Item 1.01. Entry into a Material Definitive Agreement.
On May 5, 2023, Gevo, Inc. ("Gevo") entered into a Side Agreement ("Side
Agreement") with Axens North America, Inc. ("Axens") in connection with a Master
Framework Agreement for Ethanol to Jet Collaboration ("MFA"), dated September
22, 2021 pursuant to which Axens agreed to exclusively provide for a period
beginning on the effective date of the contract and ending on December 22, 2023
(the "Initial Term") certain engineering, license rights, catalyst supply,
technical assistance and proprietary reactor for use in certain processes
(collectively, "Services") in the conversion of ethanol to hydrocarbons fuels
via dehydration, oligomerization, and saturation in the Exclusive Field (as
defined in the MFA) and the Exclusive Territory (as defined in the MFA) for the
purpose of the production of renewable hydrocarbons, including gasoline, diesel,
and jet fuel in exchange for payment by Gevo of an annual exclusivity fee and
use of the Services. The Initial Term of the MFA is subject to automatic
extension for up to two years upon the satisfaction of certain conditions.
Should the conditions not be met then any extension of the Initial Term will not
be automatic, but subject to the written agreement of Gevo and Axens.
The Side Agreement modifies the exclusivity provisions contained in the MFA. The
parties carved-out exceptions to the Exclusive Territory in certain areas of the
Midwest for (i) an ethanol wet mill facility in Decatur, Illinois, (ii) a dry
mill in Cedar Rapids, Iowa, and (iii) a dry mill and co-generation plant in
Columbus, Nebraska ("Modified Territory"). Within the Modified Territory, Axens
is permitted to provide certain services and grant certain licenses relating to
the conversion of ethanol to hydrocarbons fuels via dehydration,
oligomerization, and saturation to Phillips 66 Company ("P66"),
Archer-Daniels-Midland Company ("ADM" and, together with P66, the "Potential
Partners"), or a joint venture entity between ADM and P66 (the "JV").
The Side Agreement became effective on May 5, 2023 and will continue with full
force and effect until the exclusivity contemplated under the MFA is suspended
or is terminated. The Side Agreement may also be terminated by Gevo (after
providing written notice) in the event that P66 and ADM fail to reach certain
development milestones, subject to a cure period. If the Side Agreement is
terminated by Gevo due to the failure of P66 and ADM to reach those certain
development milestones, then Axens shall no longer be entitled to enter into any
other agreement in reliance on the terms of Side Agreement and shall immediately
terminate all agreements between Axens and P66, ADM or the JV (except for
wind-down activities and the invoicing and payment of services rendered).
In connection with the Side Agreement, and as consideration for Gevo to share
Axens' technology with, P66 and ADM in the Modified Territory, Gevo, P66 and ADM
entered into a Technology Access Agreement, dated as of May 5, 2023 (the "TAA").
As consideration for Gevo entering into the TAA and the Side Agreement, the
Potential Partners shall cause the applicable JV to pay Gevo certain milestone
payments in connection with the development and production of the hydrocarbon
fuel expected to equal to $50 million if all milestones are achieved.
Additionally, the Potential Partners will cause the applicable JV to make
royalty payments to Gevo on such renewable hydrocarbons produced during a
certain period (subject to a cap) and described in the TAA. The royalty payments
are expected to equal at least $75 million if certain conditions and production
milestones are achieved.
If the Potential Partners determine (in their sole discretion) not to utilize
any of the Services and license the Axens processes in connection with such
facilities owned by the JV, the Potential Partners may jointly agree to
terminate the TAA by delivering written notice to Gevo, which shall be effective
thirty (30) days following delivery thereof. Pursuant to the terms of the TAA,
no payments shall be due to Gevo by or on behalf of P66, ADM, any JV or any
affiliate of P66, ADM or any JV (i) under or in connection with the TAA if, for
any or no reason, no milestone is met or (ii) for a particular milestone if, for
any or no reason, such milestone is not met.
The TAA is subject to customary covenants including restrictions on amending the
MFA and Side Agreement in a manner affecting P66 and/or ADM, restrictions on P66
and ADM from assigning or otherwise transferring the TAA (or any of the benefits
derived thereunder) and Gevo's continued compliance under the MFA.
The TAA became effective on May 5, 2023 and continues with full force and effect
unless certain development milestones have not been reached, or unless earlier
terminated as jointly determined by the Potential Partners. The TAA will also
terminate upon the occurrence of a material breach by the non-terminating party
that is not cured within 30 days following written notice or certain insolvency
events, or if the MFA is terminated or Gevo otherwise loses its exclusive rights
to the Services in the United States.
The foregoing description of the MFA, Side Agreement and TAA does not purport to
be complete and is subject to, and qualified in its entirety by, the full text
of each agreement, copies of which will be attached as exhibits to our Quarterly
Report on Form 10-Q for the quarter ended June 30, 2023.
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Item 2.02. Results of Operations and Financial Condition.
On May 10, 2023, Gevo, Inc. (the "Company") issued a press release announcing
the Company's financial results for the quarter ended March 31, 2023. A copy of
this press release is furnished as Exhibit 99.1 to this Current Report on Form
8-K and is incorporated herein by reference.
The information in this Item 2.02 shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Earnings press release, dated May 10 , 202 3
104 Cover Page Interactive Data File (Formatted as Inline XBRL)
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