Welcome to Gevo's Third Quarter 2021 earnings conference call. My name is Gigi and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will be conducting a question-and-answer session. Please note that this conference is being recorded.

I'll now turn the call over to Geoffrey Williams, Gevo's Vice President, General Counsel, and Secretary. Please go ahead, Mr. Williams..

Good afternoon, everyone, and thank you for joining Gevo's third quarter 2021 earnings conference call. I would like to start by introducing today's participants from the Company. With us today is Patrick Gruber, Gevo's Chief Executive. Officer, Lynn Smull, Gevo's Chief Financial Officer, and Paul Bloom, Gevo's Chief Carbon and Innovation Officer.

Earlier today, we issued a press release that outlines the topics we plan to discuss. A copy of this press 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 that we are providing a simultaneous webcast of this call to the public.

A replay of today's call will be available on Gevo's website. On the call today and on this webcast, you will hear discussions of certain 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're also making certain forward-looking statements about events and circumstances that have not yet occurred, including but not limited to projections about Gevo 's net 01 project and Gevo 's operating activities for the remainder of 2021 and beyond.

These forward-looking statements are based on management's current beliefs, expectations, and assumptions and are subject to significant risks and uncertainties, including those disclosed in Gevo's Form 10-K for the year ended December 31, 2020. That was filed with the U.S.

Securities and Exchange Commission and in subsequent reports and other filings made with the SEC by Gevo, including Gevo's quarterly reports on Form 10-K. 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.

On today's call, Pat will begin with a discussion of Gevo's business developments, Lynn will then review Gevo's financial position and Paul will the [Indiscernible] shop but the discussion of verity tracking. Following these prepared remarks, we will open up the call for questions. I will now turn the call over to Pat..

Thanks, Geoff. Paying attention to us knows, and seeing our presentations or press releases, the videos, they know we're on a crusade in the pursuit of net zero drop in fuel.

We have learned that we can convert renewable carbon in the gasoline jet fuel [Indiscernible], and diesel fuel, as well as the building block chemicals to make most plastics and other larger volume chemicals, the technologies work.

The key to driving out the fossil footprint, and all of these products is renewable electricity, and alternatives to fossil-based natural gas. If we reduce and eliminate fossil energy from our production systems, we should be able to achieve Net-Zero fossil footprints of our products as measured across the whole -- the business system.

That means, all the way from carbon capture to tailpipe or the exhaust of a jet engine. We're in the business of transforming renewable energy into energy dense liquids like SAF and motor fuels. When we look at our business, we have some similar issues with -- that are confronted by EVs and hydrogen.

That is what's the source of electricity? Is it fossil or not? What's the source of energy [Indiscernible] hydrogen? Fossil or not? In turns out, we're all aligned regarding infrastructure. If our business system has access to renewable energy, then it shouldn't surprise anybody that the fossil footprint could be reduced and potentially eliminate.

So, EV folk, Biogen folk, and companies like us, all need improved access to renewable energy. I'm glad to see the emphasis of this in public policy, particularly regarding infrastructure. I'm glad to see that bill got passed. Because of the size of our renewable energy need, and the ability to achieve economies of scale.

We expect that our business system could further catalyze development of renewable energy. We're finding that there are many parties interested in building out renewable energy infrastructure. They need a big customer, someone like us. I'm also glad that our products dropping to existing pipelines and enhanced existing markets.

I'm glad our products are dropping at the consumer level. There's a benefit if no one needs to airplanes, cars or trucks to reduce or even eliminate the fossil fuel, greenhouse gas emissions footprint from combustion engines. I expect that we will have the opportunity to help EV and hydrogen people too.

As we expect to generate excess energy, excess renewable energy, electricity, and even hydrogen and supply to the marketplace, where they wouldn't otherwise have it or couldn't do it. Our Net-Zero 1 plant design is unusual for the following reason. We are designing it with the carbon footprint in mind from the get-go.

We are working with Juhl Energy on a wind farm that would be wired directly to the plant. We are planning to install a wastewater treatment plant that has the ability to generate water for use in the production process short. But equally as important, it is expected to produce enough bio-based methane to run the plant.

We also plan to install electrolysis units to produce green hydrogen from wind. So, the different set of paradigms about how to install energy and manage it across the whole.

Of course, we get excited that we can prove using the world-leading Argonne National Laboratory's GREET model that by substituting the energy sources, getting it away from fossil-based sources, and by using carbohydrates from sustainably growing corn, that the system we are building should be able to achieve a net zero fossil carbon footprint across the whole lifecycle, from carbon captured tail pipe or exhaustive a jet engine.

Think about it for a second here. Jet fuel has roughly a fossil footprint of about 90 using a carbon score index, that means a 90 is a fossil-based score. Our SAF, when burned according to the Argonne GREET model, is expected to be 0.

That means that our SAF, sitting a tank or a railcar before it's been burned, is at least a minus 90 CI score? minus 90. If we never burned it as a fuel, it would just be sequestered carbon at a tank. That's an interesting paradigm. When the fuel such as SAF is burned, it does release CO2, so then the carbon scores backup from minus 90 to near 0.

