Gevo Inc. Q1 2023 Earnings Call

Good day and thank you for standing by. Welcome to the GEVO Incorporated Q1 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After this 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 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 over to your speaker for today.

John Richardson, Investor Relations, you may go ahead.

from the company.

With us today, our Dr. Patrick Grover, G.O. is chief executive officer.

and Lynn Small, GBO'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.jibba.com.

Please be advised that our remarks today, including answers to your questions, contain forward-looking statements within the meeting of the Private Security's litigation reform act.

These forward looking statements are subject to risks and uncertainties that could cause actual results to be materially different and those currently anticipated.

Those statements include projections about the timing, development, engineering, financing and construction of our sustainable aviation fuel projects.

are recently executed agreements.

A renewable natural gas project and other activities described in our filings with the Securities and Exchange Commission.

and other activities described in our filings with the Securities and Exchange Commission, which are in cooperative by reference.

We display many obligations that to update these four looking statements.

In addition, we may provide certain on- GAAP financial information on this call. The relevant definitions in Gap Reconciliation may be found in our orange release and thank you which can be found on our website at www.qlo.com in the industrial relations section.

Following the prepared remarks, we'll open a call for questions.

I would like to remind everyone that this conference call is open to the media. We are providing a simultaneous webcast of the public.

A replay will be available via the company's Investor Relations page at www.gb.com.

But now let's turn call over to CEO of GD, Dr. Patrick Green.

Thanks, John . Good afternoon, everyone, and thanks for joining us on our call. We are filing our Form 10-Q today, and we ask that you refer to it for more detailed information after this call.

Now, last earnings call, I said that I expect that Chiba will play the role of project originator, developer, and investor in most of our business development projects, and that we expect to generate cash using a developer business model. Well, today, I am glad that I can finally, finally talk about two deals that have been in the work for a long time.

The deal with ADM and P66 is an example, in my opinion, of us demonstrating leadership.

by enabling the production of staff.

the anticipated potential revenue of $125 million from this deal, depending upon a mix of milestone and reality payments, provided certain conditions are met. I like that we aren't expected to deploy Jeevo Capital in these projects.

Now we stand ready to assist EDM in Phillips 66. If they need our assistance, we want them to be successful. We believe it reinforces the view of the readiness of the technology. I think it's a great outcome for G-Bo. QU Yes member. anders.

A piece of what we bring in building yet, SAF business is knowledge around the most commercially ready technology. That is, AXS and ETA technology jet norm. AXS and ETA technology jet norm.

piece of what we bring in building yet, FAS businesses knowledge around the most commercially ready technology. And that is Axons, ETA technology, jet and all. Integrated to ethanol.

investment in our SAF projects, I believe my opinion is shared.

Combining access technology with GIVO's low carbon integration technologies, we believe makes for the winning competition. That of low cost production, reliable operations, which is something most people forget about.

and low CI potential for SAF and carbohydrate-based renewable diesel.

We at GIVO have been after we've followed patents and we have learned as we integrate these business systems and technologies. The combination of axles along with GIVO's know how technology we believe makes all these hydrocarbon solutions better.

We at GIVO have an active we follow patent some we have learned as we integrate these business systems and technologies. The combination of actions along with GIVO's know how technology we believe makes all these hydrocarbon solutions better. Access has been a great partner. We share a common vision.

to see the technologies widely deployed and enabled to produce multiple hydrocarbon products and drive CIS cores down and even potentially go negative. It's a business system approach. We want everyone who makes SAF from alcohols using axes and geotechnologies.

So this is just one example of us at Jeeva leveraging our expertise in converting carbohydrates to fuels and chemicals going through alcohols.

a couple of other knowledge and partnerships with farms, your growth feed stocks. It puts us in a unique position to see the number of businesses.

SAS is one example where we've identified and brought together the best technologies and partners to deliver low-CI SAS.

Our expertise in competitive advantage is also being applied to create carbohydrate to chemicals, especially fuel business opportunities.

and build the capability to measure and track sustainability attributes and do carbon accounting across the supply chain and teach brand owners about these better ways of doing business.

