Gevo (NASDAQ:GEVO) Q3 2020 Earnings Call

0:01 Welcome to the GVO's third quarter 2020 earnings conference call. My name is Catherine, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will be conducting a question-and-answer session. Please note that this conference is being recorded. I'll now turn the call over to Jeffrey Williams, GVO's Vice President, General Counsel, and Secretary. Please go ahead, Mr. Williams.

0:29 Good afternoon, everyone, and thank you for joining GEVO's third quarter 2020 earnings conference call. I would like to start by introducing today's participants from the company. With us today is Patrick Gruber, GEVO's chief executive officer, Lynn Small, GEVO's chief financial officer, and Carolyn Romero, GEVO's vice president and controller. Earlier today, we issued a press release that outlines the topics we plan to discuss today. A copy of this press release is available on our website at www.jivo.com. I would like to remind our listeners that this conference call is open to the media and that we are providing a simultaneous webcast of this call to the public. A replay of today's call will be available on Jivo's website.

1:16 On the call today and on this webcast, you will hear discussions of certain non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in accordance with GAAP. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in the press release distributed today, which is posted on our website. We will also make certain forward-looking statements about events and circumstances that have not yet occurred, including but not limited to projections about JIVA's business development plans, and operating activities for the remainder of 2020 and beyond. These forward-looking statements are based on management's current beliefs, expectations and assumptions and are subject to certain or significant risks and uncertainties, including those disclosed in GEVO's Form 10-K for the year ended December 31, 2019 that was filed with the U.S. Securities and Exchange Commission and in subsequent reports and other filings made with the SEC by Jivo, including Jivo's quarterly reports on Form 10-Q.

2:26 Investors are cautioned not to place undue reliance on any such forward-looking statements. Such forward-looking statements speak only as of today's date, and Jivo disclaims any obligation to update information contained in these forward-looking statements, whether it is a result of new information, future events, or otherwise. On today's call, Pat will begin with a discussion of Jivo's business developments, Lynn will discuss the status of the Citigroup financing process, and Carolyn will then review JIVA's financial results for the third quarter of 2020. Following the presentation, we'll open up the call for questions. I'll now turn the call over to Pat.

3:06 Thanks, Jeff. This past quarter was extremely significant for us. We now have about 48 million gallons per year of take or pay offtake agreements in place representing approximately $1.5 billion across the life of those contracts, which would run about six to seven years from the start of full-scale production. These take-or-pay contracts are being used to secure the funding to build plants. Not that long ago, we were working hard just to sell out the capacity of our La Verne facility. Our business has now changed. We now have demand for our products and and with contracts that justify more than one production facility. La Verne is not big enough to service the contracts we already have signed.

3:58 The increased demand is significant because it shows potential investors that our plant projects offer significant growth potential beyond just La Verne. That's important because people want to see platforms of projects. Not only that, potential investors in the project see clearly that we have the funds to fully pay off Whitebox. Before we raised money this past quarter, there had been a real question of how we deal with Whitebox. Whitebox, from a potential investor point of view, complicated future deals because Whitebox, by the way, has been an outstanding partner over the last seven years, has a senior secured position in all of GEVO assets, the physical and intellectual property. Well, now we have the money in the bank to pay off white box and remove the liens.

4:48 Being able to pay them off clearly is a big deal. Nothing can prevent that from happening by year end. We also now have the money to do the required project engineering and development work necessary to secure project financing. In fact, we've already started to move forward on this. We are in the midst of choosing additional plant sites. Our choice of plant sites is impacted by the ideas of our potential equity investors. Yeah, you heard me right. While we haven't announced who our potential equity investors are, we are working with several potential partners. Lynn will talk more about the Citigroup financing project in a couple minutes.

5:35 On the business development front, we are expecting to secure additional large offtake agreements. Negotiations are progressing, albeit not fast enough for my taste. I would prefer to announce them already, but they aren't inked yet. We have more players in the mix wanting more volume, and that's great. But we need the details pinned down, the contract signed, so that we can then pin down additional plant sites as well as the total number of plants. In the meantime, we are getting on with the engineering for the 48 million gallons per year of plant projects that are already under the contracts. I expect that in the near future we will announce the names of the engineering firms that we'll be using to engineer and build the projects.

