Financial Data and Key Metrics Changes - The company reported a combined revenue and interest income of $9.4 million for Q4 2023, benefiting from higher interest rates [61] - The company ended Q4 2023 with a strong liquidity position of $375.6 million in cash, restricted cash, and other liquid investments [37][61] - The corporate spend for 2023 was $25.5 million, excluding non-cash stock-based compensation, which increased by $2.5 million from 2022 [61] Business Line Data and Key Metrics Changes - The dairy RNG assets in Northwest Iowa sold 90,666 MMBtu of RNG, generating revenue of $4.4 million for the quarter [62] - The company expanded its dairy manure RNG capacity from about 350,000 to 400,000 MMBtu per year, achieving positive standalone non-GAAP cash EBITDA for two consecutive quarters [5][62] - The non-GAAP cash EBITDA from the RNG business could reach $12 million to $16 million annually, with potential upside to $50 million to $60 million if LCFS prices recover [28] Market Data and Key Metrics Changes - The initial target market for the Verity platform in the U.S. is estimated to be between $1.5 billion and $3 billion for carbon intensity reduction tracking [36] - The company is seeing strong support for carbon abatement initiatives, with New Mexico recently signing a clean fuel standard into law [35] Company Strategy and Development Direction - The company is focused on delivering EPC contracts and customer contracts that align with the DOE loan guarantee to begin construction of the Net-Zero 1 project, estimated to take 24 months [34] - The company aims to leverage its knowledge and technology from the Net-Zero 1 project to produce higher value low carbon ethanol and SAF over time [4][27] - The company is committed to integrating field-level measurement and tracking of agricultural practices into the GREET protocol to enhance carbon abatement data [59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market dynamics favoring the reuse of knowledge-based assets developed through the Net-Zero 1 business model [27] - The company is working closely with the DOE to secure a loan guarantee and is optimistic about the progress on federal support for carbon abatement [26][27] - Management highlighted the importance of proving that taxpayers receive value for their money in carbon abatement initiatives, which aligns with the goals of the Verity platform [49] Other Important Information - The company anticipates spending between $236 million and $286 million to achieve FID for the Net-Zero 1 project, with $125 million to $175 million of cash remaining to complete the project [26] - The company is developing additional sites to meet customer demand for carbon abatement beyond the initial production capacity [66] Q&A Session Summary Question: What is the budget for spending to achieve FID for Net-Zero 1? - Management clarified that the budget of $125 million to $175 million is for spending to achieve FID, not time-based [64] Question: What are the operating expenses and flexibility in spending for 2024? - Management indicated that spending will be moderated and that the basic burn rate is estimated to be between $12 million and $15 million, with careful management of expenditures [18][72] Question: What are the latest sentiments around the 45Z and carbon value in the marketplace? - Management noted that there is a positive sentiment regarding 45Z and that there appears to be sufficient carbon value in the marketplace to support various initiatives [49]

Part I [Business and Properties](index=8&type=section&id=Item%201.%20and%202.%20Business%20and%20Properties) Gevo is a carbon abatement company focused on producing energy-dense liquid hydrocarbons, primarily Sustainable Aviation Fuel (SAF), from renewable sources with a goal of achieving a net-zero greenhouse gas footprint - Gevo's mission is to reduce greenhouse gas emissions in transportation sectors by transforming renewable energy into energy-dense liquid hydrocarbons like Sustainable Aviation Fuel (SAF), aiming for a "net-zero" carbon footprint based on the GREET Model[17](index=17&type=chunk)[18](index=18&type=chunk) - The company's primary production strategies are: - **Greenfield Projects:** Developing new "Net-Zero" facilities, starting with Net-Zero 1 (NZ1) in South Dakota, designed to produce ~**65 MGPY** of hydrocarbons, including **60 MGPY** of SAF - **Leveraging Existing Capacity:** Converting existing ethanol plants for SAF production by decarbonizing their energy sources and adding hydrocarbon production capabilities[27](index=27&type=chunk)[30](index=30&type=chunk)[35](index=35&type=chunk) - The Gevo NW Iowa RNG project surpassed its 2023 production target of **310,000 MMBtu** and expanded its annual design capacity to **400,000 MMBtu** The company realized substantial sales from environmental attributes (LCFS credits and RINs) in 2023[39](index=39&type=chunk)[40](index=40&type=chunk) - Gevo launched its Verity Tracking platform in Q2 2023, a blockchain-based system to measure, report, and