Aemetis Inc. (
) is a company which is totally off the radar for most investors.
The company only recently uplisted to the Nasdaq from the OTC BB,
and has no institutional following. As a result, the mostly retail
investor base has missed some critical issues with the company.
Between May and July, shares of Aemetis rose from $5.00 to over
$12.00. But now, the shares have been dropping daily. Even though
earnings on August 7th were relatively positive, the shares have
fallen by 20% since then, and are already down by more than 30% in
just three weeks.
(click to enlarge)
The reason that the positive earnings did not cheer the stock is
because Aemetis is very deeply in debt and is already defaulting on
obligations in both the US and India. Creditors have already
taken 100% of the cash
generated by Aemetis this year, and are first in line to take
anything else that Aemetis can make. Indian creditors are already
attempting to seize assets.
It is clear that Aemetis must issue a massive amount of new
stock to pay creditors, and it must do so quickly. Aemetis has over
$90 million in short-term debt coming due, and only $4.7 million in
Aemetis has already filed an
S3 registration statement
to raise up to $100 million, and has engaged an investment bank to
help with financing. The equity offering will put extreme pressure
on the share price. This is what is driving the share price
Because Aemetis MUST complete a financing regardless of price
and because of the urgency, the share price will continue to fall
sharply. No one wants to be the last one holding shares when the
company conducts a huge equity offering.
The shares could fall by a further 50%-80% due to the "death
spiral" nature of this financing situation. Past examples will
illustrate this problem clearly and why it applies to Aemetis.
Again, the reason that the market has missed this is simply
a) Aemetis is an under-followed stock
b) Aemetis is mostly held by retail and has no legitimate
c) Aemetis only recently uplisted to the Nasdaq from the OTC
In 2013, I wrote
describing a "death spiral" at Biolase Inc. (
) which saw the stock plunge by 80% in a week. The situation was
very similar to what we are starting to see now with Aemetis.
In early 2013, the Biolase share price was quite strong and
traded as high as $6.00. In August 2013, Biolase had just reported
earnings and reported a very mild miss. It certainly should not
have been a big deal. But still, the share price plunged by 25%
that day. The death spiral had already begun... however, many
investors had not yet realized it.
By the time I could finish my article within a few days, the
stock had already fallen by 50%. Despite this massive drop in less
than a week, I still predicted even further declines. The stock
then fell an additional 30% on the day of
With the stock down 80% in a week, Biolase took the unusual step
of halting its own stock when it hit $1.16, down from $3.60 before
earnings. It was an epic plunge in just days, and a far cry from
$6.00 just weeks earlier.
(click to enlarge)
Biolase was ultimately able to stabilize and raise some of the
money it needed. The stock has recovered to around $2.00, still
down by 45% from where it was before.
Biolase offers a good lesson in what triggers a death spiral.
Biolase was in violation of its loan covenants and needed to raise
money urgently. Issuing stock was the only option, and investors
could plainly see that Biolase had filed a large S3 registration
statement to sell stock. The situation with Aemetis is nearly
identical, except that Aemetis has far more debt than Biolase.
In general, a death spiral will occur when a company needs to
obligation (i.e. debt) and when it must use a
number of shares to do so. Investors know that the stock will fall
upon the equity offering, so they sell and the share price falls.
But then, the subsequent investors know that the equity offering
has not yet happened, so they know that the stock will continue to
fall further. They sell, the stock falls, and the cycle repeats
No one wants to get caught holding the stock, because it is
pre-determined that it will continue falling by even more. As the
share price gets lower and lower, the relative dilution becomes
larger and larger, which then exacerbates the share price decline
As with Biolase, Aemetis Inc. is now facing a death
spiral situation, and for very similar reasons. And as with
Biolase, it is purely the fault of management for letting the
situation get to this point. More prudent management in years
past could have prevented this situation from arising.
Aemetis: Company Overview
Aemetis Inc. is a $200-million market cap producer of
"alternative fuels". The company produces biodiesel from a plant in
India, and produces mainly ethanol from a plant in California.
During Q1 of 2013, its ethanol plants were idled, as the company
was experiencing recurring
negative gross margins
. It was literally selling its product below cost, so it
decided to shut down
. In recent quarters, the company has resumed operations, and a
buoyant market for ethanol has seen the company begin to eke out
tiny profits in two consecutive quarters. But it is still the case
that over the past few years, the company has accumulated
over $80 million in cumulative losses
Aemetis Inc. uplisted from the OTC BB to the Nasdaq in May, and
its share price quickly shot up from an initial price of $5.00 to
over $12.00. One contributing factor was the strong performance of
any stock with an ethanol connection. For example, Pacific Ethanol
) is up by 400% in the past year. Aemetis has simply ridden on the
coattails of the sector.
