Gevo, Inc. (GEVO) CEO Patrick Gruber on Q3 2019 Results - Earnings Call Transcript

Nov. 12, 2019 7:42 PM ETGevo, Inc. (GEVO)2 Comments
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Gevo, Inc. (NASDAQ:GEVO) Q3 2019 Earnings Conference Call November 12, 2019 4:30 PM ET

Company Participants

Geoffrey T. Williams Jr. - General Counsel & Secretary

Patrick Gruber - Chief Executive Officer

Carolyn Romero - Vice President Controller & Principal Accounting Officer

Conference Call Participants

Amit Dayal - H.C. Wainwright


Welcome to the Gevo Incorporated Q3 2019 Earnings Conference Call. My name is Adrian, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will be conducting a question-and-answer session. [Operator Instructions] Please note this conference is being recorded.

I'll now turn the call over to Geoffrey T. Williams Jr. Geoffrey T. Williams Jr., you may begin.

Geoffrey T. Williams Jr.

Good afternoon, everyone and thank you for joining Gevo's Third Quarter 2019 Earnings Conference Call. I would like to start by introducing today's participants from the company. With us today is Patrick Gruber, Gevo's Chief Executive Officer; and Carolyn Romero, Gevo's Vice President Controller and Principal Accounting Officer.

Earlier today, we issued a press release that outlines the topics we plan to discuss. A copy of this press release is available on our website at I would like to remind our listeners that this conference call is open to the media and that 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 this 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 is 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 2019 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 for the year ended December 31, 2018, which was filed with the U.S Securities and Exchange Commission or SEC and in subsequent reports and other filing made with the SEC by Gevo, including Gevo's 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 obligations 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 discussion of Gevo's business developments. Carolyn will then review Gevo's financial results for the third quarter of 2019. Following the presentation, we will open-up the call for questions.

I'll now turn the call over to Pat.

Patrick Gruber

Thanks, Geoff. Now you've already seen what we reported today in the press release and the takeaway is that we're making a lot of progress. Rather than rehashing the press release, I'll talk about what it means and that is really the path to the profitability and growth of this company.

Now, we believe that we can become profitable or close to it as a company by the end of 2021. If we are successful in improving the carbon footprint of our Luverne site and selling low carbon ethanol to California market under the low carbon fuel standard program. We'd also be deploying a one million gallon per year hydrocarbon plant that produces jet fuel isooctane and capturing some value from the RNG projects renewable natural gas projects by selling to RNG partners in California or using the RNG for processed fuel at our Luverne Facility.

Now the cash flows from these projects would be expected to have potential to offset the cost inherent in development and mainstream low-carbon jet fuel gasoline and diesel fuel businesses that have the potential to grow very, very large. It takes a pretty good development budget a lot of people to continue to do the market development and commercialization to get this to be a really big business.

Now, what I like is that, we're able to do these projects and identify them, but with the combination of the way in renewable natural gas, low-carbon ethanol generates a lot of cash flow. The one million-gallon hydrocarbon plant would generate positive cash flow and help produce the products that establish the supply chains. It's not about proving a technology, developing a technology it's all about making the market rate accept volumes that are order of magnitude greater. The time line for that one million gallon hydrocarbon plant would be about 12 months after its financing and it'd be expected to come online in the first part of 2021.

Now, we expect the renewable natural gas projects to come online and be qualified for California low-carbon fuel standard by the end of 2020 or early 2021. And we'd expect them to start generating meaningful cash flows through a combination of either selling to a pipeline or taking it to the plant, and capturing value of low-carbon ethanol in 2021

Now, it's worth reemphasizing that it's not our strategic intent to simply be a low-carbon ethanol supplier in the long run. Now, this instead is a means to generate cash in the near term while we build-out our major Luverne expansion.

Now in support of our -- these initial levers around decarbonizing our site low-carbon ethanol and this one million gallon hydrocarbon plant, here's a list of things that we've accomplished. In July of 2019, the company entered into an agreement with DDL that's the anaerobic digestion technology company. This is going to -- those digesters will be installed at dairy farms near the Luverne Facility.

We signed definitive agreements with one dairy and we will soon close with a couple of others. This will be to develop anaerobic digesters at their sites. This is all about getting that manure based renewable natural gas on a path to come to our plant and give us the optionality to put it to a pipeline as well. That's a good business. We need it for the decarbonization of our site. It's the natural gas for petroleum that gives us some of our biggest footprint contributions. We want to get rid of those.

