KiOR: The Inside True Story of a Company Gone Wrong. Part 5, The Collapse 

Gasoline costs rising fast

Meanwhile, KiOR in this SEC filing backed away from the $1.80 per gallon target discussed in its IPO.

The Company estimates on a preliminary basis that the combined Columbus facilities will be able to produce cellulosic gasoline and diesel at a per-unit, unsubsidized cost between $2.60 and $2.80 per gallon at its current proven yields of 72 gallons per BDT, excluding costs of financing and facility depreciation, which would decrease to between $2.15 and $2.35 per gallon if it is able to achieve its short-term yield target of 92 gallons per BDT.

Yet, even this revised production cost target could be described as ridiculous, given that the company had not achieved anywhere near the 72 gallons per ton yields.

And, the company, even at this late stage, is clinging not only to a yield target of 92 gallons per ton, it is describing its 72 gallon per ton figure as “current proven yields”. There is no evidence available that KiOR had data to support such a submission to the Securities & Exchange Commission.

Costs soar again, this time the capex

By November, KiOR again reported to the SEC on its plans for Columbus II, but costs had skyrocketed. KiOR reported:

The Company currently estimates on a preliminary basis that the total cost of this second initial scale commercial facility in Columbus, Mississippi would be approximately $216 million to $232 million.

And, the company continued to stand behind its 72 gallon per ton yield claim, which was wholly unfounded in the scientific data according to every insider the Digest has spoken with. In November, KiOR claimed:

The Company estimates on a preliminary basis that the combined Columbus facilities will be able to produce cellulosic gasoline and diesel at a per-unit, unsubsidized cost between $2.60 and $2.80 per gallon at its current proven yields at its research and development facilities of 72 gallons per BDT, excluding costs of financing and facility depreciation, which would decrease to between $2.15 and $2.35 per gallon if it is able to achieve its yield target of 92 gallons per BDT.

CFO Karnes resigns

The bleeding of personnel turned briefly to a hemorrhage when, on December 1 2013, John Karnes resigned as Chief Financial Officer. Although the true reasons were not made public at the time — a simple statement of fact was released to the public — Karnes had become convinced that KiOR’s technological claims were “unreasonable,” as one source put it. Before leaving, Karnes authored a devastating review of KiOR’s progress from Q2 2012 through Q4, and recalled several attempts he had made over the years to bring KiOR’s technological distress to board attention.