AEMETIS, INC (Form: 10-K, Received: 04/16/2013 17:31:15)

Consolidated Financial Statements

	Page Number

Report of Independent Registered Public Accounting Firm	52
Consolidated Financial Statements
Consolidated Balance Sheets	53
Consolidated Statements of Operations and Comprehensive Loss	54
Consolidated Statements of Cash Flows	55
Consolidated Statements of Stockholders' Equity	56
Notes to Consolidated Financial Statements	57-85

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Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Aemetis, Inc.

We have audited the accompanying consolidated balance sheets of Aemetis, Inc. and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Aemetis, Inc. and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and its cash flows from operations are not sufficient to cover debt service requirements. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ McGladrey LLP

Des Moines, Iowa

April 16, 2013

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AEMETIS, INC.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2012 AND 2011

	2012			2011

Assets
Current assets:
Cash and cash equivalents	$	290,603		$	249,466
Accounts receivable, less allowance of $201,890 and $143,089, as of 2012 and 2011, respectively		1,360,606			1,379,668
Inventories		4,555,780			3,981,997
Prepaid expenses		264,243			491,308
Other current assets		374,217			1,026,477
Total current assets		6,845,449			7,128,916

Property, plant and equipment, net		83,893,472			15,530,905
Assets held for sale		-			885,000
Goodwill and intangible assets		2,767,994			2,767,994
Other assets		3,365,244			905,106
Total assets	$	96,872,159		$	27,217,921

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	15,070,106		$	14,337,536
Current portion of long term secured notes		26,278,535			2,425,588
Current portion of subordinated notes, net of discount for issuance costs		329,013			-
Secured notes, net of discount for issuance costs		5,756,752			5,161,191
Working capital loans and short-term notes		2,159,291			2,066,720
Mandatorily redeemable Series B convertible preferred stock		2,437,649			2,320,164
Other current liabilities		5,803,857			3,116,868
Total current liabilities		57,835,203			29,428,067

Long term debt:
Secured notes, net of discount for issuance costs		25,954,536			15,701,023
Related party line of credit, net of discount for issuance costs		1,540,074			4,291,913
Subordinated notes, net of discount for issuance costs		3,009,101			-
Seller note payable		4,011,430			-
EB-5 notes payable		1,006,863			-
Total long term debt		35,522,004			19,992,936

Commitments and contingencies

Stockholders' equity:
Series B convertible preferred stock, $0.001 par value; 7,235,565 authorized; 3,097,725 and 3,115,225 shares issued and outstanding, respectively (aggregate liquidation preference of $9,293,175 and $9,345,675 respectively)		3,098			3,115
Common stock, $0.001 par value; 400,000,000 authorized; 180,281,094 and 130,746,890 shares issued and outstanding, respectively		180,281			130,747
Additional paid-in capital		75,457,760			45,432,447
Accumulated deficit		(69,808,294	)		(65,526,029	)
Accumulated other comprehensive income/(loss)		(2,317,893	)		(2,243,362	)
Total stockholders' equity/(deficit)		3,514,952			(22,203,082	)

Total liabilities and stockholders' equity	$	96,872,159		$	27,217,921

The accompanying notes are an integral part of the financial statements

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AEMETIS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

	2012			2011
Revenues	$	189,048,226		$	141,857,914

Cost of goods sold		197,975,173			137,216,040

Gross profit/(loss)		(8,926,947	)		4,641,874

Research and development expenses		620,368			576,625
Selling, general and administrative expenses		11,613,357			8,570,591

Operating loss		(21,160,672	)		(4,505,342	)

Other income/(expense)
Interest income		4,976			23,436
Interest expense		(17,657,915	)		(13,561,285	)
Other income/(expenses)		(167,275	)		52,960
Gain on acquisition bargain purchase		42,335,876			-
Loss on debt extinguishment		(9,068,868	)		-
Gain/(loss) on sale of assets		350,356			(401,407	)
Loss before income taxes		(5,363,522	)		(18,391,638	)

Income tax benefit/(expense)		1,081,257			95,279

Net loss	$	(4,282,265	)	$	(18,296,359	)

Other comprehensive loss
Foreign currency translation adjustment		(74,531	)		(1,372,441	)
Comprehensive loss	$	(4,356,796	)	$	(19,668,800	)

Loss per common share
Basic and diluted	$	(0.03	)	$	(0.18	)

Weighted average shares outstanding
Basic and diluted		151,023,977			103,536,643

The accompanying notes are an integral part of the financial statement

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AEMETIS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

	For the twelve months ended December 31,
	2012			2011
Operating activities:
Net loss	$	(4,282,265	)	$	(18,296,359	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Stock-based compensation		686,059			177,278
Depreciation		3,041,783			1,141,007
Inventory provision		104,895			201,887
Amortization of debt issuance discount		7,543,583			4,624,705
Change in fair value of warrant liability		97,022			-
Loss on extinguishment of debt		9,068,868			33,926
(Gain)/loss on sale or disposal of assets		(350,356	)		401,407
Gain on acquisition bargain purchase		(42,335,876	)		-
Deferred tax liability/(asset)		(1,085,257	)		(98,479	)
Changes in assets and liabilities, net of assets and liabilities acquired in acquisitions:
Accounts receivable		3,113,643			(1,316,028	)
Inventory		(740,242	)		(3,724,088	)
Prepaid expenses		148,166			(172,840	)
Other current assets and other assets		475,965			(1,476,557	)
Accounts payable		799,620			9,597,694
Accrued interest expense and fees, net of payments		4,007,260			7,470,040
Other liabilities		2,775,405			189,508
Net cash used in operating activities		(16,931,727	)		(1,246,899	)

Investing activities:
Capital expenditures		(1,368,395	)		(2,568,001	)
Proceeds from the sale of assets		1,404,166			1,598,593
Acquisition of Cilion		(16,500,000	)		-
Cash obtained through merger		-			1,451
Net cash used in investing activities		(16,464,229	)		(967,957	)

Financing activities:
Proceeds from borrowings under secured debt facilities		39,840,000			3,621,500
Repayments of borrowings under secured debt facilities		(9,962,259	)		(3,053,426	)
Proceeds from borrowings under unsecured and subdebt term notes and working capital lines of credit		7,325,325			8,773,415
Repayments of borrowings under unsecured and subdebt notes and working capital facility		(3,868,050	)		(7,476,182	)
Warrant exercises		1,433			-
Net cash provided by financing activities		33,336,449			1,865,307

Effect of exchange rate changes on cash and cash equivalents		100,644			(84,001	)
Net cash and cash equivalents increase/(decrease) for period		41,137			(433,550	)
Cash and cash equivalents at beginning of period		249,466			683,016
Cash and cash equivalents at end of period	$	290,603		$	249,466

Supplemental disclosures of cash flow information, cash paid:

Interest payments, net of capitalized interest of $0 in 2012 and $184,933 in 2011		2,084,751			1,021,188
Income tax expense/(benefit)		4,000			3,200

Supplemental disclosures of cash flow information, non-cash transactions:

Issuance of shares for acquisition		12,511,200			1,890,135
Stock and warrants issued to pay interest and fees on borrowings		11,885,579			1,662,323
Payment of loans and fees by issuance of stock to related party		4,107,141			1,452,818
Beneficial conversion discount on related party debt		884,851			1,732,872
Seller note payable issued in Cilion acquisition		3,584,371			-

The accompanying notes are an integral part of the financial statement

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AEMETIS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

																Accumulated Other
	Series B Preferred Stock						Common Stock				Additional		Accumulated			Comprehensive			Total
	Shares			Dollars			Shares		Dollars		Paid-in Capital		Deficit			Income/(loss)			Dollars

Balance at December 31, 2010		3,165,225		$	3,165			90,342,032	$	90,342	$	38,557,376	$	(47,229,670	)	$	(870,921	)	$	(9,449,708	)

Stock-based compensation		-			-			5,585		6		152,736		-			-			152,742
Shares issued to consultants		-			-			30,000		30		24,506		-			-			24,536
Shares issued to secured lender		-			-			4,589,360		4,589		1,657,734		-			-			1,662,323
Conversion of related party note		-			-			29,056,356		29,056		1,423,762		-			-			1,452,818
Beneficial conversion feature on related party notes		-			-			-		-		1,732,872		-			-			1,732,872
Conversion of Series B preferred to common stock		(50,000	)		(50	)		50,000		50		-		-			-			-
Zymetis, Inc. merger		-			-			6,673,557		6,674		1,883,461		-			-			1,890,135
Other comprehensive loss		-			-			-		-		-		-			(1,372,441	)		(1,372,441	)
Net loss		-			-			-		-		-		(18,296,359	)		-			(18,296,359	)
Balance at December 31, 2011		3,115,225		$	3,115			130,746,890	$	130,747	$	45,432,447	$	(65,526,029	)	$	(2,243,362	)	$	(22,203,082	)

Stock-based compensation		-			-			321,965		322		258,271		-			-			258,593
Shares issued to consultants		-			-			1,000,000		1,000		426,466		-			-			427,466
Shares issued to secured lender		-			-			17,699,172		17,699		10,848,280		-			-			10,865,979
Issuance and exercise of warrants		-			-			1,432,667		1,433		1,018,167		-			-			1,019,600
Beneficial conversion feature on related party note		-			-			-		-		884,851		-			-			884,851
Conversion of Series B preferred to common stock		(17,500	)		(17	)		17,500		17		-		-			-			-
Cilion, Inc. merger		-			-			20,000,000		20,000		12,491,200		-			-			12,511,200
Conversion of related party note		-			-			9,062,900		9,063		4,098,078		-			-			4,107,141
Other comprehensive income		-			-			-		-		-		-			(74,531	)		(74,531	)
Net loss		-			-			-		-		-		(4,282,265	)		-			(4,282,265	)
Balance at December 31, 2012		3,097,725		$	3,098			180,281,094	$	180,281	$	75,457,760	$	(69,808,294	)	$	(2,317,893	)	$	3,514,952

The accompanying notes are an integral part of the financial statements.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Activities and Summary of Significant Accounting Policies

Nature of Activities . These consolidated financial statements include the accounts of Aemetis, Inc. (formerly AE Biofuels, Inc.), a Nevada corporation, and its wholly owned subsidiaries (collectively, “Aemetis” or the “Company”):

●	Aemetis Americas, Inc., a Nevada corporation and its subsidiaries AE Biofuels, Inc., a Delaware corporation;

●	Biofuels Marketing, a Delaware corporation;

●	Aemetis International, Inc., a Nevada corporation and its subsidiary International Biofuels, Ltd., a Mauritius corporation and its subsidiary Universal Biofuels Private, Ltd., an India company;

●	Aemetis Technologies, Inc., a Delaware corporation;

●	Aemetis Biochemicals, Inc., a Nevada corporation;

●	Aemetis Biofuels, Inc., a Delaware corporation and its subsidiary Energy Enzymes, Inc., a Delaware corporation;

●	AE Advanced Fuels, Inc., a Delaware corporation and its subsidiaries Aemetis Advanced Fuels Keyes, Inc., a Delaware corporation and Aemetis Facility Keyes, Inc., a Delaware corporation and its subsidiary EE Leasing Inc., a California corporation;

●	Aemetis Advanced Fuels, Inc., a Nevada corporation.

Aemetis, Inc. is an international advanced fuels and specialty chemical company focused on the production of renewable fuels and chemicals and the acquisition, development and commercialization of innovative technologies that are substitutes for traditional petroleum-based products. In 2010, the Company retrofitted an ethanol production facility in Keyes, California and in April 2011 began high volume production of ethanol and wet distiller’s grain (WDG). In May 2012 equipment for corn oil separation added the capability to produce and sell corn oil.

Principles of Consolidation . The consolidated financial statements include the accounts of the Company and its subsidiaries. All material inter-company accounts and transactions are eliminated in consolidation.

Use of Estimates . The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. To the extent there are material differences between these estimates and actual results, the Company’s consolidated financial statements will be affected.

Revenue recognition . The Company recognizes revenue when there is persuasive evidence of an arrangement, delivery has occurred, the price is fixed or determinable and collection is reasonably assured. The Company records revenues based upon the gross amounts billed to its customers.

Cost of Goods Sold . Cost of goods sold include those costs directly associated with the production of revenues, such as raw material consumed, factory overhead, and other direct production costs.

Shipping and Handling Costs . Shipping and handling costs are classified as a component of cost of goods sold in the accompanying consolidated statements of operations.

Research and Development. Research and development costs are expensed as incurred, unless they have alternative future uses to the Company.

Cash and Cash Equivalents . The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances at various financial institutions domestically and abroad. The Federal Deposit Insurance Corporation (FDIC) insures domestic cash accounts. The Company’s accounts at these institutions may at times exceed federally insured limits. The Company has not experienced any losses in such accounts.

Accounts Receivable. The Company sells ethanol, wet distillers grains, corn syrup and corn oil through third-party marketing arrangements generally without requiring collateral. The Company sells biodiesel, glycerin, and processed natural oils to a variety of customers and may require advanced payment based on the size and creditworthiness of the customer. Accounts receivables consist of product sales made to large creditworthy customers. Trade accounts receivable are presented at original invoice amount, net of the allowance for doubtful accounts.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivable are charged against the allowance for doubtful accounts once uncollectibility has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate additional allowances may be required.

Inventories . Inventories are stated at the lower of cost, using the first-in and first-out (FIFO) method, or market.

Property, Plant and Equipment . Property, plant and equipment are carried at cost less accumulated depreciation after assets are placed in service and are comprised primarily of buildings, furniture, machinery, equipment, land, and the biodiesel plant in India. It is the Company policy to depreciate capital assets over their estimated useful lives using the straight-line method.

Goodwill and Intangible Assets. Intangible assets consist of intellectual property in the form of patents pending, in-process research and development and goodwill. Once the patents pending or in-process R&D have secured a definite life in the form of a patent or product, they will be carried at cost less accumulated amortization over their estimated useful life. Amortization commences upon the commercial application or generation of revenue and is amortized over the shorter of the economic life or patent protection period.

Company intangible assets such as goodwill have indefinite lives and as a result need to be evaluated at least annually, or more frequently, if impairment indicators arise. In the Company’s review, we determined the fair value of the reporting unit using market indicators and discounted cash flow modeling. The Company compares the fair value to the net book value of the reporting unit. An impairment loss would be recognized when the fair value is less than the related net book value, and an impairment expense would be recorded in the amount of the difference. Forecasts of future cash flows are judgments based on the Company’s experience and knowledge of the Company’s operations and the industries in which the Company operates. These forecasts could be significantly affected by future changes in market conditions, the economic environment, including inflation, and the purchasing decisions of the Company’s customers.

