Q4 2021 Aemetis Inc Earnings Call

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Welcome to the AMETS fourth quarter and year 2021 earnings review conference call. At this time, all participants are in a listen-only mode.

Welcome to the Amyris fourth.

Fourth quarter and year 2021 earnings review conference call.

At this time all participants are in a listen only mode.

A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Todd Waltz, Executive Vice President and Chief Financial Officer of Amatis, Inc.

A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Mr. Todd Waltz, Executive Vice President and Chief Financial Officer of <unk>, Inc. Mr. Waltz, you may begin.

Todd Waltz: Thank you, Kate. Welcome to the AMETS fourth quarter and year 2021 earnings review conference call.

Thank you Kate and welcome to the <unk> fourth quarter and year 2021 earnings Review Conference call Joy.

Todd Waltz: Joining us for the call today is Eric McAfee, founder, chairman, and CEO of Amedys, and Andy Foster, president of Amedys Advanced Fuels and Amedys Biogas.

Joining us for the call today is Eric Mcafee, founder Chairman and CEO of <unk>, Metis and Andy Foster President of a medicine advanced fuels any meadows biogas.

Todd Waltz: We suggest visiting our website at ametys.com to review today's earnings press release, the Ametys corporate and investor presentations, filing with the Security and Exchange Commission, recent press releases, and previous earnings conference calls. The presentation for today's call is available for review and download on the investor section of the ametys.com website.

We suggest visiting our website at <unk> Dot Com to review today's earnings press release.

<unk> corporate and Investor presentations filing with the security and Exchange Commission recent press releases and previous earnings Conference calls the presentation for today's call is available for review on download on the investors section of <unk> Dot Com website.

Todd Waltz: Before we begin our discussion today, I'd like to read the following disclaimer statements.

We begin our discussion today I'd like to read the following disclaimer statements.

Todd Waltz: During today's call, we'll be making forward-looking statements, including without limitation, statements with respect.

During today's call, we'll be making forward looking statements, including without limitation statements with respect to our future stock performance plans opportunities and expectations with respect to financing activities and the execution of our business plan. These statements must be considered in conjunction with the disclosures and cautionary warnings that appear in our.

Todd Waltz: to our future stock performance plans, opportunities, and expectations with respect to financing activities and the execution of our business plan. These statements must be considered in conjunction with the disclosures and cautionary warnings that appear in our SEC filings.

SEC filings.

Todd Waltz: Investors are cautioned that all forward-looking statements made on this call involve risk and uncertainty, and that future events may differ materially from the statements made. For additional information, please refer to the company's Security and Exchange Commission filings which are posted on our website and available from the company without charge.

Investors are cautioned that all forward looking statements made on this call involve risks and uncertainty and that future events may differ materially from the statements made for additional information. Please refer to the company's security and Exchange Commission filings, which are posted on our website.

Available from the company without charge.

Todd Waltz: Our discussion on the call will include a review of non-GAAP measures as a supplement to financial results based on GAAP. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is included in our earnings release for the quarter ended on December 31, 2021, which is available on our website.

Our discussion on this call will include a review of non-GAAP measures as a supplement to financial results based on GAAP.

Reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is included in our earnings release for the quarter ended on December 31, 2021, which is available on our website adjusted.

Todd Waltz: Adjusted EBITDA is defined as net income or loss, plus to the extent deducted in calculating such net income, interest expense, gains on extinguishment, income tax expense, intangible and other amortization expense, accretion,

Adjusted EBITDA is defined as net income or loss plus to the extent deducted in calculating such net income interest expense gains on extinguishment.

Income tax expense intangible and other amortization expense accretion.

Todd Waltz: and other expense of Series A preferred units, depreciation expense, and share-based compensation

Other expense of series, a preferred units depreciation expense and share based compensation expense.

Todd Waltz: Now I'd like to review the financial results for the fourth quarter and year end of 2021.

Now I'd like to review the financial results for the fourth quarter and year end of 2021.

Todd Waltz: Revenues were $64.4 million for the fourth quarter of 2021 compared to $37.3 million for the fourth quarter of 2020.

Revenues were $64 4 million for the fourth quarter of 2021 compared to $37 3 million for the fourth quarter of 2020.

Todd Waltz: The selling price of ethanol increased from $1.60 per gallon during the fourth quarter of 2020 to $3.36.

The selling price of ethanol increase from $1 60 per gallon during the fourth quarter of 2020 to $3 $36 per gallon during the fourth quarter of 2021, the deliberate corn price rose from an average of $5 61 per bushel during the fourth quarter of 2020.

Todd Waltz: dollars per gallon during the fourth quarter of 2021, the delivered corn price rose from an average of five dollars and sixty-one cents per bushel during the fourth quarter of 2020 to seven dollars and twenty-three cents per bushel during the fourth quarter of 2021.

To $7 23 per bushel during the fourth quarter of 2021.

Todd Waltz: Are California ethanol and dairy natural gas segments accounted for all of the reported consolidated gross profits in both periods?

Our California, ethanol and dairy natural gas segments accounted for all of the reported consolidated gross profits in both periods.

Todd Waltz: Gross profit for the three months ended December 31, 2021, was $12.7 million compared to a gross loss of $3.4 million during the same period in 2020. The gross profit increase was attributable to stronger ethanol and wet distillers grains pricing during the fourth quarter of 2021 compared to the fourth quarter of 2020.

Gross profit for the three months ended December 31, 2021 was $12 7 million compared to a gross loss of $3 4 million during the same period in 2020.

The gross profit increase was attributable to stronger ethanol and wet distillers grains pricing during the fourth quarter of 2021 compared to the fourth quarter of 2020.

Todd Waltz: Selling general and administrative expense increased to $7.5 million during the fourth quarter of 2021, compared to $4.3 million during the fourth quarter of 2020, principally due to a $2.5 million non-cash share-based compensation charge.

Selling general and administrative expense increased to $7 5 million during the fourth quarter 2021, compared to $4 $3 million during the fourth quarter of 2020, principally due to a $2 $5 million noncash share based compensation charge.

Todd Waltz: Operating profit was $5.2 million for the fourth quarter of 2021, compared to an operating loss of $7.7 million during the fourth quarter of 2020.

Operating profit was $5 2 million for the fourth quarter of 2021 compared to an operating loss of $7 7 million during the fourth quarter of 2020.

Todd Waltz: Net loss was $881,000 for the fourth quarter of 2021 compared to a net loss of $14.6 million for the fourth quarter 2020.

Net loss was 881000 for the fourth quarter of 2021 compared to a net loss of $14 6 million for the fourth quarter of 2020.

Todd Waltz: turning to the financial results for the year ended December 31, 2021.

Turning to the financial results for the year ended December 31 2021.

Todd Waltz: Revenues were $212 million for the 12-month end of December 31, 2021, compared to $166 million for the same period in 2020, which is a 28% revenue increase for 2021 compared to 2020.

Revenues were $212 million for the 12 months ended December 31, 2021 compared to $166 million for the same period in 2020, which is a 28% revenue increase for 2021 compared to 2020.

Todd Waltz: The increase in revenue was primarily attributable to increase in the sales price for ethanol in California from $1.84 per gallon during 2020 to $2.72 per gallon.

The increase in revenue was primarily attributable to increase in the sales price for ethanol in California from $1 84 per gallon during 2020 to $2 72 per gallon.

Todd Waltz: as demand for ethanol increased as recovery from COVID-19 disruptions continued.

As demand for ethanol increased as recovery from COVID-19 disruptions continue.

Todd Waltz: Gross profit for the 12-month ended December 31, 2021 was $7.9 million compared to $11 million of gross profit during the same period in 2020, primarily due to the stronger margin associated with high-grade alcohol sales coupled with lower corn prices during the year December 31, 2020, in our California ethanol segment and lower gross profit margin contribution from our India biodiesel segment during 2021.

Gross profit for the 12 months ended December 31, 2021 was $7 9 million compared to $11 million of gross profit during the same period in 2020, primarily due to the stronger margin associated with high grade alcohol sales, coupled with lower corn prices during.

December 31, 2020, and our California ethanol segment and lower gross profit margin contribution from our India biodiesel segment during 2021.

Todd Waltz: Selling general and administrative expenses increased to $23.7 million during the 12-month ended December 30, 2021, compared to $16.9 million during the same period in 2020, driven principally from a charge for stock-based compensation, property insurance, and professional services. Operating loss increased to $15.8 million.

Selling general and administrative expenses increased to $23 $7 million. During the 12 months ended December 30, <unk> 2021, compared to $16 9 million. During the same period in 2020, driven principally from a charge for stock based compensation property insurance and professional services.

Operating loss increased to $15 $8 million.

Todd Waltz: for the 12 months ended December 31, 2021, compared to an operating loss of $6.1 million for the same period in 2020.

For the 12 months ended December 31, 2021, compared to an operating loss of $6 1 million for the same period in 2020.

Todd Waltz: Interest expense was $24.1 million during the year ended December 31, 2021, excluding accretion and other expenses Series A preferred units in our emitted biogas LLC subsidiary, compared to interest expense of $26.4 million during the year ended December 31, 2020.

Interest expense was $24 1 million during the year ended December 31, 2021, excluding accretion and other expense of series a preferred units and our <unk> biogas LLC subsidiary compared to interest expense of $26.4 million. During the year ended December 31.

Todd Waltz: Additionally, our Emetis Biogas LLC subsidiary.

20 <unk>.

Additionally, our <unk> biogas LLC subsidiary recognized $7 $7 million of accretion in connection with preference payments on its preferred stock. During the year ended December 31, 2021, compared to $4 7 million during the same period in 2020.

Todd Waltz: recognize $7.7 million of accretion in connection with preference payments on its preferred stock during the year end of December 31, 2021, compared to $4.7 million during the same period in 2020.

Todd Waltz: Net loss was $47.1 million for the 12 months ended December 31, 2021, compared to a net loss of $36.7 million during the same period in 2020.

Net loss was $47 1 million for the 12 months ended December 31, 2021, compared to a net loss of $36 $7 million during the same period in 2020.

Todd Waltz: Cash at the end of the fourth quarter of 2021 increased to $7.8 million compared to $592,000 at the end of 2020.

Cash at the end of the fourth quarter of 2021 increased to $7 8 million compared to $592000 at the end of 2020.

Todd Waltz: Investments in our low-carbon initiatives increased property plant equipment by $30.5 million, while debt repayment of $55.5 million were made during 2021. These activities and others were funded with proceeds from equity offerings of $103.6 million.

Investments in our low carbon initiatives increased property plant and equipment by $35 million, while debt repayment of $55 $5 million were made during 2021.

These activities and others were funded with proceeds from equity offerings of $103 6 million.

Todd Waltz: This completes our review of the fourth quarter and year end of 2021.

This completes our review of the fourth quarter and year end of 2021.

Todd Waltz: Now I'd like to introduce the founder, chairman, and chief executive officer of Aemetus, Eric McAfee. Let's update. Eric.

Now I'd like to introduce the founder Chairman and Chief Executive Officer, Eric.

Eric Mcafee.

Eric.

Eric McAfee: Thank you, Todd. AMETIS is focused on producing below zero carbon intensity products, including the production of negative carbon intensity renewable natural gas and renewable fuels. Our projects maximize the value of carbon credits under the California Low Carbon Fuel Standard, the Federal Renewable Fuel Standard, IRS 45Q Carbon Sequestration Tax Credits, and Blenders Tax Credit.

Todd a medicine is focused on producing below zero carbon intensity products, including the production of negative carbon intensity renewable natural gas and renewable fuels our projects maximize the value of carbon credits under the California, low carbon fuel standard the federal renewable fuel standard IRS 45, Q carbon sequestration tax credits.

And blenders lenders tax credits, while reducing operating costs by using waste materials as feedstock.

Eric McAfee: while reducing operating costs by using waste materials as feedstock.

Eric McAfee: In early 2021, we announced a five-year plan to grow to more than $1 billion of revenues and $325 million of annual EBITDA cash flow by year 2025. Last month, we updated the five-year plan, projecting revenues to grow to $1.5 billion and annual EBITDA to increase to $460 million by year 2026.

In early 2021, we announced a five year plan to grow to more than $1 billion of revenues and $325 million of annual EBITDA cash flow by year 2025.

Last month, we updated the five year plan projecting revenues to grow to $1 5 billion in annual EBITDA to increase to $460 million by year 2026.

Eric McAfee: We are on track with last year's five-year plan.

We are on track with last year's five year plan.

Eric McAfee: In the past year and this year, we have paid $79 million to reduce the higher interest rate bridge loans from Third Eye Capital, with only about $90 million of high interest rate loans remaining outstanding to Third Eye.

In the past year and this year, we have paid $79 million to reduce the higher interest rate bridge loans from third eye capital with only about $90 million of high interest rate loans remaining outstanding to third eye.

