Q3 2022 Origin Materials Inc Earnings Call
Welcome to the rigid materials third quarter 2022 earnings conference call.
This time, all participants will be in a listen only mode. Later, we will conduct a question and answer session. I will now turn the call over to your host Ashish Gupta Investor Relations Ashish you may begin.
Thank you and welcome everyone to origin materials third quarter 2022 earnings conference call.
Joining the call today from margin materials, our co CEO Rich Riley co CEO and co founder John vessel and CFO Nate Wally.
How does this call, Oregon issued its third quarter press release and presentation, which we will refer to today.
It can be found on the Investor Relations section of our website at origin materials Dot com.
Please note on this call we will make some forward looking statements based on current expectations and assumptions, which are subject to risks and uncertainties.
These statements reflect our views as of today should not be relied upon as representative about views of any subsequent date.
We undertake no obligation to revise or publicly release the results of any revision to these forward looking statements in light of new information or future events.
These statements are subject to a variety of risks and uncertainties.
That could cause actual results to differ materially from expectations.
For further discussion of the material risks and other important factors that could affect our financial results. Please refer to our filings with the SEC, including our quarterly report on Form 10-Q dated August three 2022. In addition, during today's call we will discuss non-GAAP financial measures, which we believe.
Are useful as supplemental measures of orchard materials performance.
These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.
You will find additional disclosures regarding the non-GAAP financial measures discussed on today's call in our press release issued this afternoon and our filings with the SEC each of which is posted on our website.
The webcast of this call will also be available on the Investor Relations section of our company website.
With that I will turn the call over to rich.
Thank you Ashish and thanks to everyone for joining us for.
For today's presentation, we will be referring to the slides that were posted to the Investor Relations section of our website earlier this afternoon.
I will start by reviewing Q3 highlights then provide a commercial and regulatory update I will then turn it over to John who will discuss our recent alternative fuels and chemicals Coalition Award and construction progress on origin won an origin to Nate will wrap up with the financial overview.
We will begin on slide three.
Continue to execute on our plan and make progress on our mission to enable the world's transition biddable materials.
First we have seen a more than nine fold increase in our customer demand since our announcement to become a public company in February 2021, with offtake and capacity reservations, increasing to $9 billion today.
Second we remained well capitalized non track for a completion of origin. One by the end of 2022 with preparations for commissioning and startup now well underway with bank commissioning to be complete by the end of Q1 2023 and startup beginning shortly thereafter.
We are also maintaining our previously disclosed capital budget for origin, one of $125 million $130 million.
For origin to the previously disclosed capital budget construction timeline financing assumptions are unchanged as reported previously the state of Louisiana pending Finalization is expected to award a private activity bonds volume cap allocation to origin in the amount of 400 billion.
We also expect to receive more than $100 million.
State and local incentives.
As discussed on prior calls and then design of origin to is underway with detailed engineering set to begin in 2023.
And third we remain well capitalized with approximately $362 $2 million in cash and cash equivalents on hand.
We maintain our expectation that the capital projects for origin, one in order to be fully funded from our existing cash on hand, and previously indicated traditional project financing source.
Now turning to slide four I'd like to provide a brief overview of origin for those who are new to the story.
Origin was founded with a mission to help solve climate change by enabling the world transition to sustainable materials, our patented drop in core technology attractive unit economics, and carbon impact of game in support of a growing list of major global brands and investors and in an increasingly diverse range of consumer and industrial end markets.
Our list of strategic partners includes industry leaders such as the node.
Waters, Pepsico Ford Motor Company, Mitsubishi got chemical loan industries, I'm, a law Solvay Mitsui <unk> co management group <unk> beauty Revlon, Mitsubishi Chemical group, who are re <unk> world resources and ATC plastics.
Our CPG partners have publicly disclosed their intent to migrate 100% of their current petroleum based consumption to decarbonize and recycled materials after.