verify the carbon intensity (CI) of feedstocks and fuels The company has signed joint development agreements with three ethanol producers to implement the technology[53](index=53&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) Employee Headcount and Distribution (as of Dec 31, 2023) | Category | Count | | :--- | :--- | | **Total Employees** | **103** | | Full-time | 101 | | Part-time | 2 | | **By Department** | | | Project Development | 31 | | Research and Development | 16 | | Production | 13 | | General, admin & business dev | 43 | | **By Location** | | | Colorado | 44 | | Other US States | 46 | | Foreign | 3 | [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks, including a history of net losses ($66.2 million in 2023) and the need for substantial additional financing to fund its capital-intensive Net-Zero projects - The company has a history of net losses, incurring **$66.2 million** in 2023 and **$98.0 million** in 2022, with an accumulated deficit of **$721.6 million** as of December 31, 2023 Profitability is not expected in the foreseeable future[99](index=99&type=chunk) - Gevo requires substantial additional financing for its capital-intensive growth strategy, particularly for the development and construction of its Net-Zero Projects Failure to obtain this capital could force delays or termination of these efforts[102](index=102&type=chunk)[107](index=107&type=chunk) - Revenue from existing offtake agreements is subject to significant conditions, primarily the successful financing and construction of production facilities There is no guarantee these conditions will be met or that expected revenues will be realized[110](index=110&type=chunk)[112](index=112&type=chunk) - The business is exposed to market volatility, including fluctuations in the price of corn and other feedstocks, petroleum prices which affect demand for renewable fuels, and the value of carbon credits (e.g., RINs, LCFS credits)[113](index=113&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - On February 29, 2024, Gevo received a notice from Nasdaq for non-compliance with the minimum bid price requirement of **$1.00 per share**, posing a risk of delisting if not rectified within the grace period[189](index=189&type=chunk)[191](index=191&type=chunk) [Unresolved Staff Comments](index=68&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None[216](index=216&type=chunk) [Cybersecurity](index=68&type=section&id=Item%201C.%20Cybersecurity) Gevo maintains an information security program to manage cybersecurity risks, overseen by the Chief People Officer and the Board's Audit Committee - The company has an information security program to identify and manage cybersecurity risks, which includes regular risk assessments and testing[217](index=217&type=chunk)[218](index=218&type=chunk) - Oversight is provided by the Chief People Officer and the Board's Audit Committee, which receives regular reports on cybersecurity matters[220](index=220&type=chunk)[221](index=221&type=chunk) - As of the report date, Gevo has not experienced a cybersecurity threat or incident that resulted in a material adverse impact[219](index=219&type=chunk) [Legal Proceedings](index=68&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any litigation that it believes to be material, nor is it aware of any pending or threatened litigation that could have a material adverse effect on its business - The company is not presently a party to any material litigation[222](index=222&type=chunk) [Mine Safety Disclosures](index=68&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[223](index=223&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=69&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Gevo's common stock is traded on The Nasdaq Capital Market under the symbol "GEVO" and the company does not anticipate paying dividends in the foreseeable future - The company's common stock is listed on The Nasdaq Capital Market under the symbol "GEVO"[225](index=225&type=chunk) - No cash dividends have been paid to date, and none are anticipated in the foreseeable future[226](index=226&type=chunk) - A stock repurchase program of up to **$25 million** was authorized in May 2023, but no shares were repurchased during 2023[228](index=228&type=chunk)[229](index=229&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=71&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, Gevo's revenue increased significantly to **$17.2 million** from **$1.2 million** in 2022, driven primarily by its Renewable Natural Gas (RNG) project which became fully operational Comparison of Operations (Years Ended Dec 31, in thousands) | Account | 2023 | 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $17,200 | $1,175 | $16,025 | 1,364% | | Loss from operations | ($81,835) | ($102,686) | $20,851 | (20)% | | Net loss | ($66,215) | ($98,007) | $31,792 | (32)% | | Net loss per share | ($0.28) | ($0.44) | | | - The **$16.0 million** increase in revenue in 2023 was primarily due to sales of RNG and related environmental attributes