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Thread on one of the more interesting 10-K filings I’ve read in a while. Everything taken directly from public info, augmented with add’l info & sourcing. Information rendered without judgment
Long, but stick around at least through the NEVO section
$AMTX
#EFT
Long, but stick around at least through the NEVO section
$AMTX
#EFT
An intro and some context before the 10-k
AMTX is a renewable fuels producer whose strategy is to lead the transition to “below zero carbon intensity” fuels to reverse climate change
AMTX is a renewable fuels producer whose strategy is to lead the transition to “below zero carbon intensity” fuels to reverse climate change
Co owns 2 operating facilities: ethanol plant in CA & a biofuels plant in India. Also owns an unfinished plant in KS. It plans to build a 3rd plant in CA that will generate cellulosic hydrogen to produce “carbon zero” renewable diesel & jet fuel
AMTX historical quarterly revenue, EBITDA, and net debt per Bloomberg
AMTX enterprise value
5 buys, 0 holds/sells from covering analysts. Avg target price of $33.60
5 buys, 0 holds/sells from covering analysts. Avg target price of $33.60
AMTX slide deck projects significant EBITDA growth in the coming years, driven largely by two projects: dairy RNG tied to its existing ethanol plant & the new carbon zero facility
AMTX stock performance. From COVID lows of $0.37 to a peak of $26.19 in April ‘21
Recent positive stock performance been driven by narratives embraced by the market: ramp in biogas development w/ very negative carbon intensity through its dRNG projects and…
Its future Riverbank project. AMTX to take carbon negative feedstock (biomass), make hydrogen, combine with corn oil from its ethanol plant to produce renewable jet & diesel fuel
Names pertinent to the 10-k review:
Eric McAfee – Chairman & CEO, founder AMTX
Michael Peterson – former director AMTX
Nevo Motors – Formerly Solargen, subsidiary of Nevo Energy
Third Eye Capital – “Alternative capital provider”
Now the 10-K …..
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000738214/000165495421002764/amtx_10k.htm
Eric McAfee – Chairman & CEO, founder AMTX
Michael Peterson – former director AMTX
Nevo Motors – Formerly Solargen, subsidiary of Nevo Energy
Third Eye Capital – “Alternative capital provider”
Now the 10-K …..
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000738214/000165495421002764/amtx_10k.htm
First topic: NEVO
Pg 4. “In December 2020, Aemetis Inc. subsidiary, Aemetis Properties Riverbank, Inc., acquired less than a 20% ownership in Nevo Motors, Inc.”
Pg 4. “In December 2020, Aemetis Inc. subsidiary, Aemetis Properties Riverbank, Inc., acquired less than a 20% ownership in Nevo Motors, Inc.”
AMTX stock rallied 35% on the NEVO announcement in Dec ‘20 https://www.aemetis.com/aemetis-enters-electric-vehicle-market-through-stake-in-zero-emission-heavy-duty-truck-producer-nevo-motors/
Pg. 72. As consideration, “the Co received 489,716 pref shares & 5 mm common stock shares in Nevo Motors, a privately held company, in exchange for conversion of its existing debt, carried at 0 value, into equity. Due to the lack of ops, carrying amount of our investment is 0.”
According to the release, “Nevo … is a stealth mode company with its product launch planned for Q1 2021.”
