Gevo(GEVO)2023-03-09 22:44Financial 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 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 8.6 million to Net-Zero 1, 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 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]