6:20 So for the first time in many years, and this is a big deal, we aren't in the mode of having to raise money just simply to stay alive. Now it's all about project execution and growth. It's about leveraging our technology, the marketplace development that we already have in place, and getting the project financing secured to build multiple projects. With that, I will turn the call over to Lynn to provide more details on the project finance process with Citigroup. Lynn? Thank you, Pat.

6:52 The Citigroup process to assist GEVO in securing financing to build out our production capacity is going well. Recall that we're trying to raise about $700 million at the project level, which would finance three plant construction projects to supply about 70 million gallons per year. We anticipate that this financing would require about $200 million in equity and $500 million in debt. Citigroup is helping us with both the debt and the equity. The $700 million in funding would be invested in special purpose project entities that are non-recourse to Jivo. We anticipate that Jivo will be a minority equity holder in the SPVs.

7:37 By raising money at the project level, we avoid a couple of issues. First, it's not dilutive to Jivo, Inc. stock. And second, it allows us access to capital from companies and funds who may have limitations on investing in Jivo stock and may have preferences for specific project exposures. On the equity side we have several term sheets that are more than enough to cover the equity needed. Each of these potential investors is deep into diligence. This isn't like investing in penny stocks where people buy them knowing nothing. In project finance, investors go through every detail. They hire experts who have to vet the information from technology to commercial structure to pro forma financial results. Project investors, both debt and equity, require a complete understanding of the risk-return proposition.

8:32 After they complete their diligence, we would move to finalizing equity investment terms. The timeline for diligence typically takes months, even if we weren't in a COVID world. Despite COVID, we've become pretty adept at dealing with COVID by increasing our use of video conferencing. Once the diligence phase is complete and we've agreed on financial terms, we would enter into binding agreements for the investments and advance the work to meet typical project style conditions precedent to financial close. On the debt front, Citigroup has been figuring out the best options and we believe we have a clear path to a debt format and structure that should appeal to investors. The debt to build out the plants doesn't get into place unless the equity commitment is assured and vice versa. These closings are essentially simultaneous.

9:25 We are also paying attention to timing. We have approximately 48 million gallons per year under contract. The city projects contemplate Thank you for joining us. Now I'll turn the call over to Carolyn who will take us through the financials. Carolyn?

10:07 Thank you, Lynn. GEVO reported revenue in the third quarter of 2020 of $0.2 million as compared to $6.1 million in the same period in 2019. During the third quarter of 2020, hydrocarbon revenue was $0.1 million compared to $0.6 million in the same period in 2019. Thank you for joining us. An unfavorable commodity environment, we terminated our production of ethanol and distillers grain in March 2020, which resulted in lower sales for the third quarter.

11:11 Cost of goods sold was $2.3 million in the third quarter of 2020 versus $9.9 million in the same period in 2019. Cost of goods sold included approximately $0.9 million associated with the production of IBA and related products, and the maintenance of the La Verne facility and approximately $1.4 million in depreciation expense. The gross loss was $2.1 million for the third quarter of 2020 versus $3.8 million for the third quarter of 2019. Research and development expense decreased by $0.9 million during the third quarter of 2020 compared with the same period in 2019 due primarily to a decrease in personnel and consulting expenses.

11:59 Selling, general, and administrative expense increased by 0.8 million during the third quarter of 2020 compared with the same period in 2019 due primarily to an increase in personnel, consulting, and insurance expenses, and then professional fees offset by a decrease in investor relation expense. For the third quarter of 2020, We reported a loss from operations of $6.1 million compared to $8.0 million for the same period in 2019. In the third quarter of 2020, cash EBITDA loss, a non-GAAP measure that is calculated by adding back depreciation and non-cash stock-based compensation to GAAP loss from operations, was $4.0 million compared to $5.8 million in the same quarter of 2019.

12:50 Interest expense for the third quarter of 2020 was 0.5 million, a slight decrease compared to the same period in 2019 as a result of lower amortization of original issue discounts and debt issuance costs and the conversion of 2.0 million of the 2020-21 notes to common stock during July of 2020. For the third quarter of 2020, we reported a net loss of 6.8 million, or a loss of $0.09 per share based on a weighted average shares outstanding of 77,049,896 shares. This compares to a loss of $8.6 million in the third quarter of 2019 or a loss of $0.66 per share based on a weighted average share outstanding of 12,968,265 shares. In the third quarter of 2020, We recognized net non-cash gain totaling $0.2 million due to changes in the fair value of certain of our financial instruments, such as warrants and embedded derivatives.

