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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission File Number 001-35073

GEVO, INC.

(Exact name of registrant as specified in its charter)


Delaware									87-0747704
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)


345 Inverness Drive South, Building C, Suite 310 Englewood, CO									80112
(Address of principal executive offices)									(Zip Code)

(303) 858-8358

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	GEVO	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 9, 2023, 237,246,223 shares of the registrant’s common stock were outstanding.

Table of Contents

GEVO, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	3
	Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022 (unaudited)	4
	Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2023 and 2022 (unaudited)	5
	Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2023 and 2022 (unaudited)	6
	Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	36

	Signatures	38

Table of Contents

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements.

GEVO, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except share and per share amounts)


	Note	As of March 31, 2023		As of December 31, 2022
Assets
Current assets
Cash and cash equivalents		$	342,283	$	237,125
Marketable securities	4	32,897		167,408
Restricted cash (current)	5	1,032		1,032
Trade accounts receivable, net		855		476
Inventories	8	4,355		6,347
Prepaid expenses and other current assets	6	4,985		3,034
Total current assets		386,407		415,422
Property, plant and equipment, net	9	183,862		176,872

Restricted cash (non-current)	5	76,736		77,219
Operating right-of-use assets	7	1,285		1,331
Finance right-of-use assets	7	217		219
Intangible assets, net	10	7,400		7,691
Deposits and other assets	11	32,787		21,994
Total assets		$	688,694	$	700,748
Liabilities
Current liabilities
Accounts payable and accrued liabilities	12	$	24,931	$	24,760
Operating lease liabilities (current)	7	421		438
Finance lease liabilities (current)	7	59		79
Loans payable (current)	13	152		159
Total current liabilities		25,563		25,436
2021 Bonds payable, net	13	67,408		67,223
Loans payable (non-current)	13	126		159
Operating lease liabilities (non-current)	7	1,392		1,450
Finance lease liabilities (non-current)	7	184		183
Other liabilities (non-current)		560		820
Total liabilities		95,233		95,271
Stockholders' Equity
Common stock, $0.01 par value per share; 500,000,000 shares authorized; 237,261,164 and 237,166,625 shares issued and outstanding at March 31, 2023, and December 31, 2022, respectively.		2,373		2,372
Additional paid-in capital		1,264,203		1,259,527
Accumulated other comprehensive loss		(115)		(1,040)
Accumulated deficit		(673,000)		(655,382)
Total stockholders' equity		593,461		605,477
Total liabilities and stockholders' equity		$	688,694	$	700,748

See the accompanying Notes to the Consolidated Financial Statements.

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GEVO, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except share and per share amounts)


	Note	Three Months Ended March 31,
			2023		2022
Total operating revenues	2, 19		$	4,060	$	232
Operating expenses:
Cost of production	14		4,425		3,090
Depreciation and amortization	9, 10		4,575		1,442
Research and development expense	14		1,198		1,192
General and administrative expense	14		10,761		9,367
Project development costs	14		2,959		1,096
Facility idling costs			999		—


Total operating expenses	14		24,917		16,187
Loss from operations			(20,857)		(15,955)
Other income (expense)
Interest expense			(539)		(2)
Investment income			3,067		252
Other income, net			711		32
Total other income, net			3,239		282
Net loss			$	(17,618)	$	(15,673)
Net loss per share - basic and diluted			$	(0.07)	$	(0.08)
Weighted-average number of common shares outstanding - basic and diluted	3		237,260,681		201,925,747

See the accompanying Notes to the Consolidated Financial Statements.

GEVO, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited, in thousands)


	Note	Three Months Ended March 31,
			2023		2022
Net loss			$	(17,618)	$	(15,673)
Other comprehensive loss
Unrealized gain (loss) on available-for-sale securities	4		925		(973)
Comprehensive loss			$	(16,693)	$	(16,646)

See the accompanying Notes to the Consolidated Financial Statements.

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GEVO, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited, in thousands, except share amounts)






















		Three Months Ended March 31, 2023 and 2022
		Common Stock			Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Stockholders’ Equity
	Note	Shares	Amount
Balance, December 31, 2022		237,166,625	$	2,372	$	1,259,527	$	(1,040)	$	(655,382)	$	605,477


Non-cash stock-based compensation	14	—	—		4,677		—		—		4,677
Stock-based awards and related share issuances, net	18	94,539	1		(1)		—		—		—
Other comprehensive income		—	—		—		925		—		925
Net loss		—	—		—		—		(17,618)		(17,618)
Balance, March 31, 2023		237,261,164	$	2,373	$	1,264,203	$	(115)	$	(673,000)	$	593,461

