Welcome to Gevo’s Third Quarter 2016 Earnings Conference Call. My name is Ashley and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I'll now turn the call over to Geoff Williams, Gevo’s General Counsel and Secretary. Please go ahead Mr. Williams.

Good afternoon everyone and thank you for joining Gevo's third quarter 2016 earnings conference call. I'd like to start by introducing today's participants from the Company. With us today is Pat Gruber, Gevo's Chief Executive Officer; and Mike Willis, Gevo's Chief Financial Officer. Earlier today we issued a press release, which outlines the topics that we plan to discuss today. A copy of that press release is available on our website at www.gevo.com. I would like to remind our listeners that this conference call is open to the media and we are providing a simultaneous webcast of this call to the public. A replay of today's call will be available on Gevo's website. 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 are contained in the press release distributed today and 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 Gevo's operating activities for the remainder of 2016 and beyond. These forward-looking statements are based on management's current, beliefs, expectations and assumptions and are subject to significant risks and uncertainties including those disclosed in Gevo's Form 10-K which was filed with the U.S. Securities and Exchange Commission or SEC on March 30, 2016 and in our subsequent reports and other filings made with the SEC by Gevo including our quarterly reports on Form 10-Q. 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 Gevo disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events or otherwise. On today's call Pat will begin with a review of Gevo's recent business developments. Mike will then review Gevo's financial results for the third quarter of 2016. Following the presentation, we will open up the call to questions. I'll now turn the call over to Pat.

Thank you, Geoff. Hello, everyone. I would like to start off by saying that we had another exciting quarter with a number of key strategic events taking place. For today's call, I will start by giving you an operational update on Luverne followed by a progress report on our efforts in the gasoline blendstock markets. I will finish with a strategic overview and update on the jet fuel market and our recently announced partner Lufthansa. Mike will then provide a detailed financial review of the quarter before we open up for questions. So let's begin. We continue to make solid progress at Luverne. We're very pleased with the isobutanol fermentation performance in terms of yields and rates. And the equipment related to our isobutanol production that we installed at Luverne is working as designed. All operations, including the distillation system, are now up and running. During this third quarter, we produced approximately 145,000 gallons of isobutanol, which is almost a threefold increase from the approximate 50,000 gallons we produced during the second quarter. Importantly, we have brought our fermentation cycle times down from seven days to our targeted five days per batch. As you may recall, a full cycle includes not only the production of the isobutanol itself, but also the cleaning of the equipment between batches to ensure that we minimize any potential contamination issues from popping up. Moving into the fourth quarter, we continue to stay focused on increasing the frequency of our batches, so that we will be able to run an isobutanol batch every five days back to back. While the isobutanol fermentation process is going very well, we do continue to experience minor bumps along the way as we operate our overall plant. For instance, during the third quarter, we had some equipment issues on…

Thank you, Pat. People reported revenue in the third quarter of 2016 of $6.9 million as compared to $8 million in the same period in 2015. The decrease in revenue during 2016 is primarily results with the production and sale of approximately $6.4 million with ethanol, isobutanol and distillers grains at the Luverne plant as compared to $7.6 million in the third quarter of 2015. This decrease in revenue was mainly due to lower ethanol production, ethanol prices and distiller grain prices in the third quarter of 2016 versus the same period in 2015. During the third quarter of 2016, hydrocarbon revenues were $0.5 million, $0.3 million higher than in the same period in 2015, principally as a result of the shipment of isooctane in the quarter. Gevo also generated grant and other revenue of $0.1 million during the third quarter of 2016, down $0.1 million as compared to the same period in 2015. Cost of goods sold was $9.7 million in the third quarter of 2016 versus $10.6 million in the same quarter in 2015. Cost of goods sold included approximately $8.1 million associated with the production of ethanol, isobutanol and related products and approximately $1.5 million in depreciation expense. Gross loss was $2.7 million for the third quarter of 2016 versus $2.6 for the third quarter of 2015. R&D expense was $1.2 million in the third quarter of 2016, compared to $1.5 million reported in the third quarter of 2015. R&D expense decreased in the third quarter of 2016 compared with the same period in 2015 due primarily to a reduction in employee related expense. SG&A expense for the third quarter of 2016 decreased to $2.3 million compared to the $5.1 million for the comparable quarter in 2015. SG&A expense decreased during the third quarter of 2016 compared…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from [indiscernible].

Hey, Pat. Hey, Mike. How are you?

Hey, good. How are you?

Good. So the question relates to the Luverne expansion. Now that you have 30 plus million in the bank, what is the plan and timelines for that expansion? And just clarify if this money is going to be enough for the hydrocarbon facility there as well?

