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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, 2022
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)
Delaware87-0747704
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
345 Inverness Drive South,
Building C, Suite 310
Englewood, CO
80112
(Address of principal executive offices)(Zip Code)
(303) 858-8358
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $0.01 per shareGEVOThe Nasdaq Stock Market LLC
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. Yes ☒ No ☐
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). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer☐Accelerated filer☐
    
Non-accelerated filer☒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 ☐ No ☒
As of November 7, 2022, 237,221,732 shares of the registrant’s common stock were outstanding.

GEVO, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022
TABLE OF CONTENTS
  Page
   
 
 
 
 
 
 
   
   
   
   
 
2

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements.
GEVO, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share and per share amounts)

 NoteAs of September 30, 2022As of December 31, 2021
Assets  
Current assets  
Cash and cash equivalents$200,564 $40,833 
Marketable securities (current)5222,012 275,340 
Restricted cash (current)61,024 25,032 
Accounts receivable, net352 978 
Inventories94,135 2,751 
Prepaid expenses and other current assets73,635 3,607 
Total current assets431,722 348,541 
Property, plant and equipment, net10166,004 139,141 
Marketable securities (long-term)5— 64,396 
Restricted cash (long-term)676,842 70,168 
Operating right-of-use assets81,671 2,414 
Finance right-of-use assets827,012 27,297 
Intangible assets, net117,995 8,938 
Deposits and other assets1218,165 5,581 
Total assets$729,411 $666,476 
Liabilities
Current liabilities
Accounts payable and accrued liabilities13$14,916 $28,288 
Operating lease liabilities (current)8430 772 
Finance lease liabilities (current)82,125 3,413 
Loans payable - other (current)14158 158 
Total current liabilities17,629 32,631 
2021 Bonds payable (long-term)1467,038 66,486 
Loans payable - other (long-term)14199 318 
Operating lease liabilities (long-term)81,734 1,902 
Finance lease liabilities (long-term)816,349 17,797 
Other long-term liabilities1,520 87 
Total liabilities104,469 119,221 
Stockholders' Equity
Common stock, $0.01 par value per share; 500,000,000 and 250,000,000 shares authorized at September 30, 2022, and December 31, 2021, respectively; 237,221,732 and 201,988,662 shares issued and outstanding at September 30, 2022, and December 31, 2021, respectively.
2,372 2,020 
Additional paid-in capital1,254,733 1,103,224 
Accumulated other comprehensive loss(2,168)(614)
Accumulated deficit(629,995)(557,375)
Total stockholders' equity624,942 547,255 
Total liabilities and stockholders' equity$729,411 $666,476 

See the accompanying Notes to the Consolidated Financial Statements.
3
GEVO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share and per share amounts)

 NoteThree Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Revenue and cost of goods sold  
Ethanol sales and related products, net2$— $16 $240 $16 
Hydrocarbon revenue2— 104 81 463 
Renewable natural gas commodity2309 — 309 — 
Total revenues2, 20309 120 630 479 
Cost of production15318 2,378 5,242 4,896 
Idle facility costs2,330 — 2,330 — 
Depreciation and amortization10, 111,250 1,104 3,429 3,374 
Total cost of goods sold3,898 3,482 11,001 8,270 
Gross loss(3,589)(3,362)(10,371)(7,791)
Operating expenses
Research and development expense151,562 1,495 4,720 4,205 
Selling, general and administrative expense1511,144 9,287 29,205 17,947 
Preliminary stage project costs15915 313 1,736 8,512 
Other operations151,303 — 3,814 — 
Impairment loss324,749 — 24,749 — 
Loss on disposal of assets— 183 — 5,137 
Depreciation and amortization10, 11407 94 1,144 198 
Total operating expenses40,080 11,372 65,368 35,999 
Loss from operations20(43,669)(14,734)(75,739)(43,790)
Other income (expense)
Gain (loss) from change in fair value of derivative warrant liability— 6 16 (4)
Interest expense(712)(67)(716)(78)
Investment income (loss)5874 233 1,204 354 
Gain on forgiveness of SBA loan— — — 641 
Other income (expense), net(279)182 2,615 187 
Total other income (expense), net(117)354 3,119 1,100 
Net loss$(43,786)$(14,380)$(72,620)$(42,690)
Net loss per share - basic and diluted4$(0.19)$(0.07)$(0.34)$(0.22)
Weighted-average number of common shares outstanding - basic and diluted4236,649,805 199,341,519 216,255,710 193,739,605 

