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Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<h3>KEY POINTS</h3>
<div></div>
<ul>
<li>On November 8, 2022, Gevo&nbsp;announced&nbsp;its 3Q22 earnings results. The company recorded $0.3 million in revenue from the initial Renewable Natural Gas (RNG) sales, compared with $0.1 million in 3Q21. During the quarter, Gevo sold 41,791 MMBtu of RNG from its RNG project in northwest Iowa.</li>
<li>The company registered a gross loss of $3.6 million, compared with a gross loss of $3.4 million in 3Q21. Net loss was $43.8 million, including a $24.7 million impairment loss or $0.19 per share versus $14.4 million or $0.07 per share in 3Q21.</li>
<li>Gevo suspended production at its Luverne plant to focus on net-zero planning, design, and finance. Luverne was placed into care and maintenance for marketing, testing, and R&amp;D purposes. This change and the operating losses of Luverne compelled an evaluation of asset impairment. The impairment test necessitated depreciating the assets to their estimated fair value.</li>
<li>During 3Q22, the company invested and capitalized $22.5 million cash in capital projects, consisting of $15 million into the Net-Zero 1 (NZ1) project, $7.3 million into the RNG project, and approximately $0.2 million into other capital projects.</li>
<li>Gevo displayed a strong liquidity position of $500.4 million in cash, restricted cash, and other liquid investments. 2021 bonds payable (part of debt) of $67 million are related to the northwest Iowa RNG project.</li>
<li>Combined with Gevo’s equity, NZ1’s construction and commissioning will be completely funded by debt and third-party equity financing in 2023.</li>
<li>The company has revised the NZ1 annual EBITDA figure by 50% from $200 million to $300 million due to the increase in yield from the ethanol-to-SAF design and the assistance of the Inflation Reduction Act. It has also revised the total cost for the project to $850 million from $640 million (+33%) due to increased steel, equipment, and supply chain costs related to the inflationary environment.</li>
</ul>
<h2>EARNINGS SNAPSHOT</h2>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/308/599/original/image_468909728211668040528236.png?1668040530" class="editor-image img-responsive" data-smartkarma-image-id="308599"></figure>
<div class="content-remarks">
<p>Source: Company Filings 10-Q</p>
</div>
<h2>HIGHLIGHTS FROM THE QUARTER</h2>
<ul>
<li>Gevo has more than 375 million gallons per year (MGPY) of financeable sustainable aviation fuel (SAF) and hydrocarbon fuel supply agreements, representing ~$2.3 billion in expected revenue per year, inclusive of the value of environmental benefits.</li>
<li>The company recently entered into an agreement with Summit Carbon Solutions (Summit), whereby Summit is expected to safely capture, transport, and permanently store Gevo’s renewable CO2 from its NZ1 plant. This will further reduce the carbon intensity of the fuel produced at NZ1, thereby increasing the expected value of associated environmental benefits.</li>
<li>The&nbsp;US Department of Agriculture&nbsp;(USDA) selected Gevo’s Climate-Smart Farm to Flight proposal for a grant providing up to $30 million. The project aims to create critical structural climate-smart market incentives for low carbon-intensity corn and to accelerate the production of SAF to reduce the sector’s dependency on fossil-based fuels.</li>
<li>As part of the Oneworld Alliance,&nbsp;Qatar Airways&nbsp;has engaged in a new fuel sales deal with Gevo for 5 million gallons of SAF each year for five years, beginning in 2028.</li>
<li>Iberia Airlines&nbsp;also entered a new fuel sales deal with Gevo for 6 million gallons of SAF per year over five years, with fuel delivery expected to begin in 2028.</li>
<li>Gevo&nbsp;held a groundbreaking ceremony at the future site of its first commercial-scale SAF facility, NZ1, to be constructed in Lake Preston, South Dakota.</li>
<li>Gevo continues to progress on securing future SAF production sites beyond the NZ1. These future locations must have a desirable combination of attributes that allow the company to produce low-cost fuels with the lowest feasible carbon footprint.</li>
<li>The RNG project continues to ramp up production. The federal Renewable Fuel Standard (RFS) has informed Gevo that its RNG qualifies for Renewable Identification Numbers (RINs). The full extent of the available credits will begin contributing to revenue in 2023. Gevo anticipates that the RNG project will earn $16-22 million in EBITDA annually by 2023.</li>
<li>Our prior content on Gevo can be accessed&nbsp;here.</li>
</ul>
<h2>OUR PREVIOUS RESEARCH CONTENT</h2>
<h2>Initiation of Coverage Report</h2>
<p>08/23/21&nbsp;Flying High in the New Carbon Economy with Commercial Scale Renewable Jet Fuel and Gasoline</p>
<p>Extensive coverage on Gevo, Inc. assessing key opportunities, obstacles, technology, industry, risks, competition, financials, management profiles, etc.</p>
<h2>Management Series Summary</h2>
<p>12/15/21&nbsp;Key Developments In Carbohydrate-to-Hydrocarbon Production and Net-Zero Project with CEO Dr. Patrick Gruber</p>