California Ethanol Producer Incentive Program – The Company is eligible to participate in the California Ethanol Producer Incentive Program (“CEPIP”). Under the CEPIP an eligible California ethanol facility may receive up to $3 million in cash per plant per year of operations through 2013 when current production corn crush spreads, measured as the difference between specified ethanol and corn index prices, drop below $0.55 per gallon. The California Energy Commission determines on an annual basis the funding allocated to the program. No funds were allocated to this program during the government’s 2012 fiscal year. For any month in which a payment is made by the CEPIP, the Company may be required to reimburse the funds within the subsequent five years from each payment date, if the corn crush spreads exceed $1.00 per gallon. Since these funds are provided to subsidize current production costs and encourage eligible facilities to either continue production or start up production in low margin environments, the Company records the proceeds, if any, as a credit to cost of goods sold. The Company will assess the likelihood of reimbursement in future periods as corn crush spreads approach $1.00 per gallon. If it becomes likely that amounts may be reimbursable by the Company, the Company will accrue a liability for such payment and recognize the costs as an increase in cost of goods sold. With respect to CEPIP payments received and applied as reductions to cost of goods sold, the Company recorded $0 and $1,803,380 for the years ended December 31, 2012 and 2011, respectively. To date, the Company has not been required to reimburse any amounts.

Warrant liability : The Company adopted guidance related to distinguishing liabilities from equity for certain warrants which contain a conditional obligation to repurchase feature. During the year ending December 31, 2012, the Company granted 1,816,000 warrants with a conditional obligation to repurchase feature that require liability treatment. As a result, a long-term warrant liability was recorded to recognize the fair value of the warrants upon the issuance of each warrant. The Company estimates the fair value of these warrants using the Black-Scholes valuation pricing model with the assumptions as follows: The risk-free interest rate for periods within the contractual life of the warrant is based on the U.S. Treasury yield curve. The expected life of the warrants is based upon the contractual life of the warrants. Volatility is estimated based on an average of the historical volatilities.

The Company computes the fair value of the warrant liability at each reporting period and the change in the fair value is recorded through earnings. The key component in the value of the warrant liability is the Company's stock price, which is subject to significant fluctuation and is not under the Company's control. The resulting effect on the Company's net loss is therefore subject to significant fluctuation and will continue to be so until the warrants are exercised, amended or expire. Assuming all other fair value inputs remain constant, the Company will record non-cash expense when the stock price increases and non-cash income when the stock price decreases.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Income Taxes. The Company recognizes income taxes in accordance with ASC 740 Income Taxes using an asset and liability approach. This approach requires the recognition of taxes payable or refundable for the current year and deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns. The measurement of current and deferred taxes is based on provisions of enacted tax law.

ASC 740 provides for recognition of deferred tax assets if the realization of such assets is more likely than not to occur. Otherwise, a valuation allowance is established for the deferred tax assets, which may not be realized. As of December 31, 2012 and 2011, the Company recorded a full valuation allowance against its net deferred tax assets due to operating losses incurred since inception. Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets were fully offset by a valuation allowance.

We are subject to income tax audits by the respective tax authorities in all of the jurisdictions in which it operates. The determination of tax liabilities in each of these jurisdictions requires the interpretation and application of complex and sometimes uncertain tax laws and regulations. The recognition and measurement of current taxes payable or refundable and deferred tax assets and liabilities requires that the Company make certain estimates and judgments. Changes to these estimates or a change in judgment may have a material impact on the Company’s tax provision in a future period.

Long - Lived Assets. The Company evaluates the recoverability of long-lived assets with finite lives in accordance with ASC Subtopic 360-10-35 Property Plant and Equipment –Subsequent Measurements, which requires recognition of impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, based on estimated undiscounted cash flows, the impairment loss would be measured as the difference between the carrying amount of the assets and its estimated fair value.

Basic and Diluted Net Loss per Share. Basic loss per share is computed by dividing loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the dilution of common stock equivalents such as options, convertible preferred stock and warrants to the extent the impact is dilutive. As the Company incurred net losses for the years ended December 31, 2012 and 2011, potentially dilutive securities have been excluded from the diluted net loss per share computation, as their effect would be anti-dilutive.

The following table shows the number of potential dilutive shares excluded from the diluted net loss per share calculation as of December 31, 2012, and 2011:

	December 31, 2012		December 31, 2011

Aemetis Series B preferred		3,097,725		3,115,225
Aemetis Series B warrants		-		392,479
Aemetis Common stock options and warrants		10,309,257		8,232,292
Convertible interest & fees on related party note		-		457,143
Convertible promissory note		178,495		-
Total weighted average number of potentially dilutive shares excluded from the basic and diluted net income/(loss) per share calculation		13,585,477		12,197,139

Comprehensive Income. ASC 220 Comprehensive Income requires that an enterprise report, by major components and as a single total, the change in its net assets from non-owner sources. The Company’s other comprehensive income and accumulated other comprehensive income consists solely of cumulative currency translation adjustments resulting from the translation of the financial statements of its foreign subsidiary. The investment in this subsidiary is considered indefinitely invested overseas, and as a result, deferred income taxes are not recorded related to the currency translation adjustments.

Foreign Currency Translation/Transactions. Assets and liabilities of the Company’s non-U.S. subsidiary that operates in a local currency environment, where that local currency is the functional currency, are translated into U.S. dollars at exchange rates in effect at the balance sheet date; with the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive income. Income and expense accounts are translated at average exchange rates during the year. Gains and losses from foreign currency transactions are recorded in other income (loss), net.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Operating Segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance.

Aemetis recognized three reportable geographic segments: “India”, “North America” and “Other.”

●	The “India” operating segment encompasses the Company’s 50 million gallon per year nameplate capacity biodiesel plant in Kakinada, India, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius.

●	The “North America” operating segment includes the Company’s 55 million gallons per year nameplate capacity ethanol plant in Keyes, California and the research facilities in College Park, Maryland.

●	The “Other” segment encompasses the Company’s costs associated with new market development, company-wide fund raising, formation, executive compensation and other corporate expenses.

Fair Value of Financial Instruments. The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, other current liabilities, mandatorily redeemable Series B preferred stock, warrant liability and debt. The fair value of current financial instruments was estimated to approximate carrying value due to the short-term nature of these instruments. The warrant liability fair value was estimated using the Black-Scholes option valuation model at the end of each reporting period. The Company’s debt was valued using inputs from independent consultants evaluating external market inputs and internal financings to determine appropriate discount rates to determine fair value.

The carrying amount of debt obligations with TEC and the seller note payable at December 31, 2012 of $56.2 million had an estimated fair value of approximately $59.2 million based on estimated interest rates for comparable debt. It was not practicable to determine the fair market value of the Company’s remaining debt obligations due to the lack of availability of comparable credit facilities and related party nature of the financial arrangements.

Share-Based Compensation. The Company recognizes share based compensation in accordance with ASC 718 Stock Compensation requiring the Company to recognize expense related to the estimate fair value of the Company’s share-based compensation awards at the time the awards are granted adjusted to reflect only those shares that are expected to vest. To estimate the discount for lack of marketability on restricted stock issued, the Company uses the Black-Scholes model for pricing call options, which assists in deriving the implied price of put options using the put-call parity principle. The price of the put option divided by the market price quoted on the OTC markets exchange implies the discount for lack of marketability (DLOM) in valuing issued shares to consultants, debt holders, employees or affiliated investors.

Commitments and Contingencies. The Company records and/or discloses commitments and contingencies in accordance with ASC 450 Contingencies . ASC 450 applies to an existing condition, situation, or set of circumstances involving uncertainty as to possible loss that will ultimately be resolved when one or more future events occur or fail to occur.

Business Combinations . The Company applies the acquisition method of accounting to account for business combinations. The cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued. Identifiable assets, liabilities, and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date. The excess of the cost of the acquisition over our interest in the fair value of the identifiable net assets acquired is recorded as goodwill. If our interest in the fair value of the identifiable net assets acquired in a business combination exceeds the cost of the acquisition, a gain is recognized in earnings on the acquisition date. The Company will adjust the preliminary purchase price allocation, as necessary, after the acquisition closing date through the end of the measurement period (up to one year) as the valuations for the assets acquired and liabilities assumed are finalized.

Convertible Instruments . The Company evaluates the impacts of convertible instruments based on the underlying conversion features. Convertible Instruments are evaluated for treatment as derivatives that could be bifurcated and recorded separately. Any beneficial conversion feature is recorded based on the intrinsic value difference at the commitment date.

Modification Accounting . The Company evaluates amendments to its debt in accordance with ASC 540-50 Debt – Modification and Extinguishments for modification and extinguishment accounting. This evaluation included comparing the net present value of cash flows of the new debt to the old debt to determine if changes greater than 10 percent occurred. In instances, where the net present value of future cash flows changed more than 10 percent, the Company applies extinguishment accounting and determines the fair value of its debt based on factors available to the Company.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Sequencing Policy . In the event partial reclassification of contracts subject to ASC 815-40-25 is necessary, due to the Company’s inability to demonstrate it has sufficient authorized shares, shares will be allocated on the basis of maturity dates of potentially dilutive instruments with the latest maturity date receiving first allocation of shares. If a reclassification of an instrument were required, it would result in the earliest maturity instrument being reclassified first.

Recent Accounting Pronouncements .

Effective January 1, 2012, the Company adopted the third phase of amended guidance in ASC Topic 820, Fair Value Measurements and Disclosures. The purpose of the amendment is to achieve common fair value measurement and disclosure requirements by improving comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and those prepared in conformity with International Financial Reporting Standards, or IFRS. The amended guidance clarifies the application of existing fair value measurement requirements and requires additional disclosure for Level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. The Company has additional disclosure requirements associated with recurring Level 3 measurements for warrant liability accounting and fair value of debt instruments.

Effective January 1, 2012, the Company adopted the amended guidance in ASC Topic 220, Comprehensive Income . This accounting standards update, which helps to facilitate the convergence of GAAP and IFRS, is aimed at increasing the prominence of other comprehensive income in the financial statement by eliminating the option to present other comprehensive income in the statement of stockholders’ equity, and requiring comprehensive income to be reported in either a single continuous statement or in two separate but consecutive statements reporting net income and other comprehensive income. This amended guidance will be implemented retroactively. The Company has determined that the changes to the accounting standards will not materially affect the presentation of consolidated financial statements.

Effective January 1, 2012, the Company adopted the amended guidance in ASC Topic 350, Intangibles – Goodwill and Other. The amended guidance permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. The Company has determined that the changes to the accounting standards will not impact the Company’s disclosure or reporting requirements.

2. Ability to Continue as a Going Concern

The accompanying financial statements have been prepared on the going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced losses and negative cash flow and currently has a working capital deficit. These factors raise substantial doubt about its ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on several factors, including the ability to raise a significant amount of capital for operating expenses, capital purchases, current liabilities and debt service. The Company has been reliant on their senior secured lender to provide additional funding requirements when cash flows do not support operating expenses and the payment requirements on the Company’s debt. Although the current agreements in place with this lender do not require any payments or covenant requirements through May 2013, the continuation of the Company depends on management being able to maintain this relationship with the lender or find other financing options to provide cash as the Company expands its technologies. Management’s plans to continue to operate the Company include:

●

Working with the Company’s senior lender, Third Eye Capital, to restructure or provide additional financing as well as explore other financing arrangements including working with Advanced BioEnergy LP to attract investors for the remaining $35 million of notes available under the program, or through the issuance of additional debt or equity.

●	Restarting the Keyes ethanol plant and using milo, a less expensive feedstock than corn, for a portion of the raw material inputs.

●	Restructuring the State Bank of India note payable to allow for additional working capital to take advantage of the improved biodiesel margins from reductions in the diesel subsidies from the Indian government and higher volumes of international shipments.

·	Continuing to receive support from major shareholders and members of board of directors in providing cash financing.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company has produced negative gross profit during 2012, has less than one month of operating cash as of April 2013, has incurred cumulative losses since inception and has negative working capital (current assets less current liabilities) of $50,989,754. The Company has raised approximately $31.8 million to date through the sale of preferred stock and approximately $80 million through debt facilities. The Company will have to raise significantly more capital and debt to complete its business plan and continue as a going concern. The Company has one biodiesel production facility in operation that began selling biodiesel into the domestic Indian market in November 2008 and one ethanol production facility currently at idle. Although the biodiesel plant provides some cash flow to the Company it will likely be insufficient to allow for the completion of our business plan in fiscal 2013 until we are able to restart the facility in Keyes, California and attain cash from operations. The Company plans on beginning grinding milo and or corn depending on availability and attractiveness of margins toward the later part of April 2014.

Management believes that it will be able to raise additional capital through equity offerings and debt financings. Should the Company not be able to raise enough capital it may be forced to sell all or a portion of its existing biodiesel facility or other assets at a discount to market value and may incur additional impairment related to these assets to generate cash to continue the Company’s business plan or possibly discontinue operations. Until such additional capital is raised, the Company is dependent on financing from related parties such as Third Eye Capital and Laird Cagan. The Company has also arranged extended terms with its trade creditors. The Company’s goal is to raise additional funds needed to construct and operate next generation ethanol and biodiesel facilities through stock offerings and debt financings. There can be no assurance that additional financing will be available on terms satisfactory to the Company. The accompanying financial statements do not include any adjustments to the classification or carrying values of our assets or liabilities that may result should the Company be unable to continue as a going concern.

3. Inventory

Inventory consists of the following:

	As of December 31,
	2012		2011
Raw materials	$	2,077,779	$	628,366
Work-in-progress		1,672,957		2,056,771
Finished goods		805,044		1,296,860
Total inventory	$	4,555,780	$	3,981,997

As of December 31, 2012 and 2011, the Company has recognized a lower of cost or market reserve of $104,894 and $223,069 respectively, related to inventory.

4. Property, Plant and Equipment

Property, plant and equipment consist of the following:

	As of December 31,
	2012			2011
Land	$	2,837,780		$	667,008
Buildings		83,004,928			10,429,402
Furniture and fixtures		376,333			152,373
Machinery and equipment		2,615,140			1,025,105
Leasehold/Tenant Improvements		-			2,800,339
Construction in progress		82,627			3,186,551
Total gross property, plant & equipment		88,916,808			18,260,778
Less accumulated depreciation		(5,023,336	)		(2,729,873	)
Total net property, plant & equipment	$	83,893,472		$	15,530,905

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company recorded depreciation for the years ended December 31, 2012 and 2011 of $ 3,041,783 and $1,141,007, respectively. As of December 31, 2011, construction in progress related to the Company’s Kakinada, India biodiesel pre-treatment and glycerin units. As of December 31, 2011, leasehold improvements/tenant improvements related to the Keyes, California ethanol plant. Upon acquisition of the underlying asset on July 7, 2012, the leasehold improvements were valued and reclassified as a component of the purchase price allocation and eliminated as part of the Cilion merger accounting entries.

Management is required to evaluate these long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Based on the evaluation, management determined no assets required impairment as of December 31, 2012 and 2011.

5. Intangible Assets and Goodwill

Intangible assets consist of goodwill, patents, and in-process research and development. In July 2011 the Company acquired Zymetis, Inc., a biochemical research and development firm, with granted patents valued at $912,600, patents pending valued at $797,400 and licensed patents at $90,000 at the time of acquisition. Goodwill in the amount of $967,994 resulted from the excess in consideration paid over the fair value of the net assets acquired from the Zymetis acquisition. Following ASC 350-20-35 guidance, goodwill and indefinite lived intangibles were tested for impairment at the Aemetis Technologies, Inc. reporting unit level and no impairment resulted from the analysis. As of December 31, 2012, all pending and granted patents were in-process R&D and accordingly, no amortization expense has been recognized.