Renewable energy in a tank with all the advantages that infrastructure provides to take it to market and all the vehicles or planes, they all exist for use with our change. That's pretty amazing. It's really a new game to think about what can be done.

So, for a minute, suppose our building blocks produced a net-zero plant, were used to make plastics rather than making SAF, or motor fuels, these building blocks would result in the same plastics made from petroleum, except that we have swapped out the fossil carbon for renewable carbon captured from the atmosphere. The technology works.

So, imagine, car bumpers or tires made from our stuff. It'd be sequestered carbon captured from the air, transformed into durable goods. The carbon score of that bumper or tires could be expected to be massively negative. Because we're not burning the products to being made into durable goods.

Of course, it would depend upon the content of those plastics or rubber derived from our Net-Zero type of ingredients. Looking forward and in the future, we expect to add geological sequestration to the carbonization mix. Of course, we can do that -- others can, we could do it too.

That should make our footprint even more negative -- more negative in a big way. But according to GREET, we'd expect the possibility of a negative 30 to 40 CI score from where we are today, that's even after the fuel is burned. If we add some new techniques in agriculture, it can even be more negative across the whole of the lifecycle.

How could it be so negative? Because our business system would be the cause of carbon sequestration. For instance, in the soil or in geological formations. In addition, by using the latest processing techniques for corn, higher-value protein products and corn oil can be produced and sold into the food chain. This is really important.

We believe that it's possible to use land to produce food, and generate raw materials for energy simultaneously. And many improvements still can be made. We're not done yet. Of course, we can also use carbohydrate feed stocks survived from wood, biomass, molasses, and other carbohydrate sources. Any of these are fair game for us as we grow our business.

The sustainability of each feed stock would need to be proven, and it must be cost -effective before we take it on. Now, we've been making excellent progress on the business front. First, Chevron.

The MOU with them outlines the basic deal where they would take up to a 150 million gallons of hydrocarbon fuels, and correspondingly invest in the production assets to produce those fuels. Good.

That means that if we did 6 Net-Zero 1 style plants each with a capacity of about 50 million gallons and if they took 50% of the capacity via -- then the MOU contemplates them investing in 50% of the capital in each of the plants. We still got to convert the MOU to definitive agreements.

And there could be some twists and turns along the way, but we like Chevron's commitment, and their energy that they bring to getting this done. Ethanol to jet is a new thing for us.

We've been working on quietly for years, and then we announced that we signed a deal with actions of North America that gives Gevo the exclusive license to develop ethanol to jet in North America. Axens is the licensing arm of the French National Research and Engineering Laboratory called IFP. IFP focuses on applied research and engineering.

They do a lot of work over the years, over the decades on refining technology, chemical plant technology, and many, many other technologies. They're really well-known research and engineering outfit. Their capabilities are truly immense. We're just visiting there in the last month. They're quite impressive. We got to know them.

We got to know accents because of our work on Net-Zero 1. We're co-engineering the process to convert isobutanol into jet fuel and renewable alkylate. We get along really well with them.

As we got to know them, we learned that they have more than 60 patents and 25 plants commercially operating with a technology to convert ethylene into fuels and chemicals. Now, we know how to decarbonize alcohols, and we know how to convert alcohols into olefins. Ethylene is an olefin.

And so together, it occurred to us that, we've got a really clear path to take ethanol as a feed stock, using commercially proven technology and then convert ethanol to SAF, improving processes. It's pretty impressive. They have done these technologies using petrochemical-based feed stocks.

What's new here? Bringing ethanol in, converting it to ethylene, and taking the ethylene onward into the well-proven processes. So, we struck a strategic alliance with them. And we believe that ethanol to jet's gonna be important. And we see it as synergistic with the isobutanol to hydrocarbon routes.

In fact, there's just many opportunities to add value to each. It should give us the optic produced more products a wider slate of products as Tim Cesarek likes to say, we can do diesel fuel, jet fuel, gasoline products, and many other building blocks for the chemical industry, and ultimately achieve a higher renewable content in fuels.

In other words, makes it easier. We have more building blocks to work with, so we can make a more complete fuel over the long run. It's also worth noting that actions will provide process performance guarantees for the alcohol to SAF and motor fuels technologies.

And of course, that's really useful in financing production facilities at the project level. We signed an MoU with ADM with the intent of converting 900 million gallons per year of ethanol into about 500 million gallons of SAF and hydrocarbons. And along with that, to build IBA hydrocarbons, particularly indicator.

ADM has some of the most economical ethanol plants on the planet. Starting with low-cost ethanol, is a really good idea when converting it into SAF. To work with ADM is expected to result in a JV with them and other investors. ADM indicator has been a pioneer in geological sequestration too.

It's an exciting opportunity and I expect that they will be a good partner. I know everybody is interested in the customer pipeline; it's growing. We're still on the tack of obtaining financeable off-take agreements, but pipeline of potential contracts is now well over a billion gallons per year. We're negotiating these contracts.

