Verenium in debt, company remains confident

By Kris Bevill | March 05, 2009
Web exclusive posted March 20, 2009, at 1:31 p.m. CST

Cellulosic ethanol and enzyme developer Verenium Corp. has received a going concern qualification as part of its 10-K form filing with the U.S. Securities and Exchange Commission. The qualification is a result of doubt on behalf of the auditor that the company can continue to move forward under its heavy debt load and may ultimately need to file for bankruptcy.

According to the company's filing, Verenium has incurred more than $300 million in net losses over the past three years. As of Dec. 31, 2008, the company held an accumulated deficit of $622.6 million and working capital deficit of $23.8 million; it expects to continue to incur additional losses for the foreseeable future. In its SEC filing, Verenium stated that it will attempt to raise additional capital through a combination of partnerships and collaborations, government funding, project financing and possibly the sale of equity or debt securities. If, however, the company is unable to attain necessary additional capital from these sources it may be forced to restructure, significantly curtail or cease operations or file for bankruptcy.

"The going concern noted in our 10K is not new, we have reported this for the last three years," said Verenium Vice President of Communications Kelly Lindenboom. "We continue to be confident in the prospects for the company and are on track with all previously disclosed goals, for both biofuels and specialty enzymes."

To date, Verenium's specialty enzyme business has been the only portion of the company to generate revenue. Twelve of its specialty enzyme products have been commercialized and four Verenium collaborators have incorporated Verenium technologies into their commercial products, which will result in royalties generated for the company. The company noted that their enzyme products have only recently begun to bring in notable profits and product revenue has increased significantly over the past two years.

In May 2008, Verenium opened a demonstration-scale production facility in Jennings, La., and plans to build a 36 MMgy commercial facility in Highlands County, Fla., as part of its ongoing collaboration with petroleum giant British Petroleum. Lindenboom said the relationship between Verenium and BP continues to be strong; the Highlands project included a $22.5 million commitment from BP. According to Lindenboom, Verenium intends to break ground on the $300 million facility in early 2010.

To see previous coverage of the Highlands project, read "Verenium to build Florida cellulosic ethanol facility."

For additional coverage regarding Verenium, read:

"Verenium acquires oil partner, expands worldwide availability"

"Verenium receives DOE grant"

"Verenium hosts grand opening of cellulosic ethanol demonstration plant"