Gevo, Inc.

Good day, and thank you for standing by. Welcome to the GVO Incorporated Quarter 3 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to turn the conference call over to your speaker for today, Dr. Eric Frey, Vice President of Finance and Strategy. Eric, you may begin.

Good afternoon, everyone, and thank you for joining us on today's call to discuss Jivo's third quarter 2024 results. I'm Eric Frey, Vice President of Finance and Strategy at Jivo. With me today are Jivo's CEO, Dr. Patrick Gruber, and CFO, Lynn Small. 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 the timing, development, engineering, financing, and construction of our sustainable aviation fuel projects, our recently executed agreements, our renewable natural gas project, and other 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 on this call. The relevant definitions and GAAP reconciliations may be found in our earnings release, which can be found on our website at www.givo.com in the investor relations section. Following the prepared remarks, we'll open the call for questions. I'd like to remind everyone that this conference call is open to the media, and we're providing a simultaneous webcast to the public. A replay of this call and other past events will be available via the company's investor relations page. I'd now like to turn the call over to the CEO of Jivo, Dr. Patrick Gruber. Pat?

Thanks, Eric. Good afternoon, everyone, and thanks for joining us on our call. We have filed our Form 10-Q today. We ask that you refer to it for more detailed information after this call. During the third quarter and shortly after the close of the third quarter, we achieved several important milestones. Not only did these milestones enhance our financial outlook, but they also reinforced GEVO's commitment to advancing drop-in, cost-effective, scalable carbon abatement solutions for those difficult-to-electrify market sectors and industries. Two of the milestones we achieved are transformative to our company, even when you consider them individually. Let's start with our acquisition of Red Trail Energy's low-carbon ethanol and carbon capture sequestration assets in North Dakota. This acquisition, which we expect to close by the first quarter of next year, brings a well-operated low-carbon ethanol plant along with an active CCS site into our portfolio. Red Trail assets will be a valuable addition to GEVO. In fact, they generate approximately $200 million in revenue in the fiscal year of 2023. They're going to be a great addition to our company. It's transformative. This positions us for long-term success, providing a platform for further growth by developing our carbon abatement capabilities. For example, We are exploring converting low carbon ethanol at the site to SAF using our Verity business to track the farms and count carbon and make sure that we can account for all the carbon abatement that occurs throughout the business system. We also, by acquiring this site, provides our Net Zero One project in South Dakota with access to a wholly owned CCS site that could be important for the future. In short, this acquisition, once closed, is expected to accelerate our plans to scale SAF production, we call it Net Zero North, and strengthen our footprint in the region with abundant renewable resources, strong rural communities, and resilient domestic circular economies. Now let's talk about the other transformative milestone we achieved. That is the conditional commitment from the U.S. Department of Energy. This is a major milestone for our Net Zero One SAF project in South Dakota. This 1.63 billion loan facility marks the first large-scale alcohol-to-jet project to receive such a commitment. We believe this commitment validates the strength of our project, reduces our execution risk, and supports our financing plan. NET-01 is the largest economic development project in South Dakota history based on our and we expect to attract other capital investments to unlock SAP commercialization given the robust due diligence conducted by the DOE. We are grateful for the support from the DOE Loan Programs Office. We also recently acquired Cultivate Agricultural Intelligence LLC, or Cultivate AI. It's a proven business with expected 2024 revenue of $1.7 million and a correspondingly positive cash flow. Cultivate AI provides agricultural data, including that from drones with near-infrared sensors, to clients through a software as a service platform, a SaaS platform. We are combining Cultivate AI's digital agricultural data and analytics platform with Verity's carbon accounting and tracking solutions to provide the highest quality data-driven solutions for carbon abatement in food, feed, fuels, and industrial markets. while simultaneously helping farmers improve their operations, sustainability, and profitability. Finally, in the third quarter, we were granted not one, but two patents for our breakthrough ethanol to olefin process. We also monetized investment tax credits related to our R&G business, generating cash proceeds, and further bolstering our liquidity. So in summary, we've been pretty busy, and there's a lot more to come. We are looking forward to next year with this acquisition of Red Trail Energy Assets and in combination with our energy business, we believe this will help us achieve a positive adjusted EBITDA 2025. That's very exciting. This quarter's achievements reinforce our commitment to reducing the carbon footprint of the things we people need, that is food, fuel, materials, while transforming GEVO into a large scale platform for growth. With each milestone, We're advancing our vision to scale drop-in low-carbon molecules such as sustainable aviation fuel and, of course, to create value for our stakeholders.