After extensively evaluating our technology and testing our products. These market leaders have made significant financial contributions to origin, others investors and customers demonstrating their environmental commitment and confidence in our technology and products. They have signed multi year contracts, where hundreds of millions of dollars.
This year is escalating geopolitical tension and energy rich portions of the globe and provided a reminder of the urgency, which the world needs to transition to more sustainable and less volatile energy solutions.
Carbon intensive nature of the plastic industry, where over 99% of product is making fossil fuels is placed the industry under considerable pressure to dramatically transform the way. It produced at that uses elastic both for environmental and economic considerations.
<unk> offers an entirely circular plastic pollution carbon negative recyclable TT, which.
Which is the world's plastic recycling infrastructure is already designed to collect sort and reuse with the critical hasnt been a bit of a moving cotr from the atmosphere.
And plastics, we note that while there has been some progress made in reducing greenhouse gases from shifts to renewable energy sources and electric vehicles. It is clear that reducing emissions from energy use alone is insufficient to achieve the goals and commitments established by companies and governments.
As a result in the near term, we believe that these companies will need to integrate decarbonize materials into their supply chain.
Such we expect demand to remain well ahead of our projected supplies for the foreseeable future.
Turning to slide five we continue to see strong favorable tailwind for our technology and business model with some of the world's largest public companies submitting the zero carbon mandates and governments increasingly enacting regulations and funded investments to tackle climate change.
The recently passed inflation reduction act or IRI is expected to provide approximately $369 billion of direct investment related to climate solutions.
Excited by the support the Bill is received and see multiple meaningful funding opportunities that we plan to provide more detail on the legislation is finalized.
For one the IRI is expected to significantly expand the section 48, the advanced manufacturing expertise available for investment in manufacturing facilities for clean energy technologies.
<unk> is currently exploring several paths of eligibility in order to qualify for a discretionary tax credits, where a significant portion of origin twos capital expenditures, providing benefits toward the financing of the plant.
Second while we are still evaluating the details of the program, we see the potential to benefit from the Iras advanced industrial facilities deployment program.
This department of Energy run program created under the opposite clean energy demonstration will provide $5 $8 billion in competitive funding such as France rebates direct loans cooperative agreement.
To advance industrial facilities aimed at reducing greenhouse gas emissions from historically energy intensive industries.
We are optimistic that our pilot facility in west Sacramento or origin to Geismar, Louisiana as well as future plant that we built in the U S to qualify for this competitive financing.
Finally in addition to the IRA origin is exploring opportunities for funding and financing under last year's infrastructure investment and jobs Act for JA.
Origin has identified more than a dozen initiatives that may potentially assisted RIDEA investments, most notably origin to infrastructure improvements in and around the Geismar, Louisiana site.
Turning to slide six we continue to make steady progress commercializing the business and have grown customer demand to a total of $9 billion today.
<unk> made up of off take agreements and capacity reservation.
This represents a more than nine fold increase since we announced our intent to go public in February 2021.
As a refresher capacity reservations are signed agreements designed to lead towards take or pay contracts and revenue once our plans are complete.
They give us and our customers more time to negotiate a take or pay off take agreement, which typically has a much longer document that meets the requirements for project financing.
As previously mentioned, we continue to expand the breadth of industries and end markets that we serve from global CPG brands like Pepsi Danone and test the waters to automotive leaders like forward, especially chemical innovators like Solvay and Mitsubishi Chemical group to ultra luxury brands like <unk> beauty and iconic cosmetic brands like Revlon.
Our sales pipeline remains strong we continue to make inroads into new industries and have numerous active discussions with existing customers to expand their current agreements with prospective customers to adopt our sustainable products.
We also see significant opportunities to expand into high margin product categories.
This year's new strategic partnerships with Mitsubishi Chemical group <unk> and agency plastics for example have provided us with significant momentum and carbon black a promising new product category for origin <unk>.
Our carbon black margins hydrothermal carbon is a personal 100% bio content pillar.
Like traditional petroleum based carbon black it can be used in a wide variety of applications.