from the RNG project, which commenced sales in Q3 2022[269](index=269&type=chunk) - The decrease in net loss was primarily due to the increased revenue and a **$24.7 million** impairment loss on the Luverne Facility recorded in 2022 that did not recur in 2023[277](index=277&type=chunk)[279](index=279&type=chunk) - As of December 31, 2023, the company had **$298.3 million** in cash and cash equivalents and **$77.3 million** in current restricted cash, totaling **$375.6 million**[290](index=290&type=chunk) Cash Flow Summary (Years Ended Dec 31, in thousands) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($53,719) | ($44,311) | | Net cash provided by investing activities | $114,129 | $85,092 | | Net cash (used in) provided by financing activities | ($189) | $138,562 | [Quantitative and Qualitative Disclosures about Market Risk](index=88&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to several market risks, including the pricing of environmental attributes (RINs and LCFS credits), commodity prices (RNG), and interest rates - A hypothetical **10%** decrease in the average realized price per RIN would reduce operating profit by ~**$1.0 million**, and a **10%** decrease per LCFS credit would reduce it by ~**$0.5 million**[307](index=307&type=chunk) - A hypothetical **0.25%** decrease in market interest rates would negatively impact annual interest income by approximately **$2.8 million**[309](index=309&type=chunk) - The company anticipates its interest rate on the 2021 Bonds will increase to **4.5%** upon remarketing in 2024, which would negatively impact annual interest expense by **$2.0 million**[310](index=310&type=chunk) [Financial Statements and Supplementary Data](index=90&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements for the years ended December 31, 2023 and 2022 are presented, with key financial data showing total assets of **$650.3 million** and a net loss of **$66.2 million** for 2023 [Report of Independent Registered Public Accounting Firm](index=91&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor, Grant Thornton LLP, issued an unqualified opinion on the financial statements, identifying the company's assessment of Variable Interest Entities (VIEs) as a critical audit matter - The auditor identified a critical audit matter related to management's assessment of Variable Interest Entities (VIEs), specifically the determination of the primary beneficiary for the Project LLCs (Kingsbury County Wind Fuel, LLC and Dakota Renewable Hydrogen, LLC)[321](index=321&type=chunk)[324](index=324&type=chunk) - The complexity arose from management's judgment in evaluating which party had the power to direct the activities that most significantly affect the VIEs' economic performance, especially after agreements were amended in December 2023, leading to their deconsolidation[324](index=324&type=chunk)[325](index=325&type=chunk) [Consolidated Financial Statements](index=94&type=section&id=Consolidated%20Financial%20Statements) For the year ended December 31, 2023, Gevo reported total assets of **$650.3 million**, a decrease from **$700.7 million** in 2022, with a net loss of **$66.2 million** Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $298,349 | $237,125 | | Total current assets | $386,382 | $415,422 | | Property, plant and equipment, net | $211,563 | $185,174 | | **Total assets** | **$650,322** | **$700,748** | | Total current liabilities | $91,426 | $25,436 | | **Total liabilities** | **$92,933** | **$95,271** | | **Total stockholders' equity** | **$557,389** | **$605,477** | Consolidated Statement of Operations Data (in thousands) | Account | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Total operating revenues | $17,200 | $1,175 | | Loss from operations | ($81,835) | ($102,686) | | **Net loss** | **($66,215)** | **($98,007)** | | Net loss per share | ($0.28) | ($0.44) | [Notes to Consolidated Financial Statements](index=100&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the financial statements, including revenue breakdown, significant commitments, and the deconsolidation of Project LLCs in December 2023 Revenue by Major Source (in thousands) | Major Goods/Service Line | 2023 | 2022 | | :--- | :--- | :--- | | Renewable natural gas commodity | $659 | $640 | | Environmental attribute revenue | $14,798 | $214 | | Licensing and development revenue | $1,300 | $— | | Other hydrocarbon revenue | $443 | $321 | | **Total operating revenue** | **$17,200** | **$1,175** | - In December 2023, the company deconsolidated two Project LLCs (VIEs) with ZEDI after amendments to the agreements resulted in a loss of control This led to the recognition of **$33.6 million** in 'Deposits and other assets' representing the company's maximum exposure to loss[478](index=478&type=chunk)[479](index=479&type=chunk) - As of Dec 31, 2023, the company has significant future commitments totaling **$83.8 million**, including **$43.4 million** related to the Zero6 wind project for NZ1 and **$37.9 million** for RNG fuel supply