Greetings, and welcome to the Aemetis Fourth Quarter 2015 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. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Todd Waltz, CFO of Aemetis. Thank you, Mr. Waltz, you may begin.

Thank you, Michelle. We welcome our shareholders and financial market professionals to today's Aemetis fourth quarter 2015 earnings release conference call. We suggest visiting the Aemetis website at aemetis.com to review today's earnings press release, the updated Aemetis corporate presentation, Aemetis filings with the SEC, recent press releases, and previous Aemetis earnings conference calls. Before we begin our presentation, I'd like to read the following disclaimer statement. 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 expectation with respect to financial activities. These statements must be considered in conjunction with the disclosure and cautionary warnings that appear in our SEC filings. Investors are cautioned that all forward-looking statements made on this call involve risks and uncertainties, 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 are available from the company without charge. Our discussion on this call will include a review on 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 September 30, 2015, which is available on our website. Adjusted EBITDA is defined as net income or loss plus, to the extent deducted and calculating net income, interest expense, loss on extinguishment, income tax expense, intangible and other amortization expense, depreciation expense, and share-based compensation. Now, I'd like to review the financial results for the fourth quarter 2015 and total year 2015. Revenues were $147 million during 2015 represented 29% year-over-year decline from revenues of $208 million during 2014. For the year ended December 31, 2015 56 million gallons…

Thank you Todd, for those of you who may be new to our company, let me take a moment to provide some brief background information. Aemetis was founded in 2006 and we own and operate facilities with more than 110 million gallons per year of renewable fuel production capacity in the U.S. and in India. Included in our production portfolio is a 60 million gallon per year capacity ethanol plant located in Keyes, California, near Modesto. We also own and operate a 50 million gallon per year capacity distilled biodiesel and refined glycerin bio-refinery on the east coast of India near the port city of Kakinada. Headquartered in Cupertino, California, Aemetis has developed and acquired a portfolio of technologies to advance biofuels and biochemical. We recently filed a provisional patent on a breakthrough process for the production of high energy density biofuels, isoprene, another high value products from any sugar source. This technology was developed by the team of scientists working at our Maryland Molecular Biology Laboratory. Let's discuss our business starting with India. The India domestic biodiesel market is growing and important policy changes to accelerate this growth occurred in the second half of 2015. For elimination of the $10 billion per year annual diesel subsidy in October 2014. In August 2015 direct sales to both users by biodiesel plants was approved. In October 2015 the 20% cap on feedstock's was ended and we were recently informed that after extensive testing with our biofuel, 100% to scope biodiesel has been approved by the transport ministry as a full replacement for diesel fuel. This even 100% approval opens the entire bulk of the customer market as potential purchasers of our biodiesel in India. Each year about 25 billion gallons of diesel is consumed in India. Biodiesel reduces greenhouse gas and…

Thank you. We will now be conducting a Question and Answer session. [Operator Instructions] Our first question comes from the line of Scott Ozer from Sandlapper Securities. Please proceed with your question.

Thank you, good morning Eric. I have a couple of questions. One I noticed in the last release you said there was $22 million of EB-5 funding, actually $23.5 million and this one is $22.5 million of EB-5 funding has been released by the company. I was wondering what happened to the $1.5 million, was that a clerical error and when will the money be actually used to pay down debt if that's the intention?

I think what you might be citing is the $12.5 million still in an escrow because we have received $23.5 million from the escrow account into the company and the total of $36 million is the total funded amount so I think it's the amount in escrow so if you want send an email to us we will be recheck it, it should be $23.5 million and we have $12.5 million in escrow.

Yes, I am looking at it, I will send it to you as it says $22.5 million of EB-5 funding released to the company from escrow during 2015 that was on the first page of the fourth quarter. It was on the first page of the fourth quarter --

Oh, yes, during the year, that's correct actually during the year that's when it was released. The total amount that has been released includes some funds that were released in-- before 2015.

All right and I don't know how to convert 19.5 or 19,522 metric tons of bio diesel into figuring out what kind of percentage the plant is operating at? Do you have that number?