Now I'll turn it over to Lynn, our CFO, to discuss the financial results for the quarter. Lynn?

Thanks, Pat, and good afternoon, everyone. Starting with our financial position, we ended the third quarter of 2024 with $292.9 million in cash, cash equivalents, and restricted cash. Our continued strong liquidity position reflects our disciplined approach to Net Zero One development and other capital expenditures, our attention to corporate G&A expense, and our strategic approach to financing and our receipt of proceeds from the recent sale of R&G investment tax credits. Combined revenue and interest income for the third quarter was $5.8 million. The third quarter's results include $2 million in revenue generated by our RNG business, including $1.8 million in net proceeds from environmental attributes and $0.2 million in RNG sales. This also represents a reduction in sales by choice due to our preference to build up environmental attributes inventory in anticipation of our final carbon intensity pathway approval under California's low carbon fuel standard. We expect this approval targeted for early 2025 to substantially increase the revenue potential from our RNG business. Operationally, the business has been running well. generating more than 100,000 MMBT of RNG sales last quarter. And as previously announced, we sold RNG investment tax credits netting about 14 million of cash to the balance sheet. Our corporate spend, that is G&A, was 8.6 million for the quarter, excluding non-cash stock-based compensation of 3.1 million. The primary driver for these costs is personnel costs in critical areas to support execution and growth the majority of which we expect to allocate to our projects, segments, and legal entities. During the nine months ended September 30, 2024, we invested $36.5 million into our capital projects, comprised of $23 million for Net Zero One development, $11.4 million for the NV program modularization design and engineering work, $1.6 million in R&G project expansion, and $0.5 million in other projects. Our strategic growth investments also include cash of $6 million we spent on Cultivate AI and $10 million of earnest money deposited in connection with the announced Red Trail asset acquisition. Our loss from operations in the third quarter was $24 million, and our non-GAAP adjusted EBITDA loss was $16.7 million. This includes personnel and consulting expenses associated with our Net Zero and Verity growth initiatives. Notably, our development spend for Net Zero One is tracking to come in under the previously estimated range, and we expect reimbursement of our development capital at financial close, allowing us to reinvest in Net Zero One project equity and possibly recycling capital into other projects, depending on the total recovery and fee amounts, which will be negotiated with third-party equity investors. This project-level financing strategy also means we do not expect to have to commit further cash to the project once it's in the construction phase. The Red Trail energy asset acquisition is going well. We're advancing due diligence and term sheet discussions with multiple project finance lenders and plan to combine third-party project debt with GEVO equity capital to consummate the acquisition early 2025. In summary, we remain focused on prudent management of our capital with a view to supporting the continued development of Net Zero One, the Red Trail Asset Acquisition, and other value-generating projects. We're excited about the path forward and look forward to the opportunities in 2025. And now I'll hand it back to Pat.

Thanks, Lynn. Before we open the line for questions, let me reiterate how proud we are of the progress we have made this quarter. This is hard work we're doing. between our DOE loan commitment, our pending acquisition of Red Trail assets, and the advancements in our Verity R&G and technologies businesses, we're making meaningful strides towards this vision of net zero business systems, where we can really, truly drive out and abate carbon throughout the whole of the business system, and that cuts across the fuels, the food, and the feed. This is important stuff, and it matters. Now, remember what we're doing. This is about making something that's cost-effective. It works. It works economically. It competes with petrochemicals on a cash cost basis. That's what we're trying to achieve. And the vision, yeah, we've got to spend the capital and build it. We've got to get on and go get that done. It's a different game to play. This isn't just about taking it. It's not a giveaway. We're delivering products that are really, really valuable, and they truly abate carbon and cost competitive. That's what the future holds here. And that's what makes it so darn exciting. That's why we're able to get this DOE loan commitment. We're looking forward to continuing this momentum into our coming quarters and sharing further updates on the Transform company and a new platform in 2025. All right, let's open it up for questions. Go ahead, operator.

Thank you very much. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press Star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from Sameer Joshi of HC Wainwright. Sameer, your line is open.