So I'm glad we could finally talk about our development and licensing deal with LG Chem too.

At GEVO, we've developed several proprietary technologies to convert alcohol to hydrocarbons. In the past, we've talked primarily about these being used for SAF, diesel fuel, and gasoline.

Well, these technologies can also be used to make chemicals materials like polymers and plastics.

developed at elegant technology, you can put alcohols into a range of drop in polymers and plastics that are used in components for cars, consumer goods, carpet, diapers, packaging and such. Think about what's possible here. Carpet from the atmosphere, captured through climate smart agricultural systems, and converted into carbohydrates.

then have that carbon transformed into durable goods using a Givo type net zero business system and technologies. Picture in your mind.

transformed into durable goods using a GEVO type net zero business system and technologies. Picture in your mind seeing automobile interiors

and exteriors, flooring, diapers, and realizing that the carbon in those products came from captured CO2 in the atmosphere, but it's now sequestered right in front of your eyes.

It's a new paradigm of what is possible.

The agreement we executed with LG Chem specifically designed to develop biopropylene for production of renewable chemicals using Chivas proprietary ethanol to olefin's technology or e-toat technology. Our plan is to have LG Chem take the lead in the scales of the process. In this deal we are co-developing the e-toat technology with LG.

which will allow G Little Conservates financial resources to pursue other projects.

The agreement includes a combination of direct payments to GeoBeginning in 2023, commercial licensing terms, and potential options for the party's performance joint venture if the research and development activities prove successful. LG Chem is a large world-class company and is proven to be an excellent partner, sharing our vision for a more sustainable future.

have been developing a new business called Verity Carvin Solutions or DCS. This business is an outgrowth of our proprietary system of a county for carbon and sustainability cross-business systems using blockchain-based tools. We have previously called Verity Tracking.

This business focuses on accounting for validating monetizing carbon assets created in the value chain.

This business focuses on accounting for, validating, monetizing carbon insets created in the value chain. Carbon insets are carbon reduction credits.

created inside of a value chain.

GEVO's business system approach and technology that reach across the whole value chain have provided us with this unique business opportunity. We originally developed this intellectual property for NZ1, but realized that this technology could be applied to all types of renewable resource-based fuels, chemicals, foods, and such. The first test of a new business idea, though, is showing that someone besides us, who is

that could also ultimately be monetized.

We expect to grow this business, working with other ethanol, nutrition, and non-ethanol biofuels companies.

An important aspect of this business is to enable farmers to get credit, and by that, I mean get paid.

An important aspect of this business is to enable farmers to get credit, and by that I mean get paid for that carbon value that they are delivering.

that real data is used and reported about reductions in carbon and capture carbon.

We believe the potential for this business is vast given the agriculture industry is so large that it applies broadly to tracking environmental attributes for any supply chain.

as we develop this business.

We expect to add more customers and partners. We will continue to inform you all and eventually put forth revenue projections. eyebrows.

Final note, the VCS business model is a capital-wide business model. VCS is developing software, tools, and providing business system advice, engineering.

Sustainability, consultant services, and creating the carbon inserts.

Automatically we'd expect.

the company that the company in sense can be monetized one way or another and that we'd share in that value with our customers and or partners.

Before I turn to the SAP projects, I want to make very clear and important point.

We are primarily project developers, lifeturns and business developers. We may indeed invest equity into projects, but our cost of capital is expensive.

and we will be prudent with our cash. We expect to secure third-party debt investment for our net zero projects.

We also expect to secure third party equity.

We expect to make money through development, fees, licenses, and what commonly is called a carry in the project. A carry means that we expect to receive an equity interest in the project without necessarily making a cash investment per se.

The staff and hydrocarbon markets are so big, we want to enable as many projects as possible and make money while we're doing it.

In addition to playing the role of enabler and project developer, we expect that for certain projects we can provide operation, maintenance, engineering, and even training services or other support if necessary.

Now, turning to our net zero SAF projects, specifically NZ1, since our last call, there have been several things that have impacted our thinking. First, interest rates are high and expected to go higher. After discussions with potential equity investors, we believe that the right approach is to secure financing using the DOE loan. This is expected to be the lowest cost source of debt and require the least amount of equity. However, this would delay the timeframe for financial close.

pushing financial clothes into 2024 based on current expectations and assumptions.