Each metric ton just for a simple math is about 300 gallons and so, you do the math on that and we are running at roughly approximately 15% capacity on that number but the key message here was that our European sales faced a change in quality in the middle of 2014 which discontinued our sales in Europe and so we ran tough our India sales, so its occurred going from the first to the fourth quarter that is rapidly increasing. We actioned the fourth quarter at $20 million annualized run rate up from a very low annualized run rate in the first quarter so it's the domestic India growth trend that we are tracking now.

Okay and have you, did you mention, maybe I missed it, maybe getting the customer through the biofuel or biodiesel or anything about the IPO advancement over there?

Didn't mention anything about it, but we did mention we have an investment banker retained. The stock markets worldwide have a difficult first quarter but our business continues to grow aggressively and frankly the supportive government policies in India such as the approval of the 100% bio-diesel refreshment diesel has created a lot of interest in what we are doing and has expanded customer distribution etcetera so we do expect the market conditions will improve for the IPO of our subsidiary in India. Our California opportunity was more than a years' worth of work and that now being in place will now expand shipments not only in India but higher margin opportunities in California so we think that will help drive the ideal opportunity in India. Of course, we are only in March, we got a long way to go in 2016 and we are well positioned to take advantage of the other markets in India as we see things happening. I would mention that if we were to have this call just about 60 days we would have been talking about $25 and $27 crude oil prices. Today we are talking about $38 to $40 crude oil price so crude oil has moved up by 50% and that has had a very direct positive impact on the appetite in India because we sell our product in direct competition with diesel. So as long the price of crude oil continues to move up, the price of diesel continues to move up and our commodity eventually is much less expensive solution and with the recent approvals it was decided the removal of feedstock acts the removal customers now, the removal of the various so that we can sell 100% product. We are really positioned to go extremely rapidly as the price of diesel continues to move upward.

And did you actually say when you were going to use some of the EB-5 money to pay down the Third Eye capital debt?

We have acquired all of the EB-5 money through payment of the higher Third Eye interest capital debt. The EB-5 money is of course only 3% interest rate so we apply all the proceeds immediately paying down the higher interest rate debt so the $12.5 million we have in escrow right now really is functionally to offset the outstanding principal amount we have to give to Third Eye and so we are already anticipating of course the lower interest cost and lower principal balance that will occur when the EB-5 money occurs. Interestingly our next project is a $50 million offering. We have received approval of released escrow to significant portions of funds. A vast majority of funds will be released upon funding. Currently the escrow requires us to wait until the Federal government has approved the Hi-Fi 26 with the investor which can take up to 18 months. The trend in the EB-5 community is to allow the investor to start generating some investment returns and not have the fund sit in escrow for long because the investor isn't earning return while sitting in escrow. So because of that trend the next offering is expected to have a release of approximately 80% of the funds upon funding and that will have a very positive impact on our pay down of our credit line in Canada. That pay line is Canada is structured as a bridge funding so that we can do the EB-5 offering and can pay them off and the success of our first EB-5 offering has become a source of capital for us not just to do the one phase II project but also other projects after that an the recent Chinese presentation that happened last week resulted in large brokers who are now competing to underwrite the next rollout we are doing of the current offering. So expect the page to be much better. Certainly the lack of an escrow will be a dramatic improvement in our pace of paying back Third Eye and quite frankly $50 million + $12.5 million is almost the amount of money that's outstanding about right now so we see 3% money reprising our more expensive Third Eye money just by excuse.

Okay, that's good. And when do you think you will be at 50% capacity over at India and 100% capacity?

It's really dependent on market conditions. We did a structural upgrade at the plant in the fourth quarter last year, you know electrical substations, those things so that we can have 100% production capability. The ramp-up coming out of winter is really being hampered primarily by the prices home steering the El-Nino effect as constant hedge funds come and get excited about price of palm oil, push the prices of palm oil and all the other oils and so we are transitioning through a scenario where price of diesel continues and frankly the price is steering which is the least product minimal palm oil has risen but is weakening so as that margin improves we will accelerate our shipments in India. We have recently had the Volvo Bus company and as well as frankly just yesterday, the Scania Bus, both of them European bus companies come out strongly and say in favor of our product. Scania yesterday used 100% biodiesel and advertised they were completely replacing diesel on their buses using our 100% distilled biodiesel and you would recall Scott that we are the only 100% distilled biodiesel producer in India so the other competitors are restricted to 10% or 20% biodiesel through their contaminants or lower cetane values so, we're very well positioned for rapid expansion in India but right now it's primarily feedstock and diesel margin management that we are dealing with in terms of scaling pace. We do believe that this whole production this year by having favorable dynamics of the crude oil and frankly a little bit of the excitement of El-Nino settling down.