Balance, December 31, 2021		201,988,662	$	2,020	$	1,103,224	$	(614)	$	(557,375)	$	547,255

Issuance of common stock upon exercise of warrants	18	4,677	—		3		—		—		3
Non-cash stock-based compensation	14	—	—		4,044		—		—		4,044
Stock-based awards and related share issuances, net	18	(240,617)	(1)		(220)		—		—		(221)
Other comprehensive loss		—	—		—		(973)		—		(973)
Net loss		—	—		—		—		(15,673)		(15,673)
Balance, March 31, 2022		201,752,722	$	2,019	$	1,107,051	$	(1,587)	$	(573,048)	$	534,435

See the accompanying Notes to the Consolidated Financial Statements.

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GEVO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Note	Three Months Ended March 31,
		2023		2022
Operating Activities
Net loss		$	(17,618)	$	(15,673)
Adjustments to reconcile net loss to net cash used in operating activities:



Stock-based compensation	14	4,677		4,258
Depreciation and amortization	9, 10	4,575		1,442
Amortization of marketable securities (discount) premium		(114)		1,150
Other noncash expense		234		139
Changes in operating assets and liabilities:
Accounts receivable		(379)		810
Inventories	8	1,650		16
Prepaid expenses and other current assets, deposits and other assets	6, 11	(12,852)		(2,367)
Accounts payable, accrued expenses and non-current liabilities	12	381		(2,269)
Net cash used in operating activities		(19,446)		(12,494)
Investing Activities
Acquisitions of property, plant and equipment	9	(11,434)		(31,218)
Acquisition of patent portfolio	10	—		(10)
Proceeds from sale and maturity of marketable securities	4	135,550		71,082
Proceeds from sale of property, plant and equipment	9	67		—

Purchase of marketable securities	4	—		(31,993)
Net cash provided by investing activities		124,183		7,861
Financing Activities



Proceeds from exercise of warrants	18	—		3
Net settlement of common stock under stock plans	14	—		(220)
Payment of debt	13	(39)		(103)
Payment of finance lease liabilities	7	(23)		—
Net cash used in financing activities		(62)		(320)
Net increase (decrease) in cash and cash equivalents		104,675		(4,953)
Cash, cash equivalents and restricted cash at beginning of period		315,376		136,033
Cash, cash equivalents and restricted cash at end of period		$	420,051	$	131,080


	Three Months Ended March 31,
Schedule of cash, cash equivalents and restricted cash	2023		2022
Cash and cash equivalents	$	342,283	$	44,626
Restricted cash (current)	1,032		16,216
Non-current restricted cash	76,736		70,238
Total cash, cash equivalents and restricted cash	$	420,051	$	131,080


	Three Months Ended March 31,
Supplemental disclosures of cash and non-cash investing and financing transactions	2023		2022
Cash paid for interest, net of amounts capitalized	$	515	$	(514)
Non-cash purchase of property, plant and equipment	$	13,277	$	7,530

See the accompanying Notes to the Consolidated Financial Statements.

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GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)

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

Nature of business. Gevo, Inc. (Nasdaq: GEVO) ("Gevo", "we", "us", "our", or the "Company," which, unless otherwise indicated, refers to Gevo, Inc. and its subsidiaries), a Delaware corporation founded in 2005, is a growth-oriented company with the mission of solving greenhouse gas ("GHG") emissions for those sectors of the transportation industry that are not amenable to electrification or hydrogen.

The Company is focused on transforming renewable energy into energy-dense liquid drop-in hydrocarbons that can be used as renewable fuels, such as sustainable aviation fuel ("SAF") and other fuels and chemicals, with the potential to achieve a “net-zero” GHG, or even carbon negative footprint measured by the Argonne National Laboratory’s GREET (Greenhouse gases, Regulated Emissions, and Energy use in Transportation) model (the "GREET Model") to measure, predict and verify GHG emissions across the life-cycle. Our “net-zero” concept means production of drop-in hydrocarbon fuels by using sustainably grown feedstocks (e.g., low till, no-till and dry corn cultivation), renewable and substantially decarbonized energy sources, resulting in a net-zero carbon footprint from the full life cycle of the fuel measured from the capture of renewable carbon through the burning of the fuel.