See the accompanying Notes to the Consolidated Financial Statements.
4
GEVO, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited, in thousands)
 NoteThree Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Net loss$(43,786)$(14,380)$(72,620)$(42,690)
Other comprehensive income (loss)
Unrealized gain (loss) on available-for-sale securities588 11 (1,554)(296)
Comprehensive loss$(43,698)$(14,369)$(74,174)$(42,986)

See the accompanying Notes to the Consolidated Financial Statements.
5
GEVO, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited, in thousands, except share amounts)
For the three months ended September 30, 2022 and 2021
Common StockPaid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitStockholders’ Equity
NoteSharesAmount
June 30, 2022235,165,951 $2,353 $1,249,880 $(2,256)$(586,209)$663,768 
Non-cash stock-based compensation15 — — 4,361 — — 4,361 
Issuance of common stock under stock plans, net of taxes19 2,055,781 19 492 — — 511 
Other comprehensive loss— — — 88 — 88 
Net loss— — — — (43,786)(43,786)
September 30, 2022237,221,732 $2,372 $1,254,733 $(2,168)$(629,995)$624,942 
June 30, 2021197,964,476 $1,980 $1,100,932 $(307)$(526,482)$576,123 
Issuance of common stock and common stock warrants, net of issuance costs19 — — (162)— — (162)
Non-cash stock-based compensation15 — — 1,880 — — 1,880 
Issuance of common stock under stock plans, net of taxes19 3,915,502 39 (3,711)— — (3,672)
Other comprehensive loss— — — 11 — 11 
Net loss— — — — (14,380)(14,380)
September 30, 2021201,879,978 $2,019 $1,098,939 $(296)$(540,862)$559,800 

See the accompanying Notes to the Consolidated Financial Statements.
6
GEVO, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited, in thousands, except share amounts)
For the nine months ended September 30, 2022 and 2021
Common StockPaid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitStockholders’ Equity
NoteSharesAmount
December 31, 2021201,988,662 $2,020 $1,103,224 $(614)$(557,375)$547,255 
Issuance of common stock and common stock warrants, net of issuance costs19 33,333,336 333 138,675 — — 139,008 
Issuance of common stock upon exercise of warrants19 4,677 — 3 — — 3 
Non-cash stock-based compensation15 — — 12,625 — — 12,625 
Issuance of common stock under stock plans, net of taxes19 1,895,057 19 206 — — 225 
Other comprehensive loss— — — (1,554)— (1,554)
Net loss— — — — (72,620)(72,620)
September 30, 2022237,221,732 $2,372 $1,254,733 $(2,168)$(629,995)$624,942 
December 31, 2020128,138,311 $1,282 $643,269 $— $(498,172)$146,379 
Issuance of common stock, net of issuance costs19 68,170,579 682 456,801 — — 457,483 
Issuance of common stock upon exercise of warrants19 1,866,758 18 1,103 — — 1,121 
Non-cash stock-based compensation15 — — 3,300 — — 3,300 
Issuance of common stock under stock plans, net of taxes19 3,704,330 37 (5,534)— — (5,497)
Other comprehensive loss— — — (296)— (296)
Net loss— — — — (42,690)(42,690)
September 30, 2021201,879,978 $2,019 $1,098,939 $(296)$(540,862)$559,800 