Eric McAfee: We are also on track with financing growth using long term 20 year low interest rate project financing from the United States Department of Agriculture, including a 50 million dollar funding for our biogas subsidiary that is expected to close in the next couple of months. Importantly, our 2021 fourth quarter cash flow and our 2021 annual revenues were on track with.

We're also on track with financing growth using long term 20 year low interest rate project financing from the United States Department of agriculture, including a $50 million funding for our biogas subsidiary that is expected to close in the next couple of months.

Importantly, our 2021 fourth quarter cash flow and our 2021 annual revenues.

We're on track with the five year plan.

Eric McAfee: The positive regulatory trends for renewable fuels have continued to improve, driven by initiatives to decarbonize transportation, the need to reduce the cost of fuels as petroleum prices increase, and a renewed interest in energy security.

The positive regulatory trends for renewable fuels have continued to improve driven by initiatives to decarbonize transportation the need to reduce the cost of fuels as petroleum prices increase and a renewed interest in energy security.

Eric McAfee: California and much of the rest of the country currently enforces a 90 percent petroleum gasoline mandate, which is commonly known as a 10 percent ethanol blending limit.

California and much of the rest of the country currently enforces a 90% petroleum gasoline mandate, which is commonly known as a 10% ethanol blending limit.

Eric McAfee: With record high gasoline prices in California, the fact that AMETA sells ethanol for more than $2 per gallon less than gasoline creates a direct cost to California consumers by the California Air Resource Board's slow progress toward adoption of E15.

With record high gasoline prices in California, The fact that a meta sells ethanol for more than $2 per gallon less than gasoline creates a direct cost to California consumers by the California Air Resource Board slow progress towards adoption of <unk>.

Eric McAfee: E15 allows a 15% blend of ethanol into gasoline, directly decreasing fuel costs to California drivers and expanding the use of renewable fuels in the state.

<unk> allows a 15% blend ethanol into gasoline directly decreasing fuel cost to California drivers and expanding the use of renewable fuels in the state.

Eric McAfee: We're hopeful that this year, especially with consumers getting squeezed by high prices at the pump, CARB will move forward with the 15 percent ethanol blending requirement in California. During the fourth quarter and year of 2021, AMETIS achieved important milestones toward revenue growth and sustained profitability in each of our four lines of business.

Eric McAfee: Now, Andy Foster, the president of the Emedis Biogas and Emedis Advanced Fuel Businesses, will review highlights of our Renewable Natural Gas and Ethanol business. Andy? Thanks, Eric.

Biogas and <unk> advanced fuels businesses will review highlights of our renewable natural gas and ethanol business Andy Thanks, Eric.

Andy Foster: The Ametis Dairy Renewable Natural Gas business has been producing biogas since September of 2020. And we received a negative 426 carbon intensity pathway from CARB in 2021 for our first two dairy digesters.

<unk> dairy renewable natural gas business has been producing biogas since September of 2020, and we received a negative 426 carbon intensity pathway from carb in 2021 for our first two dairy digesters.

Andy Foster: RNG is a negative carbon intensity renewable fuel that exemplifies the circular bioeconomy that AMETIS is creating by using waste products and byproducts of our production facilities as feedstocks to produce sustainable, below-zero carbon intensity transportation fuels.

<unk> is a negative carbon intensity renewable fuel that exemplifies the circular bio economy that <unk> is creating by using waste products and byproducts of our production facilities as feedstocks to produce sustainable below zero carbon intensity transportation fuels Len.

Andy Foster: Let me take a moment to update you on some key milestones achieved as we build out our network of dairy digesters and the supporting infrastructure that will deliver RNG to the California market.

Let me take a moment to update you on some key milestones achieved as we build out our network of dairy Digesters and the supporting infrastructure that will deliver RMG to the California market.

Andy Foster: In addition to the two dairy digesters and four miles of gas pipeline currently in operation since September of 2020, we have completed the construction and are currently commissioning the main biogas cleanup facility and utility pipeline interconnection unit.

In addition to the two dairy Digesters and four miles of gas pipeline currently in operation Since September of 2020, we have completed the construction and are currently commissioning the main biogas cleanup facility and utility pipeline interconnection unit.

Andy Foster: We are also currently permitting, procuring equipment, and or constructing an additional 15 dairy digesters and 32 miles of biogas pipeline.

We are also currently permitting procuring equipment <unk> constructing an additional 15 dairy digesters and 32 miles of biogas pipeline.

Andy Foster: We now have executed participation or lease agreements with 24 dairies to install digest.

We now have executed participation or lease agreements with 24 dairies to install digesters, we're in advanced discussions with more than a dozen additional dairies.

Andy Foster: We are in advanced discussions with more than a dozen additional.

Andy Foster: As the pipeline and digesters are built, we are receiving additional inquiries from other dairies in the local area who would like to participate in the AMETIS biogas project.

As the pipeline in Digesters or Bill we are receiving additional inquiries from other areas in the local area, who would like to participate in the <unk> biogas project.

Andy Foster: A MEDIS was granted an encroachment permit to use the public right-of-way in local roads, county roads, for the construction of the 21-mile Stanislaus County segment of our pressurized biogas pipeline and the 11-mile Merced County segment of the pipeline.

<unk> was granted an encroachment permit to use the public right of way and local roads County roads for the construction of the 21 mile Stanislaus County segment of our pressurized biogas pipeline and the 11 mile Merced County segment of the pipeline.

Andy Foster: About 16 miles of the 36-mile biogas pipeline, nearly 50 percent has been completed.

About 16 miles of the 36 miles 36 mile Biogas pipe pipeline nearly 50% has been completed with expected completion of the entire biogas pipeline construction before the end of 2022.

Andy Foster: with expected completion of the entire biogas pipeline construction before the end of 2022.

Andy Foster: Five additional digester projects are now under construction with the expected completion of these five digesters in the summer of 2022.

Five additional digest your projects are now under construction with the expected completion of these five digesters in the summer of 2022.

Andy Foster: The portion of the pipeline to transport biogas from these five dairies to the Central Biogas Upgrading Facility has already been completed.

The portion of the pipeline to transport biogas from these five areas to the central biogas upgrading facility has already been completed.

Andy Foster: A USDA-guaranteed loan under the Renewable Energy for America program, known as REAP, is nearing completion of a $50 million financing for dairy digesters, on-site H2S cleanup and pressurization, and pipeline construction at about a 6% interest rate to be repaid over 20 years.

A USDA guaranteed loan under the renewable energy for America program known as reap is nearing completion of a $50 million financing for dairy Digesters onsite <unk> cleanup and pressurization and pipeline construction at about a 6% interest rate to be repaid over <unk>.

Three years.

Andy Foster: An additional $50 million of USDA REAP financing is in process for closing in Q4 of 2022, with another $50 million expected to close in 2023.

An additional $50 million of USDA refinancing is in process for closing in Q4 of 2022 with another $50 million expected to close in 2023.

Andy Foster: The USDA-guaranteed credit facilities enable the construction of the biogas project without equity dilution to a Metis parent company shareholder.

The USDA guaranteed credit facilities enable the construction of the biogas project without equity dilution to.

<unk> parent company shareholders.

Andy Foster: During 2021, we added several key people to our biogas team, including an experienced senior dairy digester operations manager who recently managed 10 dairy biogas digesters in California's Central Valley, and a construction supervisor with extensive civil engineering and construction project management experience.

During 2021, we added several key people to our biogas team, including an experienced senior dairy digester operations manager, who recently managed.

10, dairy biogas Digesters in California, Central Valley, and a construction supervisor with extensive civil engineering and construction project management experience.

Andy Foster: Our pipeline construction manager is a 30-year industry veteran who supervised the installation of our Phase I pipeline while working for our lead contractor.

Our pipeline construction manager is a 30 year industry veteran who supervise the installation of our phase one pipeline, while working for our lead contractor.

Andy Foster: We've also added an operations and maintenance operator who has extensive experience working at our ethanol plant for the past 10 years.

We've also added in operations and maintenance operator, who has extensive experience working at our ethanol plant for the past 10 years.

Andy Foster: To date, AMETIS has been awarded $23 million of grants related to the biogas project from the California Department of Food and Agriculture, CDFA, the California Energy Commission, Pacific Gas and Electric, and other government agencies for the Dairy Biogas Project and the production of renewable natural gas.

To date <unk> has been awarded $23 million of grants related to the biogas project from the California Department of food and Agriculture, CFA, The California Energy Commission Pacific gas and electric and other government agencies for the dairy biogas project and the production of renewable natural gas.

Andy Foster: The RNG initiative has many natural synergies with our Keys ethanol plant, which uses agricultural feed, feedstock that absorbs CO2 from the atmosphere during plant growth, from which our production facility produces ethanol and high-value animal feed.

<unk> initiative has many natural synergies with our Keyes ethanol plant, which uses agricultural feed feedstock that absorbs cotwo from the atmosphere during plant growth from which our production facility produces ethanol and high value animal feed.

Andy Foster: The Ametis ethanol plant produces about 65 million gallons per year of renewable ethanol, but also produces about 2 million pounds per day of wet distiller's grains that supply about 80 local dairies to feed more than 100,000 cows.

The <unk> ethanol plant produces about 65 million gallons per year of renewable ethanol, but also produces about two 2 million pounds per day of wet distillers grains that supply about 80 local dairies to feed more than 100000 cows. These.

Andy Foster: These cows consume the renewable feed produced by A. mettus and create waste, which in turn produces the methane we capture for the production of RNG.

These cows consumed the renewable feed produced by <unk> and create waste, which in turn produces the methane capture for the production of our LNG.

Andy Foster: Trucks involved in our ethanol, animal feed, sustainable aviation fuel, renewable diesel, and carbon sequestration businesses can be fueled by our RNG at compressed natural gas fueling stations at locations throughout the state of California, or at the RNG fueling site that we are building at the Keys plant.

Trucks involved in our ethanol animal feed sustainable aviation fuel renewable diesel and carbon sequestration businesses can be fueled by our RMG at compressed natural gas fueling stations at locations throughout the state of California or at the our RMG fueling site that we are building at the Keyes plant.

Andy Foster: Additionally, the Keys ethanol plant produces approximately 1.4 million pounds per month of renewable distillers oil, corn oil, or DCL, which has been traditionally sold as animal feed.

Additionally, the Keyes ethanol plant produces approximately one 4 million pounds per month of renewable distillers oil corn oil or <unk>, which has been traditionally sold as animal feed with the explosive growth of renewable diesel biodiesel and sustainable aviation fuel desio has become a <unk>.

Andy Foster: With the explosive growth of renewable diesel, biodiesel, and sustainable aviation fuel, DCO has become a far more valuable commodity as a feedstock input to renewable fuel.

Far more valuable commodity as a feedstock input to renewable fuels in fact, the value of our Dci has more than tripled since we first started producing it in 2012, allowing us to sell this co product to other biofuel producers and eventually utilize it in the production of a medicine Saf and renewable diesel at our own.

Andy Foster: In fact, the value of our DCO has more than tripled since we first started producing it in 2012, allowing us to sell this co-product to other biofuel producers and eventually utilize it in the production of amethyst, SAF, and renewable diesel at our own riverbank plant, further complementing the circular bioeconomy that Eric often refers to when describing our business model. Let's discuss progress.

Riverbank plant further complementing the circular bio economy that Eric often refers to when describing our business model.

Let's discuss progress in our California ethanol plant.

Andy Foster: As Todd mentioned earlier, we saw a 28% year-over-year increase in revenue.

As Todd mentioned earlier, we saw a 28% year over year increase in revenue.

Andy Foster: revenues from ethanol sales in 2021 compared to 2020.

Revenues from ethanol sales in 2021 compared to 2020.

Andy Foster: As the COVID pandemic restrictions were relaxed in the second half of 2021, demand for ethanol increased and ethanol margins also increased.

As the Covid pandemic restrictions were relaxed in the second half of 2021 demand for ethanol increased in ethanol margins also increased at.

Andy Foster: At the same time, high corn prices and a tight corn supply have combined with ongoing railroad logistical issues to increase the cost of corn to about $9 per bushel delivered to Keys, nearing all-time highs.

At the same time high corn prices and a tight corn supply have combined with ongoing railroad logistical issues to to increase the cost of corn to about $9 per bushel delivered to key's nearing all time highs.

Andy Foster: Strong demand and favorable pricing for both wet distillers grains and distillers corn oil remain bright spots in the overall product mix and we expect this trend to continue.

Strong demand and favorable pricing for both wet distillers grains, and distillers corn oil remained bright stop bright spots in the overall product mix and we expect this trend to continue let.

Andy Foster: Let me take a moment to provide a few updates on the Keyes ethanol plant projects that are expected to increase cash flow by approximately $23 million per year when the projects are fully completed.

