Gevo, Inc. (NASDAQ:GEVO) shares are collapsing 30% after underwhelming investors with another share dilution. The biofuel maker just announced that it has agreed to sell 5,680,000 Series G units, with each Series G unit consisting of one share of common stock, a Series K warrant to purchase one share of common stock and a Series M warrant to purchase one share of common stock, at a public offering price of $1.90 per Series G unit. Gevo has also agreed to sell 570,000 Series H units, with each Series H unit consisting of a pre-funded Series L warrant to purchase one share of common stock, a Series K warrant to purchase one share of common stock and a Series M warrant to purchase one share of common stock, at a public offering price of $1.89 per Series H unit.

The Series K warrants will have an exercise price of $2.35 per share, be exercisable beginning the date of original issuance and will expire on February 17, 2022. The Series L warrants will have an exercise price of $1.90 per share, which will be pre-paid upon issuance, except for a nominal exercise price of $0.01 per share and, consequently, no additional payment or other consideration (other than the nominal exercise price of $0.01 per share) will be required to be delivered to the Company by the holder upon exercise of the Series L warrants. The Series L warrants will be exercisable from the date of original issuance and will expire on February 17, 2018. The Series M warrants will have an exercise price of $2.35 per share, be exercisable beginning on the date of original issuance and will expire on November 17, 2017. The shares of common stock and the warrants will be immediately separable and will be issued separately.

The gross proceeds to Gevo from this offering are expected to be approximately $11.9 million not including any future proceeds from the exercise of the warrants.

Gevo intends to use 15% of the net proceeds from the offering, excluding any future proceeds from the exercise of the warrants, to pay down a portion of its outstanding 10% convertible senior secured notes due 2017, with the balance to be used to fund working capital and for other general corporate purposes. The offering is expected to close on or about February 17, 2017, subject to customary closing conditions.

Second Dilution in 6 Months

As a reminder, Gevo shares dropped 30% back in September after the company announced that it has agreed to sell 24,800,000 Series E units, with each Series E unit consisting of one share of common stock and a half of one Series I warrant to purchase one share of common stock at a public offering price of $0.55 per Series E unit. Gevo has also agreed to sell 3,700,000 Series F units, with each Series F unit consisting of a pre-funded Series J warrant to purchase one share of common stock and a half of one Series I warrant to purchase one share of common stock at a public offering price of $0.54 per Series F unit.

Gevo, Inc. is a renewable chemicals and next generation biofuels company. The company focuses on the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks. It operates through the following segments: Gevo, Inc. and Gevo Development & Agri-Energy. The Gevo, Inc. segment is responsible for all research and development activities related to the future production of isobutanol, including the development of its proprietary biocatalysts, the production and sale of biojet fuel, its Retrofit process and the next generation of chemicals and biofuels that will be based on isobutanol technology. The Gevo Development & Agri-Energy segment is currently responsible for the operation of its agri energy facility and the production of ethanol, isobutanol and related products.