<p>Dr. Patrick Gruber talks about the 'Billion Gallon' initiative and the importance of the GREET model to account for emissions across the lifecycle.</p>
<h2>Update Note Summary</h2>
<p>08/09/22&nbsp;2Q22 Results: SAF Sales Agreements Worth $2.1 Billion Signed with Multiple Airlines; Company Strengthens Balance Sheet with Equity Finance</p>
<p>The company recorded $0.1 million in revenue compared with $0.3 million in 2Q21. The decrease was due to the Luverne facility being run on an as-needed basis for the company's development initiatives.</p>
<p>06/07/2022&nbsp;New Strategic Partnership with Google Cloud to Measure and Verify the Carbon Intensity of Biofuels Across Supply Chain Using Verity Tracking</p>
<p>Gevo announced that it had signed a partnership agreement with Google Cloud to evaluate and verify the efficacy of next-generation biofuels throughout the supply chain using full lifecycle data tracking for sustainability.</p>
<p>05/10/2022&nbsp;1Q22 Results: RNG Plant to Kickstart Revenue; Key Tie-Ups with Top Airlines to Supply SAF; Net-Zero 1 Project on Track</p>
<p>Gevo announced its 1Q22 earnings results. While Gevo is in the pre-revenue stage, it expects the bulk of revenues to begin in late 2022, mostly from its RNG factory.</p>
<p>02/28/2022&nbsp;4Q21 Results: RNG Plant to Kickstart Revenue Stream in 2022; Net-Zero 1 Update</p>
<p>The company is still in a pre-revenue stage; however, Gevo expects to start generating biogas revenues from its RNG plant in 2Q22, along with the sale of credits in the second half of 2022.</p>
<h2>COMPANY OVERVIEW</h2>
<p>Gevo’s mission is to transform renewable energy and carbon into de-fossilized, energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for&nbsp;drop-in transportation fuels&nbsp;such as gasoline, jet fuel, and diesel fuel, that when burned, have the potential to yield net-zero greenhouse gas emissions when measured across the entire lifecycle of the products. Gevo uses low-carbon renewable resource-based carbohydrates as raw materials and intends to use renewable electricity and renewable natural gas in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared with standard petroleum fossil-based fuels across their lifecycle). Gevo’s products perform as well as or better than traditional fossil-based fuels in infrastructure and engines but substantially reduce greenhouse gas emissions. The company also produces renewable chemicals with a negative greenhouse gas profile. Gevo’s technology enables certain plastics, such as polyester, to be made with more sustainable ingredients.</p>
<h2>Net-Zero Projects</h2>
<p>Gevo has developed a proprietary technology for producing hydrocarbons from renewable feedstocks (residual carbohydrates and starches). This is accomplished using two pieces of proprietary technology: a yeast designed to make isobutanol and a product-recovery technology that continuously removes isobutanol as it is formed. Isobutanol is a building block for converting high-value liquid hydrocarbons such as renewable jet fuel and gasoline. Gevo’s strategy is centered around constructing net-zero projects capable of producing high-value liquid hydrocarbons that are carbon neutral or carbon negative (when entrained in a polymer). The plants’ resulting carbon scores consider the entire supply chain and production process to determine the carbon impact. Each plant is expected to produce approximately 62 MGPY in hydrocarbons. Based on the company’s current modeling assumptions, it believes that the EBITDA for a net-zero plant should be more than $300 million per year once operating. Currently, the company estimates nearly $30 billion in its offtake pipeline, creating significant scale-up opportunities.</p>
<h2>Products</h2>
<p>Sustainable Aviation Fuel (SAF):&nbsp;To reduce the environmental impact of aviation, sustainable fuels are critical and have an immediate impact on the carbon footprint. Gevo’s renewable jet fuels can be used in today’s aircraft and are one of the few non-fossil-based alternative jet fuels available for commercial use. Gevo supplies small amounts of aviation fuel commercially, primarily for business aviation.</p>
<p>Isooctane &amp; Renewable Gasoline:&nbsp;Isooctane is a pure form of gasoline and is, in fact, an octane. Sometimes referred to as renewable alkylate, the Gevo product can be blended directly with fossil-based gasoline up to 60% while staying within the specification for gasoline. The benefit is higher octane gasoline, enhanced energy content and efficiency, and no negative engine maintenance or longevity impacts while achieving instant GHG reduction on a net carbon basis at the tailpipe. By blending isooctane with renewable naphtha and alcohols (such as isobutanol or ethanol), it is possible to make 100% renewable, low GHG footprint gasoline. Gevo is supplying isooctane to the EU automobile racing circuit, which is used as the primary ingredient for high-end racing fuels.</p>
<p>High-Protein Animal Feed:&nbsp;When Gevo uses sustainable corn as a feedstock, nearly eight pounds of high-protein animal feed is produced for every gallon of fuel. This valuable co-product is then sold into the market, offsetting the production cost of the hydrocarbons and driving down the carbon score.</p>