Let me take a moment to provide a few updates on key on the Keyes ethanol plant projects that are expected to increase cash flow by approximately $23 million per year. When the projects are fully completed.

Andy Foster: The Keys ethanol plant is operating at full capacity, taking advantage of strong ethanol, distillers' corn oil, and distillers' grain prices.

The Keyes ethanol plant is operating at full capacity, taking advantage of strong ethanol distillers corn oil and distillers grain pricing.

Andy Foster: wet distillers grains are completely sold out with more than 2.2 million pounds per day or the equivalent of 45 truckloads being delivered to dairies across our region.

Wet distillers grains are completely sold out with more than $2 2 million pounds per day or the equivalent of 45 truckloads being delivered to dairies across our region.

Andy Foster: Distiller's corn oil deliveries are more than one million pounds per month at record prices, driven by the use of non-edible corn oil in biodiesel and renewable diesel production.

Distillers corn oil delivers deliveries or more than 1 million pounds per month at record prices driven by the use of non edible corn oil and biodiesel and renewable diesel production.

Andy Foster: CO2 production at the Keys plant is approximately 400 metric tons per day, which is being upgraded, compressed, and delivered to local food and beverage processors by Messer, generating about $3.4 million per year of tax credits at a $30 per metric ton under current law.

Production at the Keyes plant is approximately 400 metric tons per day, which is being upgraded compressed and delivered to local food and beverage processors by messer generating about $3 $4 million per year of tax credits at a $30 per metric ton under current law.

Andy Foster: The Mitsubishi Xebrex dehydration unit, which separates water from ethanol, has been fully installed. The test run has been completed, and the system met or exceeded key system design milestones.

The Mitsubishi Zebra dehydration unit, which separates water from <unk>.

Ethanol has been fully installed the test run has been completed and the system met or exceeded key system design milestones the goal of significantly reducing steam consumption and the plant has been demonstrated in stable operations with the reduction from 20000 pounds of steam per hour to less than 5000.

Andy Foster: The goal of significantly reducing steam consumption in the plant has been demonstrated in stable operations with a reduction from 20,000 pounds of steam per hour to less than 5,000 pounds of steam per hour. Since steam is currently mostly produced from carbon intensive, expensive petroleum based natural gas, this 75% reduction in steam use for the ethanol dehydration reduces our operating costs and increases our revenues through lower carbon intensity ethanol.

Pounds of steam per hour since steam is currently mostly produced from carbon intensive expensive petroleum based natural gas this 75% reduction in steam used for the ethanol dehydration reduces our operating costs and increases our revenues through lower carbon intensity ethanol.

Andy Foster: Additional commissioning work is currently underway, and we expect to have the ZBREC system fully operational during the second quarter of this year.

Additional commissioning work is currently underway and we expect to have the zebra system fully operational during the second quarter of this year.

Andy Foster: The solar microgrid with battery backup is progressing.

The solar micro grid with battery backup is progressing with.

Andy Foster: with the signed EPC contract with SunPower for the installation of a $12 million solar microgrid. This project is supported by an $8 million grant from the California Energy Commission. The solar unit is designed to generate approximately 1.9 megawatts of zero carbon intensity electric power at a low cost for operation at the ethanol plant.

With the signed EPC contract with Sunpower for the installation of a $12 million solar micro grid. This project is supported by an $8 million Grant from the California Energy Commission to Solar unit is total unit is designed to generate approximately $1 nine megawatts of zero carbon intensity electric power.

<unk>.

At a low cost.

For operation at the ethanol plant.

Andy Foster: The Mechanical Vapor Recompression System, otherwise known as MVR, to further reduce petroleum, natural gas, and steam use is moving forward with detailed engineering almost completed.

The mechanical vapor recompression system, otherwise known as MBR to further reduce petroleum natural gas and steam use is moving forward with detailed engineering almost completed.

Andy Foster: This project is expected to significantly reduce the use of petroleum natural gas and combined with the ZBREX system, we expect to eliminate approximately 85% of our natural gas use when the MDR system becomes operational in 2023.

This project is expected to significantly reduce the use of petroleum natural gas and combined with the zebra system, we expect to eliminate approximately 85% of our natural gas use when the MBR system becomes operational in 2023.

Andy Foster: Currently, natural gas costs for the Keys plant are more than $10 million per year, so we expect to save more than $8 million per year of natural gas costs while also reducing the ethanol's carbon intensity, therefore increasing the value of the ethanol produced by the Keys plant.

Currently natural gas costs for the Keyes plant are more than $10 million per year. So we expect to save more than $8 million per year of natural gas costs, while also reducing the ethanol carbon intensity. There therefore, increasing the value of the ethanol produced by the Keyes plant.

Andy Foster: Our California ethanol plant is being upgraded to primarily operate using high efficiency electric motors and pumps powered by low or zero carbon intensity renewable power sources, including our solar array and local renewable electricity.

Our California ethanol plant is being upgraded to primarily operate using a high efficiency electric motors and pumps powered by low or zero carbon intensity renewable power sources, including our solar array and local renewable electricity.

Speaker Change: In summary, operational performance and project milestones for the AMETIS biogas and AMETIS plant ethanol plant businesses are on track with our five-year plan. Eric? Thank you, Andy. Let's discuss our carbon zero renewable jet and diesel fuel project with carbon sequestration in Riverbank, California.

In summary, operational performance and project milestones for the <unk> biogas and a <unk> plant ethanol plant businesses are on track with our five year plan, Eric. Thank you, Andy let's discuss our carbon zero renewable jet and diesel fuel project with carbon sequestration in riverbank, California.

Eric McAfee: We are pleased that the Ametis Carbon Zero Biorefinery under development in Riverbank, California near Modesto continues to achieve major milestones.

We are pleased that the <unk>.

Carbon zero by refinery underdeveloped in riverbank, California, near Modesto continues to achieve major milestones and.

Eric McAfee: In December 2021, after three years of negotiations with the City of Riverbank and the U.S. Army, AMETA signed the acquisition of the 125-acre Riverbank Industrial Complex. This site is a former U.S. Army ammunition production facility, with 710,000 square feet of existing buildings laid out as eight production lines.

In December 2021, after three years of negotiations with the city of <unk> Bank in the U S. Army <unk> signed the acquisition of the 125 acre riverbank industrial complex. This site is a former U S Army ammunition production facility with 710000 square feet of existing buildings laid out as <unk>.

<unk> production lines.

Eric McAfee: 120 railcars and a rail line on the site, a 20 megawatt electricity substation.

Hundred 20 railcars and a real line on the site.

<unk> 20 megawatt electricity substation.

Eric McAfee: and 100% zero carbon intensity renewable power with a direct power line connection to a hydroelectric dam.

And 100% zero carbon intensity renewable power with a direct power line connection to a hydro electric dam.

Eric McAfee: The terms of the agreement provide for a payment of about $145,000 per year to the City of Riverbank, along with ongoing investments in building our sustainable aviation fuel and renewable diesel plant at the site.

The terms of the agreement provided for a payment of about $145000 per year to the city of riverbank, along with ongoing investments in building, our sustainable aviation fuel and renewable diesel plant at the site.

Eric McAfee: But Emedis receives all of the lease revenue from more than 30 existing tenants at the facility.

But <unk> receives all of the lease revenue for more than 30 existing tenants at the facility. We expect to transfer ownership to about 50 acres or the <unk> site to <unk> during 2023 for a total of $2 six.

Eric McAfee: We expect to transfer ownership to about 50 acres of the Riverbank site to Emetis during 2023 for a total of $2.6 million. Actually, correction, during 2022 for a total of $2.6 million, including the jet diesel plant site and the carbon sequestration project site.

$6 million actually correction during 2022 for a total of $2 6 million <unk>.

Including the jet diesel plant site and the carbon sequestration project site.

Eric McAfee: The remaining 75-acre parcel will be under the low-cost lease for about 15 years, and then will be purchased by Metis for $8.8 million.

The remaining 75 acre parcel will be under the low cost lease for about 15 years, and then will be purchased by met us for $8 8 million.

Eric McAfee: In the past two quarters, we have announced $2.5 billion of sales contracts with Delta Airlines, American Airlines, and Japan Airlines for blended sustainable aviation fuel for flight operations at San Francisco Airport. Additional memorandums of understanding have been signed with other airlines for more than $1 billion of sales contracts. These additional agreements are expected to be announced during the next quarter.

In the past two quarters, we've announced $2 5 billion of sales contracts with Delta Airlines American Airlines, and Japan Airlines for blended sustainable aviation fuel for flight operations at San Francisco Airport additional memorandums of understanding had been signed with other airlines for more than 1 billion.

Have sales contracts.

Additional agreements are expected to be announced during the next quarter.

Eric McAfee: Under the sales agreements, the NEAT SAF will be trucked from the Riverbank production plant to a tank farm in the San Francisco Bay Area for blending with jet fuel. The blended SAF will be delivered via pipeline to San Francisco Airport for use by airlines.

Under the sales agreements the need Saf will be trucks from the riverbank production plant to a tank farm and the San Francisco Bay area for blending with jet fuel the blended Saf will be delivered via pipeline to San Francisco Airport for use by airlines and.

Eric McAfee: In addition to major U.S. and international airlines, we have received a high level of interest from leading private jet FBOs due to meeting corporate jet owner interest in sustainable aviation fuel.

In addition, a major U S and International Airlines, we have received a high level of interest from leading private jet Fps due to meet meeting corporate jet owner interest and sustainable aviation fuel.

Eric McAfee: In addition to the $2.5 billion of blended sustainable aviation fuel sales contracts.

In addition to the $2 $5 billion of blended sustainable aviation fuel sales contracts we.

Eric McAfee: We signed a $3.2 billion Renewable Diesel Sales Agreement to deliver 45 million gallons per year under a 10-year sales contract with a major travel stop chain for its northern California location.

We signed a $3 $2 billion renewable diesel sales agreement to deliver 45 million gallons per year under a 10 year sales contract with a major travel stop chain for its northern California locations.

Eric McAfee: The construction of the Renewable Jet and Diesel Plant is moving forward steadily. We are currently in the engineering phase to support the closing of the debt financing, which is planned for late this year.

Construction of the renewable jet and diesel plant is moving forward steadily. We are currently in the engineering phase to support the closing of the debt financing, which is planned for late this year.

Eric McAfee: We announced that the $2 billion global EPC contractor, CTCI, has begun engineering work to support completion of the permits and the EPC agreement.

We announced that the $2 billion global EPC contractors CTC.

<unk> has begun engineering work to support completion of the permits and the EPC agreement <unk> is currently constructing a 225 million gallon renewable diesel plant in Bakersfield, California with planned completion of that plant in mid 2022.

Eric McAfee: CTCI is currently constructing a 225-million-gallon renewable diesel plant in Bakersfield, California, with planned completion of that plant in mid-2022.

Eric McAfee: And CTCI is ideally suited to construct the Ametis plant on time and on budget.

And <unk> is ideally suited to construct the <unk> plant on time and on budget.

Eric McAfee: Let's review our new subsidiary, Ametis Carbon Capture.

Let's review, our new subsidiary in Medicine carbon capture.

Eric McAfee: In October 2020, the Ametis plant in California was identified in a study issued by the Stanford University Center for Carbon Capture as one of three ethanol plant CO2 sources in California that have the highest potential return on investment from building a carbon capture and sequestration facility.

In October 2020, the <unk> plant in California was identified in this study issued by the Stanford University Center for carbon capture as one of three ethanol plant Cotwo sources in California that have the highest potential return on investment from building a carbon capture and sequestration facility.

Eric McAfee: compared to the oil refineries, cement plants, and natural gas power plants that comprise the 61 largest CO2 emission sources in California.

Compared to the oil refineries cement plants and natural gas power plants that comprised of 61 largest cotwo emission sources in California.

Eric McAfee: Our ethanol plant currently captures about 150,000 metric tons per year of CO2 and compresses the CO2 in the Messer liquefaction plant into transportable liquid carbon dioxide.

Our ethanol plant currently captures about 150000 metric tons per year of Cotwo.

And compresses, the Cotwo and the messer liquid liquefacient plant into transportable liquid carbon dioxide.

Eric McAfee: from which we already generate IRS 45Q tax credits worth $30 per metric ton from CO2 reuse. Current operations generate about $3.4 million per year of tax credits.

From which we already generate IRS 45, Q tax credits.

$30 per metric ton from Sidoti reuse current operations generate about $3 $4 million per year of tax credits.

Eric McAfee: We selected Baker Hughes as the drilling vendor for the CCS project.

We selected Baker Hughes is the drilling vendor for the Ccs project.

Eric McAfee: a $20 billion market value company operating in more than 120 countries. Baker Hughes was originally founded in the west side of the Central Valley of California about 100 years ago.