Okay, that sounds good. Any comments about the jet fuel or any other chemicals or the carbon?

Yes, two comments about it. First of all, the initiatives we announced this week are major upgrade to our California plants. I would say these are the technologies we have been working on for several years. Frankly, the CEO of LanzaTech we have known since she was at Honeywell, 5 years ago, so these are long term relationships. Edeniq I think falls in that category as well and close association with them since 2012 and what we didn’t have is we did not have Federal state or Federal tax policy that was being enforced and I think you recall November last year after a two year delay, the EPA began to enforce its Federal renewable fuel standard began and in California, for years the litigation delay, the enforcement of carbon credit program or the low carbon fuel standard until December that litigation was resolved and also in December the Dollar 1 on tax credit for and the Dollar tax credit for diesel was signed into law by President Obama. So in the course of about a month and late 2015, the policies supporting advanced fuels were adopted at Federal and State levels so that has been the reason that we have moved forward these initiatives and certainly have the market adoption of the product at values that are somewhat determinable in the current market.

Okay great, let me have anybody else ask their questions. Thank you.

Okay, thanks.

[Operator Instructions] Our next question comes from the line of James Stone who is a private investor. Please proceed with your question.

Good afternoon folks, I was wondering if you can tell us what the issues are that are controlling the roll out of the ethanol in California because I would think that you would want to start that almost immediately so what are some of the things that are controlling it and when do you expect to see first revenue on that?

Good question Jim, thank you. The Edeniq technology has a lead time of approximately six -- months to installation and this is the fabrication of the equipment and so we announced Q4 is when expect to be operating, we have some opportunity to speed that up a little bit so it could be a Q3 revenue opportunity but we're currently projecting Q4 as when we would install. Parallel to that we have applications that need to go through the process at the ETA and then for full value of the fuel relative to applications in resources. So as administrative process, it will be going parallel, we are leading for an excellent news there pending application by specific ethanol, halfway to be approved and that should happen sometime soon, it's ETA but we do expect that approval to happen certainly within the six month timeframe that's getting our plant going. And that application by specific ethanol is extremely similar to our application and should become a well half to the ETA for the production of ethanol from corn fiber. So it is potentially a situation which we could open the units and get our federal D3 rent which is worth about $1.38 a gallon right now. At the same time, California resource support has a similar process that will probably take a little bit longer but we still will be in position to get the $1.01 for gallon tax credit, and potentially the even the low carbon fuel standard value which is about $0.08 a gallon today. So it's a ramp up to the full value of the mall fuel, but when completed including the $1 for gallon tax credit, today's map which show about $4.60 in total cash value which is of course $3 more than fuel. And so producing more than 500,000 gallons at a $4.68 number means we're over $6 million of additional revenue. This is revenue we currently do not get because it's converting the sugars in the current fiber in the silos is already in the plant, but it's currently not being converted because we currently are not using any enzymes and not using this. So it's really a brand new margin and at the very favorable net margin.

Look, I'm still a little confused. So you would expect to see revenue from this in Q3 or Q4?

Q4 as well apparently if we're judging.

Okay. And what do you expect the build off curve to look like, is that going to be a quick ramp, a staircase, what type of roll out?

We would be installing three of their devices. Each device handles approximately 20 million gallons worth of biofuel. So the three devices cover our entire 50 million gallons. And they'd be fully operational within a matter of weeks of installation. So the ramp is extremely rapid. It's certainly in less than a month.

Judging by some of the difficulties we've had ramping up in India, then would we expect then at the end of the first half of next year that we would be at that initial step up in revenue? Is that going to be shorter or longer than that?

Yes, India ramp up has virtually nothing to do that the plant's production capacity. It has all to view with the taxes on feed stock and the inabilities to all the customers directly and government policy. And I'd say likewise the EPA and their regional support opening the door and in December of 2015 is what opened the door for this. But this is an inline process that we currently mill corn down into flour, and then we go through the process of making it an ethanol. This is a device that's put in place after you mill the corn and it reduces the size of the particles such that the starch can be extracted more easily and that sugars in that can be extracted.

