Q3 2023 Origin Materials Inc Earnings Call
Thank you for standing by this is the conference operator.
Welcome to the origin materials third quarter 2023 earnings call.
As a reminder, all participants are in a listen only mode and the conference is being recorded.
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I would now like to turn the conference over to Ashish Gupta Investor Relations. Please go ahead.
Thank you and welcome everyone to origin materials third quarter 2023 earnings conference call joining the call today from margin materials co CEO co founder John vessel co CEO, Richard White, and CFO, Matt <unk> out of this call origin has 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 web site at Orange and materials Dot com.
Please note on this call we will mention 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 representing views of any subsequent date, we undertake no obligation to revise or publicly release the results of any revision to these forward looking statements.
New information or future events.
These statements are subject to a variety of external uncertainties that could cause actual results to differ materially from expectations.
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 filed on November nine 2023.
During today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of origin 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.
You see each of which is posted on our website.
The webcast of this call will also be available on the Investor relation section of our company website with that I'll turn the call over to John.
Thank you good afternoon, and thank you for joining us before we begin I'd like to welcome Matt Glavin, Oregon's New Chief Financial Officer, I'm confident that will be a tremendous addition to between <unk> 16 years of executive level experience within publicly traded technology driven companies operating in complex environments.
Moving track record of leading initiatives to fund the commercial scale up of disruptive technologies into a well established industry like a CFO. He has successfully led all finance functions, including equity debt and strategic partner capital acquisition.
Long range project budgeting forecasting and private progress reporting.
We look forward to working with Matt welcome.
I'll start by reviewing our recent success initiating commercial scale production network and one we believe that this is a historic milestone not just for origin, but for renewable manufacturing more broadly.
I will then provide a brief update on orchard to next I will turn it over to rich who will provide a commercial update.
That will conclude with the financial overview.
In early October we announced the commencement of production at origin won our first commercial scale plant and the first plant that it's kind of like a founder I have never been prouder of our team.
Origin, one scaled up our core technology platform for converting sustainable wood residues into intermediate chemicals, including CMI for HCC and oils and extracts the scale up of a new fundamental chemical technology like our platform is not to be taken lightly and we're thrilled to have a breakthrough moment.
We are very pleased with our planned financial performance. The brand has worked as close to flawlessly as we could've hoped producing at commercial scale entails far more than flipping that switch the preparation is extensive.
The moment the plant came alive and made its first product was unforgettable.
The origin team did it despite a pandemic a snarl global supply chain.
Occasionally horrendous weather high inflation and many other challenges and they get it with uncommon poise and professionalism congratulations origin team.
You got us through the biggest inflection point in our company's history.
As an operating chemical plant origin, one proves our technology scalability, a key milestone for advancing our strategic partnerships. We are more excited than ever to deploy our platform and begin to meet the growing demand for our technology and products.
Having produced CMS and HTC at origin. One we were in the process of setting materials to customers and strategic partners for sand. This includes a specialty chemical company and a major surfactants company for HTC does include several major carbon black companies for using green tires that are up.
Major tire companies rubber companies and specialty carbon user spending plastics batteries pigments inks skirting dispersion than other applications have expressed interest in our HTC pretty storage in one.
Our process of origin won his heart batch art continuous.
One benefit of our origin one system, we expect a more modular configurable setup to allow us to adjust operating parameters more easily than if we were running a fully continuous process.
For a closer look at our June one I encourage you to watch our latest video released this afternoon and available on our website. It shows you. The plant provide our first look at senior knock on HTC produced all right let's.
Once you get to know our team and walks you through taking samples from our CMS storage tanks for analytics fantastic.
We're proud of our origin, one operations team, which is doing the hard work of running a plant, while creating a culture of operational excellence and maintaining safety as a core value.
Doing an exceptional job looking ahead, we aim to ramp up production and very feedstocks over the coming months.
For origin to we continue to advance the project with an appropriate focus on optimal funding strategies. We're happy to report that many of our strategic partners have leaned in AST.
