Sunday, September 22, 2013

Lawsuit alleges Kior fraud, Kior increases production. Will state lose its $75 million?

Investor Michael Berry and other parties filed a federal securities class action lawsuit against Kior in U.S. District Court in Texas. The plaintiffs allege the Texas-based biofuels company violated securities laws as it made false and misleading statements to investors about the true financial nature of the company. The lawsuit claims Kior did not tell the truth about its true prospects to produce biofuel on a commercial scale. The plaintiffs represent a class of investors who purchased Kior stock between August 14, 2012 and August 7, 2013.

credit: MIT Tech. Review

The company operates a plant in Columbus and plans to open a larger one in Natchez.  The legislature approved $75 million in interest-free loans to Kior in a 2010 special session.   The plants are supposed to convert woodchips into crude oil and gasoline.  The project was supposed to create 1000 direct and indirect jobs in Mississippi as well as constructing up to five plants. 

The complaint states the company "provided guidance" of 300,000 to 500,000 gallons for the second quarter yet only shipped 75,000 gallons in the same quarter. Mr. Berry alleges the company promised the "guidance" after it announced a $31.3 million loss for the first quarter in 2013.

Kior's financial condition only grew worse in the second quarter. The company stated in an August 8 press release announcing the second quarter results:

the second quarter 2013 net loss was $38.5 million, or $0.36 per share, compared to a net loss of $31.3 million, or $0.30 per share, for the first quarter of 2013. Net loss for the second quarter of 2012 totaled $23.0 million, or $0.22 per share.

During the second quarter of 2013, total revenues were $239 thousand, all of which related to production from our initial scale commercial production facility in Columbus, Mississippi. Total revenues for the first quarter of 2013 were $71 thousand, compared to none in the second quarter of 2012. Press release.

Indeed, the company stated on August 9 it needed additional capital to continue as a "going concern":

Until recently, we have focused our efforts on research and development and the construction of our Columbus facility. As a result, we have generated $265.4 million of operating losses and an accumulated deficit of $296.6 million from our inception through June 30, 2013. We expect to continue to incur operating losses through at least 2015 as we continue into the commercialization stage of our business. We must raise capital in one or more external equity and/or debt financings by the end of September 2013 to fund the cash requirements of our ongoing operations. The lack of any committed sources of financing other than the remaining availability under our Loan and Security Agreement with 1538731 Alberta Ltd. as agent and lender, 1538716 Alberta Ltd. as lender, who we refer to collectively as the Alberta Lenders, and KFT Trust, Vinod Khosla, Trustee, as lender, who we refer to as Khosla, raises substantial doubt about our ability to continue as a going concern.

The new results hammered the stock price as it fell from $4.76 to $2.62 per share. The stock price is now $1.75 per share. The market cap is $186 million. The share price stood at $7.00 in January. However, the company issued a press release announcing an increase in production last week:

In July and August, the Columbus facility produced 172,398 gallons of fuel, bringing the 2013 production total from the facility to 357,532 gallons through August 31, 2013. The ratio between gasoline, diesel and fuel oil produced during the most recent two months equaled to approximately 83% gasoline and diesel, with the remaining production as fuel oil. Production from Columbus during July and August exceeded total second quarter production by nearly 40,000 gallons.

As of August 31, 2013, Columbus has shipped 199,071 gallons of fuel since the beginning of 2013, about half of which (99,175 gallons) were shipped in July and August. The Company expects to continue shipping fuel produced in July and August during the month of September.

Will the company go out of business? Is the increase in production the step in the right direction that will save the company?  What will happen to Mississippi's $75 million? Stay tuned. 

History time:



Bill: Second special session in 2010.  Author of bill: Percy Watson. 
Nays in House: Clark, Evans (91st), Horne, Huddleston (30th), Robinson, Scott
Nays in Senate: Harden

10 comments:

Anonymous said...

Hire Ashley Edwards to turn this Democrat mess around! Too bad he already has his next big new thing.

The Future's So Bright I Gotta Wear Shades

Captain Renault: I'm shocked, shocked to find that gambling is going on in here!

Kingfish said...

Democrat?

Anonymous said...

Haley is a closet democrat.

Anonymous said...

This had con game written all overall it.

Anonymous said...

Can you believe Ashley Edward's next gig. No experience needed justneed to have worked for Dr. Feel or Haleys vomit and you get that $150,000 position. Read the Sunherald article about it for a good laugh. Wonder if Josh made the deal for him like Miller at the DMR? Sad statewe find ourselves in because of these guys.

Anonymous said...

This had con game written all overall it.

The downtown Jackson con game on a state level. Both with big time RINO cheerleaders plus their RINO offspring and familial RINO offshoots.

Anonymous said...

Of course KIOR and the rest of these type "investments" are democrat schemes.

What real Republican would claim this group of neer-do-wells and lobbying swells? Real Republicans and Democrats would have enough self respect to be creeping around and trying to do these grifts on the down low. Not these guys. Talk about shameless and entitled.

Is this KIOR more like Kemper Kleen Koal (greenwashed with the ratepayer's bux) or like trying to paddle Up Twin Creeks without a stinking paddle?

Ashley might be one of Phildo's favorites. If he gets the 150K Port job after telling the truth, then it's for sure. It probably could be like a free reacharound for Haley. (That Ashley is one of his boys too, look how long he's been parked on the taxpayer's dime waiting to find his next big thang.) Looks like Ashley's been eating on someones tab. What do the executive pilots allow for him when doing the CG calculations?

Anonymous said...

IF a business plan is solid and sure to create jobs, there should be NO need for start up costs from the government. Investors will line up at the urging of their financial advisors.
Allowing some short term tax breaks until the operation is in the black and improving infrastructure is fine, but the legislature continues, despite one failure after another to turn taxpayers into unwilling investors who have no hope of return on that investment.
The only jobs created are construction jobs for a very short term and do not offset costs to the taxpayer.
We should never vote for anyone who has been so stupid as to fall for these schemes again.
The questions we should ask everyone running for office are " What math courses have you had and what were your grades?" " Have you ever taken a course in accounting or finance or economics and did you pass ?"
Our elected officials appear to be walking suckers.

Anonymous said...

Lets see....Haley's Coal plant, Haley's Bio-Fuel plant. When it all goes to shit, can we pardon Haley and buy him a car to leave the state?

Anonymous said...

This may be a bad investment by the state and an utter failure. I can't really say yet. It is blattenly obvious, though that this lawsuit is just attorney trolls looking to cash in on a stock that happened to drop.



Recent Comments

Search Jackson Jambalaya

Subscribe to JJ's Youtube channel

Archives

Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS
.