Aemetis, Inc · NASDAQ:AMTX

Aemetis — Investor Presentation (May 2014)

46 slides from Aemetis's investor presentation, May 28, 2014

1. Slide 1: The Aemetis Biorefinery

   The Aeme�s Biorefinery Advanced Renewable Fuels and Chemicals Produced by Conversion of Exis�ng Biofuels Facili�es May 2014

2. Slide 2: Disclaimer

   Disclaimer Certain of the statements contained herein may be statements of future expecta�ons and other forward-­‐looking statements that are based on management's current views and assump�ons and involve known and unknown risks and uncertain�es that could cause actual results, performance or events

3. Slide 3: Aemetis Value Proposition

   Aeme�s Value Proposi�on § Strong posi�ve cash flow from $178 million biofuels/biochemical revenues in 2013 § Opera�ng plants in California and India cost $165 million to build/upgrade § Patented technology to produce advanced fuels by upgrading facili�es § High efficiency produc�on with significant

4. Slide 4: Table of Contents

   Table of Contents 1. Introduc�on 5 2. Company Overview 9 3. Industry Overview 23 4. Company Highlights 36 5. Financial Overview 43 4

5. Slide 5: Introduction

   Introduction =)

6. Slide 6: Executive Management

   Execu�ve Management § Founder, Chairman and CEO of Aeme�s since 2006 § Founder of energy companies including $800 million revenues Pacific Ethanol (Nasdaq: PEIX) Eric McAfee and $400 million market cap Evolu�on Petroleum (NYSE: EPM) Chairman and CEO § Founded seven public companies, including Proc

7. Slide 7: Company Summary

   Company Summary § Aeme�s, Inc. (the “Company”) was founded in February 2006 by biofuels industry veteran Eric McAfee and has since grown to become a leading second-­‐genera�on renewable fuels and specialty chemicals company with $178 million in revenues during 2013 § Since its forma�on, the Compan

8. Slide 8: Company Highlights

   Company Highlights § Keyes Plant was originally constructed in 2008 at a cost of $132 million, then upgraded at a cost of $13 million for a total investment of $145 million Strong Asset Coverage § India plant was originally constructed in 2008 at a cost of $22 million and upgraded with glycerin re

9. Slide 9: Company Overview

   Company Overview <=

10. Slide 10: Aemetis Vision

    Aeme�s Vision Aeme�s is an interna�onal renewable fuels and biochemicals company using patented industrial biotechnology for the conversion of first-­‐ genera�on ethanol and biodiesel plants into advanced biorefineries. Tradi�onal Corn Ethanol and Advanced Biofuels Non-­‐Food, Low Carbon, Less Land Ve

11. Slide 11: Aemetis Key Highlights

    Aeme�s Key Highlights § Owns and operates renewable fuels and chemicals facili�es in US and India − Acquired Cilion, Inc. 60 MGY ethanol plant in Keyes, CA in 2012 (build and upgrade cost $145 million) − Built 50 MGY advanced biofuel plant in Kakinada, India in 2008 (build cost $22 million) § Acqu

12. Slide 12: Key Company and Industry Milestones

    Key Company and Industry Milestones February 2007 Acquired Energy Enzymes -­‐ Former DOE funded enzyme technology for enzyme produc�on and integra�on November 2008 Built 50 MGY non-­‐food feedstock and biomass energy biorefinery in Kakinada, India to use waste stearine and tallow to produce biodiesel

13. Slide 13: Keyes Plant Description

    Keyes Plant Descrip�on § Designed by Praj Industries, an industry leading builder of ethanol plants that has been involved in the General design and development of more than 450 alcohol plants § Stabilized produc�on capacity of more than 60 MGY, with permits allowing up to 75 MGY § Products inclu

14. Slide 14: Keyes Plant Description (continued)

    Keyes Plant Descrip�on (con�nued) § Access to the Union Pacific rail line provides access to key feedstock markets § Close proximity (40 miles) to the deep water Port of Stockton provides access to less expensive milo from key interna�onal feedstock markets (e.g., Argen�na) § 100% of ethanol and W

15. Slide 15: Keyes Plant Aerial View

    Keyes Plant Aerial View 1) Union Pacific Rail System access 8) One 1.05 MG denatured ethanol storage tank, two 2) Two corn/milo storage tanks (owned by A.L. Gilbert) and one 210,000 gallon 200-­‐proof ethanol storage tanks and one feedstock bin (owned by Aeme�s) 63,000 gallon 190-­‐proof ethanol stor

16. Slide 16: Keyes Plant Photos

    Keyes Plant Photos 16

17. Slide 17: Technology & Production Process

    Technology & Produc�on Process Typical Dry Mill Ethanol Process(1) 1) Aeme�s’ dis�llers grains are sold wet and therefore do not require large and expensive industrial dryers which o�en require significant maintenance. 17

