Brett Lund - Chief Legal Officer, General Counsel and Secretary Pat Gruber - Chief Executive Officer Mike Willis - Chief Financial Officer and Executive Vice President-Corporate Development and Strategy.

Craig Irwin - Roth Capital Partners Jeff Osborne - Cowen and Company.

Welcome to the First Quarter 2015 Gevo Incorporated Earnings Conference Call. My name is Hilda, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now like to turn the call over to Brett Lund. Mr.

Lund, you may begin..

Good afternoon, and thank you for joining Gevo’s first quarter 2015 conference call. I’m Brett Lund, Gevo’s Chief Legal Officer and General Counsel. With me today are Pat Gruber, our CEO; and Mike Willis, our CFO. Earlier this afternoon we issued a press release which outlines the topics that we plan to discuss today.

A copy of this release is available on our website at www.gevo.com. I would like to remind our listeners that this conference call is open to the media and we are providing a simultaneous webcast of this call to the public. A replay of our discussion will be available on our website later today.

On the call and on this webcast, you will hear discussions of non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in accordance with GAAP.

Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in the press release distributed today, which is posted on our website.

We will also provide certain forward-looking statements about events and circumstances that have not yet occurred, including projections of Gevo’s operating activities for the remainder of 2015 and beyond.

These statements are based on management's current beliefs, expectations and assumptions, and are subject to significant risks and uncertainty, including those disclosed in Gevo's most recent annual report on Form 10-K, as amended which was filed with the SEC on March 30, 2015, and in subsequent reports and other filings made with the SEC by Gevo.

Investors are cautioned not to place undue reliance on any such forward-looking statements. Such forward-looking statements speak only as of today's date, and Gevo disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events, or otherwise.

Please refer to Gevo's SEC filings for detailed discussions of the relevant risks and uncertainties. On today's call, Pat will begin with a review of our recent business developments. Mike will then review our financial results for the first quarter of 2015. Following the presentation, we will open up the call for questions.

I will now turn the call over to Pat..

Thank you for joining us on our call today. It has been a short six weeks since our last call. I’ll talk to the progress we made, where we are going, and our financials. First, the Luverne plant. In the first quarter, we operated it Side-by-Side mode. We produced ethanol and also ran isobutanol as we needed to.

In the isobutanol run, we proved out the performance of an improved yeast biocatalyst. We also ran support due diligence efforts being conducted by different parties. The isobutanol process ran well.

We are pleased that the diligence showed that our projections of full-scale costs to produce isobutanol looked good, meaning that the isobutanol process should give margins of $0.50 to $1.00 per gallon. Our yeast biocatalyst has achieved commercial rates and yields with best [indiscernible] meeting our commercial goal.

Several of our key patented technologies have enabled these yields and rates. In fact, I should mention that patents for these technologies survived challenges of U.S. Patent Office. To our knowledge, these patents are required to achieve commercial isobutanol performance of yeast, we all know, and they have been upheld, this is very good.

Now all of this together, the progress on the commercial process, the performance of the technology makes our technology even more attractive to licensee partners. The ethanol margins in the first quarter were soft, soft enough that we decided to take down the plant for maintenance.

We worked on tanks, pipes, pumps, evaporators to clean things, and our ethanol margins are making a comeback now, and that’s great. Going forward, we will continue to run the plant to maximize cash flow. We will run isobutanol if needed [ph] to keep our customer supply so that they can continue to develop the markets.

We also plan on running isobutanol to prove out continued improvements in the biocatalyst, and the process, as well as support licensing activity as needed. We’ve learned a lot about the optimization of the isobutanol fermentation process, optimizing ingredients, and the run strategies. We believe that we are down to the short strokes of improvements.

As we run more isobutanol, it would be fun to see the result at full scale. Now turning to licenses and licensees. Our goal for isobutanol is to secure definitive licensing agreements for our technology this year. We should be able to do this based on the feedback we have received. We’ve been plugging along on definitive contracts with Praj and others.

