Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Nature of Business [Policy Text Block]

Nature of Business

. Gevo, Inc. (“Gevo” or the “Company,” which, unless otherwise indicated, refers to Gevo, Inc. and its subsidiaries) is a growth-oriented renewable fuels technology and development company that is commercializing the next generation of renewable low-carbon liquid transportation fuels, such as sustainable aviation fuel (“SAF”) and renewable isooctane (which we refer to as “renewable premium gasoline”), with the potential to achieve a “net zero” greenhouse gas (“GHG”) footprint and address global needs of reducing GHG emissions with sustainable alternatives to petroleum fuels. Its technology transforms carbon from the atmosphere using photosynthetic energy, wind energy and biogas energy into liquid hydrocarbons with a low or potentially “net-zero” GHG footprint.

As next generation renewable fuels, Gevo's hydrocarbon transportation fuels have the advantage of being “drop-in” substitutes for conventional fuels that are derived from crude oil, working seamlessly and without modification in existing fossil-fuel based engines, supply chains and storage infrastructure. In addition, with SAF, the carbon footprint of air travel can be reduced, or in the long run, eliminated on a net carbon basis, without change to planes or fuel systems. In addition to the potential of net-

zero

carbon emissions across the whole fuel life-cycle, its renewable fuels eliminate other pollutants associated with the burning of traditional fossil fuels such as particulates and sulfur, while delivering superior performance. 

Gevo uses low-carbon, renewable resource-based raw materials as feedstocks. In the near-term, its feedstocks will primarily consist of non-food corn. As the Company's technology is applied globally, feedstocks can consist of sugar cane, molasses or other cellulosic sugars derived from wood, agricultural residues and waste. Gevo's patented fermentation yeast biocatalyst produces isobutanol, a

four

-carbon alcohol, via the fermentation of renewable plant biomass carbohydrates. The resulting renewable isobutanol has a variety of direct applications but, more importantly to our fundamental strategy, serves as a building block to make renewable isooctane (which we refer to as renewable premium gasoline) and SAF using simple and common chemical conversion processes. The Company also plans to reduce or eliminate fossil-based process energy inputs by replacing them with renewable energy such as wind-powered electricity and renewable natural gas (“RNG”).

Gevo's technology represents a new generation of renewable fuel technology that overcomes the limitations of

first

-generation renewable fuels.

Ultimately, the Company believes that the attainment of profitable operations is dependent upon future events, including, but 

not

limited to (i) the successful development of the Net-Zero

1

Project, for the production of energy dense liquid hydrocarbons using renewable energy and our proprietary technology; and (ii) the achievement of a level of revenues adequate to support its cost structure.

COVID-

19.

The novel coronavirus ("COVID-

19"

) pandemic has had an adverse impact on global commercial activity, including the global transportation industry and its supply chain, and has contributed to significant volatility in financial markets. It has also resulted in increased travel restrictions and extended shutdowns of businesses in various industries including, among others, the airline industry, and significantly reduced overall economic output. It is possible that that the impact of the COVID-

19

pandemic on general economic activity could continue to negatively impact the Company's revenue and operating results for

2021

 and beyond. In light of the current and potential future disruption to its business operations and those of its customers, suppliers and other

third

parties with whom the Company does business, management considered the impact of the COVID-

19

pandemic on its business. The impact of the COVID-

19

pandemic on the global transportation industry could continue to result in less demand for the Company's transportation fuel products, which could have a material adverse effect on the Company's business, financial condition and prospects for the foreseeable future.

During the

first

quarter of

2020,

we suspended our ethanol production at our production facility in Luverne, Minnesota (the "Luverne Facility") due to COVID-

19

and an unfavorable commodity environment, largely the result of greater corn costs as compared to national markets than the region has historically produced. The suspension of ethanol production and reduction in the Company's workforce that occurred during the

first

quarter of

2020

due to the impact of COVID-

19

had an adverse impact on Gevo's financial results for the

three

months ended

March 31, 2021 

reducing revenue by

98%

 compared to the

three

months ended

March 31, 

2020.

There is also a risk that COVID-

19

could have a material adverse impact on the development of the Company's Net-Zero

1

Project, customer demand and cash flow, depending on the extent of our future production activities.

The Company has considered multiple scenarios, with both positive and negative inputs, as part of the significant estimates and assumptions that are inherent in its financial statements and are based on trends in customer behavior and the economic environment throughout the

three

months ended

March 31, 2021 

and beyond as the COVID-

19

pandemic has impacted the industries in which the Company operates. These estimates and assumptions include the collectability of billed receivables and the estimation of revenue and tangible assets. With regard to collectability, the Company believes it

may

face atypical delays in client payments going forward but the Company has

not

experienced significant delays in collection as of

March 

31,

 

2021.

In addition, management believes that the demand for certain discretionary lines of business

may

decrease, and that such decrease will impact its financial results in succeeding periods. Non-discretionary lines of business

may

also be adversely affected, for example because reduced economic activity or disruption in hydrocarbon markets reduces demand for or the extent of SAF, isooctane and isooctene.

Financial Condition [Policy Text Block]

Financial Condition

. The Company has incurred consolidated net losses since inception and had a significant accumulated deficit as of

March

31,

2021.