The DOE has a lengthy and time-consuming process that must be followed. A 2024 close would mean the earliest possible plant startup for NZ1 would be in 2026.

In any event, the schedule of timing of NZ1 will be driven by our ability to obtain third-party financing, both debt and equity.

What does this mean for Givo? This means that recovery of our development costs and fees for NZ1 will be delayed until the financial close of NZ1 expected in 2024. As a result of this delay, we are reducing our spend of capital for NZ1 to better align with the timing of the DOE loan. Said differently, we have been prudent and careful with our cash given the timing of the DOE loan in the volatile macroeconomic conditions in the world today.

carbon.

Khrasia is a policy framework not a scientific method to measure carbon intensity. We note that according to IKO's website, those responses of Khrasia. Khrasia, quote, moves away from the patchwork of national and regional regulatory initiatives and offers a harmonized way of reducing emissions from international aviation while respecting special circumstances and respective capabilities of IKO member states.

Having Chrissy has cited in this bill for counting carbon doesn't make practical sense. It isn't a method of counting carbon. However, applied correctly as a framework and taking into account modern US data and the gold standard for counting carbon, that is the Argonne-Greet model, I could see how it could work. Contrast this to the sections of 45Z regarding transportation fuel.

that are specifically called out to use the Argonne-Green model.

So something strange is going on in the SAF section that these are very resolved through rulemaking. It is of course the government, so I do expect some sausage making. It will eventually come clear. The world needs SAF and the world really does need to use these excess carbohydrates to make it happen. But enough of that.

So it would be really clear, for SAF, we do not have a traditional build-on operate business model.

We are pursuing a capitalized project developer role that is projected to give an attractive return on investment.

on Paradise.

while managing our cash wisely. We bring projects to financial close. We would expect to recover our project development cost and keep that carry interest in the project.

We bring projects to financial close. We would expect to recover a project development cost and keep that carry interest in the project. Capital Light Mob.

Now, we may choose to invest in particular projects along the way too, but it will depend upon our view at the time of what's the best use of cash and her balance sheet.

What generates the greatest potential for Givo? In this difficult economic environment, we are glad that we have a very strong balance sheet. We expect to have multiple routes to generate cash for this balance sheet going forth.

These routes are expected to include RNG business, BRD business solutions, our project development businesses, licensing, and eventually our retained interest or equity in the projects that we develop. We're just beginning.

Now I'll pass it off the lid to talk through the operations and numbers. Thanks, Pat. Let's start off.

We have moved our RNG business into normal operations and I'm pleased to report that we have revenue that exceeds expectations for the quarter on RNG.

Given consistent uptime and strong rinse generation driven in part by a catch-up of rinse received for the poor production in the fourth quarter of 2022, our revenue from operations was $4 million.

We received some LCFS revenue in Q1 and we'll continue that going forward based on a default temporary CI score of negative 150 until we received the final pathway approval from CARBS expected early next year, which should improve to something like negative 350.

from free or 55,000 MMBTU to 400,000 MMBTU is implemented later in the year.

We entered the first quarter of 2023 with a strong liquidity position of 453 million in cash, restricted cash and other liquid investments. Restricted cash totaled 77.8 million and was associated with the Northwest Biola RNG bonds.

and certain collateral related to the development of net zero one. Long-term debt outstanding of 67 million is related to the Northwest Iowa RNG project. Our corporate span, that is, SGNA, was approximately 6.2 million for the quarter net of non-cash dot base compensation.

of 4.6 million. During the first quarter of 2023, we invested in capitalized 11.4 million cash in capital projects comprised of 8 million into net zero one, 1.5 million into the Northwest by a RNG project and 2 million into other projects.

We intend to finance the majority of construction capital at the NZ1 subsidiary level with project finance, debt and third party equity.

We have strong interest from several potential equity investors based on the amount of due diligence they are doing, although the macro issues Pat talked about are on everyone's minds.