6. Notes Payable

	December 31, 2012		December 31, 2011
Third Eye Capital senior secured term notes	$	—	$	18,126,611
Third Eye Capital term notes		6,679,466		—
Third Eye Capital revolving credit facility		23,378,535		—
Third Eye Capital revenue participation term notes		7,406,224		—
Third Eye Capital acquisition term notes		14,768,846		—
Cilion shareholder Seller note payable		4,011,430		—
State Bank of India secured term loan		5,756,752		5,161,191
Revolving line of credit (related party)		1,540,074		4,291,913
Subordinated notes		3,338,114		—
EB-5 long term promissory notes		1,006,863		—
Unsecured working capital loans and short-term notes		2,159,291		2,066,720
Total debt		70,045,595		29,646,435
Less current portion of long-term debt		34,523,591		9,653,499
Total long term debt	$	35,522,004	$	19,992,936

Third Eye Capital. On July 6, 2012, Aemetis, Inc. and Aemetis Advanced Fuels Keyes, Inc. (AAFK), entered into an Amended and Restated Note Purchase Agreement with Third Eye Capital Corporation, as agent for the Note holders. Third Eye Capital extended credit in the form of (i) senior secured revolving loans in an aggregate principal amount of $18 million (“Revolving Credit Facility”); (ii) senior secured term loans in the principal amount of $10 million to convert the Revenue Participation agreement to a Note; and (iii) senior secured term loans in an aggregate principal amount of $15 million (“Acquisition Term Note”) used to fund the cash portion of the acquisition of Cilion, Inc. After this financing transaction, Third Eye Capital obtained enough equity ownership in the Company to be considered a related party.

In connection with the Amended and Restated Note Purchase Agreement, the Company evaluated the credit agreement for modification and extinguishment accounting. Based on the terms of the agreement, the Company accounted for the amendment under extinguishment accounting. To determine the fair value of the outstanding debt obligations, a 20% effective interest rate was applied to discount cash flows to their present value. In aggregate $9.1 million in extinguishment losses resulted from fair valuing the Notes and expensing fees charged as part of the agreement.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On October 18, 2012, Third Eye Capital agreed to (i) extend the maturity date of the Term Notes to July 6, 2014; (ii) to increase the amount of the Revolving Loan Facility by $6 million, to a total of $24 million; (iii) to modify the redemption waterfall so that any payments would be applied first to the increase in the Revolving notes; (iv) granted waivers to the Borrowers’ obligation to pay or comply, and any event of default which has occurred or may occur as a result of such failures of the Borrowers to pay or comply with certain financial covenants and principal payments, including financial covenants for the quarter ended September 30 and December 31, 2012; and (v) agreed to defer interest payments until the earlier of certain events described in the Limited Waiver or February 1, 2013. In consideration for the Limited Waiver and Amendment No. 1 to Amended and Restated Note Purchase Agreement, the Borrowers, among other things, agreed to pay the Lenders a waiver fee in the amount of $4 million; and (ii) cash in the amount of $28,377 for certain unreimbursed costs. The $6 million increase in the Revolving Credit Facility may not be drawn upon due to the additional credit being set aside for fee payments. An immediate $1 million draw from the Revolving Credit Facility paid the first installment of the Amendment No. 1 $4 million waiver fee. The remaining waiver fees are due in $1 million increments on January 1, 2013, April 1, 2013 and July 1, 2013 and have been included in the outstanding balance on the Revolving Credit Facility.

On February 27, 2013, Third Eye Capital agreed to the Limited Waiver and Amendment No. 2 to (i) provide a Notional Paydown by pledging addition collateral on the Revolving Portion of the Revolving Notes in the amount of $3,100,000, such Notional Paydown was replaced in the Limited Waiver and Amendment No. 3 with an increase in the Revolver Note and the collateral substitution of a pledge of 6,231,159 shares of stock held by McAfee Capital LLC (ii) grant waivers to the Borrowers’ obligation to pay or comply, including financial and production covenants for the quarter ended March 31 and June 30, 2013; (iii) extend the date of the next interest payment until the earlier of certain events described in the Limited Waiver or May 1, 2013, and (iv) allow the Borrowers to pay the Partial Amendment Fee of $1,000,000 due January 1, 2013 in shares of the Company’s common stock. In consideration for the amendment, the Company agreed to: (i) pay a waiver fee comprised of $1,500,000 and (ii) issue to 750,000 common shares of the Company. In addition, the interest rate on all outstanding indebtedness with Third Eye Capital increases 5% until certain conditions are met.

On April 15, 2013, Third Eye Capital agreed to the Limited Waiver and Amendment No. 3 to waive the following covenants of the Borrower in their entirety:(i) Borrowers’ obligation to obtain an NASDAQ listing by April 1, 2013; (ii) Borrower’s obligation to cause the Chairman to enter into certain agreements; and (iii) the Company’s obligation to deliver an auditor opinion as of and for the period ended December 31, 2012 without a going concern qualification. In addition, the Administrative Agent agreed to (i) extend the completion date of the conversion of the Keyes Plant to accommodate an 80:20 corn-to-milo ratio to May 31, 2013, (ii) amend the redemption provision in the event of an equity offering of Capital Stock up to $7,000,000, and (iii) increase the balance of the Revolving Credit Facility by an amount equal to the February 2013 $3.1 million advance and the $1.5 million waiver fee. In consideration for the Limited Waiver and Amendment, the Company agreed to: (i) pay a waiver fee comprised of $500,000 (which is added to the outstanding principal balance of the Revolving Notes) and (ii) require McAfee Capital, LLC to pledge an additional 6,231,159 Common Shares of the Parent to Agent, together with the delivery of stock certificates for such shares and stock powers. The $3.1 million advance, together with all accumulated interest, shall be repaid in full no later than September 30, 2013.

On April 15, 2013, Third Eye Capital also arranged a Special Bridge Advance providing additional borrowings of $2,000,000 with the same terms as the existing Revolving Credit Facility, subject to customary closing conditions . In consideration for the Special Bridge Advance, the Company agreed to (i) pay the Lender a placement fee of $300,000 and (ii) issue the Lender 1,000,000 shares of common stock of Aemetis, Inc. The Special Bridge Advance is secured by a blanket lien on the assets of Eric A. McAfee, the Company’s CEO and Chairman of the Board.

Details about each Third Eye Capital financing facility follows:

Third Eye Capital Senior Secured Term Notes . Aemetis Inc. redeemed its Senior Secured Note on July 6, 2012 with a $7,336,671 draw on the Third Eye Capital Revolving Credit Facility. For the twelve months ending December 31, 2012, the Company issued waiver and extension fee shares of 709,172, with a fair value at the time of issuance of $401,000, in association with this financing arrangement. As of December 31, 2011, senior secured term notes from Aemetis, Inc., Aemetis Advanced Fuels Keyes term notes and revenue participation agreement had an outstanding balances of $18,126,661, but were refinanced as part of the July 6, 2012 financing arrangements described in B., C., and D. following.

Third Eye Capital Existing Term Notes . As of December 31, 2012 Aemetis Advanced Fuels Keyes had $6,679,466 in principal and interest outstanding net of unamortized debt issuance costs of $481,342. As part of No. 1, the maturity of the Note changed to July 6, 2014. Interest on the term notes accrues at 14% on the unpaid principal balance and is payable monthly in arrears. Subsequent to year end, Amendment No. 2 deferred the payments of principal and interest until May 2013, subject to acceleration upon certain conditions. In May 2013 monthly principal payments will equal the greater of $200,000, $0.05 per gallon produced from the Keyes ethanol plant, or 50% of free cash flow. Consideration for these subsequent changes have been reflected in the following Scheduled Debt Repayment schedule. .

The Term notes contain various covenants, including but not limited to, minimum free cash flow and production requirements and restrictions on capital expenditures. Throughout the twelve months ending December 31, 2012, the Company violated certain covenants, which have been waived by the note holders in exchange for the issuance of Company common stock. As a result, during twelve months ended December 31, 2012, the Company issued 1,990,000 shares of common stock with a fair value at time of issuance of $1,080,000 and, in addition, paid or accrued cash in the amount of $588,000 as waiver or extension fees to the note holders on the Term Note.

Third Eye Capital Revolving Credit Facility . On July 6, 2012 Aemetis Advanced Fuels Keyes entered into a Revolving Credit Facility with a commitment of $18 million. On October 16, 2012, Amendment No. 1 increased the amount of the Revolving Loan Facility by $6 million, to a total of $24 million. Interest on the credit facility accrues at the prime rate plus 13.75% or 17% as of December 31, 2012. Interest is payable monthly in arrears. The Revolving Credit Facility matures on July 6, 2013 and may be extended with the payment of extension fees. As of December 31, 2012 Aemetis Advanced Fuels Keyes had $23,378,535 in principal and interest outstanding on the credit facility, net of unamortized debt issuance costs of $1,780,628 with available credit set aside for the purpose of paying Third Eye Capital fees. Subsequent to year end, on February 27, 2013, Amendment No. 2 provided an additional $3.1 million in additional borrowings based on anticipated collateralized arrangements and waived certain covenants. See note 17 Subsequent Events .

Third Eye Capital Revenue Participation Term Notes . On July 6, 2012 Aemetis Advanced Fuels Keyes entered into a $10 million Revenue Participation Note and issued 15 million shares of Company common stock with a fair value at the time of issuance of $9,383,000 in exchange for the defeasance of the revenue participation arrangement under the Existing Term Notes agreement. The Revenue Participation Note bears interest at 5% per annum. The Revenue Participation Note matures on July 6, 2014. As of December 31, 2012 Aemetis Advanced Fuels Keyes had $7,406,224 in principal and interest outstanding net of unamortized fair value discount of $2,763,994.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Third Eye Capital Acquisition Term Notes . On July 6, 2012 Aemetis Facility Keyes loaned $15 million to fund the cash portion of the merger and acquisition with Cilion, Inc. Interest on the Acquisition Term note accrues at the prime rate plus 10.75%, or 14% as of December 31, 2012, and matures on July 6, 2014. As of December 31, 2012 Aemetis Facility Keyes had $14,768,846 in principal and interest outstanding net of unamortized fair value discount of $2,446,082.

The Third Eye Capital notes are secured by first-lien deeds of trust on all real and personal property, and assignment of proceeds from all government grants and guarantees from Aemetis, Inc. The Term Note, Acquisition Term Note, Revenue Participation Term Note, and Revolving Credit Facility contain cross-collateral and cross-default provisions. McAfee Capital, solely owned by Eric McAfee, provided a guaranty of payment and performance secured by Company shares owned by the Guarantor. In addition, Eric McAfee provided a $10 million personal guarantee plus reimbursement to the Note holders any interest and expenses incurred enforcing the Guaranty. Subsequent to year end, on February 27, 2013, Amendment No. 2 stipulated an increase in Eric McAfee’s personal guarantee to $15 million, a 7.5 million Aemetis common stock pledge from Mr. McAfee personal assets, and an additional $8 million guaranty from McAfee Capital. See note 18 Subsequent Events .

Cilion shareholder Seller note payable . As part of the Cilion merger on July 6, 2012, Aemetis Facility Keyes provided $5 million in Seller note payable to Cilion shareholders as merger compensation subordinated behind the senior secured Third Eye Capital Notes. The liability bears interest at 3% per annum and is due and payable after the Third Eye Capital Notes and Revolving Credit Facilities have been paid in full. As of December 31, 2012, Aemetis Facility Keyes had $4,011,430 in principal and interest outstanding, net of unamortized debt discount of $1,061,721. State Bank of India secured term loan . On July 17, 2008, Universal Biofuels Private Limited (“UBPL”), the Company’s India operating subsidiary, entered into a six year secured term loan with the State Bank of India in the amount of approximately $6 million. The term loan matures in March 2014 and is secured by UBPL’s assets, consisting of the biodiesel plant and land in Kakinada.

In July 2008 the Company drew approximately $4.6 million against the secured term loan. The loan principal amount is repayable in 20 quarterly installments of approximately $270,000, using exchange rates corresponding to the date of payment, with the first installment due in June 2009 and the last installment payment due in March 2014. As of December 31, 2012, the 12% interest rate under this facility is subject to adjustment every two years, based on 0.25% above the Reserve Bank of India advance rate.

The principal payments scheduled for June 2009 through December 2012 were not made. The term loan provides for liquidating damages at a rate of 2% per annum for the period of default.

On October 7, 2009, UBPL received a demand notice from the State Bank of India. The notice informs UBPL that an event of default has occurred for failure to make an installment payment on the loan due in June 2009 and demands repayment of the entire outstanding indebtedness of 19.60 Crores (approximately $3.6 million) together with all accrued interest thereon and any applicable fees and expenses by October 10, 2009. As of December 31, 2012, UBPL was in default on interest and principal repayments, and all covenants, including asset coverage and debt service coverage ratios. Additional provisions of default include the bank having the unqualified right to disclose or publish the Company’s name and its director’s names as defaulter in any medium or media. At the bank’s option, it may also demand payment of the balance of the loan since the principal payments have been in default since June 2009. As a result the Company has classified the entire loan amount as current. State Bank of India has filed a legal case before the Debt Recovery Tribunal (DRT), Hyderabad, for recovery of approximately $5 million against the company and also impleaded Andhra Pradesh Industrial Infrastructure Corporation (APIIC) to expedite the process of registration of Factory land for which counter reply is yet to be filed by APIIC. In the case that the Company is unable to prevail with its legal case, DRT may pass a Decree for recovery of due amount, which will impact operations of the Company including action up to seizing company property for recovery of their dues. As of December 31, 2012 and December 31, 2011, the State Bank of India loan had accrued interest plus default interest of $2,188,693 and $1,485,614 less unamortized issuance discount of $4,966 and $14,902, respectively.

Revolving line of credit (related party) . The Company has a subordinated Revolving Line of Credit Agreement (“RLOC”) with Laird Cagan and other related party investors for $5 million. As of December 31, 2012 and December 31, 2011 the RLOC had a principal, interest and fees balance of $1,540,074 and $4,291,913, respectively net of unamortized issuance discount costs from extension fees and beneficial conversion costs of $0 and $873,292, respectively. As of December 31, 2012 approximately $3.46 million of credit may be available through the RLOC dependent upon Mr. Cagan and his co-owner’s willingness to fund. On September 30, 2011 Mr. Cagan was given the right to convert future interest and fees on the Revolving Line of Credit into shares of Aemetis common stock at a conversion price based off the 22 trailing days average stock price prior to the conversion. Under the RLOC, as of December 31, 2012, none of the $1,540,074 outstanding balance had a conversion right at year end.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

According to the original RLOC, only interest and fees were convertible to stock. Mr. Cagan approached the Board of Directors and provided the Company a notice of conversion under the RLOC, converting certain amounts of the outstanding interest and fees eligible for conversion to stock and a special request to convert outstanding principal. The Board of Directors accepted notice of conversion of $0.8 million of interest and fees and approved the special request to convert approximately $3.3 million in principal during the December 31, 2012 governance meeting. Mr. Cagan previously disclosed that the RLOC was owned by four note holders: Laird Cagan (27%); McAfee Capital, LLC (62%); Clyde Berg (6%) and Mougins Capital (5%). During the twelve months ended December 31, 2012 and 2011, Mr. Cagan’s investment group received 9,062,900 and 29,056,356 common stock shares in exchange for reduction in the RLOC outstanding balance.

