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What changed in Gevo, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Gevo, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+260 added−189 removedSource: 10-K (2024-03-07) vs 10-K (2023-03-09)

Top changes in Gevo, Inc.'s 2023 10-K

260 paragraphs added · 189 removed · 154 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

85 edited+34 added−12 removed177 unchanged
Biggest changeCost overruns on our growth projects could occur due to changes in a variety of factors such as: • failure to properly estimate costs of engineering, materials, equipment, labor or financing; • unanticipated technical problems with the structures, materials or services; • unanticipated project modifications; • changes in the costs of equipment, materials, labor or contractors; • our suppliers' or contractors' failure to perform; • changes in laws and regulations; and • delays caused by weather conditions. 20 Table of Contents As projects grow in size and complexity, multiple factors may contribute to reduced profit or greater losses, and depending on the size of the particular project, variations from the estimated project costs could have a material adverse effect on our business.
Biggest changeCost overruns on our growth projects could occur due to changes in a variety of factors such as: ● failure to properly estimate costs of engineering, materials, equipment, labor or financing; ● unanticipated technical problems with the structures, materials or services; ● unanticipated project modifications; ● changes in the costs of equipment, materials, labor or contractors; ● our suppliers’ or contractors’ failure to perform; ● changes in laws and regulations; and ● delays caused by weather conditions.
We operate in a capital-intensive industry and will need substantial amounts of capital to execute on our business plans. We believe that we will continue to expend substantial resources for the foreseeable future on further growth of our business, including developing, constructing, financing and acquiring facilities necessary for the production of our products on a commercial scale.
We operate in a capital-intensive industry and will continue to need substantial amounts of capital to execute on our business plans. We believe that we will continue to expend substantial resources for the foreseeable future on further growth of our business, including developing, constructing, financing and acquiring facilities necessary for the production of our products on a commercial scale.
Furthermore, even if we are able to satisfy all conditions precedent to our take-or-pay contracts, including completion of the Facility or acquiring, constructing or retrofitting a facility at another suitable location and securing adequate funding, we still may never realize the full amount of revenue that we expect or project to earn from such contracts.
Furthermore, even if we are able to satisfy all conditions precedent to our take-or-pay contracts, including completion of the Facility or acquiring, constructing or retrofitting a production facility at another suitable location and securing adequate funding, we still may never realize the full amount of revenue that we expect or project to earn from such contracts.
A variety of factors may have a significant effect on our stock price, including: • actual or anticipated fluctuations in our liquidity, financial condition and operating results; • the position of our cash and cash equivalents; • the capital costs required to construct our Net-Zero Projects; • our ability to obtain certain regulatory permits or approvals for our production facilities, including our Net-Zero Projects; • actual or anticipated changes in our growth rate relative to our competitors; • actual or anticipated fluctuations in our competitors’ operating results or changes in their growth rate; • announcements of technological innovations by us, our partners or our competitors; • announcements by us, our partners or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; • the entry into, modification or termination of licensing arrangements, marketing arrangements, and/or research, development, commercialization, supply, off-take or distribution arrangements; • our ability to consistently produce commercial quantities of our products; • additions or losses of customers or partners; • our ability to obtain certain regulatory approvals for the use of our products in various fuels and chemicals markets; • commodity prices, including oil, ethanol and corn prices; • additions or departures of key management or scientific personnel; • competition from existing products or new products that may emerge; • issuance of new or updated research reports by securities or industry analysts; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • litigation involving us, our general industry or both; • disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • announcements or expectations of additional financing efforts or the pursuit of strategic alternatives; • changes in existing laws, regulations and policies applicable to our business and products, and the adoption of or failure to adopt carbon emissions regulation; • sales of our common stock or equity-linked securities, such as warrants, by us or our stockholders; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • general market conditions in our industry; and • general economic and market conditions, including as a result of the COVID-19 pandemic.
A variety of factors may have a significant effect on our stock price, including: ● actual or anticipated fluctuations in our liquidity, financial condition and operating results; ● the position of our cash and cash equivalents; ● the capital costs required to construct our Net-Zero Projects; ● our ability to obtain certain regulatory permits or approvals for our production facilities, including our Net-Zero Projects; ● actual or anticipated changes in our growth rate relative to our competitors; ● actual or anticipated fluctuations in our competitors’ operating results or changes in their growth rate; ● announcements of technological innovations by us, our partners or our competitors; ● announcements by us, our partners or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; ● the entry into, modification or termination of licensing arrangements, marketing arrangements, and/or research, development, commercialization, supply, off-take or distribution arrangements; ● our ability to consistently produce commercial quantities of our products; ● additions or losses of customers or partners; ● our ability to obtain certain regulatory approvals for the use of our products in various fuels and chemicals markets; ● commodity prices, including oil, ethanol and corn prices; ● additions or departures of key management or scientific personnel; ● competition from existing products or new products that may emerge; ● issuance of new or updated research reports by securities or industry analysts; ● fluctuations in the valuation of companies perceived by investors to be comparable to us; ● litigation involving us, our general industry or both; ● disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; ● announcements or expectations of additional financing efforts or the pursuit of strategic alternatives; ● changes in existing laws, regulations and policies applicable to our business and products, and the adoption of or failure to adopt carbon emissions regulation; ● sales of our common stock or equity-linked securities, such as warrants, by us or our stockholders; ● share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; ● general market conditions in our industry; and ● general economic and market conditions.
We expect to incur losses and negative cash flows from operating activities for the foreseeable future. We currently derive revenue primarily from the sale of RNG and related environmental attributes produced at Gevo RNG. Furthermore, we expect to spend significant amounts on the further development and commercial implementation of strategic plans and technology.
We expect to incur losses and negative cash flows from operating activities for the foreseeable future. We currently derive revenue primarily from the sale of RNG and related environmental attributes produced at Gevo RNG. Furthermore, we expect to spend significant amounts on the further development and commercial implementation of our strategic plans and technology.
SAF has not been used as a commercial fuel in large quantities or for a long period of time. Research regarding SAF and its distribution infrastructure is ongoing. Although SAF has been tested on some engines, there is a risk that they may damage engines or otherwise fail to perform as expected.
SAF has not been used as a commercial fuel in large quantities or for a long period of time. Research regarding SAF and its distribution infrastructure is ongoing. Although SAF has been tested on some engines, there is a risk that SAF may damage engines or otherwise fail to perform as expected.
Our proposed growth projects may not be completed or, if completed, may not perform as expected. Our project development activities may consume a significant portion of our management’s focus, and if not successful, reduce our profitability. We plan to grow our business by building multiple production facilities, including greenfield and brownfield projects.
Our proposed growth projects may not be completed or, if completed, may not perform as expected or achieve profitability. Our project development activities may consume a significant portion of our management’s focus, and if not successful, reduce our profitability. We plan to grow our business by building multiple production facilities, including greenfield and brownfield projects.
Our approach to the renewable fuels and chemicals markets will be dependent on the price of corn and other feedstocks that will be used to produce our products. A decrease in the availability of plant feedstocks or an increase in the price may have a material adverse effect on our financial condition and operating results.
Our approach to the renewable fuels and chemicals markets is dependent on the price of corn and other feedstocks that will be used to produce our products. A decrease in the availability of plant feedstocks or an increase in price may have a material adverse effect on our financial condition and operating results.
In order to actually realize revenue under such contracts, we are required to, among other things, complete the Facility or acquire, construct or retrofit a facility at another suitable location, which is, in turn, dependent on our ability to secure adequate financing.
In order to actually realize revenue under such contracts, we are required to, among other things, complete the Facility or acquire, construct or retrofit a production facility at another suitable location, which is, in turn, dependent on our ability to secure adequate financing.
Nevertheless, these agreements may not be enforceable, our proprietary information may be disclosed, third parties could reverse engineer our biocatalysts and others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets.
Nevertheless, these agreements may not be enforceable, our proprietary information may still be disclosed, third parties could reverse engineer our biocatalysts and others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets.
These expenditures may include costs associated with our Net-Zero Projects, research and development, developing biogas processing projects and wind projects, obtaining government and regulatory approvals, and negotiating offtake agreements for our products. In addition, other unanticipated costs may arise. To date, we have funded our operations primarily through equity offerings and issuances of debt.
These expenditures may, among other things, include costs associated with our Net-Zero Projects, research and development, developing biogas processing projects and wind projects, obtaining government and regulatory approvals, and negotiating offtake agreements for our products. In addition, other unanticipated costs may arise. To date, we have funded our operations primarily through equity offerings and issuances of debt.
We also expect to spend significant amounts on (i) developing and financing our Net-Zero 1 Project and other similar growth projects, (ii) marketing, general and administrative expenses associated with our planned growth, and (iii) management of operations as a public company. As a result, we expect to continue to incur new losses for the foreseeable future.
We also expect to spend significant amounts on (i) developing and financing our Net-Zero projects and other similar growth projects, (ii) marketing, general and administrative expenses associated with our planned growth, and (iii) management of operations as a public company. As a result, we expect to continue to incur new losses for the foreseeable future.
Joint ventures are complex and time consuming and we may encounter unexpected difficulties or incur unexpected costs related to such arrangements, including: • difficulties negotiating joint venture agreements with favorable terms and establishing relevant performance metrics; • the inability to meet applicable performance targets; • difficulties obtaining the permits and approvals required to produce and sell products in different geographic areas; • complexities associated with managing the potential geographic separation of facilities; • diversion of management attention from ongoing business concerns to matters related to the joint ventures; • difficulties maintaining effective relationships with personnel from different corporate cultures; and • the inability to generate sufficient revenue to offset retrofit costs.
Finally, joint ventures are complex and time 25 Table of Contents consuming and we may encounter unexpected difficulties or incur unexpected costs related to such arrangements, including: ● difficulties negotiating joint venture agreements with favorable terms and establishing relevant performance metrics; ● the inability to meet applicable performance targets; ● difficulties obtaining the permits and approvals required to produce and sell products in different geographic areas; ● complexities associated with managing the potential geographic separation of facilities; ● diversion of management attention from ongoing business concerns to matters related to the joint ventures; ● difficulties maintaining effective relationships with personnel from different corporate cultures; and ● the inability to generate sufficient revenue to offset retrofit costs.
As a result, we may be required to defend against claims of intellectual property infringement that may be asserted by our competitors against us and, if the outcome of any such litigation is adverse to us, it may affect our ability to compete effectively.
As a result, we may be required to defend against claims of intellectual property infringement that may be asserted by our competitors against us and, if the outcome of any such litigation is adverse to us, it may affect our financial condition and our ability to compete effectively.
If competitors are able to use our technology without our authorization, our ability to compete effectively could be adversely affected. Moreover, competitors and other parties such as universities may independently develop and obtain patents for technologies that are similar to or superior to our technologies.
If competitors are able to use our technology without our authorization, our ability to compete effectively could be adversely affected and our business could be harmed. Moreover, competitors and other parties such as universities may independently develop and obtain patents for technologies that are similar to or superior to our technologies.