A $20 billion market value company operating in more than a 120 countries.

Acres Baker Hughes as was originally founded in the West side of the Central Valley of California about a 100 years ago.

Eric McAfee: And the company is very familiar with the formations in the former inland ocean that formed the Central Valley.

And the company is very familiar with the formations in the former inland ocean that form the central Valley.

Eric McAfee: The carbon sequestration study prepared by Baker Hughes determined that the Emettus Keys plant and the Riverbank plant site are located above a 7,000-foot deep strata known as a cap rock and an 8,000-foot deep strata known as a basement rock.

The carbon sequestration study prepared by Baker Hughes determined that the <unk> plant and the riverbank plant site are located a boat above a 7000 foot deep strata known as a cap rock and an 8000 foot deep strategy known as a basement rock.

Eric McAfee: Between the two layers is a saline formation that was cited by Stanford as ideal for carbon dioxide sequestration.

Between the two layers of saline formation that was cited by Stanford is ideal for carbon dioxide sequestration.

Eric McAfee: Over a long period of time, the injected CO2 reacts with saline to form a mineral that is permanently sequestered underground and does not return to the atmosphere.

Over a long period of time.

The injected cotwo reacts with saline to form the mineral that is permanently sequestered underground.

Does not return to the atmosphere.

Speaker Change: We expanded the team managing the Amedas Carbon Capture subsidiary by adding Megan Hopkins as manager of regulatory and compliance.

We expanded the team managing the <unk> carbon capture subsidiary by adding Megan Hopkins as manager of regulatory and compliance to lead the EPA classic <unk> injection well permitting process.

Speaker Change: to lead the EPA Class 6 CO2 injection well permitting process.

Speaker Change: as well as to manage other permitting and regulatory opportunities related to the Riverbank site and our jet diesel plant development process.

As well as to manage other permitting and regulatory opportunities related to the riverbank site and our jet diesel plant development process and.

Speaker Change: In addition to Central California permitting experience for industrial and commercial projects, Megan worked at Chevron for 10 years and recently managed Chevron's global waste remediation.

In addition to the central California, permitting experience for industrial and commercial projects Megan worked at Chevron for 10 years, and recently managed chevron's global waste remediation.

Speaker Change: In phase one of the Amedas Carbon Capture Project, we plan to inject up to 400,000 metric tons per year of CO2 emissions from our biogas, ethanol, and jet diesel plants into two sequestration wells, which we plan to drill near our two biofuels plant sites in California.

And phase one of the <unk> carbon capture project, we plan to inject up to 400000 metric tons per year of Cotwo emissions from our biogas ethanol and jet diesel plants into two sequestration wells, which we plan to drill near our two biofuels plant sites in California.

Speaker Change: We are expecting to construct two CO2 injection wells that each have a minimum of 1 million metric tons per year of injection capacity.

We are expecting construct to Sidoti <unk> wells that each have a minimum of 1 million metric tons per year of injection capacity with additional cotr supplied by oil refineries and other sources to sequester a total of 2 million metric tons per year of Cotwo.

Speaker Change: with additional CO2 supplied by oil refineries and other sources to sequester a total of 2 million metric tons per year of CO2.

Speaker Change: The initial phase of construction includes drilling two characterization wells to provide empirical data for the EPA Class VI permit.

The initial phase of construction includes drilling to characterization wells to provide empirical data for the EPA classics permit the injection wells will then be drilled at the same site after receiving EPA and other permits we are currently in the engineering and permitting process for the two characterizations wells with an expectation.

Speaker Change: The injection wells will then be drilled at the same site after receiving EPA and other permits. We are currently in the engineering and permitting process for the two characterizations wells, with an expectation that we will drill the first characterization well at the Riverbank site in the second quarter of this year. Let's review our...

With that we will drill the first characterization well after riverbank site in the second quarter of this year.

Let's review, our biodiesel business in India.

Speaker Change: India is now recovering from a significant COVID pandemic impact.

India is now recovering from a significant COVID-19 pandemic impact.

Speaker Change: Last month, a two rupee per liter tax was adopted in India for any petroleum diesel that is not blended with biodiesel.

Last month, a two rupee per liter tax was adopted in India for any any petroleum diesel that is not blended with biodiesel. The new tax becomes effective in October 2022, and has already led to significant discussions with major oil refineries in India regarding supply of more than $1 25.

Speaker Change: The new tax becomes effective in October 2022 and has already led to significant discussions with major oil refineries in India regarding supply of more than 1.25 billion gallons of biodiesel that will need to be blended into about 25 billion gallons of diesel, which is consumed in India each year, in order to avoid payment of the

Gallons of biodiesel that will need to be blended into about 25 billion gallons of diesel which is consumed in India. Each year in order to avoid payment of the new tax.

Speaker Change: We continue work on an approval to export biodiesel, opening the export market, which has previously been prohibited under the India National Biofuels Policy.

We continued work on an approval to export biodiesel opening the export market, which has previously been prohibited under the India National Biofuels policy the price of biodiesel in California has been significantly higher than India prior to the new India government tax.

Speaker Change: price of biodiesel in California has been significantly higher than India prior to the new India government tax.

Speaker Change: Our Riverbank facility is well positioned to manage product, reheating, and transloading for local truck delivery of biodiesel in California.

Ah riverbank facility is well positioned to manage product reheating and trans loading for local truck delivery of biodiesel in California.

Since our India subsidiary has no debt.

Speaker Change: and is fully constructed and commissioned, we are well positioned for a rapid revenue increase as we expand biodiesel exports. We do expect large oil refinery and government purchases of renewable biodiesel to meet climate change and air quality goals in India as the current COVID crisis facing India continues to subside.

And is fully constructed and commissioned we are well positioned for rapid revenue increase as we expand biodiesel exports.

We do expect large oil refinery in government purchases of renewable biodiesel to meet climate change and air quality goals in India as the current Covid crisis facing India continues to subside.

Speaker Change: Let's finish with a brief review of an important innovation, which is in the commercialization process, from the Emedis Technology Development Group.

Let's finish with a brief review of an important innovation, which is in the commercialization process from the <unk> technology development group.

Speaker Change: Millions of acres of wildfires each year and other adverse impacts of climate change continue to create significant losses of property and life.

Millions of acres of wildfires, each year and other adverse impacts of climate change continues to create significant losses of property and life.

Speaker Change: causing alternative uses of waste wood to become a focus of government policy and funding.

<unk> alternative uses of wastewater to become a focus of government policy and funding.

Speaker Change: Headed by Dr. Gautam Vemuri, as our Vice President of Technology Development, working with our laboratory staff in Minnesota and at the Keyes ethanol plant in California,

Headed by Dr. <unk> <unk> as our vice President of Technology development, working with our laboratory staff in Minnesota and at the Keyes ethanol plant in California.

Speaker Change: The EMEDIS technology development team worked with the federally funded Joint Bioenergy Institute in Berkeley, California, for more than three years in the development of a patented process to extract sugars from low-cost waste orchard and forest wood feedstocks.

The <unk> technology development team worked with the federally funded joint Bioenergy Institute in Berkeley, California for more than three years and the development of a patented process to extract sugars from low cost waste Orchard Forest Wood feedstocks.

Speaker Change: We now hold exclusive licenses to two issued patents that protect this sugar extraction technology for use with waste biomass and with wood from non-commercial forests.

We now hold exclusive licenses to two issued patents that protect this sugar extraction technology for use with waste biomass and with wood from noncommercial forests.

Speaker Change: By extracting negative carbon intensity C6 and C5 sugars from waste wood, we plan to reduce the amount of cornstarch used in our ethanol production process.

By extracting negative carbon intensity <unk> sugars from wastewater we plan to reduce the amount of cornstarch used in our ethanol production process by using negative carbon intensity sugars from wastewater to produce cellulosic ethanol.

Speaker Change: by using negative carbon intensity sugars from waste wood to produce cellulosic ethanol. Every 10% of our feedstock

10% of our feedstock for ethanol production that is obtained from wastewater sugars instead of corn starch is expected to generate about $30 million per year of increased EBITDA cash flow from the Keyes ethanol plant the.

Speaker Change: that is obtained from wastewood sugars instead of cornstarch is expected to generate about $30 million per year of increased EBITDA cash flow from the Keyes ethanol plant.

Speaker Change: The increased EBITDA is created by the value of D3 cellulosic ethanol RINs compared to D6 corn ethanol RINs and the expected significantly lower cost of waste wood feedstock compared to corn starch.

The increased EBITDA is created by the value of <unk> Cellulosic ethanol rins compared to <unk>, six corn ethanol rins and the expected significantly lower cost of wastewater feedstock compared to corn starch.

Speaker Change: The remaining lignin and non-converted sugars are designed to be the feedstock for our gasifier unit at the Riverbank Jet Diesel Plant to produce carbon-negative cellulosic hydrogen for the hydrotreatment of vegetable and other oils to produce sustainable aviation and diesel fuels.

The remaining lignum and non converted sugars are designed to be the feedstock for our Gasifier unit at the riverbank jet diesel plant to produce carbon negative cellulosic hydrogen for the hydro treatment of vegetable and other oils to produce sustainable and aviation and diesel fuels.

Speaker Change: A $3 million California Energy Commission grant was awarded to JBEI and Amedas, which partially funded the years of collaborative work and lab testing that led to the granted patent.

A $3 million, California Energy Commission Grant was awarded to <unk>, and <unk>, which partially funded the years of collaborative work and lab testing testing that led to the granted patents.

Speaker Change: Recently, AMETIS was awarded a $250,000 U.S. Forest Service grant to further develop the sugar extraction technology to extract sugars from locally sourced orchard and forest waste wood.

<unk> <unk> was awarded a $250000 U S Forest service grant to further develop the sugar extraction technology to extract sugars from locally sourced orchard enforced waste would we.

Speaker Change: We expect commercial operations to pre-extract cellulosic sugars from waste wood when the Riverbank Renewable Jet Diesel Plant becomes operational.

We expect commercial operations to pre extract cellulosic sugars from Westwood when the riverbank renewable jet and diesel plant becomes operational.

Speaker Change: In summary, AMEDIS is expanding a diversified portfolio of negative carbon intensity projects.

In summary.

A medicine is expanding a diversified portfolio of negative carbon intensity projects.

Speaker Change: Dairy Renewable Natural Gas, Renewable Aviation and Diesel Fuel, Low-Carbon Ethanol using cellulosic sugars from waste wood, and CO2 sequestration. All of these projects are synergistic and create a circular bioeconomy within AMETIS in which we use byproducts and waste products from our facilities and local areas as feedstock to produce low and negative carbon intensity renewable fuels.

<unk> renewable natural gas renewable aviation and diesel fuel low carbon ethanol using cellulosic sugars from waste wood and Cotwo sequestration.

All of these projects are synergistic and create a circular bio economy within <unk>, which we use byproducts of waste products from our facilities in local areas as feedstock to produce low and negative carbon intensity renewable fuels.

Speaker Change: Our company's values include a long-term commitment to building value for shareholders, the empowerment and respect for our employees and business partners, and making significant and positive contributions to the communities we serve.

Our company's values include a long term commitment to building value for shareholders.

Empowerment and respect for our employees and business partners, and making significant and positive communications the contributions to the communities we serve.

Speaker Change: Now, let's take a few questions from our call participants. Kate?

Now, let's take a few questions from our call participants.

Kate: Thank you. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. If you wish to leave the queue, you may press.

Thank you ladies and gentlemen, the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time.

Wish to leave the queue you May press Star Q, we do ask that if you are listening via speakerphone. Please pick up your handset for optimum sound quality. Please hold a moment, while we poll for questions.

Kate: We do ask that if you are listening via speakerphone, to please pick up your handset for optimum sound quality. Please hold a moment while we poll for questions.

Kate: And our first question today is coming from Manav Gupta at Credit Suisse. Your line is live.

And our first question today is coming from Manav Gupta at Credit Suisse. Your line is live you may begin.

Manav Gupta: So Eric, a year ago, the pushback we primarily got on Imatus was if the story is so good, why aren't other people associating with it? Now a year ahead, you see Delta, American, some Japanese airlines, all collaborating with you. So I think that overhang on the stock is kind of gone, in my opinion.

Yes.

The year ago.

<unk>, we primarily on the meet the slides if the story is still good.

Why aren't other people associated with it now a year ahead, you see Delta American some Japanese airlines.

Collaborating with you so I think that the overhang on the stock is kind of gone in my opinion.

Manav Gupta: There are some people who still push a negative thesis.

There are some people who still push a negative thesis.

Manav Gupta: And there are two reasons they say they're still negative on this company is, one, they say there are so many projects coming on that LCFS price will go to $80 and stay there in perpetuity and CARD would not do anything to help out. And B, they say there's a probability.