We called at Praj and we have agreed at principal to a license for up to 250 million gallons per year of isobutanol outside of the U.S. using molasses as the feedstock. This is a good strategy for both Praj and Gevo, adding diversity to feedstock and geography. We also are making progress with Highland, IGPC and Porta.

We are seeing increased interest in licenses from additional South American companies, who use corn and/or cane feedstock. I expect that we will be able to talk about these companies and their countries in the near future. I really like that we are developing geographical diversification for isobutanol technology.

And by the way, litigation issues we have only apply here in the U.S. Now as we’ve discussed before, isobutanol could serve as a raw material for the chemical conversion to jet fuel isooctane, para-xylene, for polyester plastics, and bottle plastics.

We ship isobutanol produced at Luverne to our hydrocarbon plant down at South Hampton Resources in Silsbee, Texas. There the isobutanol is converted via chemical process into these products. We have been running and testing jet fuel and octane since 2011. The conversion technology to make these fuel products is ready for prime time, we believe.

The jet fuel made from isobutanol is the kerosene, that’s the stuff of standard jet fuels. Of course, ours is renewable with the smaller CO2 footprint, and according to the study [indiscernible] it makes for cleaner fuel when it burns.

Jet fuel from isobutanol also, we had told our customers, is one of the lowest potential cost bio-based kerosene fuel if not the lowest cost fuel. Many of you probably saw the recent press release for Alaska Airlines, which is planning on running our alcohol to jet fuel on flights to DC, Washington, DC.

Alaska Airlines is a forward-thinking company, and I look forward to working with them. Partners such as these are fun to work with. They know they need a strategic alternative to petro-jet and they want to step up. They know they just can’t sit back and wait.

Now it’s worth noting that our objection showed that our alcohol-to-jet could have much, much, much volatility month-on-month, compared to a petro-jet. Also it isn’t lost on airlines that they at some point are going to have to deal with some kind of a carbon test. Isobutanol converted to jet fuel looks like a good alternative.

We are also seeing an up-tick in interest for isooctane. Isooctane is the key ingredient to make high-performance gasoline fuels. It’s made by the chemical processing converting isooctane - converting the isobutanol into isooctane. The value proposition is a high performance renewable fuel that doesn’t have the limitation of oxygenated renewable fuels.

It seems companies are formulating new high-performance fuel mixtures. This will be interesting to see how it unfolds. On the last call, I introduced you to the advances we have made burning ethanol into propylene and hydrogen. This catalytic process means that no biology involved converts fuel-grade ethanol into high yields of propylene and hydrogen.

Other technologies that we can see in the public domain don’t use fuel-grade ethanol gives the same high yields of a small number of products or produce hydrogen. We have filed a number of patents on the process and the catalyst. Both renewable propylene and renewable hydrogen are interesting.

The propylene could to be used in plastics, fibers, things like diapers, car parts, packaging, or as an intermediate to make other chemicals. Renewable hydrogen has potential to solve an issue for those companies interested in fuel cells or for chemical conversions.

Instead of shipping hydrogen, ethanol could be shipped as it is now, and hydrogen could be generated locally. This breaks away from a natural gas pipeline. The economic models that we have show that both propylene and the hydrogen could be cost competitive with their petrochemical-derived counter parts.

The technologies to convert isobutanol and ethanol into olefins and building blocks are interesting to ethanol producers, chemical companies, fuel stock companies, car companies, gas producers, sugar products companies, airlines, catalyst companies, and the military. We are receiving a lot of interest from strategic partners across these areas.

We are very focused on establishing a viable business to convert alcohol into chemical products and fuels. I look forward to landing deals with strategic partners. Not only that these opportunities create new applications for isobutanol, but create new markets for ethanol.

On the market front, we still hold the same view for isobutanol, it’s attractive. Renewable isobutanol can substitute for petro-based isobutanol, and it is preferable to some customers when competitively priced for chemical market uses. These are things like solvents or uses in oil field.