<p>Renewable Natural Gas (RNG):&nbsp;In January 2022, the company&nbsp;announced&nbsp;the successful completion of its RNG plant on time and within budget. It is designed to produce 355 billion BTUs of RNG, which BP will sell as a transportation fuel to the California market. Gevo expects the RNG Project to generate ~$16-22 million EBITDA annually by 2023.</p>
<p>Other Products:&nbsp;Through the same isobutanol production processes employed with its Net-Zero program, Gevo can also produce&nbsp;renewable diesel, salable finished&nbsp;isobutanol&nbsp;(a value-added oxygenated blendstock and ingredient for chemical products and materials),&nbsp;isobutylene&nbsp;(the key ingredient for synthetic rubber),&nbsp;isooctane&nbsp;(the key ingredient for making high-quality gasoline), isooctene (the key enabling building block for fully renewable low carbon polyester), and renewable propylene.</p>
<h3>DISCLOSURES</h3>
<div></div>
<p>Water Tower Research (“WTR”) is a professional publisher of investment research reports on public companies and, to a lesser extent, private firms (“the Companies”). WTR provides investor-focused content and digital distribution strategies designed to help companies communicate with investors.<br><br>WTR is not a registered investment adviser or a broker/dealer nor does WTR provide investment banking services. WTR operates as an exempt investment adviser under the so called “publishers’ exemption” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940. WTR does not provide investment ratings / recommendations or price targets on the companies it reports on. Readers are advised that the research reports are published and provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities or the rendering of investment advice. The information provided in this report should not be construed in any manner whatsoever as personalized advice. All users and readers of WTR’s reports are cautioned to consult their own independent financial, tax and legal advisors prior to purchasing or selling securities.<br><br>Shawn Severson, who is the writer of this report, covers the BioEconomy, Emerging Growth &amp; Special Situations, and ClimateTech &amp; Sustainable Investing sectors for WTR. Mr. Severson and members of his household have no personal or business-related relationship to the subject company other than providing digital content and any ancillary services WTR may offer.<br><br>Unless otherwise indicated, WTR intends to provide continuing coverage of the covered companies. WTR will notify its readers through website postings or other appropriate means if WTR determines to terminate coverage of any of the companies covered.<br><br>WTR is being compensated for its research by the company which is the subject of this report. WTR receives no more than a maximum of $10,500 per month from a given client and is required to have at least a 6-month commitment. None of the earned fees are contingent on, and WTR’s client agreements are not cancellable for the content of its reports. WTR does not accept any compensation in the form of warrants or stock options or other equity instruments that could increase in value based on positive coverage in its reports.<br><br>WTR or an affiliate may seek to receive compensation for non-research services to covered companies, such as charges for presenting at sponsored investor conferences, distributing press releases, advising on investor relations and broader corporate communications and public relations strategies as well as performing certain other related services (“Ancillary Services”). The companies that WTR covers in our research are not required to purchase or use Ancillary Services that WTR or an affiliate might offer to clients.<br><br>The manner of WTR’s research compensation and Ancillary Services to covered companies raise actual and perceived conflicts of interest. WTR is committed to manage those conflicts to protect its reputation and the objectivity of employees/analysts by adhering to strictly-written compliance guidelines.<br><br>The views and analyses included in our research reports are based on current public information that we consider to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, timeliness, or correctness. Neither we nor our analysts, directors, officers, employees, representatives, independent contractors, agents or affiliate shall be liable for any omissions, errors or inaccuracies, regardless of cause, foreseeability or the lack of timeliness of, or any delay or interruptions in the transmission of our reports to content users. This lack of liability extends to direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, losses, lost income, lost profit or opportunity costs.<br><br>All investment information contained herein should be independently verified by the reader or user of this report. For additional information, all readers of this report are encouraged to visit WTR’s website www.watertowerresearch.com.</p>

KEY POINTS


On November 8, 2022, Gevo&nbsp;announced&nbsp;its 3Q22 earnings results. The company recorded $0.3 million in revenue from the initial Renewable Natural Gas (RNG) sales, compared with $0.1 million in 3Q21. During the quarter, Gevo sold 41,791 MMBtu of RNG from its RNG project in northwest Iowa.