The Revolving Line of Credit bears interest at the rate of 10% per annum and matures on July 1, 2014, after a two-year extension effective July 1, 2012. A five percent extension fee in the amount of $262,919 was accrued as part of the July 2012 agreement. The July 2012 extension fee has the same conversion right as accumulated interest on the credit arrangement. For the twelve months ended December 31, 2012 and 2011, principal, interest and fees in the amount of $4,107,141and $1,611,258, respectively, were converted to stock.

Subordinated Notes. On January 6 and January 9, 2012, Aemetis Advanced Fuels Keyes, Inc. entered into $3 million in Note and Warrant Purchase Agreements with 5% annual interest rate with two accredited investors. An additional $600,000 and $800,000 in Notes were added to one of the existing accredited investor’s balance in May and December 2012, respectively. This same accredited investor received payments of $600,000 in principal and $3,288 in interest in July 2012. The Notes included 5-year warrants exercisable for 1,733,333 shares of Aemetis common stock. Interest is due at maturity. The Promissory Notes are guaranteed by Aemetis and are due and payable upon the earlier of (i) December 31, 2013; (ii) completion of an equity financing by AAFK or Aemetis in an amount of not less than $25 million; (iii) the completion of an Initial Public Offering by AAFK or Aemetis; or (iv) after the occurrence of an Event of Default, including failure to pay interest or principal when due and breaches of note covenants. Neither AAFK nor Aemetis may make any principal payments under the Promissory Notes until all loans made by Third Eye Capital to AAFK are paid in full. At December 31, 2012 the Company had $3,338,114 in principal and interest outstanding, net of unamortized issuance discount of $612,365 and $0, respectively.

On May 31, 2012, Aemetis Advanced Fuels Keyes, Inc. (AAFK) entered into an additional $110,000 in 5 percent annual interest rate, Notes and Warrant Purchase Agreements with a related party, Laird Cagan. Mr. Cagan received one warrant for every three dollars of principal loaned or 36,667 warrants with 5-year exercise rights at $0.001 per share. The full amount of the $110,000 Note and accrued interest was paid in full on July 6, 2012.

Subsequent to year end, on January 14, 2013, Laird Cagan loaned $106,201 through a Promissory note maturing on April 30, 2013 with a 5 percent annualized interest rate and the right to exercise 53,101 warrants exercisable at $0.001 per share. On January 24, 2013, an additional $300,000 in David Lies Promissory Notes were issued with 150,000 warrants at $0.001 per share and 5 percent annual interest rate due April 30, 2013.

EB-5 long-term promissory notes . EB-5 is a US government program authorized by the Immigration and Nationality Act [8 U.S.C. §1153 (b)(5)(A)-(D); INA §203 (b)(5)(A)-(D)] designed to foster employment-based visa preference for immigrant investors to encourage the flow of capital into the U.S. economy and to promote employment of U.S. workers.

On March 4, 2011, and amended January 19, 2012, and July 24, 2012, the Company entered into a Note Purchase Agreement with Advanced BioEnergy, LP, a California limited Partnership authorized as a Regional Center to take EB-5 investments, for the issuance of up to 72 subordinated convertible promissory notes bearing interest at 3%, each note in the principal amount of $500,000 due and payable four years from the date of the note for a total aggregate principal amount of up to $36,000,000. The notes are convertible after three years at a conversion price of $3.00 per share.

Advanced BioEnergy, LP arranges investments with foreign investors, who each make investments in the Keyes plant project in investment increments of $500,000. The Company sold notes in the amount of $1,000,000 to the first two investors during the fourth quarter of 2012. As of December 31, 2012 $6,863 in accrued interest remained outstanding on the notes. The availability of the remaining $35,000,000 will be determined by the ability of Advanced BioEnergy, LP to attract additional qualified investors .

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Unsecured working capital loans . In November 2008, the Company entered into an operating agreement with Secunderabad Oils Limited (“Secunderabad”). Under this agreement Secunderabad agreed to provide the Company with working capital, on an as needed basis, to fund the purchase of feedstock and other raw materials for its Kakinada biodiesel facility. Working capital advances bear interest at the actual bank borrowing rate of Secunderabad of fifteen percent (15%). In return, the Company agreed to pay Secunderabad an amount equal to 30% of the plant’s monthly net operating profit. In the event that the Company’s biodiesel facility operates at a loss, Secunderabad owes the Company 30% of the losses. The agreement can be terminated by either party at any time without penalty.

Associated with the Working Capital Agreement with Secunderabad, during the twelve months ended December 31, 2012 and 2011, the Company made principal payments of approximately $2,383,481 and $7,287,063, respectively, and interest payments of approximately $174,241 and $124,856, respectively. Included as current short-term borrowings on the balance sheet at December 31, 2012 and 2011, the Company had $1,709,773 and $1,652,162, respectively, outstanding under this agreement.

Short-term notes . Aemetis Technologies, formerly Zymetis, Inc., carries certain debt obligations associated with a series of grants issued by the Maryland Department of Business and Economic Development to Zymetis prior to the merger. These grants were converted to promissory notes with interest upon the achievement of certain objectives.

Scheduled Debt Repayments

A significant amount of the current portion of debt is made up of $23.4 million in Third Eye Capital’s Revolving Credit facility, subject to an six month extension provision, and State Bank of India’s $5.8 million outstanding debt obligation, which is currently under discussion for restructured terms. Scheduled debt repayments for all loan obligations follow:

For the twelve months ending December 31,
2013	$	36,480,170
2014		37,886,509
2015		3,823,151
2016		1,006,863
Total	$	79,196,693
Debt discount at 12/31/12		(9,151,098	)
Carrying value of debt at 12/31/12	$	70,045,595

7. Operating Leases

As of December 31, 2012, the Company, through its subsidiaries, has non-cancelable future minimum operating lease payments for various office space locations. Future minimum operating lease payments are as follows:

For the twelve months ended December 31,
2013	$	421,089
2014		366,749
2015		154,737
Total	$	942,575

On December 1, 2009, the Company entered into a lease for a 55 million gallon nameplate ethanol facility located in Keyes, California for a term of 36 months at a monthly lease payment of $250,000. The Lease term and rental began upon substantial completion of the repair and retrofit of the plant on April 1, 2011, which was amended in April 2012 to a 60-month term ending March 2016. On July 6, 2012, Aemetis, Inc. acquired the Keyes, California ethanol plant. As a result, no additional lease obligations remain on the ethanol plant lease after the acquisition date.

For the years ended December 31, 2012 and 2011, the Company recognized rent expense of $2,170,824 and $3,314,712, respectively.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. Stockholders’ Equity

The Company is authorized to issue up to 400,000,000 shares of common stock, $0.001 par value and 65,000,000 shares of preferred stock, $0.001 par value.

Convertible Preferred Stock

The following is a summary of the authorized, issued and outstanding convertible preferred stock:

			Shares Issued and
	Authorized		Outstanding December 31,
	Shares		2012		2011
Series B preferred stock		7,235,565		3,097,725		3,115,225
Undesignated		57,764,435		—		—
		65,000,000		3,097,725		3,115,225

Our Articles of Incorporation authorize the Company’s board to issue up to 65,000,000 shares of preferred stock, $0.001 par value, in one or more classes or series within a class upon authority of the board without further stockholder approval.

Significant terms of the designated preferred stock are as follows:

Voting. Holders of the Company’s Series B preferred stock are entitled to the number of votes equal to the number of shares of Common Stock into which the shares of Series B preferred stock held by such holder could be converted as of the record date. Cumulative voting with respect to the election of directors is not allowed. Currently each share of Series B preferred stock is entitled to one vote per share of Series B preferred stock. In addition, without obtaining the approval of the holders of a majority of the outstanding preferred stock, the Company cannot:

●	Increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series B preferred stock;

●	Effect an exchange, reclassification, or cancellation of all or a part of the Series B preferred stock, including a reverse stock split, but excluding a stock split;

●	Effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series B preferred stock; or

●	Alter or change the rights, preferences or privileges of the shares of Series B preferred stock so as to affect adversely the shares of such series.

Dividends . Holders of all of the Company’s shares of Series B preferred stock are entitled to receive non-cumulative dividends payable in preference and before any declaration or payment of any dividend on common stock as may from time to time be declared by the board of directors out of funds legally available for that purpose at the rate of 5% of the original purchase price of such shares of preferred stock. No dividends may be made with respect to the Company’s common stock until all declared dividends on the preferred stock have been paid or set aside for payment to the preferred stock holders. To date, no dividends have been declared.

Liquidation Preference. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of the Series B preferred stock are entitled to receive, prior and in preference to any payment to the holders of the common stock, $3.00 per share plus all declared but unpaid dividends (if any) on the Series B preferred stock. If the Company’s assets legally available for distribution to the holders of the Series B preferred stock are insufficient to permit the payment to such holders of their full liquidation preference, then the Company’s entire assets legally available for distribution are distributed to the holders of the Series B preferred stock in proportion to their liquidation preferences. After the payment to the holders of the Series B preferred stock of their liquidation preference, the Company’s remaining assets legally available for distribution are distributed to the holders of the common stock in proportion to the number of shares of common stock held by them. A liquidation, dissolution or winding up includes (a) the acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) that results in the voting securities of the Company outstanding immediately prior thereto failing to represent immediately after such transaction or series of transactions (either by remaining outstanding or by being converted into voting securities of the surviving entity or the entity that controls such surviving entity) a majority of the total voting power represented by the outstanding voting securities of the Company, such surviving entity or the entity that controls such surviving entity, or (b) a sale, lease or other conveyance of all or substantially all of the assets of the Company.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Conversion. Holders of Series B preferred stock have the right, at their option at any time, to convert any shares into common stock. Each share of preferred stock will convert into one share of common stock, at the current conversion rate. The conversion ratio is subject to adjustment from time to time in the event of certain dilutive issuances and events, such as stock splits, stock dividends, stock combinations, reclassifications, exchanges and the like. In addition, at such time as the Registration Statement covering the resale of the shares of common stock is issuable, then all outstanding Series B preferred stock shall be automatically converted into common stock at the then effective conversion rate.

Mandatorily Redeemable Series B preferred stock. In connection with the election of dissenters’ rights by the Cordillera Fund, L.P., at December 31, 2008 the Company reclassified 583,334 shares with an original purchase price of $1,750,002 out of shareholders’ equity to a liability called “mandatorily redeemable Series B preferred stock” and accordingly reduced stockholders’ equity by the same amount to reflect the Company’s obligations with respect to this matter. The obligation accrues interest at the rate of 5.25% per year. At December 31, 2012 and 2011, the Company had accrued an outstanding obligation of $2,437,649 and $2,320,164, respectively. Full cash payment to the Cordillera Fund is past due. The Company expects to pay this obligation upon availability of funds after paying senior secured obligations.

9. Outstanding Warrants

For the twelve months ended December 31, 2012, the Company granted 1,816,000 common stock warrants, which had the potential to enhance returns for accredited investors who entered into additional Notes and Warrant Purchase Agreements. The accredited investors received 5-year warrants exercisable at $0.001 per share.

For the Twelve months ended December 31, 2012, Note investors exercised 1,432,667 warrant shares at a weighted average exercise price of $0.001 per share.

For the twelve months ended December 31, 2012, 392,479 Series B Preferred stock warrants and 5,000 common stock warrants expired, both classes of warrant shares having a weighted average exercise price of $3.00 per share.

A summary of historical warrant activity for the years ended December 31, 2011 and 2012 follows:

Preferred Stock
	Warrants Outstanding & Exercisable			Weighted - Average Exercise Price		Average Remaining Term in Years
Outstanding December 31, 2010		443,853			3.00		1.18
Expired		(51,374	)		3.00		-
Outstanding December 31, 2011		392,479			3.00		0.25
Expired		(392,479	)		3.00		-
Outstanding December 31, 2012		-		$	-		-

Common Stock
	Warrants Outstanding & Exercisable			Weighted - Average Exercise Price		Average Remaining Term in Years
Outstanding December 31, 2010		1,428,590			0.35		4.08
Expired		-			-		-
Outstanding December 31, 2011		1,428,590			0.35		3.08
Granted		1,816,000			0.001		-
Exercised		(1,432,667	)		0.001		-
Expired		(5,000	)		3.00		-
Outstanding December 31, 2012		1,806,923		$	0.27		2.67

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10. Fair Value of Warrants

The following tables summarize the assumptions used in computing the fair value of liability warrants subject to fair value accounting at the date of issue during the year ended December 31, 2012:

Expected dividend yield		0%
Risk-free interest rate		0.67% - 0.86%
Expected volatility		79.08% - 119.03%
Expected Life (years)		5.0
Exercise price	$	0.001
Company stock price	$	0.40 - $0.73

The following tables summarize the assumptions used in computing the fair value of liability warrants subject to fair value accounting at December 31, 2012:

Expected dividend yield		0%
Risk-free interest rate		0.72%
Expected volatility		79.08%
Expected Life (years)		4.5-5.0
Exercise price	$	0.001
Company stock price	$	0.70

11. Fair Value Measurements

The Company complies with the fair value measurements and disclosures standard which defines fair value, establishes a framework for measuring fair value, and expands disclosure for those assets and liabilities carried on the balance sheet on a fair value basis.

The Company's balance sheet contains derivative financial instruments that are recorded at fair value on a recurring basis. Fair value measurements and disclosures require that assets and liabilities carried at fair value be classified and disclosed according to the process for determining fair value. There are three levels of determining fair value.

Level 1 uses quoted market prices in active markets for identical assets or liabilities.

Level 2 uses observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3 uses unobservable inputs that are not corroborated by market data.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Warrant liability : The warrant liability consists of stock warrants issued by the Company that contain conditional obligation to repurchase feature. In accordance with accounting for warrants as liabilities, the Company calculated the fair value of warrants under Level 3 using the assumptions described in “Fair Value of Warrants”. Realized and unrealized gains and losses related to the change in fair value of the warrant liability are included in Other income (expense) on the Statement of Operations.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes financial liabilities measured at fair value on a recurring basis as of December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	Total		Level 1		Level 2		Level 3

Warrant liability	$	267,950	$	-	$	-	$	267,950

The following table reflects the activity for liabilities measured at fair value using Level 3 inputs for the twelve months ended December 31, 2012:

Balance as of December 31, 2011	$	-
Issuances of warrant liabilities		1,189,095
Exercise of warrant liabilities		(1,018,167	)
Realized and unrealized loss
related to change in fair value		97,022
Balance as of December 31, 2012	$	267,950

Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Financial assets and financial liabilities measured at fair value on a non-recurring basis were not significant at December 31, 2012.

12. Stock-Based Compensation

Common Stock Reserved for Issuance

Aemetis authorized the issuance of 9,600,434 shares under its 2006 and 2007 Plans and 977,500 outside the plans, which includes both incentive and non-statutory stock options. These options generally expire five years from the date of grant and are exercisable at any time after the date of the grant, subject to vesting.