You discussed that earlier. I understand that. But what I'm trying to understand is will revenue to your substantial lag to when you get the plant completed or the revenue ramp very close for those schedule.

The revenue ramp would be actually immediate. You turn the devices on and it happens that day. The only quote ramp up is if for whatever reason your mechanical casting or something else requires an amount of adjustment of time, but you're talking in a week or two. This is an in process device that just immediately increases yield. So there is no ramp up period per se from an investor perspective. The only ramp up really is the regulatory side. We have applications with the EPA and applications with California in order to garner the, roughly today $1.38 a gallon cash from and that's what Pacific Ethanol is doing right now and they expect to have approval very, very soon. And same goes with California. So the ramp up is no in production. We'll be producing within a matter of hours upon installing the unit. The real process is just getting the full $4.60 value that could be obtained including the tax credit.

Okay. When should we expect to see revenue from shipping biodiesels to the U.S.? What are the issues that are controlling that ramp up?

There is really only one issue controlling it. We have all the California approvals. That took us about two years. It's completed in January 27 of this year, 2016. The only approval we're awaiting and we're working aggressively on that is the approval for the brand used cooking oil into India so we can do the bulk shipments that enable us to submit the requirements for shipping, and you're talking about 3,000 metric tons minimum order to bulk ship across the ocean. And so the importation of UCO in India has been publicly supported in articles and interviews by the transport minister who is no other ministers is directly involved in this process. And so we're going just through the administrative process of getting approval for importation of UCO in India from other Asian countries for then export to the U.S. and it is a process of working with the Indian government, and so it is not a detrimental process in which we have in period of time. But that being said, we're down to one remaining minister and that is the minister who actually issues the license and I can assure you we've had extensive meetings with that minister as well as the other ministers who have now signed off, and it's a bit of process of chasing paper around the government and now we've gotten it to the final requirement for approval. So I have to say we're making excellent progress. I do not have a projection of whether we're going to get that approval but when we do we will immediately start importing in the next quarter.

So do you think by the time you report the next quarter that you will begin to have some revenue?

I think by the time we record next quarter it's highly likely we'll have approval then you go through the process of importing and exporting. Depending on how we're selling we could be selling them to India plant which takes about six weeks in the revenue cycle, because if we ship into California and then distribute in California, that process is about a six-week process. So depending on how we do the sales which we have existing customers that would buy directly from India but in lower margin, we'll make a margin decision about the timing of revenue on that. We have significant additional value we can garner by bringing the product into California and then distribute it to more than 50 fuel racks that are stored around California, so you get it close to the customer and there is significant amount of additional revenue that is available to us. So we are working with several field distributors that we have longer bit relationships with about executing that strategy with us. And now we have the effect of pulling revenue roughly two months when we otherwise would get it. But the margins would be significantly higher. So we're working on those relationships in California. Now ahead of having the approval bringing UCO in India in the next quarter to California.

Okay. Is there any possibility that you can ship smaller roads that would need all these approval that could generate revenue?

Yes. We shipped I don't know, the number is probably $50 million of products into Europe and so we're very familiar and quite successful frankly and profitable at selling in foreign markets. It needs to be a bulk business. So when you chop it up into small pieces and put it in sea train or something like that, the cost in doing that exceeds the margin. So it really is a bulk business, it's a large volume business of shipping a million gallons or more for shipment. And it's a business we want to do obviously because we're a 50-million gallon plant. So our desire is to do a couple million gallons a month into California and then end up with essentially a good profit in India where we just don't have enough supply to keep up with our customers. And so the margin in California appear to be excellent especially if we work on the distribution plan to get as close to the customers. California is about four billion gallon per year diesel market, and a 20% of about 800 million gallons a year of biodiesel into California. Our estimation is currently is only considering about 250 million gallons a year. So our calculations are that there is about 500 million gallons additional biodiesel can be brought into the state and we would like to be a major player in that because for prior reasons, but frankly the margins are great.

The question which I don't fully understand, about a year ago you were saying you should be at full capacity and to our biodiesel by the end of the year, but obviously didn't happen. And I'm wondering what sort of things came up or brought unexpected issues appear that really kept you from making that goal?

