Welcome to Gevo's Fourth Quarter 2021 Earnings Conference Call. My name is Kevin and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will be conducting a question-and-answer session. Please note that this conference is being recorded. I'll now turn the call over to Heather Manuel, Vice President of Investor Relations & Communications. Please go ahead, Ms. Manuel.

Good afternoon, everyone, and thank you for joining Gevo's fourth quarter 2021 earnings conference call. I would like to start by introducing today's participants from the Company. With us today is Patrick Gruber, Gevo's Chief Executive Officer, Lynn Smull, Gevo's Chief Financial Officer, and Paul John Richardson, Gevo’s Investor Relations Manager. Earlier today, we issued a press release that outlines the topics we plan to discuss today. A copy of this press release is available on our website at www.gevo.com. I would like to remind our listeners that this conference call is open to the media and that we are providing a simultaneous webcast of this call to the public. A replay of today's call will be available on Gevo's website. On the call today and on this webcast, you will hear discussions of certain non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in accordance with GAAP. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in the press release distributed today, which is posted on our website. We're also making certain forward-looking statements about events and circumstances that have not yet occurred, not limited to projections about Gevo's Net-Zero 1 project and our operating activities in 2022 and beyond. These forward-looking statements are based on management's current beliefs, expectations, and assumptions and are subject to significant risks and uncertainties, including those disclosed in Gevo's Form 10-K for the year ended December 31, 2021. That was filed with the U.S. Securities and Exchange Commission and in subsequent reports and other filings made with the SEC by Gevo, including Gevo's quarterly reports on Form 10-Q. Investors are cautioned not to place undue reliance on any such forward-looking statements. Such forward-looking statements speak only as of today's date, and Gevo disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events, or otherwise. On today's call, Pat will begin with a discussion of Gevo's business developments, Lynn will then review Gevo's financial results for the fourth quarter of 2021. Following the presentation, we will open up the call for questions. I will now turn the call over to Pat.