Furthermore, should we become more dependent on spot market sales, our profitability will become increasingly vulnerable to short-term fluctuations in the price and demand for petroleum-based fuels and competing substitutes. 21 Table of Contents If we engage in acquisitions, we will incur a variety of costs and may potentially face numerous risks that could adversely affect our business and operations.
Furthermore, should we become more dependent on spot market sales, our profitability will become increasingly vulnerable to short-term fluctuations in the price and demand for petroleum-based fuels and competing substitutes. If we engage in acquisitions, we will incur a variety of costs and may potentially face numerous risks that could adversely affect our business and operations.
Integrating new facilities with our existing operations may prove difficult. Rapid growth, resulting from our operation of, or other involvement with, renewable hydrocarbon facilities or otherwise, may impose a significant burden on our administrative and operational resources.
In addition, integrating new facilities with our existing operations may prove difficult. Rapid growth, resulting from our operation of, or other involvement with, renewable hydrocarbon facilities or otherwise, may impose a significant burden on our administrative and operational resources.
A failure to successfully meet the specifications of our potential customers could decrease demand and significantly hinder market adoption of our products, thus having a material adverse impact on our business and results of operations. Our experience may not be sufficient to operate commercial-scale facilities and we may encounter substantial difficulties operating commercial plants or expanding our business.
A failure to successfully meet the specifications of our potential customers could decrease demand, hinder market adoption of our products, and harm our reputation, thus having a material adverse impact on our business and results of operations. Our experience may not be sufficient to operate commercial-scale facilities and we may encounter substantial difficulties operating commercial plants or expanding our business.
We have net operating loss carryforwards due to prior period losses generated before January 1, 2022, which if not utilized will begin to expire at various times over the next 20 years.
We have net operating loss carryforwards due to prior period losses generated before January 1, 2023, which if not utilized will begin to expire at various times over the next 20 years.
Accordingly, we are unable to exercise the same degree of control over licensed intellectual property as we exercise over our own intellectual property and we face the risk that our licensors will not prosecute or maintain it as effectively as we would like. In addition, unauthorized parties may attempt to copy or otherwise obtain and use our products or technology.
Accordingly, we are unable to exercise the same degree of control over licensed intellectual property as we exercise over our own intellectual property and we face the risk that our licensors will not prosecute or maintain it as effectively as we would like. 31 Table of Contents In addition, unauthorized parties may attempt to copy or otherwise obtain and use our products or technology.
We undertook a detailed study of our net operating loss carryforwards through December 31, 2022 to determine whether such amounts are likely to be limited by Section 382 of the Code.
We undertook a detailed study of our net operating loss carryforwards through December 31, 2023 to determine whether such amounts are likely to be limited by Section 382 of the Code.
We cannot assure you that we will ultimately prevail if any of this third-party intellectual property is asserted against us. 26 Table of Contents Our ability to compete may be adversely affected if we do not adequately protect our proprietary technologies or if we lose some of our intellectual property rights through costly litigation or proceedings.
We cannot assure you that we will ultimately prevail if any of this third-party intellectual property is asserted against us. Our ability to compete may be adversely affected if we do not adequately protect our proprietary technologies or if we lose some of our intellectual property rights through costly litigation or proceedings.
We may not be able to attract or retain qualified employees in the future due to the intense competition for qualified personnel among biotechnology and other technology- 22 Table of Contents based businesses, particularly in the advanced renewable fuels area, or due to the limited availability of personnel with the qualifications or experience necessary for our renewable chemicals and advanced renewable fuels business.
We may not be able to attract or retain qualified employees in the future due to the intense competition for qualified personnel among biotechnology and other technology-based businesses, particularly in the advanced renewable fuels area, or due to the limited availability of personnel with the qualifications or experience necessary for our renewable chemicals and advanced renewable fuels business.
If we are required to sell a large portion of the equity in our projects to third parties, it may have a material adverse effect on our business, financial condition and operating results. Our stock price may be volatile, and your investment in our securities could suffer a decline in value.
If we are required to sell a large portion of the equity in our projects to third parties, it may have a material adverse effect on our business, financial condition and operating results. 36 Table of Contents Our stock price may be volatile, and your investment in our securities could suffer a decline in value.
Accordingly, our efforts to enforce our intellectual property rights in such countries may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop. 28 Table of Contents Confidentiality agreements with employees and others may not adequately prevent disclosures of trade secrets and other proprietary information.
Accordingly, our efforts to enforce our intellectual property rights in such countries may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop. Confidentiality agreements with employees and others may not adequately prevent disclosures of trade secrets and other proprietary information.
Additionally, the EPA has exercised the authority to waive the requirements of the RFS minimum levels for certain small refiners. Any waiver of the RFS minimum levels with respect to 29 Table of Contents one or more states would reduce demand for renewable fuels and could cause our results of operations to decline and our financial condition to suffer.
Additionally, the EPA has exercised the authority to waive the requirements of the RFS minimum levels for certain small refiners. Any waiver of the RFS minimum levels with respect to one or more states would reduce demand for renewable fuels and could cause our results of operations to decline and our financial condition to suffer.
If that were to occur, we could lose all of our investment in development expenditures and may be required to write-off project development assets. We may be unable to successfully perform under current or future offtake agreements to provide our products, which could harm our commercial prospects.
If that were to occur, we could lose all of our investment in development expenditures and may be required to write off project development assets. 21 Table of Contents We may be unable to successfully perform under current or future offtake agreements to provide our products, which could harm our commercial prospects.
Our future success on alcohol-to-SAF projects depends on our ability to produce commercial quantities of SAF from ethanol using Axens technology. We may encounter challenges in scaling up the Axens technology and/or the technology may not work as expected, or at all on a commercial scale.
Our future success on alcohol-to-SAF projects depends on, among other things, our ability to produce commercial quantities of SAF from ethanol using Axens technology. We may encounter challenges in scaling up the Axens technology and/or the technology may not work as expected, or at all on a commercial scale.
If we issue additional shares of common stock or instruments convertible into common stock, it may materially and adversely affect the price of our common stock. 31 Table of Contents Raising capital at a subsidiary, or project, level would result in lower revenues attributable back to us.
If we issue additional shares of common stock or instruments convertible into common stock, it may materially and adversely affect the price of our common stock. Raising capital at a subsidiary, or project, level would result in lower revenues attributable back to us.
Many of our competitors have substantially greater production, financial, research and development, personnel and marketing resources than we do. In addition, certain of our competitors may also benefit from local government subsidies and other incentives that are not available to us.
Many of our competitors have substantially greater production, financial, research and development, personnel 26 Table of Contents and marketing resources than we do. In addition, certain of our competitors may also benefit from local government subsidies and other incentives that are not available to us.
Any significant increase in production capacity above the RFS Program minimum requirements may have an adverse impact on renewable fuel prices. Any change in government policies regarding the RFS Program could have a material adverse effect on our business and the results of our operations.
Any significant increase in production capacity above the RFS Program 33 Table of Contents minimum requirements may have an adverse impact on renewable fuel prices. Any change in government policies regarding the RFS Program could have a material adverse effect on our business and the results of our operations.
The departure, illness or absence of any key members of our management, including our named executive officers, or the failure to attract or retain other key employees who possess the requisite expertise for the conduct of our business, could prevent us from developing and commercializing our products for our target markets and entering into partnerships or licensing arrangements to execute our business strategy.
The departure, illness or absence of any key members of our management, including our named executive officers, or the failure to attract or retain other key employees who possess the requisite expertise for the conduct of our business, could prevent us from developing and commercializing our products for our target markets and entering into partnerships or licensing arrangements to execute our business strategy, as could the loss of any key scientific staff, or the failure to attract or retain other key scientific employees.
The price of our common stock could also be affected by possible sales of common stock by investors who view our warrants as a more attractive means of equity participation in us and by hedging or engaging in arbitrage activity involving our common stock.
The price of our common stock could also be affected by possible sales of common stock by investors who view our warrants as a more attractive means of equity participation in us and by hedging or engaging in arbitrage 37 Table of Contents activity involving our common stock.
Further, we typically make a large investment in our projects prior to receiving registration and/or qualification. Failure of our projects or products to qualify for government economic incentives could have a material adverse effect on our business.
Further, we typically make a large investment in our projects 29 Table of Contents prior to receiving registration and/or qualification. Failure of our projects or products to qualify for government economic incentives could have a material adverse effect on our business.
Any adverse effect resulting from such a release could have a material adverse effect on our business and financial condition, and we may be exposed to liability for any resulting harm. As our products have not previously been used as a commercial fuel in significant amounts, their use subjects us to product liability risks.
Any 28 Table of Contents adverse effect resulting from such a release could have a material adverse effect on our business and financial condition, and we may be exposed to liability for any resulting harm. As our products have not previously been used as a commercial fuel in significant amounts, their use subjects us to product liability risks.
Further, changes in U.S. federal, state or local political, social or economic conditions, including a lack of legislative focus on these programs and regulations, could result in their modification, delayed adoption or repeal.
Further, changes in U.S. federal, state or local political, social or economic conditions, including a lack of legislative focus on these programs and regulations, could result in their 34 Table of Contents modification, delayed adoption or repeal.
If that happens, the potential competitive advantages provided by our intellectual property may be adversely affected. We may then need to license these competing 27 Table of Contents technologies, and we may not be able to obtain licenses on reasonable terms, if at all, which could cause material harm to our business.
If that happens, the potential competitive advantages provided by our intellectual property may be adversely affected. We may then need to license these competing technologies, and we may not be able to obtain licenses on reasonable terms, if at all, which could cause material harm to our business.
If needed funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate: • our Net-Zero Projects, including NZ1; • our plans to enter into agreements with strategic partners; • our development of future RNG facilities or expansion of the Gevo RNG project; • our efforts to prepare, file, prosecute, maintain and enforce patent, trademark and other intellectual property rights and defend against claims by others that we may be violating their intellectual property rights; and/or • our activities in negotiating and performing under offtake agreements that may be necessary for the commercialization of our products.
If needed funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate: ● our Net-Zero Projects, including NZ1; ● our plans to enter into agreements with strategic partners; ● our development of future capital projects or expansions; ● our efforts to prepare, file, prosecute, maintain and enforce patent, trademark and other intellectual property rights and defend against claims by others that we may be violating their intellectual property rights; and/or ● our activities in negotiating and performing under offtake agreements that may be necessary for the commercialization of our products.
We may be sued for any injury or contamination that results from our use or the use by third parties of these materials, and our liability may 30 Table of Contents exceed our total assets.
We may be sued for any injury or contamination that results from our use or the use by third parties of these materials, and our liability may exceed our total assets.
The timing and volume commitment of certain of these agreements are conditioned upon, and subject to, our ability to complete the 18 Table of Contents construction of a new or expanded production facility (the “Facility”). In order to commence construction of and complete the Facility, we must secure third-party financing.
The timing and volume commitment of certain of these agreements are conditioned upon, and subject to, our ability to complete the construction of a new or expanded production facility (the “Facility”). However, in order to commence construction of and complete the Facility, we must secure third-party financing.