payments[457](index=457&type=chunk) - The **$68.2 million** 2021 Bonds, used to finance the NW Iowa RNG project, are classified as current liabilities as of Dec 31, 2023, due to a mandatory tender date of April 1, 2024, by which they must be repaid or re-marketed[429](index=429&type=chunk)[433](index=433&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=133&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its accountants on any matter of accounting principles or practices, or financial statement disclosure - None[487](index=487&type=chunk) [Controls and Procedures](index=133&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023, with a previously identified material weakness in VIE accounting fully remediated - Management concluded that disclosure controls and procedures were effective as of December 31, 2023[489](index=489&type=chunk) - A material weakness related to identifying and accounting for Variable Interest Entities (VIEs), identified in Q3 2023, was remediated as of December 31, 2023[490](index=490&type=chunk)[491](index=491&type=chunk) - Remediation efforts included enhancing contract review procedures, performing a comprehensive review of existing agreements, and engaging third-party advisory services[491](index=491&type=chunk) [Other Information](index=134&type=section&id=Item%209B.%20Other%20Information) During the fourth quarter of 2023, CEO Patrick Gruber and Chief Carbon Officer Paul Bloom terminated their Rule 10b5-1 trading arrangements Termination of Rule 10b5-1 Trading Arrangements in Q4 2023 | Name and Title | Action | Date of Termination | | :--- | :--- | :--- | | Patrick Gruber, CEO | Terminate | November 15, 2023 | | Paul Bloom, Chief Carbon Officer | Terminate | December 8, 2023 | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=136&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - None[499](index=499&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=136&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required by this item, including details on directors, executive officers, and corporate governance, is incorporated by reference from the company's definitive proxy statement for the 2024 annual meeting of stockholders - This information is incorporated by reference from the registrant's proxy statement for the 2024 annual meeting of stockholders[501](index=501&type=chunk) [Executive Compensation](index=136&type=section&id=Item%2011.%20Executive%20Compensation) Information required by this item regarding executive compensation is incorporated by reference from the company's definitive proxy statement for the 2024 annual meeting of stockholders - This information is incorporated by reference from the registrant's proxy statement for the 2024 annual meeting of stockholders[503](index=503&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=136&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required by this item concerning security ownership is incorporated by reference from the company's definitive proxy statement for the 2024 annual meeting of stockholders - This information is incorporated by reference from the registrant's proxy statement for the 2024 annual meeting of stockholders[504](index=504&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=136&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required by this item regarding related party transactions and director independence is incorporated by reference from the company's definitive proxy statement for the 2024 annual meeting of stockholders - This information is incorporated by reference from the registrant's proxy statement for the 2024 annual meeting of stockholders[505](index=505&type=chunk) [Principal Accountant Fees and Services](index=136&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required by this item regarding principal accountant fees and services is incorporated by reference from the company's definitive proxy statement for the 2024 annual meeting of stockholders - This information is incorporated by reference from the registrant's proxy statement for the 2024 annual meeting of stockholders[506](index=506&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=137&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements included in the report, notes that all financial statement schedules have been omitted as they are not applicable, and provides a comprehensive list of exhibits filed with the report - This item lists the consolidated financial statements, notes that financial statement schedules are omitted, and provides an index of all exhibits filed with the Form 10-K[509](index=509&type=chunk)[510](index=510&type=chunk)[511](index=511&type=chunk) [Form 10-K Summary](index=145&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that no Form 10-K summary is provided - None[517](index=517&type=chunk)

Wall Street expects a year-over-year increase in earnings on higher revenues when Gevo, Inc. (GEVO) reports results for the quarter ended December 2023. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on March 7. On ...