Hey, guys. Thanks. Thanks, Patrick. We have discussed this before. The $1.6 billion conditionally commitment is not dependent on any change in the administration. But can you explain what are the remaining steps before the money gets released? And is there a cadence to the release of the money?

So, yeah, you're correct. This conditional commitment is a real commitment. It survives administration changes. They've designed it that way. And so, yeah, we just got to go through and do the work. Right now, I think that everyone is trying to sort out what's what, where. So we can't talk about specific details of that according to their rules. That's just the way it is. So we have to go and once the dust settles a little bit, we'll have more insight into that. And then they'll let us know what we can say when. But it does survive is the important thing. And now it's about how we still got to go push forward and get it done. Our project is a good one. So that's the thing that people forget. Our project is a good one. It creates a huge number of jobs. Our project capital is high when we deploy in part because these are really good paying jobs that we're doing to go hire these thousands of people to build things. And so it plays... to lots of agendas. And remember, the Charles Rivers study shows that it creates $170 million regionally in South Dakota, and it creates a bunch of tax revenue. So it's a good, solid project, and it makes money. That's the thing. So it's a good overall project. That's what makes it good.

It's a tax generator. It's a job creator, and it is in a traditionally Republican state.

Yeah, and there's one other important thing that everybody seems to forget is that these net zero type system like we put together, the cash cost of our product would be competitive with Petrojet. It's in that realm. So people forget that. This isn't like It's a free handout for carbon. No, it's not. Yes, the carbon credits, remember, it's $1 of carbon credit value creates $6 back to the general economy, according to Charles River. Well, that's pretty important. And then, of course, there's the RIN value and all the rest. But all those kind of values, the RINs, the LCFS, what comes down the pike from other federal programs, those things... are uh they help pay for the capital and you'll notice this thing is a conditional commitment without the finalization of the 45z someone should ask themselves why i can't talk about it in detail but you've got to notice that how did that happen yeah yeah very interesting um on the other uh media news from you guys uh uh the red trail acquisition uh merger um

I know it will be early 2025, but from now until then, are there any financing discussions? Are there any other steps that need to be accomplished, milestones to be accomplished before the merger can take place?

Yeah, we're going to do debt. And so we've been doing a debt process, and it's going quite well. We're very pleased with it. Okay.

Okay. And then the Cultivate AI acquisition, of course, is there a pathway or any plan of integrating the Verity program into this or are these going to be independently operating?

They're together. They're already being integrated and it makes for a more complete offering. And of course, for everyone who's listening, the big game here is It's not good enough just to say, oh, I hope my corn is good. You've got to prove it's good with real data. That's the thing that gains goodbye to partisan support. And it's true also in the marketplace. You've got to be able to show it's not that even if it's corn or soybeans or something, it's not just growing it that counts. It's how did you process it? What energy did you use? And you've got to track things all the way through the whole supply chain. This point is lost now. on the world at large, it seems to us, and that creates the opportunity for Verity. Now, Cultivate AI has some outstanding tools available that are in operation and working with farmers, and it helps them measure their crops and how the crops are performing or what's needed in the fields, and it's valuable. And so that's one more component. And you'll look for us as we grow Verity to add in other technologies into the overall portfolio of Verity.

Interesting. Yeah, that is, we agree, it is a big opportunity and has a wide market that you can address. On the R&D front, I know you have intentionally not sold these environmental attributes. The amount we see on the inventory and the balance sheet and the press release What is the basis of the valuation for that? Is it based on a higher carbon intensity value or like how do we gauge? Should we say that the inventory will be translated into revenues going forward in subsequent months or it will be at a higher than the inventory that we see there?

Yeah, it would be at, yes. So what we expect to happen, we're holding them right now because we expect to get the pathway approval in California. We can see that they're working on it. You know, we've done the site visits and stuff. So we know that it's progressing. It's just a question of when it gets done. And if we hold the gas until we have the pathway done, then we can get the higher value for it rather than selling it at the 150 pathway. And so if the question is, What is it currently booked at in the inventory? Is that what you were asking? Yes, yes. I don't know. We're going to plan on monetizing it at the full value. But we'll have to get back with you and check. Lynn is telling me it's booked at minus $150. Okay. Got it.

And the last question, sequentially the operating costs are slightly lower. Should we expect these new lower levels for operating costs, R&D, ESG, and ESP, those line items?

