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| PART I | | | |
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| Item 1. and 2. | Business and Properties | | 6 |
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| Item 1A. | Risk Factors | | 20 |
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| Item 1B. | Unresolved Staff Comments | | 40 |
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| Item 1C. | Cybersecurity | | 40 |
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| Item 3. | Legal Proceedings | | 40 |
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| Item 4. | Mine Safety Disclosures | | 40 |
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| PART II | | | |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | 41 |
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| Item 6. | [Reserved] | | 42 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 43 |
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| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | | 53 |
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| Item 8. | Financial Statements and Supplementary Data | | 54 |
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | 89 |
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| Item 9A. | Controls and Procedures | | 89 |
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| Item 9B. | Other Information | | 90 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | 91 |
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| PART III | | | |
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| Item 10. | Directors, Executive Officers and Corporate Governance | | 91 |
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| Item 11. | Executive Compensation | | 91 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | 91 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence | | 91 |
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| Item 14. | Principal Accountant Fees and Services | | 91 |
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| PART IV | | | |
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| Item 15. | Exhibits, Financial Statement Schedules | | 92 |
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| SIGNATURES | | | 97 |
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Forward-Looking Statements
This Annual Report on Form 10-K (this “Report”) contains forward-looking statements within the meaning of Section 21 E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). When used in this Report, the words “expect,” “believe,” “anticipate,” “estimate,” “intend,” “plan” and similar expressions are intended to identify forward-looking statements. These statements relate to future events or our future financial or operational performance and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. These forward-looking statements include, among other things, statements about: our financial condition, our results of operation and liquidity, our ability to finance, develop, and construct our Net-Zero Projects (as defined below), as well as other growth projects, our ability to produce our products, our expectations regarding the demand for our products and our ability to meet such demand, our ability to meet production, financial and operational guidance, our ability to generate revenue from our executed contracts, our strategy to pursue low-carbon or “net-zero” carbon renewable fuels for sale into California and elsewhere, our ability to replace our fossil-based energy sources with renewable energy sources at our Net-Zero Projects and elsewhere, our expectations regarding the location and start-up date for our initial Net-Zero Project, our expectations regarding our ability to produce renewable liquid hydrocarbons, our expectations regarding our ability to produce protein and other products for use in the food chain, our ability and plans to construct greenfield commercial hydrocarbon facilities to produce sustainable aviation fuel (“SAF”) and other products, our ability to raise additional funds to finance our business and the sources of those funds, our ability to perform under our existing offtake agreements and other sales agreements we may enter into in the future, our ability to successfully operate our renewable natural gas (“RNG”), also known as biogas, facilities in Iowa, our ability to produce renewable hydrocarbon products at a commercial level and at a profit, the availability of, and market prices for, government economic incentives to the renewable energy market, achievement of advances in our technology platform, the availability of suitable and cost-competitive feedstocks, our ability to gain market acceptance for our products, our expectations regarding the demand for carbon credits, the expected cost-competitiveness and relative performance attributes of our products, our strategy to pursue alcohol-to-SAF development and production, additional competition and changes in economic conditions and the future price and volatility of petroleum and products derived from petroleum. Important factors could cause actual results to differ materially from those indicated or implied by forward-looking statements such as those contained in documents we have filed with the United States (“U.S.”) Securities and Exchange Commission (the “SEC”), including this Report in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 1A. “Risk Factors” and subsequent reports on Form 10-Q. All forward-looking statements in this Report are qualified entirely by the cautionary statements included in this Report and such other filings. These risks and uncertainties or other important factors could cause actual results to differ materially from results expressed or implied by forward-looking statements contained in this Report. These forward-looking statements speak only as of the date of this Report. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and readers should not rely on the forward-looking statements as representing the Company’s views as of any date subsequent to the date of the filing of this Report.
Unless the context requires otherwise, in this Report the terms “Gevo,” “we,” “us,” “our” and “Company” refer to Gevo, Inc. and its wholly owned, direct and indirect subsidiaries.