ENGLEWOOD, Colo., Feb. 26, 2024 (GLOBE NEWSWIRE) -- Gevo, Inc. (NASDAQ:GEVO) is pleased to announce that Damien Perriman has been hired as Chief Business Development Officer to lead the effort to bring in new business in a wider variety of industry sectors and expand the brand footprint for the company. Damien is a highly experienced business executive with proven thought leadership and a track record for establishing partnerships with companies looking to engage with disruptive bio-based technologies. His ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35073 GEVO, INC. (Exact name of registrant as specified in its charter) Delaware 87-0747704 (State or other juris ...

Financial Data and Key Metrics Changes - The company ended Q2 2023 with a strong liquidity position of $426 million in cash, restricted cash, and other liquid investments, with restricted cash totaling $77.8 million related to the Northwest Iowa RNG bonds and Net Zero-1 development [34] - Combined revenue and interest income for Q2 2023 was $9.3 million, with SG&A expenses at $6.7 million, reflecting a $0.2 million decrease from Q1 due to cost control efforts [49] - RNG revenue for the quarter was $2.9 million, achieving positive standalone RNG EBITDA despite a temporary CI score of minus 150 [50] Business Line Data and Key Metrics Changes - The company invested $17.7 million in capital projects during Q2 2023, with $9.8 million allocated to Net Zero-1, $3 million to Northwest Iowa RNG, and $4.9 million to other NZ projects [34] - The Northwest Iowa RNG project achieved an onstream injection of 97% and uptime of 91% in its first year, with plans to expand capacity to 400,000 MMBtus per annum expected to be completed in Q4 [35] - The company signed agreements with additional ethanol partners for its Verity carbon tracking platform, aiming to capture and monetize carbon value [30] Market Data and Key Metrics Changes - The U.S. jet fuel demand is approximately 20 billion gallons per year, with nearly 200 ethanol plants having a collective capacity of about 17 billion gallons per year, presenting significant opportunities for the company [16] - The company is exploring the potential of the plastics and chemicals market, which exceeds 400 million tons and hundreds of billions of dollars, leveraging proprietary technology to produce olefins [18] Company Strategy and Development Direction - The company aims to optimize capital use by taking on roles as a developer, licensor, and co-investor in projects, focusing on generating higher returns and cash flow [10][25] - The strategy includes licensing plant designs to other developers and pursuing partnerships to expand its market presence in sustainable aviation fuel (SAF) and low-carbon products [14][17] - The company is also focused on developing proprietary technologies, such as ETO, to reduce capital and operating costs in converting ethanol to olefins and SAF [20][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a pathway to positive cash flow, with multiple avenues to become EBITDA positive in the near future, including RNG, specialty chemicals, and fuels [40] - The company is closely monitoring regulatory developments, particularly regarding the 45Z rule-making, which is expected to provide clarity on carbon credits and economic returns [79][97] - Management emphasized the importance of partnerships with airlines and other stakeholders to navigate potential economic challenges and ensure project success [41] Other Important Information - The company is in the term sheet phase for a DOE loan guarantee of up to $950 million for the Net Zero-1 project, which is a significant milestone for financing [42] - The company has received payments related to its ETO technology and expects additional payments as commercialization progresses [73] Q&A Session Summary Question: Clarification on RNG revenues - The $2.9 million RNG revenue includes the LCFS at a score of minus 150 [53][54] Question: Additional steps needed to reach 400,000 MMBtu capacity - The additional steps are minor and involve optimization work, with some costs potentially covered by the IRA bill [55] Question: EPC process and DOE loan finalization - The EPC pricing must be finalized to complete the DOE loan, with McDermott being the preferred contractor [78] Question: Variance in expected CI pathways for RNG - The variance is due to the company's advanced instrumentation and operational discipline in managing the RNG project [90] Question: Licensing and development business model returns - The returns will likely be linked to carbon value, with a focus on specialty products and government support [94] Question: Timing on 45Z rule-making - The 45Z rule-making is expected to occur in late fall, with potential impacts on the company's operations [97]

