With dreams of a biofuels revolution based in Mississippi seemingly wiped away for good amid mounting losses and questions from investors and regulators regarding being misled about the company’s prospects, KiOR now finds itself not as Mississippi’s latest business success story but its newest defendant.
State officials have filed suit against KiOR’s leaders and its top financial backer, wealthy venture capitalist Vinod Khosla, in Hinds County Circuit Court.
They essentially contend KiOR misled them regarding the company’s production capability – it would turn local biomass such as woodchips into crude through catalytic conversion – in order to secure a $75 million loan backed by the Mississippi Legislature in 2010 to build several production facilities.
The company has denied misleading anyone about its prospects. In exchange for the state loan, KiOR had to spend at least $500 million on land, equipment and construction and create at least 1,000 jobs by the end of 2015.
KiOR never came close to meeting those goals, with its production facility in Columbus not operational more than in use since it officially ramped up three years ago. Company officials never publicly backed off the technology or its business plan, even as it was losing millions of dollars each fiscal quarter as money spent on research, development and fine-tuning far outweighed any revenue coming in.
That insistence on a bright future even as the present suggested decidedly otherwise has spurred questions from investors and the Securities and Exchange Commission.