How they can help us bring world scale plants online as soon as possible.
It include co development with one or more strategic partners, we look forward to providing additional detail on these last capital I kept our strategies for building a world scale plant and our February 2024 earnings call.
We continue to expect that phase one of ordering two will be cash flow positive once operating at capacity.
The next step for origin to is a revised speed or front end engineering design package, we will periodically update on feed progress on project costs as appropriate based on guidance from our engineering procurement and construction partners and relevant macro indicators.
Regarding product development, we continue to find what we believe are higher value applications for each of our product revenue streams. For example, we expect the market for the Palmer P. F to quickly emerge as an adjacent value add market PTC market.
We're developing high value <unk> applications beyond carbon black for sustainable tires, such as batteries again, we're also focusing on developing fuel from the first phase of origin to generate profits from our oils and extract it straight.
With that I will turn it over to rich who will provide a commercial update.
Thanks, John I would also like to add my welcome to Matt, but we are very happy to have on board.
First demand for our products remains strong inbound inquiries remain broad and inclusive of our higher value products.
Our over $10 billion in signed off take agreements capacity reservations reflects the profound level of alignment and incentive for bringing our technology platform to the market.
The world is struggling to decarbonize, the traditional routes to making products across a trillion dollar addressable market.
Most are trying to find solutions within the confines of what they have done historically.
With the freedom to operate outside those compounds, we have developed new pathways that meet the needs of the low carbon future theyre low cost renewable and offer performance at least identical to if not better than incumbent fossil based solutions.
As we move ahead and as John alluded to we are laser focused on responsibly, managing our cash flow we.
We see a great future for origins technology, and the vast range of products that we can bring to market.
We also understand that what we are doing like many hard science efforts is challenging work as.
As such we are taking great care to responsibly manage our cash so that we can navigate the road ahead in a way that best serves our shareholders.
As we advance our origin to project, where at the same time implementing a rigorous cash conservation program. We expect this program to balance our need to reach EBITDA positive with the need to maintain our forward momentum.
Under this program, we are prioritizing revenue generating projects with the greatest near term contributions to cash and seeking opportunities to defer research expenses or other programs targeting longer term results.
These actions are consistent with feedback that we've heard from our investors with whom we have spent substantial time this quarter.
Opportunities to generate or conserve cash include funded joint development agreements. Our JDM program continues to gain momentum with more funded programs in our pipeline than ever.
Other cash generating opportunities include continuing to apply for government grants and related programs managing our expenses and developing other unique origin technologies and products such as our caps and closures business.
We are currently engaged with many of the world's largest consumers and producers of caps and closures by market share and we are advanced discussions with a few of the leading machine manufacturers in the world for our technology.
Just last month, we reached another milestone in caps and closures commercialization. We ran our first automated production line trial with encouraging results.
We're very excited about these initiatives and we look forward to providing further updates in the future.
Our engagements with some of the world's leading companies to deploy our technology platform continued to accelerate.
Since becoming a public company, we have fields of interest from multiple parties, who recognize the unique value of our platform.
As John mentioned, we are now seeing many of our strategic partners ask how they can help us bring world scale plants online as fast as possible.
With origin, one having commenced operations and started making products. This interest has only increased.
Our potential licensing and commercial partners are world class and include large well capitalized market leaders.
<unk> productive mutually beneficial arrangements as a priority and one that we expect will be well received by the market.
Look forward to providing updates as appropriate.
Before I turn it over to Matt I would mentioned that this quarter. We were pleased to announce a funding award from biomass to advance U S Department of defense sustainability goals as part of our project, we will be providing sustainable carbon black and polymers and the federal government and fleet de carbonization.
We are grateful for the award in June is a positive validation of our attractiveness as a funding target for grants and a further demonstration of alignment and the value we offer with respect to federal de carbonization goals.
As we look ahead, we remain committed to bringing our sustainable products to market, while maximizing shareholder value.