<unk> components in tires belts, and hoses mechanical rubber goods plastic master batch and tuners.
We expect our sustainable carbon black to be deployed across the diverse array of applications to decarbonize, the rubber and automotive supply chain and markets, which have very favorable growth prospects.
In light of strong customer demand, we are pleased to announce that we have.
Actually committed for origin to para xylene and PD capacity going forward, our sales and marketing team will be primarily focused on high margin products, such as carbon black and advanced CMS derived products for origin to and beyond as.
As we previously mentioned our customers require more development and testing for these products that were dropping ready para xylene and PBT as.
As we approach the start of origin, one operations, we anticipate being able to deliver larger quantities of samples to our customers. We look forward to updating everyone. As we embark on this evolution in our sales efforts.
In addition, we're very excited to tell you about a new strategic relationship with a major Japanese chemical company and a major Asian chemical company.
We continue to see considerable opportunities to expand into new end markets and applications and we look forward to providing more detail about these partnerships as well as others when appropriate.
With that I would like to turn it over to John who will discuss our recent alternative fuels and chemicals Coalition award and provide an update on the origin won an origin too.
Thanks, Rich and early October origin received the 2020 to alternative fuels and chemicals coalition Global Bio based economy performance Award.
The award, which is sponsored by the industrial Biotechnology Journal given annually to recognize companies are advancing science in contributing to the production and commercialization of industrial biotechnology products.
Origin was selected for outstanding performance and achievements in our commercialization and scale up of our patented technology platform, which as many of you now turn to the carbon count and sustainable wood residue into useful carbon negative materials for a wide range of electronics.
In clothing, textiles, plastics packaging or hires carpeting endpoint.
Turning to slide seven I'm going to provide a construction update for origin <unk> to those interested in the origin. One story and the continued progress made by our team I'd like to place to a new construction update.
The Investor Relations section of our website.
One our first plant located in Sarnia, Ontario traction is progressing well and we remain on track for mechanical completion by the end of Q a considerable achievement. Despite the pandemic hygiene related headwinds.
We expect plant commissioning to be complete by the end of Q1 2023 startup beginning shortly thereafter, we are maintaining our previously disclosed capital budget for <unk> $125 million.
During the third quarter, we further strengthened our origin, one operations leadership team and support staff I'm very proud of how our teams have executed against our construction milestones as we draw closer to commercial production. This is a large manufacturing plant with a lot of moving parts and what we've been able to accomplish to date. Despite opening macro supply cash is truly shows the capability efficiency and efficacy.
Our capital projects team.
In our slides and in our construction, but you can see the progress we've made since our last update in August all major equipment has been delivered.
Since our last call further progressing the assembly of the piping electrical systems, I think Michael interconnect, our core chemical process module and connect the ordering one utility applied by the neighboring state as we have discussed before the modules were fabricated offsite using a modular construction approach minimizing the Brexit, which part B type deal.
We also completed the construction of our biomass building, which is where we will store sandalwood rest is entering the plant prior to processing and some banks reactors as well as substantially completed our HTC building, which where we were separate HCC solid material from the liquid <unk> advantage of our core chemical process.
Notably the biomass building and the HTC building future significant amount of deal on a number of components and pieces connecting together.
HCC is a carbon rich I think structured and flexible raw material that can be converted into a wide range of applications, including carbon black in activated carbon for the automotive industry handling it.
We've recently received and installed our second filter presses and important part of how we handle HCC at Archrock.
Filter presses will use the same HTC separation technique that is currently use at our pilot plant in California, what are about 100.
The control room building, which houses our distributed control system and the power distribution building both arrived on site during the quarter.
Distribution control system is the brain of the plant control controlling every powered smart right.
Finally, we delivered several new tanks on site that will contain product as well as solvent that will be used and recycled as part of our core chemical process.
Our site will have lots of integrated storage, which gives us the ability to manage our chemicals materials.
New equipment includes storage tank, which will contain unrefined CMS put forth relationship as well as Brian tanks tank.