We've already announced we've secured our wind project. The wind powers are going up, and they'll supply our electricity needs, but in essence take us off the grid in – although, we'll still be connected to it, it'll offset our fossil-based electricity and reduce our footprint. And of course all of this matters and that it continues to reduce our carbon index. Now, it shouldn't be lost on anyone that we put $1.5 million into this project. Others put in the rest of the money more than $7 million, we believe in our business.

Now, these low-carbon projects I just listed, give us a good carbon score for use in California. And that means that we could make good margin for our ethanol by selling it to California. Now, that's different than the ethanol margins at the commodity level that are done broadly. As you know, this year they've been terrible and that we project to be terrible in the future.

So, even if they remain terrible at the broad ethanol market commodity pricing by decarbonizing it, lowering the CI score, that adds margin potential by selling it into California, even if the margins at the normal ethanol business stick. Now, on the other hand, just suppose that the ethanol margins recover at the commodity level, well good, that's an upside for us. And that will have potential.

Now, regarding the one million gallon hydrocarbon plant Haltermann Carless will be taking the isooctane through the -- for the renewable gasoline. We had good pricing from them. There is all about developing the market further making a good landing zone and we go to orders of magnitude larger quantities.

Avfuel Air TOTAL and now another airline will be taking the jet fuel that comes from that one million gallon plant. Now the revenue from this one million gallon plant is expected to be about $15 million per year and contribute several million dollars of positive EBITDA for our business.

Even planning for zero margin commodity ethanol between the low CI projects, which include biogas and wind power that combined with the EBITDA of one million gallon hydrocarbon plant, I expect and can see a line of sight to about $20 million of EBITDA by the end of 2020. That's pretty good. It would make us profitable. And this -- all this of course is based on today's assumption and what I can see and what the values are.

Now in 2020, we still expect to be negative in EBITDA, but it's a clear line of sight as to how we get to be profitable. It's all about the financing and executing of these projects. There are lots of players who want to participate with us. But the low carbon ethanol in the small hydrocarbon plant that is just the first step of our strategic vision.

What we intend is to make it sell renewable hydrocarbons, that's jet fuel and gasoline, and get them on a growth track for many tens of millions of gallons in the relatively near term. Right now based on what Tim Cesarek, our Chief Commercial Officer has done. He's achieved -- the offtake agreements that are already in hand and the LOIs that we use, things are looking pretty good and it's changed from where we've been before.

For perspective now in what we need to accomplish, the minimum size of plant that we want to build is eight million to 10 million gallons per year of hydrocarbons. This is really gets us on a place that's decent in economy of scale curve where we can spread our fixed costs. Bigger plant would be better. And it's interesting that looks like we could be on a track for that. We'll have to see what we close and when and how we want to accomplish it. And we intend to close on these additional contracts resulting in offtake agreements. They'd probably be between -- we can see 10 million to 30 million gallons per year or more.

Here's a summary of where we are. Haltermann Carles, Avfuel, Air TOTAL, the city of Seattle and other airline partners add up to about 6 million to 7 million gallons per year. That's an increase of what I've reported before and that accounts for more than 50% of the minimum of what we want our capacity to be. These are all attractive pricing good offtake agreements.

Based on the MOUs and LOIs that we have in place, it adds up to more than 50 million gallons per year. And these are across -- people across the value chain major fuel suppliers and customers. We expect to close these contracts during the fourth quarter of 2019 and the first quarter of 2020. They've made progress, it's -- we are asking customers to put up their balance sheets to back the take-or-pay offtake.

This takes some time, because it's a serious commitment that they're making. It's not just as simple as oh yes, I'll buy it if you make it. No, no. This is like, no really. If we make it you will buy it and pay us. That's the kind of agreements that we're shooting for here. And that these people have agreed to at least in the MOU, LOI stage.

Now the revenue -- if we did this, the revenue from a build-out of Luverne would be something on the order of $100 million to $200 million depending upon how big we build. Once we have the volumes and pricing signed in definitive contracts, we expect to arrange financing for the build-out of the major expansion of Luverne. Now regarding the question of where will all this money come from to build-out the big plant at Luverne.