Gevo's primary market focus, given current demand and growing customer interest, is SAF. The Company believes it also has commercial opportunities for other renewable hydrocarbon products, such as (i) renewable natural gas, also known as biogas (“RNG”), (ii) hydrocarbons for gasoline blendstocks and diesel fuel, and (iii) plastics, materials and other chemicals. We are engaged in technology, process and intellectual property development targeted to large scale deployment of net-zero hydrocarbon fuels and chemicals. We are developing the marketplace and customers for SAF and other related products. We also are engaged as a developer and enabler/licensor for large scale commercial production, and we expect to be a co-investor on certain projects. Gevo's business model is that of a developer of projects, a licensor, process technology developer, and operator of certain assets in the future.

Net-Zero Projects

In early 2021, we announced the concept of “Net-Zero Projects” as a series of planned facilities to produce energy dense liquid hydrocarbons using renewable energy and our proprietary technology. The concept of a Net-Zero Project is to convert renewable energy (e.g., photosynthetic, wind, RNG) from a variety of sources into energy dense liquid hydrocarbons that, when burned in traditional engines, has the potential to achieve net-zero GHG emissions across the whole lifecycle of the liquid fuel: from the way carbon is captured from the atmosphere, processed to make liquid fuel products, and burnt as a fuel for planes, cars, trucks and ships. As announced in February 2022, and as a result of our agreement and relationship with Axens North America, Inc. (“Axens”), Gevo made the decision to utilize Axens’ ethanol fermentation technology instead of our proprietary isobutanol fermentation technology to produce sustainable aviation fuel and other renewable hydrocarbon products in our Net-Zero Projects.

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. Along with the hydrocarbons, NZ1 is being designed to produce approximately 1,390 million pounds per year of high-value protein products for use in the food chain and more than 34 million pounds per year of corn oil. Our products will be produced in three steps; the first step is milling the corn and the production of protein, oil, and carbohydrates, the second step produces alcohols using fermentation and the third step is the conversion of the alcohols into hydrocarbons.

We also are developing other commercial production projects for SAF at other locations in the United States where we expect to use the design of the ethanol-to-jet plant of Lake Preston. Gevo expects to play the role of developer and licensor; and, depending upon circumstances, partial owner of these projects.

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GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)

Renewable Natural Gas Facilities

Gevo's RNG facilities in Northwest Iowa ("NW Iowa RNG") are owned by Gevo NW Iowa RNG, LLC, and produce RNG captured from dairy cow manure. The manure is supplied by three local dairies that have over 20,000 milking cows in total. Animal manure can be digested anaerobically to produce biogas, which is then upgraded to pipeline quality gas referred to as RNG. Gevo NW Iowa RNG, LLC sells the produced RNG to the California market through an agreement with BP Canada Energy Marketing Corp. and BP Products North America Inc. (collectively, "BP"). In addition, NW Iowa RNG generates and sells Low Carbon Fuel Standard ("LCFS") credits as well as D3 Renewable Identification Numbers ("RINs") through the production of RNG (collectively, "environmental attributes").

Luverne Facility

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

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) along with the instructions to Form 10-Q and Article 10 of Regulation S-X assuming the Company will continue as a going concern. Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company as of, and for the three months ended, March 31, 2023, and are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included under the heading “Financial Statements and Supplementary Data” in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The financial statements at December 31, 2022, have been derived from the audited financial statements as of that date. For further information, refer to our audited financial statements and notes thereto included for the year ended December 31, 2022 (the "2022 Annual Report").

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

2.Revenues from Contracts with Customers and Other Revenues

The Company’s revenues are primarily comprised of the sale of RNG and related environmental attributes produced at the NW Iowa RNG facility under long-term contracts with customers. Revenue is recognized at a point in time when the Company transfers the product to its customer. The customer obtains control of the product upon RNG delivery into gas pipeline system, whereas the title and control for the environmental attributes are transferred to the customer subsequent to the issuance of such attributes by the relevant regulatory agency. The Company generally has a single performance obligation in our arrangements with customers. The Company’s performance obligation related to the sales of RNG and related environmental attributes are satisfied at a point in time upon delivery to the customer.

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GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)

The following table displays the Company’s revenue by major source based on product type (in thousands):


	Three Months Ended March 31,
Major Goods/Service Line		2023		2022
Ethanol sales and related products, net		$	—	$	169
Hydrocarbon revenue		397		63
Renewable natural gas commodity		130		—
Environmental attribute revenue		3,533		—
Total operating revenue		$	4,060	$	232

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring its products. There is no variable consideration present in the Company’s performance obligations. Consideration for each transaction is based upon quoted market prices at the time of delivery.

The Company recorded limited revenues from its development-scale plant, the Luverne Facility, during the three months ended March 31, 2023, and 2022. These revenues were promotional in nature and from customer contracts for ethanol sales and related products and hydrocarbon revenues, which included SAF, isooctene, and isooctane. These products were sold mostly on a free-on-board shipping point basis (recognized at a point in time), were independent transactions, did not provide post-sale support or promises to deliver future goods, and were single performance obligations.