Yeah. Stacey Buchholz, who runs that plant, she's on a mission to keep driving out costs. So that's what I expect. Sounds good.

Good. Thanks for taking my questions and congratulations on all the progress.

Thank you very much.

Thank you very much. One moment for our next question. Our next question comes from the line of Semyon J. John of UBS. Your line is open.

Hey, how are you guys feeling about raising your, I guess, equity portion of the project financing? Are you guys looking towards that?

Yes, there's a lot of interest in it. The thing about having a conditional commitment from the DOE loan office is that the amount of diligence that's done is absolutely mind-boggling detailed, and that helps. All the questions that can be asked have pretty much been asked. People know that there's built-in extra costs to protect the project financially. And that benefits equity holders too. So yeah, there's a lot of interest in it. So we've got to go work through it with the equity firms.

Got it. Okay. And then how was your annualized RNG production looking this year compared to last?

Well, I think last year, the actual rate, annualized rate, it was a three and a quarter or something like that. We're up about 325,000 million BTUs last year. This year, we're going to be at like 400,000 million BTUs or so. Okay. On instantaneous rates, we're above that.

Okay. Perfect. Thank you.

Thank you very much. One moment for our next question. Our next question comes from the line of Greg Gimmer at LPI. Greg, your line is open.

Hi, everybody. Can you talk more about that conditional loan with the DOE? When did you say you'd be giving us more information on that?

When they tell us we can.

Okay.

It's one of these things where they're super duper.

Dr. Gruber, are you there? Hello?

Hello? Okay, there we go. We're back.

Okay. Dr. Gruber, are you there?

Yeah, I'm here.

Okay. Sorry about that. Yeah, as far as the data, so they'll let you know and then you'll pass it on to us. But the big thing I heard a while ago from the previous question was that this does survive a change as far as presence. So that's good. That's way good. Yeah. Okay. Cause I was very concerned about that. So I'm glad to hear that.

Yeah.

That's the most important thing. And the other part I was trying to get across is that our project plays to both sides of the aisle. We're in a red state. It's a creating jobs. It's rural economic development, rural infrastructure development. It lifts the price of corn in the region. It's a big economic impact, you know, and it also sets a precedent And it's think of it instead of oil from under the ground. This is oil at the surface of the ground captured. And the paradigm buster is, yes, it can be cost competitive with oil. Hello. That's an important point. It's not that these things are just pie in the sky. It's going to cost 10 times X. No, that's not the case of a project like ours. That's what makes it important. That's why we get lots of bipartisan support.

And this is something I should probably already know, but as far as the deal, you know, it's coming from things like corn and soybeans.

It's cornstarch, cornstarch. Yeah, so the business system works like this. They do climate smart corn. So depending on how you grow corn, you could actually improve the carbon footprint and actually make it negative. Not that we would get credit for that anytime soon, but in the future we would. You take the corn kernel, you fractionate the corn kernel in the process, and you're using the carbohydrate portion and making that into ethanol and then ethanol into jet fuel. In the meantime, you're generating enormous quantities of protein. In fact, on a tonnage basis, it's three times the tons for making protein than it is for jet fuel in a plant like this. And then you also get a bunch of oil that you can use for the food market or just sell it into one of the other industrial markets for oil. And so you're capturing value from the protein, the oil, and then the carbohydrates transformed into jet fuel. That's how the business system works. And then we're applying renewable energy across the whole of it. And that's what drives it down to a net zero. One of the important analyses that people need to do and pay attention to is that when we're going to very low CI scores or even negative in our business system, when we include carbon capture, It's pretty darn interesting in that that makes it more valuable. Why is it more valuable? Because when we take that net zero fuel, and if I have one gallon of our net zero fuel, and I blend it with one gallon of petrol jet, I get a, if I got two gallons, when I'm done blending, I got two gallons at a 50% reduction. Think about what that means in the marketplace. That's a big deal in terms of value that's created for the customer. A lot of other technologies that are out there in our space, they struggle to get to a 50% reduction. You can get two gallons for one by blending one of ours. That's what's possible here. And in the future world, we're just talking with a group today talking about what future looks like. And it's going to be driving the CI scores down and negative. That because it takes less gallons to move the needle in the marketplace. That's the kind of technologies we're on and why they're important and why people care.