I will turn it over to Matt to discuss financials.
Thanks, Rich and good afternoon, everyone.
First let me say, how pleased I am to have joined origin rarely if ever in a career does one have an opportunity to be part of an industrial revolution much less lead one origin is clearly leading the way in the transformation from fossil fuel based materials manufacturing to decarbonize materials manufacturing.
Oregon's novel biomass conversion technology is truly game changing and a vital element in our fight against climate change and providing the better performing materials that the world needs to have such a novel and complex technology online and already be producing product at origin won in such a short timeframe.
The remarkable technical achievement and a testament to an exceptional team most of all I look forward to helping the team execute the forward plan for exceptional shareholder value creation.
That said, let me provide some commentary on our results with regards to revenue we reported our highest quarterly revenue thus far a total of $7 1 million as compared to no revenue in the prior year period. These are mostly comprised of supply chain activation revenues in preparation for our origin one scale up.
The remaining revenues were from J D I agreements.
Third quarter operating expenses were $12 9 million as compared to $9 7 million during the same period in the prior year. The difference driven primarily by increases in general administrative expenses.
Net income was $30 9 million for the third quarter compared to net income of $8 3 million in the same period prior year.
<unk> in the $30 9 million of net income was approximately 28 million more in gains from increases in the fair value of our warrants and earn out liabilities than in the prior year net income.
That's illustrated in our reconciliation of GAAP to non-GAAP results included in the earnings release, turning to our balance sheet origin ended the third quarter with $189 $5 million in cash and cash equivalents and marketable securities regarding origin to as rich referenced earlier in the call.
<unk> mix of funding for project development is evolving with increasing interest from strategic partners moving origin one's operational scale has capitalized interest from well capitalized strategic partners to participate in scaling our technology in order to better secure access and priority regarding with the central capability.
We expect to be able to provide more insights during our February 2024 earnings call I will conclude with our 2023 outlook prioritizing near term cash generation origin intentionally scaled back its supply chain activation business during the quarter. Although this business has long term strategic value. It has low short term margins.
And higher working capital requirements. In addition.
I'm joined development programs, we previously projected to close in 'twenty to 'twenty three we now project to close in 2024. Therefore, we are expecting 2023 revenue of 25 million to $30 million versus 40 million to $60 million as a result of this re prioritization.
Expect a beneficial impact on EBITDA loss, improving our guidance range to 45 million to $50 million from 50 million to $60 million.
Lastly, we intend to provide 2020 for guidance on our next earnings call expected to take place in February with that I will turn the call back to John for closing remarks.
Thank you Matt.
I would like to briefly remind everyone what a massive opportunity our technology represents our aim is profound to change how the world makes its materials, including some of the basic ingredients found in nearly everything.
Doing so will improve the performance of materials across many sectors, adding new functionality to be exact and chemical industry as well as eliminate a major source of carbon emissions today and that is take a step towards preserving the future of our planet.
Our technology is unique and strongly protected by patents the magnitude of the opportunity with over one trillion dollar addressable market is stunning in its scope and the level of alignment between customers governments and strategic partners, bringing our materials to market.
Scaling up our technology as we have done with origin won is a win not just for Oregon, but for all the stakeholders deeply committed to bringing origin solution to market.
In closing I'm incredibly proud of our teams continue to hard work and want to congratulate all of those who made the scale up of our technology and origin won a reality. Thank.
Thank you to everyone, who has put tremendous effort into building and now operating our first of its kind plant.
Like to thank our customers for their commitment to origin, our team and our partners for their contributions to our company's success and our shareholders for their continuous support and with that I will ask the operator to open the line for questions.
Thank you.
I'd like to ask a question. Please press star one on your telephone keypad now you'll be placed into the queue. In the order received please be prepared to ask your question when prompted.
Once again, if you have a question. Please press star one on your phone now.
And our first question will come from Frank Mitsch with Fermium research.
Hey, good afternoon generates and nice to meet you over the phone, Matt and congrats on the.