The share price was also no doubt buoyed by a Seeking Alpha
article entitled: "
Aemetis Is A Potential Four- Or Five-Bagger
", as well as by the initiation of "
" on the company by
, which came with a
$26 share price target
See Thru claims (in all caps) that it does not get compensated
to write such reports. But instead, See Thru charges its clients
$11,000 for slots at its conferences. It then issues hyper-bullish
research on the attendees "for free". As noted on the See Thru
website, Aemetis is an
in See Thru's conferences.
In reality, this is all just a very transparent way to
pay for positive research on one's own company.
Both the article and the research report contain materials which
are largely a simple repetition of company presentations, including
links and direct quotes. As a result, they not surprisingly portray
the company in a very optimistic light, and contain multi-bagger
share price targets.
Yet, both of them ignore the obvious realities which are
contained in Aemetis' SEC filings. Even a quick and cursory read of
the company filings reveals the following:
- Aemetis already is and has been in default on its debts, with
creditors already attempting to seize assets.
- The company has just $4.7 million in cash and over $95
million in short-term debt coming due.
- Over $65 million of this debt has been classified as "long
term", simply because it is due 1 day after the end of the
quarter. As a result, that $65 million is all, in fact,
short-term debt by now.
- Aemetis' major lender is already "sweeping" cash from the
company every day, not even trusting the company with cash
- The company's internal controls for accounting have been
deemed to be ineffective.
- Creditors have already claimed as collateral ALL of the
assets of Aemetis
- In order to avoid an immediate default, the CEO was forced to
$15 million of the debts with 100% of his own personal assets. If
Aemetis defaults on even this portion, he loses everything he
owns - personally !
As a result of the above, Aemetis (and the CEO) are in the
situation where they simply
issue stock at any price and in very large size. They must also do
so as soon as possible.
The intention to issue equity should be clear. The company just
S3 registration statement
for up to $100 million. It is huge for a company of this size. The
company also disclosed that it has already "engaged an investment
bank" to advise on its financing.
An equity offering is desperately needed, there are no
alternatives, and the timing is imminent. These are the
precursors for a death spiral to occur. This is why the stock has
been selling off, even after earnings which were relatively good
(compared to the past). Yet, many of the retail holders will have
no idea what is coming.
The only reason why the equity offering hasn't already
occurred is that the S3 is not yet effective. This is also
identical to what happened with Biolase. But just as with
Biolase, the S3 can become effective immediately and with no
notice, such that an equity offering could occur at any
How has the market missed this?
The reason why this obvious situation has been missed by the
market is that aside from existing insiders, the stock is almost
exclusively held by retail investors. There is no institutional
presence in terms of either investors or research. Because the
stock was just recently uplisted to the Nasdaq, it is largely
unknown to the wider market.
Furthermore, there are many retail investors who simply invest
based on company descriptions who happen to be in hot sectors (i.e.
The share price of Aemetis has no doubt benefited from the other
soaring ethanol stocks, such as Pacific Ethanol, which has been a
stunning 5-bagger in the past year. Aemetis CEO, Eric McAfee was an
original founder of Pacific Ethanol, so some people choose to
associate the two together, even though Pacific happens to be a far
(click to enlarge)
How did Aemetis get into this situation?
In 2012, Aemetis sought to acquire a company called Cilion, but
it didn't have the money. As a solution, Aemetis went to a
distressed lender by the name of Third Eye Capital. This was really
the beginning of the end for Aemetis.
In July 2012, Third Eye lent around $40 million to Aemetis by
means of loans, notes and a revolving credit facility. The "stated"
interest rates have been as high as 17%, but due to a creative
variety of fees, the real rate of interest has approached 100% per
Aemetis clearly had no ability to repay these debts. In fact, it
could not ever even service the
. Within less than 6 months, the company was already in
As a result, in October of 2012, Aemetis and Third Eye entered
Waiver and Amendment #1
. This extended the maturity of the obligations to July 2014 and
increased the lending amounts by $6 million.
But... the $6 million could not actually be drawn upon by
Aemetis, it was simply extended to account for the unpaid interest.
For Aemetis, the only real result was that its debt increased to
$46 million instead of $40 million, with no new cash coming in the
Aemetis was just borrowing more money from Third Eye so that it
could pay the money directly back to Third Eye. Third Eye is doing
nothing illegal here. This is how Third Eye makes a fortune. In
mafia movies, it's called "the vig".
