15. Liquidity and Going Concern

The accompanying financial statements have been prepared contemplating the realization of assets and satisfaction of liabilities in the normal course of business. This approach to presentation is qualified by the following additional descriptions of our financial position.

Debt

We have a substantial amount of accumulated debt, and our senior lender has a security interest in substantially all of our assets. We have been reliant on our senior secured lender to provide extensions to the maturity dates of its debt facilities and have been required to remit substantially all excess cash from tax credit sales as payments of that debt, in addition to other periodic payments. In order to meet our obligations during the next twelve months, we will need to refinance debt with our senior lender for amounts that are due on demand in the next twelve months or receive its continued cooperation.

We are pursuing the following strategies to improve liquidity:

California Ethanol

Optimize Operations. We plan to continue to operate the Keyes Plant and optimize operating parameters and purchase contracts based on market conditions.

Reduce Natural Gas Use and Reduce Ethanol Carbon Intensity. We are constructing a MVR system that is expected to significantly reduce the Keyes Plant's natural gas consumption and lower the carbon intensity of the ethanol produced at the Keyes Plant. This will reduce overall fuel costs and volatility and increase income from LCFS credits and Section 45Z PTCs. The MVR system is expected to become operational in 2026.

Monetize Section 45Z PTCs. The Keyes Plant started earning Section 45Z PTCs effective January 1, 2025, and we have monetized the credits earned during all of 2025 and through mid- June 2026. We plan to continue to monetize the Section 45Z PTCs on a regular basis. The recent federal tax and budget legislation referred to as the "One Big Beautiful Bill" that was enacted in July 2025 extended the term of the credits to a total of five years.

Evaluate New Technologies. We continue to evaluate other opportunities to improve the Keyes Plant's financial performance by adopting new technologies or process changes that further improve energy efficiency, decrease feedstock costs, increase coproduct yields, and create other margin enhancements.
 

California Renewable Natural Gas

Operate Existing Digesters. As of  June 30, 2026, the RNG segment operates twelve anaerobic digesters that produce biogas from manure waste received from fifteen dairies.

Construct New Digesters. We plan to continue to build new dairy digesters that increase cash flow from operations as allowed by capital availability. We have agreements with over fifty dairies and expect the next set of digesters to begin producing biogas in the third quarter of 2026. We are seeking new loans and other forms of financing from a variety of sources to facilitate additional digester construction.

Increase LCFS Credit Revenue. The California Air Resource Board ("CARB") has approved provisional pathways for the RNG produced from seven of our operating dairy digesters. Dairies with approved provisional LCFS pathways generate more LCFS credits than dairies with temporary pathways. We generate LCFS credits under lower temporary pathways at five operating digesters that have applications for provisional pathways pending with CARB. In addition, CARB's amendments to the LCFS regulation that became effective July 1, 2025, are expected to reduce the oversupply of LCFS credits and lead to higher LCFS credit prices in the future.

Monetize Section 45Z PTCs. Our RNG production started earning Section 45Z PTCs effective January 1, 2025. We monetized the 2025 credits in December 2025, and we are planning to continue to monetize 2026 and later credits on a regular basis. The recent federal tax and budget legislation referred to as the "One Big Beautiful Bill" that was enacted in July 2025 contains provisions that are expected to increase our future income from Section 45Z tax credits for RNG production, including an increase in the credit amount earned for each MMBtu of RNG we produce and an extension of the term of the credits to a total of five years.

India Biodiesel

Continue Sales to OMCs. We plan to continue to operate the Kakinada Plant to produce biodiesel and glycerin and to sell the biodiesel to government-owned Oil Marketing Companies ("OMCs") to help them achieve government mandates to increase the percentage of biodiesel used in India as a percentage of total diesel uses.

Expand Operations and Plan for IPO. We have hired a new executive team in India to help develop plans for additional growth of our India business and to execute on a potential initial public offering ("IPO") of stock in our India subsidiary.

Maintain Self-Sustaining Cash Flow. Our India business has been self-sustaining in recent years from a cash and liquidity perspective, and we expect this to continue.

Financing

While we are implementing our plans to improve liquidity, we have been raising cash for operations by selling equity through our at-the-market stock sales program, and we expect to continue to do so. We also plan to seek additional funding for existing and new business opportunities through a combination of working with our senior lender, restructuring or refinancing existing loan agreements, entering into additional debt agreements for specific projects, obtaining project specific equity and debt for development projects, and obtaining additional debt from the current EB-5 Phase II offering.

Summary

Notwithstanding our plans to improve liquidity and the favorable recent events described above, based on the extent of our debt and reliance on our senior secured lender, along with expected near-term shortfalls in cash flow from operations, substantial doubt exists about our ability to continue as a going concern over the next twelve months.