3.Net Loss Per Share

Basic net loss per share is calculated based on the weighted average number of common shares outstanding for the period. Diluted net loss per share is calculated based on the assumption that stock options and other dilutive securities outstanding, which have an exercise price less than the average market price of the Company's common shares during the period, would have been exercised on the later of the beginning of the period or the date granted, and that the funds obtained from the exercise were used to purchase common shares at the average market price during the period. None of the Company's stock options or other dilutive securities are considered to be dilutive in periods with net losses.

The effect of the Company’s dilutive securities is calculated using the treasury stock method and only those instruments that result in a reduction in net income per common share are included in the calculation. Diluted net loss per share excluded common stock equivalents because the effect of their inclusion would be anti-dilutive or would decrease the reported net loss per share. Therefore 58,651 and 72,434 of dilutive common stock equivalents have been excluded for the three months ended March 31, 2023 and 2022, respectively, as the Company is in a net loss position. See Notes 14 and 18 for all outstanding options and warrants that were not included in the computation of diluted weighted average common shares outstanding, as the exercise price of the options and warrants exceeded the average price of the Company’s common stock during the reporting period, and therefore are anti-dilutive.

Basic and diluted net loss per share is calculated as follows (net loss in thousands):


	Three Months Ended March 31,
		2023		2022
Net loss		$	(17,618)	$	(15,673)
Basic weighted-average shares outstanding		237,260,681		201,925,747
Net loss per share - basic and diluted		$	(0.07)	$	(0.08)

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GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)

4.Marketable Securities

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


	March 31, 2023
	Amortized Cost Basis		Gross Unrealized Losses		Fair Value
Marketable securities (current)
U.S. Treasury notes	$	11,005	$	(61)	$	10,944
U.S. Government-sponsored enterprise securities	22,007		(54)		21,953
Total marketable securities (current)	$	33,012	$	(115)	$	32,897


	December 31, 2022
	Amortized Cost Basis		Gross Unrealized Losses		Fair Value
Marketable securities (current)
U.S. Treasury notes	$	56,418	$	(344)	$	56,074
U.S. Government-sponsored enterprise securities	112,030		(696)		111,334
Total marketable securities (current)	$	168,448	$	(1,040)	$	167,408

The cost of securities sold is based upon the specific identification method. Interest receivable related to the marketable securities of $0.2 million was included within "Prepaid expenses and other current assets" on the Consolidated Balance Sheets as of March 31, 2023.

Interest income from marketable securities totaled $0.6 million and $1.6 million for the three months ended March 31, 2023 and 2022, respectively, and is included in "Investment income" in the Consolidated Statements of Operations.

5.Restricted Cash

Current and non-current restricted cash of $77.8 million consists of amounts held as collateral for letters of credit to provide financing support for development and construction of the NW Iowa RNG and NZ1 projects and interest earned on restricted cash.

The Company entered into an irrevocable direct pay letter of credit (the "Bond Letter of Credit") with Citibank N.A ("Citibank") in April 2021 to support the 2021 Bonds (as defined below) for the development and construction of NW Iowa RNG. See Note 13, Debt, for additional information on the 2021 Bonds. The Bond Letter of Credit has a 0.5% annual fee and expires April 4, 2024 (unless terminated earlier). The Company deposited $71.2 million with Citibank as restricted cash to secure any amounts drawn under the Bond Letter of Credit. The Company is entitled to receive interest income on the restricted cash. As of March 31, 2023, no amounts have been drawn under the Bond Letter of Credit.

The proceeds from issuance of the 2021 Bonds recorded as restricted cash are maintained by the Trustee (as defined below) under the Indenture (as defined below) and are released to the Company to pay costs of the construction of NW Iowa RNG. The Company has used all bond proceeds for the project as of March 31, 2023.

In September 2022, the Company entered into a Pledge and Assignment agreement with Citibank to provide credit support in the form of a letter of credit (the “Power Letter of Credit”) from Citibank to a local electric utility company in order to induce the utility company to design and construct the power transmission and distribution facilities that will serve NZ1. The Company deposited $6.6 million of restricted cash in an account with Citibank to collateralize the Power Letter

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GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)

of Credit, which has a 0.3% annual fee and expires September 30, 2024 (unless terminated earlier). As of March 31, 2023, no amounts have been drawn under the Power Letter of Credit.

