Business Context and Reporting Period
This Form 8-K filing by Green Plains Renewable Energy, Inc. (Green Plains) covers events occurring on May 5, 2006. The company is incorporated in Iowa and is engaged in the development of fuel-grade ethanol production facilities.
Key Financial Metrics and Transaction Details
The filing details a specific land acquisition transaction rather than providing comprehensive financial statements for a reporting period.
- Land Acquisition: Exercised options to purchase 68 acres near Superior, Iowa.
- Purchase Price: $478,542.
- Payment Method: Issuance of 10,900 restricted shares of common stock.
- Implied Share Price: Approximately $43.90 per share.
- Capital Structure Post-Transaction: 4,360,667 shares of common stock outstanding and warrants exercisable for 832,721 shares.
The filing text does not provide clear values for revenue, profit, cash flow, margins, debt, or liquidity metrics.
Material Changes and Project Status
The primary material change is the expansion of the company's asset base through the Superior, Iowa land purchase to support a new 50 Million Gallon Fuel Grade Ethanol Plant.
- Design and Permitting: Agra Industries of Merrill, WI, is the design builder. An air permit application was submitted to the Iowa Department of Natural Resources on April 19, 2006, by consultant NRG (Natural Resource Group).
- Logistics: On April 28, 2006, Union Pacific Corporation agreed in principle to supply rail service to the site, contingent upon final rail design meeting engineering standards.
Outlook, Risks, and Contingencies
Management intends to proceed with construction of the Superior plant, but the filing explicitly highlights significant execution risks.
- Construction Risk: There can be no assurance that the Company will be successful in building the plant.
- Regulatory Risk: Success depends on obtaining the necessary air permit.
- Infrastructure Risk: Rail service authorization is contingent on final design standards being met; there is no assurance these contingencies will be satisfied.
Investor Verification Checklist
- Confirm the status of the air permit application submitted to the Iowa Department of Natural Resources.
- Verify the finalization of rail design standards with Union Pacific Corporation to ensure service authorization.
- Monitor the dilution impact of the 10,900 restricted shares issued for the land purchase.
- Assess the company's capital adequacy to fund the construction of the 50 Million Gallon plant given the lack of disclosed cash flow data.