We are working to set our plant up -- our plant expansions up as projects and we will -- we appeal to project financiers. We know that because we've already engaged several players. We have term sheets from them and these cut across people who have -- are strategic-type players to project financiers equity funds and they are anxiously looking over our shoulders as we complete these offtake agreements.

The key question has been what is that price and volume for tens of millions of gallons of offtake. That's been the unresolved question, but we're getting that answered and we see it reflected in where we are in the marketplace with these potential customers and what they've agreed to in pricing in these LOIs and MOUs. The project financiers have given us term sheets to provide the equity and our debt that we need to build-out our large capacity. We're sorting through these options working to make sure we have a strong cash flow that would come back to the parent Gevo Inc.

Now as we get on the growth track, we recognize that our business ultimately is expected to take the form of a market development and licensing business. This is beyond Luverne. So in parallel to what we are doing focused on Luverne, we will be moving forward on licensing in other parts of the world. We expect to continue in India first with Praj and then with other partners. And we have been progressing an additional set of licensing agreements focused on hydrocarbons from molasses sugar and rice drop and we have other discussions that are now kicked off in various parts of the world.

And in fact, we've opened up discussions in South America. And this of course in addition to EU ones that I've reported before, but also Australia, Southeast Asia and locations in the U.S. Everyone has the same question, what price leads to large volume. When does this business grow really, really big? And I think we're about to answer that question over the next few months, at least for the initial steps for growth and I think that with the volumes that Tim's talking about, it's going to be quite interesting.

Now regarding ethanol revenue and margin in the current state of affairs, it's extremely frustrating and irritating. We have been operating our plant so that when the margins go negative in ethanol, we stop grinding corn. So we have less ethanol volume, hence less ethanol revenue, it's irritating for me as a CEO that people focus on that in any way, because it's not the right metric versus all about what we accomplished in the marketplace regarding the growth of our company.

For commodity ethanol, because we're going to take the conservative approach, we're going to plan for zero contribution margins next year too. Hopefully, the analysts pick up on this, understand it and are crystal clear going forward. And then we really can work on the upside. Now our focus is to drive down that carbon score at the plant, so we can capture margin from selling it to California, Oregon or one of the other low-carbon regions.

We will stop grinding for next year too, if the ethanol margins go negative. So we would -- likely will run at less than 20 million gallons a year of ethanol. We'll just have to see what happens. We can't predict the volumes or revenue accurately from that ethanol plant. That's what drives our business. It doesn't define our business.

So, hopefully the macro environment will change, the ethanol margins change and we'll have some upside here. And it will be great. But you know what, that's not going to define us. It's not what we're about.

We're going to do the hydrocarbon business, the isobutanol drive the carbon down, on the ethanol and capture that margin. We're going to change this game to very low carbon, advanced biofuels, that's the jet fuel, the gasoline and ultimately diesel.

Now, I'll turn this call over to Carolyn, who's going to take us through the financials. Carolyn?

Carolyn Romero

Thank you, Pat. Gevo reported revenue in the third quarter of 2019 of $6.1 million, as compared to the $8.6 million in the same period in 2018. Cost of goods sold was $9.9 million in the third quarter of 2019, versus $10.6 million in the same period in 2018.

Cost of goods sold included approximately $8.3 million associated, with the production of ethanol, isobutanol, and related products and approximately $1.6 million, in depreciation expense. Gross loss was $3.8 million for the third quarter of 2019, versus $2.1 million for the third quarter 2018.

Research and development expense, decreased by $0.1 million during the third quarter in 2019, compared with the same period in 2018, due primarily to a decrease in costs associated with the South Hampton facility, partially offset by an increase in, personnel and consulting expenses.

Selling, general and administrative expense increased by $0.2 million during the third quarter of 2019, compared with the same period in 2018, due primarily to increase in personal, consulting and investor relation cost, partially offset by decrease in professional fees.

Within total operating expenses for the third quarter of 2019, we reported approximately $0.1 million for non-cash stock-based compensation. For the third quarter of 2019, we reported a loss from operations of $8.0 million, compared to $6.1 million for the same period in 2018.

In the third quarter of 2019, our cash EBITDA loss, a non-GAAP measure which is calculated by adding back, depreciation and non-cash stock-based compensation to GAAP loss from operations, was $5.8 million, compared to $4.2 million in the same quarter of 2018.