6.Prepaid Expenses and Other Current Assets

The following table sets forth the components of the Company’s prepaid expenses and other current assets (in thousands) as of:


	March 31, 2023		December 31, 2022
Prepaid insurance	$	1,744	$	911
Interest receivable	1,219		514
Prepaid feedstock	1,097		1,097
Prepaid other	925		512
Total prepaid expenses and other current assets	$	4,985	$	3,034

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

The Company is party to an operating lease contract for the Company’s office and research facility in Englewood, Colorado, which expires in January 2029. The lease contains an option to extend the lease which management does not reasonably expect to exercise, so it is not included in the length of the term. The Company also has one production line piece of equipment with an operating lease that expires in 2024.

The Company has four finance leases for land under arrangements related to NW Iowa RNG. Under these contracts, the Company leases land from dairy farmers on which it has built three anaerobic digesters, and related equipment and pipelines to condition raw biogas from cow manure provided by the farmers. The partially conditioned biogas is transported from the three digester sites to a central gas upgrade system located at the fourth site that upgrades the biogas to pipeline-quality RNG for sale. These leases expire at various dates between 2031 and 2050.

The following tables present the (i) other quantitative information and (ii) future minimum payments under non-cancelable financing and operating leases as they relate to the Company’s leases (in thousands, except for weighted averages):


	Three Months Ended March 31,
	2023		2022
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	23	$	1
Operating cash flows from operating leases	$	74	$	287
Finance cash flows from finance leases	$	2	$	1


Weighted-average remaining lease term, finance lease (months)	308		314
Weighted-average remaining lease term, operating leases (months)	61		68
Weighted-average discount rate - finance leases (1)	12%		11%
Weighted-average discount rate - operating leases (1)	5%		5%

(1)Our leases do not provide an implicit interest rate; we calculate the lease liability at lease commencement as the present value of unpaid lease payments using our estimated incremental borrowing rate. The incremental borrowing rate represents the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined using a portfolio approach based on information available at the commencement date of the lease.

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GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)


Year Ending December 31,	Operating Leases		Finance Leases
2023 (remaining)	$	454	$	30
2024	305		31
2025	315		25
2026	324		25
2027	334		25
2028 and thereafter	373		571
Total	2,105		707
Less: amounts representing present value discounts	(292)		(464)
Total lease liabilities	1,813		243
Less: current portion	(421)		(59)
Non-current portion	$	1,392	$	184

8.Inventories

The following table sets forth the components of the Company’s inventory balances (in thousands) as of:


	March 31, 2023		December 31, 2022
Raw materials

Consumables	$	29	$	29
Catalyst	77		139
Finished goods
SAF, Isooctane, Isooctene and other	1,061		1,457
Isobutanol	124		124

Work in process

Environmental attributes, net of allowance of $2,122 and $2,378, respectively	2,656		4,193
Jet fuel	51		51
Spare parts	357		354
Total inventories	$	4,355	$	6,347

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

During the three months ended March 31, 2023, the Company did not adjust its finished goods and work in process inventory, excluding environmental attributes, to net realizable value. During the three months ended March 31, 2022, the Company adjusted its finished goods and work in process inventory to net realizable value and recorded a loss of $2.9 million in cost of production.

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GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)

9.Property, Plant and Equipment

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


	March 31, 2023		December 31, 2022
Land	$	6,452	$	6,452
Plant facilities and infrastructure			76,875		76,900
Machinery and equipment			88,002		87,248
Furniture and office equipment			2,990		2,977
Software			2,217		2,217
Construction in progress	82,780		72,717
Total property, plant and equipment			259,316		248,511
Less: accumulated depreciation and amortization			(75,454)		(71,639)
Property, plant and equipment, net			$	183,862	$	176,872

The Company recorded depreciation expenses of $4.2 million and $1.2 million for the three months ended March 31, 2023 and 2022, respectively.

Construction in progress includes $28.9 million for Gevo, $11.4 million for the Agri-Energy segment ("Agri-Energy") related to a fractionation and hydrocarbon skid, $1.6 million for NW Iowa RNG and $40.9 million for NZ1 at March 31, 2023. Construction in progress includes $25.9 million for Gevo, $11.4 million for Agri-Energy, $1.0 million for NW Iowa RNG and $34.4 million for NZ1 at December 31, 2022. Construction in progress is not subject to depreciation until the assets are placed into service. At March 31, 2023, construction in progress included accruals of $13.3 million.

Borrowing costs. Borrowing costs directly attributable to acquisition and construction of an asset are capitalized until it is completed and ready for its intended use, and thereafter are recognized in profit or loss for the period. The Company did not capitalize interest expense during the three months ended March 31, 2023, and capitalized $0.5 million of interest expense for the three months ended March 31, 2022.