In any event, failure to realize the expected revenue thereunder would have a material adverse effect on our business, financial condition, results of operation and liquidity. Fluctuations in the price of corn and other feedstocks may affect our cost structure.
In any event, our failure to realize the expected revenue under our offtake agreements would have a material adverse effect on our business, financial condition, results of operation and liquidity. Fluctuations in the price of corn and other feedstocks may affect our cost structure.
In addition, the cost to construct commercial alcohol-to-SAF facilities or the production costs associated with the operation of such facilities may be higher than we project. If we encounter such difficulties, this could significantly affect our profitability and have a material adverse impact on our business and results of operations.
In addition, the cost to construct commercial alcohol-to-SAF facilities or the production costs associated with the operation of such facilities may be higher than we project. If we encounter such difficulties in scaling or constructing alcohol-to-SAF projects, it could significantly affect our profitability and have a material adverse impact on our business and results of operations.
We may be unable to produce renewable hydrocarbon products to meet customer specifications, including those defined in ASTM D7862 "Standard Specification for Butanol for Blending with Gasoline for Use as Automotive Spark-Ignition Engine Fuel," ASTM D7566 "Standard Specifications for Aviation Turbine Fuel Containing Synthesized Hydrocarbons" or specifications to carbon intensity standards.
We may be unable to produce renewable hydrocarbon products to meet customer specifications, including those defined in ASTM D7862 “Standard Specification for Butanol for Blending with Gasoline for Use as Automotive Spark-Ignition Engine Fuel,” ASTM D7566 “Standard Specifications for Aviation Turbine Fuel Containing Synthesized Hydrocarbons” or specifications to carbon intensity standards.
Proceedings to enforce our patents and other proprietary rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business.
Proceedings to enforce our patents and other proprietary rights in foreign jurisdictions could result in substantial costs and divert our 32 Table of Contents efforts and attention from other aspects of our business.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees. Item 1B. Unresolved Staff Comments None.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees. 39 Table of Contents Item 1B. Unresolved Staff Comments None.
The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider. As a result, only appreciation of the price of our common stock, which may never occur, will provide a return to stockholders.
The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider. As a result, only appreciation of the price of our common stock, which may never occur, will provide a return to stockholders. Investors seeking cash dividends should not invest in our common stock.
The skills and knowledge gained in operating our current facilities may prove insufficient for successful operation of a large-scale facility or the Facility, and we may be required to expend significant time and money to develop our capabilities in large-scale facility operation.
The skills and knowledge gained in operating our current facilities may not be sufficient to support the for successful operation of a large-scale production facility or the Facility, and we may be required to expend significant time and money to develop our capabilities in large-scale facility operation.
Any future intellectual property litigation could also force us to do one or more of the following: • stop selling, incorporating, manufacturing or using our products that use the subject intellectual property; • obtain from a third party asserting its intellectual property rights, a license to sell or use the relevant technology, which license may not be available on reasonable terms, or at all; • redesign those products or processes that use any allegedly infringing or misappropriated technology, which may result in significant cost or delay to us, or which redesign could be technically infeasible; • pay attorneys’ fees and expenses; or • pay damages, including the possibility of treble damages in a patent case if a court finds us to have willfully infringed certain intellectual property rights.
Any future intellectual property litigation could also force us to do one or more of the following: ● stop selling, incorporating, manufacturing or using our products that use the subject intellectual property; ● obtain from a third party asserting its intellectual property rights, a license to sell or use the relevant technology, which license may not be available on reasonable terms, or at all; ● redesign those products or processes that use any allegedly infringing or misappropriated technology, which may result in significant cost or delay to us, or which redesign could be technically infeasible; ● pay attorneys’ fees and expenses; or ● pay damages, including the possibility of treble damages in a patent case if a court finds us to have willfully infringed certain intellectual property rights. 30 Table of Contents We are aware of a significant number of patents and patent applications relating to aspects of our technologies filed by, and issued to, third parties.
Risks Related to Owning Our Securities The market price of our common stock may be adversely affected by the future issuance and sale of additional shares of our common stock or by our announcement that such issuances and sales may occur.
The market price of our common stock may be adversely affected by the future issuance and sale of additional shares of our common stock or by our announcement that such issuances and sales may occur.
Any of the risks discussed below could result in increased expenses, delays or other impediments to our programs or the public acceptance and commercialization of products and processes dependent on our technologies or inventions. 24 Table of Contents Our ability to develop and commercialize one or more of our technologies, products or processes could be limited by the following factors: • public attitudes about the safety and environmental hazards of, and ethical concerns over, genetic research and genetically engineered products and processes, which could influence public acceptance of our technologies, products and processes; • public attitudes regarding and potential changes to laws governing ownership of genetic material, which could harm our intellectual property rights with respect to our genetic material and discourage others from supporting, developing or commercializing our products, processes and technologies; • public attitudes and ethical concerns surrounding production of feedstocks on land which could be used to grow food, which could influence public acceptance of our technologies, products and processes; • governmental reaction to negative publicity concerning genetically engineered organisms, which could result in greater government regulation of genetic research and derivative products; and • governmental reaction to negative publicity concerning feedstocks produced on land which could be used to grow food, which could result in greater government regulation of feedstock sources.
Our ability to develop and commercialize one or more of our technologies, products or processes could be limited by the following factors: ● public attitudes about the safety and environmental hazards of, and ethical concerns over, genetic research and genetically engineered products and processes, which could influence public acceptance of our technologies, products and processes; ● public attitudes regarding and potential changes to laws governing ownership of genetic material, which could harm our intellectual property rights with respect to our genetic material and discourage others from supporting, developing or commercializing our products, processes and technologies; ● public attitudes and ethical concerns surrounding production of feedstocks on land which could be used to grow food, which could influence public acceptance of our technologies, products and processes; ● governmental reaction to negative publicity concerning genetically engineered organisms, which could result in greater government regulation of genetic research and derivative products; and ● governmental reaction to negative publicity concerning feedstocks produced on land which could be used to grow food, which could result in greater government regulation of feedstock sources.
Risk Related to our Business and Strategy We have a history of net losses, and we may not achieve or maintain profitability. We incurred net losses of $98.0 million and $59.2 million during the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $655.4 million.
Risk Related to our Business and Strategy We have a history of net losses, and we may not achieve or maintain profitability. We incurred net losses of $66.2 million and $98.0 million during the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $721.6 million.
Our actual costs may be greater than expected in developing our growth projects, causing us to realize significantly lower profits or greater losses on our projects. We generally must estimate the costs of completing a specific project to prior to the construction of the project. The actual cost of labor and materials may vary from the costs we originally estimated.
Our actual costs may be greater than expected in developing our growth projects, causing us to realize significantly lower profits or greater losses on our projects. We generally must estimate the costs of completing a specific project to prior to the construction of the project.
If these products degrade the performance or reduce the life-cycle of engines, or cause them to fail to meet emissions standards, market acceptance could be slowed or stopped, and we could be subject to product liability claims.
If SAF degrades the performance or reduces the life-cycle of engines, or cause them to fail to meet emissions standards, market acceptance could be slowed or stopped, and we could be subject to product liability claims.
We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business regardless of the outcome.
Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business regardless of the outcome.
Our future capital requirements will depend on many factors, including: • the timing of and costs involved in financing and constructing our Net-Zero Projects, including NZ1; • the timing of and costs involved in obtaining permits; • the ability for us to deploy strains of yeast with improved performance that help to lower capital cost; • the timing and costs associated with any future RNG projects or expansion of the Gevo RNG project; • the costs involved in maintaining the Luverne Facility; • our ability to gain market acceptance for our products; 17 Table of Contents • our ability to negotiate additional offtake agreements for the products we produce, and the timing and terms of those agreements, including terms related to sales price; • our ability to negotiate sales of our products and the timing and terms of those sales, including terms related to sales price; • our ability to establish and maintain strategic partnerships, licensing or other arrangements and the timing and terms of those arrangements; and • the cost of preparing, filing, prosecuting, maintaining, defending and enforcing patent, trademark and other intellectual property claims, including litigation costs and the outcome of such litigation.
Our future capital requirements will depend on many factors, including: ● the timing of and costs involved in financing and constructing our Net-Zero Projects, including NZ1; ● the timing of and costs involved in obtaining permits and compliance with applicable regulations; ● the timing and costs associated with any future capital projects or expansions; 20 Table of Contents ● the costs involved in maintaining the Luverne Facility; ● our ability to gain market acceptance for our products; ● our ability to negotiate financeable offtake agreements for the products we produce, and the timing and terms of those agreements, including terms related to sales price; ● our ability to negotiate sales of our products and the timing and terms of those sales, including terms related to sales price; ● our ability to establish and maintain strategic partnerships, licensing or other arrangements and the timing and terms of those arrangements; and ● the cost of preparing, filing, prosecuting, maintaining, defending and enforcing patent, trademark and other intellectual property claims, including litigation costs and the outcome of such litigation.
If one or more of the analysts who cover us downgrade our common stock or change their opinion of our common stock, our common stock price would likely decline which in turn would likely cause a decline in the value of our warrants.
We do not have any control over securities or industry analysts. If one or more of the analysts who cover us downgrade our common stock or change their opinion of our common stock, our common stock price would likely decline which in turn would likely cause a decline in the value of our warrants.
Significant disruption to our IT system or breaches of data security could have a material adverse effect on our business, financial condition and results of operations. We may engage in hedging transactions, which could adversely impact our business. In the future, we may engage in hedging transactions to offset some of the effects of volatility in commodity prices.
Significant disruption to our IT system or breaches of data security could have a material adverse effect on our business, financial condition and results of operations. 27 Table of Contents We may engage in hedging transactions, which could adversely impact our business.
The trading market for our common stock will be influenced by the research and reports that securities or industry analysts publish about us or our business. We do not have any control over securities or industry analysts.
If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline. The trading market for our common stock will be influenced by the research and reports that securities or industry analysts publish about us or our business.
In addition, we may not carry sufficient business interruption insurance to compensate us for losses that may occur. Any losses or damages we incur could have a material adverse effect on our cash flows and success as an overall business. Our business and operations would suffer in the event of IT system failures or a cyber-attack.
We do not have a detailed disaster recovery plan. In addition, we may not carry sufficient business interruption insurance to compensate us for losses that may occur. Any losses or damages we incur could have a material adverse effect on our cash flows and success as an overall business.
If our production is slower than we expect, if demand decreases or if we encounter difficulties in successfully completing the Facility, our counterparties may terminate our existing offtake agreements and potential customers may be less willing to negotiate definitive offtake agreements with us, and therefore cause our performance to suffer.
If our production is slower than we expect, we experience production delays, if demand decreases or if we encounter difficulties in successfully completing the Facility or producing our renewable hydrocarbon products to specification, our counterparties may terminate our existing offtake agreements and potential customers may be less willing to negotiate definitive offtake agreements with us, which would adversely impact our performance and results of operations.
