Carbon recycler LanzaTech widens annual loss to $US38m as revenue falls

LanzaTech, the New Zealand-founded carbon recycling company, has widened its annual loss on falling revenue as it gears up for full commercialisation of its innovative technology.

The US-based company reported a group after-tax loss of $US38.3 million for the year ended December 31, 2015, a bigger loss than $US27.8 million the year before, taking its accumulated losses to date to $US166.8 million.

Financial accounts lodged with the Companies Office show revenue dropped to $US3.95 million from $US6.8 million in the 2014 financial year, with $US1.2 million derived from government contracts and $US2.75 million from commercial ones.

LanzaTech turns waste gas from steels mills into ethanol and other high-value fuels and chemicals and was last month named on the fourth annual CNBC Disruptor 50, which includes the likes of Uber and Airbnb. The company was founded in New Zealand 11 years ago and the parent company remains New Zealand-registered while headquarters have shifted to Illinois and it now reports in US dollars.

Directors said the continued net losses from the research and development-heavy operations in the near term, other uncertainties around raising additional funds if needed, and the timing of customer contracts, could cast doubt on the company's ability to trade on as a going concern. But after reviewing existing working capital against the group's operating requirements, they said they have a "reasonable expectation" there will be sufficient funds and current and projected customer contracts to continue at present activity levels for at least the next financial year.

The company accounts show the group had net operating cash outflows for the year of $US31.3 million and by year's end had total cash and cash equivalents and investments of $US56.4 million, just under $US30 million less than at the same time the previous year. Research and development expenses for the group rose to $US18.2 million from $US13.6 million the prior year while the parent expenditure on R&D leapt to $US22 million from just $US4.4 million in 2014.

No tax was paid and cashflow included $US19 million for an income tax refund. The group and parent had $US89 million and $US11.2 million of unrealised tax losses respectively.

LanzaTech has raised more than $US200 million from investors including Silicon Valley-based Khosla Ventures and the NZ Superannuation Fund, which invested $US60 million in late 2014. Notes to the 2015 accounts show the Series D round the Super Fund participated in raised a total $US112 million at $US19.93 per preferred share and in June 2015 the company raised a further $US15 million at the same price.

Share-based payments to employees, directors, and others were $US1.3 million during the year. The board approved a new stock option plan during the year from a previously unallocated pool of share options already approved by shareholders. Granted share options were priced at $US6.61 per ordinary share.

Earlier this year LanzaTech announced the production of IPA, a chemical precursor to plastics manufacture, from recycled emissions. In March it also signed its first North American deal, giving US biofuels and biochemical maker Aemetis exclusive rights for 12 years to its patented technology to convert various types of waste gas to ethanol in California. The first phase of adoption of LanzaTech's technology by Aemetis will be at a plant that's expected to be built by the end of next year.

(BusinessDesk)

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