See the accompanying Notes to the Consolidated Financial Statements.
7
GEVO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 NoteNine Months Ended September 30,
 20222021
Operating Activities
Net loss$(72,620)$(42,690)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment loss324,749 — 
Loss on disposal of assets— 5,137 
(Gain) on forgiveness of SBA Loans— (641)
Stock-based compensation1512,624 5,823 
Depreciation and amortization10, 114,452 3,572 
Amortization of marketable securities premium2,755 — 
Other noncash (income) expense(153)77 
Changes in operating assets and liabilities:
Accounts receivable626 14 
Inventories9(338)150 
Prepaid expenses and other current assets, deposits and other assets7, 12(8,445)(4,459)
Accounts payable, accrued expenses and long-term liabilities13, 14(420)4,324 
Net cash used in operating activities(36,770)(28,693)
Investing Activities
Acquisitions of property, plant and equipment10(68,535)(30,955)
Acquisition of patent portfolio11(10)— 
Proceeds from sale and maturity of marketable securities5243,817 34,332 
Purchase of patents and license— (9,000)
Purchase of marketable securities5(130,402)(422,362)
Net cash provided by (used in) investing activities44,870 (427,985)
Financing Activities
Proceeds from issuance of 2021 Bonds14— 68,995 
Debt and equity offering costs19(10,993)(34,919)
Proceeds from issuance of common stock and common stock warrants19150,000 487,549 
Proceeds from exercise of warrants193 1,119 
Net settlement of common stock under stock plans15(285)(5,137)
Payment of loans payable - other14(112)(98)
Payment of finance lease liabilities8(4,316)(2,996)
Net cash provided by financing activities134,297 514,513 
Net increase (decrease) in cash and cash equivalents142,397 57,835 
Cash, cash equivalents and restricted cash at beginning of period136,033 78,338 
Cash, cash equivalents and restricted cash at end of period$278,430 $136,173 

Nine Months Ended September 30,
Schedule of cash, cash equivalents and restricted cash20222021
Cash and cash equivalents$200,564 $16,201 
Restricted cash (current)1,024 49,804 
Long-term restricted cash76,842 70,168 
Total cash, cash equivalents and restricted cash$278,430 $136,173 

See the accompanying Notes to the Consolidated Financial Statements.
8
GEVO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine Months Ended September 30,
Supplemental disclosures of cash and non-cash investing and financing transactions20222021
Cash paid for interest, net of amounts capitalized$770 $11 
Non-cash purchase of property, plant and equipment$11,136 $12,164 
Right-of-use asset purchased with financing leases$834 $28,416 
Right-of-use asset purchased with operating lease$— $1,611 

See the accompanying Notes to the Consolidated Financial Statements.
9
GEVO, INC.
Notes to Consolidated Financial Statements
(unaudited)

1.Nature of Business, Financial Condition and Basis of Presentation

Nature of business. Gevo, Inc. (Nasdaq: GEVO) ("Gevo" or the "Company," which, unless otherwise indicated, refers to Gevo, Inc. and its subsidiaries), a Delaware corporation founded in 2005, is a growth-oriented company with the mission of solving greenhouse gas 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” greenhouse gas ("GHG") footprint. The Company uses 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 of its products. The “net-zero” concept means Gevo expects that by using sustainably grown feedstock (i.e., low till, no-till and dry corn cultivation), renewable and substantially decarbonized energy sources, drop-in hydrocarbon fuels can be produced that have a net-zero, full life cycle footprint 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 it also has commercial opportunities for other renewable hydrocarbon products, such as (i) hydrocarbons for gasoline blendstocks and diesel fuel, (ii) plastics, materials and other chemicals, and (iii) renewable natural gas (“RNG”).

Net-Zero Projects

In early 2021, we announced the concept of “Net-Zero Projects” as a series of planned facilities to produce energy dense liquid hydrocarbons using renewable energy and our proprietary technology. The concept of a Net-Zero Project is to convert renewable energy (e.g., photosynthetic, wind, RNG, biogas) from a variety of sources into energy dense liquid hydrocarbons that, when burned in traditional engines, have 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 burnt as a fuel for cars, planes, trucks and ships.