When they made this end there and there are two reasons they say they're still negative on this company is one they see there's so many projects coming on that else CFS flights and go to $80 and stay there in perpetuity and odd, but not do anything to help out and b. They see it as a probability that R&D might get kicked out.

Manav Gupta: that RNG might get kicked out by CARB. Now, you talk to higher officials at CARB versus some of these other people. So help us understand how CARB is thinking about LCFS prices and the probability of RNG not being part of the LCFS program.

By now you talked to higher officials at Cod, let's say some of these other people so help us understand.

Just thinking about LCM spaces, and the probability of RMG not being part of the whole CFS program.

Speaker Change: You are correct. There is wide concern about the response CARB has had.

You are correct. There is wide concerned about the response carb has had two of roughly 38% decrease the price of CFS credits, we deal directly with the staff at carbon we can confirm that they have a very strong commitment to low carbon fuel standard.

Speaker Change: to a roughly 38% decrease in the price of LCFS credits.

Speaker Change: We deal directly with the staff at CARB and we can confirm that they have a very strong commitment to the low carbon fuel standard and actually have expressed confusion.

And actually have expressed confusion about why institutional investors have not seen a strong commitment to reducing carbon emissions in California.

Speaker Change: about why institutional investors have not seen a strong commitment to reducing carbon emissions in California.

Speaker Change: As you know, January 2024 is the next scheduled adoption of LCFS credit demand criteria. But in the meantime,

As you know January 2024 is the next scheduled adoption of <unk>.

<unk> credit demand criteria, but in the meantime.

Speaker Change: We have completed a study by Argus. It was a part of a federal financing process we go through, and that study brought a very interesting point to light.

We have completed a study by Argus It was a part of a.

Federal financing process, we go through in <unk>.

And that study brought up a very interesting point too light and that is the roughly 8 billion gallons of renewable diesel that's been announced largely will not be at the same carbon intensity of current renewable diesel because of a lack of used cooking oil and other low carbon intensity feedstocks that currently drive <unk>.

Speaker Change: and that is the roughly 8 billion gallons of renewable diesel that's been announced, largely will not be at the same carbon intensity of current renewable diesel because of a lack of used cooking oil and other low carbon intensity feedstocks that currently drive the low CI score.

Oh Ci scores. So if the Ci score is much higher than the number of <unk> credit generates its much lower and so the Rguest report concluded that the market is basically of unfortunately.

Speaker Change: So if the CI score is much higher than the number of LCFS credits generates, it's much lower. And so the Argus report concluded that the market is basically, unfortunately, expecting too much of future renewable diesel production and that the amount of LCFS credits generated could be 50 to 75 percent less than what the market is expecting, and described the LCFS market as being structurally

Expecting too much of future renewable diesel production and that the amount of Lcs credits generated could be.

50% to 75% less than what the market is expecting and describe the <unk> market as being structurally in a deficit in other words under any circumstance, it's reasonable it will be running at a maximum.

Speaker Change: in a deficit. In other words, under any circumstance, it's reasonable it will be running at a maximum level, which is $200 plus the cost of living index.

Level, which is $200 plus the cost of living index.

Speaker Change: We ran our projection in our five-year plan at the lowest number that the Argus projection had, which is $155 per LCFS credit, but their own most probable outcome actually got to $242 by the year 2020.

<unk>.

We ran our projection and our five year plan at the lowest number that the rguest projection had which is a $155 per <unk> credit, but their own most probable outcome actually got to $242 by the year 2020.

Speaker Change: So our five-year plan model is $242 minus $150. It's $90 less than what the actual expected outcome is by the experts in the field. And what they're looking at is that we're not too far from a year from now when CARB will certainly be telling the market where they think they'll end up in 2024.

So our five year plan model is 242 minus 150, it's $90 less than what the actual expected outcome is by the experts in the field and what Theyre looking at is that we're not too far from a year from now when carb will certainly be telling the market where they think.

Will end up in 2024, and they are expecting the markets can be somewhat surprised at carbs commitment to decarbonization, though carbs not surprised they are telling us constantly thats, what they intend to do institutional investors are reacting to the immediate.

Speaker Change: and they are expecting the markets to be somewhat surprised at CARB's commitment to decarbonization. Though CARB's not surprised, they're telling us constantly that's what they intend to do. Institutional investors are reacting to the immediate...

Speaker Change: gap in information that's occurring during 2020, to 2022, I'm sorry.

GAAP information Thats occurring during 2020.

2022, I'm sorry.

Speaker Change: Regarding RNG, staff members of CARB at senior levels have just recently in the last two weeks written public social media postings in strong support of dairy-renewable natural gas because of the positive benefits on local disadvantaged communities.

Regarding R&D.

Staff members of carved at senior levels have just recently in the last two weeks written public social media postings and strong support of dairy renewable natural gas because of the positive benefits on local disadvantaged communities, creating jobs, but more importantly, I would almost say than jobs, if there would be hard.

Speaker Change: But more importantly, I would almost say, than jobs, though it would be hard to say more importantly than jobs.

Save more importantly jobs is improved environment.

Speaker Change: is improved environment. Our digesters

Digesters.

<unk> reduce odor emissions and of course capture methane, which have been harmful for local disadvantaged communities and so we've seen top staff at carb strongly support RMG.

Speaker Change: capture methane, which have been harmful for local disadvantaged communities, and so we've seen top staff at CARB.

Speaker Change: strongly support RNG as a result of that. So as you know, the board in January denied a petition.

As a result of that so as you know the board in January denied our petition to exclude dairy LNG from the CFS and we do see that the carb staff understands the significant environmental health and de carbonization benefits of dairy RMG.

Speaker Change: to exclude dairy RNG from the LCFS.

Speaker Change: And we do see that the CARB staff understands the significant environmental health and decarbonization benefits of dairy RNG.

Speaker Change: Eric, I have just one quick follow-up. Some of your peers who are also in RNG and even in CNG are very excited about this Cummins 15 liter engine. Can you talk a little bit about it and if you think that could be a game changer and I'll leave it there. Thank you so much, Eric.

And I just have one quick follow up some of your peers, who are also in R&D and even in CMG are very excited about this come in 15 liter engine can you talk a little bit about it and if you think that could be a game changer and I'll leave it there. Thank you so much.

Speaker Change: Thank you so much, Manav, and thank you for the opportunity to be with you at the Vail Energy Conference last week in Colorado.

Thank you so much.

Manav and thank you for the opportunity to be with you at the Vale Energy Conference last week in Colorado.

Speaker Change: The Cummins 15-liter engine is a game-changer because this is a long-haul, heavy cargo truck engine that's widely adopted throughout the trucking industry.

<unk>. The Cummins 15 liter engine is a game changer, because this is a long haul heavy cargo truck engine that's widely adopted.

Throughout the trucking industry and Cummins, bringing in R&D or I should say a natural gas version of that engine. The market does substantially increase the demand for dairy RMG, which is the world's lowest carbon intensity fuel and is a very large contributor to two things number one day.

Speaker Change: and Cummins bringing an RNG or I should say a natural gas version of that engine to market.

Speaker Change: does substantially increase the demand for dairy R&G, which is the world's lowest carbon intensity fuel and is a very large contributor to two things. Number one, decarbonizing the diesel fuel for long-haul trucking, but also, frankly, lowering the cost.

Carbonite into diesel fuel for long haul trucking, but also frankly lowering the cost.

Speaker Change: R&G is a great opportunity for operators to reduce their fuel costs in light of $120 or so crude oil prices.

LNG is a great opportunity for operators to reduce our fuel costs in light of $120 or so crude oil prices.

Thank you for taking my questions.

Thank you.

Speaker Change: Thank you. Our next question today is coming from Amit Dayal at HC Wainwright. Your line is live. You may begin.

Thank you. Our next question today is coming from Amit Dayal at H C. Wainwright. Your line is live you may begin.

Amit Dayal: Thank you, good afternoon everyone. Eric, just to begin with, in terms of RNG deployments and revenue expectations against those deployments, could you give us any update on how we should think about contributions from the digestives that are coming online for you guys?

Thank you good afternoon, everyone.

Eric just to begin with in terms of RMG deployments.

<unk> revenue expectations against those deployments could you give us any.

A bit on how we should think about contributions from digesters that are coming online for you guys.

Eric McAfee: On our five-year plan, it's on our website on the home page, we lay out the number of digesters per year.

On our five year plan, it's on our website on the homepage, we lay out the number of digesters per year.

Eric McAfee: defined two different rows. One of the rows is capacity. The other one is actually the number of MMPTUs being delivered, which is what drives revenue. And the reason why there's a gap there is we complete construction, then we have a approval process of the pathway with the State of California CARB group. And so we felt it was important that investors had insight that even though we have capacity in place, it's completed.

We.

Defined two different rose one is one of the roses capacity. The other one is actually the number of <unk> being delivered which is what drives revenue and the reason why there is a gap there as we complete construction then we have a approval process of the pathway with the state of California Carb.

And so we felt it was important that investors had insight that even though we have capacity in place it's completed.

Eric McAfee: We can't start actual revenue generation until those approvals have occurred. So there's a slight delay there, and we disclosed that.

We can't start actual revenue generation until.

Those approvals have occurred so there's a slight delay there and we disclosed that in our five year plan.

Eric McAfee: in our five-year plan. We are in our sixth year scheduled now to go to 66 dairy digesters.

We are in our six year scheduled now to go to 66% area Digesters and currently on track and frankly, I think we'll see some nice acceleration during the middle of the year due to the.

Eric McAfee: And currently we're on track and frankly, I think we'll see some nice acceleration during the middle of the year due to the weather and other things. Winter tends to be a little slower in construction, but we should have a great spring and summer.

The weather and other things winter tends to be a lot slower in construction, but we should have a great spring and summer and so I expect us to see that we're continuing to be on track with our five year plan.

Eric McAfee: And so I expect us to see that we're continuing to just be on track with our five-year plan.

Eric McAfee: And with respect to your, you know, CapEx needs for this year, just from the presentation, it looks like you have all the funding you need to, you know, make all these investments. Could you give us any color on sort of what your needs going into 2023 are going to be and whether some of those needs are already in place for you guys?

Okay.

With respect to your.

Capex needs for this year.

The start of the presentation. It looks like you have all of the funding you need to work very closely with vessels.

Could you give us any color on sort of what are your needs going into 2023 is going to be.

Some of those needs are already in place for you guys.

Speaker Change: What we've structured the company to do is to use the parent company, which has significant value of its of its existing assets.

What we've structured the company to do is to use the parent company, which has significant value of its of its existing assets as the source of the equity for our subsidiaries. So the $100 million of financing that we announced here in the last week or so is broken into a 50.

Speaker Change: as the source of the equity for our subsidiaries, so the $100 million of financing that we announced here in the last week or so,

Speaker Change: is broken into a $50 million carbon reduction bucket. And that is funding the activities of the subsidiary. Andy mentioned the Zbrex unit and solar units and other things we're doing, mechanical vapor compression. But also, our carbon sequestration subsidiary, our jet and diesel subsidiary.

<unk>.

Carbon reduction Buck.

Bucket and that is funding the activities of the subsidiary Andy mentioned, the Zebra <unk> unit in solar units and other things we're doing mechanical vapor.

Compression, but also our carbon sequestration subsidiary, our jet and diesel subsidiary.

Speaker Change: The initial project development of each one of those subsidiaries is actually paid for by the credit facility of the parent company.

The initial project development of each one of those subsidiaries is actually paid for by the credit facility of the parent company separately from that we have a $50 million credit facility has availability calculations in it but it is working capital. So it can be used for any.

Speaker Change: Separately from that, we have a $50 million credit facility, it has availability calculations in it, but it's working capital. So it could be used for any sort of things that we need to do in the course of development, of course. So that $100 million credit facility is set up to fully fund.

Sort of things that we need to do in the course of development of course, so those those that $100 million credit facility.

Set up to fully fund all of the development activities.

Speaker Change: all of the development activities are sub series which provide the equity capital.

Series, which provide the equity capital such that when we get to project financing and we really are pretty much down to only a couple of them.

Speaker Change: such that when we get to project financing, and we really are pretty much down to only a couple of them, it's jet and diesel. We already have $32 million of total investment there. We'll put another roughly $8 million this year. So about $40 million in the common equity of our jet and diesel project. We'll do a project financing, which will fully fund that project.

Jet and diesel we already have $32 million of total investment there will put another roughly $8 million. This year, so about $40 million in the common equity of our jet diesel project, we'll do a project financing, which will which will.

Fully fund that project.

Speaker Change: And then in about a year and a half or so, we'll have our EPA Class 6 licenses and we'll be doing some smaller financings, which are project financings. But the development work is all being funded from our $100 million credit line. So we're really funded for 18 months on our carbon sequestration business.

And then in about a year and a half or so.