Additionally, isobutanol can serve as a value-added fuel oxygen at blend stock. In this later market segment, the fuel properties of isobutanol shines [ph]. It’s got [indiscernible] engines and infrastructure to solve a bunch of issues for certain niche markets, like the marine, boat, and off-road segments.

I expect that we will hear more about the benefits of isobutanol from the marketplace in the near future. I would now like to turn the call over to Mike who will talk through the financials..

one, lower ethanol prices; and two, lower overall isobutanol and ethanol production. On the second point, we took advantage of the weaker ethanol margin environment in the quarter to take the plant down for various maintenance initiatives, which resulted in an overall decrease in alcohol gallons produced in the quarter.

During the first quarter of 2015, hydrocarbon revenues were $0.5 million, primarily related to the shipment of bio-jet fuel to the U.S. military during the quarter. Gevo also continued to generate revenue of $0.3 million during the first quarter of 2015 associated with the ongoing research agreements.

Cost of goods sold increased to $9.2 million in the first quarter of 2015, versus $4.7 million in the same period in 2014, due to the increased production activity at the Luverne plant under Side-by-Side. Gross loss was $3.3 million for the three months ended March 31, 2015 versus the gross loss of $3.8 million in the same period in 2014.

After deducting depreciation expense of $1.5 million, the non-GAAP cash gross margin was a negative $1.9 million for the first quarter of 2015, as compared to a negative $3.2 million in the same quarter in 2014. R&D expense was $1.7 million in the first quarter of 2015 compared to $4.1 million reported in the first quarter of 2014.

Our R&D activities in the first quarter of 2015 continue to be focused on the optimization of our isobutanol technology, as well production-related activities at our hydrocarbons demo plant in Silsbee, Texas, where we produce our bio-jet, paraxylene, and isooctane products.

R&D expense decreased in the first quarter of 2015 compared with the same period in 2014 due primarily to a $1.4 million reduction in employee-related expenses, a $0.4 million decrease in consultant and lab-related expenses, and a $0.5 million decrease in expenses incurred at the hydrocarbons demo facility located in Silsbee.

SG&A expense for the first quarter of 2015 decreased to $4.5 million, compared to $5 million for the comparable quarter in 2014. SG&A expense decreased in the first quarter of 2015 compared with the same period in 2014, due primarily to a decrease of $0.4 million in miscellaneous SG&A expense items.

Within total operating expenses for the first quarter of 2015, we reported approximately $0.4 million for non-cash stock-based compensation. For the first quarter of 2015, we reported a loss from operations of $9.5 million, down from a loss from operations of $12.9 million in first quarter of 2014.

Interest expense for the first quarter of 2015 was $2 million, compared to $1.6 million for the comparable quarter in 2014. The increase was due primarily to interests associated with the Whitebox convertible notes issued in June 2014.

We reported a non-cash gain of $0.2 million during the first quarter of 2015, related the changes in the fair value of our derivative warrant liabilities and embedded derivatives contained in the convertible notes issued in 2012.

The company also reported non-cash gains of $3.8 million compared to the first quarter of 2015, related to a change in the fair value of the Whitebox convertible notes. $2 million of the 2022 notes were converted during the three months ended March 31, 2015. As a result, the company recognized a $0.3 million gain upon the conversion of this debt.

For the first quarter of 2015, we reported net loss of $7.3 million or a loss of $0.88 per share based on weighted average shares outstanding of 8,312,398, this compares to a loss of $12 million in the first quarter of 2014, or a loss of $2.65 per share.

During the first quarter, $2 million of the 2022 notes were converted into 170,041 shares in Gevo common stock and outstanding warrants were exercised into approximately 725,226 shares of common stock. At quarter end, we had approximately 9,751,500 shares outstanding. Our cash on hand at March 31, 2014 was $4.4 million.

Subsequent to our last earnings call on March 26, we had additional outstanding warrants exercise, which are expected to result in net proceeds to Gevo of approximately $6.2 million.