10.Intangible Assets

Identifiable intangible assets consist of patents, which management evaluates to determine whether they (i) support current products, (ii) support planned research and development, or (iii) prevent others from competing with Gevo's products.

The following tables set forth the Company’s intangible assets by classification (in thousands) as of:


	March 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Identifiable Intangible Assets, net		Weighted-Average Useful Life (Years)
Patents	$	4,580	$	(1,184)	$	3,396	7.4
Defensive assets	4,900		(896)		4,004		8.4
Intangible assets	$	9,480	$	(2,080)	$	7,400	7.9

Table of Contents

GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)


	December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Identifiable Intangible Assets, Net		Weighted-Average Useful Life (Years)
Patents	$	4,580	$	(1,039)	$	3,541	7.4
Defensive assets	4,900		(750)		4,150		8.4
Intangible assets	$	9,480	$	(1,789)	$	7,691	7.9

The Company recorded amortization expense of $0.3 million for each of the three months ended March 31, 2023 and 2022.

The following table details the estimated amortization of intangible assets as of March 31, 2023 (in thousands):


Year Ending December 31,	Patents		Defensive Assets		Total
2023 (remaining)	$	437	$	439	$	876
2024	582		586		1,168
2025	582		586		1,168
2026	582		586		1,168
2027	582		586		1,168
2028 and thereafter	631		1,221		1,852
Total intangible assets	$	3,396	$	4,004	$	7,400

11.Deposits and Other Assets

The following table sets forth the components of the Company's deposits and other assets (in thousands) as of:


	March 31, 2023		December 31, 2022
Deposits (1)	$	276	$	276
Prepaid feedstock (2)	1,175		934
Equity interest (3)	1,500		1,500
Exclusivity fees (4)	2,522		2,522
Deposits receivable (5)	18,961		8,302
Other assets, net (6)	8,353		8,460
Total deposits and other assets	$	32,787	$	21,994

(1)Deposits for legal services and products for NZ1.

(2)Prepaid feedstock fees, non-current, for the production of RNG.

(3)The Company directly holds a 4.6% interest in the Series A Preferred Stock of Zero6 Clean Energy Assets, Inc. ("Zero6"), formerly Juhl Clean Energy Assets, Inc., which is not a publicly listed entity with a readily determinable fair value. The Company therefore measures the securities at cost, which is deemed to be the value indicated by the last observable transaction in Zero6's stock, subject to impairment. The equity interest in Zero6 is also pledged as collateral against two future obligations to Rock County Wind Fuel, LLC ("RCWF"), a Zero6 subsidiary, see Note 16, Commitments and Contingencies, for additional information.

(4)Axens will provide certain alcohol-to-SAF technologies and services exclusively provided to the Company which may be offset against future license fees subject to the delivery of a process design package.

Table of Contents

GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)

(5)Deposits provided to a developer of certain wind-farm projects and power utility contractor to induce the contractor to design and construct the power generation, transmission and distribution facilities that will serve NZ1, $5.5 million of which will be either reimbursed or used as an investment into wind generation facility and the remaining $13.5 million is expected to be fully reimbursed upon completion of the project. Gevo has contractual priority liens against the equipment and constructed facilities under the contracts.

(6)Payments which were allocated to the non-lease fuel supply, primarily related to sand separation systems, to support NW Iowa RNG fuel supply agreements prior to commencement of operations, being amortized over the life of the project.

12.Accounts Payable and Accrued Liabilities

The following table sets forth the components of the Company's accounts payable and accrued liabilities in the Consolidated Balance Sheets (in thousands) as of:


	March 31, 2023		December 31, 2022
Accounts payable	$	3,858	$	5,009
Accrued liabilities	16,193		12,594
Accrued payroll and related benefits	4,505		5,105
Accrued sales and use tax	375		2,052
Total accounts payable and accrued liabilities	$	24,931	$	24,760

