Ladies and gentlemen, welcome to the Aemetis Third Quarter 2019 Earnings Review Conference Call. At this time, all participants are in a listen-only mode. And 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 Aemetis, Inc. Mr. Waltz, you may begin.

Thank you, Jim. Welcome to the Aemetis third quarter 2019 earnings review conference call. We suggest visiting our website at aemetis.com to review today’s earnings press release, updated corporate presentation, filing with the Securities and Exchange Commission, recent press releases and previous earning conference calls. This presentation is available for review or download on the aemetis.com homepage. Before we begin our discussion today, I’d like to read the following disclaimer statement. During today’s call, we’ll be making forward-looking statements, including without limitations 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 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 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 September 30, 2019, which is available on our website. Adjusted EBITDA is defined as net income or loss plus to the extent deduced in calculating such net income; interest expense, loss on extinguishment, income tax expense, intangible and other amortization expense, accretion expense, depreciation expense, loss contingency on litigation and share-based compensation expense. Now, I’d like to review the financial results for the third quarter of 2019. Revenues were $57.4 million for the third quarter of 2019…

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 production facilities with more than 110 million gallons per year of renewable fuel capacity in the U.S. and India. Included in our production portfolio is a 60 million gallon per year capacity ethanol, distillers grain and corn oil plant located in Keyes, California near Modesto. We also built, own and operate a 50 million gallon per year capacity distilled biodiesel and refined glycerin biorefinery on the East Coast of India near the port city of the Kakinada. Last year, we signed $30 million of equity funding and launched a renewable natural gas project to build biogas digesters at about a dozen local dairies near our ethanol plant in California. Construct a pipeline connecting the digesters to our plant and installed gas conditioning to produce carbon negative renewable natural gas to reduce the carbon content of our ethanol production and to displace diesel by fueling natural gas trucks. Earlier this year, we signed financing term sheets to fund a $175 million advanced ethanol production facility in California to convert waste orchard wood and other waste biomass into about 12 million gallons of cellulosic ethanol per year. We are now in the final engineering and procurement cycle prior to completion of project financing and commencement, the construction of the plant. The combination of these growth and cost reduction initiatives are expected to increase our revenue run rate to more than $500 million per year and annual cash flow to more than $130 million per year. This projected growth in revenues reflects certain planned and completed upgrades of our existing plants as well as plant completion of the…

Mr. McAfee, thank you. [Operator Instructions] We’ll hear from Ed Woo with Ascendiant Capital. Please go ahead. Your line is open.

Yes, thank you for taking my question. My question is if you just comment on the current political state of ethanol and what do you think the outlook is near term?

I think we’re in a very important transition time in which between now and the end of the December the Environmental Protection Agency will determine what the renewable volume obligation is for next year for ethanol and for the next two years for bio diesel. And the President met with key biofuel political leaders, including Senator Grassley Ernst about a month ago or so, and agreed to an arrangement in which the EPA’s reduction of demand for biofuels will be offset by taking the three-year average of those reductions that had been granted to small refineries. And add that back into the current 2020 Renewable Volume Obligation. That political agreement was met with enthusiasm by the industry, but also a certain amount of concern that the EPA would not fully implement the rules. And that’s exactly what happened. About three weeks ago or so, EPA came out with their own little concept of how to do the calculation of the three-year average. And they took the Department of Energy’s estimates, which have been ignored in each of the last three years and averaged only half of the amount of waivers actually granted by the EPA in terms of volumes. So the net outcome of that has been what we or, I think, accurately reflecting as irritation and anger, I think, would be an accurate statement among the corn industry, soybean industry, the biofuels industry about the EPA not fully implementing the President’s agreement with industry leaders. And that political outcome is going to be – have to be determined in the next six weeks. We get to the end of December and the RVO is actually implemented January 1. So the blending percentages need to be known by January 1. I’ve been asked many, many times what my bet is…

That sounds good. And you said this decision has to be made before the end of the year.

Yes, it needs to actually be posted to the federal register before the end of the year to meet the need of the industry, which start blending at that rate starting January 1.

Great. And then my other question is just on your outlook for crude oil, I know it has impact on your India biodiesel business. How does it correlate with your business there?

The India oil marketing companies, is that what you’re talking about?

Yes in terms of just the overall where crude price is now, now it’s been relatively stable. How does it impact good or bad your ethanol and your bio diesel business?

Yes, the crude oil price has been relatively stable around the $55 range. I just reviewed that actually looking over the last year or so. And we bobbled around a bit, but it’s really kind of been around the $55 number, we’re currently at $57 this morning. I think everybody is aware, that Saudi Aramco has the ambitions to go public on a global basis in London and New York. They pulled that back instead in a couple weeks, they are going to be going public on the Saudi Arabia exchange and going to raise significant less money than they originally expected. But they’re trying to raise it at evaluation that’s over $1.5 trillion. Saudi Aramco is the world’s most profitable company, but it’s entirely dependent upon the price of crude oil for those profits. And so it is my firm belief that Mohammad Bin Salman and the other folks who have to make decisions about the valuation of Saudi Aramco, will understand that a firm or slightly rising crude oil prices is in their better interest in the time period in which to trying to take Saudi Aramco public. And so to simplify the entire oil industry down to one country and one IPO transaction is in many cases and oversimplification, but in this one I don’t think it is. Saudi Aramco controls about 12 million barrels per day of production capacity. They have proven they can pull that back to as low as 7 million barrels per day just simply on the phone call. And so if they want the price of crude oil to be $5 higher, I think, have the independent ability to make that happen. And certainly they have a strong reason to want to do that in the next six to twelve months as…

Great. Well thank you and good luck.

Thank you.

[Operator Instructions]

I think we’re going to say thanks to the Aemetis shareholders today. If you want to follow-up with us directly, that’s fine. But we’ve got some other things going on here. So we’d very much like to follow-up with our shareholders and continue our dialogue about growth opportunities at Aemetis. Todd?

Thank you for attending today’s Aemetis earnings conference call. Please visit the Investor section of the Aemetis website, where we’ll post a written version and audio version of this earnings review and business update. Please visit the Investor section of the Aemetis website, where we’ll post a written version and a audio version of this, Aemetis earnings review and update. Jim?

Ladies and gentlemen, this does conclude today’s teleconference. And we do thank you all for your participation. You may disconnect your lines and we hope that you enjoy the rest of your day.