NEVO is private, but does have a website which has both a section for press releases (2 total) and a section to subscribe to new alerts
https://nevomotors.com/
https://nevomotors.com/
The home page for NEVO motors has a picture of a truck with the company’s logo on the door. Zooming in on the picture offers incremental detail on the NEVO logo
Nevo Motors is a subsidiary of Nevo Energy, according to the latter’s website,. It changed its name from Solargen Holdings to Nevo Motors on 12/22/20 when the AMTX deal was announced
NEVO Motors press release lists the CEO as the contact person. The CEO is Michael Peterson, former AMTX board member
Michael Peterson’ LinkedIn profile lists his current position as Mission President for LDS in Taiwan, in the midst of a “3 year work sabbatical” that started July ’18. He and his wife “will return to the United States in July, 2021” per his profile
Another employee of Nevo Energy, according to LinkedIn, is CFO Adam McAfee, brother of AMTX CEO Eric McAfee
Adam McAfee is CFO of Nevo Energy (per LinkedIn) and VP Finance of AMTX (per 10-K/A)
10-K/A pg 21: We employ Mr. Adam McAfee as Vice President, Finance …. Mr. Adam McAfee is the brother of Mr. Eric McAfee our Chief Executive Officer
10-K/A pg 21: We employ Mr. Adam McAfee as Vice President, Finance …. Mr. Adam McAfee is the brother of Mr. Eric McAfee our Chief Executive Officer
The most recent public filing for Nevo Energy, parent of Nevo Motors, is dated 8/7/12
That filing detailed the Nevo Energy Board accepting the resignation of CEO Michael Peterson in July 2012
Mr. Peterson is today, according to the 12/20/20 press release, CEO of Nevo Energy subsidiary Nevo Motors.
https://sec.report/otc/financial-report/87340
Mr. Peterson is today, according to the 12/20/20 press release, CEO of Nevo Energy subsidiary Nevo Motors.
https://sec.report/otc/financial-report/87340
2nd topic: GAFI
Pg. 4 Goodland Advanced Fuels Inc “AMTX exercises option to purchase all of capital stock of GAFI and has future plans to construct an advanced biofuels facility at Goodland.”
Pg. 32. GAFI is a “partially completed 40mm gallon per year dry-mill ethanol plant”
Pg. 4 Goodland Advanced Fuels Inc “AMTX exercises option to purchase all of capital stock of GAFI and has future plans to construct an advanced biofuels facility at Goodland.”
Pg. 32. GAFI is a “partially completed 40mm gallon per year dry-mill ethanol plant”
Pg. 90. Sole shareholder of GAFI agrees to agreement which grants AMTX option to purchase all capital stock for total purchase price of $10.00.
Pg 68. “On December 31, 2009, we exercised an option to acquire all capital stock of GAFI for $10 and consolidated assets, liabilities, and equity of GAFI are included as a wholly-owned subsidiary”
Pg. 90. “Sole shareholder of GAFI received 100,000 shares of common stock”
Pg. 90. “Sole shareholder of GAFI received 100,000 shares of common stock”
Pg. 83 “As of December 31, 2020 and 2019, GAFI had $22.2mm and $19.7mm net of debt issuance costs of $0.4 and $0.3 million outstanding and on the Term Loan and $11.8 and $10.5 million on the Revolving Loan, respectively”
According to 7/10/17 8-k the “sole shareholder” of GAFI was former AMTX board member Michael Peterson, current CEO of Nevo Motors, former CEO of Nevo Energy, and current Mission President in Taiwan
https://www.sec.gov/Archives/edgar/data/738214/000165495417006445/amtx_8k.htm
https://www.sec.gov/Archives/edgar/data/738214/000165495417006445/amtx_8k.htm
Pg 91. GAFI statements of Operations for year ended December 31, 2019
Next topic: EB-5
At YE20, AMTX listed $43.1 million of EB-5 promissory notes as debt
At YE20, AMTX listed $43.1 million of EB-5 promissory notes as debt
US Citizenship & Immigration Services’ EB-5 Immigrant Investor Program: investors are eligible to apply for a Green Card if they make the necessary investment in a commercial enterprise in the US; plan to create or preserve 10 permanent full time jobs for qualified US workers
Pg 82. Under AMTX’s EB-5 Phase I, Advanced BioEnergy arranges investments with foreign investors, who each make loans to the Keyes Plant in increments of $0.5 million.
