Verenium struggles in cellulosic ethanol quest

Verenium struggles in cellulosic ethanol quest
By Sarah Smith

Source: Ethanol Producer Magazine

Web exclusive posted April 3, 2008 at 2:45 p.m. CST

Successfully commercializing cellulosic ethanol technology has become a quest that many companies have tried – and failed at. For Massachusetts-based Verenium Corp., the difficulty of that quest started on page 37 of its 200-page annual regulatory filing to the U.S. Securities and Exchange Commission, and extended through the remainder of the report.

After noting it had raised $174 million from 2006 into 2007, Verenium reported a total of nearly $240 million in net losses for 2005, 2006 and 2007. The company, which needs $90 million to support continued cellulosic ethanol research, detailed accumulated debt of $437 million and looming cash deficits. It planned to generate additional working capital from a sale of $71 million in notes, corporate partnerships, grant funding and “incremental” product sales. “If we are unsuccessful in raising additional capital from any of these sources, we may need to defer, reduce or eliminate planned expenditures, restructure or significantly curtail our operations, file for bankruptcy or cease operations,” the statement said. The company didn’t return Ethanol Producer Magazine’s calls seeking further comment.

“We have experienced, and may continue to experience, significant delays or cost overruns related to our cellulosic ethanol plant construction projects,” the company said, referring to plans to develop a 1.4 MMgy demonstration plant. “We may not achieve any or all of our goals and, thus, we cannot provide assurances that we will ever be profitable or achieve significant revenues,” the company admitted in a March 17 filing. “Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.” And the company acknowledged a “material weakness in internal controls” over its financial reporting.

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