Hcl tanks, and several banks for storing and interim CMO due.
Due to its large size our distillation crude tank was assembled onsite hasn't been delivered by road.
Today.
Thrilled to tell you that we are closer than ever for mechanical completion and operation of poured its first commercial plant of.
Of course this is a testament to the amazing level of talent, we've been able to attract for our company.
The original one team has done an incredible job, creating a great safety culture, while exiting a project and we will very much take what we've learned.
And then culturally ultra orphan two and beyond at origin, we recognize that our team is a critical differentiating factor that will enable our success in the execution of our vision over the past year, our ability to attract high caliber technical talent with a deep commitment to our sustainability book values has far exceeded even our most optimistic expectations.
And it's become clear to us following recent conversations with investors that the pace at which we're adding depth to our team and a truly remarkable quality of our people is something worth highlighting.
We decided to use a portion of today's call to discuss some of the great. Recent addition to Oregon.
Beginning on slide 18, it will be hard to overstate, how enthusiastic we feel about the future specifically our ability to commercialize our technology and product I'd like to highlight just a small sampling of the world class talent that has joined our team.
Matt Hawkins origins engineering director for capital projects.
His experience in project execution, which he developed over our 20 plus year career, working with Fortune 500 owner operators and EPC company.
He is highly experienced in design procurement and construction or industrial asset petrochemical technologies Dr.
Dr. John Lu Technical manager is the inventor of the award winning technology <unk> TD LTE, which received the 2019 hydrocarbon processing award a tremendous accomplishment for any research triangle.
Dr. Bill Williams director of process development for hardware products.
As an expert in carbon black applications in chemical engineering.
Incredibly talented new people that I won't have I mentioned on this call, but are likewise, making credible contribution permission everything.
An example of R&D success that can be a tribute and a large part to new technical talent organs recent increase in registered Pakistan.
As indicated on slide four R&D efforts continue to yield fantastic results. We have registered additional patent families bring our total to 23 with more in development as we speak apart from being it has been to our technical abilities are R&D successes also validates flexibility as came out on chemical which with our technology can be produced of high yields under mild conditions for.
From a biomass.
In the ordinary course of business origin may acquire counties are entering the license agreements to improve our product offerings.
During this quarter, we made at approximately $5 million towards securing a license accounts that can be used to produce high margin downstream products using our intermediate <unk>.
We will provide an update on this license accomplish can be when appropriate.
With regard towards it to our previously disclosed capital budgets construction timeline dancing are unchanged.
Updates to be provided with appropriate as discussed on fire calls are closely monitoring costs associated with the current high level of inflation and the challenging supply chain environment. We.
We continue to proactively manage our cost base a note that we have built the perfect tendencies of our initial production.
We are not currently placing any equipment <unk> and we expect to front and placement supply chain conditions likely change our favorite last 12 to 24 months, notably we've seen recent decline fuel prices, which have also filtered through the specialty field and next I'll make breakfast and that are used in the construction of my flight ordering checks.
I'd also note that materials companies generally benefit from higher prices at the margin deflationary environment, which can mitigate the impacts of inflation on our capital budget.
According to our first world scale manufacturing facility will produce carbon negative materials used to make plastic resident fiber, which is used in packaging textile apparel and other applications and HCC, which can be used in fuel is activated carbon in as a replacement for carbon black front and design of the site is underway with detailed engineering accidentally break.
Extremely previously announced we selected a site and Geismar, Louisiana preferred to subject to Finalization of economic incentives. We expect the 150 acre facility will convert an estimated $1 million dry metric tons of sustainable wood residue seizure and Fox for a wide range of and markets.
Some of the reasons that we believe the guys provided the ideal location for her to include the extremely skilled labor pool, Sienna attract relevant infrastructure accents of sustainable feedback before I conclude I'd like to give you. Some additional detail about what we're currently working on for or to the team as optimizing are finding that scope and lay out of the plant operating value insuring activity.