We do, however, expect to secure one or more investors and we are working through the due diligence process with a number of premier infra funds.

It's also worth mentioning that while the DOE load is the primary track to secure the debt, we are running a second commercial debt track as we want to keep our options open. Now I'll turn the call back over to Pat. Thanks Lynn, let's open it up for questions.

Thank you.

If you'd like to ask a question, please press star 11 on your telephone.

And we also ask that you wait for your name to be pronounced before you ask your question.

One moment while we compile the Q&A roster. I have the first question that is coming from Deshlant Alani of Jeffrey. Please your line is open.

Hi team, how are you? Thank you for taking my questions. My first one was just on the PSX ADM agreement. Just wanted to quickly touch on what are the next steps in that?

When can we expect to see that cash look on? Just any kind of more color or thoughts around that? What I think is...

We're going to have the details on how and when you've got paid, they're confidential and won't be disclosed yet. ADM and P66, we've got to go do their thing. We do expect payments to begin as early as late 2023. They'd last approximately five to seven years. But if we don't make milestones and stuff, whatever happens, then you know, it's.

So it's not a guaranteed income. They got to go deploy, build plans, get on with it. I understood. I understood. OK. And then similarly for this, on my second question, was just on the LG agreement, to what extent, or maybe if you can share all the wisdom.

to say what that might look like, but the opportunity could be really significant. So what's interesting is that refer to ILG's press release and how they talked about it. They said, quote, biobase plastic production in 2022 marked 4.5 million tons. I'm going to expect it compound annual growth rate of 14% up until 2027. And we think about.

probably can be used in eco-friendly raw material for various plastic products and it's expected to play a pivotal role in the rapid growth of the bioplastics market.

That's helpful. Thank you guys. I'll turn it over. Thank you. One moment for the next question.

Oh, hey, just a second before we go on to the next question. I just got word here that we got $187 million of private activity bonds approved. I just got that. I was hoping to have it just before the call started, but we just got the word of it. So that's good. The state of South Dakota is stepping up and doing their part to help us get the private activity bonds done.

That's great. And that'll help us as we put together the overall financing package. Cool. Go ahead. OK. The next question, it will be coming from Derek Woodfield of SPIFIL. Please wait for your name to be announced again before you begin. Thanks, and good afternoon, all.

and that will help us as we put together the over-off and answering package. Cool. Go ahead. OK. The next question, it will be coming from Derek Woodfield. A fee for please wait for your name to be announced again before we move. Thanks, and thanks, and good afternoon, all. Hey.

Regarding in Z1, I completely understand your decision to pursue the DOE long.

Based on your prepared remarks on licensing, are you suggesting that you will sell down nearly all of your equity ownership in NZ1? And if so, does that or any timing of first production impacts?

in any way impact your supply contract that you have as off-take? Well let me address that latter one first. We announced last week that we just couldn't come to agreement with Tropha Gura about what to do, how to do it, so we parted ways. And they had a reservation on the capacity of net zero one, so this gives us a little more breathing room.

the airlines want to pick it up and pick up the pace. So we have an opportunity to work with the airlines and bring them in and solve some of their problems. So that's all good because we have, you know,

everybody knows we have a whole lot of off-take agreements in place. So that part's all good, I think, and it'll be interesting to see who we fill the plants up, who wants that volume, etc. There'll be a bit of a discussion negotiation along that. We recognize that airlines really got to have their stuff.

So I think I feel pretty good about it Straight away and then your second question was what?

straight away and then your second question was what? Remind me.

Sure, just on your prepared remarks on licensing, are you suggesting that you're going to sell down your equity ownership almost entirely in NZ1?

I don't know what for sure we'll do right now. We think that there's opportunities for many plants. What we're doing is we're doing a lot of work to modularize these ETJ plants based on 100 million gallons of ethanol input to make 65 million gallons hydrocarbon output. We're getting it pinned down so we can put them anywhere.

And the idea would be to instead of field building these plants, you know, stick built, you build them in modules at a factory and then be able to deliver those plants. We've got enough interest in enough plants. It looks like we want to do multiples at once. Everybody's always wondering about how we're going to afford all this stuff. Well, the way you afford it is to make a turnkey project that's ready to execute straight away. We think that's a better return on our money.