Our initial Net-Zero Project, Net-Zero 1 (“NZ1"), is located in Lake Preston, South Dakota, and is being currently designed to produce approximately 62 million gallons per year ("MGPY") of total hydrocarbon volumes, including 55 MGPY of SAF. Along with the hydrocarbons, NZ1 is being currently designed to produce approximately 475 million pounds per year of high-value protein products for use in the food chain and more than 30 million pounds per year of corn oil. Our products will be produced in three steps; the first step is milling the corn and the production of protein, oil, and carbohydrates, the second step produces alcohols using fermentation and the third step is the conversion of the alcohols into hydrocarbons.

Renewable Natural Gas Projects

Gevo's RNG project in Northwest Iowa ("NW Iowa RNG") is owned by Gevo NW Iowa RNG, LLC, and produces RNG captured from dairy cow manure. The manure is supplied by three local dairies that have over 20,000 milking cows in total with additional milking cows expected pursuant to agreements executed during the second quarter of 2022. Animal manure can be digested anaerobically to produce biogas, which is then upgraded to pipeline quality gas referred to as RNG. Gevo NW Iowa RNG, LLC sells the produced RNG to the California market through an agreement with BP Canada Energy Marketing Corp. and BP Products North America Inc. (collectively, "BP").

Luverne Facility

Gevo's development plant in Luverne, Minnesota (the "Luverne Facility") was originally constructed in 1998 and is located on approximately 55 acres of land, which contains approximately 50,000 square feet of building space. Gevo may use the Luverne Facility in the future to prove our processes, process concepts, unit operations and for other purposes in order to optimize feedstocks and the processes used for producing hydrocarbons from alcohols. Currently, the activities at the Luverne Facility are minimized to care and maintenance, as the Company has shifted focus to the Net-Zero Projects.

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
10
GEVO, INC.
Notes to Consolidated Financial Statements
(unaudited)
Article 10 of Regulation S-X assuming the Company will continue as a going concern. Accordingly, they do not include all 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, 2022, 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, 2021. The financial statements at December 31, 2021, 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, 2021 (the "2021 Annual Report").

Environmental Attribute Inventory. The Company generates D3 RINs Renewable Identification Numbers ("RINs") and Low Carbon Fuel Standard ("LCFS") credits (collectively, "environmental attributes") through the production of RNG used for transportation purposes as prescribed under the Renewable Fuels Standard program ("RFS"). The Company considers environmental attributes to be a distinguishable product that is generated as an integral component of the production process of RNG as the environmental attributes that are generated can be separated from the underlying commodity and may be sold independently from the RNG produced. As such, the Company considers environmental attributes to be a co-product of the production of RNG and accordingly allocates the costs of production based on the relative sales value of all revenue items for the NW Iowa RNG operations. Revenue is recognized on these environmental attributes when there is an agreement in place to monetize the credits at an agreed upon price with a customer based upon defined third party market prices and a transfer of control has occurred.

Reclassifications. The Company reclassified certain prior period amounts to conform to the current period presentation. The reclassifications included the categorization of depreciation and amortization on the Consolidated Statements of Operations and had no impact on total revenues, total cost of goods sold, total operating expenses, net loss or stockholders' equity for any period.

2.Revenues from Contracts with Customers and Other Revenues

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 as the customer obtains control of the product upon delivery. The Company generally has a single performance obligation 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 no variable consideration present in the Company’s performance obligations. Consideration for each transaction is based upon quoted market prices at the time of delivery. The Company recognized $0.3 million of revenue from the sale of RNG during each of the three and nine months ended September 30, 2022, and recognized no revenue from the sale of environmental attributes during each of the three and nine months ended September 30, 2022, due to the timing of governmental approval for the issuance of such environmental attributes.