13.Debt

2021 Bond Issuance

On April 15, 2021, on behalf of Gevo NW Iowa RNG, LLC, the Iowa Finance Authority (the "Authority") issued $68,155,000 of its non-recourse Solid Waste Facility Revenue Bonds (Gevo NW Iowa RNG, LLC Renewable Natural Gas Project), Series 2021 (Green Bonds) (the "2021 Bonds") for NW Iowa RNG. The bond proceeds were used as a source of construction financing alongside equity from the Company. The 2021 Bonds were issued under a Trust Indenture dated April 1, 2021 (the "Indenture") between the Authority and Citibank, N.A. as trustee (the "Trustee"). The 2021 Bonds mature April 1, 2042. The bonds bear interest at 1.5% per annum during the Initial Term Rate Period (as defined in the Indenture), payable semi-annually on January 1 and July 1 of each year. The effective interest rate is 1.0%. The 2021 Bonds are supported by the $71.2 million Bond Letter of Credit; see Note 5, Restricted Cash. The Trustee can draw sufficient amounts on the Bond Letter of Credit to pay the principal and interest until the first mandatory tender date of April 1, 2024. The 2021 Bonds became callable and re-marketable on October 1, 2022. If the 2021 Bonds have not been called and re-marketed by the first mandatory tender date, the Trustee may draw on the Bond Letter of Credit to repay the 2021 Bonds in their entirety at the purchase price. As of March 31, 2023, no amounts have been drawn under the Bond Letter of Credit.

The 2021 Bonds were issued at a premium of $0.8 million and debt issuance costs were $3.0 million. The bond debt is classified as non-current debt and is presented net of the premium and issuance costs, which are being amortized over the life of the 2021 Bonds using the interest method. As of March 31, 2023 and December 31, 2022, the premium balance and the debt issuance cost net of amortization were $0.3 million, $0.4 million, $1.0 million, and $1.3 million, respectively.

Loans Payable

In April 2020, the Company and Agri-Energy each entered into a loan agreement with Live Oak Banking Company, pursuant to which the Company and Agri-Energy obtained loans from the Small Business Administration's Paycheck Protection Program (“SBA PPP”) totaling $1.0 million in the aggregate (the "SBA Loans").

In April 2021, the entire balance of $0.5 million of the Company's and $0.1 million of Agri-Energy's loans and accrued interest obtained through the SBA PPP were forgiven. The remaining SBA Loan for Agri-Energy totals $0.2 million, bears interest at 1.0% per annum and matures in April 2025. Monthly payments of $8,230, including interest, began on June 5, 2021, and are payable through April 2025.

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GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)

The summary of the Company's debt is as follows (in thousands) as of:


	Interest Rate			Maturity Date			March 31, 2023		December 31, 2022
2021 Bonds, net	1.5%			April 2042			$	67,408	$	67,223
SBA Loans	1.0%			April 2025			200		224
Equipment	4%	to	5%	December 2023	to	December 2024	78		94
Total debt							67,686		67,541
Less: current portion							(152)		(159)
Non-current portion							$	67,534	$	67,382

Future payments for the Company's debt are as follows (in thousands):


Year Ending December 31,	Total Debt
2023 (remaining)	$	120
2024	67,537
2025	29
Total debt	$	67,686

14.Stock-Based Compensation

Equity incentive plans. In February 2011, the Company’s stockholders approved the Gevo, Inc. 2010 Stock Incentive Plan (as amended and restated to date, the "2010 Plan"), and the Employee Stock Purchase Plan (the "ESPP").

The 2010 Plan provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units and other equity awards to employees and directors of the Company. In June 2021, upon approval of the stockholders at the 2021 Annual Meeting of Stockholders, the 2010 Plan was amended and restated, which increased the number of shares of common stock reserved for issuance under the 2010 Plan to 22,980,074 shares. At March 31, 2023, 4,109,441 shares were available for future issuance under the 2010 Plan.

Stock-based compensation expense. The Company records stock-based compensation expense during the requisite service period for share-based payment awards granted to employees and non-employees.

The following table sets forth the Company’s stock-based compensation expense for the periods indicated (in thousands):


	Three Months Ended March 31,
		2023		2022
Equity Classified Awards
Cost of production		$	18	$	193
General and administrative		3,923		3,494
Other		736		357
Total equity classified awards		4,677		4,044





Liability Classified Awards
General and administrative		—		214

Total liability classified awards		—		214
Total stock-based compensation		$	4,677	$	4,258

Table of Contents

GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)

Stock option award activity. Stock option activity under the Company’s stock incentive plans and changes during the three months ended March 31, 2023, were as follows:


	Number of Options	Weighted-Average Exercise Price (1)		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Options outstanding at December 31, 2022	5,945,321	$	4.65	9.6	$	—
Granted	55,918	$	2.12		$	—
Canceled or forfeited	(26,173)	$	8.04		$	—
Exercised	—	$	—		$	—
Options outstanding at March 31, 2023	5,975,066	$	4.62	9.1	$	—
Options vested and expected to vest at March 31, 2023	1,492,796	$	5.26	0.5	$	—

(1)Exercise price of options outstanding range from $2.12 to $11,160 as of March 31, 2023. The higher end of the range is due to the impact of several reverse stock splits during the years 2015 to 2018, subsequent to certain option grants, and relates to awards that expire during 2023.