However, we still may invest, it depends on how much cash we have on the balance sheet. I'm not a big fan of raising money up here at GEVO Inc. level. It does not. We can do project financing and it's ripe for it. We should use it.

And as my follow-up, perhaps building on your comment on modularization, if we were to think about NZ1 and your modularization approach, what could the install cost be if you were to pursue a brownfield plant with an existing ethanol plant as a partner?

Probably, these are swag ranges. So depending upon what infrastructure they have on their site.

and for instance if they have railway and tanks or something that could be repurposed or something like that, you know, maybe that'll be on the cheaper side, maybe 400 million in capital. And if they have to build in something else new, that's maybe 500 million in capital. And so we're actively looking at several Brownfield sites in discussions. Like some of these sites we see.

So when we first chose the NETSERA one site, that was several years ago. And it's a great site. Don't give me wrong. But you know what? In criminal returns look like they're going to be better from certain brown field sites. And what's happened in the ethanol industry, is some of these people woke up a few years ago, started really paying attention to how to decarbonize their ethanol. So they've been doing the work of decarbonizing ethanol. And so we bring along the integration packages, the knowledge of how to put it all together.

that you guys are perfecting.

As you think about scaling that up to let's say an NZ2, which would be 3x, are you seeing some capital efficiencies now with this modularization approach that you guys could articulate? Well, what's interesting about it is we are doing that designing and finishing that design for a 3x size and you know what one option actually is to do three of these plants.

That is one option, that is a possibility. Or, and we're evaluating it. Now, what's different about that, the 300 million gallon of sign, is that we're spending the time to learn how to do it from nuclear power.

In other words, buying, so as nuclear electricity, so as an electric plant, and it makes a massive reduction in carbon. Well, that's interesting to the marketplace at large. Well, we don't have, that's still a big capital bite, right? Even with efficiencies at that scale. And we don't have a capital ourselves to do this. That's, that's done more of the eye of volume.

In other words, flying, so it's nuclear electricity, so it's an electric plant, and it makes a massive reduction in carbon. Well, that's interesting to the marketplace at large. Well, we don't have, that's still a big capital bite, right, even with efficiencies at that scale. And we don't have the capital ourselves to do that. That's done more in the eye of big strategic partners.

As far as, you know, so you get the idea of what we're doing is two sides of plants. I think this idea of remember that any ATJ plant if you're using grid electricity, any ATJ plant, I don't care whose it is, and it's got 100 million gallons of ethanol coming in, and you know, a high yield of product coming out, it's going to be that's going to cost.

I don't know, 20 to 25 C.I. points on grid electricity grid gas.

And you know we don't want that increase, so this is what we're doing is figuring out how to wipe that out and get it down to net zero. Terrific thanks for your time and comments. Sure.

Thank you. One moment while we prepare for the next question. And again, please waste your name to be called before you proceed with your question. And our question will come from Brian Kuzla of Tomas Capital. Your line is open. Hey, good afternoon, Pat. Hi, Brian .

Can you talk a little bit more about some of the specific benefits of waiting to get the DOE funding before you kind of move forward with the NZ1 capital deployment? Yeah. So we don't have to go blazing speed. We've already, and of course the world's changing around long lead equipment too. I don't expect to spend much of anything.

be scheduled and there's just no way that they can get it. That'll be the timeframe. We gotta go along with their path. Everybody views that as being a really low interest rate and helps with the overall financing.

when we're out talking to people in Wall Street, and in strategic too actually.

people in Wall Street and in strategic too actually. They all, you know.

Why wouldn't you want to do that? We do want to do it. And so before we were beholden to the trough, so was a consequence, but now we're basically going, no, we want to make sure we're spending our money wisely and we're going to keep our cash on our balance sheet. My God, we have 450 million bucks here. I'm going to keep it here and use it for development and deploy it when I have to deploy it to move the ball ahead. We don't have to go a whole hog. The world has changed, so we don't have to. We don't have to go a whole hog.

