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Note 9 - Agreements

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Collaborative Arrangement Disclosure [Text Block]

9. Agreements

Working Capital Arrangement. Pursuant to a Corn Procurement and Working Capital Agreement with J.D. Heiskell, the Company agreed to procure whole yellow corn and grain sorghum, primarily from J.D. Heiskell. The Company has the ability to obtain grain from other sources subject to certain conditions; however, in the past all the Company’s grain purchases have been from J.D. Heiskell. Title and risk of loss of the corn pass to the Company when the corn is deposited into the Keyes Plant weigh bin. The term of the Corn Procurement and Working Capital Agreement expires on December 31, 2023, and the term can be automatically renewed for additional one-year terms. J.D. Heiskell further agreed to sell all ethanol to Murex or other marketing purchasers, all WDG and corn oil to A.L Gilbert, and DCO to other customers under the J.D. Heiskell Purchase Agreement. The Company’s relationships with J.D. Heiskell, and A.L. Gilbert are well established, and the Company believes that the relationships are beneficial to all parties involved in utilizing the distribution logistics, reaching out to widespread customer base, managing inventory, and building working capital relationships. These Agreements are ordinary purchase and sale agency agreements for the Keyes Plant. On May 25, 2023, we entered into the second amendment to the Aemetis Keyes Grain Procurement and Working Capital agreement with J.D. Heiskell, the second amendment to the Corn Procurement and Working Capital Agreement with J.D. Heiskell, and the second amendment to the Keyes Ethanol and Corn Tank Lease with J.D. Heiskell. The amendments provide that (i) the Keyes Plant will receive a temporary increase in the credit limit equivalent to four days of grain payables repayable in equal daily installments over 120 days, (ii) that J.D. Heiskell agrees to buy all Ethanol, WDGS, CDS, and Corn Oil produced by the Keyes Plant, sell all ethanol to certain designated purchasers and pay us the same price as it received from such sales, and (iii) J.D. Heiskell would lease certain ethanol product storage tanks from the Keyes Plant.

As of September 30, 2023 and December 31, 2022, Aemetis made prepayments to J.D. Heiskell of none and $2.4 million, respectively.

The J.D. Heiskell sales and purchases activity associated with the J.D. Heiskell Purchase Agreement and J.D. Heiskell Procurement Agreement during the three and nine months ended September 30, 2023 and 2022 were as follows:

		*As of and for the three months ended September 30,*								*As of and for the nine months ended September 30,*
		*2023*				*2022*				*2023*				*2022*
Ethanol Sales		$	36,375			$	-			$	45,388			$	-
Wet distiller's grains sales			9,427				13,003				11,980				39,669
Corn oil sales			1,487				2,917				1,613				8,067
CDS Sales			9				-				62				-
Corn purchases			37,030				53,063				48,029				151,425
Accounts receivable			1,008				106				1,008				106
Accounts Payable			759				540				759				540
Working Capital			13				-				13				-

Ethanol and Wet Distillers Grains Marketing Arrangement. The Company entered into a Fuel Ethanol Purchase and Sale Agreement with Murex, which matures on October 31, 2023, with automatic one-year renewals thereafter. On May 30, 2023 the Company entered into Amendment No. 1 to the Fuel Ethanol Purchase and Sale Agreement that provides (i) the Company temporarily suspend the agreement for the duration of the Company's Working Capital Agreement with J.D. Heiskell, and (ii) the initial term shall be automatically renewed beginning on October 1, 2023 and ending on March 31, 2025. The Company also entered into a Wet Distillers Grains Marketing Agreement with A.L. Gilbert, which matures on December 31, 2023, with automatic one-year renewals thereafter.

Accounts receivable associated with our marketing partners was none and $0.6 million as of September 30, 2023 and December 31, 2022.

For the three months ended September 30, 2023 and 2022, the Company expensed marketing costs of $0.8 million and $0.8 million, respectively, and for the nine months ended September 30, 2023 and 2022, the Company expensed marketing costs of$0.7 million and $2.2 million, respectively, under the terms of both the Ethanol Marketing Agreement and the Wet Distillers Grains Marketing Agreement. These marketing costs are presented as part of Selling, General, and Administration expense.

Supply Trade Agreement. On July 1, 2022, the Company entered into an operating agreement with Gemini Edibles and Fats India Private Limited (“Gemini”). Under this agreement, Gemini agreed to provide the Company with a supply of feedstock up to a credit limit of $12.7 million. If the Company fails to pay the invoice within the ten-day credit period, the outstanding amount will bear interest at 12%. The term of the agreement is for one year. Either party can terminate the agreement by giving notice one month notice in writing. As of September 30, 2023 and December 31, 2022, the Company had accounts payable of $0.5 million and no outstanding balance, respectively, under this agreement.

As of September 30, 2023 and 2022, the Company has no forward sales commitments.