The interest in SAF has definitely increased, especially since the White House meeting a couple of months ago. We expect to announce next agreement that sells out Net-Zero 2 and beyond soon. We acquired the Butamax patent portfolio.

We now have about 600 or so patents covering the biotechnology fermentation production processes to bringing up the ultimate hydrocarbons. It has -- it adds value to have all these patents under one roof. I'm glad to have that cleaned up. Our Net-Zero 1 project is on track.

Kiewit, one of the world's largest and most capable engineering and construction firms, is a great addition to our team. Kiewit has tremendous horsepower, and the capability to build multiple plants at once. This ability is really important to us since that is the situation, I think, we're going to find ourselves in.

That is, needing to build more than 1 plant at once. They have a reputation of delivering on-time and on-budget. In addition, they're really good people. We'll have the next round of engineering done around year-end. Then we'll be moving to a more detailed phase.

We expect to have the EPC wrap completed around the end of the first quarter, maybe early second quarter, and then work to complete the project debt deal. If this timing all holds up, we expect to get the plant up and running in 2024. Our Northwest Iowa renewable natural gas project is on track.

It's expected to start up in the first part of next year, it's going very well so far. I would like the experience we are getting because renewable methane, bio-gas, and R&D are all going to be really important to us as we work to finalize the hydrocarbon production systems, like alcohol and alcohol hydrocarbons.

As they're already mentioned, one of the big issues in create -- that creates the footprint from these plants is, the fossil base natural gas and fossil-based electricity. Eliminating these things makes everything greener. As the last key point, we are changing our ambitions.

We believe that it's possible to bring online a business that's delivered themselves 1 billion gallons of capacity or more per year using the combination of IBA and ethanol. as hydro -- as feedstocks to hydrocarbons to serve SAF and motor fuels markets by 2030. We call this a billion-gallon initiative. Simple, a billion gallons or more by 2030.

This is what we're working on, and I believe the pieces are falling into place. Net-Zero 1 is the first step and we need to get it right. But we see that the potential is large and we can achieve fast-growth beyond Net-Zero 1. We see that Chevron, ADM, Axens and others all could be part of making this happen. Now, Lynn Smull is here with me today.

We decided to change the format and content of our earnings calls rather than read the financial details that are already disclosed in our earnings press release, and Form 10-Q, we figured be far more useful for Lynn to just talked about Gevo's financial position, and what his thoughts are in larger, more general terms. Lynn..

Thank you, Pat. Gevo's primary execution focus is getting Net-Zero 1 built and operating. Net-Zero 1's design and engineering work is progressing well and we're advanced in the plant engineering, procurement and construction contract with Kiewit.

We feel very good about our partnership approach with Kiewit and there's strong expertise and capabilities as well as their abilities around delivering multiple plants simultaneously as Pat mentioned.

We expect to start ordering long lead equipment to engage in site mobilization and preparation work, and to continue detailed engineering in the first half of 2022. This is key to enable us to hold our project timelines.

The wind power and wastewater anaerobic digestion design, build, own, operate, manage partnerships referred to as [Indiscernible] partnerships, are progressing well.

Juhl Energy, our wind [Indiscernible] partner is advancing that Zero 1, 60 megawatts behind the meter wind project development and working with potential utility partners to ensure a structure that works for all participants.

We are well into the engineering and commercial processes with multiple wastewater anaerobic digestion [Indiscernible] partners and expect to finalize those arrangements with a winning party early 2022. We've been very active with advanced work around the Net-Zero 1 non-recourse debt financing.

We have multiple tracks underway, including tax-exempt private activity bonds, or PABs, a potential Department of Energy loan guarantee route, and some interest with long-term private placement debt providers. We are pursuing multiple PABs out of an abundance of caution, and to see which will present the best debt structure in terms.

The base case so far has been a PABs offering by a city group. The majority of our Net-Zero project costs are eligible to be funded with PABs, and those markets are very attractive for this type of credit. We expect to have the project finance elements in place in time for a mid-2022 debt offering, regardless of the route taken.

The strength of Net-Zero 1 's project participants from off - takers, to Kiewit, to Citigroup, and a range of other important supporting elements, will all play well as we head towards breaking ground in financing construction next year.

We are also working to get follow-on Net-Zero 1 plant sold out with off-take agreements, developed, financed, and built. To build out a fleet of plants will be raising money at the project level as contemplated in the Chevron MoU, and if the right circumstances arise at the Gevo Inc. level.

For example, adding a strategic party or 2 in the mix as a possibility and would enhance our ability to execute on projects. In any case, we will eventually want to raise money at the Gevo Inc. levels so that we have capital to contribute as equity and can benefit from commensurate levels of project cash flows.

Our view on capital investments is that the opportunities are immense and the that they should be accretive. We are also interested in partnering with companies that own ethanol assets, and in acquiring ethanol assets.