But wait, it gets better.
In order to compensate Third Eye for this extension and waiver,
Aemetis was required to "pay" an additional "waiver fee" of $4
million. But again, Aemetis had no cash, so this was just tacked on
to the debt. So now the obligation became $50 million, instead of
$40 million. And again, there was not even any new cash coming in
the door at Aemetis.
The balance of the debt therefore increased by 25% in just 4
That equates to an annualized rate of over 95%!
That was October, 2012. Within just 4 more months (February
2013), the company was again in default. So Aemetis agreed to
Waiver and Amendment #2
This time, Aemetis was required to issue shares to pay an
additional extension fee of $1.5 million. In addition, Third Eye
required McAfee Capital to pledge millions of shares as collateral.
McAfee Capital is the investment company owned by Aemetis' CEO,
Eric McAfee, and which holds some of his shares.
That was the second default waiver within 8 months.
third default and waiver
happened just 3 more months later, with more waiver fees and
increased debt balances in respect of unpaid interest.
Then, there was a fourth default and waiver. And
. And a seventh.
At each new waiver just a few months apart, Third Eye would
impose additional fees and would jack up the interest rates. The
net result was that by late 2013 (less than 18 months), Aemetis'
debt to Third Eye had
ballooned to over $72 million
from just $40 million.
The "vig" was quickly compounding at a truly unsustainable
By the end of 2013 (within 18 months), total annual debt service
amounts were accruing and almost $30 million per year - and this
for a debt that started at just $40 million.
But Third Eye still wasn't satisfied, and was repeatedly
demanding warrants. Aemetis was already in default. If Aemetis
attempted to say no, Third Eye could just foreclose on the assets
of the entire company. Third Eye could now call all of the
As a result of the heavy warrants and shares being
issued, Third Eye quickly owned over 17% of the entire
But at the current valuation, Third Eye's equity stake is worth
just $34 million - only half of what it has lent to Aemetis. And
the problem now is that Aemetis has demonstrated a very limited
capacity to pay down these debts.
As a result, Third Eye is now agitating for the equity offering.
In one default waiver amendment, Aemetis agreed to give Third Eye
100% of the proceeds of any equity offering it conducts in excess
of $7 million. This is how Third Eye plans to get its money
The stock will clearly be crushed and Aemetis will end up
getting almost none of the proceeds, but Third Eye will get its
incredible pound of flesh out of the deal after just 2 years.
What happened with earnings? Why is the stock falling?
Last Thursday, Aemetis reported Q2 earnings, and the numbers
appeared good on the surface. But the share price quickly fell by
10% that day, and continued its descent on Friday. This is just
what we saw with Biolase.
In the press release, the company noted the following:
- Revenues increased 21% vs. Q2 2013
- Net income was $2.7 million, compared to a loss of $9 .6
million in Q2 2013
- Aemetis paid down $13.6 million of debt (interest and
These all would appear to be very positive developments. As
such, retail investors were likely confused by the sharp drop in
More savvy investors quickly realized that positive comparisons
to 2013 are unfair, because the plant had been idled for almost a
month during Q2 2013. Had it not been idled, revenues would have
come out as being largely flat, despite a very buoyant ethanol
market in 2014.
In reality, the results are actually a bit of a
As for the debt, a closer read of the subsequently released 10Q
reveals that debt service expenses are still accruing at over $5
million per quarter (a run rate of over $20 million per year). In
addition, every penny of cash generated by Aemetis has already been
handed over to creditors, mostly to Third Eye.
But even after handing every penny of cash that came in
the door, Aemetis still has over $95 million in short-term
liabilities coming due. Aemetis has made virtually no progress
whatsoever, even in the best ethanol market in a decade.
Note: Many investors could have easily missed the short-term
nature of $65 million these liabilities, because in the Form 10Q,
they are classified as "long-term liabilities". The reason for
this classification is that Aemetis agreed with Third Eye to set
the new maturity date as July 1, one day after Q2 ends. As a
result, they were technically considered to be "long-term"
obligations in the most recent 10Q - but only by a single day.
These obligations are now clearly short-term liabilities.
For those who care about accounting ratios, Aemetis has a stated
"current ratio" of 0.4. That should already be extremely
concerning. Anything below 1.0 indicates meaningful financial
weakness. Anything below 0.5 indicates a severe liquidity
But in fact, it is much worse. Because all of these
liabilities are now short term, the real current ratio for
Aemetis is just 0.1. The company is visibly insolvent.