How high a quality, to make your SAF, how high a quality does the corn have to be? For instance, if we have a drought condition and it's inedible corn, can you work with that or does it have to be very high quality corn?

No, no. So the corn that's grown in the United States is only 1% is actually grown for food. None of the corn that's used for food is what we're using. This is field corn. Yeah, yeah. So sweet corn and all that kind of stuff, that's not what we're talking about here. So stuff that's in a cornflake box or in a bag of corn or a can of corn or corn in the cup, none of that. This is a different kind of corn. It's field corn, standard field corn. And instead of making it into more high fructose corn syrup or feeding it to cows and giving them a sick stomach, because you know when you feed too much sugar to a cow, they get a sick stomach and they burp methane. Well, how about we do this? We don't do that. We separate the protein from the carbohydrate and now they're happier cows. And in fact, that's how the world is working. So no, no, the standard field corn.

So drought conditions would not impact?

Not the way you're talking about it, nope. And so that's one of the beauties of this supply chain is that it's well-established, fundamentally no new creation of this. This is about what we've done in this business system is taken giant business systems that exist and we're adapting them to make them decarbonized. And we're even, the technologies that we're using and converting the carbohydrates from the corn into jet fuel. We're even co-opting things that are already existing in other industries and bringing them all together and putting it with renewable energy. And that's how we achieve a net zero. So in that sense, we don't have technology risk like you do in new magical things. Yeah, we're boring. We use things that work for sure at giant scale. That's what we're doing.

Speaking of co-opting, do you have any relationships with other countries? Like I think at one time, maybe you still do with India, for example. Are you still having any partnerships overseas?

Yeah, we do. We do. We work with Praj all the time and the other companies. So when they flew jet fuel in India, that was ours. When India did. So yeah, we've had many discussions. We stay involved with them and then in other parts of the world too. So it isn't just, yeah, we are very focused on execution here. We love our Net Zero One project, want to get that done, want to get it financed to prove the point that these things do work financially, and then get on with it. And then we want to build our Net Zero North plant, get it going, and get it financed up there in North Dakota, because it's a great site already having sequestration right there on site. And we have other sites here in the States, but we're in discussions in other parts of the world as well.

Okay. Lastly, I'm sorry to take some time. Is there any plans to dilute this current share base? in the near term? I don't even know.

No.

Okay. You may have alluded to raising capital through debt.

Is that what you're saying? Yeah. Okay. So let me add more color to this. To finance, it's going to be a project level financing for net zero one. That means it's a separate company than Jibo. We have already spent 210 million or so in development of this project that gets contributed as equity into the project By the time this is finally done, we get the financial close, maybe we'll have spent $250 million. That gets credited to us as a equity contribution in the project. And we get ownership for that. It shouldn't take any more capital unless we're in the mood to spend more capital down there. And then as far as anything else, we're doing a red trail acquisition. I think we're bought three things, actually, is the way to think of it. We bought an ethanol plant. We bought a CCS. plant where it actually operates. And we also bought a big field of pore space under the ground that can be expanded. That's pretty darn important too. And so to finance that, we're bringing in debt. So no, I don't see us having to support these two projects. I don't see any need to raise capital at a GEVO level. I have more than enough cash in the balance sheet.

All right. Thank you, Dr. Gruber. Appreciate it.

Thank you very much. One moment for our next question. Our next question comes from the line of Peter Gastric of Water Tower Research. Peter, your line is open.

Thank you very much. So thanks for the presentation today and congratulations to Dr. Gruber and team. Just really a transformational quarter there. The question on the CCF, you know, some of the carbon pipeline appears to have hit a bit of a snag with this referendum in South Dakota. GEVO, you know, already has the industry's lowest CI score, so CCS is kind of a nice to have, so to speak. I understand that, but, you know, still would be interested in your thoughts there. And also, related to that, could you discuss how RedTrail could be brought in as a CCS option for NZ1? So, considering that we've got some distance there between the two, between NZ1 and RedTrail, is that something you can work with in terms of logistics, or is that something that's not on the table? Thank you.