The following is a summary of options granted under the employee stock plans:

	Shares Available			Number of			Weighted-Average
	for Grant			Shares Outstanding			Exercise Price
Balance as of December 31, 2010		10,167			5,780,977		$	1.02
Authorized		959,290			—			—
Merger with Zymetis, Inc. Plan		323,817			1,421,183			0.41
Exercised		—			(35,585	)		0.06
Forfeited/Expired		362,874			(362,874	)		0.20
Balance as of December 31, 2011		1,656,148			6,803,701			0.94
Authorized		1,000,000			—			—
Granted		(2,555,000	)		2,555,000			0.55
Exercised		—			(321,965	)		0.23
Forfeited/Expired		1,511,902			(1,511,902	)		2.17
Balance as of December 31, 2012		1,611,134			7,524,834		$	0.59

During 2012 the net 321,965 shares of common stock exercised from the Company’s stock plans had an intrinsic value of $155,292 at time of exercise. The weighted average strike price for the shares exercised was $0.23 per share and the weighted average closing market price at time of exercise was $0.72. The exercised shares hold a restrictive legend.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

During 2011 the 35,585 shares of common stock exercised from the Company’s stock plans had an intrinsic value of $24,041 at time of exercise. The weighted average strike price for the shares exercised was $0.06 per share and the weighted average closing market price at time of exercise was $0.74. The exercised shares hold a restrictive legend.

The Company recorded an expense for the years ended December 31, 2012 and 2011 in the amount of $49,121 and $24,533, respectively, which reflects periodic fair value re-measurement of outstanding consultant options under ASC 505-50-30 Equity Based Payments to Non Employees . The valuation using the Black-Scholes-Merton model is based upon the current market value of the Company’s common stock and other current assumptions, including the expected term (contractual term for consultant options). The Company records the expense related to consultant options using the accelerated expense pattern prescribed in ASC 505-50-30. Vested and unvested options outstanding under the Aemetis Stock Option Plans as of December 31, 2012 and 2011 follow:

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Term (In Years)		Average Intrinsic Value 1
2012
Vested		5,061,850	$	0.63		2.21	$	2,081,910
Unvested		2,462,984		0.52		4.69		435,197
Total		7,524,834	$	0.59		3.02	$	2,517,107

2011
Vested		5,960,116	$	1.05		2.26	$	1,986,222
Unvested		843,585		0.17		3.16		445,606
Total		6,803,701	$	0.94		2.37	$	2,431,828

———————

(1) Intrinsic value calculation based on the $0.70 closing price of Aemetis stock on December 31, 2012 and 2011, as reported on the Over the Counter Bulletin Board.

Valuation and Expense Information. The weighted-average fair value calculations for options granted within the period are based on the following weighted average assumptions:

	Fiscal Year Ended December 31
	2012			2011
Dividend-yield		0	%	0		%
Risk-free interest rate		0.28-0.38	%	0.20-1.80		%
Expected volatility		79.08	%		90.38-103.22	%
Expected life (years)		2.0-3.0			0.2-4.0
Weighted average fair value per share of common stock	$	0.26		$	0.10

The Company incurred non-cash stock compensation expense of $258,593 and $152,742 in fiscal 2012 and 2011, respectively, for options granted to employees and consultants. As of December 31, 2012 and 2011, the Company had $30,631 and $38,690 respectively, of total unrecognized compensation expenses that the Company will amortize over the next three years.

Non-Plan Stock Options

In November 2012 the Company issued 977,500 stock options to board members and consultants outside of any Company stock option plan. None of the non-plan options have been exercised.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Outside Company Stock Plan

See following for summary of options granted outside the Company stock plans:

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Term (In Years)		Average Intrinsic Value 2
2012
Vested		402,500	$	0.55		4.85	$	60,375
Unvested		575,000		0.55		4.85		86,250
Total		977,500	$	0.55		4.85	$	146,625

———————

(2) Intrinsic value based on the $0.70 closing price of Aemetis stock on December 31, 2012, as reported on the Over the Counter Bulletin Board.

13. Acquisitions, Divestitures and Material Agreements

Technology Company Acquisition. On July 1, 2011, the Company completed the acquisition of Zymetis, Inc., a Delaware corporation in exchange for 6,673,557 shares of Aemetis common stock. The acquisition was made as a strategic purchase related to the research and development work that Zymetis was performing. The purchase price was determined based on an arms-length negotiated value, which resulted in the recognition of goodwill. See following for Zymetis merger Purchase Price Allocation and Goodwill Reconciliation:

	2011

Issuance of Stock as merger consideration	$	1,801,860
Fair Value of stock options attributable to the pre-combination service		88,275
Consideration paid	$	1,890,135

Working capital assets	$	11,201
Property, Plant & Equipment		65,493
Working capital liabilities		(509,078	)
Debt assumed		(346,995	)
Deferred Taxes		(98,479	)
Intangibles		1,800,000
Net Assets Acquired	$	922,141
Goodwill	$	967,994

Post-merger the Zymetis subsidiary was renamed Aemetis Technologies, Inc. and continued its R&D development work. The proforma adjustments for this acquisition are not material. For the year ending December 31, 2011, Aemetis Technologies generated $1,750 in consulting income and $174,488 in losses.

Working Capital Arrangement. In March 2011, we entered into a Corn Procurement and Working Capital Agreement with J.D. Heiskell. Pursuant to the agreement we agreed to procure whole yellow corn from J.D. Heiskell. We have the ability to obtain corn from other sources subject to certain conditions, however, in 2012, all of our corn requirements were purchased from Heiskell. Title to the corn and risk of loss passes to us when the corn is deposited in the weigh bin. The initial term of the Agreement expired on December 31, 2012 and is automatically renewed for additional one-year terms, currently to December 31, 2013. Heiskell further agrees to sell all ethanol to Kinergy Marketing or other marketing purchaser designated by the Company and all WDG and syrup to A.L. Gilbert. These agreements are ordinary purchase and sale agency agreements for an ethanol plant. See following for J.D. Heiskell & Company sales, net of transportation costs and marketing fees, purchases and accounts receivable as of and for the years ended 2012 and 2011.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

J.D. Heiskell & Company:
	2012		2011
Sales
Ethanol	$	128,830,630	$	105,447,012
Distillers Grains		35,468,559		20,558,034
Corn Oil		2,582,858		—
Total Sales		166,882,047		126,005,046

Corn Purchases		156,984,918		106,194,420

Accounts Receivable	$	394,784	$	841,729

Ethanol and Wet Distillers Grains Marketing Arrangement. The Company entered into an Ethanol Marketing Agreement with Kinergy Marketing and a Wet Distillers Grains marketing agreement with A. L Gilbert. Under the terms of the agreements, subject to certain conditions, the agreements mature on August 31, 2013 with automatic one-year renewals thereafter. For the years ended December 31, 2012 and 2011, the Company in total expensed $2,394,194 and $2,022,679, respectively, under the terms of both ethanol and wet distillers grains agreements.

Acquisition of Cilion . On July 6, 2012, the Company acquired 100% of Cilion, Inc. through a merger. The Company had been leasing the property owned by Cilion. The Company’s primary lender supported the financing of the acquisition in anticipation the merger will be accretive to earnings in the long term. Acquiring the real property and assets associated with the ethanol plant provides assets beneficial to the Company in securing additional financing and much needed flexibility not available under the lease in the development, testing, and commercialization of next generation biofuels technologies owed by the Company.

At the effective time of the Merger, each issued and outstanding share of Cilion Preferred Stock was automatically converted into the right to receive an aggregate of (a) $16,500,000 cash and (b) 20,000,000 shares of Aemetis common stock and (c) the right to receive an additional cash amount of $5,000,000 plus interest at the rate of 3% per annum, which is payable upon the satisfaction by the Company of certain conditions set forth in the merger agreement. The Seller Note was recorded at its estimated fair value based on an expected term of 2 years and a 22% discount rate.

Acquisition transaction costs funded during the merger included $15,000 in appraisal fees to Natwick & Associates, $185,065 in legal fees paid to DLA Piper, and $135,126 in mergers and acquisitions fees paid to UBS Securities LLC, all of which were recorded as selling, general and administrative expenses. Subsequent to the year end, UBS negotiated a settlement with Aemetis to be paid $2,250,000 in mergers and acquisition fees over time for their involvement in the transaction, which has been accrued for in 2012 and recognized in general and administrative expense.

The fair value of the future consideration was determined by discounting the anticipated cash flow stream at an estimated market rate of interest based on potential payment timing. The merger agreement is the basis for determining the amount of the payment. The $5,000,000 future consideration is payable when the TEC loans have been satisfied. The Company anticipates the future consideration will be redeemed after satisfaction of amounts owed under senior secured debt arrangements with TEC. Management projects full satisfaction of the TEC obligations will occur within two to three years from the acquisition.

The purchase price for Cilion, Inc. is recapped below based on the trading value of the stock at the time of the acquisition and the expected fair value of the future consideration (in thousands):

Cash	$	16,500
Fair value of shares issued		12,511
Seller note payable		3,584
	$	32,595

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The acquisition provisional date fair value was allocated to Cilion’s net tangible and identifiable intangible assets based on their estimated fair values as of July 6, 2012 as set forth below (in thousands).

Tangible Assets:
Accounts receivable	$	3,114
Prepaid assets		5
Equipment held for resale		1,367
Property, plant and equipment		70,464
Other assets		1,073
Total Tangible Assets Acquired		76,023

Liabilities Assumed
Accounts payable		(6	)
Deferred tax liability		(1,086	)

Total Enterprise Value	$	74,931

The Company recognized a bargain purchase gain of $42,335,876. The Company believes the Cilion shareholders valued the equity component of the consideration higher than the current quoted market price. The Company believes the lower market share price is due to the lack of information available to the market and the Cilion shareholders valued Aemetis common stock at value higher than the trading price on the OTC market at the time of the transaction, giving rise to the gain on bargain purchase accounting treatment. As of December 31, 2012 the purchase price allocation for deferred income tax and gain on acquisition bargain purchase were provisional and had not yet been finalized due to certain final tax information not being available yet. The amounts and final allocations will be completed in 2013.

The unaudited pro forma financial information below presents the combined revenue and net income for Cilion and the Company for the years ending December 31, 2011 and 2012, as if the acquisition occurred as of January 1, 2011 (in thousands):


		Unaudited Proforma
2011
	Revenue	$	141,858
	Net loss		15,864

2012
	Revenue	$	189,048
	Net loss	$	(49,851	)

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

14. Segment Information

Summarized financial information by reportable segment for the years ended December 31, 2012 and 2011 follow:

	For the twelve			For the twelve
	months ended			months ended
Statement of Operations Data	December 31, 2012			December 31, 2011
Revenues
India	$	13,547,620		$	9,911,616
North America		175,500,606			131,946,298
Other		-			-
Total revenues	$	189,048,226		$	141,857,914

Cost of goods sold
India	$	14,191,098			9,494,395
North America		183,784,075			127,721,645
Other		-			-
Total cost of goods sold	$	197,975,173		$	137,216,040

Gross income/(loss)
India	$	(643,478	)	$	417,221
North America		(8,283,469	)		4,224,653
Other		-			-
Total gross income/(loss)	$	(8,926,947	)	$	4,641,874

India: During 2012 two customers accounted for 45.8% of sales through their purchase of Refined Palm Oil. One customer accounted for 10.7% of consolidated sales through its purchase of biodiesel. In 2011, one customer accounted for approximately 70% of total revenues by purchasing biodiesel for export to Europe.

North America: In 2012 and 2011, all of the Company’s revenues from sales of ethanol, WDG and corn oil were sold to J.D. Heiskell pursuant to the Corn Procurement and Working Capital Agreement. Sales to J.D. Heiskell accounted for 93% of the Company’s North American segment consolidated revenues in both 2012 and 2011.

Company total assets by segment follow:

	Year Ended December 31
Total Assets Data	2012			2011

India		$	15,597,333		$	15,654,763
North America			81,274,826			11,563,132
Other			—			26
Total Assets		$	96,872,159		$	27,217,921

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Quarterly Financial Data (Unaudited)

As a result of year end evaluations, the quarter ended September 30, 2012 required a combined increase to net income of $5.4 million, which consists of a $2.3 million adjustment to loss on debt extinguishment and a $3.1 million adjustment to gain on acquisition bargain purchase, which resulted from a revision in the value of stock issued, and a $1.1 million reclassification to income tax benefit and gain on acquisition bargain purchase recognized in the acquisition. A summary of the unaudited quarterly results of operations incorporating these changes to the 3 rd quarter information discussed above for the years ended December 31, 2012 and 2011 is as follows:

2012

	For the three months ended												For the year Ended
	March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012			December 31, 2012
Revenues		44,195,776			44,279,866			53,408,202			47,164,382			189,048,226

Cost of goods sold		46,454,288			46,300,806			55,670,850			49,549,229			197,975,173

Gross loss		(2,258,512	)		(2,020,940	)		(2,262,648	)		(2,384,847	)		(8,926,947	)

Research and development		192,617			148,704			142,498			136,549			620,368
Selling, general and administrative expenses		1,962,841			2,412,495			2,551,415			4,686,606			11,613,357

Operating loss		(4,413,970	)		(4,582,139	)		(4,956,561	)		(7,208,002	)		(21,160,672	)

Other income/(expense)
Interest income		348			1,840			348			2,440			4,976
Interest expense		(3,965,047	)		(5,304,917	)		(3,376,796	)		(5,011,155	)		(17,657,915	)
Other income/(expense)		18,211			(99,569	)		54,219			(140,136	)		(167,275	)
Gain on acquisition bargain purchase		-			-			40,332,333			2,003,543			42,335,876
Loss on debt extingishment		-			-			(9,068,868	)		-			(9,068,868	)
Gain on sales of assets		-			236,830			-			113,526			350,356
Income/(loss) before income taxes		(8,360,458	)		(9,747,955	)		22,984,675			(10,239,784	)		(5,363,522	)

Income taxes benefit/(expense)		(4,000	)		-			-			1,085,257			1,081,257

Net income/(loss)		(8,364,458	)		(9,747,955	)		22,984,675			(9,154,527	)		(4,282,265	)

Other comprehensive income/(loss)
Foreign currency translation adjustment		310,983			(226,977	)		336,285			(494,822	)		(74,531	)
Comprehensive income/(loss)		(8,053,475	)		(9,974,932	)		23,320,960			(9,649,349	)		(4,356,796	)

Income/(loss) per common share attributable to Aemetis, Inc.
Basic		(0.06	)		(0.07	)		0.14			(0.05	)		(0.03	)
Diluted		(0.06	)		(0.07	)		0.13			(0.05	)		(0.03	)

Weighted average shares outstanding
Basic		131,128,280			133,239,456			168,583,985			170,734,618			151,023,977
Diluted		131,128,280			133,239,456			176,559,067			170,734,618			151,023,977

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2011

	For the three months ended												For the year Ended
	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			December 31, 2011
Revenues	$	738,469		$	27,253,190		$	56,571,595		$	57,294,660		$	141,857,914

Cost of goods sold		787,472			27,567,654			55,789,374			53,071,540			137,216,040

Gross income/(loss)		(49,003	)		(314,464	)		782,221			4,223,120			4,641,874

Research and development		32,569			71,400			337,229			135,427			576,625
Selling, general and administrative expenses		2,103,409			1,989,282			2,212,510			2,265,390			8,570,591

Operating income/(loss)		(2,184,981	)		(2,375,146	)		(1,767,518	)		1,822,303			(4,505,342	)

Other income/(expense)
Interest income		4,021			2,796			351			16,268			23,436
Interest expense		(2,103,163	)		(3,649,359	)		(3,785,857	)		(4,022,906	)		(13,561,285	)
Other income/(expense)		24,031			54,207			4,070			(29,348	)		52,960
Loss on debt extingishment		-			(401,407	)		-			-			(401,407	)
Loss before income taxes		(4,260,092	)		(6,368,909	)		(5,548,954	)		(2,213,683	)		(18,391,638	)

Income taxes benefit/(expense)		(3,200	)		-			98,479			-			95,279

Net loss	$	(4,263,292	)	$	(6,368,909	)	$	(5,450,475	)	$	(2,213,683	)	$	(18,296,359	)

Other comprehensive loss
Foreign currency translation adjustment		20,286			(16,031	)		(727,992	)		(648,704	)		(1,372,441	)
Comprehensive loss	$	(4,243,006	)	$	(6,384,940	)	$	(6,178,467	)	$	(2,862,387	)	$	(19,668,800	)

Loss per common share attributable to Aemetis, Inc.
Basic and diluted	$	(0.05	)	$	(0.07	)	$	(0.05	)	$	(0.02	)	$	(0.18	)

Weighted average shares outstanding
Basic and diluted		90,789,254			92,384,340			100,446,788			130,127,853			103,536,643

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

16. Related Party Transactions

The Company owes Eric McAfee and McAfee Capital, solely owned by Eric McAfee, amounts of $1,262,133and $1,254,188 in connection with employment agreements and expense reimbursements, which are included in accrued expenses and accounts payable on the balance sheet as of December 31, 2012 and 2011. For the years ended December 31, 2012 and 2011, the Company expensed $65,343 and $519,828 in connection with non-employee compensation and expense reimbursements. Beginning September 2011, Eric McAfee began receiving employee compensation. For the years ended December 31, 2012 and 2011, Eric McAfee received $180,000 and $60,000, respectively, in employee compensation.