The Company's cash and cash equivalents as of

March 

31,

2021

 totaled

$525.3

 million. Gevo expects to use its cash and cash equivalents for the following purposes: (i) development of the Luverne Facility expansion plan; (ii) identification of new production facilities and to plan for expanded production to fulfill existing off-take agreements; (iii) operating activities at the Company's corporate headquarters in Colorado, including research and development work; (iv) development projects associated with the Company's RNG projects; (v) exploration of strategic alternatives and additional financings, including project financing; and (vi) future debt service obligations. 

The Company expects to incur future net losses as it continues to fund the development and commercialization of its product candidates. To date, the Company has financed its operations primarily with proceeds from issuance of equity and debt securities, borrowings under debt facilities and product sales. The Company's transition to profitability is dependent upon, among other things, the successful development and commercialization of its product candidates and the achievement of a level of revenues adequate to support the Company's cost structure. The Company

may

never achieve profitability or positive cash flows, and unless and until it does, the Company will continue to need to raise additional capital. Management intends to fund future operations through additional private and/or public offerings of debt or equity securities. In addition, the Company

may

seek additional capital through arrangements with strategic partners or from other sources, and it will continue to address its cost structure. Notwithstanding, there can be

no

assurance that the Company will be able to raise additional funds or achieve or sustain profitability or positive cash flows from operations. Management believes it has adequate cash to fund operations for at least 

one

year from the date the financial statements are issued.

Stockholders' Equity, Policy [Policy Text Block]

January 2021

 

Offering.

On

January 19, 2021,

the Company completed a registered direct offering pursuant to a securities purchase agreement withcertain institutional and accredited investors providing for the issuance and sale by the Company of an aggregate of

43,750,000

shares of the Company's common stock (the

“2021

Shares”) at a price of

$8.00

per share (the

“January 2021 

Offering”). 

The net proceeds to the Company from the

January 2021 

Offering were approximately

$321.9

 million, after deducting placement agent fees and other estimated offering expenses payable by the Company.

At-the-Market Offering Program.

In

February 2018,

the Company commenced an at-the-market offering program, which allows it to sell and issue shares of its common stock from time-to-time. In

December 2020,

the at-the-market offering program was amended to provide available capacity of

$150.0

million. 

During the

three

months ended

March 31, 2021,

the Company issued

24,420,579

 shares of common stock under the at-the-market offering program for total proceeds of

$135.8

 million, net of commissions and other offering related expenses. 

As of

March 31, 2021,

the Company has remaining capacity to issue up to approximately

$10.6

 million of common stock under the at-the-market offering program.

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation.

The unaudited consolidated financial statements of the Company (which include the accounts of its wholly-owned subsidiaries Gevo Asset, LLC (“Gevo Asset”), Gevo RNG Holdco, LLC ("Gevo RNG Holdco"), Gevo NW Iowa RNG, LLC ("Gevo RNG") and Agri-Energy, LLC (“Agri-Energy”)) have been prepared, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do

not

include all information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Compan

y at

March 31, 2021

and are

not

necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included under the heading “Financial Statements and Supplementary Data” in Part II, Item 

8

of the Company's Annual Report on Form

10

-K for the year ended

December 

31,

2020.

Preliminary Stage Project Costs [Policy Text Block]

Preliminary Stage Project Costs.

 Preliminary stage project costs consist of research and development expense in addition to selling, general and administrative expenses related to our RNG and Net-Zero projects.

Reclassification, Comparability Adjustment [Policy Text Block]

Reclassifications.

 The Company reclassified certain prior period amounts to conform to the current period presentation, including the categorization of preliminary stage project costs on the Consolidated Statements of Operations. These reclassifications had

no

impact on total revenues, total cost of goods sold, total operating expenses, net loss or stockholders' equity for any period.

Income Tax, Policy [Policy Text Block]

Income Taxes.

There is

no

provision for income taxes because the Company has incurred operating losses since inception.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Business Risk.

 

As of

March 31, 2021,

four

 companies, Total Petrochemicals & Refining USA, Inc. ("Total"), Juhl Clean Energy Assets, Inc. ("Juhl"), AvFuel Corporation ("AvFuel") and Wisconsin Bioproducts ("Wisconsin"), comprised approximately

41%,

27%,

16%

 and

14%,

or approximately

98%

in total, of the Company's outstanding trade accounts receivable, respectively. As of

December 

31,

2020,

one

 customer, HCS Group GmbH ("HCS") comprised approximately

79%

 of the Company's outstanding trade accounts receivable, respectively.

For the

three

months ended

March 31, 2021,

New Vision, LLC ("New Vision") and Av Fuel accounted for approximately

79%

 and

15%,

or approximately

94%

in total, of the Company's consolidated revenue, respectively. For the

three

months ended

March 31, 2020,

Eco-Energy, LLC ("Eco-Energy") and Purina Animal Nutrition, LLC ("Purina") represented approximately

73%

and

22%,

or approximately

95%

in total, of the Company's consolidated revenue, respectively. Total, AvFuel, Wisconsin and HCS are customers of the Company's Gevo segment. New Vision, Eco-Energy and Purina are customers of the Company's Agri-Energy segment (see Note

14

).