Thanks, Heather, and thank you all for joining us. We have had a great and very busy quarter, though everything except our stock price. Today, I'll be using a slide deck; please refer to it, and I'll let you know when to turn the pages as I go through it. Let's start on slide number 3. Recently, we've had some very important announcements, and today I'll be talking about how these announcements fit together towards our goal of properly producing 1 billion gallons of stable fuels by 2030. A lot of what we will discuss today will focus on achieving that goal while de-risking the strategy as much as possible. The Axens ethanol for sustainable aviation fuel technology for SAF is that alliance is all about Axens exclusively licensing their ethanol to Gevo in the United States. The ADM MOU is about converting large scale capacity for ethanol into SAF. The Colmar supply agreement is about firm demand for SAF and other hydrocarbons. Gevo’s RNG project in Northwest Iowa is about executing an energy transition project that is expected to bring in meaningful revenue starting later this year. Now, before we get into the details of those announcements, I want to refresh everyone on Gevo’s overall business and how investors should view it. Please turn to slide four. Gevo is focused on properly converting renewable carbohydrates into SAF and other renewable hydrocarbons. Gevo has been one of the leaders in these technologies over the years. In the U.S., it's a vertically integrated system that includes primary processing of corn, a fermentation to alcohol process, and a chemical process to make renewable hydrocarbons like SAF. Vertical integration should allow a Net-Zero plant to achieve a very low or even potentially negative carbon intensity (CI) score for SAF using the scientific Argonne group model for measuring carbon emissions. Being vertically integrated from primary processing of corn to fermentation to hydrocarbon production provides an advantage for driving carbon scores down due to the integration of systems. For example, integrating wastewater and generating biogas on-site is expected to enable the displacement of fossil-based natural gas that we would use to power the facility. Setting a plant to avoid fossilized electricity is critical because of the large footprint that grid electricity would mean for CI score. By working with farmers, we believe we can enhance soil carbon capture, which should translate to improved CI scores. So, by reducing and eliminating fossil-based energy in Gevo’s businesses, in particular, and by choosing feedstocks wisely, Gevo believes it can achieve Net-Zero SAF, meaning Net-Zero for capturing CO2 from the farm to the exhaust of a jet engine. To provide the transportation industry with real decarbonizing options, it is critical that we offset the exhaust emissions fully with the carbon absorbed in the fuel production process. We have established and are developing a business called Verity and Tracking that uses blockchain technology to track carbon and other sustainability attributes for renewable carbon sources. We expect that we will separate Verity and Tracking out as a standalone company at some point, perhaps as early as 2022. We think that the way to deal with all controversy around sustainability is to document facts, use science, and be transparent. And that's what Verity Tracking is all about. Moving on, how we’re developing a proper business, remember that we set a goal of a billion gallons of capacity and sales for Gevo’s business system by 2030. Let's go to slide five. We struck what we believe is a good financial offtake agreement with Kolmar. This agreement brings us to nearly 100 million gallons per year of offtake agreements. We expect to get more offtake contracts done relatively soon. Our contract pipeline, where we are negotiating terms, is greater than 1.5 billion gallons per year. As SAF contract momentum picks up, we need more production capacity, likely sooner. Going to the airline industry, airlines themselves have made bold statements about using SAF, and I believe them. The chart on the upper left shows that SAF towards the California renewable diesel market, by 2030, assuming a 10% SAF blend level, the market would be roughly 13 billion gallons per year. We believe that the economics work for investment, and the pricing people can offer works for customers. Now it's all about building out production capacity to scale to match the offtake agreements we have in place and the offtake agreements that we expect to ink in the future. Please turn to slide 6. In the fourth quarter of last year, we did a deal with Axens that grants Gevo the exclusive license in the U.S. to develop and commercialize their technology to convert ethanol to SAF and other hydrocarbons. Now we had been working with Axens on Gevo's isobutanol hydrocarbon production process. As we got to know each other, it became clear that there was a lot of synergy. We know how to decarbonize feedstocks and production plants and alcohols using our net zero concepts, and Axens had proven technology to convert ethanol and other alcohols into hydrocarbons, including SAF. Axens is well known in the chemical and refining industries and is an outstanding technology and engineering company. The hydrocarbon process technology to make jet fuels from olefins has been commercialized in the petrochemical industry many times. It's really a strategic relationship. We complement each other. In addition to Greenfield plants we're developing, we see the opportunity to convert certain existing ethanol plants to Net-Zero SAF. We'll work together with Axens to try to make that happen. We all want to grow faster. We have made the decision to use ethanol as a building block for SAF rather than isobutanol at our Net-Zero 1 plant. We believe we can make more money, produce more SAF, and have a complete engineering package that would work with existing ethanol plants. Currently, the capital cost for a Net-Zero plant is projected to be about $900 million, fully installed in a non-recourse project finance. The Net-Zero 1 project EBITDA estimates are approximately $150 to $200 million per year, based on the current assumptions of commodities and all the rest. Ethanol plants are well known in terms of cost and operating reliability. On the hydrocarbon process, Axens is doing the engineering and will provide certain process guarantees for converting the ethanol into hydrocarbons. This is a de-risked production system as much as we can make it in the current more cautious environment for financing the right way to move forward. The engineering designs, modules, and integrations are planned to be cookie-cutter for deployment at other sites and ethanol plants. A great deal of the engineering work and designs that we already have completed for NZ-1 will be utilized for NZ-1 using Axens technology. The fermentation section of the plant will be smaller and we will have to add additional equipment as part of the chemical processes. We expect NZ-1 to be mechanically complete in 2024 and operating in 2025. We expect to order long-lead equipment in 2022 and begin site preparation work later this year. Please turn to slide 7. Many of you may recognize this chart; it's basically the same as before. Although the amounts and product mix has changed, there's more SAF being produced. The total capital expenditure has remained about the same. The IRR is projected to be better using ethanol rather than isobutanol. Deploying renewable energy and infrastructure to drive down CI is still critical to success. Please turn to slide 8. The Axens relationship and our plans to grow help to put the ADM MoU announcement into perspective. ADM has some of the biggest and most efficient ethanol plants in the world. We think there is an opportunity to convert those plants into SAF plants and other hydrocarbons. ADM has one of the few operating CO2 sequestration sites in the U.S. We're in the midst of figuring out how to work with them. We expect that we will be able to leverage the engineering work we are doing with Axens for NZ-1 into any transaction that we would do with ADM. We are also exploring other opportunities with existing ethanol plants and are currently in discussions with several plant owners. The idea here is that we can bring our decarbonization partners, Juhl Energy, the SAF plant designs, and our offtake contracts to the table. The value proposition for the ethanol plant owner is simple; they would make more money, more reliably, by feeding ethanol to a SAF plant. They also would need to be decarbonized along the lines of a Net-Zero plant. We have a very open business model and look forward to working with many ethanol operations over time. But we stress that Net-Zero 1 is our priority. Ultimately, to reach our 1 billion-gallon goal, we expect to build multiple Greenfield sites. We have several sites in development already; they are at least as good, if not better than the Lake Preston site. The advantage of Greenfield sites is that we can optimize the key parameters for long-run success. In addition to raw material costs, we also take into consideration access to fossilized energy and potential for carbon capture sequestration. In a strategic sense, it is always good to have options. For example, the plant layout that we have developed from Lake Preston could be used at another piece of land of similar size. We believe that the site we select would require minimal changes to the engineering work. Please turn to Slide 9. We announced that we have begun the startup of Gevo’s RNG project in Northwest Iowa. When our RNG project comes fully online, it is projected to be the fifth-largest dairy RNG project ever done in the U.S. This project has over 20,000 cows and is expected to produce 355,000 million BTUs annually, or thereabouts. There are three dairies involved at this point. You can see the pictures of the digesters at each of the dairies. The upper right picture is the gas upgrading injection site. The picture in the middle shows the relative locations of the digestion systems that we built and our Gevo pipeline that connects them to the upgrading system. We expect that the RNG project EBITDA would be approximately $16 million to $20 million per year across the year of 2023. I give a range because the RNG project EBITDA will depend upon a variety of assumptions, including how carbon scores, the CI for each of the dairies. Now to get a CI score, we have to achieve a steady state, send an application, and wait for the approval to get the full value from carbon California; we expect to get those scores in late 2022 or early 2023. CARB is backed up these days with lots of applications. RNG provides an exciting opportunity for Gevo, we see it as strategic for Gevo because we have to decarbonize our SAF plants, and we like the idea of being able to take RNG up to our Net-Zero 1 plant and drive our CI scores lower if we so choose. We like adding RNG and biogas to our portfolio as an option. In the meantime, we can make good money meeting demand in California for our partner, BP. Please turn to Slide 10. This is an engineering rendering of our hydrocarbon plant currently being built by Praj in India. We expect that this plant will be delivered to our production facility in Luverne, Minnesota, in the latter part of 2022. We are currently making adjustments in Luverne; this hydrocarbon plant could convert isobutanol into a variety of hydrocarbon products. We also expect to be able to produce or to take ethanol and make various hydrocarbon products. We expect to use Luverne as a development site for new products and to improve and refine the isobutanol production processes. We may deploy isobutanol in a side-by-side configuration in the future, for example, as an add-on to a Net-Zero plant. Now I'll turn it over to Lynn.