I would say to you the primary constraint we had was the tax on our feed stock which we removed in October, actually October 21, 2015. We had a 20% tax on our feed stock that the government had verbally supported removing but they just took them literally a year longer than what it should have took that removal to happen. And that tax made it very, very difficult to ramp up our purchase of feed stock. As I mentioned we got the approvals to sell to both customer in August, and so we had ramped up from virtually zero to $20 million annualized number in a very short period of time, and with the onset of winter which this is the first winter that we've gone through, some essentially the 100% valuable product to Indian customers, we had to develop blend ratios for different segments of the Indian geography, cooler areas and different plant ratios than warmer. That's a trend. We have to see that constraint an issue for us. India is warm about ten months a year, and so we're back into the warm months especially Southern India. And we've ramped up with credibility with customers. Our largest customer has 4,000 section in buses and we have more than a half dozen tanks at their locations, and their frankly talking to looking for more product. So we are now just dealing with what everyone's dealing with which is a low price in crude oil. When it hit $25 in January, we have to sell product against a $25 crude oil price for diesel, and we sell biodiesels and discounted diesel. So when the price of diesel went down to $25 or $27. We have to be selling at a discount to that. So now the price of diesel…

Then you got to start building another expansion and then maybe even building another plant?

It is, and possible just driving our IPO in India is the expected announcement that we're fully deployed and frankly in need of additional capacity and going to market at that time is I believe something to the public market is going to look on favorably. There are only about five producers in all of India. There's only one who is biodiesel producer and that gives us a product that can be of 100% replacement fuel. We stand alone in a very big field of 25 billion gallons a year of diesel. And I must tell you we're running at the pace of the India government, and the India government has got up its pace. If you read much about the India business environment you'll find that it's moving up the ranks of best places to do business in the world. If you need the intention pond, one of the leading ponds just put $150 million dedicated to a clean tech investment in India citing it as the number one emerging market in which investors should do business.

Waiting positions in India by not being able to build plants. So I assume you got that problem under control.

I think we're in very, very good shape and we just have to be patient with the continuing growth of the market. Our regulatory step that we need to do now is the used cooking oil importations, that all turns up cheap and on good feed stock in California has a 24 carbon intensity compared to 100 for diesel. So 100 minus 24, 76% is the reduction of carbon content when you bring in our used cooking oil and biodiesel from India. That provides about $1.20 a gallon of additional value in California by bringing in used cooking oil based biodiesel from India. So it is a very attractive business and we are committed to being successful. And we have completed the California side which did take since 2014. This is no overnight thing to accomplish, and we'll be this close to any other plants we obligate. So we're insuringly well positioned, and I believe with the UCO approval from India we'll then be actually facing the problem of how do we increase capacity.

One last question and I'll get back in the queue. That is you've mentioned that one of the barriers to growth has been that you couldn't import your feed stock, but that is under the impression that at least for the near term was insufficient feed stock coming from India and you didn't need them for, I'm wondering if you can clarify that issue for me.

We use steering in India which is a product that works well in warm climates. But it's not a product that is incentifies to be brought into California. And so we have two pathways in accrueding California, one is used cooking oil which is a 24 carbon intensity at 76% reduction, and then animal oils which is a 57 carbon intensity which as you can see about half would mean that it has less economic value in California and has a different clot point. So UCO into California is the product that we're foreseeing to show. We found the domestic supply of used cooking oil in India is very limited. We dedicated two people to that return of cycle over a long period of time and have to obtain an amount which is not sufficient to support a large export business. So we are parallel to that and then spending a lot of time in New Delhi with the government ministers and staff to get a UCO approval because we can bring in used cooking oil from China and elsewhere in bulk and the product is readily available to us. So that is the product that allows us to come into California in volume.

Okay. I thank you very much for clarifying those issues and being called at this point. I'm supposedly on vacation and the sun is shining in the beach.

Thank you, Jim.

There are no further questions at this time. I would like to turn the call back over to management for closing comments.

Thank you very much to our Aemetis shareholders and analysts and others for joining us today. We look forward to meeting with you and continuing our dialogue about growth opportunities for Aemetis.

This concludes today's…