The company registered a gross loss of $3.6 million, compared with a gross loss of $3.4 million in 3Q21. Net loss was $43.8 million, including a $24.7 million impairment loss or $0.19 per share versus $14.4 million or $0.07 per share in 3Q21.
Gevo suspended production at its Luverne plant to focus on net-zero planning, design, and finance. Luverne was placed into care and maintenance for marketing, testing, and R&amp;D purposes. This change and the operating losses of Luverne compelled an evaluation of asset impairment. The impairment test necessitated depreciating the assets to their estimated fair value.
During 3Q22, the company invested and capitalized $22.5 million cash in capital projects, consisting of $15 million into the Net-Zero 1 (NZ1) project, $7.3 million into the RNG project, and approximately $0.2 million into other capital projects.
Gevo displayed a strong liquidity position of $500.4 million in cash, restricted cash, and other liquid investments. 2021 bonds payable (part of debt) of $67 million are related to the northwest Iowa RNG project.
Combined with Gevo’s equity, NZ1’s construction and commissioning will be completely funded by debt and third-party equity financing in 2023.
The company has revised the NZ1 annual EBITDA figure by 50% from $200 million to $300 million due to the increase in yield from the ethanol-to-SAF design and the assistance of the Inflation Reduction Act. It has also revised the total cost for the project to $850 million from $640 million (+33%) due to increased steel, equipment, and supply chain costs related to the inflationary environment.

EARNINGS SNAPSHOT


Source: Company Filings 10-Q

HIGHLIGHTS FROM THE QUARTER

Gevo has more than 375 million gallons per year (MGPY) of financeable sustainable aviation fuel (SAF) and hydrocarbon fuel supply agreements, representing ~$2.3 billion in expected revenue per year, inclusive of the value of environmental benefits.
The company recently entered into an agreement with Summit Carbon Solutions (Summit), whereby Summit is expected to safely capture, transport, and permanently store Gevo’s renewable CO2 from its NZ1 plant. This will further reduce the carbon intensity of the fuel produced at NZ1, thereby increasing the expected value of associated environmental benefits.
The&nbsp;US Department of Agriculture&nbsp;(USDA) selected Gevo’s Climate-Smart Farm to Flight proposal for a grant providing up to $30 million. The project aims to create critical structural climate-smart market incentives for low carbon-intensity corn and to accelerate the production of SAF to reduce the sector’s dependency on fossil-based fuels.
As part of the Oneworld Alliance,&nbsp;Qatar Airways&nbsp;has engaged in a new fuel sales deal with Gevo for 5 million gallons of SAF each year for five years, beginning in 2028.
Iberia Airlines&nbsp;also entered a new fuel sales deal with Gevo for 6 million gallons of SAF per year over five years, with fuel delivery expected to begin in 2028.
Gevo&nbsp;held a groundbreaking ceremony at the future site of its first commercial-scale SAF facility, NZ1, to be constructed in Lake Preston, South Dakota.
Gevo continues to progress on securing future SAF production sites beyond the NZ1. These future locations must have a desirable combination of attributes that allow the company to produce low-cost fuels with the lowest feasible carbon footprint.
The RNG project continues to ramp up production. The federal Renewable Fuel Standard (RFS) has informed Gevo that its RNG qualifies for Renewable Identification Numbers (RINs). The full extent of the available credits will begin contributing to revenue in 2023. Gevo anticipates that the RNG project will earn $16-22 million in EBITDA annually by 2023.
Our prior content on Gevo can be accessed&nbsp;here.