We'll have our EPA class six licenses and we'll be doing some smaller financings, which are project financings, but the development work is all being funded from our $100 million credit lines. So we're really funded for 18 months on our carbon sequestration business.

Speaker Change: So the Keys plant largely has all the money it needs between the 16.7 million of grants that we've been awarded and the credit lines, we're pretty much wrapping up all those projects except for one here in the next 12 months.

The Keyes plant largely has all the money it needs between the $16 $7 million of grants that we have been awarded and the credit lines, where we're pretty much wrapping up all those projects except for one here in the next 12 months and so basically we're just fully funded for all these miscellaneous items and then we just do one project financing on jet fuel.

Speaker Change: And so basically, we're just fully funded for all these miscellaneous items, and then we just do one project financing on jet fuel, and then in a year and a half or so, do one project financing on carbon sequestration, and we're done. And none of these require any equity investment by the parent company. We were able to use our credit facilities to fund these projects. Okay, thank you for that, Eddie.

And then a year and a half or so to one project financing on carbon sequestration and we're done and none of these require any equity investment by the parent company, we were able to use our credit facilities to fund these projects.

Okay.

Okay.

Okay.

Speaker Change: Could you clarify, you know, at what utilization levels the plant in India is operating at right now and, you know, where do you expect that to be maybe by the end of the year?

Could you clarify.

Utilization levels the plant in India.

And where do you expect that to be maybe by the end of the year.

Great.

Speaker Change: Our India plant is ramping up out of the

Our India plant is ramping up out of the winter typically about two months in the wintertime biodiesel plants in India.

Speaker Change: The winter, typically about two months in the wintertime, biodiesel plants in India don't operate because it's a little bit cold. But as I mentioned, this new government tax is a big driver for scale-up in India. And the existing three oil marketing companies, again, are an opportunity in India. We do have high feedstock costs, but this 2 rupee per liter, there's 3.7854 liters per gallon. So it's a very, very significant government tax per gallon.

Don't operate because it's a little bit cold.

But as I mentioned this new government taxes, a big driver for the scale up in India and the existing three.

Oil marketing companies again are an opportunity in India, we do have high feedstock costs, but this two rupees per leader. There is $3 70, 504 liters per gallon. So it's a very very significant government tax per gallon.

Speaker Change: that is driving the rapid adoption of biodiesel blending in India. And that's occurring over the next two quarters, October 2022 is when that tax comes into play. So we're dealing specifically with the private refiners.

That is driving the rapid adoption of biodiesel blending in India and that's occurring over the next two quarters October of 2022 is when that tax comes into play. So we're dealing specifically with the private refiners.

Speaker Change: in India because their desire to avoid this government tax is extremely high.

Yeah.

Because their desire to avoid this government taxes extremely high.

Speaker Change: even though it applies to all the refiners in India. So we expect to scale up over the next two quarters. And if we can get an export approval to export to California, we'll be getting that process as fast as possible. So we have two very, very exciting expansion opportunities in India.

Even though it applies to all the refineries in India. So we expect to scale up over the next two quarters and if we can get an export approval to export to California, beginning that process as fast as possible. So we have two very very exciting.

Expansion opportunities in India.

Speaker Change: one to California and one domestically in India that all appeared really in the last couple of months. So we're looking to see that wrap up occur this year.

The California, and one domestically in India that all appeared really in the last couple of months. So we're looking to see that ramp up occur this year.

Thank you Eric Thats, all I have.

Sure.

Speaker Change: Thank you. Our next question today is coming from Nate Pendleton at Stiefel. Your line is live. You may begin. Good morning

Thank you. Our next question today is coming from Nate Pendleton at Stifel. Your line is live you may begin.

Good morning, all and thanks for taking my questions for my first question regarding the potential use of tallow from India and your riverbank plant.

Nate Pendleton: For my first question, regarding the potential use of tallow from India in your riverbank plant, could you at a high level speak to the difference in cost and CI potential compared to using vegetable oil?

Would you at a high level speak to the difference in cost in Ci potential compared to using vegetable oil.

The.

Nate Pendleton: Talu in India that we acquire is a crude product, so it actually is not a biofuel feedstock at the point at which we acquire it.

<unk> in India.

We acquire is a crude products. So it actually is not a biofuels feedstock at the point in which we acquire it.

Nate Pendleton: We announced recently that we're building a crude refining program, so what comes out of that plant is now a biofuels feedstock, so we take what is essentially a non-viable product and turn it into a feedstock product.

We announced recently that we're building a crude refining program. So what comes out of that that plant is.

<unk> is now a biofuels feedstock. So we take what is essentially a non viable product and turned into feedstock product.

Nate Pendleton: And we can use that in India at our biodiesel plant. We are already one of the largest users of tallow in the biodiesel business in India. And of course, because of our need in California, we can also export tallow, which is allowed in India to the United States, and specifically to our California plant. So the core of our operational activity in India is taking this really, literally waste

And we can use that in India at our biodiesel plant. We are already one of the largest users of <unk> in the biodiesel business in India.

And of course, because of our need in California. We can also export tallow, which is allowed in India.

To the United States, and specifically to our California plant. So the core of our operational activity in India is taking this really literally a waste product and converting it into a <unk>.

Nate Pendleton: and converting it into a low or no odor clean feedstock that can be used for renewable fuels.

Low or no odor clean.

Feedstock that can be used for renewable fuels production. So in terms of cost differential there is a meaningful cost differential it is.

Nate Pendleton: So in terms of cost differential, there is a meaningful cost differential. It is.

Nate Pendleton: It's more than 20% today and potentially even more than 30% today less expensive to buy that crude product than it is to buy a refined vegetable oil or animal oil feedstock.

It's more than 20% today.

And potentially even more than 30% today less expensive to buy that crude product than it is to buy a refined.

For oil or animal oil feedstock.

Speaker Change: Great, thanks. And for my second question, regarding your CCS business...

Great. Thanks, and for my second question regarding your Ccs business could you provide an update on how conversations are progressing regarding third party <unk> volumes also could you comment on the logistics involved to move those potential third party volumes.

Speaker Change: provide an update on how conversations are progressing regarding third-party co2 volumes also could you comment on the logistics involved to move those potential third-party volumes

Sure.

Speaker Change: We have spoken to every California San Francisco Bay Area oil refiner we are Actively in negotiations on actual terms with two of those refiners that would comprise

We have spoken to every.

California.

San Francisco Bay area oil refiner, we are.

Actively in negotiations on actual terms with two of those refiners that would comprise.

Speaker Change: frankly, all of the 2 million metric tons per year if we included flue gas.

Frankly, all of the 2 million metric tons per year, if we included flue gas theres.

Speaker Change: There's two major major sources. One is the steam methane reformer that produces hydrogen. It's a very concentrated source of co2 and If we just go with SMR, we could probably include a third oil refinery but we we are are having a very solid discussions with with several of the oil refiners and They're located roughly a hundred miles from our facility

Theres two major major sources, one is the steam methane reformer that produces hydrogen it's very concentrated source of cotwo and if we just go with <unk>. We could probably include a third oil refinery, but we are having a very solid discussions with with several of the oil refiners and they're located rough.

100 miles from our facility. So our approach is.

Speaker Change: So our approach is, as a producer of dairy renewable natural gas, we're seeking to have trucks.

As a producer of dairy renewable natural gas, we're seeking to have trucks.

Speaker Change: that can be very, very low emission. Of course, negative carbon intensity, RNG, is a fuel instead of diesel. And so driving roughly 100 miles to pick up CO2 at oil refineries is actually probably the lowest carbon transportation tool available in terms of vehicular transport. And so we see ourselves being uniquely positioned.

That can be very very low emission of course negative carbon intensity R&D as a fuels diesel and so driving roughly 100 miles to pick up <unk> at oil refineries is actually probably the lowest carbon transportation tool available.

In terms of vehicular transport and so we see ourselves being uniquely positioned to provide the roughly.

Speaker Change: to provide the roughly 100 trucks per well. We're doing two wells.

100 trucks per well, we're doing two wells and that's only about five trucks an hour just kind of do the math 100 trucks divided by 20 hours and so we're we're well positioned.

Speaker Change: And that's only about five trucks an hour. You just kind of do the math, 100 trucks divided by 20 hours.

Speaker Change: And so we're well-positioned to have a low-cost, low-carbon emission.

Have a low cost low carbon emission.

Speaker Change: you know, five trucks an hour is not much, uh, one, you know, one, one truck, uh, every 10 minutes is, is just not a big deal.

Five trucks in hours not much.

One truck.

Every 10 minutes is just not a big deal so were we.

Speaker Change: So we're seeing that as a value out of our situation because the alternative, of course.

We're seeing that as a value out of our system situation because the alternative of course is building a <unk> pipeline, it's high pressure very difficult to see how that could get permitted and constructed in California of that significant litigation or barging, which has enormous normally problematic because <unk> or <unk>.

Speaker Change: is building a CO2 pipeline. It's high pressure, very difficult to see how that could get permitted and constructed in California without significant litigation. Or barging, which is enormously problematic because CO2 evaporates. Or railing, which is even worse. You lose about 10% of your CO2 every day it sits in a rail car. So in a $500 million business, two days in a rail car.

Selling which is even worse you lose about 10% of your <unk> everyday it sits in a railcar so a $500 million business two days in a railcar.

Speaker Change: can easily reduce revenues by $100 million and reduce earnings by $100 million. So we think we're very well positioned to add value to that business. And I think our oil refiner partners, I guess, would be a big term to use, see it the same way. We have a unique value proposition there.

Italy reduced revenues by $100 million in reduced.

Earnings by $100 million.

So we think we're very well positioned to add value to that business and I think our oil refiner.

Partners, I guess would be a big term to use.

At the same way, we have a unique value proposition there.

Thanks for your time and congrats on a strong quarter.

Thank you so much.

Speaker Change: Thank you. Our next question today is coming from Matthew Blair at Tudor Pickering Holt. Your line is live. You may begin.

Thank you. Our next question today is coming from Matthew Blair at Tudor Pickering Holt. Your line is live you may begin.

Matthew Blair: Hey, good afternoon. Eric and Todd, congrats on the quarter. I think your progress on the dairy RNG side has been pretty impressive.

Hey, good afternoon, Eric and Paul Congrats on the quarter.

I think your progress on the dairy Orange juice has been.

Pretty impressive.

Matthew Blair: I think you mentioned that you signed agreements with an additional 24 or 25 dairies. Could you talk about the factors that are helping you win?

You mentioned that you signed agreements with an additional $24 25, various could you talk about the factors that are helping you win.

Matthew Blair: these contracts and what we're hearing is a pretty competitive market. And then could you also talk about your market opportunity outside of the 80 dairies that you currently supply the wet distillers grains to? Have you signed any?

Contracts and what we're hearing is a pretty competitive market and then could you also talk about your market opportunity outside of the 80 dairy.

Currently supplier the wet distillers grains to find any any contracts with carriers outside of that existing network.

Matthew Blair: any contracts with areas outside of that existing network?

Matthew Blair: Andy, you want to take it? Sure. Thanks for the question. I think the

Andrew you want to take that sure.

Thanks for the question I think the.

Andy Foster: You're correct that it is a competitive marketplace.

You are correct that it is a competitive marketplace.

Andy Foster: You know, we've been in this business since early 2018. And at that time, there were, you know, really in addition to A. Metis, a couple other significant developers, CalBio and Moss Energy Works, and a lot more have come to the party since that time. I think one of the things that has helped us tremendously in terms of securing the dairy participation agreements or leases or, you know, the ongoing discussions that we have with multiple parties.

We've been in this business since early 2018 and at that time there.

In addition to a <unk> couple of other.

Significant developers <unk> and Mas synergy works.

And a lot more have come to the party since that time I think one of the things that has helped us tremendously in terms of securing the dairy participation agreements releases or quarter of the ongoing discussions we have with multiple parties.

Andy Foster: Is the fact that we are located in the neighborhood if you will We have a long operating history at the keys plant for you know, we've been operating the ethanol plant for since 2011 and so We you know, we we come to the party with some local knowledge And and obviously those that are currently customers of our distiller's grains know who we are So I think you know starting with that foundation and building upon it one of the other things I think that that has helped us and this is

Is the fact that we are located in the neighborhood. If you will we have a long operating history at the Keyes plant for we've been operating the ethanol plant for.

Since 2011 and so.

We come to the party with some note local knowledge.

And obviously those that are currently customers of our distillers grains know, who we are so I think starting with that foundation and building upon it.

One of the other things I think that has helped us and this is.

Andy Foster: You know, one of the one of the real when Eric, you know, when we talked about getting into this business, it was it was let's get busy and let's execute quick. Let's move to demonstrate how serious we are in the marketplace.

One of the one of the real when Eric.