Thank you, Pat. We finished 2021 with a strong cash and cash equivalent position of $40.8 million, as well as $95.2 million of short and long-term restricted cash. Our highly liquid and readily convertible short and long-term marketable securities totaled $339.7 million and are available for capital and operational needs. Our long-term debt outstanding related to Northwest Iowa RNG was $67 million. Our corporate spend was approximately $18 million for 2021, net of non-cash stock-based compensation. During 2021, we invested significant capital into our preliminary and advanced stage projects, including approximately $23 million into our flagship Net-Zero 1 project, $52 million into Northwest Iowa RNG and other capital projects, as well as approximately $12 million into strategic patents and licenses. As Heather noted, our full financial statements are available in our earnings release and our Form 10-K, both available on our website. I'd like to stress that we substantially advanced the company with our expenditures last year. We have continued to staff experienced talent to bolster our corporate management platform and to prepare for successful execution across a range of critical functions, including stronger design engineering capabilities, continued R&D around our technologies, deeper commercial contract solicitation and execution capabilities. The development of Verity and the Gevo Growers program substantially improved capabilities around investor relations, significant advancement in the integration of our ERP system into current and future operations to enable intelligent automation and reliable internal and external reporting, successful implementation of SOX 404(b) compliance requirements without any deficiencies, and improved financing and financial management capabilities. We strengthened our balance sheet to provide financial resources to support the development of our one billion gallon initiative, the equity investment in Net-Zero 1, RNG execution, and operational and R&D activities at Luverne. We advanced the development, engineering, and expected non-recourse debt terms and attainability for Net-Zero 1, and we substantially constructed the Northwest Iowa RNG project. As a result of this progress and our work with institutional investors, there was an impressive shift in Gevo's institutional stock ownership from 10% at the end of 2020 to 46% at the end of 2021. We may still be considered a pre-revenue company as our revenues have been intermittent, and mostly related to testing and R&D activities. However, that will begin to change in 2022, given that we have begun the Northwest Iowa RNG project startup. We expect to start generating revenue and cash flow later this year once the biogas production ramps up and stabilizes. Initial revenue recognition and cash flow realization for any RNG project in the marketplace lags actual RNG production due to California carbon scores and EPA RINs certification processes. But we will push hard to realize value in 2022. Upon full RNG operations and certifications, we would expect to see RNG project EBITDA flows in the range of $16 million to $22 million a year, depending on the project certified carbon index outcome and market prices for commodities and environmental benefits. As we flesh out our one billion-gallon initiative, and the staff we expect to produce and when, we expect to communicate these plans to our shareholders. Everything we are planning to do is supported by a comprehensive financial enterprise model. We are happy to be in the growth phase of our business, and we are delighted that our capital deployment opportunities should result in excellent returns. We expect any future capital reasons to support this growth to be accretive. Now I'll turn this call back over to Pat to wrap things up.