We are vulnerable to natural disasters and other events that could disrupt our operations, such as riots, civil disturbances, war, terrorist acts, pandemics, such as COVID-19, floods, infections in our laboratory or production facilities or those of our contract manufacturers and other events beyond our control. We do not have a detailed disaster recovery plan.
We are vulnerable to natural disasters and other events that could disrupt our operations, such as riots, civil disturbances, war, terrorist acts, pandemics and other public health crises, weather conditions, electricity rationing, floods, infections in our laboratory or production facilities or those of our contract manufacturers and other events beyond our control.
We may also need to hire new employees or contract with third parties to help manage our operations, and our performance will suffer if we are unable to hire qualified parties or if they perform poorly. We may face additional operational difficulties as we further expand our production capacity, including our RNG facilities and the Facility.
We may also need to hire new employees or contract with third parties to help manage our operations, and our performance will suffer if we are unable to hire qualified parties or if they perform poorly.
This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. 34 Table of Contents If a court were to find the exclusive forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition.
If a court were to find the exclusive forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition.
Accordingly, we cannot be certain that we can consistently produce renewable hydrocarbon products in an economical manner in commercial quantities. If we fail to consistently produce renewable hydrocarbon products economically on a commercial scale or in commercial volumes, our commercialization of renewable hydrocarbon products and our business, financial condition and results of operations will be materially adversely affected.
If we fail to build or scale up the facilities required to produce our renewable hydrocarbon products or are unable to consistently produce renewable hydrocarbon products economically on a commercial scale or in commercial volumes, our commercialization of renewable hydrocarbon products and our business, financial condition and results of operations will be materially adversely affected.
Hedging activities may cause us to suffer losses, such as if we purchase a position in a declining market or sell a position in a rising market.
In the future, we may engage in hedging transactions to offset some of the effects of volatility in commodity prices. Hedging activities may cause us to suffer losses, such as if we purchase a position in a declining market or sell a position in a rising market.
Our ability to obtain adequate financing will depend on, among other things, the status of our product development, our financial condition and general conditions in the capital, financial and debt markets at the time such financing is sought. In addition, any further equity or debt financings could result in the dilution of ownership interests of our then-current stockholders.
Our ability to obtain adequate financing will depend on, among other things, the status of our product development, market conditions for our products, our financial condition and general conditions in the capital, financial and debt markets at the time such financing is sought.
These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of shares of our common stock, regardless of our operating performance, and cause the value of your investment to decline. 32 Table of Contents Additionally, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation or other derivative shareholder lawsuits.
These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of shares of our common stock, regardless of our operating performance, and cause the value of your investment to decline.
We lack significant commercial operating experience and may face difficulties in developing marketing expertise in these fields. Our business model relies upon our ability to successfully negotiate, structure and fulfill long-term offtake agreements for our products. Certain agreements with existing and potential customers may initially only provide for the purchase of limited quantities from us.
We expect that many of our customers will be large companies with extensive experience operating in the fuels or chemicals markets. We lack significant commercial operating experience and may face difficulties in developing marketing expertise in these fields. Our business model relies upon our ability to successfully negotiate, structure and fulfill long-term offtake agreements for our products.
We believe that we understand the engineering and process characteristics necessary to successfully build the additional facilities that we are contemplating and to scale up to larger facilities. We expect to incur additional capital expenditures to produce renewable hydrocarbon products at our Net-Zero Projects. Our assumptions, however, may prove to be incorrect.
We believe that we understand the engineering and process characteristics necessary to successfully build the additional facilities that we are contemplating and to scale up to larger facilities. Our assumptions, however, may prove to be incorrect. Accordingly, we cannot be certain that we will be able to consistently produce renewable hydrocarbon products in an economical manner in commercial quantities.
Furthermore, we have not demonstrated that we can meet the production levels and specifications contemplated in certain of our current offtake agreements, or future offtake agreements.
We cannot assure you that we will be able to obtain adequate financing on favorable terms, or at all. Furthermore, we have not demonstrated that we can meet the production levels and specifications contemplated in certain of our current offtake agreements, or future offtake agreements.
Our business is dependent on proprietary technologies, processes and information that we have developed, much of which is stored on our computer systems. We also have entered into agreements with third parties for hardware, software, telecommunications and other information technology (“IT”) services in connection with our operations.
We also have entered into agreements with third parties for hardware, software, telecommunications and other information technology (“IT”) services in connection with our operations.
Our ability to increase our sales will depend in large part upon our ability to expand these existing customer relationships into long-term offtake agreements. Maintaining and expanding our existing relationships and establishing new ones can require substantial investment without any assurance from customers that they will place significant orders.
Maintaining and expanding our existing relationships and establishing new ones can require substantial investment without any assurance from customers that they will place significant orders.
If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our common stock price and the price of our warrants to decline or the trading volume of our common stock to decline.
If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our common stock price and the price of our warrants to decline or the trading volume of our common stock to decline. 38 Table of Contents We are subject to anti-takeover provisions in our certificate of incorporation, our bylaws and under Delaware law that could delay or prevent an acquisition of the Company, even if the acquisition would be beneficial to our stockholders.
We have received funding from U.S. government agencies, which could negatively affect our intellectual property rights. Some of our research has been funded by grants from U.S. government agencies.
Any exposure of our trade secrets or other proprietary information could harm our competitive position and have an adverse impact on our financial condition. We have received funding from U.S. government agencies, which could negatively affect our intellectual property rights. Some of our research has been funded by grants from U.S. government agencies.
Additionally, our feedstocks may be grown on land that could be used for food production, which subjects our feedstock sources to “food versus fuel” concerns. If we are not able to overcome the ethical, legal and social concerns relating to genetic engineering or food versus fuel, our products and processes may not be accepted.
If we are not able to overcome the ethical, legal and social concerns relating to genetic engineering or food versus fuel, our products and processes may not be accepted widely enough for our business to be profitable, or at all.
Failure to meet the operational challenges of developing and managing increased production, or failure to otherwise manage our growth, may have a material adverse effect on our business, financial condition and results of operations.
Failure to meet the operational challenges of developing and managing increased production, or failure to otherwise manage our growth, may have a material adverse effect on our business, financial condition and results of operations. 24 Table of Contents Even if we are successful in producing our products on a commercial scale, we may not be successful in negotiating additional fuel offtake agreements or pricing terms to support the growth of our business.
In addition, future changes in our stock ownership, which may be outside of our control, may trigger an ownership change, as may future equity offerings or acquisitions that have equity as a component of the purchase price. 25 Table of Contents Competitiveness of our products for fuel use (including RNG) depends in part on government economic incentives for renewable energy projects or other related policies that could change.
In addition, future changes in our stock ownership, which may be outside of our control, may trigger an ownership change, as may future equity offerings or acquisitions that have equity as a component of the purchase price.
At certain levels, prices may make these products uneconomical to use and produce as we may be unable to pass the full amount of feedstock cost increases on to our customers. The price and availability of corn and other plant feedstocks may be influenced by general economic, market and regulatory factors.
At certain levels, prices may make these products uneconomical to use and produce and we may be unable to pass the full amount of feedstock cost increases on to our customers, which would make it unprofitable for us to operate in these markets.
We are subject to anti-takeover provisions in our certificate of incorporation, our bylaws and under Delaware law that could delay or prevent an acquisition of the Company, even if the acquisition would be beneficial to our stockholders. Provisions in our certificate of incorporation and our bylaws may delay or prevent an acquisition of the Company.
Provisions in our certificate of incorporation and our bylaws may delay or prevent an acquisition of the Company.
The subjects of genetically engineered organisms and food versus fuel have received negative publicity, which has aroused public debate. This adverse publicity could lead to greater regulation and trade restrictions on imports of genetically engineered products or feedstocks grown on land suitable for food production.
This adverse publicity could also lead to greater regulation and trade restrictions on imports of genetically engineered products or feedstocks grown on land suitable for food production. Additionally, the use of social media platforms and similar devices, provide an opportunity for the immediate and far-reaching dissemination of information, including inaccurate information.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not presently a party to any litigation that we believe to be material and we are not aware of any pending or threatened litigation against us that we believe could have a material adverse effect on our business, operating results, financial condition or cash flows. Item 4. Mine Safety Disclosures Not Applicable. 35 Table of Contents PART II
Biggest changeWe are not presently a party to any litigation that we believe to be material and we are not aware of any pending or threatened litigation against us that we believe could have a material adverse effect on our business, operating results, financial condition or cash flows. Item 4.
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Mine Safety Disclosures Not Applicable. ​ 40 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph assumes a $100 investment in our common stock and each index at December 31, 2017. 36 Table of Contents COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Gevo, Inc., The S&P Smallcap 600 Index and the NASDAQ Clean Edge Green Energy Index December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 Gevo, Inc. $ 100.00 $ 16.60 $ 19.57 $ 36.00 $ 36.25 $ 16.09 S&P Smallcap 600 100.00 91.52 112.37 125.05 158.59 133.06 NASDAQ Clean Edge Green Energy 100.00 87.89 125.39 357.14 347.70 242.88 The information in the graph will not be considered solicitation material, nor will it be filed with the SEC or incorporated by reference into any future filing under the Securities Act or the Exchange Act, unless we specifically incorporate it by reference into our filing.
Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Gevo, Inc., The S&P Smallcap 600 Index and the NASDAQ Clean Edge Green Energy Index ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, December 31, December 31, December 31, December 31, ​ 2018 2019 2020 2021 2022 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gevo, Inc. ​ $ 100.00 ​ $ 117.86 ​ $ 216.84 ​ $ 218.37 ​ $ 96.94 ​ $ 59.18 S&P Smallcap 600 ​ 100.00 ​ 122.78 ​ 136.64 ​ 173.29 ​ 145.39 ​ 168.73 NASDAQ Clean Edge Green Energy ​ 100.00 ​ 142.67 ​ 406.35 ​ 395.62 ​ 276.35 ​ 248.97 ​ The information in the graph will not be considered solicitation material, nor will it be filed with the SEC or incorporated by reference into any future filing under the Securities Act or the Exchange Act, unless we specifically incorporate it by reference into our filing.
Any future determination to declare cash dividends on our common stock will be made at the discretion of our Board of Directors, subject to compliance and limitations under our debt arrangements in effect at such time. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities None. Purchases of Equity Securities by the Issuer None.
Any future determination to declare cash dividends on our common stock will be made at the discretion of our Board of Directors, subject to compliance and limitations under our debt arrangements in effect at such time. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities None.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock Market Information The Company's common stock is listed and traded on the Nasdaq Capital Market under the symbol "GEVO". Holders of Record As of January 31, 2023, there were approximately 33 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The Company’s common stock is listed and traded on The Nasdaq Capital Market under the symbol “GEVO”. Holders of Record As of January 31, 2024, there were approximately 69 holders of record of our common stock.
Performance Graph The following information is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such a filing.
Performance Graph The following information is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such a filing. 41 Table of Contents The following line graph compares the cumulative total shareowner return on our common stock against the cumulative total return of the S&P Smallcap 600 Index and the NASDAQ Clean Edge Green Energy Index for the each of the five years ended December 31, 2023.
