Following just one day after a big win in the Supreme Court and a corporate update last week, Gevo (GEVO) announced that it intends to offer and sell, subject to market and other conditions, common stock units.
Each common stock unit will consist of one share of common stock, Series A warrants to purchase a certain number of shares of common stock and Series B warrants to purchase a certain number of shares of common stock. The units are to be sold by Gevo subject to market and other conditions in an underwritten public offering.
Gevo announced this morning (Jan 29) that it has priced the public offering. The Series A warrants will have an exercise price of $0.27 per share, and the Series B warrants will have an exercise price of $0.20 per share, be exercisable from the date of original issuance and will expire on August 3, 2015.
The gross proceeds to Gevo from this offering are expected to be approximately $6.6 million not including any future proceeds from the exercise of the warrants.
How much runway?
Not much. Although Gevo slashed costs in the past few weeks, and reduced the average monthly corporate-wide EBITDA burn rate to $1.50-1.75 million in 2015 this offering buys Gevo roughly 4 months of extra runway for its efforts and came at a cruel cost to current investors. The Gevo share price dropped after the pricing (morning of Jan 29) to $0.14 in early trading.
More detail on the offering
Gevo currently intends to use the net proceeds from the offering, excluding any future proceeds from the exercise of the warrants, to fund working capital, potential capital optimizations at its Luverne, MN facility and for other general corporate purposes.
In connection with the offering, Cowen and Company, LLC is acting as sole manager.
A shelf registration statement relating to the shares of common stock and warrants to be issued in the proposed offering was filed with the Securities and Exchange Commission (SEC) and is effective. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, these securities, nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale is not permitted.
A preliminary prospectus supplement and accompanying prospectus describing the terms of the proposed offering will be filed with the SEC.
Here’s a link to the Gevo IR site with the SCOTUS win, the corporate update and the filing.
Jim Lane is editor and publisher of Biofuels Digest where this article was originally published. Biofuels Digest is the most widely read Biofuels daily read by 14,000+ organizations. Subscribe here.