We've got interest in this this example of the 80 and p66 you can see how we think we're like well dang those guys got billions I don't have to spend money that I can get paid well like it. Yeah so the end of the day you you end up keeping more of NZ1 post DOE than you would if you just raised a bunch of money to try to do it now. That's right. Yeah that's true you know and we have more options.

at other sites.

So we're getting a two for a three for here in what we're doing. I guess that's what kind of has to be interested that when you look at what you guys can do and what you can control, you have over $400 million of cash that's plenty of capital to do lots of different parts of ATJ.

across the value spectrum. I have to imagine those rates returns are better than in Z1 at the end of the day when...

across the value spectrum. I have to imagine those rates returns are better than in Z1 at the end of the day when given how.

what's happened in the financing market over the last 12 months? Yeah, I'd say that the Brownfield sites generally, if it's the right sites, and we have particular sites that we like, where those are incrementally better returns than NZ1. But the NZ1s are still real good. But yes, you're right. There's ones that we could envision could be better. And so the game here for us is to spend our money and make sure we got this modularization right so that we can crank out multiple plants at once. For us, the way we think of it is, this is the basic reality, is throwing money at NZ1 for speed, just to drive it. It's like, this will save us all their money.

That's crazy. We wouldn't do that. Why would you do that? We got to have the financing. The critical issue is about getting the financings in place and getting it done rationally and getting it built. We've got a huge balance sheet for a developer like us, and we get to have a carry. A carry is a meaningful portion of the plant. We can invest over that if we want. So it's a... It is a

It's a little bit different mentality game to play how to think about it, how to set an upswing in licensing. And so there's, we see, it's just a different world than what we thought.

When you guys have so much capital and you're going to the capital light model, it seems like you have all of these options on your table. I mean taken to the extreme, if you guys went completely capital light.

I'm not suggesting that you guys do that, but it seems like a

If you took it to the extreme, that's where you would end up. It could be, it depends upon how much money we want to make, on investments and all the rest, and there's always the unknown, unknown. So.

You know, yeah, it's not lost on us. Yeah. Can you comment at all on where things stand on the Chevron L.O.I. right now? You know the Chevron thing. People ask me, are we still working with them? And the answer is, yep, we are still working with them.

I can't say something specifically, although I think folks ought to scan the press and see what's been done by them lately. That'd be a useful thing to do. I will point out that we are the only ones in the world who make large quantities of isooctane and gasoline.

trading at $280 million worth of market cap. Let's.

Like, let's just do a deal where we build this and you become the public vehicle. Like, I will, some private equity firm rolls in.

You know, they're navigator pipeline or something into that and now you have like a well-funded publicly traded vehicle out there. I mean, there's just so many opportunities with that much cash sitting there for someone to utilize all around the ATJ value chain. Yeah, it's just like so many opportunities exist right now. Well, it is. It's starting to...

And some of these things, we don't know what it's going to take fully for financing yet, or what guarantees that we'll have to help, or there's other things we don't know yet. So I think it's all premature at the moment, but these are natural conversations that do occur and everybody wants to see things like, I think it's really good on, you know.

This access technology is the one that's the most developed of anybody's out there for making jet fuel from an alcohol. And I think we've seen enough data for that. And so it's about, we got to work on the banks, we got to work on the DOE, we got to work on whatever skeptics. We got to get through whatever committees that we have for equity financiers.

and stuff like that. So we ourselves have some sausage to make stills, we work through that process. So, yeah, those conversations do come up, and we're not lost on any of it. Thank you guys. Thank you. One moment while we prepare for the next question. And the next question will be coming from Amit Thail of HCW. Your line is open. Thank you, Graffin and I want to bet. I mean, is this a given that you are now basically just going to pursue the DOE option to close on the financing for NZ1? No, what we said in the, what we said in our comments was that the DOE should be the primary one. And the reason is is that.

you can get more debt loaded onto a project than you could from commercial debt. So therefore it takes less equity and it would be at a lower interest rate. Kind of a win-win-win all around, right?

than you could from commercial debt, so therefore it takes less equity and it would be at a lower interest rate. Kind of a win-win-win all around, right? However...