Excellent. Let's open up the call for questions. Operator?

Our first question comes from Shawn Severson with Water Tower Research.

Thanks. Good afternoon, everyone. Hey, Pat, could you maybe start with a 50,000-foot view here and what's going on with demand for SAF and kind of an update on where the airlines are taking this and any other industry items we can point to in terms of increasing demand there. Hello?

Here we go. Sorry. What we're seeing is because of the government discussions about wanting to see SAF because of some of the policies that are being talked about putting in place, because the airlines themselves are making pretty bold goals as to how much has to be replaced by 2030. We're seeing a definite uptick in SAF, and there's a clear-cut shift now. All our existing customers are on board with what we're doing, they get it and are moving forward with us. It's pretty interesting to see. SAF is the one thing everyone can agree upon; we have to have hydrocarbons to fly jets over long hauls, and nobody disputes that. And so that makes it much easier, and now the momentum has definitely shifted that way. Our goal is to make more of it, do it faster, and grow bigger, hence, we like the idea of being able to leverage existing assets.

And along those lines, how does that de-risk the business and talking about in terms of EPC guarantees, the cost of capital, obviously a very mature, well-developed ethanol market. So how is that going to affect the economics for you?

Using an ethanol route obviously carries less risk involved in the fermentation systems around that, unlike using isobutanol, where we would have been the ones guaranteeing it. The costs are similar using isobutanol and ethanol per gallon, but isobutanol isn't fully optimized. Ethanol, on a cash-cost basis, is good enough to work well. In total, you get more gallons for the same kind of capex, and that means you make more profit. This serves the market need where the market is heading, and we’re seeing other customers coming down the line. The net-zero concept we've been working on translates directly to using ethanol, making it much easier. We didn't have all the mass and energy balances to figure out our CI scores with isobutanol, but we had done that work already. We already had the groundwork done, and were able to see this as a faster path for growth given the demand.

My last question is on process. Could you explain a little bit more about what was going on there? What was equipment transfer?

Yes. So Praj is building that plant for us. That thing is in partial construction, and they'll deliver it later this year. It's an alcohol-to-hydrocarbon plant. We can make a variety of products. We can make hydrocarbon gasoline products, jet fuel products, diesel products, olefins, and feedstocks for other units. We commissioned this last year. We talked about this in terms of an artist's rendition, but it will be several skins stacked on top of one another. That has been under construction, and we'll see it delivered to Luverne.

Thanks. Bye. I'll take the rest of the questions offline.

Cool.

Our next question comes from Derrick Whitfield with Stifel.

Good afternoon, all, and thanks for taking my questions. Perhaps for Pat or Paul, you’re referencing slide 8, you indicated that you’re still evaluating site selection for Net-Zero 1. Are there several Greenfield sites that are at least as attractive as Lake Preston?

Yes.

Can you elaborate on the degree of economic improvement that is possible at another location?

There are a couple of factors that come into play. One, obviously, you have to have the land, and it has to have good transportation, corn prices, raw materials. You need access to renewable energy, and we also like access to sequestration. We believe Lake Preston will have that too. We still have other sites; if we pick them carefully, it could definitely happen. We have to have alternatives if something comes up with the deployment of something like Lake Preston. We still talk about it very much. We have a few sites that are attractive, and sometimes they come with economic incentives. However, we’ll not trade off a new site if it impacts the timeframes to commercialize unless the payments upfront are so great, but I don't have one of those in hand yet.

Great. And perhaps for Pat or Lynn, I know you guys have been working hard on the enterprise financing plan, which you referenced in your prepared remarks to support the 1 million gallon initiative. Could you just speak to the progress on that and your latest thoughts on that initiative?

Lynn, do you want to come in?

Sure, I'll jump in. That model is substantially complete and useful now. It's a very large model and it incorporates a lot of flexibility to make different assumptions around growth in capital deployment, pace, cadence, and all of the costs involved and assumptions around revenue streams. And it does it in a way that rolls up into a traditional three-statement format. The underlying assumptions that have gone into it are pretty robust. Everything around the project level assumptions is based on our work at Net-Zero 1 and other ETJ opportunities. The returns are very attractive, and when we roll up, it's quite appealing regarding the impact on the stock price. We'll share some thoughts around that in the future.