The Company recorded limited revenues from its development-scale plant, the Luverne Facility, during the three and nine months ended September 30, 2022, and 2021. 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.

3.Asset Impairment

During the three and nine months ended September 30, 2022, the Company recorded a $24.7 million impairment loss on long-lived assets, to reduce the carrying value of certain property, plant, and equipment, and a leased right of use ("ROU") asset, at the Agri-Energy, LLC ("Agri-Energy") segment to its fair value. The impairments recorded to date relate to the determination to suspend production at the Luverne Facility and shift the plant into an idled, care and maintenance
11
GEVO, INC.
Notes to Consolidated Financial Statements
(unaudited)
status during the three months ended September 30, 2022. As a result of this change in use, combined with a sustained history of operating losses, the Company assessed that indicators of impairment were present for long-lived assets within its Agri-Energy reporting segment. The Company therefore performed impairment testing and determined that, as of September 30, 2022, the carrying amounts of certain property plant and equipment, and the leased ROU asset exceeded estimated fair values. The Company estimated the fair value of these asset groups generally using a cost approach which is based on replacement or reproduction costs of the assets and is considered a Level 2 measurement and recorded a corresponding impairment loss under Operating Expenses within the Consolidated Statements of Operations.

4.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, the following number of potentially dilutive common stock equivalents have been excluded 1,193,436 and 1,716,010 for the three and nine months ended September 30, 2022, respectively, and 4,835,752 and 4,835,752, for the three and nine months ended September 30, 2021, respectively.

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,
2022202120222021
Net loss$(43,786)$(14,380)$(72,620)$(42,690)
Basic weighted-average shares outstanding236,649,805 199,341,519 216,255,710 193,739,605 
Net loss per share - basic and diluted$(0.19)$(0.07)$(0.34)$(0.22)

The impact of the one-time impairment charge of $24.7 million, discussed in Note 3 above, was $0.10 and $0.11 of basic and diluted impairment loss per share for the three and nine months ended September 30, 2022, respectively.

5.Marketable Securities

The Company's investments in marketable securities are stated at fair value and are available-for-sale. The following table summarizes the Company's investments in marketable securities (in thousands) as of:

September 30, 2022
MaturityAmortized Cost BasisGross Unrealized LossesFair Value
Short-term marketable securities
U.S. Treasury notesWithin one year$109,327 $(729)$108,598 
U.S. Government-sponsored enterprise securitiesWithin one year114,853 (1,439)113,414 
Total short-term marketable securities$224,180 $(2,168)$222,012 

12
GEVO, INC.
Notes to Consolidated Financial Statements
(unaudited)
December 31, 2021
MaturityAmortized Cost BasisGross Unrealized LossesFair Value
Short-term marketable securities
U.S. Treasury notesWithin one year$226,136 $(344)$225,792 
U.S. Government-sponsored enterprise securitiesWithin one year49,618 (70)49,548 
Total short-term marketable securities$275,754 $(414)$275,340 
Long-term marketable securities
U.S. Government-sponsored enterprise securitiesWithin two years64,596 (200)64,396 
Total long-term marketable securities$64,596 $(200)$64,396 

The cost of securities sold is based upon the specific identification method. Interest receivable related to the marketable securities of $0.7 million was included within "Prepaid expenses and other current assets" on the Consolidated Balance Sheets as of September 30, 2022.

Interest income from marketable securities totaled $1.2 million and $3.9 million for the three and nine months ended September 30, 2022, respectively and nil for both the three and nine months ended September 30, 2021. Interest income from marketable securities is included in "Investment income (loss)" in the Consolidated Statements of Operations.

Future maturities of the Company's marketable securities are $55.8 million in 2022 and $168.6 million in 2023.

6.Restricted Cash

Short-term and long-term restricted cash of $77.9 million consists of amounts held as collateral for letters of credit to provide financing support for development and construction of the NW Iowa RNG and NZ1 projects.