14:00 Also during the third quarter of 2020, we incurred a $0.5 million loss related to the conversion of $2.8 million of the 2020-21 notes into common stock during July 2020. Adding back these non-cash losses resulted in a non-GAAP adjusted net loss of $6.5 million in the third quarter of 2020, or a non-GAAP adjusted net loss per share of 8 cents based on a weighted average shares outstanding of 77,049,896 shares. This compares to a non-GAAP adjusted net loss of $8.6 million in the third quarter of 2019, or a non-GAAP adjusted net loss per share of 66 cents based on weighted average shares outstanding of 12,968,265 shares.

14:58 Now, I'll turn it back over to Pat to wrap things up.

15:03 Thanks, Carolyn. I've got a couple other points to touch upon. Praj continues to make progress. Recall that they are working to license and build plants in India with the idea that the Indian Air Force would be the ultimate customer. I have a suspicion that other airlines might become customers, too. That will continue to make progress over the coming months and over the next year. We are also continuing the development of our biogas projects. These projects are financially attractive, offering significant cash flows and returns. We have the development engineering money needed to secure project financing, so we're moving forward with that rather than being stuck having to raise development expense capital. And we also have the equity needed to move forward. We have to work on and continue to work on getting the debt terms arranged.

15:53 That's a nice project. It generates nice cash flows. Now, looking forward, I expect I will soon announce the engineering firms and additional plant sites. Thank you. Thank you. I expect that as we finalize the equity investors in our plant production projects and get those deals done to the point where they are allowed to be visible, we're going to be very glad to tell you about that too.

16:46 We've heard from some of you that you may have noticed more activity up at our La Verne site. Well, you're right. There's more going on there. We're in the midst of running a campaign to produce more isobutanol to replenish our inventory. We use the isobutanol that we produce there as a feedstock for the hydrocarbon plant down in Texas. Halteman and others want the products. We still see no reason to run ethanol. It would just lose money. So with that, let's open up the call for questions. Operator? Thank you. Ladies and gentlemen, if you have a question at this time, please press star then 1 on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. To prevent any background noise, we ask that you please place your line on mute once your question has been stated. Our first question comes from the line of Sean Severson with Water Tower Research. Your line is open.

17:40 Please go ahead.

17:41 Thanks. Good afternoon, everyone. Pat, can you give a little more color on who you're talking to? Specifically, I'm addressing strategic versus financial investors. and maybe compare and contrast, I guess, which one will be preferred by you and why.

18:00 Well, what's interesting about what we're doing, if you stop and really look at it, is we're capturing renewable energy. It happens to be that we're putting that renewable energy into the form of a liquid fuel. Our liquid fuels can be used in the gasoline sector, for automobiles, it can be done for trucks, of course, for airplanes. We're using Wind energy, biogas energy, photosynthetic energy, which touches on agriculture. And so when you start thinking about, and hydrogen too, because if you have excess wind, you could do something with it. We'll be involved with hydrogen as well. So you start to look at that and who might be interested. It makes for a different slate of people than one might expect because the whole game, the whole greenhouse gas issue that needs to be solved is how do we get off of coal, fossil-based natural gas, fossil-based electricity.

18:55 A business system like ours allows and enables the capture of all those different things and packs that energy into a fungible fuel in the form of a liquid hydrocarbon, which, of course, can be taken to any market. That's interesting. So it's a different kind, different groups of people are interested in these things. And then as far as the individuals of whether the companies, whether they're funds or strategics, is that because the, I think that Carbon is more valuable, reductions of carbon are more valuable to strategics because they have to do something about it. So that's what we're seeing in the midst of all this investment like in renewable diesel. And you have all these big energy companies who not that long ago you said no way would they ever invest in such things. And now that's what they're starting to do.

19:44 You have that kind of thing. They have to do something and there's no more escapings.

19:53 Just to have a follow-up on looking at liquid fuels, I guess, and kind of comparing that as a renewable solution, I mean, relative to, you know, wind and bio and fuel cell, fuel cell electric vehicles, renewable natural gas, you know, a lot of different technologies. And obviously, you know, sometimes I think liquid fuel gets left by the wayside a bit. But can you sort of compare and contrast, you know, how that fits in to the renewable future? Sure.

