existing market E10 = 1.3 billion gallons per year is 10% of gasoline market ▪ E15 approved by EPA in 2009 after $42 million of DOE testing (equal to six times to the Moon) ▪ Starting 2015, EPA now does not test engines with less than E15 ethanol blend ▪ E30 standard sought by EPA from engine manufacturers to increase octane and oxygen ▪ ASTM approved 100 octane gasoline in April 2017 = about E50 (50% ethanol) blend

Advanced Electric Trucks/Vans/Cars use Ethanol Fuel Cells for Power and Range

▪ Nissan e-Bio van sales start in 2020 using 8 gallon ethanol tank to fuel hydrogen fuel cell to provide 400 mile range for electric pickup/van/truck/car at 50 miles per ethanol gallon

• High power, long range electric vehicles require energy dense, storable, transportable fuel

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Cellulosic Ethanol from Waste Orchard Wood: Below Zero Carbon Emissions Biofuels

California Air Quality Crisis: Biomass Electricity Plants Closed

Biomass-to-Energy Plants Closing in California

▪ Inability to compete with 30% Investment Tax Credit subsidies for solar and wind ▪ Spreading orchard wood waste on farmland introduces pests into soils ▪ Spraying chemicals to kill pests in orchard wood is often illegal and damaging to land

Current Solution: Orchard wood is being burned to avoid future orchard damage

▪ Creates air pollution ▪ Damages human health ▪ Returning California to the polluted air before biomass-to-energy plants were built

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Solution: Orchard Wood Waste Produces Low Carbon Ethanol

About 1.5 million acres of almond and walnut orchards in CA

▪ 20 year almond tree life = remove about 40,000 acres per year − Up to 40 tons per acre for each orchard removed − Orchard/vineyard wood waste = 2+ million tons per year ▪ Pistachio shells and hulls have limited uses

Existing CA ethanol plants can produce 160+ million cellulosic ethanol gallons per year

▪ At 80 gallons per ton of waste feedstock, requires 1.6 million tons of biomass per year − Forest/Construction & Demolition wood waste ▪ Creates 30,000 direct/indirect jobs in Central Valley ▪ Attracts $1.6 billion of new capital investment to California ▪ Eliminates air pollution from orchard, vineyard and forest wood burning

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Aemetis Cellulosic Ethanol Plant using Lanzatech Technology

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Aemetis Biorefinery Upgrade to Produce Cellulosic Ethanol using Lanzatech technology

▪ 12 million biofuels gallons per year – Future expansion to 40 mgy per plant; Four plants planned ▪ Carbon Intensity score is expected to be negative due to using orchard waste feedstock ▪ Eliminates air and carbon pollution from orchard, vineyard and forest wood burning

Funding for Aemetis Low Carbon Fuels Project

▪ USDA Federal Phase I Approval Received Q4 2016

• $125 million, 20-year guaranteed loan projected closing 2018

Job Creation and Investment in California

▪ Creates 1,900 direct/indirect jobs in Central Valley in each phase ▪ $158 million project to produce cellulosic ethanol and high value fish meal

Lanzatech Technology: Syngas to Ethanol

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Gasification LanzaTech Fermentation Ethanol Plant Integration

Biomass

• Orchard/Vineyard Wood Waste
• Orchard Byproducts
• Forest Waste

Feedstock

• Founded in 2005, Lanzatech has

raised more than $250 million

• 250 patents pending
• Six pilot plants worldwide
• Building steel mill waste gas-to-

ethanol plants in Europe and Asia

• Aemetis first biomass-to-ethanol

plant using Lanzatech process Feedstock Electricity Byproduct Syngas

Aemetis 12 mgy Cellulosic Ethanol Plant: Riverbank, California

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Project Funding: $158 million to open plant in 2019

• Capital Expenditures: $126 million
• Commissioning: $8 million
• Reserves/Working Capital/Contingency: $24 million

Funding Sources:

• USDA guaranteed 20 year, low interest loan: $125 million
• Aemetis parent company: $10 million (already funded)
• Subordinated funding: $23 million

EBITDA Per Year: $40+ million (using waste orchard wood under 20 year contract)

Advanced Biofuels from Orchard and Field Waste Producing “Below Zero” Carbon Renewable Fuel

www.aemetis.com