The Aemetis Biorefineries Commercially Operating Second Generation Advanced Biofuels Company April 2013
Disclaimer Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on 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) distillery grain soluble markets, (v) persistency levels, (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 and steam 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.
Agenda Introduction Board / Management Team Industry Problem & Solution Company Background Current / Future Developments
Our Company Aemetis is an international renewable fuels and biochemicals company focused on the acquisition, development and commercialization of innovative technologies that replace traditional petroleum-based products by the conversion of first generation ethanol and biodiesel plants into advanced biorefineries . Grain Sorghum Cyanobacteria (Milo) (Blue Algae) Traditional Corn-Based Ethanol PAST PRESENT FUTURE G1 G2 G3 - 4 -
Aemetis Value Proposition North American renewable fuels company with Emerging Market exposure Strong management leadership with proven track record Management team has integrated advanced technologies into existing plants Flexible, non-food feedstock input which is non-disruptive to food supply Higher-margin, cost-effective production with significant scalability Already cost competitive with traditional gasoline without subsidies Positive cash flow in international operations, with US positive in 2013 - 5 -
Key Highlights: Aemetis, Inc. • Acquired Zymetis, Inc., a novel biorefining technology company, for its patent portfolio and production processes (2011) o 5 granted patents on enzyme and microbe technology for biofuels production • Owns/Operates renewable fuels and chemicals facilities in US and India o Acquired Cilion, Inc. 60 MGY ethanol plant in Keyes, CA (2012) (build cost $132M) o Built 50 MGY advanced biofuel plant in Kakinada, India (2008) (build cost $22M) • ~$190 million revenue in 2012 • Positive EBITDA in India; On track to US positive EBITDA in 2Q 2013 • 110+ employees worldwide • Key Customers: - 6 -
Agenda Introduction Board / Management Team Industry Problem & Solution Company Background Current / Future Developments
Board of Directors • Eric McAfee, Chairman and CEO, Founder Founder of Pacific Ethanol (Nasdaq: PEIX), Evolution Petroleum (Amex: EPM), Pacific Asia o Petroleum (Amex: CAK) GlobalScot appointed by First Minister of Scotland to advise on renewable energy o • Harold Sorgenti, Director Principal of Sorgenti Investment Partners (chemical investments) o Former President/CEO of ARCO Chemical Company (12 years including IPO) o • John Block, Director Former Secretary of Agriculture from 1981-86 under President Reagan o Food industry executive for 18 years o • Fran Barton, Director Former CFO of several multi-billion-dollar revenues companies: AMD, Atmel, Amdahl, UTStarcom, o Digital Equipment (PC division) • Dr. Steven Hutcheson, Director Founder of Zymetis, Inc. o 25 years bacterial molecular biology and molecular genetics at University of Maryland o PhD University of California Berkeley in cellular biology o - 8 -
Senior Management Team • Eric McAfee, Chairman and CEO • Andy Foster, President, AE Advanced Fuels Six years in biofuels industry with Aemetis o Extensive high tech/govt background, including White House and Governor staff o • Sanjeev Gupta, Managing Director, Universal Biofuels (India) President of $250 million global specialty chemical company o Nabisco Brands - India o • Todd Waltz, CFO Former Ernst & Young, Litton Industries (5 years) and Apple, Inc. (12 years) o • Jarrett Hollis, Senior Vice President, Operations Plant manager of large Midwest and California ethanol plants for 15 years o Plant manager of 55 mgy Cilion plant startup in 2008 as new facility and restart 2011 o • Michael Rosa, Senior Vice President, Engineering Land-O-Lakes (33 years); large-scale food-processing facility construction o Plant engineer for construction and retrofit of $130 million Cilion plant o - 9 -
Agenda Introduction Board / Management Team Industry Problem & Solution Company Background Current / Future Developments
Introduction: Biofuels Industry • Large Market : $40 billion per year in US for 13 billion gallons blended • Capacity : 210+ plants cost about $28 billion to construct • Less Expensive Fuel : Ethanol is less expensive than gasoline by more than $0.50 per gallon • Lowers cost of gasoline by $1.09 per gallon : Replaces 10% of gasoline in US, lowering cost of crude oil by replacing demand with renewable fuel • Provides 115 octane o More power o Allows using lower quality, lower cost crude oil to make gasoline • Contains 30% oxygen o Cleaner burning gasoline – required by federal air quality laws • Not subsidized : o Federal blender tax credit ended Dec 2011 o Biofuels do not receive tax-free Master Limited Partnership (MLP) status - 11 -
Problem: Gen 1 Biofuels Challenges • Gen 1 Corn-Based Ethanol Issues: o Capital Expenditures: Cost $1 for $1 of equipment – no discounted assets o High Operating Costs: Corn feedstock competes with food supply o Subsidy driven marketplace: Ended Dec 2011 (repeal of $0.45 tax credit) o Capacity to meet EPA mandates for first generation ethanol achieved Mandated 1 st Gen. Ethanol Capacity Source: USDA. Economic Research Service. The Renewable Identification Number System and U.S. Biofuel Mandates. - 12 -
Solution: Convert Gen 1 Plants to Gen 2-3 • Larger Markets: o Advanced Biofuels = 21 billion gallon EPA mandate by 2022 = $60 billion market o Fermentation of Bioplastics = $500 billion market • Lower Capital Costs: o Acquire or JV with existing Gen 1 facilities at significant discount o Leverage Gen 1 permits, operating personnel, low asset values • Lower Operating Costs: o Non-food feedstocks do not compete with food supply o Feedstock geographic diversity o Solar energy directly used in production of biofuels/chemicals o Lower land use – 400 acres instead of 120,000 acres to supply feedstock for 60 mgy plant • Higher Margins: o Gen 2 Feedstocks - Limited alternative markets o Gen 2 Biofuels - Higher market value and lower carbon content o Gen 3 Feedstocks - Produced at plant rather than offsite with transport costs o Gen 3 Biofuels/Bioplastics - Higher market value and lower carbon content - 13 -
Result: New Products at Higher Margins • New Products produced at Gen 1 Plants upgraded to Gen 2 and 3 technology o Fuels • Advanced ethanol from grain sorghum December 2012 EPA ruling that ethanol made from grain sorghum and • biogas using CHP is Advanced Biofuel Biodiesel from waste stearine feedstock (a byproduct of edible oils) • • Advanced ethanol from cyano-bacteria (blue algae) • 100% Replacement Jet and Diesel fuel from algal oils o Chemicals/Plastics • Sustainable plastic from fermentation of natural gas or biogas Other biocatalyst, fermentation-based products from sugar • • Isoprene from sugar, starch and cellulose feedstocks - 14 -
Agenda Introduction Board / Management Team Industry Problem & Solution Company Background Current / Future Developments
Improved Profitability Aemetis Increases Cash Flow of Biofuels Plants Advanced Biofuel - Algae Advanced Biofuel - Milo Traditional Ethanol - Corn G2 G1 $0.05 per Gallon $0.18 per Gallon $1.65 per Gallon $3.90 revenues Trends in 2013 to higher fuel prices and D5 Advanced Biofuels using biogas - $0.50 feedstock 20% lower corn costs and CHP - $0.48 processing = Cash flow of more than $0.20 per gallon by 2014 = CF of $0.38 per gallon by 2014 = $2.92 gross margin - 16 -
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