Verenium Corp (NASDAQ:VRNM)

CAPS Rating: 2 out of 5

The Company possesses a growing portfolio of specialty enzyme products and unique technical and operational capabilities designed to enable the production of low-cost, biomass-derived sugars.


Player Avatar u2nyr (< 20) Submitted: 9/6/2008 1:50:40 AM : Outperform Start Price: $26.28 VRNM Score: -102.02

has a big backer in BP to develop cellulosic ethanol

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Member Avatar Livelier (< 20) Submitted: 8/29/2009 11:22:47 PM
Recs: 1

Info - for your consideration Good review

info :

Greening thru Bio-Mass--BP and Veranium Corporation (Nasdaq: VRNM) today announced.
(BP) British Petroleum(153) Billion Dollar company & Vercipia plans to break ground on its first commercial plant in Highlands County, Florida in 2010. For more information on Vercipia, please visit On 32,000acres. Why Verenium? 1. Pioneer in the process since 1995
2. US Patent for their biofuel process
3. Has already sold millions in licenses
4. Has a demo plant in La.
5. Has already received govnt funding
6. Friendly with Chu from the DOE
7. Partnership with BP
8. Building a new plant in Florida with BP
9. Getting a loan guarantee from the DOE
10. Can apply for millions in new grants
11. Govnt offering money to auto manufacturers to produce cars that use renewable energy.
12. Govnt offering money to service stations to add E85 pumps and sell more renewable fuel
13. Govnt has mandated the increased use of cellulosic biofuels starting next year. 15,600% increase by 2022
That its 50-50 joint venture company will operate under the name Vercipia Biofuels, and plan
BP and Verenium Announce Vercipia Biofuels to Advance the Commercialization of Cellulosic Ethanol 7/31/09
BP and Verenium Corporation (Nasdaq: VRNM) today announced that its 50-50 joint venture company will operate under the name Vercipia Biofuels, and plan to relocate its corporate headquarters to Florida. Vercipia
continues to focus on the development of one of the nation's first commercial-scale cellulosic ethanol facilities, located in Highlands County, Florida. The company is also developing a second commercial-scale cellulosic ethanol site in the Gulf Coast region. "I continue to be pleased and enthusiastic with the progress our joint venture - Vercipia - has made in only a few short months, and I look forward to a highly productive and successful next two years as we move toward bringing a first commercial facility into production," said Carlos Riva, President and Chief Executive Officer at Verenium.
"BP's 'all of the above' approach to meeting America's future energy needs includes a significant investment in biofuels development, as this project demonstrates," said Susan Ellerbusch, President of BP Biofuels North America. "We believe Vercipia will be a key player in the biofuels supply chain in the coming years."
Since announcing the formation of the joint venture company in February, Vercipia has applied for and been selected to move forward with due diligence on a Department of Energy (DOE) Loan Guarantee for the Highlands project, which is now underway. In addition, the team has continued to advance development activity in Florida and on a second site in the Gulf Coast region. BP is of one of the world's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items. It is the largest oil and gas producer in the U.S. and one of the largest refiners. BP is also a leading player in the global biofuels market. Since 2006, BP has announced investments of more than $1.5 billion in biofuels research, development and operations. This includes partnerships with other companies to develop the technologies, feedstocks and processes required to produce advanced biofuels and $500 million over 10 years in the Energy Biosciences Institute (EBI), at which biotechnologists are investigating applications of biotechnology to energy.

Member Avatar TimoDOZ (< 20) Submitted: 9/7/2009 1:28:24 PM
Recs: 1

Well then there are the down side considerations. This company with a current negative cash burn as against current cash flow from current operations, has made a couple questionable moves as of late. The management on some level appears to be a rather arrogant, rapacious, predatory group. Here is a management that recently pushed through an "options swap" resolution at their recent annual meeting while nearly synchronously doing a covrt bond issue swap. It seems that the week before the annual meeting VRNM announced they would swap existing cvt debt at 5.5% for new cvrt debt at 9%. They were able to nearly halve the principle so the ~2X interest increase might be marginally a near wash in total. Well this is of course not helping that negative cash burn, but that of course was not the main concern of the convertible bond holders. They were accepting way below market rates for their conversion prospects. Unfortunately management failed to either maintain or improve on the stock's performance and so the conversion value has become dubious. While this is of course a mostly sound strategy for a penny stock like this, for maintaining their credibility in terms of having to raise further equity there was a failure to fully apprise shareholders of how this marginally increasing cash flow requirement might be met. That news bloomed a week later when they announced the servicing of this new debt instrument either entirely or in part with shares in lieu of cash. While all this was going on, at the meeting on 9/2 this Management/BOD passed the Stock "options swap" resolution. This is a Merrill Lynch/BOA model scam that will now reward this questionable management for their failure to provide any performance in the shares. Since VRNM sees an impending awarding of a DOE loan/ loan guarantee/grant as being forthcoming in the very near term, the management figures there is plenty of extra cash being infused and they quite rightfully have every right to be pigs and help themselves to some of this by extracting some extra equity out of shareholder's equity. This swap would have of course been quite acceptable as an incentivization of most of the 300 employees if the management had seen fit to exclude the over ~$250K compensated personnel from participating. This Carlos Riva guy receives +$700K in total compensation already out of the negative cash burn of this company. There are four or five other BOD managers posting +$400 k compensation. The shareholders are concerned that someone like Senator Shelby finds out about this scamming of taxpayer money. This could endanger or delay the DOE action that most expect will be the catalyst to get the Vercipia project moving forward. This board also voted a reverse stock split at the meeting.
While they proclaimed that they were trying to get a sustainable stock price well above $5 with a 1:12 split hopefully getting more institutional participation in the shares, they then subsequently to the split announced the servicing of the previously mentioned debt with a share dilution scheme.

None of the particulars of the votes at the meeting were released to the shareholders until after the close of the market the day after the meeting adjourned. Apparently the investor relations person a Ms Carmody left her office to go home before the market closed the day of the meeting. Investors who called in that period were directed to voice mail.

There was and has been very little useful information released by investor relations as to when the actual split of shares is to be accomplished. This then is making it difficult for shareholders to make decisions on the purchase of additional shares to prevent any of their positions being lost to fractional share redemptions and the creation of odd ball lots. Apparently the company is unsure whether to pay the fractional shares on the basis of the current market or the price on the record date of the split. Perhaps just allocating Bona fide funds to redeem fractional shares may be a problem.

These shares may come to look like a chart of DIN which made a Form -3 shelf registration to sell $200 MM in shares, debt, and preferred etc on 7/31. Most of that is anticipated to be used to pay down and restructure debt. Restructuring of debt that is what the cvt to the 9% cvrt notes were? Or.. the DOE cavalry may come riding to the rescue in just the nick of time and the shares could jump to $1 pre-split. Personally I think if the later case were to come to pass it would be an excellent opportunity to get some or all these shares off the table pending an outcome of the subsiding of a short covering spike, and the extent of share and equity dilution to shareholders by a voracious management, becoming more defined by the market.

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