OUR PREVIOUS RESEARCH CONTENT
Initiation of Coverage Report
08/23/21&nbsp;Flying High in the New Carbon Economy with Commercial Scale Renewable Jet Fuel and Gasoline
Extensive coverage on Gevo, Inc. assessing key opportunities, obstacles, technology, industry, risks, competition, financials, management profiles, etc.
Management Series Summary
12/15/21&nbsp;Key Developments In Carbohydrate-to-Hydrocarbon Production and Net-Zero Project with CEO Dr. Patrick Gruber
Dr. Patrick Gruber talks about the 'Billion Gallon' initiative and the importance of the GREET model to account for emissions across the lifecycle.
Update Note Summary
08/09/22&nbsp;2Q22 Results: SAF Sales Agreements Worth $2.1 Billion Signed with Multiple Airlines; Company Strengthens Balance Sheet with Equity Finance
The company recorded $0.1 million in revenue compared with $0.3 million in 2Q21. The decrease was due to the Luverne facility being run on an as-needed basis for the company's development initiatives.
06/07/2022&nbsp;New Strategic Partnership with Google Cloud to Measure and Verify the Carbon Intensity of Biofuels Across Supply Chain Using Verity Tracking
Gevo announced that it had signed a partnership agreement with Google Cloud to evaluate and verify the efficacy of next-generation biofuels throughout the supply chain using full lifecycle data tracking for sustainability.
05/10/2022&nbsp;1Q22 Results: RNG Plant to Kickstart Revenue; Key Tie-Ups with Top Airlines to Supply SAF; Net-Zero 1 Project on Track
Gevo announced its 1Q22 earnings results. While Gevo is in the pre-revenue stage, it expects the bulk of revenues to begin in late 2022, mostly from its RNG factory.
02/28/2022&nbsp;4Q21 Results: RNG Plant to Kickstart Revenue Stream in 2022; Net-Zero 1 Update
The company is still in a pre-revenue stage; however, Gevo expects to start generating biogas revenues from its RNG plant in 2Q22, along with the sale of credits in the second half of 2022.
COMPANY OVERVIEW
Gevo’s mission is to transform renewable energy and carbon into de-fossilized, energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for&nbsp;drop-in transportation fuels&nbsp;such as gasoline, jet fuel, and diesel fuel, that when burned, have the potential to yield net-zero greenhouse gas emissions when measured across the entire lifecycle of the products. Gevo uses low-carbon renewable resource-based carbohydrates as raw materials and intends to use renewable electricity and renewable natural gas in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared with standard petroleum fossil-based fuels across their lifecycle). Gevo’s products perform as well as or better than traditional fossil-based fuels in infrastructure and engines but substantially reduce greenhouse gas emissions. The company also produces renewable chemicals with a negative greenhouse gas profile. Gevo’s technology enables certain plastics, such as polyester, to be made with more sustainable ingredients.
Net-Zero Projects
Gevo has developed a proprietary technology for producing hydrocarbons from renewable feedstocks (residual carbohydrates and starches). This is accomplished using two pieces of proprietary technology: a yeast designed to make isobutanol and a product-recovery technology that continuously removes isobutanol as it is formed. Isobutanol is a building block for converting high-value liquid hydrocarbons such as renewable jet fuel and gasoline. Gevo’s strategy is centered around constructing net-zero projects capable of producing high-value liquid hydrocarbons that are carbon neutral or carbon negative (when entrained in a polymer). The plants’ resulting carbon scores consider the entire supply chain and production process to determine the carbon impact. Each plant is expected to produce approximately 62 MGPY in hydrocarbons. Based on the company’s current modeling assumptions, it believes that the EBITDA for a net-zero plant should be more than $300 million per year once operating. Currently, the company estimates nearly $30 billion in its offtake pipeline, creating significant scale-up opportunities.
Products
Sustainable Aviation Fuel (SAF):&nbsp;To reduce the environmental impact of aviation, sustainable fuels are critical and have an immediate impact on the carbon footprint. Gevo’s renewable jet fuels can be used in today’s aircraft and are one of the few non-fossil-based alternative jet fuels available for commercial use. Gevo supplies small amounts of aviation fuel commercially, primarily for business aviation.
Isooctane &amp; Renewable Gasoline:&nbsp;Isooctane is a pure form of gasoline and is, in fact, an octane. Sometimes referred to as renewable alkylate, the Gevo product can be blended directly with fossil-based gasoline up to 60% while staying within the specification for gasoline. The benefit is higher octane gasoline, enhanced energy content and efficiency, and no negative engine maintenance or longevity impacts while achieving instant GHG reduction on a net carbon basis at the tailpipe. By blending isooctane with renewable naphtha and alcohols (such as isobutanol or ethanol), it is possible to make 100% renewable, low GHG footprint gasoline. Gevo is supplying isooctane to the EU automobile racing circuit, which is used as the primary ingredient for high-end racing fuels.