With the intent to de -carbonize existing ethanol production to provide low carbon feed stock, to new staff production capacity, with correspondingly low carbon index scores on the final product. We would welcome hearing from ethanol plant owners who may be interested in Gevo's approach to that.

We have identified and are pursuing several sites for follow-on greenfield Net-Zero projects that are as attractive as Net-Zero 1 Lake Preston site. We will need these options on locations as we grow production capacity. De - carbonization of production is always a focus when looking at sites.

For example, ATMs Decatur, Illinois site presents a superb opportunity around that need due to its carbon sequestration capacity. We are also operating our Luverne plant to make isobutanol and working on optimization of systems and processes. These learning should serve us well as we operate the Net-Zero plants.

We're using the Luverne isobutanol to make small quantities of hydrocarbons down at the Silsbee, Texas plant. And next year, we expect to use Luverne's isobutanol production as feedstock for a modular hard to carbon plant that is currently being fabricated by price and is scheduled to be installed at Luverne in 2022.

We are currently a pre -revenue Company. Recall that while we are producing it, isobutanol at Luverne to accumulate feedstocks for hydrocarbon production, we suspended the plants ethanol production in Q1 2020 to focus on our Net-Zero program.

Late next year, we would expect to some revenues from our RNG project, and some revenues from sales of small quantities of hydrocarbon products. In late 2024, we expect to see substantial revenue upon Net-Zero 1's projected start-up.

As that 1-billion-gallon initiative begins to take shape, we would expect to put out some guidance, but that is premature today. Given our pre -revenue status, the key third quarter financial metrics are as follows.

End of Q3 cash and cash equivalents was $522.4 million, long-term debt outstanding was $66.8 million, corporate burn was $6.1 million, capital investments associated with Net-Zero 1 and other capital projects with $16.8 million, and we had other investing activity of $9 million associated with the Butamax patent acquisition.

As Geoff noted, full financials are available in our earnings release and our Form 10-Q available on our website. Now, I will turn it over to Paul Bloom to talk about where we're at on the Verity Tracking. Paul..

Thanks, Lynn. First, I'd like to note that we have executed a joint venture agreement for verity tracking with block-size Capital. Verity tracking is based upon distributed ledger technology, commonly called blockchain.

And it's focused on the tracking of sustainability attributes, such as the greenhouse gas footprint across the whole of the supply chain, including carbon capture, feed stocks, sources of energy used in production, and other key inputs to determine the lifecycle footprint of products like ours.

We intend to provide verifiable and mutable sustainability data from the source of the raw material to the tailpipe and exhaustive jet engines. I am the responsible Executive of Gevo for this joint venture. In the future, we intend on spending Verity tracking out of Gevo.

We still have some more work to do to get it organized, such as putting the key leadership team in place. We envisioned that Verity can be a benefit to any Company, that needs to prove their sustainability footprint. When we started Verity, we were focused on using it for Gevo's sustainability systems and products.

We quickly discovered that this technology and method of tracking sustainability improvements using a blockchain solution filled the gap for other industries as well. We intend to open Verity up to work with any Company that wants verifiable proof with their carbon intensity reduction and is willing to commit to transparency.

As the anticipated demand grows for high-quality carbon offsets for compliance and voluntary Markets. Verity Tracking is anticipated to provide the carbon accounting needed for both segments, while avoiding double counting. We also intend to simplify auditing while providing users with the best-in-class data security.

We look forward to continuing to develop the joint venture with Blocksize Capital and developing solutions for other potential customers. Thank you. Now, I will turn it back over to Pat to wrap things up..

All right. Thanks, Paul. Thanks, Lynn. And let us open up the call for questions. Operator..

[Operator Instructions]. Please stand by while we compile the Q&A roster. Our first question comes from the line of Nate Pendleton from Stifel. Your line is now open..

Good afternoon, all. Thanks for taking my questions..

Sure..

The first question is, with the understanding that you and ATM are only a couple of weeks re moved from your ethanol to jet announcement, could you share comments on how your dialogue is progressing, and what's a reasonable timeline for disclosure of commercialization plans to achieve first production in 2025–2026-time frame?.

Well, the steps that have to happen are that we got to figure out the game plan of how we're going to fully de -carbonize. And then we're doing some engineering work on the ethanol to jet stuff. Once we have that pinned down, then we'll know what's the timeline should be. So, we're a way away from that yet. It's not like it's in the month.

And the -- as far as we go with ADM, the idea -- you heard that their CEO talked about it as well in their earnings call, is that using 900 million gallons of ethanol as raw material is -- that's a good starting point to generate a heck of a lot of SAF. We have a lot of work to do. Put in a game plan of do this.

We're going to bring in other partners because it's a lot of work to de carbonize things, and then we have to finance the whole thing. There's a whole lot of interested parties who are hanging around here working on it with us. It's one of the things you just have to stay tuned to..

Excellent. Thank you. And then for quick follow-up regarding Net-Zero 1, I wanted to follow-up on the CCS commentary that you gave while not part of the initial for Net-Zero 1, could you comment on the opportunity you have the integrated CCS and the price and EBITDA uplift potential..

