Gevo, Inc.

Thank you for standing by and welcome to the GVO Inc. first quarter 2022 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. As a reminder, today's program may be recorded. And now I'd like to introduce your host for today's program, Mr. John Richardson, Director of Investor Relations. Please go ahead, sir.

Good afternoon, everyone. This is John Richardson, GEVO's Director of Investor Relations. Thanks for joining us to discuss GEVO's first quarter results for the period ended March 31st, 2022. I'd like to start by introducing today's participants from the company. With us today are Dr. Patrick Gruber, GEVO's Chief Executive Officer, Dr. Chris Ryan, GEVO's Chief Operating Officer, and Lynn Small, GEVO's Chief Financial Officer. Earlier today, we issued a press release that outlines the topics we plan to discuss. A copy of this press release is available on our website at www.jivo.com. Please be advised that our remarks today, including answers to your questions, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those currently anticipated. Those statements include projections about GEVO's sustainable aviation fuel projects, its renewable natural gas project, and other operating activities described in our filings with the Securities and Exchange Commission, which are incorporated by reference. We disclaim any obligation to update these forward-looking statements. In addition, we may provide certain non-GAAP financial information in this call. The relevant definitions and GAAP reconciliations may be found in our earnings release and 10-Q, which can be found on our website at www.jivo.com in the investor relations section. Following the prepared remarks, time permitting, we'll open the call to your questions. I would like to remind everyone that this conference call is open to the media, and we are providing a simultaneous webcast to the public. A replay will be available via the company's investor relations page at www.givo.com. I would now like to turn the call over to the CEO of Givo, Dr. Patrick Gruber. Pat?

Thanks, John. Good afternoon, everyone, and thanks for joining us on our call today. We filed our form 10Q earlier today, and we asked that you refer to it for detailed information. The first quarter was exciting on several fronts. We progressed further down the path toward GEVL becoming one of the first commercial producers of verifiable net zero carbon aviation fuels, starting with residual carbohydrates as the raw material, and toward our goal producing a billion gallons of this valuable high-demand fuel by 2030. We are in a unique position with our vertically integrated plant design that we believe will make it possible for GEVO to offer the transportation industry a fuel with a very low and potentially negative full life cycle CI score. This can only be achieved by managing the entire system from feedstock selection through product delivery. The optimization of farming practices and the elimination of fossil-based energy throughout the whole life cycle is key to achieving low CI scores. Low CI scores are critically important to the airlines as they have limited options to decarbonize their operations. As a reminder, a CI score of zero means that as much CO2 is consumed in producing the fuel as is created when it's burned in an engine. During the first quarter, we announced new supply agreements with Delta and British Airways for a combined total volume of 105 million gallons of sustainable aviation fuel, or SAF. We now have contracts for more than 200 million gallons per year. These agreements further validate the airline industry's commitment to low-carbon SAF as the solution for their businesses to meet the environmental goals that they have identified and that their customers and investors demand. We also completed construction of our RNG plants in northwest Iowa on time and within budget. That plant is served by three dairies with 20,000 cows plus combined, and it is designed to produce 355,000 million BPUs of RNG. The digesters are in the startup phase and should be reaching steady state production levels in a matter of weeks. We are producing biogas and are starting up the equipment to process that gas into RNG for the pipeline distribution systems. As most of you know, this RNG will be sold by BP into the California market, where it will be used for transportation fuels. Once we've gone through the certification process, the CARB, and the EPA to understand the value of LCF and RIN credits, we can begin recognizing fully the revenue. We expect the project level EBITDA to be in the range of $16 million to $22 million a year, depending upon the value of those credits. I'm really proud of how well the RNG project was executed by our team, and it was done completely in-house. Jivo acted as the project manager and general contractor for this project, so I believe it clearly demonstrates Jivo's ability to plan, design, and execute a large-scale project while delivering it on time and on budget. Based on the interest that we've received from nearby farms, others are excited about this team's execution and RNG plans as well. Last point on our RNG project, getting it done within budget also means that we're able to plan correctly even in this inflationary environment that we have these days. The business model for Verity Tracking continues to develop. The recently signed MOU with Farmer's Edge is a big step forward to provide the proprietary data set that we can use with Verity's blockchain technology. Farmer's Edge has reported that they have data on agriculture production of more than 18 million acres, and it's growing. Verity is developing the software and methods to track carbon and other sustainable attributes from the farm to the jet exhaust. We expect Verity tracking to be able to be used for fuel products, food products, and even industrial and oil products. It's a tool and a service that tracks data and converts it into rock-solid information. We plan to offer the product to others and develop the business. I think we have something quite valuable here. We also continue to work with ADM and other ethanol producers. We are looking at several greenfield sites that are special in their economics and abilities to drive the CI score down. As we grow, I expect that we'll have a mix of both greenfield sites and existing ethanol plant sites. Both ways can give good economics. There are a rising number of ethanol producers in the U.S. that are interested in providing feedstock for our SAF process. The value proposition makes perfect sense to them, but not every ethanol plant makes sense for GEVO given the need to decarbonize the process. There will likely be other partnerships over time, but finding the best ethanol plants in areas with favorable farming practices and readily deployed defossilized energy to eliminate fossil fuels takes work and effort. We are working with concepts that are new and are critical issues in choosing sites, that is, driving the CI score down, de-fossilization of the energy, sourcing de-fossilized electricity, and the heat. Now I would like to turn the call over to Dr. Chris Ryan, our Chief Operating Officer. Chris has been with GEVO for 13 years and has been a COO and President for 11 years. Chris is one of the been there, done it leaders we have on our team. He has a long track record of delivering commercial projects and technologies going back to NatureWorks PLA. Chris is in charge of deployment of our Net Zero One project and engineering for the plants. As we are working through the engineering and costs for our NZ One project, Chris and his team have done a good job pitting down costs and supply chain issues so that nothing hinders our 2025 operational timeframe. Pitting down information is a particular hassle in this inflationary and COVID world. We've had to double and triple check equipment costs and timelines. Good news is we're on track for our 2025 startup at NZ1, but we have eaten into some of our slack time on the project. Slack time is excess time built into the project timeline for unknowns. I think it would be helpful for Chris to provide the status of our NZ1 project. Chris?