LanzaTech annual loss widens to $40.5M as biotech firm scales up, hires workers
By Jonathan Underhill
July 15 (BusinessDesk) - LanzaTech New Zealand, which counts US billionaire clean-tech investor Vinod Khosla as its
biggest shareholder, posted a wider full-year loss as the company scales up technology that uses microbes to convert
industrial waste gases into fuel-grade ethanol and other useful chemicals.
The Chicago-based biotech firm reported a loss of $40.5 million in calender 2013, from a loss of $35.1 million a year
earlier, according to its annual report. Sales rose 21 percent to $5.7 million, with US customers making the biggest
contribution. It cited five customers that each accounted for more than 10 percent of revenue, up from two a year
earlier.
LanzaTech uses a proprietary, gas-fermenting microbe of a type found naturally around hydrothermal vents, giving heavy
industry a way to mitigate output of waste gases blamed for contributing to global warming. Carbon-rich emissions from
industrial plants such as steel mills are very similar to that produced by such vents, which the microbes, called
acetogens, grow on, according to the company's website. Last year the company was ranked No. 2 in the Biofuels Digest
annual list of "the 50 Hottest Companies in Bioenergy ."
Cash on the balance sheet fell to about $14.4 million as at Dec. 31, from $41 million a year earlier. Wages and salaries
rose 38 percent to $18.9 million, while operating expenses related to research and development fell about 20 percent to
$14 million. LanzaTech won't run short of cash any time soon as its parent raised US$60 million in March. Its net
operating cash outflow was $25.4 million last year.
"As a pre-revenue company, we are very conscious about our cash burn and have taken measures to maximise our resources
on our road to commercialisation," chief executive Jennifer Holmgren said in an emailed statement.
LanzaTech is moving some of its core technical team to Chicago from New Zealand "and through this period of transition
we are recruiting new members to the team," she said. "We are also very much focussed on scaling our technology to
commercial levels with a first commercial plant targeted for operation in 2015 in China, with Baosteel."
The company's capital raising rounds have attracted investors including Japan's Mitsui & Co, German industrial giant Siemens's venture capital unit CICC Growth Capital, several of Khosla’s funding vehicles,
Warehouse Group founder Stephen Tindall’s K1W1 fund, Qiming Venture Partners, Petronas Technology Ventures and the
Malaysian Life Sciences Capital Fund.
LanzaTech said it was appropriate to report on a going concern basis, given its working capital requirements and the
expectation it can generate sufficient funds from capital raisings, government grants, sales and debt facilities.
"The group is in the early stages of taking its products and services to the global market place, and as a consequence
has a higher degree of business and continuity risk than other more established businesses," the company says in notes
to its accounts.
For a second year, the company noted that it hadn't met an agreed timetable to provide monthly management accounts and
covenant certificates required under the terms of its loan facility, and wouldn't get its audited financial statements
in by the agreed date. As a result, the loan balance of $16.1 million, as at Dec. 31, was classified as a current
liability, the notes say.
The company first raised seed capital in New Zealand in 2005/06, followed by a US$3.5 million injection from Khosla
Ventures in 2007 in its A Series funding round. The B round in 2010 raised a further US$18 million, led by Qiming
Ventures, and the 2012 C Series raised a further US$55.8 million, led by the Malaysian Life Sciences Capital Fund.
(BusinessDesk)