20:23 Sure. You know, when you look at projections of energy for the future and actually why vehicles are even being sold, and you look out to, like, 2050, it's pretty much the same kind of energy profile that we have today, although there is a bigger component of renewable attached. So thinking of it this way, the growth gets taken up by renewable energy, and, of course, we have growth because economies are planned on developing still. But we still wind up with the same kind of a size of a fossil fuel need unless something changes. Thank you for joining us. Renewable Energy, packing it into a liquid fuel and then it uses all the existing infrastructure.

21:20 There's no change required on the part of the consumer. No change required on the part of a fleet owner. It's just a different game to play. And so it isn't one or the other. We're going to need them all because the amount of fuel that has to be replaced, the fossil-based stuff, is so freaking enormous that it's going to take any and all solutions. So I think it's a question of In some places, it's going to make terrific sense to have EV. Other places, not so much, like in a rural place. Or it might be that you think about, I mentioned that, for instance, you mentioned fuel cells, and I mentioned hydrogen earlier. You know what? If we have wind towers, and we're making excess wind because the wind's blowing, and I don't need it for the plant, you know what? I think maybe we ought to make hydrogen out of it, and maybe we turn it into something and play in that. Market Sector 2.

22:16 So when I think I look at the future, I see that it's going to take multiple solutions. We have an interesting one because we're not hung up with infrastructure. We can leverage existing infrastructure. We're not hung up with having to get new fleets and talking everyone into buying a new vehicle. You know what? You just use the same old vehicle, lower your carbon footprint by using our products directly. People haven't thought of it much because they've been unaware of these types of things. They just don't know yet. and they still look at us and go, what? You're doing gasoline? You mean ethanol? No, we're not doing ethanol. Ethanol is like the 10%. We're doing the other 90%. What? You can do that? And then we run into this all the time. People just don't – they're still learning that it's possible. So it's interesting. But, of course, this is why Traffic Area did sign up with us because they get it. Halter and Carlos gets it. And there will be others who get it as well.

23:07 Thanks, Pat. My last question to step out is on cash flow. Is this quarter a pretty good proxy going forward for cash burn, or is there going to be any other changes or investments you think you need over the next couple quarters?

23:24 I think it's pretty typical. They're going to creep up incrementally a little bit because we had reduced staff, so we've got to bring back a few more people. So it should be pretty typical. We're going to have chunks. that get spent at various times for engineering projects. So these aren't like your typical, you know, R&D burn type things. These are going to be, you know, we're doing engineering work, paying it to a company to deliver on a project, and we expect to be reimbursed as the project closes. So we'll have some of those types of expenses, and we'll be able to give more color on those. So in terms of your basic burn, we're in pretty good shape. What's interesting about this is, you know, the question I get most asked is, hey, when are you going to raise money again? Why not have plans to raise money anytime soon?

24:10 Although I do recognize that as we get these projects deployed and we have a good partnership with equity investors, it might behoove us to invest because it makes with them, you know, and that might be useful, but that's down the road sometime. Thanks, Pat. Thank you. And our next question comes from the line of Amit Dayal with HC Rainwright. Your line is open. Please go ahead.

24:39 Thank you. Graaf and everyone, appreciate you taking the questions. Great to see, you know, the final pieces coming together on moving these plans forward. So did I hear it correctly, Pat, that you have equity investors for 48 million gallons already in place? You're trying to see if you can get Additional investors to come to that 70 million gallon number, if that doesn't come in within a certain time frame, you are happy to move forward with this 48 million gallon financing that is shaping up for you?

25:15 Actually, it's slightly different than that. We actually have equity investors who are willing to put up the equity for all 70 million gallons. Okay. However, we probably tranche it because we have the take-or-pay contracts in place for 48 million gallons. And so that's clear. We can move on with it. And then depending upon who takes that next tranche, and there's a couple of them who could do it, then that would dictate where we might want to locate a plant, and it will influence a little bit of the decision.

25:42 But we already have the equity players.

25:44 We have turn sheets from them to do the whole build-out of the first three plants.

25:51 Okay, understood. So that's a really big development. And alongside that, you are finalizing the engineering firms or have you already sort of finalized it and you are waiting for certain catalysts before you announce who the engineering firm will be?

26:10 Well, it's, yeah, we have our, you know, we have our lead horse and we're already engaging them. And we have to go through You know, there's an initial step of engineering they have to do, and then once you do the whole turnkey project, there's a couple other people whose names have surfaced lately that we have to look at. So it's about, we'll announce them at the appropriate time. We're definitely engaged, Amar. We're definitely engaged. It's about, so there's like an engineering part, and then they're saying, here's who's going to build out the whole giant plant, or the two plants. with whatever turnkey project. Those are two separate things.