Well, I'll comment first then Lynn, you can pick it up and talk about it, what it might mean economically or something.

All right? So, the answer is yes, our plant at Net-Zero 1, it's like any other plans to permutation plant that generate some CO2, that CO2 is actually pretty valuable and that it could be captured in sequestered when you do that, that has an impact of about 35 CI points.

So, we're starting at a minus 5, it's another minus 35, even in California where they just penalize corn. And our minus 5 in California is a 40, and that's what our contracts are based upon. Then you would get presumably credit for currency quest rations, so you'd get some improvement there.

And if you've got the full credit, you'd be down to a CI score of 5 in California.

And Lynn, do you have any comment on what you think that value might be the upside?.

It's 35's CI points, it's something like $0.02 of CI point per gallon. So, it could -- it's substantial in terms of EBITDA uplift. The costs associated with engaging the counter party under CCS is not nearly as great as the benefits that we're seeing out of the CI reductions.

I would say though that for Net-Zero 1, we don't see carbon capture sequestration as being a key component of the debt financing, but rather a potential equity upside investment in, or engagement in a contract in the future..

And of course, that's because we think the dental has to get financed before the CCI or the CCS pipelines exist..

Great. Thanks for taking my questions..

Our next question comes from the line of Shawn Severson from WTR. Your line is now open..

Great. Thanks, and good evening, Pat. A question on the mix of isooctane these days and renewable gasoline.

Obviously, a lot of -- a lot talk about SAF, and certainly through the ATM deal and stuff, but what do you see in these days when you look at the potential contracts, off-take agreements, and isooctane versus SAF?.

It's still split. Ballpark 50-50, maybe 40% isooctane, 60% jet. But in recent, since that White House meeting a couple of months ago, there definitely has been an uptick on people focused on SAF. The airlines still have an issue and that they don't make a lot of money, they're low to project long-term purchasing and things like that.

And so, I think it will be getting to see who else steps into the fray too, are the off takers before the airlines. And so, it's a bit changing, but with isooctane, isooctane, is gasoline even after everyone decarbonizes things.

If you took the most optimistic view of EVs, and worldly successfully EVs, the gasoline pool is still the biggest marketplace. I think you'd be hard-pressed to find anybody who thinks that isn't that way, even the most optimistic scenario say that gasoline will be bigger than jet fuel or diesel fuel out at 2050, so we should de carbonize those too.

California for us is a pretty good model for it though, in that they know how to count carbon there. And they've done a good job and have a good model that works. And our business group with partners calculate that we'd need something like 26 isooctane plants aimed at California just to meet their demand, currently.

There's -- and that's because they import foreign isooctane or alkylate from other places, and of course that's fossil-based. There's a good opportunity here and it's going to be an important part of the mix.

The other thing about isooctane that's interesting, is that when all these guys are doing the renewable diesel, or if you're making some lower value naphtha products -- naphtha is something that can be burn in gasoline. You mix about our isooctane; you just get more gallons of gasoline then.

And so, because our octane is such a high value product, such as -- because it's pure isooctane. So, there is -- we've the opportunity to take in more gallons from other people and make a better blend and get paid part..

And just a follow-up question. Can you -- what's the downstream Verity Tracking in the green model? I will -- just compare and contrast.

I mean, I know they're both Carbon County, but could you highlight some of the differences for me to understand the two?.

Sure. Paul, you want to take this question, just explain what grid is and then the business concept of Verity..

Thanks for the question. When you think about GREET, GREET is a life cycle inventory program that Argonne National Lab runs and basically, it can calculate the carbon intensity score of different products when you have the right inputs.

The difference here between Verity Tracking, Verity Tracking uses GREET as part of our calculation system to make sure that we get the carbon intensity calculation right.

But what Verity Tracking also does, is then tracks things from the sources, so think about what a farmer grower does, what can you do with that corn at the processor level, and then how the final product user implements or uses that product.

So really what Verity Tracking does is green, but then uses a blockchain or distributed ledger technology to connect all the dots through the value chain, through the whole of the business process system, to calculate the difference in the carbon intensity from the incumbent product that you're comparing it to..

Great, thanks guys..

Yes. So, the thing is Sean, is that think [Indiscernible] is a scientific tool that measure stuff. Verity Tracking is actually gonna have like field auditors, we had audit stuff in the fields, measure stuff in a field, account for it, take pictures, whatever the heck it turns out to be.

And then it's accounting for exactly the energy package that's used in the production, tracking it all the way back out to the marketplace. And so, think of Verity Tracking as the sustainability certificate that comes with the product, except it's going to be separate business is going to be audited. Right.

And have third-parties looking at it and saying, yes, that is in fact the case. And of course, it's not lost on any of us that Verity Tracking done right leads to derivatives of those attributes and that's interesting as well, because that could be another means of commercializing that value..

And you mean that they were in trade in some capacity, you could be exchanged like [Indiscernible] is that kind of -- what do you mean by that?.