We talked about getting into this business. It was let's get busy and let's execute quick let's move to demonstrate how serious we are in the marketplace.

Andy Foster: Some of the other developers had some fits and starts with how they've delivered in the marketplace. We said we were gonna build two dairies in a year, commission them, get them operating.

Some of the other developers had some fits and starts with with.

How they've delivered in the marketplace. We said, we're going to build two dairies in a year commission them get them operating.

Andy Foster: you know, get a CI score and, and we did it, we, we stayed right on track. We got, you know, four miles of pipeline built. We did all of that literally, you know, in the, in the space of a year.

Get a ci score and we did it.

Stayed right on track, we got four miles of pipeline built we did all of that literally.

The space of a year and I think from a credibility perspective that has helped us a lot with the dairyman.

Andy Foster: And I think from a credibility perspective, that's helped us a lot with the dairymen. If you spend any time around farmers

If you spend any time around farmers and dairy men in particular, they've had lots of people come through and try to sell them an interesting schemes and various things and they are highly cynical group of people because most of those things never come to pass when you deliver as you say youre going to deliver that goes a long way and then I think additionally.

Andy Foster: Dairyman in particular, they've had lots of people come through and try to sell them on interesting schemes and various things, and they are a highly cynical group of people because most of those things never come to pass. When you deliver, as you say you're going to deliver, that goes a long way. And then I think additionally,

Andy Foster: When people see evidence of our construction, when they see a 30-mile pipeline being built, it all of a sudden becomes more than just a PowerPoint presentation. They realize that this is happening. And so that's when we start getting incoming phone calls from folks saying, hey, why haven't you talked to me yet? And there's a strategic plan there. There are some folks that are maybe smaller dairies on our pipeline route that we're not getting to first because we're trying to secure the anchor tenants, if you will.

When when people see evidence of our construction when they see a 30 mile pipeline being built and all of a sudden becomes more than just a powerpoint presentation and they realize that this is happening and so that's when we start getting incoming phone calls from folks, saying, Hey, why haven't you talked to me yet and there is a strategic plan. There. There are some folks that are maybe smaller dairies honor.

On our pipeline route that we're not getting too first because we are trying to secure.

Tenants if you will.

Andy Foster: But we go back to them and we will include them for participation. The last part of your question. There are areas outside of our geographic, you know, our footprint that we are exploring because they're, you know.

But we go back to them and we will include them for participation.

Last part of your question there are areas outside of our geographic.

Footprint that we are exploring because there.

Andy Foster: there are some dairies that are in more remote parts of California that don't necessarily make sense for pipelines or things like that. So we're looking and talking to some of those folks to add more to the mix because there's different ways to get there either through

There are some dairies that are in more remote parts of California that don't necessarily make sense for pipelines or.

Things like that so we're looking and talking to some of those folks to add more to the mix because theres different ways to get there either through.

Andy Foster: You know, um using that gas for electricity or using that gas for Transporting it or even setting up a remote hub to clean up the gas into a Interconnection at that site. So, you know, we're trying to we're trying to focus primarily this, you know in the next year so on our geographic our neighborhood and get that really put to bed, but at the same time

Using that gas for electricity or using that gas for.

Transporting it or even setting up remote hub to clean up the gas into.

Interconnection at that site. So we're trying to we're trying to focus primarily in.

In the next year or so on our geographic our neighborhood and get that really put to bed, but at the same time.

Andy Foster: Robbie Macias, who's our VP of biogas, and I are spending a lot of time in the car talking to two prospective dairymen.

<unk> who's our VP of biogas and I are spending a lot of time in the car talking to two prospective dairyman.

Andy Foster: I should mention on the contract with R&G customers, we're actually the number one initial R&G customer.

I should mention on the contracts that RMG customers, where actually the number one.

Initial RMG customer, we have trucks that carry distillers grain and ethanol and a variety of other things that can be supplied from the LNG station that we're putting into putting up at our facility.

Andy Foster: trucks that carry distillers grain and ethanol and a variety of other things that can be supplied from the R&G station that we're putting up at our facility. And so in addition to Ametis being the customer, we have other customers in the marketplace, which we expect to announce here in the next month or two. So you'll see some other names start to pop up, but we're our own customer, sort of like what we did when we initially launched Biogas and we used it in our ethanol plant.

So.

In addition to a <unk> being the customer we have other customers in the marketplace, So which we expect to announce here in the next month or two so youll see some of the names start to pop up but we're our own customer sort of like what we did when we initially launched biogas and we used it in our ethanol plant.

Speaker Change: Great. Thanks for all the color. I also want to follow up on your dairy RNG volumes and the guidance for 2022. Thank you. Thank you.

Great. Thanks for all the color also wanted to follow up on your dairy RMG volumes in the guidance for 2022 so.

Speaker Change: you know, thanks for providing the quarterly number. It looks like it was 13.4 million MMBTU in the fourth quarter. And so if I annualize it, I get to around 53 million. And then your 2022 guidance is around, I think it's 49.9 million, even though you're adding eight digesters. So I'm not sure if I'm missing something here, but could you just walk us through that bridge on the Q4 run rate?

Thanks for providing the quarterly number it looks like it was $13 4 million Btu.

<unk> in the fourth quarter, and so if I annualize that it gets around $53 million.

And then your 2020 guidance is around I think it's $49 9 million, even though youre, adding digesters. So I'm not sure if I'm missing something here, but could you just walk us through the bridge on.

On the Q4 run rate versus the 2022 guidance.

Speaker Change: versus the 2022 guidance for your R&G volumes?

<unk>.

RMG volumes.

Speaker Change: To simplify matters, we have a slide on the February 28th presentation, which I actually gave at Credit Suisse Energy Conference in Vail, Colorado last week.

To simplify matters, we have a slide in the February 28th presentation, which I actually gave at credit Suisse.

Energy Conference in Vail, Colorado last week, and that's slide breaks down production capacity per year and also breaks down actual delivered production for the year and so those are the numbers you're referring to the deliberate production number has that delay of the California Air Resources Board pathway approval.

Speaker Change: And that slide breaks down production capacity per year

Speaker Change: and also breaks down actual delivered production for the year. And so if those are the numbers you're referring to, the delivered production number has that delay of the California Resources Board pathway approval.

Speaker Change: built into that production number. So that's where you see a bit of a gap, is that we initially, next month, we're putting gas into the pipeline. And we would be generating revenue and D3 RENs and everything next month if that were available. But unfortunately, we have this regulatory delay as we're getting our approval in place. So it's on slide 8.

Built into that production number so that's where you see a bit of a gap is that we initially.

Next month, we're putting gas into the pipeline and we would be generating revenue in <unk>.

<unk> runs and everything next month, if that were available, but unfortunately, we have this regulatory delay as we're getting our approval in place.

It's on slide eight.

Speaker Change: of the company presentation at the bottom of the home page.

<unk>.

The company presentation at the bottom of the homepage of the metastatic com. The title is <unk> expansion plans.

Speaker Change: of Amedys.com. The title is Amedys Expansion Plans, and we have rng.org.

We have R&D Digest your capacity and then the revenue line is the RMG production, so that production numbers what drives.

Speaker Change: And then the revenue line is the RNG production. So that production number is what drives actual revenue. But you'll notice that our capacity is significantly larger at 272,000 MNBTs per year exiting this year, whereas our actual production is only 49. So you go into 2023 with a very large actual production happening. We're putting it into underground storage.

Revenue, but youll notice that our capacity is significantly larger at 272000 <unk> year exiting this year, whereas our actual production is only 49. So you go into 2023 with a very large.

Actual production happening, we're putting it into underground storage for conservative conservatively speaking it could be as much as nine months, we're not projecting that we're projecting to be in the two quarter kind of situations.

Speaker Change: For Conservatives League speaking, it could be as much as nine months. We're not projecting that. We're projecting to be in a two-quarter kind of situation. But we put production starting next month into the ground, store it, and then when we have the pathway, we pull it out of the ground and are able to generate D3 federal RINs and also LCFS credits when it comes out of storage.

Situations, but we put we put production starting next month into the ground store. It and then when we have the pathway we pull it out of the ground and are able to generate the three federal returns and also <unk> credits when it comes out of storage.

Speaker Change: And, Eric, the numbers on slide 8 of that presentation, are they, so it shows, you know, 10 dairy digesters for 2022, is that an annual average for the year, or are these like kind of year-end exit run rates?

And Eric.

The numbers on slide eight of the presentation or the.

Shows 10 dairy Digesters for 'twenty, two is that an annual average.

For the year are these by kind of year end.

Run rates.

Eric McAfee: Those are year end exit numbers, and there's a little bit of there's a couple of digesters that will be in under construction or completed construction of being filled.

Those are year end exit.

Numbers and there's a little bit of there is a couple of digesters that there'll be an under construction or completed construction that being filled so take it as a it really is a 12 number at the end of the year, but 10 was a conservative number we put in there.

Eric McAfee: So take it as a, it really is a 12 number at the end of the year, but 10 was a conservative number we put in there. We'll be filling digesters and doing other things. There's a gap.

Filling digesters and doing other things there is a gap.

Eric McAfee: in the capacity as you fill the digester, it takes a month and a half or so to fill it up.

And the capacity as you fill the digest or it takes a month of the episode of fill it up so you'll see on this slide though that our conservative number of 10 drives the production capacity number. So all of those numbers correlate, but I would expect we would probably exceed that by a one or two.

Eric McAfee: So, you'll see on this slide, though, that our conservative number of 10 drives the production capacity number, so all those numbers correlate.

Speaker Change: But I would expect we'd probably exceed that by one or two. Great, thank you so much. Yeah, thank you, Matthew.

Great. Thank you so much.

Yes, Thank you Matthew.

Thank you. Our next question today is coming from Jordan Levy at truly your line is live you may begin.

Speaker Change: Afternoon all and thanks for all the details just one for me going back to the CCS business you give us a lot of good detail there.

Afternoon, all in for all the details just one for me going back to the Ccs business.

Give us a lot of good detail, but maybe just a little more on that side of things I'm just curious to get your thoughts. After he said that first characterization wells coming up after that.

Speaker Change: Just a little more on that side of things. I'm just curious to get your thoughts after.

Speaker Change: You said that first characterization well is coming up after that's drilled, maybe just kind of a general path to getting that first injection well drilled and so forth and so on. And then maybe even taking a step back on that side of things.

Maybe just kind of a general.

To.

Getting that first injection wells drilled.

So on and then maybe even taking a step back from that side of it.

Speaker Change: Is there an even larger potential you see for that business beyond these two wells, which obviously have huge potential?

Even larger potential you see for that business beyond.

These two wells with obviously.

Huge potential.

Speaker Change: Certainly. Thank you, Jordan. Let's talk about money, first of all.

Certainly thank you Jordan.

Let's talk about money first of all each characterization well unrelated permitting is about $6 million were doing one under our riverbank site and we're doing one at near our ethanol plant site. There's about 15 miles away. So it's the same people same crews same everybody just doing it twice.

Speaker Change: Each characterization well and related permitting is about six million dollars. We're doing one under our riverbank site and we're doing one at near our ethanol plant site. They're about 15 miles away. So it's the same people, same crews, same everybody just doing it twice.

Speaker Change: The RootBank site's Q2 of this year, we're expecting that the Keys plant site, because of some permitting delays, will be closer to Q4 this year. RootBank's already zoned correctly, etc., so we're literally within a month or two of rolling the drilling rig out there.

The <unk> sites Q2 of this year, we're expecting that the keyes plant side because of permitting delays be closer to Q4 this year.

<unk> already zoned correctly et cetera, so we're literally within a month or two of rolling the drilling rig out there.

Speaker Change: Uh that combination of six plus six is about 12 million dollars add another three million for just ongoing consultants and

That combination of $6 six is about $12 million add another $3 million for just ongoing consultants and lawyers and everything else over an 18 month cycle and that puts us at the end of 2023 end of next year with approved class six.

Speaker Change: lawyers and everything else over the about an 18 month cycle.

Speaker Change: And that puts us at the end of 2023, end of next year, with approved class six licenses, potentially for both sites. There was a site up in South Dakota approved in nine months in 2021. So.

Licenses potentially for both sites.

There was a site up in South Dakota approved in nine months in 2021, so projecting 18 months I think is certainly a reasonable projection. So by the end of 2023, we'll have about $15 million plus some some real estate acquisitions about $18 million of total investment all of this comes off.

Speaker Change: Projecting 18 months, I think, is certainly a reasonable projection. So by the end of 2023, we'll have about $15 million plus some real estate acquisitions, about $18 million of total investment. All this comes off of our carbon capture credit line of $50 million that's already there. And if we need a working capital, we have another $50 million available with that. At that point...

Our carbon craft capture credit line of $50 million, that's already there and if we needed working capital we have another $50 million available debt.