Also to note on May 5, we have received notice from the NASDAQ that Gevo had regained compliance under listing rule 5450(a)(1) given the fact that the closing bid price of our stock had been $1 per share or greater for over 10 consecutive trading days. So this matter is now closed. With that I will turn the call back to Pat..

Thanks Mike. So going forward then, we need to complete a lot more of our license deals. Ideally we would have the Praj deal completed, as well as one another deal. We did [indiscernible] strategic investment in what we call are alcohol-to-hydrocarbons business.

In the near term, we plan to continue to run isobutanol as we needed at Luverne, and continue to develop the marketplace and support customers. We also will be developing the more detailed plan to build out Luverne into a profitable isobutanol plant, as well as a strategy to finance it. And with that, we’ll turn to questions, thanks..

Thank you. We will now begin the question-and-answer session. [Operator Instructions] We have a question from Craig Irwin from Roth Capital Partners..

Good evening, gentlemen and thank you for taking my question. So first, thing I should say is congratulations on the $5 million in ethanol revenue, it’s pretty nice production considering the suspension and turnarounds in the quarter.

So in the context to that I want to dig into the cash gross margin improvement, as you said in your script and your release, you prove to a loss of $1.9 million in the first quarter versus a loss of $3.2 million last year.

Mostly ethanol plants out there were printing money last year, but lost money in the first quarter of this year and your margins actually went the other way.

Was ethanol headwind inside of this improvement? Can you talk about, how this was achieved?.

So Craig. It’s Mike Willis here. So the key rational was in the first quarter of 2014 we weren’t actually running in side-by-side yet. We were still just running some batches just on isobutanol. We started up on side-by-side in the March or April timeframe. So it’s less of a like-for-like comparison as a result of that..

Okay, is it fair to say that if we had normalized ethanol market conditions we would expect a different result for the first quarter?.

Definitely..

Okay that’s it. I was getting it.

And then as far as running isobutanol, I know, it’s very difficult to separate side-by-side, but can you share what the components are that contribute to cost of running isobutanol versus ethanol? And how we might be able to think holistically about the different contributions in the plant?.

Sure. So some of the costs are more difficult to separate than others. So there is certain batch costs that doesn’t show up as a line item here, as all in cost of goods. But certain batch costs like corn, like nutrient packages, enzymes, et cetera, they are very much batch-related - are very much - are easily identifiable isobutanol versus ethanol.

When you start getting into things like utilities, there are certain costs that we can attribute to isobutanol versus ethanol, others are more difficult. And then when you obviously getting to things like direct labor and like then it becomes very, very challenging. So a mix of cost across both summer very, very identifiable isobutanol versus ethanol.

Others it’s more kind of fungible..

Thanks for that. So next thing I wanted to ask about was alcohol-to-jet, your Alaska Airlines announcement this quarter is pretty, pretty exciting.

Do you have a timeline for potential flights with Alaska Airlines? I know Pat mentioned one of other deal, is this also likely to be in the alcohol-to-jet arena? And then how should we think about pricing for your product here, I mean, should you think you can get a nice premium versus ethanol or isobutanol, given the jet already trades there and that there is a green premium that the conceivably the airlines will be willing to play?.

Okay, so the first part, it’s Pat. So the part of the question is regarding the time for last year, there has been part on a timing for the final ASTM certification, we expect that sometime in the next couple of months.

The final voting is going on right now or the final preparations for the vote are going on right now –that’s been the culmination of a four year process. I’m glad it’s coming to an end..

There is no issues because this is a kerosene type fuel, so it’s Right Square in the normalness category. In terms of - Alaska Air is -- it’s fun to have them doing this flight that’s cool, and I expect we would see other people working on this as well.

[I’ll recall] that we’d selling our jet fuel for the military and the military has been working through the qualification of all their air platforms. And so we would expect the MIL-SPEC Certification sometime this year as well.

Regarding the pricing, the feedback we hear in the marketplace is that our renewable resource based alcohol-to-jet fuel is the lowest cost paraffinic type jet fuel that is not that good -- I hearing about. [I need to say] there could be some other thing or other way to go about it, but it looks like we are in a good cost position.