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 14, Debt, for additional information on the 2021 Bonds. The Bond Letter of Credit has a 0.5% annual fee and expires April 4, 2024 (unless terminated earlier). The Company deposited $71.2 million with Citibank as restricted cash to secure any amounts drawn under the Bond Letter of Credit. The Company is entitled to receive interest income on the restricted cash. As of September 30, 2022, no amounts have been drawn under the Bond Letter of Credit.

The proceeds from issuance of the 2021 Bonds recorded as restricted cash are maintained by the Trustee under the Indenture and are released to the Company to pay costs of the construction of NW Iowa RNG. The Company has used all bond proceeds for the project as of September 30, 2022.

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 the 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 $6.6 million of restricted cash in an account with Citibank to collateralize the Power Letter of Credit, which has a 0.3% annual fee and expires September 30, 2024 (unless terminated earlier). As of September 30, 2022, no amounts have been drawn under the Power Letter of Credit.

13
GEVO, INC.
Notes to Consolidated Financial Statements
(unaudited)
7.Prepaid 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, 2022December 31, 2021
Prepaid insurance$906 $805 
Interest receivable688 1,530 
Prepaid engineering900 409 
Tax refunds195 — 
Prepaid other946 863 
Total Prepaid and other current assets$3,635 $3,607 

8.Leases, Right-of-Use Assets and Related Liabilities

The Company is party to an operating lease contract for the Company’s office and research facility in Englewood, Colorado, which expires in January 2029. The lease contains an option to extend the lease which management does not reasonably expect to exercise, so it is not included in the length of the term. The Company also has one production line piece of equipment with an operating lease that expires in 2024. As of September 30, 2022, right-of-use assets under operating leases totaling $1.7 million are included in "Operating right-of use assets," and the related lease liabilities totaling $2.2 million ($0.4 million in current and $1.7 million in long-term) are included in the Consolidated Balance Sheets.

The Company also has four finance leases for land under arrangements related to NW Iowa RNG. Under these contracts, the Company leases land from dairy farmers on which it has built three anaerobic digesters, and related equipment and pipelines to condition raw biogas from cow manure provided by the farmers. The partially conditioned biogas is transported from the three digester sites to a central gas upgrade system located at the fourth site that upgrades the biogas to pipeline-quality RNG for sale. These leases expire at various dates between 2031 and 2050. The Company amended one of its leases in June 2022, which the Company treated as an existing lease modification due to an increase in the price per unit, resulting in an increase of the lease liability and right-of-use-asset by $0.8 million.

Since the Company elected the practical expedient to combine lease and non-lease components, all amounts paid to the lessors under these arrangements for cow manure and non-lease services are classified as lease payments and are included in the calculation of the right-of-use assets and lease liabilities. This results in significantly higher right-of-use assets and lease liabilities than if the Company did not elect this practical expedient. As of September 30, 2022, right-of-use assets under finance leases totaling $27.0 million are included in "Finance right-of-use assets," and related lease liabilities totaling $18.5 million are included in the Consolidated Balance Sheets.

The following four tables present the (a) costs by lease category, (b) other quantitative information, and (c) future minimum payments under non-cancelable financing and operating leases as they relate to the Company’s leases (in thousands), except for weighted averages:

 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Finance lease cost:  
Amortization of right-of-use assets (1)
$470 $464 $1,395 $930 
Interest on lease liabilities (1)
423 297 948 627 
Operating lease cost139 64 416 192 
Short-term lease cost— 377 1,449 1,003 
Variable lease cost (2)
— 94 951 164 
Total lease cost$1,032 $1,296 $5,159 $2,916 
14
GEVO, INC.
Notes to Consolidated Financial Statements
(unaudited)
(1)Amortization and interest on finance lease liabilities capitalized as construction-in-progress totaled $0.3 million and $2.0 million during the three and nine months ended September 30, 2022, respectively, and nil and $0.8 million during the three and nine months ended September 30, 2021, respectively. Total capitalized amounts of $2.8 million are included in "Property, plant and equipment, net" in the Consolidated Balance Sheets related to NW Iowa RNG facilities as of September 30, 2022.
(2)Represents amounts incurred in excess of minimum payments, including payments for common area expenses under our office and research facility lease, and additional amounts due under our NW Iowa RNG leases based on the number of cows maintained by the owners above the minimum required by the contracts of the respective facilities.