For the years ending December 31, 2012 and 2011, Eric McAfee received payments from the Company of principal, interest and fees associated with a revolving line of credit co-owned with Laird Cagan, a related party, and other investors, by converting part of the balance due for 6,231,159 and 18,141,715 shares of common stock, respectively. Laird Cagan received 2,634,376 and 7,669,857 shares of common stock as part of the same payments-for-stock transactions with the same terms.

The Company owes various Board Members amounts of $1,300,313 and $638,563 as of December 31, 2012 and 2011, respectively, in connection with board compensation fees, which are included in accounts payable on the balance sheet. For the years ended December 31, 2012 and 2011, the Company expensed $379,500 and $228,654, respectively, in connection with board compensation fees.

In July 2009, the Company entered into a sublease agreement with Nevo Energy, Inc. (formerly known as Solargen Energy, Inc.) for approximately 3,000 square feet of leased space. For the year ending December 31, 2012 and 2011, the Company invoiced Nevo Energy $58,801 and $86,291, respectively, in rents and utilities charges, but reserved all the payments during 2011 and 2012 due to Nevo Energy’s inability to pay. The Nevo Energy lease expired in May 2012. Eric McAfee is a member of the Board of Directors and a significant shareholder of Nevo Energy, Inc. Michael Peterson, a former member of the Company’s Board of Directors, was also the Chief Executive Officer of Nevo Energy, Inc. during 2011. See Note 7 Operating Leases.

17. Income Tax

The Company files a consolidated federal income tax return including all its domestic subsidiaries. State tax returns are filed on a consolidated, combined or separate basis depending on the applicable laws relating to the Company and its subsidiaries.

Components of tax expense (benefit) consist of the following:

	Year Ended December 31,
	2012			2011
Current:
Federal		—			—
State and local	$	4,000		$	3,200
Foreign		—			—
		4,000			3,200

Deferred:
Federal		(933,849	)		(83,707	)
State and local		(151,408	)		(14,772	)
Foreign		—			—
Income tax expense/(benefit)	$	(1,081,257	)	$	(95,279	)

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The income tax benefit recognized for the year ended December 31, 2012 was the result of the recognition of a deferred tax liability in the acquisition of Cilion. The deferred tax liability resulted in a reduction in the valuation allowance of the Company, as the Company believes the reversal of the deferred tax liability will occur prior to the expiration of the NOL carryforward. U.S. loss and foreign loss before income taxes are as follows:

	Year Ended December 31,
	2012				2011

United States		$	(2,981,086	)		$	(17,188,080	)
Foreign			( 2382,436	)			(1,203,558	)
Loss before income taxes		$	(5,363,523	)		$	(18,391,638	)

Income tax benefit differs from the amounts computed by applying the statutory U.S. federal income tax rate (34%) to loss before income taxes as a result of the following:

	Year Ended December 31,
	2012			2011
Income tax expense (benefit) at the federal statutory rate	$	(1,823,598	)	$	(6,253,156	)
Increase (decrease) resulting from:
State tax expense (benefit)		(476,437	)		(1,441,008	)
Stock-based compensation		25,464			41,703
Foreign loss		475,342			290,821
Interest expense		429,673			404,972
Credits		(150,452	)		(990,000	)
Gain on bargain purchase		(16,727,979	)		—
Loss on debt extinguishment		3,707,620			—
Cilion transaction costs		302,271			—
Other		196,721			9,457
Valuation allowance		12,960,118			7,841,932
Income tax expense	$	(1,081,257	)	$	(95,279	)

Effective tax rate		20.16	%		0.52	%

The components of the net deferred tax asset or (liability) are as follows:

	December 31,
	2012			2011
Deferred tax assets (liabilities):
Organization, start-up costs & intangible assets	$	9,898,832		$	8,916,114
Stock-based compensation		233,365			588,192
Property, plant and equipment		(14,546,837	)		2,511,067
Net operating loss carryforward		38,790,667			11,578,808
Convertible debt		(9,382	)		(103,127	)
Credit carryforward		1,500,000			1,500,000
Debt extinguishment		1,822,458			—
Other, net		839,555			589,890
Total deferred tax assets (liabilities)		38,528,658			25,580,944
Less valuation allowance	$	(38,528,658	)	$	(25,580,944	)
Deferred tax assets (liabilities)		—			—

Based on the Company’s evaluation of current and anticipated future taxable income, the Company believes it is more likely than not that insufficient taxable income will be generated to realize the net deferred tax assets, and accordingly, a valuation allowance has been set against these net deferred tax assets.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

We do not provide for U.S. income taxes for any undistributed earnings of the Company’s foreign subsidiaries, as the Company considers these to be permanently reinvested in the operations of such subsidiaries and have a cumulative foreign loss. At December 31, 2012 and 2011, these undistributed earnings (losses) totaled ($9,494,738) and ($7,195,566), respectively. If any earnings were distributed, some countries may impose withholding taxes. However, due to the Company’s overall deficit in foreign cumulative earnings and its U.S. loss position, the Company does not believe a material net unrecognized U.S. deferred tax liability exists.

ASC 740 Income Taxes provides that the tax effects from an uncertain tax position can be recognized in the Company’s financial statements only if the position is more-likely-than-not of being sustained on audit, based on the technical merits of the position. Tax positions that meet the recognition threshold are reported at the largest amount that is more-likely-than-not to be realized. This determination requires a high degree of judgment and estimation. The Company periodically analyzes and adjusts amounts recorded for the Company’s uncertain tax positions, as events occur to warrant adjustment, such as when the statutory period for assessing tax on a given tax return or period expires or if tax authorities provide administrative guidance or a decision is rendered in the courts. The Company does not reasonably expect the total amount of uncertain tax positions to significantly increase or decrease within the next 12 months. As of December 31, 2012, the Company’s uncertain tax positions were not significant for income tax purposes.

We conduct business globally and, as a result, one or more of the Company’s subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as India, Mauritius, and the United States. The Company files a U.S. federal income tax return and tax returns in nine U.S. states, as well as in two foreign jurisdictions. Penalties and interest are classified as general and administrative expenses.

The following describes the open tax years, by major tax jurisdiction, as of December 31, 2012:

United States — Federal	2005 – present
United States — State	2005 – present
India	2006 – present
Mauritius	2006 – present

As of December 31, 2012, the Company had federal net operating loss carryforwards of approximately $89,600,000 and state net operating loss carryforwards of approximately $90,300,000. The Company also has approximately $1,500,000 of alcohol and cellulosic biofuel credit carryforwards. The federal net operating loss and other tax credit carryforwards expire on various dates between 2027 and 2031. The state net operating loss carryforwards expire on various dates between 2027 through 2031. Under the current tax law, net operating loss and credit carryforwards available to offset future income in any given year may be limited by US or India statute regarding net operating loss carryovers and timing of expirations or upon the occurrence of certain events, including significant changes in ownership interests. The Company’s India subsidiary also has net operating loss carryforwards as of March 31, 2013, its tax fiscal year end, of approximately ($9,900,000) in US dollars, which expire from March 30, 2016 to March 30, 2020.

18. Subsequent Events

Issuance of Related Party and Subordinated Promissory Notes

On January 14, 2013, Laird Cagan loaned $106,201 through a Promissory note maturing on April 30, 2013 with a 5 percent annualized interest rate and the right to exercise 53,101 warrants exercisable at $0.001 per share. On January 24, 2013, an additional $300,000 in David Lies Promissory Notes were issued with 150,000 warrants at $0.001 per share and 5 percent annual interest rate due April 30, 2013.

Keyes plant idles corn grinding and prepares to plant to produce advanced biofuels

On January 15, 2013, the Company took the strategic step to idle corn grinding and ethanol production activities at its Keyes, California plant due to the current unfavorable market conditions for corn ethanol production while it undertakes efforts expected to result in the restart of the plant as an advanced biofuel producer, if commodity prices indicate this strategy produces positive margins. This action is in keeping with the Company’s plan to move to advanced biofuel feedstocks and inputs using a recently approved milo/biogas EPA pathway for a significant portion of its operational capacity. If market conditions change, the Company plans to use corn and milo or a mixture of the two commodities to generate the most favorable margin.

USB Settlement

On January 15, 2013, Aemetis reached a settlement with UBS for $2.25 million in cash payments over time for investment banking services provided as part of the Cilion merger transaction. The full amount of the settlement has been fully accrued as of December 31, 2012.

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Third Eye Capital Debt $3.1 Million and $2 Million Working Capital Draw Agreements

On April 15, 2013, Third Eye Capital agreed to the Limited Waiver and Amendment No. 3 to waive the following covenants of the Borrower in their entirety: (i) Borrowers’ obligation to obtain an NASDAQ listing by April 1, 2013; (ii) Borrower’s obligation to cause the Chairman to enter into certain agreements; and (iii) the Company’s obligation to deliver an auditor opinion as of and for the period ended December 31, 2012 without a going concern qualification. In addition, the Administrative Agent agreed to (i) extend the completion date of the conversion of the Keyes Plant to accommodate an 80:20 corn-to-milo ratio to May 31, 2013, (ii) amend the redemption provision in the event of an equity offering of Capital Stock up to $7,000,000, and (iii) increase the balance of the Revolving Credit Facility by an amount equal to the February 2013 $3.1 million advance and the $1.5 million waiver fee. In consideration for the Limited Waiver and Amendment, the Company agreed to: (i) pay a waiver fee comprised of $500,000 (which is added to the outstanding principal balance of the Revolving Notes) and (ii) require McAfee Capital, LLC to pledge an additional 6,231,159 Common Shares of the Parent to Agent, together with the delivery of stock certificates for such shares and stock powers. The $3.1 million advance, together with all accumulated interest, shall be repaid in full no later than September 30, 2013.

On April 15, 2013, Third Eye Capital also arranged a Special Bridge Advance providing additional borrowings of $2,000,000 with the same terms as the existing Revolving Credit Facility, subject to customary closing conditions. In consideration for the Special Bridge Advance, the Company agreed to (i) pay the Lender a placement fee of $300,000 and (ii) issue the Lender 1,000,000 shares of common stock of Aemetis, Inc. The Special Bridge Advance is secured by a blanket lien on the assets of Eric A. McAfee, the Company’s CEO and Chairman of the Board.

19. Parent Company Financial Statements (Unaudited)

The following is a summary of the Parent Company financial statements for the years ended December 31, 2012 and 2011:

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Aemetis, Inc. (Parent Company)

Consolidated Condensed Balance Sheets

As of December 31, 2012 and 2011

Assets	2012			2011
Current assets
Cash and cash equivalents	$	-		$	747
Intercompany receivables		20,802,877			3,168,587
Prepaid expenses		-			88,000
Total current assets		20,802,877			3,257,334

Investments in Subsidiaries, net of advances
Investment in Aemetis International, Inc.		3,060,684			5,979,020
Investment in Aemetis Americas, Inc		116,144			-
Total investments in Subsidiaries, net of advances		3,176,828			5,979,020

Other assets		23,095			23,095
Total Assets	$	24,002,800		$	9,259,449

Liabilities & stockholders' deficit
Current liabilities
Accounts payable	$	4,037,137		$	3,800,250
Outstanding checks in excess of cash		25,773			-
Mandatorily redeemable Series B convertibe preferred		2,437,649			2,320,164
Secured notes, net of discount for issuance cost		-			1,075,588
Other current liabilities		2,174,608			1,786,962
Total current liabilities		8,675,167			8,982,964

Parent Company long term debt portion of secured notes, net of discount for issuance cost		-			6,016,926

Subsidiary obligation in excess of investment
Investment in AE Advanced Fuels, Inc.		8,400,675			13,253,011
Investment in Aemetis Americas, Inc		-			118,252
Investment in Aemetis Biofuels, Inc.		2,624,575			2,567,894
Investment in Aemetis Technologies, Inc.		438,375			174,488
Investment in Biofuels Marketing, Inc.		349,056			348,996
Total subsidiary obligation in excess of investment		11,812,681			16,462,641

Total long term liabilities		11,812,681			22,479,567

Stockholders' equity/(deficit)
Series B Preferred convertible stock		3,098			3,115
Common stock		180,281			130,747
Additional paid-in capital		75,457,760			45,432,447
Accumulated deficit		(69,808,294	)		(65,526,029	)
Accumulated other comprehensive loss		(2,317,893	)		(2,243,362	)
Total stockholders' equity/(deficit)		3,514,952			(22,203,082	)
Total liabilities & stockholders' deficit	$	24,002,800		$	9,259,449

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Aemetis, Inc. (Parent Company)

Consolidated Statements of Operations and Comprehensive Loss

For the Years Ended December 31, 2012 and 2011

	2012			2011

Equity in subsidiary earnings (losses)	$	(12,496	)	$	(15,386,811	)

Selling, general and administrative expenses		2,302,944			1,003,879

Operating loss		(2,315,440	)		(16,390,690	)

Other income/(expense)
Interest expense		(1,865,803	)		(1,918,750	)
Other income/(expense)		(97,022	)		16,281