Project Development - Gevo's initial Net-Zero Project (NZ1) is designed to produce approximately 65 million gallons per year (MGPY) of total hydrocarbon volumes, including 60 MGPY of sustainable aviation fuel (SAF) to fulfill part of its 400 MGPY supply agreements [128]. - The installed cost for NZ1 is forecasted to be approximately $850 million, excluding certain contingencies and financing costs [131]. - The U.S. Department of Energy (DOE) has been approached for a loan guarantee to finance NZ1, which is expected to offer the lowest cost of debt for the project [131]. - Gevo is exploring financing options for NZ1, including a DOE-guaranteed loan, which is anticipated to reduce the overall equity required and enhance project returns for investors [133]. - The company is evaluating several sites in the U.S. for its second Net-Zero Project (NZ2), focusing on existing ethanol plants for decarbonization opportunities [135]. - Gevo's NZ1 project is expected to produce approximately 1,390 million pounds per year of high-value protein products and over 34 million pounds per year of corn oil as co-products [128]. - The NZ1 project is forecasted to have an installed cost of approximately $850 million, with efforts to reduce projected spending by $100 million to $200 million [193]. - The company expects to finance the construction of NZ1 using third-party capital while retaining a carried equity interest in the project [196]. Sustainable Aviation Fuel (SAF) - Gevo's SAF production process utilizes carbohydrates as feedstock, which are renewable and derived from photosynthesis, aiming for a net-zero carbon intensity across the product lifecycle [125]. - The International Air Transport Association (IATA) predicts that SAF is crucial for achieving net-zero carbon emissions in the aviation sector by 2050, with a target of supplying at least 3 billion gallons of SAF per year by 2030 [124]. - Delta Air Lines has committed to investing $1 billion through 2030 to mitigate emissions, highlighting the growing corporate interest in sustainable aviation fuel [124]. Financial Performance - Total revenues for the second quarter of 2023 were $2,917,000, a decrease of $746,000 compared to the first quarter of 2023 [154]. - Total revenues for the six months ended June 30, 2023, were $6,580,000, a significant increase of 670% compared to $854,000 in the same period of 2022 [157]. - Total operating revenues for the three months ended June 30, 2023, reached $4,238,000, a 4,662% increase from $89,000 in the same period of 2022 [160]. - Gevo reported a net loss of $32,038,000 for the six months ended June 30, 2023, compared to a net loss of $28,834,000 in 2022, reflecting an 11% increase in losses [171]. - General and administrative expenses rose by 18% to $21,369,000 for the six months ended June 30, 2023, compared to $18,061,000 in 2022 [171]. - Project development costs increased by 75% to $5,846,000 for the six months ended June 30, 2023, compared to $3,332,000 in 2022 [171]. - Depreciation and amortization expenses surged by 220% to $9,329,000 for the six months ended June 30, 2023, compared to $2,916,000 in 2022 [171]. - Interest expense increased by $1.1 million for the six months ended June 30, 2023, compared to the same period in 2022, primarily due to interest on the 2021 Bonds [181]. - Interest and investment income rose by $8.5 million during the six months ended June 30, 2023, attributed to higher interest rates on cash equivalent investments [182]. - Net cash used in operating activities was $29.4 million for the six months ended June 30, 2023, compared to $17.2 million for the same period in 2022 [191]. - Cash provided by investing activities was $139.5 million for the six months ended June 30, 2023, with $168.6 million from sales and maturities of marketable securities [192]. - Other income decreased by $2.9 million for the six months ended June 30, 2023, primarily due to a one-time receipt from the USDA in 2022 [183]. Renewable Natural Gas (RNG) - Gevo expects to produce approximately 300,000 MMBtu of RNG in 2023, with plans to increase production from 355,000 MMBtu to 400,000 MMBtu by the end of 2023 [138]. - RNG production volumes increased by 22% from 64 MMBtu in Q1 2023 to 78 MMBtu in Q2 2023 [154]. - Natural gas environmental attributes from RINs generated $4,544,000 in revenue, up 2,023% from $214,000 in 2022 [157]. - RNG production volumes increased by 14% to 142 MMBtu for the six months ended June 30, 2023, compared to 125 MMBtu in 2022 [157]. - Gevo's RNG project in Iowa was financed with $68,155,000 of Solid Waste Facility Revenue Bonds issued in April 2021 [137]. - The company aims to leverage its competitive advantage in the RNG industry to identify and execute new project opportunities [140]. Technology and Innovation - Gevo entered into a joint development framework agreement with Southwest Iowa Renewable Energy in March 2023 to implement Verity technology for carbon inset credits [143]. - The company launched the Verity Tracking Grower System Platform in Q2 2023, allowing farmers to view carbon intensity scores at both farm and field levels [145].