As of March 31, 2023, the total unrecognized compensation expense, net of estimated forfeitures, relating to stock options was $11.6 million, which is expected to be recognized over the remaining weighted-average period of approximately 1.9 years.

Restricted stock. Non-vested restricted stock awards and the changes during the three months ended March 31, 2023, were as follows:


	Number of Shares	Weighted-Average Grant-Date Fair Value
Outstanding at December 31, 2022	5,254,457	$	3.94
Granted	89,334	$	1.89
Vested and issued	—	$	—
Canceled or forfeited	(7,295)	$	3.39

Non-vested at March 31, 2023	5,336,496	$	3.91

As of March 31, 2023, the total unrecognized compensation expense, net of estimated forfeitures, relating to restricted stock awards was $14.3 million, which is expected to be recognized over the remaining weighted-average period of approximately 1.8 years. As of March 31, 2023, there are no liability-classified restricted stock awards.

15.Income Taxes

The Company has incurred operating losses since inception; therefore no provision for income taxes was recorded and all related deferred tax assets are fully reserved. We continue to assess the impact of a deferred tax asset as it relates to income taxes.

16.Commitments and Contingencies

Legal Matters. From time to time, the Company has been, and may again become, involved in legal proceedings arising in the ordinary course of its business. The Company is not presently a party to any litigation and is not aware of any pending or threatened litigation against the Company that it believes could have a material adverse effect on its business, operating results, financial condition or cash flows.

Table of Contents

GEVO, INC.

Notes to Consolidated Financial Statements

(unaudited)

Indemnifications. In the ordinary course of its business, the Company makes certain indemnities under which it may be required to make payments in relation to certain transactions. As of March 31, 2023, the Company did not have any liabilities associated with indemnities.

In addition, the Company indemnifies its officers and directors for certain events or occurrences, subject to certain limitations. The duration of these indemnifications, commitments, and guarantees varies and, in certain cases, is indefinite. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that may enable it to recover a portion of any future amounts paid. The Company accrues losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable. No such losses have been recorded to date.

Environmental Liabilities. The Company’s operations are subject to environmental laws and regulations adopted by various governmental authorities in the jurisdictions in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its locations. Accordingly, the Company has adopted policies, practices and procedures in the areas of pollution control, occupational health and the production, handling, storage and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability which could result from such events. Environmental liabilities are recorded when the Company’s liability is probable, and the costs can be reasonably estimated. No environmental liabilities have been recorded as of March 31, 2023.

Fuel Supply Commitment. The Company has three long-term fuel supply contracts to source feedstock for the anaerobic digesters at the NW Iowa RNG project. These contracts provide an annual amount of feedstock to be used in the production of RNG.

Praj Commitment. In June 2021 the Company contracted with a manufacturer in India to build a fractionation and hydrocarbon skid for $10.2 million. The remaining commitment for the contract is $3.6 million as of March 31, 2023.

Zero6 Commitments. In September 2022, the Company entered into a development agreement with Zero6 to construct and operate a wind project for the provision of electric energy for NZ1. Pursuant to the agreement, the Company has committed to pay Zero6 total development charges of $8.6 million, comprised of advanced development fee payments of $0.9 million, certain reimbursable costs of $1.2 million, and $6.5 million upon completion of the project. The Company is not contractually obligated for the specified development charges until certain milestones are met in future periods, and upon completion of the project.

Additionally, the Company's investment in Zero6, see Note 11 above, is pledged separately as collateral for two commitments for the purchase of wind electricity for the Luverne Facility, as well as the purchase of 100% of RCWF's renewable energy credits. Gevo has a commitment to purchase all of RCWF's electricity. The portion not used by the Luverne Facility is charged to the Company at a lower price.

The estimated commitments as of March 31, 2023, and thereafter are shown below (in thousands):


	December 31,												Total
	2023 (remaining)		2024		2025		2026		2027		2028 and thereafter
Fuel Supply Payments	$	2,309	$	2,408	$	1,702	$	1,718	$	1,736	$	28,263	$	38,136
Zero6 Commitment	222		322		6,747		—		—		—		7,291
Praj Commitment	3,600		—		—		—		—		—		3,600
Renewable Energy Credits	114		152		152		152		152		1,877		2,599
Electricity Above Use (Est.)	234		321		332		345		357		5,498		7,087
Total	$	6,479	$	3,203	$