You tokenize that. Everyone knows what a token is, right? Everybody who does blockchain understands tokens. If you have a certifiable attribute that’s immutable, can't be changed, documented, and all the rest, you can tokenize it. We've already worked on the prototypes for that. And so, you could do that and then they could be traded in some way.

Except [Indiscernible] what's going be different about this is be some hocus - pocus hand-waving. It's going to have all the dying data attached to it. You can say, here's exactly where it came from, how it came to be the whole bit, like you would expect that about blockchain system..

Great. Thanks for the explanation. Thanks, Pat..

Our next question comes from the line of Amit Dayal from H.C. Wainwright. Your line is now open..

Thank you. Good afternoon, everyone..

Hey there..

Thank you for taking my question. Hi, Pat.

So Pat, what gets your partners and potential customers like Chevron from MOU to definitive agreements? Is there some sort of a trigger or some catalysts that moves the needle for you guys?.

No. It's just plugging along, getting Tim in the same room with people, me in the same room, and working at all through and figuring it out, that's all. So that's progressing. And it's the same picture in all these deals, and around the ethanol. This deal with ADM is great. But we're gonna -- we intend on working with more than just ADM.

So, it'll be interesting to see who else comes into the mix because that's a very fast way of growing and it's complementary to our isobutanol. So, it's interesting and it will be sporting to see how we trained. I'm serious about this building gallons per year of hydrocarbons by '23..

And so that's our focus, and yes, the Net-Zero project and what it proves that can be done is eye-opening for everybody, because it's shows how things could be de -carbonized, if you do the right mix of renewable energy, the electricity and the gas. It shows people how it can be done. It creates a roadmap for everybody else.

And so, we're going to use that and glad that we were able to partner with Axens. And I'm glad that we have pieces that are falling into place..

Understood. Congratulations on getting the Butamax IP. I was wondering if you have any plans for that IP in the near-term or are you just going to maybe sit on it and see how things play out for you guys..

How we're going to use it is that that portfolio is really large. And so, there's lots of active patent, and so we can extend those patents for us their add to them, adjust them, and extends the life of the patents. And there's also useful technologies that are incorporated their [Indiscernible].

What it does is we're going to be successful; I believe in being a big, large Company with big revenues. And these patents have long life times, 20 years..

So, it's really important to make sure that we are creating somebody comes back. Something that -- I want to get them under our -- in our tent, because I can imagine 10 years from now, if something goes wrong, someone else might acquire them and there might have some other half or someday in the future when we're worth big bucks.

And so cleaned up is a good thing, and it gives us more opportunity to create even more intellectual property..

Understood.

And then with respect to sort of your client build-out, your equipment needs, etc, the current supply chain environment and all of the backlog that these types of deployments we're facing right now, are you already kind of dealing with those types of issues or are they a little bit removed for you at this stage?.

Kiewit is superb at this. This is one of their strengths. And so, they've already taken that into account. And so far, I don't anticipate any big issues, whether our plants start up midyear, third quarter, late in third quarter, or maybe it's even earlier. Those are all things that will be determined on other project impacts in effects.

But I don't expect its equipment at this point. We know that when I asked that same question to the engineers, they all like, we're already taken those kinds of things into account. Okay. We'll see..

Pat, I would add that for the non-recourse debt purposes, we have to have dates certain with liquidated damages. So, Kiewit will take into account the procurement constraints in guaranteeing their schedule..

And so, they're going to be absolutely certain of that date before they promised to guarantee at that price and damages..

Understood. Just last one for me with respect to this Verity Tracking effort, how much investment is going into this, like how big is the team, etc. and any color on that would be helpful..

It's a relatively small investment, so it's one of these things where I wish -- I shouldn't say this even out loud, but I wish we would have thought at this year's ago and done it.

We could add really cool, super-duper value; but we're going to have a set value business from it, but it's a -- 1 of these things is worth a small investment, a lot of leverage. It's a software-oriented thing. So, it isn't like a heavy capital asset investment. So, it's in the few millions of dollars -- kind of a thing as we develop this..

Okay. I mean, it looks like there are a lot of opportunities with you guys, even with the RNG efforts and a lot of the things you are sort of building for yourselves, these are potential services that you could provide other folks with as well.

So, is that something -- is that how you are thinking of maybe leveraging all these efforts into additional revenue opportunities?.

It is. And you see it also in how we're putting together our partnerships like with Juhl Energy, they do a great job.

They're hungry, they want to grow, and they're really good at working in the mid-west and they're creative, they got good financial partners, they got good technical partners, good technology partners, into sticking true with our wastewater treatment. The foot forward with their, they get this as to why this is important.

This point I keep making about, if we want to de -carbonize the world, let's focus on electricity. Let's focus on getting rid of our 60% plus of fossil-based electricity and turn it into renewable, and let's do something about the gas. This latter one, the gas is the reason we're doing renewable natural gas.

We originally started doing it because we're going to just supply up to our Luverne plant. But we can make more money so much California, so we're going to do that for a while. But you know what? It's available to us to use at any time, and it has a massively negative CI score.