Gevo, Inc. (NASDAQ:GEVO) Q1 2023 Results Earnings Conference Call May 10, 2023 4:30 PM ET Company Participants John Richardson - Director of Investor Relations Patrick Gruber - Chief Executive Officer Lynn Smull - Chief Financial Officer Conference Call Participants Dushyant Ailani - Jefferies Derrick Whitfield - Stifel Amit Dayal - H.C. Wainwright & Co., LLC Operator Good day and thank you for standing by. Welcome to the Gevo Incorporated Q1 2023 Earnings Conference Call. At this time, all participants are ...

Net-Zero Projects - Gevo's initial Net-Zero Project (NZ1) is designed to produce approximately 65 million gallons per year of total hydrocarbon volumes, including 60 million gallons of sustainable aviation fuel (SAF) [136] - The installed cost for NZ1 is currently forecasted to be approximately $850 million, excluding certain contingencies and financing costs [138] - Gevo expects to finance NZ1 using a combination of its own capital and third-party capital, retaining a carried equity interest in the project [139] - The U.S. Department of Energy (DOE) loan application process for NZ1 is expected to carry into 2024, with the plant start-up date projected to occur 24 to 30 months after financing closes [140] - Gevo is evaluating several sites for its second Net-Zero Project (NZ2), focusing on existing ethanol plants for decarbonization opportunities [142] - The NZ1 project is forecasted to have an installed cost of approximately $850 million, with efforts underway to reduce projected spending prior to financial close from $100 million to $200 million [178][179] - The company allocated approximately $25 million for the development of its next Net-Zero Project, with $11 million spent to date and the remaining $14 million expected to be spent in the next four to six months [180] Renewable Natural Gas (RNG) Initiatives - Gevo's RNG project in Iowa, developed to generate renewable natural gas from dairy cow manure, was financed with $68.16 million in Solid Waste Facility Revenue Bonds [145] - Gevo RNG project aims to produce approximately 400,000 MMBtu of RNG per year, with expected production levels for 2023 around 275,000-300,000 MMBtu [146] - Environmental attribute sales from RNG amounted to $3.5 million in Q1 2023, contributing to total revenues [158] Financial Performance - Total operating revenues for Q1 2023 reached $4.06 million, a significant increase of 1,650% compared to $232,000 in Q1 2022 [158] - RIN generation in Q1 2023 was 1,356, representing a 1,256% increase from 100 in Q1 2022 [155] - Average realized RIN price in Q1 2023 was $2.01, a decrease of 6% from $2.13 in Q4 2022 [155] - Operating expenses for Q1 2023 totaled $24.92 million, up from $16.19 million in Q1 2022, primarily due to increased production costs [158] - General and administrative expenses increased by $1.4 million to $X million for the three months ended March 31, 2023, primarily due to personnel costs related to strategic projects [162] - Project development costs rose by $1.9 million to $X million during the same period, driven by increased personnel and consulting expenses [163] - Loss from operations increased by $4.9 million to $X million for the three months ended March 31, 2023, attributed to heightened activities for Net-Zero Projects [165] - Investment income increased by $2.8 million to $X million, primarily due to higher interest earned on cash equivalent investments [167] - Cash and cash equivalents totaled $342.3 million, with total liquidity (including restricted cash and marketable securities) amounting to $452.9 million as of March 31, 2023 [171] - Net cash used in operating activities was $19.4 million for the three months ended March 31, 2023, compared to $12.5 million in the prior year [176] - Net cash provided by investing activities was $124.2 million, primarily from sales and maturities of marketable securities [177] Strategic Partnerships and Agreements - Gevo entered into a Side Agreement with Axens, potentially generating milestone payments of $50 million and royalty payments of at least $75 million [153] - A joint development agreement with LG Chem aims to develop bio-propylene, with LG Chem covering scale-up costs and making payments totaling $2.5 million [154] - The U.S. Department of Agriculture selected Gevo's Climate-Smart Farm to Flight proposal for funding, with a ceiling of up to $30 million [154] Industry Context and Demand - The global fuel consumption by commercial airlines has ranged from 52 billion gallons to 60 billion gallons in recent