What’s fascinating about this is when we bring the decarbonization partners, everybody wants to deploy renewable electricity, gas, biogas, or sequestration. They all want to do that. So we have numerous partners willing to work with us to deploy capital, which is great. We're also working on the ETJ side with Axens; we are designing modules so that this will be 100 million gallons of ethanol into making the product hydrocarbons coming out. This design can literally go anywhere, which is an interesting model. We think we can grow faster with that, and it mitigates risk significantly. Otherwise, you’re left wondering, does it all work together? However, with ethanol, we know it works, and it completely changes how people view the risk associated with deployment of this.

That's great. And then my last for me. Understanding you don’t have a formal announcement today on Archer Daniels, Midland, or Chevron, could you share comments on how your dialogue with those companies is progressing and a reasonable timeline for the disclosure of commercialization plans?

The conversations with both ADM and Chevron are going well. It’s about getting all the pieces together. What has to happen is regarding decarbonization; ADM has 900 million gallons of ethanol, which takes a serious chunk of capital. We have a lot of discussions going on in the background. We can't do it all at once, and that's why we stay focused on Net-Zero 1. We're learning from everything as we work on each step. It's a much bigger project than us by ourselves. There’s a lot of interest in Gevo corporate and collaborations that we have, like with ADM. They have been very cooperative in sorting this out, and we're making good progress. With the details from Axens, we're sorting out everything we need to know.

It's great. Very helpful. Thanks for your time, guys.

Next question comes from Prashant Rao with Citi Group.

Hi. Good afternoon. Thanks for taking the question. I wanted to start with the RNG side; help us hone in on the inflection there, and whether you could help walk us through the guidance you gave of $16 million to $22 million of EBITDA, and what sort of CI score you need to get or what's the credit assumptions. Also, could you clarify the offtake with BP and if there's any credit sharing in that?

Yes, I believe the BP agreements were posted on an 8-K, but to summarize, there is a sharing arrangement, and BP places that gas directly into dispensaries in California through their distribution networks. We’re ramping up now. As we commence physical production, we're ramping up coordination on gathering the right level of data for applications with CARB to get their approvals for LCFS credits on the CI score as soon as possible. We do have alternatives for temporary pathways to bring revenues in quicker, but we need to assess the risk around doing that for achieving lower CI outcomes. We're producing steady state about 355,000 MMBtu a year. You can calculate the price of RNG these days with LCFS and RINs to estimate revenue. Our EBITDA doesn't leverage positions since we financed that project with an LC backed private activity bonds issuance. We’ll refinance that, probably this year on a non-recourse basis, freeing that cash collateral back to Gevo for our use.

Perfect, that's good. My follow-up is sort of related. Pat, you talked about the revenue targets being updated in that Tier 1 with $150 million to $200 million. Just wondering what that means from credit markets or incentives, and what your risk profile looks like for that Tier 1 revenue?

Sure, I'll start, and Lynn can join in. We feel confident we can predict a $1-a-gallon BTC as an appropriate number. Stability would help us predict longer. It doesn't need to be more; it's great if we can earn more but wouldn't change behaviors. We assume the same structure for the RFS, and for LCFS, we model long-term projected carbon scores. We have experts advising us on this. We also think LCFS markets will tighten with other policies being put in place by different states. So there’s a lot of opportunities for extra profit in various market segments.

Those numbers are based on long-run projections by independent experts, and we feel they’re definitely achievable in the $150 to $200 million range.

To elaborate on the debt case discussed, that was the cynical case. The real potential is much brighter; expect a stronger profile.

Got you. And just one last one; curious about the preliminary results of the FDA testing and how that moves you closer to getting certified pathways.

Many developing LCFS type policies start with the Argonne GREET Model, and each jurisdiction has variations. Our economic models incorporate possible outcomes from different regions. We're working to validate the carbon capture possibilities, as states adapt their regulations. Completing on-field measurements will be crucial. We aim to establish robust systems for measuring and validating carbon capture opportunities.

Thank you very much. Appreciate the time. I’ll turn it over.

It's been very exciting. I think this year can be quite a year as we focus on getting our projects deployed and sorting through how to make our fermentation systems reliable in this uncertain world. Derisking is beneficial, and I appreciate having the ability to work with Axens to use proven technologies. We've been developing ethanol technology for over a decade, and we're beginning to combine those efforts, aiming toward the Net-Zero 1 project. That’s our focus. We want that capital equipment and lead stuff to arrive, prepare the ground this year for construction. We aim to have the RNG project operating and generating income; this is a sizable endeavor. So, we have much to do this year, but ultimately, it will be about the Net-Zero 1 effort and driving the RNG project. Thank you for your interest and support in Gevo.

Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.