Loss before income taxes		(4,278,265	)		(18,293,159	)

Income taxes benefit/(expense)		(4,000	)		(3,200	)

Net loss	$	(4,282,265	)	$	(18,296,359	)

Other comprehensive loss
Foreign currency translation adjustment		(74,531	)		(1,372,441	)
Comprehensive loss	$	(4,356,796	)	$	(19,668,800	)

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AEMETIS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Aemetis, Inc. (Parent Company)

Consolidated Statements of Cash Flows

For the years ended December 31, 2012 and 2011

	2012			2011
Operating activities:
Net loss		(4,282,265	)	$	(18,296,359	)
Adjustments to reconcile net loss to
net cash provided/(used) in operating activities:
Stock-based compensation		686,059			177,278
Depreciation and amortization		-			2,193
Amortization of debt issuance discount		400,997			1,177,413
Change in fair value of warrant liability		97,022
Changes in assets and liabilities:
Subsidiary portion of net losses		12,496			15,386,811
Prepaid expenses		4,668			1,160
Other current assets and other assets		-			1
Accounts payable		236,887			743,982
Accrued interest expense		682,983			894,475
Other liabilities		288,203			72,733
Net cash (used) in/provided by operating activities		(1,872,950	)		159,687

Investing activities:
Change in outstanding checks in excess of cash		25,773			-
Subsidiary advances, net		9,417,256			723,429
Net cash provided in investing activities		9,443,029			723,429

Financing activities:
Proceeds from borrowings under secured debt facilities		840,000			-
Repayments of borrowings under secured debt facilities		(8,412,259	)		(900,000	)
Warrants exercised		1,433			-
Net cash used by financing activities		(7,570,826	)		(900,000	)

Net decrease in cash and cash equivalents		(747	)		(16,884	)

Cash and cash equivalents at beginning of period		747			17,631
Cash and cash equivalents at end of period	$	-		$	747

Supplemental disclosures of cash flow information, cash paid:

Income taxes		4,000			3,200

Supplemental disclosures of cash flow information, non-cash transactions:

Issuance of shares for acquisition		12,511,200			1,890,135
Stock and warrants issued to pay interest and fees on borrowings		11,885,579			1,662,323
Payment of loans and fees by issuance of stock to related party		4,107,141			1,452,818
Beneficial conversion discount on related party debt		884,851			1,732,872

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 16, 2013

	Aemetis, Inc.

	/s/ E RIC A. M C A FEE
	Eric A. McAfee
	Chief Executive Officer
	(Principal Executive Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Eric A. McAfee and Todd A. Waltz, and each of them, his true and lawful attorneys-in-fact, each with full power of substitution, for him in any and all capacities, to sign any amendments to this report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact or their substitute or substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Name	Title	Date

/s/ Eric A. Mc A f ee	Chairman/Chief Executive Officer	April 16, 2013
Eric A. McAfee	(Principal Executive Officer and Director)

/s/ Todd Waltz	Chief Financial Officer	April 16, 2013
Todd Waltz	(Principal Financial and Accounting Officer)

/s/ Francis Barton	Director	April 10, 2013
Fran Barton

/s/ John R. Block	Director	April 12, 2013
John R. Block

/s/ Dr. Steven Hutcheson	Director	April 10, 2013
Dr. Steven Hutcheson

/s/ Harold Sorgenti	Director	April 9, 2013
Harold Sorgenti

Nevada		26-1407544
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller reporting company	þ

		Page
PART I

Special Note Regarding Forward-Looking Statements			1

Item 1.	Business		1

Item 1A.	Risk Factors		8

Item 2.	Properties		15

Item 3.	Legal Proceedings		15

Item 4.	Mine Safety Disclosures		16

PART II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		17

Item 6.	Selected Financial Data		18

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18

Item 8.	Financial Statements and Supplementary Data		31

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		31

Item 9A.	Controls and Procedures		34

Item 9B.	Other Information		36

PART III

Item 10.	Directors, Executive Officers and Corporate Governance		37

Item 11.	Executive Compensation		42

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		45

Item 13.	Certain Relationships and Related Transactions, and Director Independence		49

Item 14.	Principal Accounting Fees and Services		49

PART IV

Item 15.	Exhibits and Financial Statement Schedules		50

Index to Financial Statements			54

Signatures			86

	2012		2011		% Change
Biodiesel
Tons sold (1)		4,127		8,636		(52	%)
Average Sales Price/Ton	$	1,158	$	1,001		15	%
Crude Glycerin
Tons sold		9		23		(61	%)
Average Sales Price/Ton	$	2,171	$	643		238	%
Refined Glycerin
Tons sold		2,280		772		200	%
Average Sales Price/Ton	$	981	$	787		25	%
NRPO / Stearin
Tons Sold		6,552		588		1,079	%
Average Sales Price/Ton	$	994	$	1,024		(7	%)

Fiscal Year Ended December 31 (in thousands)

	2012		2011		Increase/(Decrease)
North America	$	175,501	$	131,946	$	43,555
India		13,548		9,912		3,636
Total	$	189,049	$	141,858	$	47,191

Quarter Ending	High Bid		Low Bid
March 31, 2011	$	0.16	$	0.08
June 30, 2011	$	0.28	$	0.10
September 30, 2011	$	1.01	$	0.25
December 31, 2011	$	0.95	$	0.34
March 31, 2012	$	1.00	$	0.53
June 30, 2012	$	0.85	$	0.37
September 30, 2012	$	0.82	$	0.37
December 31, 2012	$	0.73	$	0.35

	December 31, 2012		December 31, 2011
Cash and cash equivalents	$	290,603	$	249,466
Current assets (including cash, cash equivalents, and deposits)		6,845,449		7,128,916
Current liabilities (including short term debt)		57,835,203		29,428,067
Short and long term debt		70,045,595		29,646,435

Name	Age	Position	Director Since
Eric A. McAfee	50	Chief Executive Officer and Chairman of the Board	2006
Fran Barton	66	Director	2012
John R. Block	78	Director	2008
Dr. Steven W. Hutcheson	59	Director	2011
Harold Sorgenti	78	Director	2007

Name	Age	Position
Andrew B. Foster	47	Executive Vice President and Chief Operating Officer
Sanjeev Gupta	53	Executive Vice President and Managing Director, Chairman and President (Universal Biofuels Private, Ltd.)
Todd Waltz	51	Chief Financial Officer

Name of Director	Audit	Governance, Compensation and Nominating
Michael Peterson*	C	M
Harold Sorgenti	M	C
Francis Barton*	C	M
John R. Block*	M
Dr. Hutcheson*		M
M = Member
C = Chair

Name and Principal Position	Year	Salary ($)		Option/ Warrant Awards (1) ($)		Total Compensation ($)

Eric A. McAfee, Chief Executive Officer	2012		180,000		-		180,000
	2011		140,000		-		140,000

Andrew B. Foster, Executive Vice President	2012		180,000		84,047		264,047
	2011		180,000		-		180,000

Sanjeev Gupta, Executive Vice President	2012		180,000		84,047		264,047
	2011		180,000		-		180,000

Todd A. Waltz, Chief Financial Officer	2012		180,000		84,047		264,047
	2011		180,000		-		180,000

		Option/Warrant Awards
Name	Award Date	No. of Securities underlying unexercised options (#) exercisable	No. of securities underlying unexercised options (#) unexercisable	Equity incentive plan awards: # of securities underlying unexercised unearned options (#)	Option exercise price ($)	Option expiration date

Andrew B. Foster	11/05/12	50,000 (2)	250,000		0.55	11/05/17
	12/09/10	6,628 (2)	2,209		0.12	12/08/15
	12/09/10	41,163 (4)			0.13	12/15/15
	3/17/10	50,000 (2)			0.21	3/17/15
	5/21/09	480,000 (3)			0.16	5/20/14
	7/17/07	300,000 (1)			3.00	7/16/17

Sanjeev Gupta	11/05/12	50,000 (2)	250,000		0.55	11/05/17
	12/09/10	26,512 (2)	8,838		0.12	12/08/15
	12/09/10	164,650 (4)			0.13	12/15/15
	3/17/10	100,000 (2)			0.21	3/17/15
	5/21/09	500,000 (3)			0.16	5/20/14
	6/17/08	40,000 (1)			3.70	6/16/13

Todd A. Waltz	11/05/12	50,000 (2)	250,000		0.55	11/05/17
	12/09/10	39,769 (2)	13,255		0.12	12/08/15
	12/09/10	246,976 (4)			0.13	12/15/15
	3/17/10	600,000 (3)			0.21	3/17/15
	5/21/09	220,000 (3)			0.16	5/20/14
	6/17/08	20,000 (1)			3.70	6/16/13

Name	Fees Earned or Paid in Cash ($)		Option Awards (1)(2) ($)		Total ($)

2011
Michael Peterson		107,750		–		107,750
Harold Sorgenti		82,750		–		82,750
John R. Block		58,500		–		58,500
Dr. Steven Hutcheson		37,500		–		37,500

2012
Michael Peterson		72,250		–		72,250
Harold Sorgenti		103,750		46,813		150,563
John R. Block		78,000		46,813		124,813
Dr. Steven Hutcheson		79,250		38,036		117,286
Francis Barton		46,250		84,047		130,297

Name	Number of Shares of Common Stock Subject to all outstanding options as of December 31, 2012		Number of Shares of Common Stock Subject to all outstanding warrants as of December 31, 2012
Michael Peterson		-		82,324
Harold Sorgenti		517,676		82,324
John R. Block		517,676		82,324
Dr. Steven Hutcheson		262,500		-
Francis Barton		300,000		-

	Common Stock			Series B Preferred Stock
	Amount and Nature of Beneficial Ownership	Percentage of Class		Beneficial Ownership	Percentage of Class
Officers & Directors
Eric A. McAfee (1)	34,916,159	18.91	%
Francis Barton (2)	310,000	*	%
John R. Block (3)	632,054	*	%
Dr. Steven Hutcheson (4)	2,055,070	1.11	%
Harold Sorgenti (5)	532,054	*	%
Andrew Foster (6)	928,527	*	%
Sanjeev Gupta (7)	1,084,108	*	%
Todd A. Waltz (8)	2,181,163	1.18	%
All officers and directors as a group (8 persons)	42,639,135	23.09	%

5% or more Holders

Third Eye Capital (9)	27,153,346	14.7	%
161 Bay Street, Suite 3930
Toronto, Ontario, M5J 2S1

Laird Cagan (10)	24,648,872	13.35	%
20400 Stevens Creek Blvd., Suite 700
Cupertino, CA 95014

Michael Orsak	2,178,333	1.18	%	166,667	5.38	%
1125 San Mateo Drive,
Menlo Park, California 94025

David J. Lies	1,606,587	0.87	%	200,000	6.46	%
1210 Sheridan Road
Wilmette, Illinois 60091

Michael C Brown Trust dated June 30, 2000	481,676	0.26	%	599,999	19.37	%
34 Meadowview Drive
Northfield, Illinois 60093

Mahesh Pawani	535,358	0.29	%	400,000	12.91	%
Villa No. 6, Street 29, Community 317, Al Mankhool,
Dubai, United Arab Emirates

Frederick WB Vogel	440,678	0.24	%	408,332	13.18	%
1660 N. La Salle Drive, Apt 2411
Chicago, Illinois 60614

Fred Mancheski	-	-		300,000	9.68	%
1060 Vegas Valley Dr
Las Vegas, NV 89109

Crestview Capital, LLC	-	-		166,667	5.38	%
Crestview Capital, LLC
95 Revere Dr., Ste A
Northbrook, Illinois 60062

Plan category	Number of securities to be issued upon exercise of outstanding options (a)		Weighted average exercise price of outstanding options (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders (1)		7,524,834	$	0.59		1,282,732	(2)
Equity in the form of warrants issued to officers, directors and employees not approved by security holders		950,856		0.13		—
Equity in the form of options issued to directors and consultants not approved by security holders		862,500		0.55		—

	2012		2011
Audit Fees	$	325,000	$	245,000
Audit-Related Fees		111,500		35,000
Total Audit and Audit-Related Fees		436,500		280,000
Tax Fees		––		––
All Other Fees		2,305		––

Total	$	438,805	$	280,000

INDEX TO EXHIBITS
		Incorporated by Reference				Filed Herewith
Exhibit No.	Description	Form	Film No.	Exhibit	Filing Date
3.1.1	Articles of Incorporation	10-Q	000-51354	3.1	Nov. 14, 2008
3.1.2	Certificate of Amendment to Articles of Incorporation	10-Q	000-51354	3.1.1	Nov. 14, 2008
3.1.3	Certificate of Designation of Series B Preferred Stock	8-K	000-51354	3.2	Dec. 13, 2007
3.1.4	Certificate of Amendment to Articles of Incorporation	8-K	000-51354	3.3	Dec. 13, 2007
3.1.5	Certificate of Amendment to Articles of Incorporation	Pre14C	111136140		October 26, 2011
3.2.1	Bylaws	8-K	000-51354	3.4	Dec. 13, 2007
4.1	Specimen Common Stock Certificate	8-K	000-51354	4.1	Dec. 13, 2007
4.2	Specimen Series B Preferred Stock Certificate	8-K	000-51354	4.2	Dec. 13, 2007
4.3	Form of Common Stock Warrant	8-K	000-51354	4.3	Dec. 13, 2007
4.4	Form of Series B Preferred Stock Warrant	8-K	000-51354	4.4	Dec. 13, 2007
10.1	Amended and Restated 2007 Stock Plan	14A	000-51354		Apr. 15, 2008
10.2	Amended and Restated 2007 Stock Plan form of Stock Option Award Agreement	14A	000-51354		Apr. 15, 2008
10.4	Eric McAfee Executive Chairman Agreement dated January 30, 2006	8-K	000-51354	10.4	Dec. 13, 2007
10.7	Andrew Foster Executive Employment Agreement, dated May 22, 2007	8-K	000-51354	10.7	Dec. 13, 2007
10.10	Todd Waltz Executive Employment Agreement, dated March 15, 2010	8-K	000-51354		May 20, 2009
10.11	Sanjeev Gupta Executive Employment Agreement, dated September 1, 2007	10-K	000-51354	10.11	May 20, 2009
10.12	Agreement of Loan for Overall Limit dated June 26, 2008 between Universal Biofuels Pvt Limited and State Bank of India	10-Q	000-51354	10.12	Aug. 14, 2008
10.14	$5 million Note and Warrant Purchase Agreement dated May 16, 2008 among Third Eye Capital Corporation, as Agent; the Purchasers; and Aemetis, Inc., including the form of Note	8-K	000-51354	10.1	May 21, 2008
10.16	Revolving Line of Credit Agreement dated August 17, 2009 between International Biodiesel, Inc. and Laird Cagan	10-K	000-51354	10.16	Mar. 15, 2010
10.17	Project Agreement dated December 1, 2009 among Cilion, Inc., Aemetis, Inc., AE Advanced Fuels, Inc., and AE Advanced Fuels Keyes, Inc.	8-K	000-51354	10.1	Dec. 2, 2009