Producing updated equipment arrangement flow diagrams for our appeal to adhering contractor, while we had hoped to complete these tasks by the end of two three we decided that it was more important to expand on the value engineering work to get it done correctly upfront.
We continue to work closely with landowners in <unk>, Louisiana, and Mississippi and are performing on logistics study with our appeal to contract with a further define our feedback.
Movement strategy.
Cause otherwise the team has continued to make considerable progress and our expectation remains that works and one will be complete by the end of quickly too regarding allergic to the previously disclosed capital budget construction timeline in financing are unchanged.
Ordering one represents an important milestone permission to enable the world's transitioned pinball material. They are excited by the progress. Our team is made as we approach mechanical completion in operation with that I will turn it over to customer natural details.
Thanks, John how are we gonna commentary on a third quarter results are financing expectations for Oregon, one in Oregon too finished with an update on our 2022 outlets.
Applied twenty-three third quarter operating expenses for $9.7 million compared to 7.1 million during the same period prior year.
Just an EBITDA loss with $8.4 million for the third quarter compared to a loss 5.7 in the same period of the prior year.
<unk> net income with $8.3 million for the third quarter.
Compared to a net income of $27.9 million in the same period prior year.
Turning to our balance sheet origin ended the third quarter $362 $2 million in cash cash equivalents marketable securities.
To maintain our expectation of fully funding the construction of both origin, one of allergic to using our existing balance sheet cash and cash equivalents previously indicated traditional financing source.
Regard to the financing of words to discuss on protocol, Louisiana pending Finalization is expected towards private activity bought <unk> authorized by the state and local governments for the financing of qualified projects private capital.
Volume cap allocation to the company and the amount of $400 million. We also expect to see more than 100 million attended states milk one cents.
Rich discussed anticipate various federal tax credits grants loans and other programs targeted towards promoting advanced manufacturing the iras's incrementally beneficial for the financing of origin too once the details of those programs are finalized by the relevant government.
Maintain that our financing assumptions forward them to remain reasonable and achievable with origin to fully funded consistent cash on hand, and previously indicated traditional financing sources.
$400 million private activity bond allocation from the state of Louisiana provides a strong foundation for the financing of origin too in combination with certain 2021 infrastructure investment drawbacks probation and other non volume cap taxes and financing could enable the debt financing of words to using entirely tax-exempt spot.
And also continues to work with leading financial institutions on other forms traditional private financing of federal loan programs, including through the U S Department of Agriculture and department of energy.
So we've highlighted on our previous earnings cause inflationary pressures Romain an area of focus R. As John discussed at this point, we are not adjusting our overall capital budget for origin too.
The situation remains fluid and we continue to closely monitor our cost estimates such that we can communicate any changes to the market at appropriate times with the rest of the project.
Well now close with an update on our 2022 outlook.
Maintaining our prior outlook for an adjusted EBITDA loss of $236 million capital expenditures with up to $175 million. We look forward to providing full year 2023 guidance for revenue EBITDA. Another financial metrics on our next door next call in early 2023 with that I will turn it back to rich for closing remarks.
Thank you.
In closing I'm incredibly proud of our teams continued execution as we draw closer to the commissioner startup or just one.
And encouraged by the strong momentum, but we continue to see for our industry, leading technology as the world moves aggressively towards zero carbon future.
We'd like to thank all of our customers for their commitments to Oregon, our team in construction and engineering partners for their contribution to our company's success and our shareholders for their continuous support and with that I would like to ask the operator to open the lines of questions.
If you would like to ask a question. Please press star one on your telephone keypad now and you'll be placed in the queue. In the order received please be prepared to ask your question. When prompted once again, if you would like to ask a question. Please press star one on your phone now.
And our first question comes from Steve Burn from Bank of America. Please go ahead Steve.
Yes. Thank you you indicated that.
There is a fraction of the.
<unk> that you are going to produce it origin twos has already been allocated to produce pure xylene.
Eileen and and the derivatives P E T. I'm curious what what fraction of the CMS capacity of the plan are you allocating to that pathway.