High-Protein Animal Feed:&nbsp;When Gevo uses sustainable corn as a feedstock, nearly eight pounds of high-protein animal feed is produced for every gallon of fuel. This valuable co-product is then sold into the market, offsetting the production cost of the hydrocarbons and driving down the carbon score.
Renewable Natural Gas (RNG):&nbsp;In January 2022, the company&nbsp;announced&nbsp;the successful completion of its RNG plant on time and within budget. It is designed to produce 355 billion BTUs of RNG, which BP will sell as a transportation fuel to the California market. Gevo expects the RNG Project to generate ~$16-22 million EBITDA annually by 2023.
Other Products:&nbsp;Through the same isobutanol production processes employed with its Net-Zero program, Gevo can also produce&nbsp;renewable diesel, salable finished&nbsp;isobutanol&nbsp;(a value-added oxygenated blendstock and ingredient for chemical products and materials),&nbsp;isobutylene&nbsp;(the key ingredient for synthetic rubber),&nbsp;isooctane&nbsp;(the key ingredient for making high-quality gasoline), isooctene (the key enabling building block for fully renewable low carbon polyester), and renewable propylene.
DISCLOSURES

Water Tower Research (“WTR”) is a professional publisher of investment research reports on public companies and, to a lesser extent, private firms (“the Companies”). WTR provides investor-focused content and digital distribution strategies designed to help companies communicate with investors.  WTR is not a registered investment adviser or a broker/dealer nor does WTR provide investment banking services. WTR operates as an exempt investment adviser under the so called “publishers’ exemption” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940. WTR does not provide investment ratings / recommendations or price targets on the companies it reports on. Readers are advised that the research reports are published and provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities or the rendering of investment advice. The information provided in this report should not be construed in any manner whatsoever as personalized advice. All users and readers of WTR’s reports are cautioned to consult their own independent financial, tax and legal advisors prior to purchasing or selling securities.  Shawn Severson, who is the writer of this report, covers the BioEconomy, Emerging Growth &amp; Special Situations, and ClimateTech &amp; Sustainable Investing sectors for WTR. Mr. Severson and members of his household have no personal or business-related relationship to the subject company other than providing digital content and any ancillary services WTR may offer.  Unless otherwise indicated, WTR intends to provide continuing coverage of the covered companies. WTR will notify its readers through website postings or other appropriate means if WTR determines to terminate coverage of any of the companies covered.  WTR is being compensated for its research by the company which is the subject of this report. WTR receives no more than a maximum of $10,500 per month from a given client and is required to have at least a 6-month commitment. None of the earned fees are contingent on, and WTR’s client agreements are not cancellable for the content of its reports. WTR does not accept any compensation in the form of warrants or stock options or other equity instruments that could increase in value based on positive coverage in its reports.  WTR or an affiliate may seek to receive compensation for non-research services to covered companies, such as charges for presenting at sponsored investor conferences, distributing press releases, advising on investor relations and broader corporate communications and public relations strategies as well as performing certain other related services (“Ancillary Services”). The companies that WTR covers in our research are not required to purchase or use Ancillary Services that WTR or an affiliate might offer to clients.  The manner of WTR’s research compensation and Ancillary Services to covered companies raise actual and perceived conflicts of interest. WTR is committed to manage those conflicts to protect its reputation and the objectivity of employees/analysts by adhering to strictly-written compliance guidelines.  The views and analyses included in our research reports are based on current public information that we consider to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, timeliness, or correctness. Neither we nor our analysts, directors, officers, employees, representatives, independent contractors, agents or affiliate shall be liable for any omissions, errors or inaccuracies, regardless of cause, foreseeability or the lack of timeliness of, or any delay or interruptions in the transmission of our reports to content users. This lack of liability extends to direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, losses, lost income, lost profit or opportunity costs.  All investment information contained herein should be independently verified by the reader or user of this report. For additional information, all readers of this report are encouraged to visit WTR’s website www.watertowerresearch.com.

3Q22 Results: RNG Plant Starts Contributing to Revenue; Net Zero-1 Cost and Annual EBITDA Revised; More SAF Deals Announced