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The following line graph compares the cumulative total shareowner return on our common stock against the cumulative total return of the S&P Smallcap 600 Index and the NASDAQ Clean Edge Green Energy Index for the each of the five years ended December 31, 2022.
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Purchases of Equity Securities by the Issuer On May 30, 2023, the Board authorized a stock repurchase program, under which the Company may repurchase up to $25 million of its common stock. The primary goal of the repurchase program is to allow the Company to opportunistically repurchase shares, while maintaining its ability to fund development projects.
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Under the stock repurchase program, the Company may repurchase shares from time to time in the open market or through privately negotiated transactions. The timing, volume and nature of stock repurchases, if any, will be in the Company’s sole discretion and will be dependent on market conditions, applicable securities laws, and other factors.
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The stock repurchase program may be suspended or discontinued at any time and does not have an expiration date. The Company did not repurchase any shares of common stock under the stock repurchase program during the three months or fiscal year ended December 31, 2023.
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The graph assumes a $100 investment in our common stock and each index at December 31, 2018.
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Item 6. [Reserved] ​ 42 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table summarizes the key operating metrics described above, which metrics we use to measure performance: 39 Table of Contents Year Ended December 31, (in thousands, unless otherwise indicated) 2022 RNG Revenues Natural Gas Commodity $ 640 Natural Gas Environmental Attributes - RINs 214 Natural Gas Environmental Attributes - LCFS — RNG Total Revenues $ 854 RNG Metrics RNG production volumes (MMBtu) 125 Plus: Prior period RNG volumes dispensed in current period — Less: RNG production volumes not dispensed (116) Total RNG volumes available for RIN and LCFS generation (1) 9 RIN Metrics RIN generation (x 11.727) (2) 101 Less: Counterparty share (RINs) — Plus: Prior period RINs — Less: RINs carried into next period — Total RINs available for sale 101 Less: RINs sold (101) RIN Inventory — RNG Inventory (volumes not dispensed for RINs) (3) 116 Average Realized RIN price ($) $ 2.12 LCFS Metrics (4) RNG Inventory, volumes not dispensed for LCFS (5) 125 Operating Expenses RNG Operating Expenses $ 7,121 RNG Operating Expenses per MMBtu (actual) $ 57.19 (1) RINs are generated in the month the gas is dispensed, which generally occurs the month after the gas is produced.
Biggest changeThe following table summarizes the key operating metrics described above, which metrics we use to measure performance: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ ​ (in thousands, unless otherwise indicated) 2023 2022 Change Change % Revenues ​ ​ ​ Natural gas commodity ​ $ 659 ​ $ 640 ​ $ 19 ​ 3 % Natural gas environmental attributes - RINs ​ 9,888 ​ 214 ​ 9,674 ​ 4,521 % Natural gas environmental attributes - LCFS ​ 4,910 ​ — ​ 4,910 ​ 100 % Total revenues ​ $ 15,457 ​ $ 854 ​ $ 14,603 ​ ​ ​ Production expenses (1) ​ $ 11,481 ​ $ 2,626 ​ $ 8,855 ​ 337 % RNG metrics ​ ​ ​ ​ ​ RNG production volumes (MMBtu) ​ 314 ​ 125 ​ 189 ​ 151 % Plus: prior period RNG volumes dispensed in current period ​ 116 ​ — ​ 116 ​ 100 % Less: RNG production volumes not dispensed ​ (34) ​ (116) ​ 82 ​ (71) % Total RNG volumes available for RIN and LCFS generation (2) ​ 396 ​ 9 ​ 387 ​ 4,300 % RIN metrics ​ ​ ​ ​ ​ RIN generation (3) ​ 4,639 ​ 101 ​ 4,538 ​ 4,493 % Plus: Prior period RINs ​ — ​ — ​ — ​ — % Total RINs available for sale ​ 4,639 ​ 101 ​ 4,538 ​ 4,493 % Less: RINs sold ​ (4,639) ​ (101) ​ (4,538) ​ 4,493 % RIN inventory ​ — ​ — ​ — ​ ​ ​ RNG volumes not dispensed for RINs (MMBtu) (4) ​ 34 ​ 116 ​ (82) ​ (71) % Average realized RIN price (5) ​ $ 2.13 ​ $ 2.13 ​ $ — ​ — % LCFS metrics ​ ​ ​ ​ ​ LCFS generation (6) ​ ​ 76 ​ ​ — ​ ​ 76 ​ 100 % Less: LCFS sold ​ ​ (76) ​ ​ — ​ ​ (76) ​ 100 % LCFS inventory ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ RNG volumes not dispensed for LCFS (MMBtu) ​ 34 ​ 116 ​ (82) ​ (71) % Average realized LCFS price (5) ​ $ 64.79 ​ $ — ​ $ 64.79 ​ 100 % (1) The higher per unit cost reflects lower production volumes during the commissioning and ramp-up phase, which was substantially completed by the end of Q3 2023.
Financing Activities During the year ended December 31, 2022, we had $138.6 million of net cash provided by financing activities, primarily due to $139.0 million of net proceeds from the issuance of common stock and common stock warrants in a registered direct offering in June 2022, offset by $0.4 million of payments primarily for net settlement of common stock under stock plans and certain equipment loans.
During the year ended December 31, 2022, we had $138.6 million of net cash provided by financing activities, primarily due to $139.0 million of net proceeds from the issuance of common stock and common stock warrants in a registered direct offering in June 2022, offset by $0.4 million of payments primarily for net settlement of common stock under stock plans and certain equipment loans.
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 status during the third quarter of 2022. The impact of the one-time impairment charge of $24.7 million was $0.11 of basic and diluted impairment loss per share for the year ended December 31, 2022.
The impairments recorded relate to the determination to suspend production at the Luverne Facility and shift the plant into an idled, care and maintenance status during the third quarter of 2022. The impact of the one-time impairment charge of $24.7 million was $0.11 of basic and diluted impairment loss per share for the year ended December 31, 2022.
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.
The “net-zero” concept means Gevo expects that by using sustainably grown feedstock (e.g., 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.
This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those set forth under “Risk Factors” in Part I, Item 1A of this Annual Report, our actual results may differ materially from those anticipated in these forward-looking statements. This section of this Report discusses year-to-year comparisons between 2022 and 2021.
This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those set forth under “Risk Factors” in Part I, Item 1A of this Annual Report, our actual results may differ materially from those anticipated in these forward-looking statements. This section of this Report discusses year-to-year comparisons between 2023 and 2022.
Company Overview We are 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. We believe that the market size for hydrocarbon fuels will continue to remain significant in the long-term even with the rapid adoption of electric vehicles and hydrogen technologies.
Company Overview We are a growth-oriented, carbon abatement company with the mission of solving greenhouse gas emissions for those sectors of the transportation industry that are not amenable to electrification or hydrogen. We believe that the market size for hydrocarbon fuels will continue to remain significant in the long-term even with the rapid adoption of electric vehicles and hydrogen technologies.
General and administrative expense consists of personnel costs (including stock-based compensation), consulting and service provider expenses (including patent counsel-related costs), legal fees, marketing costs, insurance costs, occupancy-related costs, travel and relocation expenses and hiring expenses. Project Development Costs.
General and administrative expense consists of personnel costs (including stock-based compensation), consulting and service provider expenses (including patent counsel-related costs), legal fees, marketing costs, insurance costs, occupancy-related costs, travel and relocation expenses and hiring expenses.
The Company's transition to profitability is dependent upon, among other things, the successful development and commercialization of its product candidates, the development, acquisition and construction of commercial level production facilities to support the Company's offtake agreements, the achievement of a level of revenues adequate to support the Company's cost structure, and the ability to raise capital to finance the development, acquisition, and construction of additional productions facilities.
Our transition to profitability is dependent upon, among other things, the successful development and commercialization of our product candidates, the development, licensing, acquisition and construction of commercial level production facilities to support our offtake agreements, the achievement of a level of revenues adequate to support the Company’s cost structure, and the ability to raise capital to finance the development, licensing, acquisition, and construction of additional productions facilities.
Cash distributions from future NZ1 earnings would be proportionate to Gevo’s minority ownership in NZ1 under this expected financing structure which would allow us to conserve and redeploy our capital on other growth projects, including our Net-Zero 2 project ("NZ2").
Cash distributions from future NZ1 earnings would be proportionate to Gevo’s ownership in NZ1 under this expected financing structure which would allow us to conserve and redeploy our capital on other growth projects, including our Net-Zero 2 project (“NZ2”).
The complete Management’s Discussion and Analysis of Financial Condition and Results of Operations for year-to-year comparisons between 2021 and 2020 and other discussions of 2020 items can be found within Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022, which is available free of charge on the SEC's website at www.sec.gov and our corporate website at www.gevo.com.
The complete Management’s Discussion and Analysis of Financial Condition and Results of Operations for year-to-year comparisons between 2022 and 2021 and other discussions of 2021 items can be found within Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 9, 2023, which is available free of charge on the SEC’s website at www.sec.gov and our corporate website at www.gevo.com.
See Note 4 to the Consolidated Financial Statements for additional information. 41 Table of Contents Research and development expense .
See Note 4 to the Consolidated Financial Statements for additional information. 48 Table of Contents Research and development expense .
Interest expense increased by $0.9 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to the interest on the RNG Project bonds, which was capitalized into construction in process during the construction phase of our RNG Project in the prior periods. Interest and dividend income .
Interest expense . Interest expense increased by $1.0 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to the interest on the 2021 Bonds, which was capitalized into construction in process during the construction phase of our RNG Project in the prior periods. Interest and investment income .
Investing Activities During the year ended December 31, 2022, we had $93.4 million in cash provided by investing activities, of which $299.6 million related to proceeds from sales and maturities of marketable securities, partially offset by the reinvestment of $130.4 million in marketable securities, and $75.8 million of investments in our capital projects, including $34.7 million in the RNG Project, $35.0 million in NZ1 and $2.0 million in other Net-Zero Projects, as well as $4.1 million in other isobutanol related projects.
During the year ended December 31, 2022, we had $85.1 million in cash provided by investing activities, of which $299.6 million related to proceeds from sales and maturities of marketable securities, partially offset by the reinvestment of $130.4 million in marketable securities, and $84.1 million of investments in our capital projects, including $34.7 million in the RNG Project, $43.3 million in NZ1 and $2.0 million in other Net-Zero Projects, as well as $4.1 million in other isobutanol related projects.
The liquid hydrocarbons when burned are expected to have a “net-zero” GHG footprint. Along with the hydrocarbons, NZ1 is expected 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.
The liquid hydrocarbons, when burned, are expected to have a “net-zero” GHG footprint. Along with the hydrocarbons, NZ1 is expected to produce approximately 695,000 tons per year of high-value protein products for use in the food chain and more than 34 million pounds per year of corn oil.
We expect to apply similar development and financing approaches to NZ2 and future Net-Zero Projects to enable rapid growth of SAF production to meet current contractual demand for SAF.