26:53 Right. So based on this commentary, is any of this sort of news flow coming, potentially going to come before the end of 2020 or should we expect announcements around these to happen in early 21?

27:11 Don't know yet. It's like, you know, it's not my... I'll do stuff when it's signed and... The engineering stuff, I think, is more in our control. The site selection is more in our control. So those could happen sooner rather than later. But we'll do them when we'll announce them when they're ready to announce. But they could be sooner. So I would expect those to be sooner. Regarding the customers, this is one of these ones where I see it growing. So I see the list of people who want product is growing. and I see that the contracts are being negotiated there's a couple contracts that I would have thought have been done by now but they got caught up in stuff with the other company that had nothing to do with us or nothing to do with our product it's just their whole what's going on with them in the world and it'll get done eventually and so those could take a little bit longer but no the stuff is still moving forward I don't know you know it's just it'll this year is somewhat unpredictable anyway So I even hate making predictions. But in terms of the engineering firms, in terms of site selection, that's stuff I'd expect to happen sooner rather than later.

28:23 But I'll announce it when it's ready to announce.

28:28 Based on, you know, how all this sort of falls in place, you know, and if it happens to fall in place, say by the first half of 21, at that point, you know, going into the second half of 21, do you potentially start getting paid for development work that you will be putting into this?

28:50 Right. So the way that this should unfold is that we do the development work up front and then we get reimbursed for it. If the things hold the schedule, we should start to see some of that money coming back to us late in 2021. So in the late meaning, the latter half, I don't know exactly when, depends upon how things get done and their timing. We have a couple of these partners want to go faster rather than slower, which of course that suits us too. So what should happen is we'll announce, you know, the engineering firms announce the sites. We'll announce the digital customers. We'll announce then who it is that these equity partners are in the project. We'll announce who it is and how we're doing the debt side simultaneously, as Lynn mentioned. Then we'll be moving it forward to the financial close. And the financial close, then we get reimbursed for the money we just spent on the engineering and the other stuff and licensing fees and things like that.

29:40 And so, yeah, that should matter a lot, and it's material. And the good news is we have enough money in our balance sheet that if it takes longer, we're still in good shape. So I don't have any reason to think it would take longer, other than the practical reality of stuff sometimes does. But you know what? They're working through, well, the next milestone on the equity, on the project front, the plant project front, is to get those equity investors locked down. Now, I also mentioned the biogas issue. In my comments, the biogas thing is interesting because biogas is a, we need it, we want it for feeding our boilers at our plant because it gets us off natural gas partially, and that reduces our carbon scores. And, of course, we get paid per carbon score.

30:31 It matters. However, guess what? We also can sell that to California, and we'll be doing that. Initially, we expect it, and that should start up in the latter half if things go right. We've still got work to do on the financing front there on the debt side. But that should be generating revenue, you know, maybe late next year or two. It should be. So I would expect a couple revenue streams we haven't seen before. And, of course, if ethanol ever does come back to be something where it's profitable, we can always turn that back on too.

31:07 Okay. Understood. And then, you know, with this timeline that you now have, you know, there's a lot more clarity versus maybe even last quarter and all this. Are you comfortable that you will be able to sort of, you know, meet your agreement with Trafigura for the 25 million gallons per year by the 2023 timeline?

31:32 Yes. Okay. Understood.

31:38 and then with respect to sort of the, you know, 50,000 production that is ongoing right now from Southampton, you know, which customers is this product going to? Is it all going to one or two customers or are these multiple clients that you're thinking of?

31:58 Yeah, so what we're doing is remember the capacity for our plant down in Silsbury, Texas is about 100,000 gallons per year, right?

32:05 And we have the ability to move the

32:07 Output from jet fuel to gasoline, the renewable gasoline. Holtzman-Carlos, they always want, it always seems to me that they want more hydrocarbon, more iso-octane. And there's other people like them. The iso-octane is particularly interesting. Jet fuel, sure, people want to use it and test it, but we don't have enough capacity to move a needle anywhere. except for some corporate aviation stuff that someday I hope to be able to announce because people will find it interesting as to who's been buying it. We just aren't allowed to say who it is. What we're running now up at Laverne, so we did start our Laverne plant up. It's not running ethanol. It's running isobutanol. And we're running a campaign to make isobutanol gallons so that we can feed them down into our plant in Texas.

