DALLAS, TX -- August 14th, 2025 -- Stonegate Capital Partners updates coverage on Aemetis, Inc. (Nasdaq:AMTX). Aemetis’ results reinforced that the Company’s Dairy RNG platform is entering a high-growth phase, supported by regulatory approvals, capacity expansion, and favorable policy developments. Eleven digesters produced 106,400 MMBtu of RNG in the quarter, generating $3.1M in revenue. In June, CARB approved seven new LCFS pathways at a blended CI score of -384, unlocking ~120% more in LCFS credit value. Four additional pathways are under review and expected to be approved under CARB’s expedited Tier 1 process. Capacity is currently expected to reach 550,000 MMBtus by year end and is expected to further increase to 1.0M MMBtus by the end of 2026. Aemetis’ monetization opportunities now include the sale of the RNG molecules, sale of D3 RIN credits, sale of Low-Carbon Fuel Standard production tax credits, and section 45Z production tax credits.
Company Updates:
In addition, Aemetis has sold $83M in Section 48 investment tax credits to date, generating ~$70M in cash. AMTX expects 45Z monetization to become a recurring quarterly revenue item beginning in 3Q25, with initial sales monetizing the year to date credits generated. Commercial execution advanced with an agreement to build H₂S removal and compression units for 15 digesters, supporting the scale-up toward the 1.0M MMBtu/year RNG platform by 2026. Additionally, 20 year term USDA-guaranteed financing funding expansion.
The California Ethanol segment is progressing on the $30M mechanical vapor recompression (MVR) system, expected to cut natural gas use by 80% and add $32M in annual cash flow starting in 2026. This improvement should eliminate margin-related shutdowns at the Keyes Plant seen in 2Q25 as the facilities become more efficient. Ethanol margins improved with EPA summer E15 approval in 49 states, lower corn prices, and advancing legislation for year-round E15 in California. India Biodiesel resumed deliveries in April, contributing $11.9M in revenue. The India subsidiary is on track for an early 2026 IPO. Additionally, in India the Company is exploring an entry into ethanol production, which is also supported by favorable government pricing policies.
In the second quarter of 2025, revenue was $52.2M, up $9.3M from 1Q25 but down from $66.6M in 2Q24 due to lower y/y biodiesel volumes. Operating loss improved to $10.7M from $13.6M y/y, with SG&A down $4.5M sequentially. Net loss narrowed to $23.4M from $29.2M. Cash was $1.6M at quarter-end after $3.6M in CI-reduction and RNG investments. Notably, 2Q25 results did not include any 45Z or new LCFS credit revenues which are expected to have a positive material impact on the third quarter sales.
Policy Tailwinds to Drive Growth – Aemetis is ideally positioned to benefit from four major U.S. policy tailwinds accelerating demand for low-carbon fuels. These include: (1) CARB’s 20-year LCFS framework, which has driven a ~50% rise in LCFS credit prices; (2) Section 45Z Production Tax Credits, retroactive to Jan. 1, 2025, with expanded value and scope under the House-passed “One Big Beautiful Bill Act”; (3) Nationwide E15 expansion, with California adoption expected in late 2025; and (4) Strong low-carbon fuel mandates and incentives. Further we expect a favorable regulatory environment to speed up ATMX’s refinancing initiative, with AMTX currently deep into negotiations with a counterparty that should significantly reduce interest expenses.
Valuation – We use a Discounted Cash Flow Model when valuing AMTX. Our valuation model returns a valuation range of $8.30 to $18.77 with a midpoint of $12.39.
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