The first one we’re going to do is restructure our balance sheet and make sure that that happens and then we will know to lay the land completely. And then we're focused on getting the right off-take agreements in place and that will guide the timeline. I hope to be moving forward sometime in the middle of next year though – we’ve already begun sorry, right now, we’ve already begun the engineering. We’re not going to hold things up waiting around. So we’ve already – we delve into the engineering project already.

So, along the lines for Lufthansa, the heads of agreement, what is the timeline there, like what is the process you’re following? And when do you expect them to have a definitive agreement?

Well the work to be done is to pin down the details. So one of the things is that we have our ATJ to be blended up to 30%. So we have to work through that blending arrangement and get the right people on board in the right location. And so that’s what both Lufthansa and we are focused on.

Did you say 30%?

Yeah, it’s up to 30%. I think when the jet fuel is more expensive in early days, you would blend that at a much lower rate, maybe 5%. And so we have to figure that out because when you blended at a 5% obviously that’s a large quantity of gallons that need to be blended.

Right, right.

So we’re working out those logistics and make sure we pin them down and there is a couple of creative things that we can do to solve that.

The flight that just took place, the isobutanol was produced at the Missouri facility. Is that right?

It was. So, NARA produced sugars. The sugars were taken down to the pilot plant down in Missouri at the ICM facility. That’s why we have a GIFT system and there is a fermento there as well. We’ve fermented and did isobutanol from the cellulosic sugars and then we shipped the isobutanol down to Texas and produced the jet fuel at the plant in Texas. And what’s interesting about this and what’s significant is it kind of ends the debate on can use cellulosic sugars or not. I mean, these are pretty crude sugars from cellulose and our bugs did well with them.

Is there a reason why the Lufthansa Silsbee was not used for this or is it not equipped to do cellulosic?

Could we use cellulosic sugar – is that what your asking, Sameer…

Yeah, yeah.

Yeah, the answer is yes. We could use – so what’s interesting about Luverne is that we could – we’re grinding up core and obviously using the starch, but we could take on sugar is that available – would love to actually.

Okay. Just last one from me. So there are 37 locations that in the Huston area that are expected to use this isobutanol blend. Do you have – like what is the level of demand from there and do you have enough capacity right now to supply that demand in Huston?

If it expanded the way people expect, the answer is currently. No, we would not have enough demand on that supply.

Okay.

If I expanded the people think – they’ve talked about, the answer is we’d be short on supply.

Okay. Thanks a lot.

Even if we’re at our full run rate.

Which is 500,000 gallons?

No, even if I was at $1.5 million run rate.

Full run rate. Oh my god.

Even if I was at the 1.5 million gallons per year, I think that the market in Houston just itself is much bigger than that.

Okay, great. Thanks a lot then.

Thank you. And next we have a question from Jeff Osborne [Cowen & Company].

Yes. Good afternoon. Couple of questions on my end. On the – obviously a bit of a delicate answer you’re doing on the restructuring of the balance sheet and working on that but I think certainly Whitebox and other investors would want to have a handle pad on what the expectations for the cost of the additional $12 million to $16 million. So can you just talk about – is that kind of $4-ish a gallon we should think about in terms of preliminary estimates, obviously ethanol is about half of that. But I just want to any kind of ballpark or horseshoes and hand grenades number that you can draw out there for now?

I think the best way to characterize it would be much lower than $4 a gallon. Because the GIFT system is already deployed at Luverne. So that that spend capital that’s the capital that Pat talked about wanting to leverage and why we want to the expanded capacity to be Luverne itself, because we've already built that out. So the capital, we're talking about would be as you know Jeff we have some carbon steel fermenters there that we'd prefer to have stainless steel fermenters there be some re-piping. Obviously, we’d also have to build an expanded hydrocarbons’ facility to build out the jet volumes filled with tons of contract. But it's not in the $4 a gallon.

Okay. But we're at a minimum would it be higher than what a traditional ethanol expansion would cost or no?

If you mean the – why it would be very similar, because we're talking about a couple of fermenters – couple or three for fermenters up your well and some distillation columns. So it look a lot like that.

Okay.

For the isobutanol portion.

Got it.

And then jet fuel itself that portion is separate.

Got it. And then to my memory, you've already received – or you already have in hand air permit approvals to expand or is that just can you talk about the process above and beyond the capitalization of the company and having the cash to do this. What else needs to be set in motion to do this?

Those things are already in motion, moving forward.

Okay. And then how should we think about modeling the production of isobutanol in Luverne for now assuming you don't expand, should we keep it at that $300,000 through 2017. Just looking at the guidance of $500,000 looks like you have to do about $300,000 in the fourth quarter. Do you see that increasing? Do you see the ability to shift some of the other silos if you will of ethanol over to isobutanol or just given the improvement in cash spreads? Are you going to be focused more on ethanol on and preserving cash?