What about "alternative" financing sources?
Energy Commission Grant
In late July, Aemetis put out a
stating that "Aemetis announces $3M CEC grant award". Even though
$3 million is not enough to move the needle vs. over $90 million in
upcoming debts, the $3 million would serve as a small amount of
However, it appears that investors may have assumed that this
money was already distributed to Aemetis.
This is wrong.
There are several problems here. First, the grant is still
contingent upon approval of the project. It has not even been
distributed. Second, the grant is a matching grant, which means
that Aemetis itself must put up $3 million in order to receive the
grant. But Aemetis only has $4.7 million in cash total. Third (and
), as part of one of the default waivers, Aemetis already agreed
that any proceeds from grants would go straight to Third Eye.
Aemetis will see none of the money from this
California Ethanol Producer Incentive Program.
Aemetis is eligible to participate in this California program,
which subsidizes ethanol producers in times when crush spreads are
too low to make money.
Unfortunately, the program also requires ethanol producers to
repay the funds
when times improve. Because times are good for ethanol right now,
money to this program.
As a result of this, Aemetis noted in the most recent 10Q
During the six months ended June 30, 2014, the strength of the
crush spread resulted in the accrual and
obligation to repay CEPIP funding in the amount of $1.8
million, the entire remaining amount of funds received from the
to the other debts listed for Aemetis.
EB-5 Visa program
This is an odd one. In an attempt to obtain funding, Aemetis
enrolled in a program by which it can effectively sell US
immigration visas to foreigners. Foreigners can "invest" $500,000
each into notes issued by Aemetis. Because they are investing in a
US business and presumably creating jobs, the foreigner then gets a
US immigration visa.
The notes can be converted into Aemetis stock at a price of
$3.00 - but only after 3 years.
Even though this appears to be a great deal (getting stock at
$3.00), Aemetis has only managed to sell 3 of these visa
investments since 2012, raising just $1.5 million. The reason that
there has been no demand is that investors need to wait for 3 years
in order to get their stock. These investors will know that they
come behind over $90 million in debt, such that there is a very
real chance that they may never get paid.
In fact, in 2013, Aemetis was not even paying the owed
interest to these investors who paid their $500,000 each. Not
surprisingly, selling more of these has been difficult.
Despite only selling 3 of these in the past 2 ½ years, Aemetis
continues to state that this is a source of funding which they hope
to rely upon.
But once again (and of greatest importance), Third Eye
has already laid claim to any potential proceeds from this
Default Waiver #5
, Third Eye forced Aemetis to agree to remit any proceeds from
EB-5 sales to Third Eye.
Loans from board members
In the recent past, CEO Eric McAfee has already forgone actual
cash payment of his salary and benefits, because Aemetis is unable
to pay. Aemetis simply accrues these expenses along with the other
debts which it is not paying. But because 100% of his personal
assets have been claimed by Third Eye as collateral, Mr. McAfee is
no longer able to extend any form of credit to Aemetis.
As early as 2009, board member Laird Cagan extended $5 million
of credit to Aemetis, which was secured by assets of the company.
But as usual, the company was unable to even pay the interest. As a
company issued stock
to Mr. Cagan in exchange for the $5-million debt. As a result of
this, Mr. Cagan ended up quickly owning 12% of the entire company,
which he acquired at just 45 cents per share.
This once again demonstrates what we are about to see: when the
company has debts which it cannot pay, and when issuing stock is
the only option, the price at which stock can be issued tends to be
very, very low. Aemetis will truly issue stock at any price,
because it has no other options.
Complications for an equity offering - accounting
I was an investment banker on Wall Street for nearly a decade. I
helped many troubled companies raise money when the situation
looked very desperate. One thing I learned is that there is almost
always a price at which a deal can get done.
I do believe that Aemetis will be able to complete some amount
of financing to stave off insolvency. But it is also clear that the
price at which a deal gets done for Aemetis will be very, very
We already know that nearly all proceeds of the offering will
simply be handed to Third Eye. This is already a problem for
potential investors, because they know that a financing will not go
to improve the business or increases capacity. The financing itself
does nothing for Aemetis and everything for Third Eye.
But, in fact, there is a much larger problem looming for
Aemetis may have additional accounting problems. which
could require an even bigger discount from anyone who might
choose to finance the company.
