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12. Management's Plan

3 Months Ended

Mar. 31, 2020

Cilion shareholder Seller note payable

The accompanying financial statements have been prepared contemplating the realization of assets and satisfaction of liabilities in the normal course of business. The Company has been required to remit substantially all excess cash from operations to its senior lender and is therefore reliant on senior lender to provide additional funding when required. In order to meet its obligations during the next 12 months, the Company will need to either refinance the Company’s debt or receive the continued cooperation of senior lender. This dependence on the senior lender raises substantial doubt about the Company’s ability to continue as a going concern. The Company plans to pursue the following strategies to improve the course of the business:

●	Operate the Keyes Plant and continue to improve operational performance at the plant, including the expansion into new products, new markets for existing products, and adoption of new technologies or process changes that allow for energy efficiency, cost reduction or revenue enhancements.

●	Expand the ethanol sold at the Keyes Plant to include the cellulosic ethanol to be generated at the Riverbank Cellulosic Ethanol Facility and to utilize lower cost, non-food advanced feedstocks to significantly increase margins by 2021.

●	Monetize the CO2 produced at the Keyes Plant by delivery of gas to Messer facility starting in the second quarter of 2020.

●	Construct and operate the Biogas Project to capture and monetize biogas which is expected to begin operations in the third quarter of 2020.

●	Raise the funds necessary to construct and operate the Riverbank Cellulosic Ethanol Facility using the licensed technology from LanzaTech and InEnTec Technology to generate federal and state carbon credits available for ultra-low carbon fuels.

●	Secure higher volumes of shipments of fuels at the India plant by developing the sales channels and expanding the existing domestic markets.

●	Continue to locate funding for existing and new business opportunities through a combination of working with our senior lender, restructuring existing loan agreements, selling the current offering for $50 million from the EB-5 Phase II funding, or by vendor financing arrangements.

Management believes that through the above actions, the Company will have the ability to generate capital liquidity to carry out the business plan for 2020.