 Nine Months Ended September 30,
 20222021
Other Information


Cash paid for amounts included in the measurement of lease liabilities:  
Operating cash flows from finance leases$627$627
Operating cash flows from operating leases$431$192
Finance cash flows from finance leases$4,316$5,975
Right-of-use asset obtained in exchange for new finance lease liabilities
$834$28,416
Right-of-use asset obtained in exchange for new operating lease liabilities$—$1,611
Weighted-average remaining lease term, finance lease (months)208225
Weighted-average remaining lease term, operating leases (months)6688
Weighted-average discount rate - finance leases (1)
10%5%
Weighted-average discount rate - operating leases (1)
5%5%
(1)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
2022 (remaining)$303 $1,772 
2023528 1,576 
2024305 2,730 
2025315 1,744 
2026324 1,760 
2027 and thereafter706 30,499 
Total2,481 40,081 
Less: Amounts representing present value discounts317 21,607 
Total lease liabilities2,164 18,474 
Less: current portion430 2,125 
Long-term portion$1,734 $16,349 

15
GEVO, INC.
Notes to Consolidated Financial Statements
(unaudited)
9.Inventories

The following table sets forth the components of the Company’s inventory balances (in thousands) as of:
 September 30, 2022December 31, 2021
Raw materials:  
Corn$— $301 
Enzymes and other inputs31 186 
Catalyst materials203 265 
Finished goods:
SAF, Isooctane, Isooctene and other221 335 
Isobutanol124 223 
Ethanol— 96 
Work in process:
Isobutanol— 83 
Jet fuel51 — 
Spare parts1,432 1,262 
RNG - environmental attributes2,073 — 
Total inventories$4,135 $2,751 

Environmental attributes represent distinguishable and material output from our RNG operations. The Company started allocating the joint cost of production to the sales value of RNG, credits from California's LCFS program and U.S. Environmental Protection Agency ("EPA") RIN credits. The value of the environmental attributes is reviewed for potential write-downs based on the net realizable value methodology.

During the three and nine months ended September 30, 2022, the Company adjusted its finished goods and work in process inventory to net realizable value and recorded a nil and $0.8 million loss, respectively, in cost of goods sold, as compared to $1.2 million and $2.0 million during the three and nine months ended September 30, 2021, respectively.

10.Property, Plant and Equipment

The following table sets forth the Company’s property, plant and equipment by classification (in thousands) as of:

 September 30, 2022December 31, 2021
Land$6,452 $410 
Plant facilities and infrastructure76,310 84,117 
Machinery and equipment89,797 25,369 
Furniture and office equipment2,699 2,550 
Software2,134 1,564 
Construction in progress56,713 88,990 
Total property, plant and equipment234,105 203,000 
Less accumulated depreciation and amortization(68,101)(63,859)
Property, plant and equipment, net$166,004 $139,141 

The Company recorded depreciation expenses of $1.3 million and $3.6 million for the three and nine months ended September 30, 2022, respectively, as compared with $1.2 million and $3.6 million for the same periods ended September 30, 2021.

At September 30, 2022, construction in progress included accruals of $9.2 million.
16
GEVO, INC.
Notes to Consolidated Financial Statements
(unaudited)

Construction in progress includes $0.3 million for Gevo, $12.0 million for Agri-Energy related to a fractionation and hydrocarbon skid, $2.1 million for NW Iowa RNG and $42.3 million for NZ1 at September 30, 2022. Construction in progress includes $0.4 million for Gevo, $9.1 million for Agri-Energy, $56.9 million for NW Iowa RNG and $