Yeah, sure. So what was so bizarre about that referendum in South Dakota was that it was a landowner rights bill. People commonly talked about it as the pipeline referendum. It wasn't a pipeline referendum. It was about making sure that people got paid more money if a pipeline went through and they had more protections if a pipeline went through. That got defeated. That's astounding. What you saw was a bunch of activists talk about it as, ooh, this is a pipeline approval. It has nothing to do with pipeline approval. That wasn't what it was. That's astounding that it even gets out that way. And that's what happens. It's like, you're kidding me now. So it doesn't change anything that the authority rests in the public utilities commission that still hasn't changed one bit. And so this is nothing has changed from a fundamental real life standpoint of what has to happen. The ball is in summons court. They tell us they're moving forward. They've got a plan to move forward. great. And we'll help them to get people educated about what really goes on with this pipeline. I mean, my goodness, you know, people are opposing a CO2 pipeline in there and guess what? It's the green, the far activist green people who are trying to do that. And it's like, cause they think it's somehow dangerous. What are you, they need to get, we've got so much education to do with people. So it'll take some time. We'll get there. And, uh, in our position is, is that in South Dakota, uh, There is a, I think, well, when you're putting up a pipeline, you also have to respect landowners' rights, and someone's done a great job of working on that, too, and making sure that people are in cooperation. This playing up of fears on all sides, that's not good for anybody. Remember, get this. This is a piece of data I want everyone to understand. For every gallon of jet fuel burned, it makes 21.5 pounds of CO2 per gallon. That's also true of gasoline, 21.5 pounds for each time you burn a gallon of gas, that's 21.5 pounds of CO2 that goes in the air, unless of course you have ethanol, in which case it's only 18. Those numbers come from the Energy Information Agency. So people don't realize that this is a real issue. It's a big issue. It's a tremendous amount of thing. The pipeline itself is capturing biogenic carbon, biogenic carbon. That's the CO2 from the atmosphere. You see all this talk all around the world that people want that captured. Well, here's a way to do it. And now you have environmental groups opposing it directly in opposition to what they say is true. What do they want? More fossil stuff burned? Are you kidding? So it's this whole, we got a lot of education work to do here, but I think it's a practical matter if it's going to, and why the people of CO2 or people of South Dakota should be punished and and have markets work around them makes no sense to me i don't understand it why would you want to have uh disadvantaged corn why i don't understand don't you it has to be competitive so it's just it's going to take work but as far as decision making goes that ball's uh all about still in the in the puc someone's got a plan we'll work with these guys now in the meantime know what it could take some time to get that pipeline built in which case we could we could rail stuff up to our site up there at uh in richardson at our net zero one north site we could do that we could do that and yeah it costs a little more but you know what the economics look like they work so it's a in a course if we ever believed that there really was never going to be a pipeline Well, then, you know what? South Dakota has a big time problem, way bigger than something we can deal with. And in which case, you know what? It's probably not the place to be. Now, that's all stuff that we'll have to all work through and develop a point of view. But as far as I can see right now, that pipeline, I think, is still going to happen. It's just a question of when.

Okay. That's great.

Thanks very much, Dr. Gruber.

Thank you very much. One moment for our next question. Our next question comes from the line of Emily Sorenson of Sorenson Farms. Emily, your line's open.

Yeah, thank you. I guess on the coattails of that last gentleman, will you still go forward when the loan's approved to start building without the pipeline?

I think, well, we're going to make sure we're going to make that case. Now, the way that that case has to look, is it's got to be attracted to Wall Street and the equity investors. This is the thing that will be focused on. And if we could do that, but it is one of these cases where, like I say, we could rail stuff up and help solve the problem. They're definitely that's the beauty of us owning our own sequestration site. So the answer is, yeah, that could happen. But I got to tell you, there's a bigger issue at play here about business in South Dakota. And how will people respond? It's a bigger issue that needs to be understood. And we're going to be working on it because we have options about other places. We do. So it's this kind of a, I can't give definitive answers other than to say, we're going to execute this project. We're going to get, we're going to work and make NZ project number one happen. I want it in Lake Preston, South Dakota. That's what I want. And we're going to do our very best to make that happen and convince everybody Now, like I say, that pipeline's important. And why everyone would want to give away value or not is like, it's not a well-understood issue. So it's work to be done is what I would say.