Of course the benefit for airlines, the potential is something, it goes like this, is that, everybody anticipates that sometime they are going to be a real life carbon tax, okay. We could provide a benefit for that.

We are anticipated to be less volatile in terms of price and cost and say oil, and that is because the renewable resource based contents and the contributions of fixed cost and all of that the rest. So we’re attracted from that standpoint.

And of course it works well, and it does appear to burn cleaner to some reports being published that indicate that. So there is benefit on that side. We just have to work through and play them out. And then last part of your question was to anticipate other deals? I do, working towards and they are going to there are several of them that are possible.

There is more jet deals, isooctane is extremely interesting. So we’re getting increase from mostly European and South America about isooctane. The reason people think to want isooctane is because it has no oxygen in it, it’s a very good quality of isooctane that we can supply. And people can formulate their specialty fuels around it.

And have renewable content. And then there is also this alcohol, this ethanol to propylene and hydrogen, it’s interesting and that is one will - if that unfolds that is going to be quite - I think that will open people’s eyes just what possible defense chemistries..

Thank you for that Pat. My last question, it’s related to the comments and the release the third-party study that you had completed that estimates achievable EBITDA margins of $0.50 to a buck of gallons of isobutanol. I don’t know if you can main the group that did the study, but may be was this is a customer study.

Someone that’s putting money to work here already may be an academic group. And could you describe the scenario that you would need to achieve these kinds of costs..

Sure, so I'm looking at my guides that I think we can just say was Praj. Praj is the work of the diligence. They get extensive work here, they crawl all over our plant and all over the data.

And came up with the same kind of cost structures that we do and of course some of them matched up the selling price that we see, that take into the $0.50 to a gallon margins, and its good.

Now to get that at a -- place like Luverne we need to build out the capacity a bit, add some equipment to the fermentation training and add some distillation columns.

I think people who’ve been following us know that we don’t have the final distillation columns so we’re missing some of the front end fermentation equipment that we have now learned that we need. So you could do that at - we could do that at Luverne without much difficulty, actually its matter of having the capital.

And of course any of our retrofit partners who are our side-by-side partners or licensees, they all get it, they get to learn on the back of what we’ve just done. And so one of the things that’s quite interesting is that our yeast works quite well.

Fermentation performance is quite good, we are incrementally improving it all the time, and the GIFT separation systems work extremely well. And so it is interesting.

Now Luverne is not fully integrated from an energy standpoint, but you know what as you do the cost projections with the modern plant and have built it deliberately for side-by-side, you do those sorts of things and then that lowers you the energy cost further. So it’s a pretty interesting from that standpoint.

I like that Praj came in skeptical and critical. And now they want to move forward licensing it..

That’s great news, congratulations on the progress..

Thank you..

Thanks, Craig..

Thanks for taking my questions..

Thank you. Our next question comes from Jeff Osborne from Cowen and Company. Please go ahead..

Great, good afternoon just had a couple of questions on my end. I was wondering if you can talk about the Alaska Airlines fuel path and what the kind of the anatomy of that fuel is.

When did you first have negotiations with them and sampling and how long did it take to convert that over to a contract?.

We’ve been, Mike I just guided Glenn Johnston, who some of you probably have met. Glenn has been working on this alcohol-to-jet for years and he knows everybody pretty well. And it’s just one of these things the combination of we’re getting closer and closer the ASTM certification, and so Alaska has been aware of it, they understand it.

[We need to be] more clear with people, about what we believe the cost structure is to be and why it would make sense? There is more data and studies have been done. As a result of the certification process, it’s just a combination of things coming together. And Alaska Airlines is the leader and they like to be seen as a leader.

So I think that’s great. I would expect remember we have - Lufthansa has been working with our product as well. I think that has gone well. And I expect other people to be interested in our fuel products as well.