Interest expense for the third quarter of 2019 was $0.6 million, a slight decrease compared to the same period in 2018. For the third quarter of 2019, we reported a net loss of $8.6 million or a loss of 0.66 per share, that's $0.66 per share, based on weighted average shares outstanding of 12,968,265 million shares. This compares to a loss of $6.5 million, in the third quarter of 2018 or a loss of $0.85 per share.

In the third quarter of 2019, Gevo recognized a net non-cash loss of $2000, due to the changes in fair value of certain of our financial instruments such as warrants and embedded derivatives.

Adding back these non-cash gains, resulted in a non-GAAP adjusted net loss of $8.6 million, in the third quarter of 2019, or a non-GAAP adjusted net loss per share of $0.66.

This compares to a non-GAAP adjusted net loss of $6.9 million in the third quarter of 2018 or a non-GAAP adjusted net loss per share of $0.85. Having a stronger balance sheet is important to moving our business forward, developing and growing our business.

With that, I'd like to thank all of the shareholders for their continued interest and support in Gevo. Let's open the call for questions, Operator?

Question-and-Answer Session


Thank you. [Operator Instructions]. And our first question comes from Amit Dayal from H.C. Wainwright. Your line is open.

Amit Dayal

Good afternoon. Thank you for taking my question.

Patrick Gruber

Hey, Amit.

Amit Dayal

Pat so just to begin with this hydrocarbon side of the story?

Patrick Gruber


Amit Dayal

Yes. Hello?

Patrick Gruber

Just a second. My folk just sent me an e-mail handed me a message that said that in our projections, it should be 2021 where we have -- we expect to see something on the order of that $20 million kind of a number. That's when it's got the potential. I misspoke and said 2020 the second time I mentioned it in my call. So, sorry. Okay. Yeah.

Amit Dayal

Got it. Understood. Yes. So, with respect to the hydrocarbon side of the story. How long before you secure the remainder, I know you pointed out you have roughly $6 million to $7 million of the $10 million lower end of the range you're targeting. So just wondering how long before you potentially secure sort of the minimum you need to move on to the next steps.

And then once you get the -- what can we expect to take place in terms of just moving on to the build-out, et cetera? Just some color on what the milestones that will -- or how the milestones will play out if you will for that same story?

Patrick Gruber

Sure. So what we have is LOIs and MOUs that are up near that if you added them all up they do about 50 million gallons and they're all pretty decent pricing for the most part. So what we'll have to do is figure out how big we're going to build our plant and it's getting to be of an interesting size.

Now the importance of this and the big question that's been out there is, what is that pricing really. And it has to be something that people can see for the long run, it has to get past all the chief executives, financial officers downstream of us. And it looks like we've got those parts worked out we're down to the final details of contracts. I'd expect to have those done this quarter and next. And we -- the size of Luverne plant could be anywhere from 10 million gallons to 30 million gallons.

Now Tim has been busy securing these contracts. If it turns up with 40 million and 50 million gallons it might even be that we have to do a second site. I don't know yet. We'll see. It's pretty interesting. I think the thing that's the bellwether for me and I'm pretty happy is that our pricing seems to work.

Now when we have a smaller plant like a 10 million gallon plant, obviously, our cost of production would be higher than it would be if I had a 20 million gallon plant or a three million gallon plant, because it's the same number of people to run that plan. So my fixed costs would be spread out a bit more.

So, key for us, how many gallons, how big a plant? We have project finance people who have already under secrecy agreements, we already have term sheets, we already have people who want to play with both the equity and the debt. Now remember this -- think of this as project. We'll be setting this Luverne build up -- build-out as a project.

And then I think the trip point is having those contracts done. So everyone can see what that pricing looks like. And then it's a matter of arranging the financing and that would be the second milestone is getting those people signed up on definitive deals.

Some of these can be quite large because of the build outs we're talking about. We're trying to do the financing in a way that's most minimizing for dilution as we possibly can. That's how we're thinking about it obviously. And hence the project approach. We see that as key for going forth.