Pg 82. AMTX launched its EB-5 Phase II funding … to refinance indebtedness and capital expenditures of Aemetis & GAFI. Advanced BioEnergy II arranges investments w/ foreign investors who make loans to Riverbank Cellulosic Ethanol Facility in increments of $0.9mm after 12/21/19
Next topic: biogas funding
Pg. 89 “Aemetis subsidiary Aemetis Biogas LLC Series A Preferred Units to Protair-X Americas with Third Eye Capital acting as an agent for the purchaser
Pg. 89 “Aemetis subsidiary Aemetis Biogas LLC Series A Preferred Units to Protair-X Americas with Third Eye Capital acting as an agent for the purchaser
Pg 89. To date, ABGL issued 5.374 million Series A Preferred Units for total value of $26.9 million. Avg $5 per unit
Pg. 89. The Preferred Unit Agreement includes preference payments, conversion rights, mandatory redemption value at $15 per unit, minimum cash flow requirements from each digester, and $0.9 million paid as fees to the Agent (Third Eye Capital)
AMTX noted the agreement allowed project execution without any dilutive stock issuances.
https://www.globenewswire.com/en/news-release/2018/12/26/1678235/0/en/Aemetis-Closes-Non-dilutive-30-Million-Equity-Investment-to-Build-Biomethane-Pipelines-and-Dairy-Digesters-to-Produce-Below-Zero-Carbon-Renewable-Natural-Gas-RNG.html
https://www.globenewswire.com/en/news-release/2018/12/26/1678235/0/en/Aemetis-Closes-Non-dilutive-30-Million-Equity-Investment-to-Build-Biomethane-Pipelines-and-Dairy-Digesters-to-Produce-Below-Zero-Carbon-Renewable-Natural-Gas-RNG.html
Next topic: Debt & Third Eye Capital
Pg 17. “Under our note facilities with Third Eye Capital, we owe approximately $161.5 million, including the GAFI Debt”
Pg 17. “Under our note facilities with Third Eye Capital, we owe approximately $161.5 million, including the GAFI Debt”
Pg 80. Interest rates on the Third Eye Capital debt are 14%, 18.5%, 5%, 15.5%, and 30%.
Pg 85. Debt repayment schedule
Pg 81. McAfee Capital, owned by Eric McAfee the Company’s Chairman and CEO, provided a guaranty of payment and performance secured by all of its Company shares
Next topic: Mgmt Plan
Pg 17. “As a result of negative capital & negative operating results the Co been required to remit substantially all excess cash from ops to the sr secured lender.. indicates substantial doubt about the ability of the Co to continue as a going concern.”
Pg 17. “As a result of negative capital & negative operating results the Co been required to remit substantially all excess cash from ops to the sr secured lender.. indicates substantial doubt about the ability of the Co to continue as a going concern.”
Next topic: Outside Business Interests
Pg 24. McAfee’s employment agreement “permits him to devote time to his outside business interest… these outside business interests could interfere with Mr. McAfee’s ability to devote time to our business and affairs”
Pg 24. McAfee’s employment agreement “permits him to devote time to his outside business interest… these outside business interests could interfere with Mr. McAfee’s ability to devote time to our business and affairs”
Next topic: AMTX’s auditor summary - Critical Audit Matter
Pg 63. “We determined the adequacy of the available commitment on the reserve liquidity facility to be a critical audit matter b/c mgmt's plan includes significant assumptions related to the Co’s cash flow needs.”
Pg 63. “We determined the adequacy of the available commitment on the reserve liquidity facility to be a critical audit matter b/c mgmt's plan includes significant assumptions related to the Co’s cash flow needs.”
Next topic: Related Transactions
10-k/a pg 21: “The Company previously prepaid $0.2 million to Redwood Capital, a company controlled by Eric McAfee, for the Company’s use of flight time on a corporate jet”
10-k/a pg 21: “The Company previously prepaid $0.2 million to Redwood Capital, a company controlled by Eric McAfee, for the Company’s use of flight time on a corporate jet”
Pg 21: ”the Company also agreed to pay $0.2 million annually as consideration to McAfee Capital in exchange for its willingness to provide the guaranties” (to Third Eye Capital)
Final topic: At The Market Sales ($100mm)
1/26/21: $84mm
https://www.sec.gov/Archives/edgar/data/0000738214/000094787121000106/ss190703_424b5.htm
1/26/21: $84mm
https://www.sec.gov/Archives/edgar/data/0000738214/000094787121000106/ss190703_424b5.htm