And so therefore, what fraction are you going down another path, which.
Assume would be the <unk> chemists to use like P E F.
And why did you come to this conclusion do you do you have a view that.
The fewer in chemistry is could potentially create more value than going down the path P. E T.
Yes, Thanks, Steve Great question.
So we're not <unk>.
Disclosing the specific allocations of our of our CMS from origin too at this time, but we've.
Always talked about and plan for a portion of the <unk> to go to those higher value applications you mentioned.
I would call out surfactants is another one and CMS is this incredibly flexible molecule that can go on to be a lot of things and we've talked a lot about <unk> xylene and P. T and I've seen an enormous demand for that and we're excited to continue in engaging with customers and potential customers around additional.
Even higher value applications of our CMS and it's one of the one of the great things about origin, one coming on line is it enables us to produce large scale samples to those development partners as we.
As we build on the on the CMS platform.
And you picked up almost another billion in off take agreements.
Fair for us to assume that those are mostly.
P T base.
And if not what else you're getting in there now.
Or maybe more specifically.
Do you have any off safely agreements yet for the the carbon black or.
H T C or do you think you need <unk>.
Product from origin ones.
To deliver to your partner's before you could really establish some some off take agreements for the H T C.
Yeah. So it was another very strong quarter for demand and a <unk>.
Meaningful part of that is from or to reflect ship pair xylene and PDT offerings, but but for other materials as well and we previously announced marketing agreements.
Four HTC go into the carbon black application.
And.
Again, we are excited for words in one to come online and provide larger scale samples as we work to get even more carbon black after agreements and you know the <unk>.
Carbon black is not not quite as dropping as our parents xylene offering and so being able to provide meaningful samples as important to continuing to advance that business.
Pretty good thank you.
Thank you.
And our next question comes from Frank mentioned from Fermium Research. Please go ahead Frank.
Hey, good afternoon folks I wanted to talk about the timeline on origin, one and a capital spend associated with it you're maintaining that.
125 budget when plenty of 530 budget.
And you also indicated that you're going to spend this year up to $175 million in capex, but it looks like your to date you guys spent 58 million.
For the first three quarters. So can you just you know kind of walk us through the spending to get to that 120 530.
Over the next couple of quarters. Please.
Yeah sure. So we laid out the capital at by the way. Thanks I. Appreciate the question cause I hear from me again.
<unk>.
[laughter] yeah.
We laid out that debt and capex expectation beginning of the year and it was really anti.
Anticipating that we might need to place some early orders for large scale equipment for origin too.
We expect that the $125 and 30 million dollar budget that we laid out for origin one is.
We're still expecting mechanical completion by the end of this year, so I think that.
<unk> will likely hit that.
Pretty cleanly, but I think that what we're seeing right now is that we probably don't need to have quite as many.
Orders for origin, too, but we want to leave space for that and make sure that we have the sort of right capital allocation and in particular, we wanted to make sure that we don't we don't exceed it.
And so that was sort of the general thinking alongside that but but.
In any case if it isn't spent this year on origin too it'll be spent some time next year. We would expect all of that would be timing issues associated with capex not not a guidance up down in general for the project.
Alright, and it makes some sense given the fact that you're you're anticipating steel.
Steele cost et cetera, so the cost of the equipment to come down.
And if we're looking at 2025, there's no rush.
The equipment right now is that the right right right way to read that.
Exactly the right way to read that right.
Alright, great and then I.
Congrats on the ever ever rising upward capacity reservations off take agreements getting to 9 billion as you think about that.
That and let's make the assumption that.
Much of that comes to fruition, what does that get us up to in terms of origin numbers. I mean are we past two where we passed three or are we past or.
In terms of that very large number.
[noise] yeah. Thanks, Frank.
We are taking orders across all three plans for a variety of products and some products are are more sold out than others, but but yeah. We've we've been taking orders on origin three to be specific.