In its annual 10K filed in March, Aemetis noted that:
We have identified material weaknesses in our internal
control over financial reporting which have
materially adversely affected
our ability to timely and accurately report our results
of operations and financial condition. These material
weaknesses have not been fully remediated as of the filing
date of this report.
The deficiencies in internal control were not minor, in fact,
they were very significant.
The 10K (p. 28) explained that there may be significant problems
with the numbers, most importantly, including cash flow
The material weaknesses identified are: Ineffective controls
exist to ensure that the accounting and reporting for complex
accounting transactions are recorded in accordance with GAAP. A
of significant audit adjustments were made
to the general ledger, which collectively could have a
material effect on the financial statements
. These adjustments were made up of entries to properly record
the carrying value of
debt issue costs, warrant accounting
and various other adjustments summarized in our Report to the
Audit Committee communication.
As part of our review of the financial statements included in
the 10-K, we also made
significant revisions to the statement of cash flows and
various notes to the financial statements
, which indicate that additional controls over disclosures need
to be evaluated.
The company also noted that it was making efforts to remediate
But here is where it becomes much more
A few weeks later, when Q1 was reported, Aemetis noted that
no changes in our internal controls
over financial reporting during our most recently completed
fiscal quarter that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
Despite the "no changes", Aemetis management is now saying that
the previously disclosed problems no longer matter.
On page 30 of the
and on page 35 of the Q2 10Q, it is noted that:
Our controls and procedures are designed to provide reasonable
assurance that our control system's objective will be met and
our CEO and CFO have concluded that our disclosure
controls and procedures are effective at the reasonable assurance
Something is quite wrong here.
When a company discloses serious deficiencies in its accounting
controls in one quarter and then says that no changes have been
made, it is not possible to suddenly say that the numbers,
including cash flow, are all just fine. Yet, this is what Aemetis
The fact that these problems are being swept under the rug at
just the time that the company is looking to complete a large
equity offering makes the problem that much worse.
This is clearly something that small retail investors will miss,
but larger investors who might finance the company will spot
immediately. To the extent that they have any concerns over the
accuracy of the accounting numbers, they will definitely require a
steeper discount on the equity price.
Past 10b5 fraud charges against the CEO, Eric McAfee,
will not help that matter either.
In a previous OTC BB oil and gas company, Verdisys, Mr. McAfee
was also the largest shareholder and CEO.
According to the SEC, McAfee duped the company's board into
buying useless software from a different company which he
controlled. He then diverted that money to a stock promoter to
promote the stock.
McAfee then fabricated a large receivable from a supposed
customer, and forced the accounting department to put out the 10Q
filing without letting the auditor review it. The auditor had
already raised revenue recognition issues with the transaction. He
did all of this in order to prevent the share price from
This is all pretty bad stuff. As a result, Mr. McAfee was
sanctioned for fraud violations, and cease and desist orders were
Here is what happened,
according to fraud proceedings with the SEC
Verdisys issued two million shares of common stock, valued at
ostensibly to acquire software
, but that the software had been
deemed not useful
, and Verdisys was therefore recording an impairment expense of
McAfee had convinced the Verdisys board to purchase the
software by claiming it would allow the remote monitoring of oil
and gas wells, which would complement Verdisys' sales of
broadband satellite links to oil and gas companies.
McAfee controlled the company selling the
, and he knew that the software only screened job applications
and resumes of health care executives and
monitor conditions in oil and gas wells
. McAfee did not tell the company's directors that the
compensated a stock promoter
, who received half of the two million shares.
As a result, McAfee caused Verdisys, essentially a start-up
company, to not disclose that it had issued one million shares
and incurred a compensation expense of $500,000, to
retain the promoter
, before it could claim significant assets, revenues or business
Verdisys delayed the filing of its quarterly report for the
quarter ended September 30, 2003 (the "3Q Form 10-QSB"), after
auditor raised revenue recognition issues
material $1.5 million receivable
related to the company's largest drilling contract. While the
filing was in abeyance, McAfee caused Verdisys to issue an
earnings release predicting the company would soon report record
McAfee participated in efforts to justify recognition of the
$1.5 million receivable. On November 19, 2003, to meet the filing
avoid any drop in the company's stock price, McAfee
ordered Verdisys' accounting staff to file the 3Q Form 10-QSB,
even though the auditor had yet to review the financial
found in the filing. The 3Q Form 10-QSB filed as a result claimed
Verdisys had earned total current period revenues of $2.09
million, including the questioned $1.5 million receivable. The 3Q
10-QSB did not disclose
that McAfee's attempts to confirm recognition of the $1.5 million
receivable involved a buy-out agreement, by which Verdisys would
assume substantial liabilities and
forego collecting upon the $1.5 million
to purchase the drilling project from which the receivable
As a result of the conduct described above, McAfee caused
Verdisys to violate Section 10(b) of the Exchange Act and Rule
10b-5 thereunder, which prohibit fraudulent conduct in connection
with the purchase or sale of securities.