We expect to apply similar development and financing strategies to NZ2 and future Net-Zero Projects to enable growth of SAF production to meet demand for SAF.
Non-cash charges primarily consisted of an impairment loss of $24.7 million, depreciation and amortization of $7.9 million, non-cash expense of $2.7 million related to the amortization of marketable securities premiums, and stock-based compensation expense of $17.4 million, which reflects higher amortization expense for the stock awards issued in the prior period with higher market value, see Note 16 to the Consolidated Financial Statements for additional information.
Non-cash charges primarily consisted of depreciation and amortization of $19.0 million, stock-based compensation expense of $17.1 million, which reflects higher amortization expense for the stock awards issued in the prior period with higher market value, see Note 16 to the Consolidated Financial Statements for additional information, and non-cash expense of $0.1 million related to the amortization of marketable securities premiums.
The following table sets forth the major sources and uses of cash for each of the periods set forth below (in thousands): Year Ended December 31, 2022 2021 Net cash used in operating activities $ (52,613) $ (48,271) Net cash provided by (used in) investing activities 93,394 (411,358) Net cash provided by financing activities 138,562 517,324 Operating Activities Our primary uses of cash from operating activities are personnel-related expenses, and research and development-related expenses, including costs incurred under development agreements, costs of licensing of technology, legal-related costs, expenses for the development and commercialization of routes to efficiently produce fuels and chemicals from renewable feedstock carbohydrates using alcohols (isobutanol and ethanol) as an intermediate.
The following table sets forth the major sources and uses of cash for each of the periods set forth below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 Net cash used in operating activities $ (53,719) $ (44,311) Net cash provided by investing activities ​ $ 114,129 ​ $ 85,092 Net cash (used in) provided by financing activities ​ $ (189) ​ $ 138,562 ​ Operating Activities Our primary uses of cash from operating activities are personnel-related expenses, and research and development-related expenses, including costs incurred under development agreements, costs of licensing of technology, legal-related costs, expenses for the development and commercialization of routes to efficiently produce fuels and chemicals from renewable feedstock carbohydrates using alcohols (isobutanol and ethanol) as an intermediate.
Notwithstanding, there can be no 43 Table of Contents assurance that the Company will be able to raise additional funds or achieve or sustain profitability or positive cash flows from operations.
Notwithstanding, there can be no assurance that we will be able to raise additional funds or achieve or sustain profitability or positive cash flows from operations.
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, which would fulfill part of our more than 375 MGPY of SAF and hydrocarbon supply agreements.
Our initial Net-Zero Project, Net-Zero 1 (“NZ1”), is expected to be located in Lake Preston, South Dakota, and is being currently designed to produce approximately 65 million gallons per year (“MGPY”) of total hydrocarbon volumes, including 60 MGPY of SAF, which would fulfill part of our approximately 350 MGPY of SAF and hydrocarbon supply agreements.
Depreciation and amortization . Depreciation and amortization increased $2.8 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to additional depreciation for RNG assets placed into service and accelerated depreciation on Agri-Energy segment assets due to shorter lives stemming from the impairment assessment during the third quarter of 2022.
Depreciation and amortization increased $11.1 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to a full three quarters of additional depreciation expense in 2023 for RNG assets placed into service in Q3 2022 and accelerated depreciation on Agri-Energy segment assets due to shorter lives stemming from the impairment assessment during the third quarter of 2022 .
The Company recorded a $24.7 million impairment loss on long-lived assets, which reduced the carrying value of certain property, plant, and equipment, and a leased ROU asset, at the Agri-Energy segment to its fair value.
No impairment loss was recorded during the year ended December 31, 2023. During the year ended December 31, 2022, the Company recorded a $24.7 million impairment loss on long-lived assets, which reduced the carrying value of certain property, plant, and equipment, and a leased right of use asset, at the Agri-Energy segment to its fair value.
(2) One MMBtu of RNG has approximately the same energy content as 11.727 gallons of ethanol, and thus may generate 11.727 RINs under the RFS program. (3) Represents gas production which has not been dispensed to generate RINs and LCFS. (4) No LCFS credits were generated during 2022 pending regulatory approval.
(2) Represents gas production which has not been dispensed to generate RINs and LCFS. (3) RINs are generally generated in the month following the gas being dispensed . (4) One MMBtu of RNG has approximately the same energy content as 11.727 gallons of ethanol, and thus may generate 11.727 RINs under the RFS Program.
We expect to use our cash, cash equivalents, restricted cash and marketable securities for the following purposes: (i) identification, development, acquisition and construction of new production facilities and to plan for expanded production to fulfill existing offtake agreements for NZ1 and the Company's other Net-Zero Projects; (ii) potential investment in RNG projects; (iii) potential development of the Luverne Facility; (iv) development, acquisition and operation of sustainable alcohol-to-SAF plants to produce SAF alone or with partners; (v) operating activities at the Company's corporate headquarters in Colorado, including research and development work; (vi) exploration of strategic alternatives and additional financing, including project financing; and (vii) future debt service obligations.
We expect to use our cash, cash equivalents, and restricted cash for the following purposes: (i) identification, development, engineering, licensing, acquisition and construction of production facilities and the Company’s other Net-Zero Projects; (ii) potential investment in RNG projects; (iii) potential development of the Luverne Facility; (iv) operating activities at the Company’s corporate headquarters in Colorado, including research and development work; (v) exploration of strategic alternatives and additional financing, including project financing; and (vi) future debt service obligations.
Additionally, we allocated approximately $25 million of capital for the next four to six months to develop our next Net-Zero Project. Gevo is in the process of identifying and performing early site development work for additional SAF production locations.
In 2022, we allocated approximately $25.0 million to develop our next Net-Zero Project, of which we have spent approximately $15.0 million. Gevo is in the process of identifying and performing early site development work for additional Net-Zero production locations.
During the year ended December 31, 2022, net cash used in operating activities was $52.6 million compared to $48.3 million for the year ended December 31, 2021.
During the year ended December 31, 2023, net cash used in operating activities was $53.7 million compared to $44.3 million for the year ended December 31, 2022.
Research and development expense increased $0.7 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to an increase in patent and personnel related costs, as well as lab supplies, partially offset by a reduction of consulting expenses. General and administrative expense .
Research and development expense decreased $0.8 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to a reduction of consulting expenses, partially offset by an increase in personnel related costs due to additional headcount added during the year ended December 31, 2023. General and administrative expense .
We have financed our operations primarily with proceeds from the issuance of equity, warrants, debt securities, and borrowings under debt facilities. We may fund future operations through additional private and/or public offerings of equity or debt securities. In addition, the Company may seek additional capital, on acceptable terms, through arrangements with strategic partners or from other sources.
We may also fund future operations through additional private and/or public offerings of equity or debt securities. In addition, we may seek additional capital, on acceptable terms, through arrangements with strategic partners or from other sources.
"Financial Statements and Supplemental Data," of this Report, for a discussion of recent accounting pronouncements.
“Financial Statements and Supplemental Data,” of this Report, for a discussion of recent accounting pronouncements. 52 Table of Contents
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.
Project Updates Net-Zero Projects. Our concept of “Net-Zero Projects” is a series of planned facilities to produce energy dense liquid hydrocarbons using renewable energy and our proprietary technology.
We believe that this addresses the global need of reducing GHG emissions with "drop in" sustainable alternatives to petroleum fuels. We use the Argonne National Laboratory’s 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 our products.
We use the Argonne National Laboratory’s 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 our products.
See Note 4 to the Consolidated Financial Statements for additional information. Loss on disposal of assets.
See Note 4 to the Consolidated Financial Statements for additional information. Loss on disposal of assets. The Company did not record a loss on disposal of assets for the year ended December 31, 2023.
We currently expect to finance the construction of NZ1 at the subsidiary level using third party capital. The Company expects to retain a carried equity interest in the project, and may invest equity in the project using the proceeds from the reimbursement of the Company’s NZ1 development expenditures.
The Company expects to retain an equity interest in the project and may invest equity in the project using the proceeds from the reimbursement of the Company’s NZ1 development expenditures.
We also believe that we can achieve at least 1 billion gallons of hydrocarbon production and sales by 2030. We are focused on transforming renewable energy into energy-dense liquid hydrocarbons that can be used as renewable fuels, such as sustainable aviation fuel ("SAF"), with the potential to achieve a “net-zero” greenhouse gas ("GHG") footprint.
We are focused on transforming renewable energy into energy-dense liquid hydrocarbons that can be used as renewable fuels, such as sustainable aviation fuel (“SAF”), with the potential to achieve a “net-zero” greenhouse gas (“GHG”) footprint. We believe that this addresses the global need of reducing GHG emissions with “drop in” sustainable alternatives to petroleum fuels.
Facility idling costs were $4.6 million for the year ended December 31, 2022 and related to care and maintenance of our Luverne Facility. Included in facility idling costs are ongoing care and maintenance expenses, as well as one time charges related to removing flammable and other hazardous items from the site, writing off certain patents, and reduction in the workforce.
Facility idling costs decreased by $0.6 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to one-time charges recorded during 2022 related to removing flammable and other hazardous items from the site, writing off certain patents, and reduction in the workforce . Impairment loss.
Other income increased $2.7 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to our receipt of $2.9 million from the U.S.
Other income decreased $3.7 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to the receipt of $0.4 million from the USDA's Biofuel Producer Program in 2023 compared to $2.9 million in 2022.
We believe as a result of our cash and cash equivalents balances, and the performance of our current and expected operations, we will be able to meet our obligations and other potential cash requirements during the next 12 months from the date of this report.
We believe as a result of our cash and cash equivalents balances, and the performance of our current and expected operations, we will be able to meet our obligations and other potential cash requirements during the next 12 months from the date of this report . 50 Table of Contents Since our inception in 2005, we have devoted most of our cash resources to the development and commercialization of routes to efficiently produce fuels and chemicals from carbohydrates, such as renewable feedstock, using alcohols (isobutanol and ethanol) as intermediates.
As a result, our revenues are primarily affected by unit production of RNG, production of environmental attributes, and the prices at which we monetize such production.
Our failure to regain compliance during the compliance period could result in delisting. 46 Table of Contents Key Operating Metrics Total operating revenues reflect both sales of RNG and sales of related environmental attributes. As a result, our revenues are primarily affected by unit production of RNG, production of environmental attributes, and the prices at which we monetize such production.
The project aims to create critical structural climate-smart market incentives for low carbon-intensity corn as well as to accelerate the production of sustainable aviation fuel to reduce the sector’s dependency on fossil-based fuels. Key Operating Metrics Total operating revenues reflect both sales of RNG and sales of related environmental attributes.
The project expects to create critical structural climate-smart market incentives for low CI corn as well as to accelerate the production of SAF to reduce the sector’s dependency on fossil-based fuels.
Our primary market focus, given current demand and growing customer interest, is SAF. We believe we also have commercial opportunities for other renewable hydrocarbon products, such as renewable natural gas ("RNG"); hydrocarbons for gasoline blendstocks and diesel fuel; ingredients for the chemical industry, such as ethylene and butenes; plastics and materials; and other chemicals.