This alcohol-to-jet, -- be taking the isobutanol converting it to jet fuel is nice and it is a very simple process chemistry - it is a chemistry process. No biology involved. And so chemical companies get [indiscernible] understand it and it makes sense. And it’s a great way to simplify all the hard parts of the bio-base business.

If you got bio-base business and it’s like that the raw materials are mixed with all kinds of crap fat oils, lipids, dirt, whatever. Right into fermentation, make it clean chemical, isobutanol, you do clean chemistry to make it into the jet fuel or other chemical products..

Thanks, appreciate the comments.

Is that a 100% Gevo product or you blending now a traditional aviation fuel?.

I think ASTM certification is going to land on something that is up to 50%, I didn’t hear the final yet..

Okay. So when should we think about volumes ramping for that particular customer just in general for jet for Gevo..

My guys were all looking in [indiscernible] we’re not 100% sure yet, because what we need to do is build our capacity for the butanol and the jet fuel. And so that’s something to be work through with our partners..

Okay..

The right off takers in the right time before I can project that with any confidence. I think that the isobutanol can be built out, that’s the capital limitation jet fuel can be built out that is the technology there..

With the beauty of getting above the ASG and MIL-SPEC certifications allow us, obviously to be positioning our sales to be selling, commercial volumes and ultimately really about getting off take from potential customers that drive the capacity additions of isobutanol front..

Understand, just a two questions for you Mike, I was wondering do you have a rough idea of how much cash, you would expect from the warrants in 2Q, I know you mentioned kind of quarter-to-date.

And also do you any kind of forecasting you’re willing to share as it relates the cash inflows out there? And the second question was also around cash as it relates to the licensing deals that you talked about signing in 2015. Do you expect as you’re negotiating those any upfront cash payments or would those be longer tails in nature..

So on the first question, we’re only comfortable at this stage based on the visibility we have on discussions with warrant holders at $6.2 million level, although considering where our stock is at, I wouldn’t be surprised of additional warrants or exercised as well. It’s hard for me to forecast beyond that.

On the licensing side, we definitely expect some kind of a contribution from the first licensee when we sign a binding agreement, different parties the structures are different depending on the party that we are talking to. So depending on who is the first group is we will dictate what the upfront payment will be.

Ultimately these licensing arrangements I liking it to the software SaaS model we are really what you’re generating is a long-term ongoing recurring revenue stream. So that’s really the Holy Grail in all this..

Well, last question I had just given the improvement in the ethanol margin outlook is and also the maintenance that you’ve done in the first quarter.

How should we think about the cadence of ethanol revenue in the second or the fourth quarter through year-end? Is there any changes to plans that you forecast between now and then or you just kind of run out when played out assuming that the current environment across margins stay the same, in terms of ethanol production?.

Yes, it’s definitely in terms we have already seen a significant improvement in Q2 to-date. To be honest our revenues should be kind of much closer to Q4 revenues than obviously Q1 and Q2.

And yes, no I think we will run the plant like we have discussed over the last couple of quarters, which is we are going to run it to maximize cash flows by the same token. We are not in any way, if you want isobutanol we will make sure that we’re producing isobutanol for our customers.

We are producing isobutanol to promote aspects of our technology, in particular to no more step change evolutions of the technology. And definitely as Pat described in his opening statements is licensees as they are trying to diligence and so obviously want to see data from the plant as well.

So that would be another reason why we would be running isobutanol going forward. We’re considering where ethanol margins are at we like making money too..

Understand that thanks very much, appreciate the comments..

Thanks John..

We have reached the time allotted for questions. I would like to turn the call over to Dr. Gruber for closing remarks..

Well, thank you all for joining us, going forward we are focused on getting these license deals completed. Moving forward, the alcohol and hydrocarbons and getting moving in towards the jet or to the ethanol and propylene and hydrogen.

I want to see how this unfold is exciting and I like the progress we are making with our technology and on the intellectual property front. So thank you for joining us..

Thanks everyone. Bye, bye..

Ladies and gentlemen, this concludes today's conference. We thank you for participating and you may now disconnect..