18. Slide 18: Aemetis Process Benchmarking

    Aeme�s Process Benchmarking Aeme�s sells ethanol in California where it demands a premium price over ethanol sold in the U.S. on average. The Keyes Plant is one of the most efficient and produc�ve facili�es in the industry, with a higher yield than the industry average. Los Angeles Ethanol Price vs. M

19. Slide 19: Destination Model a Competitive Differentiator

    Des�na�on Model a Compe��ve Differen�ator West Coast loca�on and large local markets provide several advantages over Midwest ethanol producers § 10% ethanol mandate in California is approximately a 1.3 billion gallon market yearly CA Dairy Concentra�on Map § Given limited produc�on capacity, Califo

20. Slide 20: India Plant Description

    India Plant Descrip�on General § Built and 100% owned by Aeme�s subsidiary Aeme�s Interna�onal § 50 MGY nameplate biodiesel produc�on capacity § 50 MGY addi�onal capacity can be added at a cost of approximately $15 million § Products Products & − Biodiesel: $4.3 million in revenue for FY 2012 an

21. Slide 21: India Plant Photos

    India Plant Photos 21

22. Slide 22: Intellectual Property

    Intellectual Property The Company operates an R&D lab in Maryland and earned five granted advanced biofuels technology patents. 5 Awarded Licensed § Five awarded patents on enzyme and microbe technology: § Chevron Lummus / ARA renewable Jet and Diesel − Patented plant wall degrada�ve compounds and

23. Slide 23: Industry Overview

    Industry Overview 23

24. Slide 24: U.S. Ethanol Production

    U.S. Ethanol Produc�on § Ethanol is high octane (113) and cleaner burning motor fuel derived from corn, grain sorghum and other plants which can be used safely in virtually every gasoline engine at varying levels § Ethanol is mandated by Federal Air Quality and renewable fuels laws to replace the

25. Slide 25: Drivers of Ethanol Demand

    Drivers of Ethanol Demand § The U.S. ethanol industry has grown to 211 plants with annual capacity of 15.2 billion gallons § Last year, in the midst of a severe drought, the industry produced about 13.3 billion gallons of ethanol, very close to 2010 levels − One of the primary drivers of Ethanol D

26. Slide 26: The Increasing RFS Mandate

    The Increasing RFS Mandate (1) In order to meet the increasing Renewable Fuel Standards, holding all other variables constant, obligated par�es are expected to blend greater amounts of ethanol § The current RFS was enacted with the Energy Independence and Security Act of 2007 (EISA2007) § RFS crea

27. Slide 27: California Low Carbon Fuel Standard (LCFS)

    California Low Carbon Fuel Standard (LCFS) § LCFS is a state-­‐enacted policy to reduce greenhouse gas emissions from motor vehicles § Under LCFS, every fuel has a “carbon intensity value” (CI) − CI values es�mate the level of lifecycle greenhouse gas emissions of a par�cular fuel taking into acco

28. Slide 28: Blenders Have Been Using Surplus RINS to Meet Mandate

    Blenders Have Been Using Surplus RINS to Meet Mandate As the supply of RINs diminishes, refiners will be required to blend greater amounts of ethanol in order to meet the increasing RFS mandate (4) § The last few years saw a build-­‐up of a backlog of RINs as blending economics were strong and ethan

29. Slide 29: RIN Pricing has Escalated with Diminishing Supply

    RIN Pricing has Escalated with Diminishing Supply (1) Aeme�s is one of the few plants equipped and geographically posi�oned to obtain milo for produc�on of the D5 RIN and capture the premium in the market § D6 RIN prices had historically ranged between $0.01 to $0.05 but appreciated significantly in

30. Slide 30: 10% Blend Wall Had Limited Growth Beyond Existing Ethanol Production

    10% Blend Wall Had Limited Growth Beyond Exis�ng Ethanol Produc�on § Prior to August 2012, gasoline / ethanol blends were primarily limited to 10%(1), referred to as E10, by the EPA § The term “Blend Wall” refers to the maximum amount of ethanol that can be blended in to gasoline as a result of th

31. Slide 31: Ethanol in Demand in Export Markets

    Ethanol in Demand in Export Markets(1) 2013 U.S. exports, in millions of gallons Canada 325 Europe 39 East Asia Middle 8 East 40 Mexico Jamaica Philippines 10 India 31 13 52 Africa 10 Brazil Peru 47 30 Rest of world =15 1) Source: Renewable Fuels Associa�on www.EthanolRFA.org 31