10.18	Lease Agreement dated December 1, 2009, among Cilion Inc., AE Advanced Fuels Keyes, Inc., and AE Advanced Fuels, Inc., a Delaware corporation	8-K	000-51354	10.2	Dec. 2, 2009
10.19	Amendment No. 4 and Limited Waiver to Note and Warrant Purchase Agreement dated December 10, 2009, between Aemetis, Inc. and Third Eye Capital Corporation	8-K	000-51354	10.1	Dec. 22, 2009
10.20	Assignment of Proceeds Agreement dated December 10, 2009, between Aemetis, Inc. and Third Eye Capital Corporation	8-K	000-51354	10.2	Dec. 22, 2009
10.21	Guaranty Agreement dated December 10, 2009, between AE Advanced Fuels Keyes, Inc. and Third Eye Capital Corporation	8-K	000-51354	10.3	Dec. 22, 2009
10.24	Note Purchase Agreement dated October 18, 2010, among Third Eye Capital Corporation, the Purchasers and AE Advanced Fuels Keyes, Inc., including the Form of Note	8-K	000-51354	10.1	Nov. 3, 2010
10.25	Amendment No. 5 and Limited Waiver to Note and Warrant Purchase Agreement dated October 18, 2010, between Aemetis, Inc. and Third Eye Capital Corporation	8-K	000-51354	10.1	Nov. 3, 2010
10.27	Amendment #1 to Project Agreement dated October 29, 2010 among Cilion, Inc., Aemetis, Inc., AE Advanced Fuels, Inc., and AE Advanced Fuels Keyes, Inc.	10-Q	000-51354	10.3	Dec. 1, 2010
10.28	Amendment #1 to Lease Agreement dated October 29, 2010, among Cilion, Inc., AE Advanced Fuels Keyes, Inc., and AE Advanced Fuels, Inc.	10-Q	000-51354	10.4	Dec. 1, 2010
10.29	Subordination Agreement, dated October 29, 2010 among Laird Cagan, Aemetis, Inc., AE Advanced Fuels Keyes, Inc., and Third Eye Capital Corporation	10-Q	000-51354	10.5	Dec. 1, 2010
10.30	Ethanol Marketing Agreement, dated October 29, 2010 between AE Advanced Fuels Keyes, Inc. and Kinergy Marketing, LLC	10-Q	000-51354	10.6	Dec. 1, 2010
10.31	Zymetis, Inc. 2006 Stock Incentive Plan	10-K	000-51354	10.31	October 31, 2012
10.32	Zymetis Inc. Incentive Stock Option Agreement	10-K	000-51354	10.32	October 31, 2012
10.33	Zymetis Inc. Non-Incentive Stock Option Agreement	10-K	000-51354	10.33	October 31, 2012
10.34	Amendment No. 1 to Note Purchase Agreement dated March 10, 2011 among Third Eye Capital Corporation, as Agent; the Purchasers; and AE Advanced Fuels Keyes, Inc.	8-K	000-51354	10.1	March 16, 2011
10.35	Amendment No. 2 to Project Agreement dated March 9, 2011 among Cilion, Inc., AE Biofuels, Inc., AE Advanced Fuels, Inc., and AE Advanced Fuels Keyes, Inc.	8-K	000-51354	10.2	March 16, 2011
10.36	Amendment No. 2 to Lease Agreement dated March 9, 2011 among Cilion, Inc., AE Advanced Fuels Keyes, Inc., and AE Advanced Fuels, Inc.	8-K	000-51354	10.3	March 16, 2011
10.37	Limited Waiver to Note and Warrant Purchase Agreement dated May 24, 2011, between Third Eye Capital Corporation, as Agent and AE Biofuels, Inc.	8-K	000-51354	10.1	June 1, 2011
10.38	Limited Waiver and Amendment No. 2 to Note Purchase Agreement dated June 20, 2011, among Third Eye Capital Corporation, as Agent; the Purchasers; and AE Advanced Fuels Keyes, Inc.	8-K	000-51354	10.1	June 24, 2011
10.39	First Amendment to Ethanol Marketing Agreement dated September 6, 2011, between AE Advanced Fuels Keyes, Inc. and Kinergy Energy Marketing	8-K	000-51354	10.1	September 8, 2011
10.40	Limited Waiver and Amendment No. 4 to Note Purchase Agreement dated as of November 8, 2011 and effective as of October 18, 2011 among AE Advanced Fuels Keyes, Inc., Third Eye Capital Corporation, and the Purchasers	8-K	000-51354	10.1	November 15, 2011
10.41	Form of Note and Warrant Purchase Agreement	8-K	000-51354	10.1	January 1, 2012
10.42	Form of 5% Subordinated Note	8-K	000-51354	10.2	January 1, 2012
10.43	Form of Common Stock Warrant	8-K	000-51354	10.3	January 1, 2012
10.44	Limited Waiver, Consent and Amendment No. 5 to Note Purchase Agreement dated January 31, 2012 among Aemetis Advanced Fuels Keyes, Inc., Third Eye Capital Corporation, as agent and the Purchasers	8-K	000-51354	10.1	February 6, 2012
10.45	Amendment No. 6 to Note Purchase Agreement dated April 13, 2012 among Aemetis Advanced Fuels Keyes, Inc., Third Eye Capital Corporation, as agent, and the Purchasers	8-K	000-51354	10.1	April 19, 2012
10.46	Limited Waiver to Note Purchase Agreement dated March 31, 2012 among Aemetis Advanced Fuels Keyes, Inc., and Third Eye Capital Corporation, an Ontario corporation, as agent	8-K	000-51354	10.1	April 19, 2012
10.47	Limited Waiver to Note and Warrant Purchase Agreement dated March 31, 2012 among Aemetis, Inc., Third Eye Capital Corporation, an Ontario corporation, as agent, and the Purchasers	8-K	000-51354	10.1	April 19, 2012
10.48	Amendment No. 7 to Note Purchase Agreement dated May 15, 2012 among Aemetis Advanced Fuels Keyes, Inc., Third Eye Capital Corporation, as agent, and the Purchasers	8-K	000-51354	10.1	May 22, 2012
10.49	Form of Note and Warrant Purchase Agreement	8-K	000-51354	10.1	June 6, 2012
10.50	Form of 5% Subordinated Note	8-K	000-51354	10.1	June 6, 2012

10.51	Form of Common Stock Warrant	8-K	000-51354	10.1	June 6, 2012
10.52	Note and Warrant Purchase Agreement dated June 21, 2012 among Third Eye Capital Corporation, Aemetis Advanced Fuels Keyes, Inc., and Aemetis, Inc.	8-K	000-51354	10.1	June 28, 2012
10.53	5% Subordinated Promissory Note dated June 21, 2012 among Third Eye Capital Corporation, Aemetis Advanced Fuels Keyes, Inc., and Aemetis, Inc.	8-K	000-51354	10.2	June 28, 2012
10.54	Form of Warrant to Purchase Common Stock	8-K	000-51354	10.3	June 28, 2012
10.55	Note Purchase Agreement dated June 27, 2012 among Third Eye Capital Corporation, Aemetis Advanced Fuels Keyes, Inc., and Aemetis, Inc.	8-K	000-51354	10.1	July 3, 2012
10.56	15% Subordinated Promissory Note dated June 27, 2012 among Third Eye Capital Corporation, Aemetis Advanced Fuels Keyes, Inc., and Aemetis, Inc.	8-K	000-51354	10.2	July 3, 2012
10.57	Agreement and Plan of Merger, dated July 6, 2012, among Aemetis, Inc., AE Advanced Fuels, Inc., Keyes Facility Acquisition Corp., and Cilion, Inc.	8-K	000-51354	2.1	July 10, 2012
10.58	Stockholders’ Agreement dated July 6, 2012, among Aemetis, Inc., and Western Milling Investors, LLC, as Security holders’ Representative.	8-K	000-51354	10.1	July 10, 2012
10.59	Amended and Restated Note Purchase Agreement, dated July 6, 2012 among Aemetis Advanced Fuels Keyes, Inc., Keyes Facility Acquisition Corp., Aemetis, Inc., Third Eye Capital Corporation, as Administrative Agent, and the Note holders	8-K	000-51354	10.2	July 10, 2012
10.60	Amended and Restated Guaranty, dated July 6, 2012 among Aemetis, Inc., certain subsidiaries of Aemetis and Third Eye Capital Corporation, as Agent.	8-K	000-51354	10.3	July 10, 2012
10.61	Amended and Restated Security Agreement, dated July 6, 2012 among Aemetis, Inc., certain subsidiaries of Aemetis and Third Eye Capital Corporation, as Agent.	8-K	000-51354	10.4	July 10, 2012
10.62	Investors’ Rights Agreement dated July 6, 2012, by and among Aemetis, Inc., and the investors listed on Schedule A thereto.	8-K	000-51354	10.5	July 10, 2012
10.63	Technology License Agreement dated August 9, 2012 between Chevron Lummus Global LLC and Aemetis Advanced Fuels, Inc.	8-K	000-51354	10.1	August 22, 2012
10.64	Corn Procurement and Working Capital Agreement dated March 9, 2011 between J.D. Heiskell Holdings LLC and Aemetis Advanced Fuels Keyes, Inc.**	10-K	000-51354	10.64	October 31, 2012
10.65	Purchasing Agreement dated March 9, 2011 between J.D. Heiskell Holdings LLC and Aemetis Advanced Fuels Keyes, Inc.**	10-K	000-51354	10.65	October 31, 2012
10.66	WDG Purchase and Sale Agreement dated March 23, 2011 between A.L. Gilbert Company and Aemetis Advanced Fuels Keyes, Inc.	10-K	000-51354	10.66	October 31, 2012
10.67	Keyes Corn Handling Agreement dated March 23, 2011 among A. L. Gilbert Company, AE Advanced Fuels Keyes, Inc., and J.D. Heiskell Holdings, LLC**	10-K	000-51354	10.67	October 31, 2012
10.68	Limited Waiver and Amendment No. 1 to Amended and Restated Note Purchase Agreement dated as of October 18, 2012 by and among Aemetis Advanced Fuels Keyes, Inc., a Delaware corporation, Aemetis Facility Keyes, Inc., a Delaware corporation, Third Eye Capital Corporation, an Ontario corporation as agent, Third Eye Capital Credit Opportunities Fund – Insight Fund, and Sprott PC Trust.	8-K	000-51354	10.1	October 23, 2012
10.69	Amendment No. 1 to Revolving Line of Credit Agreement dated October 16, 2012 by and among Aemetis International, Inc., a Nevada corporation, and Laird Q. Cagan	8-K	000-51354	10.2	October 23, 2012
10.70	Note Purchase Agreement effective as of March 4, 2011, amended January 19, 2012 and July 24, 2012 by and among AE Advanced Fuels, Inc., a Delaware corporation, and Advanced BioEnergy, LP a California limited partnership and Advanced BioEnergy GP, LLC, a California limited liability company.	8-K	000-51354	10.3	October 23, 2012
10.71	Form of Convertible Subordinated Promissory Note by and among AE Advanced Fuels, Inc., a Delaware corporation and Advanced BioEnergy, LP, a California limited partnership.	8-K	000-51354	10.4	October 23, 2012
10.72	Amendment to the Purchasing Agreement dated March 9, 2011 between J.D. Heiskell Holdings LLC and Aemetis Advanced Fuels Keyes, Inc. dated September 29, 2012					X
10.73	Agreement for Repayment of Note by Share Issuance dated as of December 31, 2012 by and among Aemetis, Inc., Aemetis International, Inc., (formerly known as “International Biodiesel, Inc.”), a Nevada corporation and wholly-owned subsidiary of the Company, and Laird Q. Cagan for himself and on behalf of all other holders of interests in the Revolving Line of Credit (as defined in the Agreement).	8-K	000-51354	10.1	January 7, 2013
10.74	Agreement for Repayment of Note by Share Issuance dated as of December 31, 2012 by and among Aemetis, Inc., Aemetis International, Inc., (formerly known as “International Biodiesel, Inc.”), a Nevada corporation and wholly-owned subsidiary of the Company, and Laird Q. Cagan for himself and on behalf of all other holders of interests in the Revolving Line of Credit (as defined in the Agreement).	8-K/A	000-51354	10.1	Feb. 27, 2013

10.75	Limited Waiver and Amendment No. 2 to Amended and Restated Note Purchase Agreement dated as of February 27, 2013 by and among Aemetis Advanced Fuels Keyes, Inc., a Delaware corporation, Aemetis Facility Keyes, Inc., a Delaware corporation, Third Eye Capital Corporation, an Ontario corporation as agent, Third Eye Capital Credit Opportunities Fund – Insight Fund, and Sprott PC Trust.	8-K	000-51354	10.1	March 11, 2013
10.76	Amendment No. 1 to Agreement for Repayment of Note by Share Issuance dated as of April 10, 2013 by and among Aemetis, Inc., Aemetis International, Inc., a Nevada corporation and wholly-owned subsidiary of the Company, and Laird Q. Cagan for himself and on behalf of all other holders of interests in the Revolving Line of Credit (as defined in the Agreement).					X
10.77	Amendment to the Purchasing Agreement dated March 9, 2011 between J.D. Heiskell Holdings LLC and Aemetis Advanced Fuels Keyes, Inc. dated January 2, 2013.					X
10.78	Limited Waiver and Amendment No.3 to Amended and Restated Note Purchase Agreement dated as of April 15, 2013 by and among Aemetis Advanced Fuels Keyes, Inc., a Delaware corporation, Aemetis Facility Keyes, Inc., a Delaware corporation, Third Eye Capital Corporation, an Ontario corporation as agent, Third Eye Capital Credit Opportunities Fund – Insight Fund, and Sprott PC Trust.	8-K	000-51354	10.1	April 16, 2013
10.79	Special Bridge Advance dated as of March 29, 2013 by and among Aemetis Advanced Fuels Keyes, Inc., a Delaware corporation, Aemetis, Inc., a Nevada corporation, Third Eye Capital Corporation, an Ontario corporation, as agent for Third Eye Capital Insight Fund	8-K	000-51354	10.2	April 16, 2013
14	Code of Ethics	10-K	000-51354	14	May 20, 2009
21	Subsidiaries of the Registrant					X
24	Power of Attorney (see signature page)					X
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002					X
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002					X
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X

	AEMETIS ADVANCED FUEL KEYES, INC.

	By:	/s/ Eric A. McAfee
	Name:	Eric A. McAfee
	Title:	CEO

	J.D. HEISKELL HOLDINGS, LLC

	By:	/s/ Robert Hodgen
	Name:	Robert Hodgen
	Title:	Sr. Vice President

	Regards,

	AEMETIS ADVANCED FUEL KEYES, INC.

	By:	/s/ Eric A. McAfee
	Its:	CEO

	LENDER:

	/s/ Laird Q. Cagan
	Laird Q. Cagan, on behalf of all Lenders

	BORROWER:

	Aemetis International, Inc. (f/k/a International Biodiesel, Inc.)

	By:	/s/ Eric A. McAfee
	Name:	Eric A. McAfee
	Title:	Chief Executive Officer

	PARENT: Aemetis, Inc.

	By:	/s/ Eric A. McAfee
	Name:	Eric A. McAfee
	Title:	Chief Executive Officer