So what I would see is that this quarter maybe it goes into the next year or first quarter and I don't think -- we'll get it done sooner rather than later I think based on what I'm seeing. And then it will be all about the financing, give it a couple of months. So I'd expect that sometime in the early part of next year, we can lay forth a plan, and say here's exactly, how the build-out is going to work, who exactly is financing it, what it looks like.

To put it in perspective, the build-out for our Luverne plant, if it's 10 million gallons, it would be somewhere around $150 million, if we include the additional infrastructure for reducing our carbon score. If it is a 30 million gallon plant it's going to be double that at least, but interesting enough that's more attractive to some of these project finance people. So we've got the pieces. It is about putting them together. Did that answer your question?

Amit Dayal

Yes. So, just wanted to dig in a little bit more on the pricing side of these agreements. First question, I guess is what's the duration of these off-take agreements? Is this like a one-year contract, two-year contract that you have entered into with people you already have signed up? And on the pricing front, are you kind of converging at sort of a similar price range for these different customers who have signed these agreements?

Patrick Gruber

So, regarding the -- you're going to have to ask me the first one again, because I was listening to you on the second. I got both, but now I'm going to – you've got to remind me when I'm going to ask the second part first.

Amit Dayal

Sure, sure.

Patrick Gruber

Regarding the pricing and customers is that there is some differentiation. Octane is more valuable than diesel fuel. It just simply is. And so that isn't lost on us at all and is in part of our calculation as to what we should be doing and how we think about what product mix at our plant. Isobutanol is a valuable product as well although that one as we've talked in the past it's – it takes more work to develop the marketplace, because of all the different regulations and stuff locally. But we'll get to that too.

Jet fuel, I would say is kind of converging in that there are certain pricing mechanisms that are acceptable in the marketplace. They might have different details, but I think the results are generally the same. So for isooctane discrete price most valuable. Jet fuel, it has converged different mechanism is how to do the pricing. Isobutanol we haven't changed it much. Still we can make it and sell it cheaper than you could from petroleum once we build out our big plant. Now, the first part of your question was what again? Remind me.

Amit Dayal

The first part was like what's the duration of these off-take agreements? Is it one year two years? Like how does that work?

Patrick Gruber

Oh. So for project financing, they have to be long-term agreements. So they're typically seven years after the startup of the plant. And that's what makes it hard for people, because they have to have a crystal clear view or at least the conviction a deep conviction as to what oil price would be and what carbon value looks like.

Now we've got seven million – six million to seven million gallons under contracts like this already. Some of the contracts run longer. One of them runs a little bit shorter. But they're all of that long-term duration. These are people who are signing up to buy product from us already. It's a big chunk from our point of view. And that it's pinning down that price.

Now the next 50 million gallons that Tim's got under LOIs and MOUs that's also in that same pricing region. So I think we are now coming to a conclusion soon, very soon as to pinning down these long-term prices, and what people are willing to bet on. That's interesting. So we don't have these spot agreements. We haven't done that. We're going for the long-term back it up with your letter of credit or your balance sheet in some way we-make-it you-buy-it kind of a thing.

Amit Dayal

Right. Understood. And then with regards to sort of pulling the trigger at 10 million gallons or 20 million gallons have you guys done sort of any work on, what the impact to the profitability would be taking into account the cost of capital et cetera? And how that will maybe impact your decision to either move to the construction and deployment phase once you have the 10 million gallon secured or maybe wait to see if you can maybe bring on more volume? Just any color on that would be helpful.

Patrick Gruber

Yeah. So the way that we plan is to make – whatever pricing we do it gives us returns so that it pays for the cash cost clearly, pays for depreciation, and pays for return on capital. So – and we usually --- it's a minimum of 15% is how we think about it. And sometimes it's higher. That's how we think about it. And so with the capital number the gross capital numbers of what we're doing in volumes that could give you an indication of what it might look like at a minimum.

The other thing that's here that I mentioned is that 1 million gallon hydrocarbon plant is interesting too, because that generates cash in the near-term and that'll help us I think a lot, because I want that 1 million gallons. We'll use it to create a landing spot for the 10s or 20 millions of gallons, make sure that everyone in the supply chain is trained on how to absorb the product at the right time. And that's pretty darn interesting in and of itself.