At that point in time, we then complete a project financing.

Speaker Change: We then complete a project financing. Renewable Energy for America program certainly is a very attractive opportunity for us. Tax-free municipal bonds, private activity bonds in California are attractive for us.

Renewable energy for America program, certainly is a very attractive opportunity for us tax free municipal bonds private activity bonds in California are attractive for us, but we get to build it in two phases. So with.

Speaker Change: But we get to build it in two phases. So with the the hole in the ground, you actually only have to build about 20 percent of the compression equipment above ground in order to handle the 200000 tons of the Keys plant and the 200000 tons of Riverbank plant. So our total investment there is less than less than one hundred million dollars to build out all the above ground, unloading the whole shoot and match.

The hole in the ground you actually only have to build about 20% of the compression equipment above ground in order to handle the 200000 tonnes at the Keyes plant and the 200000 tons riverbank plant.

Our total investment there is less and less.

The $100 million to build out all of the above ground unloading the whole shooting match for all of the Sidoti. We have we're not really building a cotwo line. We're just basically just building compression equipment and engineering activities. So with the equity investment we have we'd be able to borrow the funding to do that phase at that point in time.

Speaker Change: for all of the CO2 we have. We're not really building a CO2 pipeline, we're just basically just building compression equipment.

Speaker Change: and engineering activities. So with the equity investment we have, we'd be able to borrow the funding to do that phase. At that point in time...

Speaker Change: We'll be injecting 400,000 or 500,000 tons and actually it's technically a little more than 400,000 tons, generating approximately $100 million of revenue, generating approximately $70 million a year of positive cash flow.

We'll be injecting 400000, private 1000 tons.

And actually it's technically a little more than 400000 tonnes generating approximately a $100 million of revenue generating approximately $70 million year positive cash flow and at that point in time, it's pretty easy to go borrow the next tranche of funding, which would be expansion in 2026. So as you see the five year plan rollout what we see is that all we do.

Speaker Change: And at that point in time, it's pretty easy to go borrow the next tranche of funding, which would be expansion in 2026. So as you see the five-year plan roll out, what we see is that all we do is just put the first $18 million in from our credit lines, and that acts as the layer of equity under a smaller funding, and then that acts as the equity for the bigger funding. And we end up with

As just put the first $18 million from our credit lines and that acts as the layer of of equity under our smaller funding and then that acts as the equity for the bigger funding and we end up with.

Speaker Change: um the entire project about 250 million dollars 248 something

The entire project about $250 million 248, something.

Speaker Change: ends up being in place and with 2.4 million total potential tons.

Ends up being.

Being in place and with $2 4 million total potential tons.

Speaker Change: We just start trucking in CO2 from our refining partners, and Chevron alone generates over 4 million metric tons a year, and most oil refineries will be over a million tons a year between their SMR and flue gas.

We just start tracking and cotwo from our refining partners and Chevron alone generates over 4 million metric tons, a year and most oil refineries will be over 1 million tons, a year between their <unk> and flue gas <unk>.

Speaker Change: So we just start trucking in that, but it's already built, right? You've got the compression equipment above and you've got the well that we'll be building anyway, just because there's no reason to put in two wells, just build one well with a million tons per year. So these two wells actually are fully, all the CapEx is in our five-year plan, but we're only showing.

No.

We just start trucking in that but it's already built right you've got the compression equipment above and you've got the wells that we'll be building anyway just.

Because the reason to put it in two wells just build one one well with.

1 million tonnes per year. So these two wells actually a fully all the capex is in our five year plan, but we're only showing about 20% of the actual revenue potential there is a substantial increase in revenue potential going from 500000 metric tons to $2 4 million.

Speaker Change: about 20 percent of the actual revenue potential. There is a substantial increase in revenue potential going from 500,000 metric tons to 2.4 million.

Speaker Change: Uh, we'll have all that capacity there, but we just are not projecting all revenues in the 2020

We will have all that capacity there, but we just do not projecting the all revenues in the 2026.

Speaker Change: time frame. And so there's a very, very significant revenues scale up. And in terms of operating costs, it's a little bit more trucking with R&G gas trucks, and then electricity. Those are the two operating costs that kick in.

The timeframe and so there is a very very significant revenues.

Scale up and in terms of operating cost is a little bit more trucking.

With LNG gas trucks, and then electricity those are the two operating costs that kick in so we retained ourselves a lot of upside in the model.

Speaker Change: So we retained ourselves a lot of upside in the model, and mostly it's in order to offset any potential EPA delays.

And mostly it's in order to offset any potential EPA delays.

Speaker Change: Because we can achieve these numbers, even if the APA is another year late, even if they're two years late, we still would achieve the numbers that we put up here. If it's on time, then we could obviously increase revenue substantially to somewhere in the $500 million range.

Because we can achieve these numbers even if the EPA has another year late even if they are two years late we still would achieve the numbers that we've put up here.

If it's on time, then we could obviously increase revenue substantially to somewhere in the $500 million range.

That's great. Thanks, so much guys and nice quarter.

Thank you.

Speaker Change: Our next question today is coming from Ed Wu at Ascendian Capital. Your line is live.

Our next question today is coming from Ed Woo <unk> capital. Your line is live you may begin.

Ed Wu: Yeah, I was just curious, obviously there's a lot of volatility with gasoline and oil. What's your outlook on oil prices and how it's going to affect the ethanol market in California?

Yes, I was just curious obviously theres a lot of volatility with gasoline and oil what's your outlook on oil prices and how it's going to affect the ethanol market in California.

Ed Wu: My view is that we're under a sort of a

My view is that we're under.

Ed Wu: worldwide case of uncertainty in oil prices, and so today alone I think we saw a $10 increase in West Texas Intermediate as traders were

<unk>.

Worldwide case of uncertainty in oil prices and so today alone I think we saw a $10 increase in west, Texas intermediate as traders were betting on what's happening in the Ukraine.

Ed Wu: betting on what's happening in the Ukraine, my personal view is that we have a fundamental $80.

My personal view is that we have a fundamental $80 west, Texas intermediate $85, Brent price Brent of course, as Brent, England, because that's how much it takes for the Saudi Arabians to pay for what essentially is a welfare economy that they're trying to transition.

Ed Wu: West Texas Intermediate $85 Brent price. Brent, of course, is Brent England, because that's how much it takes for the Saudi Arabians to pay for what essentially is a welfare economy that they're trying to transition.

Ed Wu: And 70% of people under the age of 35 in Saudi Arabia are unemployed. They have free housing, free education, and basically are wards of the state. And you can't run that country without $85 Brent crude oil. So I think we're structurally an $80 global economy.

70% of people under the age of 35 in Saudi Arabia are unemployed.

Free housing free education and basically.

Our wards of the state and you can't run that country without $85 Brent crude oil. So I think we're structurally.

$80 global economy.

Ed Wu: And the fact that it's $120, I think, is relatively temporary. That's my view. So I think we have high oil and gas prices, as long as there's a Ukraine and Russian problem. When that gets resolved, we probably are in the $80 range, which was double what we were about 18 months ago. And that $80 is probably going to sustain for quite a long time. And you think?

<unk>.

The fact that to $120 I think is relatively temporary.

My view, so I think we have high oil and gas prices as long as there's a Ukraine and Russian problem when that gets resolved, we probably in the $80 range, which was double what we were about 18 months ago and that that $80 is probably going to sustain for quite a long time.

And thats kind of keep up ethanol prices.

Ed Wu: Ethanol prices, frankly, have continued to be a discount of gasoline at every price of discount. Ethanol is discounted below that. And ethanol is more about how committed we all are as a society to having cleaner, domestic...

Ethanol prices frankly.

<unk> continued to be a discount of gasoline it at every price or discount ethanol.

As discounted below that.

And ethanol is more about how committed we are as a society to having cleaner domestic lower cost fuels and as we become more committed that ethanol just becomes more and more of a solution, Nebraska did a five year study with 30% biofuel is running in a regular.

Ed Wu: lower cost fuels and as we become more committed to that, ethanol just becomes more and more of a solution. Nebraska did a five year study with 30% biofuels running in regular old engines and regular old cars and found that 30% ethanol actually provided significantly better emissions and lower costs and all the other benefits.

Engines and regular old cars and found that 30% ethanol actually provided.

Significantly better emissions and lower cost and all the other benefits job creation as well that you get from using ethanol. So I think we're headed towards 30% and it's just a matter of how fast we get there.

Ed Wu: Job creation as well that you get from using ethanol. So I think we're we're headed toward 30% and It's just a matter of how fast we get there Great thanks

Great. Thanks, and wish you guys. Good luck.

Thank you so much Ed.

Speaker Change: Thank you. Our final question today is coming from Marco Rodriguez at Stonegate Capital Partners.

Thank you. Our final question today is coming from Marco Rodriguez at Stonegate Capital Partners. Your line is live you may begin.

Marco Rodriguez: Good afternoon, everybody. Thank you for taking the question.

Good afternoon, everybody. Thank you for taking the questions.

Marco Rodriguez: Most of my questions have already been asked and answered. Just a real quick modeling question. Just kind of wondering how you guys are thinking about the cadence of gross margin.

Most of my questions have already been asked and answered just a real quick modeling question just kind of wondering how you guys are thinking about the cadence.

Gross margin in fiscal 'twenty two.

Marco Rodriguez: Uh, we are in a pattern of uncertainty which ethanol sold by our company is is about two dollars a gallon less

We are in a pattern of uncertainty, which ethanol sold by our company is about $2 a gallon less than what you pay at the pump in California. If you take the price we sell plus about 70 cents of taxes, you are actually a little below the pump so when you're selling.

Marco Rodriguez: than what you pay at the pump in California. If you take the price we sell plus about $0.70 of taxes, you're actually a little below the pump. So when you're selling a commodity molecule at $2 per gallon less than the market, and we do about 60 plus million gallons of that per year, that's $120 million a year of.

Commodity molecule at $2 per gallon less than the market and we do about 60 plus million gallons of that per year, that's $120 million a year of.

Marco Rodriguez: uh... uh... subsidy essentially of the oil industry so we're we're very very good at subsidizing the oil industry right now i do not think that the sustainable gap i think the policy makers are going to want to have some of that discount available to consumers and all you have to do in california is have a fifteen percent ethanol blend and you have a pretty significant direct impact on the price of the pump

Subsidy essentially of the oil industry. So we're very very good at subsidized in the oil industry right now I do.

Do not think that's a sustainable gap I think that policymakers are going to want to have some of that discount available to consumers and all you have to do in California's have a 15% ethanol blend and you have a pretty significant direct impact on the price of the pump.

Marco Rodriguez: Hopefully at the federal level, the enforcement of the Renewable Fuel Standard, likewise, is an opportunity to tap into the roughly a billion gallons of ethanol that's currently in storage in the U.S., unlike petroleum and gasoline, which is not in shortage. I'm sorry, which has a shortage. Ethanol is not in shortage. And so this is an immediate opportunity to decrease the price at the pump by both federal as well as state policy supporting ethanol and renewable fuels in general.

Hopefully at the federal level the enforcement of the renewable fuel standard. Likewise why is this an opportunity to tap into the roughly 1 billion gallons of ethanol. It's currently in storage in the U S. Unlike petroleum gasoline, which is not in shortage.

I'm, sorry, which has a shortage ethanol is not in shortage and so this is a immediately immediate opportunity to decrease the price at the pump by both federal as well as state policy.

Supporting ethanol and renewable fuels in general.

Got it I appreciate your time thank you.

Speaker Change: Thank you, Marko. We have no further.

Thank you Marco.

We have no further questions in queue at this time I'd now like to turn it back to management for closing remarks.

Marko: Thank you, Kate. Thank you to Ametis shareholders, analysts, and others for joining us today. We review the, please review the Ametis company presentation and the Ametis investor presentation that's posted on the home page of the Ametis website.

Thank you Kate Thank you to <unk> shareholders analysts and others for joining US today, We review this.

Please review the <unk> company presentation, and the <unk> Investor presentation, that's posted on the homepage of the <unk> website. We also look forward to talking with you or even touring our facilities as we invite you to participate in the growth opportunities at <unk>.

Marko: We also look forward to talking with you or even touring our facilities as we invite you to participate in the growth opportunities at A-Medicine.

Speaker Change: Thank you for attending today's AMETIS Earnings Conference Call. Please visit the Investor section of the AMETIS website where we'll post a written version and audio version of this AMETIS Earnings Review and Business Update. Okay.

Thank you for attending today's <unk> earnings Conference call. Please visit the investors section of the <unk> website, where we'll post a written version and an audio version of this earning of the Saint <unk> earnings review and business update.

Speaker Change: Thank you ladies and gentlemen. This does conclude today's event. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation.

Thank you ladies and gentlemen, this does conclude todays event you may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation.