UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of | (I.R.S. Employer |
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(Address of principal executive offices) | (Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
| Trading Symbol |
| Name of Each Exchange on Which Registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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☒ | Smaller reporting company | ||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 6, 2024,
GEVO, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024
TABLE OF CONTENTS
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Condensed Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023 | 3 | |
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5 | ||
6 | ||
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Notes to Condensed Consolidated Financial Statements (unaudited) | 8 | |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 29 | |
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43 | ||
Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities | 44 | |
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2
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements.
GEVO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share and per share amounts)
| Note |
| September 30, 2024 |
| December 31, 2023 | |||
Assets |
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Current assets |
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Cash and cash equivalents |
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Restricted cash |
| 4 |
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Trade accounts receivable, net |
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Inventories |
| 7 |
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Prepaid expenses and other current assets |
| 5 |
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Total current assets |
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Property, plant and equipment, net |
| 8, 20 |
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Restricted cash |
| 4 |
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| — | ||
Operating right-of-use assets |
| 6 |
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Finance right-of-use assets |
| 6 |
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Intangible assets, net |
| 9, 18 |
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Goodwill | 18 | | — | |||||
Deposits and other assets |
| 10 |
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Total assets |
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Liabilities |
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Current liabilities |
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Accounts payable and accrued liabilities |
| 11, 20 | $ | | $ | | ||
Operating lease liabilities |
| 6 |
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Finance lease liabilities |
| 6 |
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Loans payable |
| 12 |
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2021 Bonds payable, net | 12 | — | | |||||
Total current liabilities |
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Remarketed Bonds payable, net |
| 12 |
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| — | ||
Loans payable |
| 12 |
| — |
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Operating lease liabilities |
| 6 |
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Finance lease liabilities |
| 6 |
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Other long-term liabilities | 18 | | — | |||||
Total liabilities |
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Stockholders' Equity |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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| ( |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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| $ | | $ | | ||
See the accompanying Notes to the Condensed Consolidated Financial Statements.
3
GEVO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share and per share amounts)
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||
| Note |
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Total operating revenues |
| 2, 20 | $ | | $ | | $ | | $ | | ||||
Operating expenses: |
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Cost of production |
| 13 |
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Depreciation and amortization |
| 8, 9 |
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Research and development expense |
| 13 |
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General and administrative expense | | | | | ||||||||||
Project development costs |
| 13 |
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Facility idling costs |
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Total operating expenses |
| 13 |
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Loss from operations |
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| ( |
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Other income (expense) |
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Interest expense |
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| ( |
| ( |
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Interest and investment income |
| 4, 16 |
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Other income, net |
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Total other income, net |
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Net loss |
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| $ | ( | $ | ( | $ | ( | $ | ( | ||||
Net loss per share - basic and diluted |
| 3 | ( | ( | ( | ( | ||||||||
Weighted-average number of common shares outstanding - basic and diluted |
| 3 |
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See the accompanying Notes to the Condensed Consolidated Financial Statements.
4
GEVO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited, in thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| Note |
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Net loss |
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| $ | ( | $ | ( | $ | ( | $ | ( | ||||
Other comprehensive income: |
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Unrealized gain on available-for-sale securities |
| — |
| — |
| — |
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Comprehensive loss |
| $ | ( | $ | ( | $ | ( | $ | ( | |||||
See the accompanying Notes to the Condensed Consolidated Financial Statements.
5
GEVO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited, in thousands, except share amounts)
For the Three Months Ended September 30, 2024 and 2023 | |||||||||||||||||||
Common Stock | Accumulated Other | Accumulated | Stockholders’ | ||||||||||||||||
| Note |
| Shares |
| Amount |
| Paid-In Capital |
| Comprehensive Loss |
| Deficit |
| Equity | ||||||
Balance, June 30, 2024 |
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| $ | |
| $ | |
| $ | — |
| $ | ( |
| $ | |
Non-cash stock-based compensation |
| 13 |
| — |
| — |
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| — |
| — |
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Stock-based awards and related share issuances, net |
| 17 |
| ( |
| ( |
| ( |
| — |
| — |
| ( | |||||
Repurchase of common stock |
| 17 |
| ( |
| ( |
| ( |
| — |
| — |
| ( | |||||
Issuance of common stock upon exercise of warrants | 17 | | | | — | — | | ||||||||||||
Net loss |
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| — |
| — |
| — |
| — |
| ( |
| ( | |||||
Balance, September 30, 2024 |
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| | $ | | $ | | $ | — | $ | ( | $ | | |||||
Balance, June 30, 2023 |
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| | $ | | $ | | $ | — |
| $ | ( |
| $ | | |||
Non-cash stock-based compensation |
| 13 |
| — |
| — |
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| — |
| — |
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Stock-based awards and related share issuances, net | 17 | | | ( | — | — | — | ||||||||||||
Net loss |
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| — |
| — |
| — |
| — |
| ( |
| ( | |||||
Balance, September 30, 2023 |
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| | $ | | $ | | $ | — | $ | ( | $ | | |||||
For the Nine Months Ended September 30, 2024 and 2023 | |||||||||||||||||||
Common Stock | Accumulated Other | Accumulated | Stockholders’ | ||||||||||||||||
| Note |
| Shares |
| Amount |
| Paid-In Capital |
| Comprehensive Loss |
| Deficit |
| Equity | ||||||
Balance, December 31, 2023 |
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| $ | |
| $ | |
| $ | — |
| $ | ( |
| $ | |
Non-cash stock-based compensation |
| 13 |
| — |
| — |
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| — |
| — |
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Stock-based awards and related share issuances, net |
| 17 |
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| — |
| — |
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Repurchase of common stock | 17 | ( | ( | ( | — | — | ( | ||||||||||||
Issuance of common stock upon exercise of warrants | 17 | | | | — | — | | ||||||||||||
Net loss |
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| — |
| — |
| — |
| — |
| ( |
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Balance, September 30, 2024 |
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| | $ | | $ | | $ | — | $ | ( | $ | | |||||
Balance, December 31, 2022 |
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| $ | |
| $ | |
| $ | ( |
| $ | ( |
| $ | |
Non-cash stock-based compensation |
| 13 |
| — |
| — |
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| — |
| — |
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Stock-based awards and related share issuances, net | 17 | | | ( | — | — | — | ||||||||||||
Other comprehensive income |
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| — |
| — |
| — |
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| — |
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Net loss |
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| — |
| — |
| — |
| — |
| ( |
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Balance, September 30, 2023 |
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| | $ | | $ | | $ | — | $ | ( | $ | | |||||
See the accompanying Notes to the Condensed Consolidated Financial Statements.
6
GEVO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine Months Ended September 30, | ||||||||
| Note |
| 2024 |
| 2023 | |||
Operating Activities |
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Net loss |
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| $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock-based compensation |
| 13 |
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Depreciation and amortization |
| 8, 9 |
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Amortization of marketable securities discount |
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| — |
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Other noncash expense |
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Changes in operating assets and liabilities, net of effects of acquisition: |
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Accounts receivable |
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| ( | ||
Inventories |
| 7 |
| ( |
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Prepaid expenses and other current assets, deposits and other assets |
| 5, 10 |
| ( |
| ( | ||
Accounts payable, accrued expenses and non-current liabilities |
| 11 |
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Net cash used in operating activities |
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| ( |
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Investing Activities |
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Acquisitions of property, plant and equipment |
| 8, 20 |
| ( |
| ( | ||
Proceeds from sale of investment tax credit | 1 | | — | |||||
Payment of earnest money deposit |
| 10 |
| ( |
| — | ||
Acquisition of CultivateAI, net | 18 | ( | — | |||||
Proceeds from maturity of marketable securities |
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Proceeds from sale of property, plant and equipment | — |
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Net cash (used in) provided by investing activities |
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| ( |
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Financing Activities |
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Proceeds from issuance of Remarketed Bonds |
| 12 |
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Extinguishment of 2021 Bonds |
| 12 |
| ( |
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Payment of debt offering costs |
| 12 |
| ( |
| — | ||
Proceeds from the exercise of warrants |
| 17 |
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| — | ||
Payment of loans payable |
| 12 |
| ( |
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Payment of finance lease liabilities |
| 6 |
| ( |
| ( | ||
Repurchases of common stock | 17 | ( | — | |||||
Net cash used in financing activities |
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| ( |
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Net (decrease) increase in cash and cash equivalents |
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| ( |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period |
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| $ | | $ | | ||
| Nine Months Ended September 30, | |||||
Schedule of cash, cash equivalents and restricted cash | 2024 |
| 2023 | |||
Cash and cash equivalents | $ | | $ | | ||
Restricted cash (current) |
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Restricted cash (non-current) |
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| — | ||
Total cash, cash equivalents and restricted cash | $ | | $ | | ||
| Nine Months Ended September 30, | |||||
Supplemental disclosures of cash and non-cash investing and financing transactions | 2024 |
| 2023 | |||
Cash paid for interest | $ | | $ | | ||
Non-cash purchase of property, plant and equipment | $ | | $ | | ||
Right-of-use asset purchased with financing leases | $ | | $ | — | ||
Right-of-use asset purchased with operating lease | $ | | $ | | ||
See the accompanying Notes to the Condensed Consolidated Financial Statements.
7
1. | Nature of Business, Financial Condition and Basis of Presentation |
Nature of business.
Gevo, Inc. (Nasdaq: GEVO) (“Gevo”, “we”, “us”, “our”, or the “Company,” which, unless otherwise indicated, refers to Gevo, Inc. and its subsidiaries), a Delaware corporation founded in 2005, is a growth-oriented, carbon abatement company with the mission of solving greenhouse gas (“GHG”) emissions for those sectors of the transportation industry that are not amenable to electrification or hydrogen.
The Company is focused on transforming renewable energy into energy-dense liquid drop-in hydrocarbons that can be used as renewable fuels, such as sustainable aviation fuel (“SAF”) and other fuels and chemicals, with the potential to achieve a “net-zero” GHG, or even carbon negative footprint measured by the Argonne National Laboratory’s GREET (Greenhouse gases, Regulated Emissions, and Energy use in Transportation) model (the “GREET Model”) to measure, predict and verify GHG emissions across the life-cycle. Our “net-zero” concept means production of drop-in hydrocarbon fuels by using sustainably grown feedstocks (e.g., low till, no-till and dry corn cultivation) and renewable and substantially decarbonized energy sources, resulting in an expected net-zero carbon footprint from the full life cycle of the fuel measured from the capture of renewable carbon through the burning of the fuel.
Gevo’s primary market focus, given current demand and growing customer interest, is SAF. The Company believes that SAF from carbohydrates to alcohol is the most economically viable approach for carbon abatement. The Company also has commercial opportunities for other renewable hydrocarbon products, such as (i) renewable natural gas, also known as biogas (“RNG”), (ii) hydrocarbons for gasoline blendstocks and diesel fuel, and (iii) plastics, materials and other chemicals. We are engaged in technology, process and intellectual property development targeted to large scale deployment of net-zero hydrocarbon fuels and chemicals. We are developing the marketplace and customers for SAF and other related products. We also are engaged as a developer and enabler/licensor for large scale commercial production, and we expect to be a co-investor on certain projects. Gevo’s business model is that of a developer of projects, licensor, process technology developer, and operator of certain assets in the future.
Net-Zero Projects
In early 2021, we announced our proprietary “Net-Zero Projects” that we are developing and engineering as a series of planned facilities to produce energy dense liquid hydrocarbons using renewable energy and our proprietary technology. Our Net-Zero Projects will convert renewable energy (e.g., photosynthetic, wind, and RNG) from a variety of sources into energy dense liquid hydrocarbons that, when burned in traditional engines, has the potential to achieve net-zero GHG emissions across the whole lifecycle of the liquid fuel: from the way carbon is captured from the atmosphere, processed to make liquid fuel products, and burned as a fuel for planes, cars, trucks, and ships. Gevo owns our Net-Zero plant designs and the overall Gevo Net-Zero process (i.e., the process to enable carbon-negative olefins, and hydrocarbon fuels with an anticipated net-zero or better carbon footprint measured across the lifecycle of the whole processes). The proprietary Gevo Net-Zero processes and plant designs are based upon the conversion of carbohydrates to alcohols, followed by the conversion of the alcohols to olefins (i.e., building blocks for chemicals, plastics, and fuels), and then the conversion of the olefins into fuels, all optimized and integrated to achieve a net-zero carbon footprint. Our partners in developing and executing the Net Zero projects have included Fluid Quip Technologies, LLC, PRAJ Industries Limited (“PRAJ”), Zero6 Clean Energy Assets, Inc. (“Zero6”), McDermott International Ltd., and Fagen, Inc. Gevo owns the overall proprietary plant designs, engineering details, integration technologies, and has filed patents on several process improvements.
Our initial Net-Zero Project, Net-Zero 1 (“NZ1”), is expected to be located in Lake Preston, South Dakota, and is being currently designed to produce approximately
8
We are also developing other commercial production projects for SAF at other locations in the United States where we expect to use our Net-Zero plant designs based on work done for NZ1 at Lake Preston. Gevo expects to play the role of project developer, plant designer, technology licensor, and investor, based on traditional developer business models where the developer gets a partial ownership stake for developing the project. We may also co-invest in projects to increase our equity ownership in those projects.
Renewable Natural Gas Facilities
Gevo’s RNG facilities in Northwest Iowa (“NW Iowa RNG”), recorded in the Renewable Natural Gas segment, produce RNG captured from dairy cow manure supplied by
Luverne Facility
Gevo’s development plant in Luverne, Minnesota (the “Luverne Facility”), recorded in the Agri-Energy segment, is currently being used for market development and customer education, but is not currently operating as a production plant. The Luverne Facility was originally constructed in 1998 and is located on approximately
Red Trail Energy Asset Purchase Agreement
On September 10, 2024, the Company and its wholly owned subsidiaries Richardton CCS, LLC (“R-CCS”), and Net-Zero Richardton, LLC (together with the Company and R-CCS, the “Buyers”) entered into an Asset Purchase Agreement (the “Red Trail Purchase Agreement”) with Red Trail Energy, LLC (“Seller”). Pursuant to the Red Trail Purchase Agreement, and subject to the terms and conditions thereof, Buyers will acquire substantially all of the assets, and assume certain liabilities, of Seller on the terms set forth therein (the “Transaction”). The purchase price is $
In connection with the Red Trail Purchase Agreement, the Company and Seller entered into an escrow agreement pursuant to which the Company (i) has deposited $
9
Basis of presentation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) along with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include the information and footnotes required by GAAP for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company as of, and for the nine months ended, September 30, 2024, and are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included under the heading “Financial Statements and Supplementary Data” in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The financial statements at December 31, 2023, have been derived from the audited financial statements as of that date. For further information, refer to our audited financial statements and notes thereto included for the year ended December 31, 2023 (the “2023 Annual Report”).
Significant Accounting Policies
Governmental Grants
There is no U.S. GAAP that explicitly covers accounting for government "grants" to for-profit entities, with the exception of certain agricultural subsidies. In the absence of authoritative U.S. GAAP guidance, the Company considered the application of other authoritative accounting guidance by analogy and concluded that the guidance outlined in International Accounting Standard 20 – Accounting for Government Grants and Disclosures of Government Assistance (“IAS 20”) was the most appropriate analogy for the purpose of recording and classifying the federal funds received by the Company. Under IAS 20, once it is reasonably assured that the entity will comply with the conditions of the grant, the grant money should be recognized on a systematic basis over the periods in which the entity recognizes the related expenses or losses for which the grant money is intended to compensate.
The Company recognizes grants once both of the following conditions are met: (1) the Company is able to comply with the relevant conditions of the grant and (2) the grant is received. Further, IAS 20 permits for the recognition in earnings either (1) separately under a general heading such as other income, or (2) as a reduction of the related expenses. The Company records such grants either as a reduction of the related expense, a reduction of the cost of the related asset, or as other income depending upon the nature of the grant.
Investment Tax Credit
On August 16, 2022, the Inflation Reduction Act (“IRA’) was signed into law. The IRA includes significant extensions, expansions, and enhancements of numerous energy-related tax credits and also creates new credits in multiple categories. The law provides an election to transfer (i.e., sell) certain credits to another taxpayer in an effort to monetize them. The Company might achieve a better economic benefit by selling the credit in situations where sufficient taxable income is not available to use all or a portion of the income tax credit or in which using such credits might take multiple tax years.
The scope of Accounting Standards Codification (“ASC”) 740: Income Taxes (“ASC 740”) does not directly address how to account for transferable tax credits, however multiple acceptable views to account for transferable credits exists, including accounting for the entire credit outside of income taxes in the Condensed Consolidated Statements of Operations, analogous treatment to governmental grants under IAS 20.
The Company’s capital investment in the RNG project generated a tax credit under Section 48 of the Internal Revenue Code of 1986, as amended (the “IRC”), which provides an energy tax credit for investments in renewable energy property. Our activities in the renewable energy space may continue to generate eligible transferable tax credits in the future that we may seek monetization for. The Company has elected to apply a policy similar to the accounting method described in IAS 20 and recorded the transferable tax credit as a credit against the related asset, thus, reducing the amount of depreciation expense to be recognized over the remaining useful life of the associated asset.
10
On September 18, 2024, we sold approximately $
USDA Grant
In September 2023, we received a grant from the U.S. Department of Agriculture (“USDA”) through its Partnerships for Climate-Smart Commodities grant for Gevo’s Climate-Smart Farm-to-Flight Program (the “USDA Grant”). The USDA Grant was awarded for up to $
During the three and nine months ended September 30, 2024, the Company incurred $
Recently Issued, Not Yet Adopted Accounting Pronouncements
Segment Reporting. In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (ASC 280: Segment Reporting (“ASC 280”)): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 would enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations. The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more useful financial analyses. Currently, ASC 280 requires that a public entity disclose certain information about its reportable segments. For example, a public entity is required to report a measure of segment profit or loss that the CODM uses to assess segment performance and make decisions about allocating resources. ASC 280 also requires other specified segment items and amounts such as depreciation, amortization and depletion expense to be disclosed under certain circumstances. The amendments in ASU 2023-07 do not change or remove those disclosure requirements. The amendments in ASU 2023-07 also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact that ASU 2023-07 may have on its financial statements and related disclosures when adopted.
11
2. | Revenues from Contracts with Customers and Other Revenue |
RNG and Environmental Attribute Revenue
The Company’s revenues are primarily comprised of the sale of RNG and related environmental attributes produced at the NW Iowa RNG facility under long-term contracts with customers. Revenue is recognized at a point in time when the Company transfers the product to its customer. The customer obtains control of the product upon RNG delivery into gas pipeline system, whereas the title and control for the environmental attributes are transferred to the customer subsequent to the issuance of such attributes by the relevant regulatory agency. The Company generally has multiple performance obligations in our arrangements with customers. The Company’s performance obligation related to the sales of RNG and related environmental attributes are satisfied at a point in time upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring its products. There is
Licensing and Development Revenue
The Company’s licensing and development revenue is related to a joint development agreement with LG Chem, Ltd. ("LG Chem") to develop bio-propylene for renewable chemicals using Gevo’s Ethanol-to-Olefins ("ETO") technology. As the contractually promised intellectual properties (“IP”) are not individually distinct, the Company combined each individual IP noted in the contract into a bundle of IP (“IP Rights”) that is distinct and accounted for all of the IP Rights promised in the contract as a single performance obligation. The IP Rights granted were “functional IP rights” that have significant standalone functionality. The Company’s subsequent activities do not substantively change that functionality and do not significantly affect the utility of the IP to which the licensee has rights. The Company has no further obligation with respect to the grant of IP Rights, including no expressed or implied obligation to maintain or upgrade the technology, or provide future support or services. The earnings process is complete when the licensee obtains control of the IP and revenue is recognized upon the achievement of certain project milestones, when collectability is probable and all other revenue recognition criteria have been met.
The Company realized $
Other Hydrocarbon Revenue
The Company recorded limited revenues from its development-scale plant, the Luverne Facility during the three and nine months ended September 30, 2024 and 2023. These revenues were promotional in nature and from customer contracts for ethanol sales and related products and hydrocarbon revenues, which included SAF, isooctene, and isooctane. These products were sold mostly on a free-on-board shipping point basis (recognized at a point in time), were independent transactions, did not provide post-sale support or promises to deliver future goods, and were single performance obligations.
The following table displays the Company’s revenue by major source based on product type (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
Major Goods/Service Line | 2024 |
| 2023 | 2024 |
| 2023 | ||||||
Renewable natural gas | $ | | $ | | $ | | $ | | ||||
Environmental attributes | | | | | ||||||||
Licensing and development revenue |
| — |
| — |
| |
| | ||||
Other hydrocarbon revenue - ethanol, isooctane, IBA | | | | | ||||||||
Total operating revenue | $ | | $ | | $ | | $ | | ||||
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3. | Net Loss per Share |
Basic net loss per share is calculated based on the weighted average number of common shares outstanding for the period. Diluted net loss per share is calculated based on the assumption that stock options and other dilutive securities outstanding, which have an exercise price less than the average market price of the Company’s common shares during the period, would have been exercised on the later of the beginning of the period or the date granted, and that the funds obtained from the exercise were used to purchase common shares at the average market price during the period. None of the Company’s stock options or other dilutive securities are considered to be dilutive in periods with net losses.
The effect of the Company’s dilutive securities is calculated using the treasury stock method and only those instruments that result in a reduction in net income per common share are included in the calculation. Diluted net loss per share excluded common stock equivalents because the effect of their inclusion would be anti-dilutive or would decrease the reported net loss per share. Therefore an insignificant amount of dilutive common stock equivalents have been excluded for each of the three and nine months ended September 30, 2024, and 2023, as the Company is in a net loss position. See Notes 13 and 17 for all outstanding options and warrants that were not included in the computation of diluted weighted average common shares outstanding, as the exercise price of the options and warrants exceeded the average price of the Company’s common stock during the reporting period, and therefore are anti-dilutive.
Basic and diluted net loss per share is calculated as follows (net loss in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2024 |
| 2023 | 2024 |
| 2023 | |||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Basic weighted-average shares outstanding |
| |
| |
| |
| | ||||
Net loss per share - basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||
4. | Restricted Cash |
As of September 30, 2024, current and non-current restricted cash of $
The Company entered into an irrevocable direct pay letter of credit (the “Bond Letter of Credit”) with Citibank N.A (“Citibank”) in April 2021, to support the 2021 Bonds for the development and construction of NW Iowa RNG. See Note 12, Debt, for additional information on the 2021 Bonds. The Bond Letter of Credit has a
In September 2022, the Company entered into a Pledge and Assignment agreement with Citibank to provide credit support in the form of a letter of credit (the “Power Letter of Credit”) from Citibank to a local electric utility company in order to induce the utility company to design and construct the power transmission and distribution facilities that will serve NZ1. The Company deposited $
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In April 2024, the Company entered into an irrevocable direct pay letter of credit (the “New Bond Letter of Credit”) with Citibank to support the Remarketed Bonds (as defined in Note 12, Debt). See Note 12, Debt, for additional information on the Remarketed Bonds. The New Bond Letter of Credit has a
The Company is entitled to receive interest income on the restricted cash, and recorded interest income of $
5. | Prepaid Expenses and Other Current Assets |
The following table sets forth the components of the Company’s prepaid and other current assets (in thousands) as of:
September 30, 2024 |
| December 31, 2023 | ||||
Prepaid insurance | $ | | $ | | ||
Interest receivable |
| |
| | ||
Prepaid feedstock |
| |
| | ||
Other current assets |
| |
| | ||
Total prepaid expenses and other current assets | $ | | $ | | ||
6. | Leases, Right-of-Use Assets and Related Liabilities |
The Company is party to an operating lease for the Company’s office and research facility in Englewood, Colorado, which expires in January 2029, and
The Company has
In August 2024, the Company entered into an amendment that extended the term of an existing agreement to use a third-party processing facility beyond the previous
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The following tables present the (i) other quantitative information and (ii) future minimum payments under non-cancelable financing and operating leases as they relate to the Company’s leases (in thousands, except for weighted averages):
| Nine Months Ended September 30, |
| |||||
2024 |
| 2023 |
| ||||
Other Information |
|
|
|
| |||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
| |||
Operating cash flows from finance leases | $ | | $ | | |||
Operating cash flows from operating leases | $ | | $ | | |||
Finance cash flows from finance leases | $ | | $ | | |||
Right-of-use asset obtained in exchange for new finance lease liabilities | $ | | $ | | |||
Right-of-use asset obtained in exchange for new operating lease liabilities | $ | | $ | | |||
Weighted-average remaining lease term, finance lease (months) |
|
| |||||
Weighted-average remaining lease term, operating leases (months) |
|
| |||||
Weighted-average discount rate - finance leases (1) |
| | % |
| | % | |
Weighted-average discount rate - operating leases (1) |
| | % |
| | % | |
| (1) | When our leases do not provide an implicit interest rate, we calculate the lease liability at lease commencement as the present value of unpaid lease payments using our estimated incremental borrowing rate. The incremental borrowing rate represents the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined using a portfolio approach based on information available at the commencement date of the lease. |
Year Ending December 31, |
| Operating Leases |
| Finance Leases | ||
2024 (remaining) | $ | | $ | | ||
2025 |
| |
| | ||
2026 |
| |
| | ||
2027 |
| |
| | ||
2028 |
| |
| | ||
2029 and thereafter |
| — |
| | ||
Total |
| |
| | ||
Less: amounts representing present value discounts |
| |
| | ||
Total lease liabilities |
| |
| | ||
Less: current portion |
| |
| | ||
Non-current portion | $ | | $ | | ||
7. | Inventories |
The following table sets forth the components of the Company’s inventory balances (in thousands) as of:
September 30, 2024 |
| December 31, 2023 | ||||
Raw materials |
| $ | |
| $ | |
Finished goods |
|
| ||||
Biofuels |
| |
| | ||
Work in process |
|
| ||||
Environmental attributes | | | ||||
Biofuels | | — | ||||
Spare parts |
| |
| | ||
Total inventories | $ | | $ | | ||
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8. | Property, Plant and Equipment |
The following table sets forth the Company’s property, plant and equipment by classification (in thousands) as of:
| September 30, 2024 |
| December 31, 2023 | |||
Land | $ | | $ | | ||
Plant facilities and infrastructure |
| |
| | ||
Machinery and equipment |
| |
| | ||
Furniture and office equipment |
| |
| | ||
Software |
| |
| | ||
Construction in progress |
| |
| | ||
Total property, plant and equipment |
| |
| | ||
Less: accumulated depreciation and amortization |
| ( |
| ( | ||
Property, plant and equipment, net | $ | | $ | | ||
During the three and nine months ended September 30, 2024, the Company recorded depreciation expense of $
Construction in progress includes $