No, I think for modeling purposes probably what we expect to do in Q4 is a probably a good run rate to assume, to be honest, we're not exactly sure gallons that will produce in 2017 at this stage. Again per Pats comments gallons over either themselves aren’t the key metric or the only metric to focus in on? What we want to be is successful. When we expand the entire facility for isobutanol and hydrocarbons facility – hydrocarbons, that’s really the end goal. Because that is what gets the company to profitability? So we're going to be doing – tests operating the plant in certain configurations to ensure that success

Got it and I appreciate you laying out the kind of game plan for 2017 in terms of the five step process Pat but the last one obtained financing for the Luverne expansion. You mentioned seeking kind of take a pay or financeable off-take agreements. Assuming you're able to replicate the Lufthansa strategy with other airlines and other partners. What is your kind of feedback then from the debt markets about financing this or would you expect it to come from equity?

Let me comment first about the interest in the marketplace. We turn to be – we seem to be on a sweet spot in terms in a good timing, jet fuel is a big deal for these airlines and we're one of two technologies that can make a difference. The other one being [indiscernible] then there's ourselves and ours looks to be a route that could grow quite well. People recognize that they want to see us get through the Luverne and out to bigger plants as quick as possible. So I think we're going to – I think will be able to deliver more than one airline in – for optic is what that we want is to be able to build into the tens of millions of gallons at the next stage.

No. I appreciate that. But if you let's just say hypothetically a Ten airlines that signed an off-take agreement today take your pay today they're all signing strike. Could you go to a bank and get debt financing for this or your perception of risk of the technology and ramp up that debt maybe is just too expensive?

I think it's probably too early to pin it down, specifically, however again one of the reasons why we want to build out Luverne first is to take the technology question off the table. So as soon as people get comfortable – 100% comfortable with the technology and we have firm long-term off-take agreements in place. Then I won’t see why we shouldn't be able to finance our plans none like ethanol plants were able to finance themselves with significant percentages of project financing.

Right. Makes sense. Well last one I think a easier question for you, but if I was to go to one of those two lucky sites in the Houston area. How would the blend be marketed to me as an individual. And then also what would be the comparative price that I would be paying per gallon for fuel that has your blend in it relative to maybe a different lucky station in the same area that doesn't? I guess just given that 350 to 430 ASP I assume on-road is at the lower end of that ASP range in marine, certainly you would pay a premium in lawn care and other applications that you've talked about, but in particular I guess is the consumer aware that they're buying something that's unique and different or is it not transparent to them?

For other gasoline fuels, it's not marketed as isobutanol or anything else, it is simply ethanol free gasoline that's high performing and that's kind of how it's done. And it's sold at a premium a significant premium over the ethanol containing gasoline. And for us we're still hanging in there at the same kind of selling price that we always thought even though it's on-road not surprised of this so far. But we'll see how it changes in the future, hope growth it does change. But so far it seems to be selling well and it's expanding. So it's looking good.

There's no fear murmuring about how ethanol is bad for your engine like there might be for marine or other things or maybe the consumers a little bit more aware. Is that fair?

Well, it's more along the lines of people have really high performance engines or old cars or classic cars or whatever and this stuff is ideal for them. And so it's a ethanol free high octane gasoline high energy, it performs well and people like it.

Perfect.

Here is a subtlety that’s important. This is an non-attainment area that means under the air quality. It's a very highly restricted area they have to have oxygen units in it. So we here's some opportunity to have an oxygenated containing fuel, ethanol free and meets all the requirements with high performance. That's why it's interesting.

Got it. That's helpful. That appreciate it.

Yes.

Thank you. [Operator Instructions] And we have a question from [indiscernible].

Hi, Pat.

Hi, there.

I was just wondering to see what Gevo has planned as to regain investor confidence. I mean there's been multiple reverse splits just trying to see what kind of plans we have planned out?

What was that. The last voice, I heard the question. I'll answer the question. Yes, basically we execute the plans, when we've been – we've gone through in the last year and a half a lot of turmoil and we scale our plant in Luverne, again we deployed some capital it's working as we expected. We're hitting the jet market the isooctane market. The isobutanol market they're all growing. We have customers who are interested. Our customers are gaining confidence in us and as we – I suspect as we continue to pin down customer contracts that ought to help investor confidence. In regarding the reverse stock split, we have to be above $1 for a certain period of – stock price over a certain period of time otherwise we run the risk of being de-listed. The safest thing for us to do, is to do a reverse split. It isn't about trying to drive up the price. So we can drive it back down again. That isn't it, it's about making sure that we maintain our market position and liquidity. So it's a – as we continue to execute I would hope that people have confidence on what's going on.

All right. Thanks Pat.

Thank you. And next we have – looks like we have no further questions at this time.

Great, thank you very much. Thanks everybody for joining us. I appreciate it. Have a good day. Bye.