The microcap world is known for a lot of bullshit. This time around there is a company getting paid in the form of $30 million in a non-dilutive equity investment to make bullshit profitable for dairy farmers in California. Aemetis, Inc. (AMTX) shot up 43% on over a million volume traded on Wednesday after it announced a Non-dilutive $30 Million Equity Investment to Build Biomethane Pipelines and Dairy Digesters to Produce Below Zero Carbon Renewable Natural Gas. We think AMTX could go a lot higher on hype over this news as it is an extremely thinly traded stock. AMTX received this $30 million investment for what looks to be a completely new subsidiary it just created while its market cap in total is only $16 million. We are up to 741 followers despite not giving out a lot of alerts, a fact that we think is indicative of a successful, diligent and prudent stock picking history. If you like our picks you can follow our blog by clicking the follow button on the top of the left hand panel. You can also follow us on Twitter @StockTradePicks. We have over 3,400 followers on Twitter as well.
From the press release:
"CUPERTINO, CA, Dec. 26, 2018 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Aemetis, Inc. (AMTX) announced today that its subsidiary, Aemetis Biogas LLC, closed a $30 million equity investment without any dilutive stock issuances by Aemetis, Inc. and funded the first $8.3 million tranche to subsidiary Aemetis Biogas to build, own and operate dairy biomethane digesters, pipelines and gas cleanup/compression facilities primarily under 20-year agreements with dairy farms in California.
Dairies produce about 25% of California’s methane emissions and have become targets of carbon regulations aimed to reduce climate change. With a carbon intensity under the California Low Carbon Fuel Standard of about negative 300, dairy biomethane is highly valuable, but needs to be collected at the dairy, pipelined to a central processing facility, then cleaned and compressed for use as Renewable Natural Gas in converted diesel trucks and other natural gas vehicles.
The project will initially connect about a dozen dairies to Aemetis’ ethanol plant in Keyes, California, with expansion plans to more than three dozen dairies in the local area. The Aemetis plant supplies Wet Distillers Grain feed to about 100 dairies.
“Dairy biogas is a below zero carbon biofuel that is a new source of revenue for dairies, which do not currently have a way to monetize their biomethane as a transportation fuel without the necessary pipeline and gas cleanup/compression infrastructure, as well as a customer that can use biogas to produce low carbon biofuels. Our 60 million gallon ethanol plant is capable of using biogas to replace petroleum natural gas to produce a lower carbon biofuel and generate additional Low Carbon Fuel Standard credits,” stated Eric McAfee, Chairman and CEO of Aemetis. “Since utilities in California have not yet completed the permitting and other requirements for injection of dairy biomethane into natural gas pipelines, collecting and converting biogas for use in ethanol production provides Aemetis a sustainable first-mover advantage in biogas pipeline and dairy digester construction for dairies in the area around our Keyes plant.”
“Importantly, this equity financing by our subsidiary, Aemetis Biogas, will permit us to execute this project without any dilutive stock issuances by Aemetis, Inc.,” McAfee noted. “Aemetis continues to execute on funding and building projects that generate highly valued, low carbon biofuels primarily from waste or reused materials under the California LCFS and Federal RFS.”
The equity funding of Aemetis Biogas was provided by Protair-X Americas, an environmental investment unit of Protair-X Technologies in Canada, which has extensive experience in protecting livestock farming environments. Aemetis’ senior lender, Third Eye Capital, is a major investor in Protair-X Technologies.
Aemetis will hold an investor conference call on January 10 at 11 am Pacific / 2 pm Eastern to review the Aemetis Biogas business. For details on the call, visit: http://www.aemetis.com/investors/conference-call/"
This is very interesting because Aemetis Biogas appears to be a new subsidiary created just last month. For instance, on December 3, AMTX amended its debt deal to explicitly exclude this new subsidiary from the repayment terms:
The original text of the debt agreement can be seen here:
We think that Aemetis Biogas was made, and $30 million in funding subsequently received, due to this favorable funding ruling made by the California Public Utilities Commission (CPUC), the California Air Resources Board (CARB), and the California Department of Food and Agriculture (CDFA):
Six New Dairy Biomethane Projects Receive Funding
"Multiple dairy biomethane projects were recently awarded funding by members of the California Public Utilities Commission (CPUC), the California Air Resources Board (CARB), and the California Department of Food and Agriculture (CDFA). Six pilot projects will be established in the San Joaquin and Sacramento Valleys by a total of three different developers. The projects will be receiving approximately $319 million for infrastructure investments and operating expenses over a period of 20 years.
“The pilots chosen will provide us with valuable information about the interconnection process and hopefully facilitate other biomethane projects,” CPUC Commissioner Clifford Rechtschaffen said in a news release.
The dairy biomethane projects were mandated in Senate Bill 1383, which is aimed at reducing organic waste in landfills and requiring regulations to reduce methane emissions from livestock and dairy manure operations. The CPUC established the dairy biomethane pilot program in order to help reduce greenhouse gas emissions by repurposing biomethane from organic waste products in dairy digesters to provide a beneficial use as a renewable transportation fuel.
