They also signalled technology validation as a risk factor. According to the report, its technology has been proven at laboratory, pilot and demonstration scales and it is now in the process of completing the construction of its first commercial unit. "Unforeseen factors may arise in the course of the forthcoming development steps that could impact the group's capacity to commercialise its proprietary technology at expected yields or at all," they noted.
Low commodity prices were also noted as a risk, given its technology is linked to carbon-rich waste gases and many of its current and potential customers are companies operating steel mills, ferroalloy plants and refineries.
The deployment of its technology requires significant capital expenditure by the operators "who many not have the capacity nor the desire to make such investment during adverse commodity cycles," the directors said.
The availability of affordable financing is a risk given the company is "structurally in the red" in its current pre-revenue stage. "Any tightening in global financial markets may prevent the group from having access to affordable financing," it said. It also noted weak or unsupportive legislation and competition for global talent are other risks.
The directors noted the group has experienced and expected to continue experiencing net losses from operations in the near term and there is uncertainty around the timing and amount of cash to be received from existing and expected contracts. However, they concluded that there will be sufficient funds to enable the group to continue operations at existing levels for the foreseeable future and not less than 12 months. The funds are available from net current cash balances, its capital raising, a loan facility entered in 2016 and existing and projected contracts.
The company accounts show the group had net operating cash outflows for the year of US$31m versus $31.4m in the prior year while research and development expenses for the group rose to US$21m from US$19m the prior year. No tax was paid. The company had cash and equivalents of US$9.9m as at December 31.
LanzaTech has raised more than US$200m from a variety of leading venture capital firms and strategic partners, including Silicon Valley-based Khosla Ventures, Japan's Mitsui & Co and the New Zealand Superannuation Fund.