Risk Factors Summary
Our business is subject to a number of risks and uncertainties, many of which are beyond our control, including those described in Part I, Item 1A. Risk Factors of this annual report. These risks include, but are not limited to, the following:
| ● | We have a history of net losses, and we may not achieve or maintain profitability. |
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| ● | We will require substantial additional financing to achieve our goals, and a failure to obtain this capital when needed or on acceptable terms could force us to delay, limit, reduce or terminate our development and commercialization efforts. |
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| ● | Our business is capital-intensive in nature, and we rely on external financing to fund our growth strategy, including the development and construction of our Net-Zero Projects and other similar growth projects. Limitations on access to external financing could adversely affect our operating results. |
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| ● | Our proposed growth projects may not be completed or, if completed, may not achieve profitability or perform as expected. Our project development activities may consume a significant portion of our management’s focus, and if not successful, reduce our profitability. |
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| ● | We may be unable to successfully perform under current or future offtake and sales agreements to provide our products, which could harm our commercial prospects. |
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| ● | Our offtake agreements, including our take-or-pay agreements, are subject to significant conditions precedent and, as a result, the revenues that we expect from such contracts may never be realized. |
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| ● | Fluctuations in the price of corn and other feedstocks may affect our cost structure. |
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| ● | Fluctuations in petroleum prices and customer demand patterns may reduce demand for renewable fuels. |
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| ● | Any decline in the value of carbon credits associated with our products could have a material adverse effect on our results of operations cash flow and financial condition. |
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| ● | We may not be successful in the commercialization of alcohol-to-SAF projects utilizing Axens technology. |
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| ● | The technological and logistical challenges associated with producing, marketing, selling and distributing renewable hydrocarbon products are complex, and we may not be able to resolve such complexities in a timely or cost-effective manner, or at all. |
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| ● | 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. |
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| ● | We may be unable to produce renewable hydrocarbon products in accordance with customer specifications. |
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| ● | Our experience may not be sufficient to operate commercial-scale facilities and we may encounter substantial difficulties operating commercial plants or expanding our business. |
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| ● | 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. |
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| ● | 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. |
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| ● | If we engage in joint ventures, we will incur a variety of costs and may potentially face numerous risks that could adversely affect our business and operations. |
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| ● | If we lose key personnel, including key management personnel, or are unable to attract and retain additional personnel, it could delay our product development programs and harm our research and development efforts, make it more difficult to pursue partnerships or develop our own products or otherwise have a material adverse effect on our business. |
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| ● | We may face substantial competition from companies with greater resources and financial strength, which could adversely affect our performance and growth. |
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| ● | Business interruptions may have an adverse impact on our business and our financial results. |
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| ● | Our business and operations would suffer in the event of IT system failures or a cyber-attack. |
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| ● | We may engage in hedging transactions, which could adversely impact our business. |
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| ● | Ethical, legal and social concerns about genetically engineered products and processes, and similar concerns about feedstocks grown on land that could be used for food production, could limit or prevent the use of our products, processes and technologies and limit our revenues. |
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| ● | As our products have not previously been used as a commercial fuel in significant amounts, their use exposes us to product liability risks. |
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| ● | We may not be able to use some or all of our net operating loss carry-forwards tax deductions to offset future taxable income. |
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| ● | 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. |
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| ● | In order to benefit from RINs and LCFS credits, our RNG projects are required to be registered and are subject to regulatory audit. |
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| ● | Our RNG project has, and any future digester project may not be able to achieve the operating results we expect from these projects. |
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| ● | Our ability to compete may be adversely affected if we are unsuccessful in defending against any claims by competitors or others that we are infringing upon their intellectual property rights. |
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| ● | 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. |
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| ● | We may not be able to enforce our intellectual property rights throughout the world. |
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| ● | Confidentiality agreements with employees and others may not adequately prevent disclosures of trade secrets and other proprietary information. |
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| ● | We have received funding from U.S. government agencies, which could negatively affect our IP rights. |
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| ● | The U.S. renewable fuels industry is highly dependent upon certain federal and state legislation and regulation and any changes in legislation or regulation could have a material adverse effect on our results of operations, cash flows and financial condition. |
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| ● | Reductions or changes to existing regulations and policies may present technical, regulatory and economic barriers, which may significantly reduce demand for renewable fuels or our ability to supply our products. |
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| ● | Negative attitudes toward renewable energy projects from the U.S. government, other lawmakers and regulators, and activists could adversely affect our business, financial condition and results of operations. |
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| ● | Any claims relating to improper handling, storage or disposal of hazardous materials or noncompliance with applicable laws and regulations could be time consuming and costly and could adversely affect our business and results of operations. |
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| ● | Our international activities may increase our exposure to potential liability under anti-corruption, trade protection, tax and other laws and regulations. |
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| ● | 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. |
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| ● | Future issuances of our common stock or instruments convertible or exercisable into our common stock may materially and adversely affect the price of our common stock and cause dilution to our existing stockholders. |
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| ● | Raising capital at a subsidiary, or project, level would result in lower revenues attributable back to us. |
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| ● | Our inability to comply with applicable Nasdaq listing requirements could result in delisting of our common stock. |
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| ● | Our stock price may be volatile, and your investment in our securities could suffer a decline in value. |
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| ● | The estimates and assumptions on which our financial projections are based may prove to be inaccurate. |
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| ● | Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies. |
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| ● | We do not anticipate paying cash dividends, and accordingly, stockholders must rely on stock appreciation for any return on their investment. |
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| ● | 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 may be influenced by the research and reports that securities or industry analysts publish about us or our business. |
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| ● | 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. |
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| ● | Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. |
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