“CalBio is honored to have been selected to develop these pilot projects which will produce clean, renewable CNG which will significantly lower the carbon intensity of California’s transportation and agriculture sectors,” California Bioenergy CEO N. Ross Buckenham said in a press release. “These projects represent a true public-private partnership. They help to create local jobs and generate a new revenue stream for the dairies, all while helping the state achieve its climate goals.”
California Bioenergy, Maas Energy Works and DVO, Inc. will all be working on projects designed for the collection of biomethane from dairy digesters and its injection into natural gas pipelines. The program enables dairies of all sizes to each connect to a single point of injection to the pipeline. A total of 45 dairies will all be participating in the pilot projects."
While AMTX is not mentioned by name, we think that it is related to these projects in some way given that it has managed to raise $30 million for a piece of the Aemetis Biogas subsidiary. We do not know how much of a percentage that AMTX owns of this subsidiary, but if it is a 50/50 partnership, that means AMTX's share is also worth $30 million, more than its current market cap. This very favorable ruling and business development sponsored by Californian government agencies have been overlooked, which we think will make AMTX a great buy to get in early on as the details and context of this deal become further disclosed in January's conference call.
AMTX has had a mixed bag of results in 2018. It achieved EBITDA positive results recently, but still negative net income because of its heavy debt load causing substantial interest payments. This $30 million non-dilutive raise will go far to improving the company's working capital. AMTX has shareholder's deficit of over $100 million, so the balance sheet shows that this play is high risk even with the substantially improved income statement. AMTX has been going down despite improved financial performance because the biofuel industry as a whole has been struggling. For instance, Pacific Ethanol, Inc. (PEIX) has experienced a similar downtrend in its stock throughout 2018.
We think this bullshit news on AMTX is actually a game-changer and despite the various issues like the debt and industry headwinds, AMTX can run a lot. The price history shows that even though today's volume was just over a million shares, this is actually much, much more active than usual. Most days the stock doesn't reach 100,000 in volume. That means if buying pressure is sustained over the next few days, the stock can really move because there have been so few sellers and traders throughout 2018:
Disclosure: We are long AMTX
2018 was a wild roller-coaster for the stock market, but a bad time in general for microcap stocks. Still, we made good money on some microcap stocks if you look at our picks over the course of 2018, both longs and shorts. As we head out of a volatile 2018 and into 2019, we have to figure out what's next. TradeMiner identifies seasonal trends and market cycles while the Penny Stock Prophet and Microcap Millionaires find the next big small cap plays in a multitude of industries.
Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:
The dividend stock report from dividendstocksonline.com
From the press release:
"CUPERTINO, CA, Dec. 26, 2018 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Aemetis, Inc. (AMTX) announced today that its subsidiary, Aemetis Biogas LLC, closed a $30 million equity investment without any dilutive stock issuances by Aemetis, Inc. and funded the first $8.3 million tranche to subsidiary Aemetis Biogas to build, own and operate dairy biomethane digesters, pipelines and gas cleanup/compression facilities primarily under 20-year agreements with dairy farms in California.
Dairies produce about 25% of California’s methane emissions and have become targets of carbon regulations aimed to reduce climate change. With a carbon intensity under the California Low Carbon Fuel Standard of about negative 300, dairy biomethane is highly valuable, but needs to be collected at the dairy, pipelined to a central processing facility, then cleaned and compressed for use as Renewable Natural Gas in converted diesel trucks and other natural gas vehicles.
The project will initially connect about a dozen dairies to Aemetis’ ethanol plant in Keyes, California, with expansion plans to more than three dozen dairies in the local area. The Aemetis plant supplies Wet Distillers Grain feed to about 100 dairies.
“Dairy biogas is a below zero carbon biofuel that is a new source of revenue for dairies, which do not currently have a way to monetize their biomethane as a transportation fuel without the necessary pipeline and gas cleanup/compression infrastructure, as well as a customer that can use biogas to produce low carbon biofuels. Our 60 million gallon ethanol plant is capable of using biogas to replace petroleum natural gas to produce a lower carbon biofuel and generate additional Low Carbon Fuel Standard credits,” stated Eric McAfee, Chairman and CEO of Aemetis. “Since utilities in California have not yet completed the permitting and other requirements for injection of dairy biomethane into natural gas pipelines, collecting and converting biogas for use in ethanol production provides Aemetis a sustainable first-mover advantage in biogas pipeline and dairy digester construction for dairies in the area around our Keyes plant.”
“Importantly, this equity financing by our subsidiary, Aemetis Biogas, will permit us to execute this project without any dilutive stock issuances by Aemetis, Inc.,” McAfee noted. “Aemetis continues to execute on funding and building projects that generate highly valued, low carbon biofuels primarily from waste or reused materials under the California LCFS and Federal RFS.”
The equity funding of Aemetis Biogas was provided by Protair-X Americas, an environmental investment unit of Protair-X Technologies in Canada, which has extensive experience in protecting livestock farming environments. Aemetis’ senior lender, Third Eye Capital, is a major investor in Protair-X Technologies.