years, indicating strong demand for SAF [130] - The Biden administration aims to supply at least 3 billion gallons of SAF per year by 2030, with a long-term goal of meeting 100% of aviation fuel demand by 2050 [132] - Delta Air Lines has committed to investing $1 billion through 2030 to mitigate emissions, highlighting the industry's focus on sustainability [132] - Gevo's SAF production process utilizes carbohydrates as feedstock, which are renewable and derived from photosynthesis, aiming for a net-zero carbon intensity across the product lifecycle [133] Facility Operations - Gevo's Luverne Facility transitioned to care and maintenance in 2022, focusing resources on Net Zero Projects and RNG initiatives [152]

Financial Data and Key Metrics Changes - The company reported long-term debt outstanding of $67 million related to the Northwest Iowa RNG project [9] - The corporate spend for SG&A was approximately $7.3 million for the quarter, net of non-cash stock-based compensation of $3.4 million [9] - The company expects revenue from the RNG project to be about $13 million in 2023 based on production of approximately 360,000 million BTUs [99] Business Line Data and Key Metrics Changes - The Northwest Iowa RNG project has been operational since Q3 2022, achieving greater than design raw gas production by late Q4 2022 [14] - The capacity of the Northwest Iowa RNG project is being expanded to 400,000 million BTUs per year, up from 355,000 million BTUs, with completion expected by Q3 2023 [14] - The company invested $15.6 million in capital projects during Q4 2022, with allocations of $8.6 million to Net-Zero 1, $5.3 million to Net-Zero 2, and $1.7 million to the Northwest Iowa RNG project [40] Market Data and Key Metrics Changes - The company is working with Guggenheim and Citigroup on equity financing, and Nomura Greentech and Citigroup on debt financing, finding strong interest from potential investors [89] - The company expects to see cash flow much sooner than the operation date of NZ1 due to ongoing development and investment in projects [91] Company Strategy and Development Direction - The company plans to use its balance sheet to execute remaining detailed engineering purchases and enter into construction contracts for the NZ1 project [15] - The company is developing a new business line called Verity Carbon Solutions, which includes a proprietary digital MRV platform to track and monetize carbon intensity reductions [39] - The company aims to recycle capital from project-to-project, indicating a strategy focused on sustainable growth and development across multiple projects [91] Management's Comments on Operating Environment and Future Outlook - Management emphasized that the expectation of waiting until 2026 for cash flow from NZ1 is a misconception, as they plan to grow the R&D business to generate cash sooner [18] - The company is optimistic about the support from the Department of Energy for loan guarantees, which could provide lower-cost debt for projects [16] - Management noted that the EPC contracts are not on the critical path for the commercial operation date, allowing for parallel progress on financing and construction [100] Other Important Information - The company has engaged with investors and is in the due diligence phase for potential equity and debt partners [89] - The company has already received RIN approval from the EPA and is awaiting final pathway approval for LCFS credits [14] Q&A Session Summary Question: What is the overall CapEx budget for NZ1? - Management indicated that the expected spending for NZ1 over the next 12 months will be between $100 million and $200 million, depending on the EPC contracting process [23] Question: How does the company view the SAF Tax Credit in Illinois? - Management expressed optimism about the cooperation from airlines regarding the SAF Tax Credit, highlighting the importance of SAF in large scale [48] Question: What is the path forward for the RNG business? - Management stated that RNG is crucial for displacing fossil-based natural gas and will continue to be involved in other RNG projects [50][51] Question: What are the financing options being considered? - Management discussed the potential for both equity and debt financing, emphasizing the importance of securing favorable terms [58][91] Question: How is the Verity Tracking solution being developed? - Management confirmed that the Verity Tracking solution is in the final stages of development and is expected to attract a variety of customers [63][64]