We also have commercial opportunities for other renewable hydrocarbon products, such as RNG; hydrocarbons for gasoline blendstocks and diesel fuel; ingredients for the chemical industry, such as ethylene and butenes; plastics and materials; and other chemicals. Global fuel consumption by commercial airlines continues to remain strong, with global fuel consumption of more than 100 MGPY and growing .
Department of Agriculture's Biofuel Producer Program to support biofuel producers who faced unexpected losses due to the COVID-19 pandemic, partially offset by other expenses. 42 Table of Contents Sources of Our Revenues Our current and historic revenues are primarily derived from: (i) the sale of RNG commodities and the related environmental attributes; (ii) hydrocarbon sales consisting primarily of the sale of SAF and isooctane derived from our isobutanol; (iii) the sale of isobutanol and related products; and (iv) government grants and research and development programs.
Sources of Our Revenues Our current and historic revenues are primarily derived from: (i) the sale of RNG commodities and the related environmental attributes; (ii) licensing and development sales; (iii) hydrocarbon sales consisting primarily of the sale of isooctane derived from our isobutanol and SAF; and (iv) the sale of isobutanol and related products.
During the year ended December 31, 2022, compared to the year ended December 31, 2021, revenue increased $0.6 million primarily due to the RNG sales. Cost of production. Cost of production increased $1.0 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to the costs related to RNG production and sales.
During the year ended December 31, 2023, revenue increased $16.0 million compared to the year ended December 31, 2022, primarily due to sales of RNG and environmental attributes from our RNG project. Sales under our RNG project commenced in the third quarter of 2022.
These sites include several greenfield locations that are particularly advantageous in terms of potential economics, opportunities to decarbonize, and time to market. In addition, we are pursuing prospects with several existing ethanol plant sites. Existing ethanol plants need to be decarbonized with renewable energy or de-fossilized energy and/or carbon sequestration.
These potential sites include greenfield and brownfield (i.e., at an existing ethanol plant) locations that are advantageous in terms of potential economics, opportunities to decarbonize, and time to market.
Loss from operations. The Company's loss from operations increased by $42.4 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to the increased activities for our Net-Zero Projects and Verity Tracking project, as well as non-capitalizable costs for NZ1. Interest expense .
The Company’s loss from operations decreased by $20.9 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to increased revenue from RNG operations and LG Chem licensing in 2023, as well as the prior year impairment loss, partially offset by the increase in costs for our Net-Zero, Verity, and USDA Climate-Smart Grant projects .
Comparison of the Years Ended December 31, 2022 and 2021 (in thousands) Year Ended December 31, 2022 2021 Change ($) Change (%) Total operating revenues $ 1,175 $ 533 $ 642 120 % Operating expenses: Cost of production 8,698 7,687 1,011 13 % Depreciation and amortization 7,887 5,128 2,759 54 % Research and development expense 7,427 6,775 652 10 % General and administrative expense 39,941 25,493 14,448 57 % Project development costs 10,061 10,581 (520) (5) % Facility idling costs 4,599 — 4,599 100 % Impairment loss 24,749 — 24,749 100 % Loss on disposal of assets 499 5,137 (4,638) (90) % Total operating expenses 103,861 60,801 43,060 71 % Loss from operations (102,686) (60,268) (42,418) 70 % Other income (expense) Interest expense (1,167) (251) (916) 365 % Investment income (loss) 3,043 571 2,472 433 % Gain on forgiveness of SBA loan — 641 (641) (100) % Other income, net 2,803 104 2,699 2,595 % Total other income, net 4,679 1,065 3,614 339 % Net loss $ (98,007) $ (59,203) $ (38,804) 66 % Operating revenue.
Comparison of the Years Ended December 31, 2023 and 2022 (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2023 2022 Change ($) Change (%) Total operating revenues ​ $ 17,200 ​ $ 1,175 ​ $ 16,025 ​ 1,364 % Operating expenses: ​ ​ ​ ​ ​ ​ Cost of production ​ 11,991 ​ 8,698 ​ 3,293 ​ 38 % Depreciation and amortization ​ ​ 19,007 ​ ​ 7,887 ​ ​ 11,120 ​ 141 % Research and development expense ​ 6,637 ​ 7,427 ​ (790) ​ (11) % General and administrative expense ​ 42,628 ​ 39,941 ​ 2,687 ​ 7 % Project development costs ​ 14,732 ​ 10,061 ​ 4,671 ​ 46 % Facility idling costs ​ 4,040 ​ 4,599 ​ (559) ​ (12) % Impairment loss ​ — ​ 24,749 ​ (24,749) ​ (100) % Loss on disposal of assets ​ — ​ 499 ​ (499) ​ (100) % Total operating expenses ​ 99,035 ​ 103,861 ​ (4,826) ​ (5) % Loss from operations ​ (81,835) ​ (102,686) ​ 20,851 ​ (20) % Other income (expense) ​ ​ ​ ​ ​ ​ Interest expense ​ (2,161) ​ (1,167) ​ (994) ​ 85 % Interest and investment income ​ 19,090 ​ 3,481 ​ 15,609 ​ 448 % Other income (expense), net ​ (1,309) ​ 2,365 ​ (3,674) ​ (155) % Total other income, net ​ 15,620 ​ 4,679 ​ 10,941 ​ 234 % Net loss ​ $ (66,215) ​ $ (98,007) ​ $ 31,792 ​ (32) % ​ Operating revenue.
The net cash outflow from changes in operating assets and liabilities decreased $4.9 million, primarily due to a decrease in cash outflows of $2.0 million in prepaid expenses and other current and long-term assets for licensing fees and deposits to secure long-lead equipment power transmission and distribution facilities for NZ1 as well as a decrease of $3.9 million in accounts payable and accrued liabilities, partially offset by increased outflows of $1.7 million for RNG inventories and amortization of prepaid insurance and other prepaid items.
The net cash outflow from changes in operating assets and liabilities increased $23.9 million, primarily due to an increase in cash outflows of $23.0 million related to prepaid expenses and other current assets, deposits and other assets, $2.6 million related to increases in accounts receivable as well as $0.9 million related to accounts payable and accrued liabilities.
Gevo has developed a preferred list of partners and sites with decarbonization in mind and is engaged in preliminary feasibility and development discussions with several of them. We plan to give priority to existing industrial plant sites that have attractive potential economics and high predictability of timeline for decarbonization. Renewable Natural Gas Project.
We plan to give priority to existing industrial plant sites that have attractive potential economics and high predictability of timeline for decarbonization. Renewable Natural Gas Project. The Gevo RNG project started up and began producing and injecting initial volumes of biogas in 2022, during the project’s testing and ramp-up period.
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. We have an exclusive license in the U.S. from Axens North America, Inc.
Our products will be produced in three steps: the first step is milling the corn to produce the carbohydrates needed for the production of SAF while simultaneously enabling the production of protein and oil; the second step produces alcohols using carbohydrate-based fermentation; and the third step is the conversion of the alcohols into hydrocarbons. 43 Table of Contents We work with several technology, design and equipment partners, most notably Fluid Quip Technologies (FQT), Axens, and Praj.
Interest and dividend income increased $2.5 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to the higher interest rate earned on our investments and restricted cash. Gain on forgiveness of SBA Loans .
Interest and investment income increased $15.6 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due t o an increase in interest earned on our cash equivalent investments as a result of higher interest rates. 49 Table of Contents Other income.
Gevo's revenue from the RNG project in Northwest Iowa (the "RNG Project") is expected to come from sales of RNG and from the environmental attributes associated with its RNG sales, including the attributes available from California's Low Carbon Fuel Standard ("LCFS") program and the U.S. Environmental Protection Agency ("EPA") Renewable Fuels Standard ("RFS") program to receive renewable identification numbers ("RINs").
In addition, we completed an expansion to the Gevo RNG project to increase its annual design capacity from 355,000 MMBtu to 400,000 MMBtu. 44 Table of Contents Gevo’s revenue from the RNG project in Northwest Iowa (the “RNG Project”) stems from sales of RNG and from the environmental attributes associated with its RNG sales, including the attributes available from California’s Low Carbon Fuel Standard (“LCFS”) program and the U.S.
Liquidity and Capital Resources As of December 31, 2022, we had cash and cash equivalents of $237.1 million, short and long-term restricted cash of $78.3 million and short-term marketable securities of $167.4 million, net of unrealized losses of $1.0 million, totaling $482.8 million in cash, cash equivalents, and marketable securities.
Liquidity and Capital Resources As of December 31, 2023, we had cash and cash equivalents of $298.3 million and current restricted cash of $77.3 million, totaling $375.6 million in cash, cash equivalents, and restricted cash. As of December 31, 2023, we had net working capital of $295.0 million, with $91.4 million of current liabilities.
It is possible that that the impact of the ongoing COVID-19 pandemic on general economic activity could negatively impact the Company's revenue and operating results in the future, particularly as new variants of COVID-19 are discovered. 40 Table of Contents Results of Operations The following discussion of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the notes to those Consolidated Financial Statements appearing in this Annual Report.
(6) LCFS credits are generally generated in the calendar quarter following the gas being dispensed. ​ 47 Table of Contents Results of Operations The following discussion of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the notes to those Consolidated Financial Statements appearing in this Annual Report.
In the second half of 2022, our RNG production began ramping up resulting in natural gas commodity sales of $0.6 million and environmental attribute sales of $0.2 million, while the activities at our Luverne Facility were minimized to care and maintenance status as we have shifted focus to our Net-Zero Projects.
In 2022, the activities at our Luverne Facility were transitioned to care and maintenance, market development, and customer education, as we shifted focus to our Net Zero Projects.
We currently expect to apply similar development and financing approaches to NZ2 and future Net-Zero Projects to enable rapid growth of SAF production to meet current contractual demand for SAF. Gevo is in the process of identifying and performing early site development work for NZ2 and additional SAF production locations.
The use of project debt and third party equity allows us to conserve capital for use on other growth projects. We expect to apply similar development and financing strategies to future Net-Zero Projects to enable growth of SAF production to meet demand for SAF.
General and administrative expense increased $14.4 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to increases in personnel costs related to strategic hiring and professional fees started in late 2021 and having a full impact on 2022, as well as non-cash stock-based compensation which reflects higher amortization expense for the stock awards issued in the prior period with higher market value.
General and administrative expense increased $2.7 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to increases in personnel costs related to the hiring of highly qualified and skilled professionals, professional consulting fees, and stock-based compensation . On a periodic basis, we assess our Corporate cost allocation estimates.
We currently expect to finance the construction of NZ1 at the subsidiary level using third party capital. The Company expects to retain a carried equity interest in the project, and may invest additional equity in the project using the proceeds from the reimbursement of the Company's NZ1 development expenditures.
We are currently refining project cost estimates with engineering, procurement, and construction (“EPC”) partners to identify cost saving opportunities, and currently expect to finance the construction of NZ1 at the subsidiary level using a combination of Company equity and third-party capital, to include non-recourse debt.