Because the DOE, the DOE, and they got work to do, and we got to go make it happen, you don't leave that as your only one and only option. You develop the commercial debt market opportunities as well. And you bring everybody along to go get that done.

So what we want to know is the big deal is everybody is worried about how much equity is going to take, right?

Lending we got to know what that answer is that and of course everyone is sitting around talking to us is going Yeah, we like to know what that is, too On them it's just practical Yeah, I mean the logic makes sense that I Guess maybe you know investors probably are John now keen to just understand how the model dash flows

Because if you pursue the DOE path and we sort of push everything out by maybe a year and a half,

the cash flows and the valuation aspect, those types of calculations come into play. So how would you sort of...

How do you suggest, you know, investors think about this from the modeling perspective, you know, about sort of these variables?

Well, you take the R&D business, you saw that we exceeded expectations for the revenue. We're expanding that plan so people can calculate that. It's going to be at 400,000 million BTUs a year in the third quarter, we'd expect. We'd also expect to move from 150,000 to 150,000 BTUs a year.

um, uh, negative one 50 CIA score to something like minus 300. Once we get that from the, uh, from carb. So that's part of it. It's, we've got several million dollars of income coming in or the next few years. We've said that. So several is not tens, you know, it's several. So it's like, she got that coming in.

You heard us talk about the developer fees. So think about that. Here's how developer model works. Developer recovers usually upon financial close, all the money invested upfront to develop the project. Okay?

along with profit. So we said that we close it early next year. You can expect that we're gonna see that money we've invested so far. We've invested about $75 million for NZ1 so far, plus it'll take like another 30 at a minimum. And if people need to see extra stuff to get to the close, maybe it takes 80 to get close. We get paid that back at FID.

unless we decide to leave it in there. So we're gonna have a revenue stream from that. And so when you're getting paid like that with profit, from recovering your costs, you can do that with multiple projects, okay? Okay.

So, that's part of this game. Now, it also is true then that we could take, we'll take a retained interest, but it seems to me that everyone is discounting our ability to count any of the profit from an NZ plant anyway. Just like to me, giving our stock price for God's sakes.

So I'm looking at it going, well, no one values that it seems. That's what I think is crazy, but it's because it's too far out in time. So, you know, so how do you make this incredible story? People look at us and go, well, you know, you don't have enough money to execute all that billions of dollars that you need. You're going to have to go to loot us. Blah, blah, blah. What do you kid me? Think. What? What?

That's not how this works. That's not what you do. You manage the money. I think that we're really obviously trying to beat home about what rationality looks like as we do this, and we're managing our cash, we're going to use it. We got uncertainties to work through, but we're in a darn good situation here.

Yeah, but I mean it makes sense. I think other questions offline. Just one last question for me. Are we, you know, deploying the cash balance in a way that you know we can take advantage of this interest rate environment and you know it is general determination. Yeah, I think in our queue you'll see that.

Okay, okay. I'll take one of the questions off. Thank you so much. You bet you. Thank you. And this does conclude our Q&A session today. And I would like to turn the call back over to Dr. Patrick Goober for close remarks. Go ahead, sir.

Yeah, thanks. So, you know, obviously what we're trying to get across is to think we're actually about how we're to play our money We actually are in a really good financial shape We are finding that there are people who want to invest in these projects We don't have to make investments ourselves to make money on the projects that we've been working on

We have multiple opportunities along different threads of business from RNG to chemicals with LG to, you know, I was serious. I'd like to see everybody use the process to make jet fuel from alcohol. I want everyone to do that. And I'd like to take a nick on it too. And so it's a different paradigm and we are developing an intellectual property position. People forget that we really are.

sense as we're trying to blow that up and pay attention to what we're actually doing here.

So I appreciate everybody's investment in us and people listening to call. And it's going to be fun as we work through all these things and make progress. Thank you. Thank you everyone for to attend today call.

So I appreciate everybody's investment in us and people listening to call. And it's going to be fun as we work through all these things and make progress. Thank you. Thank you everyone for attending today's conference, Paul. You may all disconnected everyone enjoy the rest of your evening.