32. Slide 32: Favorable Supply / Demand Dynamics

    Favorable Supply / Demand Dynamics In the near term, Aeme�s is well posi�oned to benefit from the exis�ng supply / demand imbalance Demand Factors Supply Factors § At 15% of U.S. gasoline consump�on, total ethanol demand § There are 211 U.S. ethanol plants with aggregate produc�on would increase fr

33. Slide 33: Demand Outlook

    Demand Outlook Environmental policy, air quality, energy security and the growing need for domes�c fuel sources are an�cipated to drive growth for ethanol for the foreseeable future. Other factors driving ethanol demand include increased usage of ethanol for octane enhancement, high gasoline prices

34. Slide 34: Benefits of Milo as a Feedstock Alternative to Corn

    Benefits of Milo as a Feedstock Alterna�ve to Corn § Milo is a genus of numerous species of grasses and is mainly grown in dry and hot climates of the U.S. which are not conducive for corn produc�on § From an ethanol feedstock perspec�ve, milo has several advantages over corn. − Unlike corn, in the

35. Slide 35: Corn and Milo Prices Have Been Declining to Our Benefit

    Corn and Milo Prices Have Been Declining to Our Benefit Corn futures prices are falling as U.S. corn produc�on for the 2013 / 2014 crop year is expected to reach a record level of 13.8 billion bushels according to USDA es�mates as of September 2013. U.S. U.S. Corn orn aand nd MMilo ilo PP ricing rici

36. Slide 36: Company Highlights

    Company Highlights 36

37. Slide 37: Management Team

    Management Team Eric A. McAfee, Chairman and CEO § Founding shareholder of $800 million revenues Pacific Ethanol (NASDAQ: PEIX) § Founding shareholder of several publicly-­‐held energy companies including Evolu�on Petroleum (NYSE: EPM) § Founded seven public companies and funded twenty-­‐five priva

38. Slide 38: Board of Directors

    Board of Directors Eric McAfee, Chairman and CEO, Founder § Founder of Aeme�s in 2006; Pacific Ethanol (Nasdaq: PEIX); Evolu�on Petroleum (NYSE: EPM); Procera Networks (Nasdaq: PKT) § GlobalScot appointed by First Minister of Scotland to advise on renewable energy Harold Sorgen�, Director/Chairman

39. Slide 39: Strategically Located to Serve Large Addressable Markets

    Strategically Located to Serve Large Addressable Markets Aeme�s plants are strategically located to cost effec�vely serve three large target markets: renewable fuels, food & feed and biochemicals. Pla�orm Products Market Size Market Drivers Aeme�s Strategic Advantage California Biofuels Advanced Cali

40. Slide 40: Favorable Supply and Demand Dynamics

    Favorable Supply and Demand Dynamics § Increasing consump�on of advanced biofuels is mandated by the new renewable fuel standard (“RFS”) schedule in the Energy Independence and Security Act of 2007 § Milo-­‐based ethanol using milo, biogas and a Combined Heat & Power system was approved by the EPA

41. Slide 41: Margin Improvement from Advanced Biofuel Production at Keyes Plant

    Margin Improvement from Advanced Biofuel Produc�on at Keyes Plant Aeme�s is the first converted corn ethanol plant that has received EPA approval to produce advanced biofuels (D5 RIN) using milo/ biogas/ Combined Heat & Power system § In June 2013, Aeme�s achieved high-­‐volume produc�on of lower-­‐

42. Slide 42: Margin Improvement from Deregulation in India

    Margin Improvement from Deregula�on in India January 2013, the Indian Government began to deregulate the diesel market, increasing the price of diesel and biodiesel in India and resul�ng in substan�al margin expansion for Aeme�s’ Kakinada India plant § Historically, the Indian government set the ma

43. Slide 43: Financial Overview

    Financial Overview 43

44. Slide 44: Aemetis Historical Financial Performance

    Aeme�s Historical Financial Performance 1) Excludes debt ex�nguishment costs and share-­‐based compensa�on. 44

45. Slide 45: Summary of Aemetis $36 million of Approved EB-5 Funding

    Summary of Aeme�s $36 million of Approved EB-­‐5 Funding § Aeme�s is approved for up to $36 million of unsecured EB-­‐5 financing by US Customs & Immigra�on Service (USCIS) § Aeme�s’ EB-­‐5 Project company is compliant with EB-­‐5 program job crea�on requirements § $1.5 million of funding has alre

46. Slide 46: Advanced Renewable Fuels and Chemicals Produced by Conversion of Existing Biofuels Facilities

    Advanced Renewable Fuels and Chemicals Produced by Conversion of Exis�ng Biofuels Facili�es www.aeme�s.com

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