Okay. And I guess my second question and last question is kind of working backwards, I guess. But with the new administration, I know he is pro-ethanol and pro-farmers. So I get that. If he is not pro-ethanol,

green deal working backwards where you give credits to the you know the airlines for their carbon neutral if they lose those credits is would that affect what they purchase well you know what's interesting about that is uh there isn't that credit that the airlines get it's in a section it's an ira bill section 45z the way that the section 45z works has quite broad bipartisan support the reason is to get the credit it's a tax credit And the tax credit, to get it, even get on the scoreboard on the tax credit, you have to do a 50% CI reduction, meaning the carbon score reduction is by 50%. So you got to show you have 50% less emissions of CO2. And then for every point of reduction, you get rewarded further. You also have to prove how you did it with bulletproof information, okay? Now, that means it's not a broad bucket giveaway. You actually got to work hard to get this. We like that approach because that can get bipartisan support. When it's a broad bucket giveaway, that causes rock throwing from every side that there is at different points in a political life cycle. Here, it's set up so that it goes down this path of You've got to prove what you said you're delivering. You've got to validate it, have it audited, make it transparent, and then get credit for it. I like that approach. That's the right approach because that way we can build credibility and stop all this fighting because the data is the data. So we like it a lot. And they've got to finalize the rules and all that kind of stuff, and we want to see it extended. It seems to be the good bipartisan support for that too. Now, as I mentioned, the conditional commitment we have, was given to us without a finalization of Section 45Z. That is telling, isn't it? And that the DOE thinks that the marketplace will accommodate it somehow. So it's a not, is it important? Yeah. Is it the right thing? Yeah. I think that portion of that IRA bill was well done. And I think They'll have the new administration will have their hands full on doing the things that don't make sense. This one does make sense. And remember, every dollar tax credit, every dollar tax credit under 45 Z returns six dollars back to the general economy. That's what Charles Rivers did the analysis and published. So that's a big deal. And it's real economic development. It's jobs. It's about energy infrastructure, because with net zero one, you also get a bunch of wind energy. Why would it ever be built there? There'd be no demand for it. So this is about economic development, job creation. It's about fundamentally making a cost competitive jet fuel. Forget all subsidies. Remember what I'm talking about here. If the plant was built and paid off, depreciated and paid off, it competes head to head with Petrojet, except for the footprint would be net zero.

And we're not talking about getting rid of jet fuel anyway. I mean, we're going to work together. I mean, it's not one or the other. You can work together. That's the thing I think people forget. You don't have to do 100% SAF. You don't have to do 100% jet fuel. You can do a combination and everybody can be happy.

You got it. And so that's the thing that is so important is this carbon abatement. The jet fuel itself is just jet fuel. made from renewable carbon, but it's just jet fuel. It has to meet the specs. Couldn't fly it if it wasn't just jet fuel. And you're going to blend it with Petrojet. And so the idea is that the more carbon, the lower the carbon score we can get, the more carbon negative we can make it, the less of it we have to make to move the needle on the overall emissions of the blend. That is a big deal. And remember, this is using all existing infrastructure. But the same thing is possible with gasoline and diesel fuel. We can do the same thing. Those are all possibilities. We can do those. And so that means you can keep a combustion engine of whatever type and we can drive the emissions down. That's what this technology that we have holds as a promise. That's what makes it exciting. It's a different game to play about what's possible. And when you take it then and start thinking about energy infrastructure and energy security, you won't see, this is going to be spread out across the country in places. It's not all concentrated on a Gulf Coast, for example. Or, you know, so it's a different game to play in the long run. And I think that from having all the discussions with political people over the last couple of years, it's been, they didn't know it was possible. So we just show them the economics openly and show them here's what's possible. It's pretty exciting. And it changes how they think about things. well thank you thank you and wish you all the best i'm an investor so i wish it's all the best you bet thank you for investing all right you bet thank you very much at this moment i am showing no further questions i would now like to turn it back to dr gruber for closing remarks in fact i'd like to thank all the investors for investing with us it's been quite a ride lately and uh it's going to get i hope better from here and uh You know, we definitely, whenever there's an election like this, it causes people to go, what? And they hear all this crazy talk. You know what? Practical ideas, job creation matter. Practical solutions to carbon matter. There's a marketplace that's growing that demands that there be carbon abatement. So that's what we're talking about. It's serving a new segment of market that demands it. And so we have a practical solution. Yeah, we got to get that first plant financed. Get it to the ground. do it at scale and show people but it's an exciting exciting opportunity and we are extremely well positioned in the furthest along in the space thank you all for joining us on this call today uh thanks for your questions too i appreciate it