Aemetis will hold an investor conference call on January 10 at 11 am Pacific / 2 pm Eastern to review the Aemetis Biogas business. For details on the call, visit: http://www.aemetis.com/investors/conference-call/"
This is very interesting because Aemetis Biogas appears to be a new subsidiary created just last month. For instance, on December 3, AMTX amended its debt deal to explicitly exclude this new subsidiary from the repayment terms:
We think that Aemetis Biogas was made, and $30 million in funding subsequently received, due to this favorable funding ruling made by the California Public Utilities Commission (CPUC), the California Air Resources Board (CARB), and the California Department of Food and Agriculture (CDFA):
Six New Dairy Biomethane Projects Receive Funding
"Multiple dairy biomethane projects were recently awarded funding by members of the California Public Utilities Commission (CPUC), the California Air Resources Board (CARB), and the California Department of Food and Agriculture (CDFA). Six pilot projects will be established in the San Joaquin and Sacramento Valleys by a total of three different developers. The projects will be receiving approximately $319 million for infrastructure investments and operating expenses over a period of 20 years.
“The pilots chosen will provide us with valuable information about the interconnection process and hopefully facilitate other biomethane projects,” CPUC Commissioner Clifford Rechtschaffen said in a news release.
The dairy biomethane projects were mandated in Senate Bill 1383, which is aimed at reducing organic waste in landfills and requiring regulations to reduce methane emissions from livestock and dairy manure operations. The CPUC established the dairy biomethane pilot program in order to help reduce greenhouse gas emissions by repurposing biomethane from organic waste products in dairy digesters to provide a beneficial use as a renewable transportation fuel.
“CalBio is honored to have been selected to develop these pilot projects which will produce clean, renewable CNG which will significantly lower the carbon intensity of California’s transportation and agriculture sectors,” California Bioenergy CEO N. Ross Buckenham said in a press release. “These projects represent a true public-private partnership. They help to create local jobs and generate a new revenue stream for the dairies, all while helping the state achieve its climate goals.”
California Bioenergy, Maas Energy Works and DVO, Inc. will all be working on projects designed for the collection of biomethane from dairy digesters and its injection into natural gas pipelines. The program enables dairies of all sizes to each connect to a single point of injection to the pipeline. A total of 45 dairies will all be participating in the pilot projects."
While AMTX is not mentioned by name, we think that it is related to these projects in some way given that it has managed to raise $30 million for a piece of the Aemetis Biogas subsidiary. We do not know how much of a percentage that AMTX owns of this subsidiary, but if it is a 50/50 partnership, that means AMTX's share is also worth $30 million, more than its current market cap. This very favorable ruling and business development sponsored by Californian government agencies have been overlooked, which we think will make AMTX a great buy to get in early on as the details and context of this deal become further disclosed in January's conference call.
AMTX has had a mixed bag of results in 2018. It achieved EBITDA positive results recently, but still negative net income because of its heavy debt load causing substantial interest payments. This $30 million non-dilutive raise will go far to improving the company's working capital. AMTX has shareholder's deficit of over $100 million, so the balance sheet shows that this play is high risk even with the substantially improved income statement. AMTX has been going down despite improved financial performance because the biofuel industry as a whole has been struggling. For instance, Pacific Ethanol, Inc. (PEIX) has experienced a similar downtrend in its stock throughout 2018.
We think this bullshit news on AMTX is actually a game-changer and despite the various issues like the debt and industry headwinds, AMTX can run a lot. The price history shows that even though today's volume was just over a million shares, this is actually much, much more active than usual. Most days the stock doesn't reach 100,000 in volume. That means if buying pressure is sustained over the next few days, the stock can really move because there have been so few sellers and traders throughout 2018:
Disclosure: We are long AMTX
2018 was a wild roller-coaster for the stock market, but a bad time in general for microcap stocks. Still, we made good money on some microcap stocks if you look at our picks over the course of 2018, both longs and shorts. As we head out of a volatile 2018 and into 2019, we have to figure out what's next. TradeMiner identifies seasonal trends and market cycles while the Penny Stock Prophet and Microcap Millionaires find the next big small cap plays in a multitude of industries.
Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:
The dividend stock report from dividendstocksonline.com
The dividend stock report from Dividend Stocks Rock
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
And try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
And try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
Bitcoin has gone from a concept worth pennies a few years ago to worth thousands of dollars. It may appear to some who are late to the game that the opportunity to get rich is gone. However, there are still plenty of ways to make some money trading in bitcoin and other cryptocurrency. Here are some links to valuable reports and strategies:
The Cryptocurrency Codex from the Cryptocurrency Institute
Secrets To Unlimited Free Bitcoin
The Crypto-Currency Evolution eBook
Bitcoin Complete Guide for Dummies
The Bitcoin Miracle Guide
The Bitcoin Cheat Code Book
The Crpytocurrency Course
Bitcoin Investing Live
The Cryptocurrency Codex from the Cryptocurrency Institute
Secrets To Unlimited Free Bitcoin
The Crypto-Currency Evolution eBook
Bitcoin Complete Guide for Dummies
The Bitcoin Miracle Guide
The Bitcoin Cheat Code Book
The Crpytocurrency Course
Bitcoin Investing Live
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