Alright, <unk>, implying that origin too is is probably booked up at this point.
So or origin too is substantially committed for Paris Island P T.
And so as we as we said in the in the <unk> in the script.
Our sales efforts are evolving to what we've talked about in the past of of focusing on advanced CMS derivatives carbon black and the other high margin products.
Gotcha alright, thank you so much.
Thank you.
As a reminder, if you would like to ask a question. Please press star one on your phone now.
And our next question comes from Eric Nine from Craig Hallum. Please go ahead Eric.
Yeah, Hi, there and so hold on for Eric Thanks for taking the questions.
First maybe on just kind of testing and sales cycle can you kind of talk about the evolution there over the over the past year pluses as customer customer demand has grown and turn the outlook. There is origin one comes on line.
Yeah. So.
Our.
Sales cycle tends to be.
A relatively small number of relatively large deals.
And they can they can take a variety of time to to come to fruition. Some.
Some move really fast some require more.
R&D engagement and things like that so there's not really a.
A number of months or things like that that I could I could 0.2, but I would I would say you know demand continues to be very strong continues to be strung across applications and geographies as well as strong across our product portfolio.
Alright, and then can you just kind of give an update on the feedstock strategy any of any update their pricing economics margins is kind of the markets developing and you're moving forward.
Yeah sure so.
Track strategy that we're expecting to use provokes hours wondering urgent too is residuals from the timber and lumber processing industry.
There are other feedstocks that are available in the region of I've wondered too that we may also incorporate into that feedstock strategy everything from agricultural residuals to even things like like.
Right post consumer recycled corrugated cardboard or paper products mixed paper et cetera.
So that's that's the feedback strategy.
Our interest in that is both economic because those kinds of feedback tend to be.
Lower value to other industries, and so of course that means better economic lie to us.
But also there's a there's a driver from our mission side to those kinds of feedstocks often are used or not used in such a way.
They really significant C O two and methane emissions.
Those kinds of biogenic or biologically derived feedstocks when they get put into a landfill. For example, they will often decompose anaerobic Lee in the landfill and generate methane emissions, which are really very potent form of greenhouse gases and so intercepting those kinds of biological.
<unk>.
Generating feedstocks.
Cardboard horse originally came from a Theresa somewhere and.
And preventing them from going into landfill, instead, using them and power technology, which can ultimately rocket into our mature lots of carbon doing material is a is a particularly powerful way of avoiding in mitigating greenhouse gas emissions using our technology. In addition to as I said the economic benefits of using can you talk about that.
Right right understood.
The questions that will help again.
That concludes today's live Q&A segment, I will now turn it over to US She scooped up Investor relations to conduct the next segment of our Investor Q&A.
Alright.
Thank you Ross as we've done on our last two earnings cause we'd let it all investors to submit questions for our third quarter call is part of our ask origin campaign. Once again, we were pleased to see such a high level of participation and Wanna. Thank everyone, who submitted a question in the interest of time will be taken the most commonly asked questions.
Our first question is for rich.
Rich what are <unk>, what are some customers and the investor presentation Order book page unnamed excuse me why are some of the customers and the Investor presentation Order book unnamed and when will you named them.
Yeah. So as you can see from the order book increased demand is very strong and we continue to see significant sales traction and when it comes to actually press release in these customers.
As in close coordination with these customers and.
Sometimes we don't announce some right wing deals or signs or or released their names for for a variety of reasons.
A notable example would be that some customers want to wait and announced their relationship with us in conjunction with their own broader ESG announcements.
So we really differ too to customers on win.
Making our relationship public works best for them.
That makes a ton of sense appreciate the color of their.
John since you did such a great job covering.
Feedstock in our focus on sustainability of the biomass feedstock I just wanted to see if there's anything else you wanted to touch on there or if he thought it was best to move on to the <unk> question.
Yeah, I think that that is a good question as you mentioned I gave up pretty comprehensive answer to Aaron on it I think one other thing that might be worth noting is that.
You know on the economic side at the fact that we can use feedstocks.