Of course then, the other thing we have going on is this renewable natural gas with the dairies in our region. That's interesting as well. And what I like about that is it gives us some optionality. We can put the gas to the plant to make a lower carbon more CI fuel and then that actually is quite valuable in and of itself, maybe more valuable than putting it to a pipeline. But we -- on the other hand, we can put it to a pipeline as well. And so that turns into a business unto itself with some pretty good growth I think.

We'll be defining that more and as soon as we get these -- the dairies pinned down and we announce the first financing approach, then I'll be able to give that a little bit more color. But take into that -- all that into account, you see us becoming off and running for renewable hydrocarbons and we're going to have a side business -- it's not a side business, it'll be another business of RNG supplying our plants and our plant sites as we go forth.

Amit Dayal

Got it. And then just moving on to maybe the ethanol side of the things, when do you see potentially shipping some of this low carbon ethanol? Is the plant now ready with the connection from the wind et cetera now potentially having been deployed. What else remains in terms of qualifying the production as low-carbon ethanol and then you guys getting the benefit of that?

Patrick Gruber

I think the wind towers should be up and running at the end of the first quarter beginning of the second quarter next year. And then you have to be qualified in California, you have to get a CI score of a certain level and has to be certified. So you got to be below 70. And there are several projects that we're doing that could get us there along with the wind, because now we have renewable electricity. And so you got to go through the exercise of sorting out how best do you select that renewable electricity to lower your carbon score. So instead of using natural gas somewhere, we're going to use electrical energy somewhere. And then -- that's part of it.

And then we'll have the manure biogas projects it come online in the second half of the year. But by the time it's all qualified, it's probably near the end of the year. And so, I think if I'm being conservative, I'd say that we don't see the benefit from low-carbon ethanol in a meaningful way. I mean when meaningful I mean, very many -- it's in the many, many millions of EBITDA, but that would only happen near the end of next year I think.

If things stay on track like they are, I think we'll see incremental value along the way that has potential. I just don't know what the time frame is until we do see the wind power, measure the plant, look at the other projects, evaluate the CI score as it stands. And I'd expect some improvement and that will be as soon as we can get it done. I just don't know when it is call that midyear. And then it will be making sure we get that biogas in and that should be hopefully third quarter, it might go early in fourth quarter, but we got to get it qualified. So that's why we plan in some extra time.

Amit Dayal

Understood. Just maybe, just last one for me, on your announcement regarding this blockchain initiative, how much sort of investment are you putting into this? How do you hope to maybe monetize this? Is it just for sort of tracking your own production? Will you eventually sort of roll it out to the wider market? Just your thoughts on how we should expect this to play out.

Patrick Gruber

Yes. So for us, we have to track the sustainability of our products from how something is secured at the farming level all the way to the marketplace and measure its CI score and the sustainability attributes. But we want to -- since we have to do that, the idea is to use the modern technology like blockchain to track things and just attach the attributes of the farm. So, if someone buys 10,000 gallons of something, hopefully we'll be able to be at a point and say, well here's where those 10,000 gallons originated by somebody's farm specifically or farms.

And that helps them get the quality assurance or product assurance around the sustainability attributes. I think it's a natural logical tool to use. The company that we're working with Blocksize Capital is -- they're real creative good guys. And they have -- where we're going to work on this and collaborate together on it, so it's a collaboration. And we will turn it outward, so it's a small -- roughly small investment on our side. They're putting investment in on their side with -- they're going to do some work and then we're going to turn it outward.

Additionally, it's working for us. We're going to use it for ourselves, yes, but we do fully anticipate turning it outward because it's a very relevant tool. The thing that puts us in a position to be successful at this, where maybe others aren't quite there yet is we know what the requirements are for sustainability. We've been working on it, doing the certifications already. We have a plant that's heavily instrumented, so we can track the things and we have the data that's up in the cloud, so we can easily tie it into the blockchain software.

And we can see how to -- what attributes are necessary to show people what works and what doesn't out on the market side of things. So, that puts us in a position to see the whole supply chain clearly and that's what you need if you're going to put a blockchain system together -- blockchain software together. I do expect that ultimately, we do license it to other people. That's what I expect to happen. I just don't have a clear enough plan yet, how to do it. The first step is going to get to be -- to set up the blockchain software, get it working, so we like it and then we're going to shop it.

Amit Dayal

Got it. That’s all I have. Appreciate your time, thank you so much.

Patrick Gruber

Yeah, no problem. Thank you.

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