33:00 Okay. Yeah, those are all my questions, Matt. Thank you.

33:08 Yeah, it's kind of fun to be running our isobutanol again because, you know, how often do I get asked, well, you all can't run anything. Yeah, we do. It's just we've been doing this, you know, we need renewable isobutanol, so we've got to go make it ourselves. And we have a team in place to do that. Thank you. And our next question comes from the line of Paul Fratwood, Noble Capital Market. Your line is open. Please go ahead.

33:35 Thank you. Good afternoon, Pat. Good afternoon, Lynn, and the rest of the team. Busy quarter last quarter. You know, it looks like this quarter is going to be the big event. It's going to be the payoff of the white box debt at the end of the quarter. What When you talk about the biogas investment, Pat, I think you've talked before about a certain amount. And can you remind me of the amount of that potential equity investment and then what the timing might be?

34:09 It will depend upon having the debt side. I think the best answer to this is it's not an outrageous investment. I don't know the amount that we'll have to put in because there's been some equity players Players who have indicated some interest in co-investing with us. We have to decide does it make sense or not. I hope it does. Although I do like the returns from this project. And then there's the debt side. So I think this is one where because I have moving parts, I don't want to speak out of turn. It's not huge capital. Well, in any case, so, you know, it's like, you know, $15 million would be the full equity amount if we had to pay it.

35:02 But I don't think we will. It'll be a fraction of that.

35:05 Yeah, it's fun to guess, but I just don't know. You know, and this is, again, strictly a financial return. A project like this has financial returns that are ridiculously high IRRs. And so there is that real question we're going to have to look at ourselves and say, hmm, maybe we want that money for ourselves because I might want the cash flow. So that's the kind of stuff that we have to evaluate, yet I just don't know.

35:30 And then can we talk about just the, you know, the term sheets that are outstanding with the both the financial and the strategic equity players? I think on previous calls you talked about having LOIs on two plant locations. Is the strategic spring potentially another plant location replacing one of those LOIs? Can you just sort of talk about the LOIs that you previously had on plant locations and then also potentially when you expect to move on those LOIs?

36:09 Oh, okay, okay. So two separate things. So we've got two – let's deconvolute this first. We've got the term sheets from equity investors. They definitely have ideas about where they want product, how they want to do it, how fast they want to go, can we accelerate it, stuff like that. That influences how we think about things. It'll be interesting for people once we can actually talk about it clearly and openly. It's going to be interesting. Now, as we add in more gallons, we continue our search and continue to look at other sites for like taking over an ethanol plant or building a side-by-side isobutanol hydrocarbon plant. We have several players who are interesting in that we could do it on their sites. They're open to it.

37:00 We have LOIs. We have them already. And so we could do that. It's a question of which one makes the most economic sense in light of who it is that we're working with on the equity side of the project. So we have multiple and many more sites already that we could use. We think there's a better one.

37:24 Okay. And then when we look at, you know, the nine recourse SDVs that you structured and then, you know, you'll retain a minority interest, can you talk, I guess Lynn alluded to the debt. Thank you very much.

38:02 I'm not sure what our minority interest will be exactly because it depends upon how much we invest. We have enough cash in our balance sheet to make a good investment in those projects, and that would lift our portion of that project. And the returns on these projects are attractive, so that would be good for us in a cash flow sense. We already have money that we could invest without raising any more. So there's a question of do we do that or not. So that impacts then how big our minority interest is. Of course, just by being a developer and licensing technology and all the rest, we would expect to get some minority interest, typical of what would be market in a developer, although we're also a licensor. And for us, and as we make money as GEVO, remember, we get money from a license fees, operating fees, because who's going to operate these plants?

38:53 It's going to be GEVO. We get paid to operate these things. So before the project pays off returns to the investors... We've got to get paid to operate the plants and do those kind of things. So that's all part of this overall equation. And then the debt structure itself, we have a very clear view of how to do it, what to do, who's going to do it. Could it be subject to change still? Yeah, so I don't want to give a specific percentage interest rate. You know, with the specific terms, because, you know, this all depends upon who plays, how they play. Do we did it? Do we trotch it? You know, what do we do? So there's a bunch of things that still could move around.