We think bio-gas is going to be incredibly important in the future, because that is the only practical way to get rid of fossil-based methane. And so, we think we're quite bullish on those opportunities. The way we think about it though, is we can take that green value and transform it into liquids. That's a different paradigm.

And that's how we think about it. So, whenever we're looking at a site, whether it's an ethanol plant site, acquiring an ethanol plant working with ethanol partner, we're -- anaerobe digestion is going to be part of it.

It might not be manure digestion, but shoot, if we just took residual carbohydrate waste and fermented those with anaerobic digestion, we get a zero-carbon footprint for the bio-gas that's produced. That's valuable..

That's all I have. Thank you so much..

You bet..

Thank you. Our next question comes from the line of Poe Fratt, from Noble Capital. Your line is now open..

Thanks, Gigi.

Hey Pat, how are you?.

Doing great, thanks..

You have been a very busy man. I was -- You did a great job of laying out a lot of progress you've made. I'd like to focus on Lynn's comments just about being pre -revenue. You look at quarterly cash burn and maybe even on an annual basis.

Lynn, can you just highlight what will be present in the fourth quarter financials as far as capital, the Butamax is not going to be there and then highlight the corporate burn rate too if you wouldn't mind..

Yes. I think our corporate burn rates around $6 million a quarter. We're looking at $24 million for the corporate that excludes the cost of goods sold at Luverne. In terms of capital investments in the next quarter, it will be similar.

The larger investments associated with getting going with site mobilization, site acquisition, everything will be into 2022 for Net-Zero 1..

Would you be able to quantify as far as what you'd might expect over the first half of '22?.

Not at this point. I wouldn't want to throw those numbers around loosely..

But they're going to be like long -- we talked in the past about long lead equipment items and there will be some site work stuff like that. But it's not the big drop of money. That's sometime later once we have date-certain of delivery of the plant and the guarantees in place and the financing in place.

So that -- we got to unfold that still, but it's looking good. And by the way, the reason that I had Lynn make sure that he mentions pre -revenue Company is because I keep getting questions from investors where they go, oh, you aren't making any, you don't have any material revenues.

Well, no kidding, we keep telling people we shutdown ethanol, and so ethanol wasn't our main business. And we are about focusing our efforts on building out future capacity and technologies. So that's why..

And then any change to the -- either capacity or costs for Net-Zero 1 at this point?.

Not yet. I keep asking that question too, Poe, because, I look at all the world with COVID and supply chains and thinking [Indiscernible] and I got no data that says anything different yet, and we keep making progress, so this is a good thing. If there was something that was a disaster, I'd heard about already..

I was looking at it from the other side, Pat, since that you would introduce the concept that maybe 45 to 50 million gallons per year might be a little too small for potentially gaining some efficiencies. And I was just looking at whether you 've actually up-sized the Net-Zero 1 yet or sort of where that stands..

Okay. Let me comment on that. What Poe's referring to is that, we've always been talking about Net-Zero 1 at 45 million gallons of hydrocarbon, 340 million pounds of high-protein animal feed products and 30 million pounds of oil. And that's good. You know what? We could -- that thing is engineered. That site at Net-Zero could handle 2 of those plants.

And the other sites that we're choosing all could handle 2 of those plants. And so, you do a lot of -- there's the capital costs, yes, but when your carbon copying, you save a heck of a lot of money.

And when you're building things on skids or building on this skid production facilities, which is possible to do and you're sticking to carbon copies, that can be very interesting. None of this lost on us.

Of course, when you maximize capacity at a site, you do spread out your fixed cost because it's still the same team who can run both that 90 million gallons versus 45. None of that is lost on us. And then you start thinking, that's interesting and what if we have an ethanol plant plus an isobutanol plant onsite.

And once you have dehydrated ethanol to ethylene and make butanes out of it, guess what? It's the same process to take a butane from isobutanol to butane mixture from ethylene. And so, it, too, is the same plant. And so, none of this has lost on us. We just haven't gone into detail yet about how this will unfold.

In the early days here, you're right, Poe, that we sold out 54 million gallons under contract so far. We will get much more sold out, I think here shortly, and be able to talk about it. You can see that the interest from Chevron, there's a bunch of people who are interested. The chunks and bites are getting bigger.

And because we're still requiring somewhat to backstop them, on a financial basis, that makes it not for the faint of heart on the customer side. But it is interesting, and I think we are going to wind up bigger. I just don't know when we're going to be able to pull that trigger and we do need diversity of sight as well.

So, I just -- we just got to go through the work and figure out which choices make the most sense given the full set of circumstances of customers, partners, sites, economics, the whole bit..

Great. So Pat, if I heard it correctly, then you're still looking at the simpler size, but maybe call it co-location so that you get some of the whether it's input synergies or the wind, the bio-gas, and the wastewater..

Right..

Your able tap into the, if you will, the plumbing a little more efficiently so that reduces your incremental costs..