Such as those that I described is what allows us to access tax exempt bond financing.
For projects like origin too so there's that.
Sort of primary economic impact of using feedstocks like that which is that there are less expensive and and of course, there's the mission oriented impact of avoid.
Voiding pretty potent greenhouse gas emissions.
But there is a secondary economic impact, which isn't it allows us to access.
Really attractive kind of financing for these projects and that that can make a real difference as well so that might be worth highlighting for folks too.
Thank you for being so thorough with all of that and I guess, you know could you clarify for folks is there any P fast in our products.
Yes, it's an interesting question, we get we get this more often than I would expect.
You know that the performed by the right password.
Sanford per foreign aid alkyl substances in.
And that's a class of compounds, which.
As a Kenneth you wouldn't necessarily associated with any of the stuff that we are doing but.
But they're they're a substance of concern I would.
Take for the human species.
So since we're dealing with chemistry and materials and sustainability of chemistry and materials.
They tend to come up as as part of that kind of discussion and the short answer is no. We don't have any per pointed out until substances in our products.
Nor do we have those processes and hour or sorry, those those chemicals as intermediates or solvents or something like that in our processes. So we don't really we don't really touch them, but there is something that's sort of actually hits on a broader category of products and I would say a broader category of applications that you can use.
Our products for which we sometimes think of it as sort of safer safer chemicals and intermediates places where we can provide.
An intermediate that performs as well or perhaps even better than the fossil based equivalent material or analog but doesn't have some of the health impacts and so I would say there are of course sustainability is a big driver for materials and chemical with these days.
Should be I think another one is security of materials and chemical that security of supply.
Of course with with that sort.
Sort of geopolitics of all these days, that's something that is more papa buying for people, but I think another huge driver of of change in.
Materials and chemicals World is this this sort of human health and safety component as we understand better the impact that some of the materials choices, we made as humans.
Somehow 50, 60, or even 100 years ago, how those choices are affecting us.
I think we're much more sensitive as a species too.
How should we select materials, now, which don't have those kinds of negative human health impacts and.
<unk> of course, one they're they're one of these class called forever chemicals, which have their own sort of risk profile.
But there are other materials that we find really interesting targets because we could go in with our molecules and replace things like you know like BPA or salaries et cetera.
Uhm.
And and provide again sort of as good and often better performance in the application and you have eliminated that humid health issue. So we're.
We don't use any any fast on a process or in our products.
But I think that touches on a much broader category of sort.
Sort of value that we can provide using our intermediates that we're pretty excited about.
That's great John .
We're going to turn to <unk> for a couple of finance related questions.
<unk> could.
Could you.
Help us understand to what degree rising interest rates and tightening financial conditions. Our problem is projects financing an issue at this point.
Sure.
We continue to consult with the leading financial institutions specializing in financing capital projects exactly like this and we're pleased to reaffirm our financing assumptions per or origin to remain reasonable and achievable Ah.
I'll remind you of the $400 million private activity bond allocation from the state of Louisiana, We announced earlier.
Provides a strong foundation for the financing of allergic to again in combination with some of the non volume cap the tan tax exempt financing structures.
Enable the debt financing or origin to using entirely tax exempt bonds and we're continuing to work with the state and local agencies in Louisiana on our bond financing and we are pleased to report that origin to financing remains on track where.
We're also continuing to work with financial institutions on other forms of traditional private financing federal loan programs.
Including through the through the USDA in the department of energy.
No I should also just reiterate the some of the federal.
Programs that Rick mentioned earlier, including the recently passed inflation production Act, which can also provide incremental source of funds for porch them too.
Great <unk>.
Really appreciate all of that extra color <unk>.
That will conclude the Q&A portion of today's call I'll now turn it back to rich for closing remarks.
Thanks situation. Thank you all for joining us today, and we look forward to keeping everyone updated on our progress.
This concludes the call.
Since this concludes today's conference call. Thank you for attending.
The House has ended this call goodbye.