Gevo has been granted registration approval by the EPA in 2022, allowing us to participate in its RFS program and expects to receive approval for LCFS during 2023. Luverne Facility.
Environmental Protection Agency (“EPA”) Renewable Fuels Standard (“RFS”) program to receive renewable identification numbers (“RINs”). Gevo was granted registration approval by the EPA in 2022, allowing us to participate in its Renewable Fuel Standard Program (“RFS Program”) to receive renewable identification numbers (“RINs”).
Department of Agriculture tentatively selected Gevo’s Climate-Smart Farm to Flight proposal for funding with an award ceiling of up to $30 million, subject to negotiation of definitive award agreements in the coming months.
Department of Agriculture (“USDA”) for a Partnerships for Climate-Smart Commodities grant of up to $30.0 million for Gevo’s Climate-Smart Farm-to-Flight Program, with project activity beginning for the 2023 crop year.
During the year ended December 31, 2021, we generated $517.3 million in cash from financing activities, which primarily consisted of $490.5 million from the sale of common stock and exercise of warrants and $69.0 million from the proceeds of the bonds issued to finance the construction of the RNG Project in April 2021, offset by $35.0 million in debt and equity offering costs, $7.0 million net settlement of common stock for taxes under our stock plans and $0.2 million of payments on equipment loans and lease liabilities.
Financing Activities During the year ended December 31, 2023, we had $0.2 million of net cash used in financing activities, due to payments for equipment loans and finance lease liabilities. We currently expect to finance the construction of NZ1 at the subsidiary level using a combination of our own, third-party, and debt capital.
Removed
The global fuel consumption by commercial airlines was an all-time high of 95 billion gallons in 2019. However, due to the COVID-19 pandemic, fuel consumption dropped to 52 billion gallons in 2020 and then reached 57 billion gallons in 2021, and throughout 2022 continued to trend back to pre-COVID levels. Project Updates Net-Zero Projects.
Added
Our primary market focus, given current demand and growing customer interest, is hydrocarbon fuels, and SAF in particular. We believe that SAF from carbohydrates to alcohol is the most economically viable approach for carbon abatement.
Removed
("Axens") to the technology and plant designs to convert alcohols to hydrocarbon fuels. Axens will also provide certain process guarantees for our production process. Additionally, Axens has extensive commercial experience in the technology, design, and deployment of the unit operations needed to convert alcohols to hydrocarbon fuels, based on their experience in the petrochemical industry.
Added
FQT and Axens provide area operation designs which have been incorporated into Gevo’s proprietary overall design of low CI carbohydrate-to-hydrocarbon plants, such as NZ1 plant. Praj is working with us on the proprietary design and construction of prefabricated process modules for our plants.
Removed
The fermentation side of the facility is being engineered with Fluid Quip Technologies who has extensive experience in fermentation and agriculture-based facilities. We believe that by using known commercial technologies, the plant design is substantially de-risked.
Added
Our partners are working with us on proprietary process designs that have the potential to lower capital and operating cost in the future. The advantage of utilizing Fluid Quip and Axens area operation and related process designs which are well proven in other applications, we believe we have chosen technology which is substantially de-risked.
Removed
In July 2022, we completed the purchase of the land for NZ1 in Lake Preston, South Dakota, which was followed by a groundbreaking ceremony in September 2022. We believe production from NZ1 is on schedule with initial volumes of SAF expected to be delivered in 2025.
Added
We completed the value engineering on our NZ1 project and are proceeding with detailed engineering, modularization design, and capital costs updates.
Removed
Water and wind energy development agreements were executed in the third quarter of 2022, and other key milestones are on track for completion in accordance with our comprehensive project plan. Based 38 Table of Contents on the ongoing engineering work, the installed cost for NZ1 is currently forecasted to be approximately $850 million, excluding certain contingencies and financing costs.
Added
The Company expects to have invested a cumulative total of $236 to $286 million of cash equity in the project at financial close. Cash distributions from future NZ1 earnings would be proportionate to Gevo’s ownership in NZ1 under this expected financing structure.
Removed
In the third quarter of 2022, we recorded an impairment of long-lived assets, to reduce the carrying value of certain property, plant, and equipment, and a leased right of use ("ROU") asset, at our development scale plant in Luverne, Minnesota (the "Luverne Facility") to its fair value.
Added
The use of project debt and third party equity allows us to conserve capital for use on other growth projects. We expect to apply similar development and financing strategies to future Net-Zero Projects to enable growth of SAF production to meet demand for SAF. We have substantially completed the engineering design of NZ1.
Removed
The impairments recorded to date relate to the determination to suspend production at the Luverne Facility and shift the plant into a development scale property, which was transitioned to care and maintenance status. See Note 4 to the Consolidated Financial Statements for additional information. U.S. Department of Agriculture. In September 2022, the U.S.
Added
We have substantially completed value engineering and we are now focusing on detail engineering with an EPC partner, to reduce and contractually finalize a negotiated lump-sum, fixed price agreement whereby the EPC will build and deliver the plant.
Removed
(5) LCFS credits are generated in the month the gas is dispensed, which generally occurs the quarter after the gas is produced. COVID-19 The COVID-19 pandemic had an adverse impact on global commercial activity, including the global transportation industry and its supply chain, and has contributed to significant volatility in financial markets.
Added
This detail engineering work is focused specifically on increasing the modularization of component parts on the NZ1 plant design, which means that we expect that the process equipment would be built into modules at a factory, then the modules would be assembled onsite at NZ1, with the goal of minimizing specialized field work typical in plant construction of this type.
Removed
It resulted in travel restrictions and extended shutdowns of businesses in various industries including, among others, the airline industry, and significantly reduced overall economic output.
Added
This approach is expected to lower the risk and cost of, and access to, skilled labor at the site and reduce the supply chain constrictions for some of our long-lead equipment.
Removed
See Note 16 to the Consolidated Financial Statements for additional information. Project development costs . Project development costs in 2022 consisted of employee expense, preliminary engineering and technical consulting costs related to our future Net-Zero Projects and Verity Tracking project, as well as other costs related to engineering personnel and non-capitalizable items.
Added
Increasing the modularization of the plant design is also expected to reduce our spend in advance of securing third-party equity and debt financing for NZ1 and increase the certainty of construction schedule for those counterparties. In order to achieve full construction financing for NZ1, we need to secure third-party equity and debt. Upon receiving an invitation from the U.S.
Removed
We began to capitalize a majority of the RNG and NZ1 projects' costs in 2021 which resulted in a $0.5 million decrease during the year ended December 31, 2022, compared to the year ended December 31, 2021. Facility idling costs.
Added
Department of Energy (“DOE”), we submitted a Part II Application for a DOE loan guarantee for a direct lending from Federal Financing Bank. In August 2023, Gevo was invited to enter the due diligence and underwriting phases with DOE.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeReductions in the market prices of environmental attributes may have a material adverse effect on our revenues and profits as they directly reduce our revenues. 45 Table of Contents The price of RNG changes in relation to the market prices of wholesale gas. Pricing for wholesale gas is volatile and we expect this volatility to continue in the future.
Biggest changePricing for wholesale gas is volatile and we expect this volatility to continue in the future. Further, volatility of wholesale gas also creates volatility in the prices of environmental attributes. We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to the market price of wholesale gas.
Interest Rate Risk We are exposed to market risk related to changes in interest rates. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments, including cash equivalents, are invested in money market funds and U.S. treasury or government obligations.
Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments, including cash equivalents, are invested in U.S. treasury or government money market funds.
As a result, there is a risk that we may not be able to sell our common stock at an acceptable price should the need for new equity funding arise. 46 Table of Contents
The price of our common stock has been volatile in the past and may also be volatile in the future. As a result, there is a risk that we may not be able to sell our common stock at an acceptable price should the need for new equity funding arise. ​ 53 Table of Contents
Environmental Attribute and Commodity Pricing Risk We attempt to negotiate the best prices for our environmental attributes and to competitively price our products to reflect the fluctuations in market prices.
Environmental Attribute and Commodity Pricing Risk We attempt to negotiate the best prices for our environmental attributes and to competitively price our products to reflect the fluctuations in market prices. Reductions in the market prices of environmental attributes may have a material adverse effect on our revenues and profits as they directly reduce our revenues.
Credit Risk We are subject to credit risk due to concentration of our RNG receivables with a limited number of significant customers. This concentration increases our exposure to credit risk on our receivables, since the financial insolvency of these customers could have a significant impact on our results of operations.
This concentration increases our exposure to credit risk on our receivables, since the financial insolvency of these customers could have a significant impact on our results of operations. Equity Price Risk We have in the past, and may in the future, seek to acquire additional funding by sale of common stock and other equity.
However, because of the short-term nature of our portfolio and the low-risk profile of our investments, a hypothetical immediate 10% change in market interest rates would not have a material impact on the fair market value of our investments portfolio or on our financial condition or results of operations.
The estimated annual impact of a hypothetical 10% decrease in the market price of wholesale gas would not have a material impact on our financial condition or results of operations. Interest Rate Risk We are exposed to market risk related to changes in interest rates.
Removed
Further, volatility of wholesale gas also creates volatility in the prices of environmental attributes. Given the start-up status of our RNG Project and idling of Luverne Facilities we do not expect market price fluctuations to have a material impact on our financial condition or results of operations.
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We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to RIN and LCFS prices. Our analysis, which may differ from actual results, based on our actual 2023 RINs and LCFS sold of approximately $2.08 and $64.79 respectively.
Removed
Equity Price Risk We have in the past, and may in the future, seek to acquire additional funding by sale of common stock and other equity. The price of our common stock has been volatile in the past and may also be volatile in the future.
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The estimated annual impact of a hypothetical 10% decrease in the average realized price per RIN and per LCFS credit would have a negative effect on our operating profit of approximately $1.0 million and $0.5 million, respectively. The price of RNG changes in relation to the market prices of wholesale gas.
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Our analysis. which may differ from actual results, was based on our actual 2023 gas production sold pursuant to contracts that do not provide for a fixed or floor price of approximately $2.10/MMBtu.
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Our analysis. which may differ from actual results, was based on our actual 2023 effective interest rate earned on our cash and cash equivalents. The estimated annual impact of a hypothetical 0.25% decrease in market interest rates would have a negative impact on our interest income of approximately $2.8 million.
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We are exposed to further market risk related to changes in interest rates through our 2021 Bonds, see Footnote 15 to the Consolidated Financial Statements for additional information.
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Our analysis, which may differ from actual results, was based on the anticipated future interest rate that is expected to be entered into under the 2021 Bond remarketing under a Trust Indenture dated April 1, 2021 (the “Indenture”) between the Authority and Citibank, N.A. as trustee (the “Trustee”), which is expected to occur no later than April 1, 2024.
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We anticipate an increase in our interest rates to 4.5%, with a resulting negative impact on our annual interest expense of $2.0 million. Credit Risk We are subject to credit risk due to the concentration of our RNG receivables with a limited number of significant customers.

Other GEVO 10-K year-over-year comparisons