39:39 I just don't want, you know, someone sending me 50 billion emails on, well, you said this. I'm just not ready for it yet.

39:48 Okay, granted. And then if you could talk about the engineering plans, it sounds like that you, you know, it's two-phase. You have the feedback. The seed player in place already. The design works underway. And then once that's all finalized, then you'll go out and get it to a full EPC contractor. Is EPC contractors, is that potentially done at financial close or near financial close? Or potentially do you put that up a bit to EPC contractors? I think before we talked about financial close in the first half of 2021, you know, towards the, you know, later, probably later rather than sooner, you know, closer to mid-2021.

40:38 Well, it would be, yeah, yeah, yeah, yeah. Timing works like this. Feed. So feed is, for everyone else, feed means the full engineering work. It's kind of an acronym we all use. And you need that done. It gives you a final engineering. And then you turn around to an EPC contractor or engineering firm who builds the plant and constructs it and stuff like that. We are working on feed right now. We're going to get that pinned down. The people we're working with could be the EPC. We'd expect them to. They're certainly capable of it. But there's other people who, you know, maybe have a sweeter deal, and they're perfectly capable of it, too. This is partly what you do when you're negotiating, you know, contracts during the hundreds of millions. So then we'd announce those things. There's going to be the financial close.

41:25 The plant actually gets built after financial close. The equity partners would be announced long before the equity close. We're going to have to tell people about it. That's just the reality of it because we won't be able to hide it. We're going to have to put it out there and tell everybody. That's what I'd expect in the first half of the year. The close itself, it depends on All the pieces come together when all the site work is, you know, everything is completed. Everything is done and buttoned up and we can get to a project financial close. And these projects are onerous in terms of the amount of detail and work that they take and, you know, the amount of diligence stuff that goes into it and the amount of reports and expert stuff that has to be done. And so we plan for that in the second half of the year.

42:16 Okay, yeah, that seems a little later than what was contemplated before, but, you know, still with... Well, actually, it's the same.

42:24 Yeah, actually, it's the same. If you go back and look, we talked about it being the second half of the year. It takes one year, even in doing the gas, you know, on the project to get something to close. But we talked about doing the financial close for biogas, I would expect, in the first half of the year.

42:41 Okay. And then, you know, any comment on, you know, what potentially happens under good, bad, or indifferent under a Biden administration?

42:53 That's interesting to see. Yeah. So that should be interesting. It should bode well for us, eh? I would think so, you know, because this is a chance for some of the, you know, greenhouse gas stuff to get put into policy. Hopefully it'll be done in a good, constructive way. They've got to win over the Midwest. The Dems do. And so that's good for agriculture. There's a whole bunch of new techniques called regenerative agriculture. How do you capture carbon in soil? That does come into play. People are waking up to the fact that growing stuff isn't necessarily food for the earth because of how you do it. We've known that for years when talking about it. Good, people are listening. I think overall, you know, It's good for us.

43:39 There's no question about it. It's just now we got to see what happens in Georgia. You know, does the whole thing turn blue or, you know, or is it going to be more incremental if the Senate stays red? So, you know, overall, it's got to be good for us, right? Because we happen to have one of the few technologies, maybe the only one that I'm aware of that can be scaled up to deal with gasoline itself, you know, the hydrocarbon portion of gasoline. and, of course, we have the ability to make the jet fuel or diesel fuel tool. Plus, you know, if the people are as aggressive as they say they're going to be about, you know, chemicals and materials, good. I have the building blocks for those, too. So let's go. Let's get on with it.

44:25 Okay, great. Thank you so much, Pat.

44:28 You betcha. Thank you, and I'm showing no further questions at this time, and I would like to turn the conference back over to Patrick Gruber for any further remarks.

44:40 Great. Thank you all for joining us. It's an exciting time for us. It's quite a different position that this company is in now. It was not that long ago, right, when we were, you know, having to bear, you know, how are we going to live through the year? I'm looking forward to paying off white box and getting out from under that debt. I've heard from many of you that, you know, that's an important thing. It's crystal clear that that's going to happen. We're moving forward on these engineering projects, moving forward on biogas. It's good. It's interesting, and momentum seems to be going in our favor across the board, including with the election. We're pretty darn excited about what's going on, and our partners seem to be too. We've just got to get them over the line on everything.

45:26 Thanks for your support. Thanks for joining us. Have a great evening. Bye. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.