I think that's a fair assumption. And the reason I say it that way is if I want to hold timelines and get big faster, then I should stick with the current size we've already spent a year engineering. If I change it, guess what happens? I got another freaking long period of time to engineer stuff again. So, the idea is do what you said, is leverage it.

Now, we could also take the approach -- the hydrocarbon plants, mind you, are a little bit different. They're easier to scale because we have a bunch of work that's been done by actions already, we can leverage. And so that'll be a little bit different.

And of course, ethanol comes into the mix, and so when we look at ethanol, there's a lot of ethanol plants we want to -- that we can see make a lot of sense. We have -- our phone has been ringing, and we do expect to have additional partners. Don't have a timeline yet. The key is about de - carbonization.

And so, how can we leverage all these things and make them all work synergistically, get them deployed quickly because I think there is a benefit in getting lots of de -carbonized hydrocarbons out into the marketplace sooner rather than later. And that's the game afoot in what we're working on.

Lynn mentioned that we'll be putting out guidance eventually here. And I don't know when it is, but it's not very far away, meaning it's within -- I don't know. He didn't even say. Roughly soon we put out guidance for a billion-gallon plan.

Who, what, where, how, and all the rest?.

Okay, great. And then if I may, you alluded to the fact that you -- the next slug of contracts could -- b that would sell out Net-Zero 2, might be forthcoming.

If that happens by the end of the year, Pat, does that mean that you'll have Net-Zero 1 and 2 under construction the same time, at sort of very parallel tracks, or will they be sequenced a little bit?.

They're gonna be sequenced just a bit because I think we've got sites -- well, already have done site development work and continue to develop even more sites. We like some of these places and so that parts already ongoing.

The engineering work, of course, if we're doing a Net-Zero copy, it is literally taking that plant drop it down somewhere else and so it can go pretty darn fast. I think that practical timeline and, Lynn, we've been talking, a what? 7 months delay for our Net-Zero 2 would be the earliest..

Six months. Six months long..

And just as a matter of we got -- get the permits in place, get the site work done, get all the little details done, and, yeah, it would be something like that. Remember, we sold out 54 million gallons. And so, if we get a big bite here, we're going to be well into Net-Zero 3 at that point.

And then we might have even bigger bites, and if we had a bigger bite in its call, we better hurry up and get on with these ADM plants, focus indicator first..

And then Lynn talked about funding for the first time, and had seen Gevo Inc. level, you refresh the ADM when you made the Chevron announcement. But you need shareholder approval to expand the share authorization.

Can you give me an idea of when you expect to do the shareholder vote and then 2, the time in potentially funding, actually raising additional money beyond what cash you have now?.

Well, I think we actually have we're sitting here with $520 million of cash equivalents. We're in pretty good shape, so it isn't like we have those burning, "Oh my God, I got to do something. " So, we don't -- not in the situation, and we did refresh the ATM because it was time to do it and it made sense to do it and all the rest.

And we haven't used it yet. So that's offsetting there. We have a lot of interest. The world has changed for us. So, it's hard for us to describe. There is no way for me to explain it to everybody, it's not possible. But the world changed for us.

And it's about who is going to play with us, how we're going to play, how we're going to grow when everyone wants to go big sooner. How are we going to put this together and make it happen? This is a question in front of us.

I get that we can just go do our Net-Zero 1 plant, do another 1, Net-Zero 2, Net-Zero 3, and have a nice business, and it's been a very profitable business. I mean, these Net-Zero plants are looking at a cash flow streams $150 million a year or something so they're good projects.

We all want to go faster and I think now with this combination of isobutanol and ethanol to hydrocarbon technologies, the two of them together, we can grow a heck of a lot faster. That's what we should be focused on. It makes it for a more efficient deployment of capital. So, we expect to bring in other partners.

We expect to bring in people investing at the project level. That's what the Chevron deal was about. We expect to see people interested at the Gevo level. We expect that we will have to raise money in the future, but we'll see. We're going to do it judiciously.

We've talked in the past about this and it's like I'm not a real big fan of doing dilutive fundraisings. We don't -- we're beyond that stage, I think. So, it's about accretive stuff. It's about saying, "Here's these projects, we're going to go raise money and here's the casual streams that are expected to result.

" It's that kind of a game that has to get played..

Great. Thank you, Lynn. Thank you, Pat. Very helpful..

Thank you. At this time, I'm showing no further questions. I would like to turn the call back over to Pat Gruber for closing remarks..

Well, thanks, everybody for joining us. It's an exciting time for us as building gallon plan is the right kind of idea of the weekend. I want to see us do even more than that.

The fact that we're able to work with Axens, get that deal done with them, get the deal done, make progress in the Net-Zero concept, we're decarbonizing the production systems, and being able to prove it. That is all of it a big deal. And it applies across the board. It's what is attracting people to us.

And that along with the way to count carbon and track corn and all the rest or any other feed stock with Verity Tracking. We're on a good track. I like where we are. We're making great progress and thank you all for your support and thanks for joining us today..

This concludes today's conference call. Thank you for participating. You may now disconnect..