Ultimately, McAfee settled with the SEC, paid a fine and moved
on to other projects. Verdisys later changed its name to Blast
Energy, and is no longer listed.
I don't expect that any retail investors have conducted this
level of research in evaluating their investment in Aemetis. But it
should be expected that investors who might choose to participate
in an offering of up to $100 million will focus quite clearly on
The fact that Aemetis recently disclosed its internal
accounting problems and then quickly covered them up just in time
for a financing will certainly be noticed, and will be another
factor which will require a steep discount in selling new
It will not be lost on the investors that absolutely all
of Mr. McAfee's personal assets have been pledged to secure the
loans of Aemetis. If the Aemetis creditors choose to foreclose,
they will take everything he has. As a result, there is a very
high amount of pressure on Mr. McAfee to get an equity deal done
and to perhaps conveniently overlook the accounting problems
which might interfere with getting his personal assets back under
his own control and out of the clutches of Third Eye.
I did attempt to contact Aemetis by phone for comment and
clarification on these issues, but my calls have not yet been
Right now, there are very strong tailwinds boosting alt energy
stocks such as biodiesel and ethanol plays. This can be clearly
seen by looking at the soaring share prices of stocks such as
But unfortunately, the dire straits in which Aemetis has landed
basically ensure that no amount of tailwind is going to benefit
Aemetis shareholders. For any amount of cash that comes in, Third
Eye Capital stands ready to confiscate it. Third Eye is already
"sweeping" cash from Aemetis every night. That applies to cash from
biodiesel and ethanol sales, from grants and subsidies and even
from Aemetis' unusual US visa selling program. Third Eye and the
lenders take everything.
Aemetis has over $90 million in near-term debts, and just $4.7
million in cash with which to repay it. But as of the last 10Q,
much of this was technically referred to as "long-term" debt. There
is no mistake that this is currently short-term debt now.
Aemetis has already defaulted on loans, and its creditors have
already begun attempting to accelerate the seizure of assets. Each
time a default is waived for a few months only adds massive new
debt burdens to the company in the form of waiver fees, penalties
and new interest. The "vig" is compounding at an unsustainable
But now the burden is getting so high that Aemetis risks
collapse, and now Third Eye finally needs to convert these debts
Aemetis has filed a $100 million S3 in order to sell equity, and
has engaged an investment banker to advise on financing. As a
result, the share price has already fallen quickly by 30% in 3
But now that the financing becomes more visible, the share price
decline is likely to accelerate. No one wants to be left holding
the stock when all of the other buyers disappear ahead of the
offering. This is just what we saw with Biolase last year, when the
stock plunged by 80% in a single week.
Concerns over accounting issues and internal controls will
likely mean that the discount required in an equity offering is
even deeper than might otherwise be the case. Investors will want
to know why Aemetis is now ignoring the accounting problems just
revealed in March, and why they are being ignored right ahead of a
must-complete equity offering. The past history of similar fraud by
the CEO will certainly not help this issue with investors.
Based on these issues, a quick drop of 50%-80% in the
share price is now entirely predictable.
The author is short AMTX. The author wrote this article themselves,
and it expresses their own opinions. The author is not receiving
compensation for it. The author has no business relationship with
any company whose stock is mentioned in this article.
The author was previously an investment banker for a major global
investment bank and was engaged in investment banking transactions
with variety of alternative energy companies. The author has not
been engaged in any investment banking transactions with US listed
companies during the past 5 years. The author is not a registered
financial advisor and does not purport to provide investment advice
regarding decisions to buy, sell or hold any security. The author
currently holds a short interest in AMTX and has provided
fundamental and/or technical research to investors who hold a short
position. The author may choose to transact in securities of one or
more companies mentioned within this article within the next 72
hours. Before making any decision to buy, sell or hold any security
mentioned in this article, investors should consult with their
financial adviser. The author has relied upon publicly available
information gathered from sources, which are believed to be
reliable and has included links to various sources of information
within this article. However, while the author believes these
sources to be reliable, the author provides no guarantee either
expressly or implied.
U.S. Global Investors' (
) CEO Frank Holmes on Q4 2014 Results - Earnings Call