The commercial operations on an origin won.
I'd like to drill a little bit more into into origin won and how it's how it's operating and so forth I think you mentioned that you'll be testing out various feedstocks.
And you know.
With the unit operating both on a batch basis not on a continuous operation basis can you speak to the diversity of feedstocks that you've been able to run I assume successfully.
Since it's been up and running and can you talk about how the yields are turning out relative to your.
Initial expectations.
Yeah sure Hey, thanks.
For the question John.
We've had.
We know Theres a lot of interest around this so first of all we haven't been running a lot of different feedstocks, yet, we're really still running on starch.
We want to make sure that we're where we understand the performance of each individual piece of equipment on starts before we start transitioning to the other feedstocks.
But so.
So far we've seen really really excellent performance at all of them. One you asked about yields in particular I think that's an area, where we were pleasantly surprised by the performance of the plant so far.
Really often with these plants you perfect endpoints like this you would anticipate that maybe your yield performance is pretty subpar from the very beginning and then you sort of learn how to ramp it up hopefully quickly. What we saw was even from the very beginning we saw really excellent yield performance.
We're not ready to talk about sort of overall productivity metrics for the plant yet.
Want to get there, we just haven't had enough data yet.
But so far really pleased although as I said still still running on starch haven't transitioned over to biomass yet.
Gotcha Gotcha.
Helpful and if I could drill down also into the sales guidance for 'twenty three.
Taking it down somewhat you know you mentioned on the supply chain activation in some joint development programs pushing out into another year, but I want to talk about.
And you also mentioned that your quote unquote in process.
Delivering materials.
That you are producing a offer the starch based and so.
Where are where do you stand in terms of the timeline for approvals by the various customers that are you're sending the materials too.
Meeting product specs and so forth and when are we going to be looking at.
The top line being influenced by the delivery of those on spec materials.
Hey, Frank it's rich great question.
The.
We've said before origin, one gives us an incredible capability to deliver.
Large scale samples to our many customers and so getting meaningful quantities of CMS and HTC into the hands of multiple customers drives our near term funded <unk> revenue, which is the principal way that these materials will be sold in the near term and so as we said in the script already sending materials.
<unk> to customers and expect that to only continue and ramp as we go forward. So that will be a meaningful driver of our revenue in the short to medium term.
So rich if I could just follow up what are the customers, saying in terms of.
The product quality for the materials that you've already signed up I mean, I I am hoping that you can say it's on spec.
And they are ready for us to produce more et cetera, but I'd, rather hear you say that rather than me.
Well.
Yes.
So far so far so good in terms of the.
The materials were producing.
But we expect it to produce and what our customers.
As expected us to produce so I would say we've had no surprises and everything is going very smoothly.
Okay, great. Thank you so much.
Thank you.
And our next question will come from Steve Byrne with Bank of America.
Yes. Thank you.
Would you characterize the level of interest that you are getting from our partners.
To be more.
Focused on origin too and the product slate.
<unk> are targeting there.
FTC, a derived products or would you say its more from.
Interested parties to license your technology can build their own plan.
And could this latter bucket actually.
<unk> commercial scale faster because you know this would be an existing plant. They would already have a lot of the infrastructure that you would be building from scratch at origin to your thoughts on that.
Sure.
Thanks for the question, Steve I would say, it's really all of the above so.
Our customers are very understanding that scaling of new platform technology is challenging.
They also understand that they really have few alternatives for scaled solutions and so the reaction we get from our customers is them leaning in and saying how can we help how can we help you guys scale and so that's from customers and then from potential.
Licensing partners will call them.
Similar in terms of their continued interest in working with us to scale, our technology and we even now have customers wanting to get involved in those conversations to help help partners scale, our technology and so think of those partnerships as they can take a wide variety of structures, but at the core.
We're providing the technology, which we spent 12 years developing this highly proprietary technology platform that can go on to make all kinds of things into a trillion Tam and partners have a variety of things some of them have feedstocks are brownfield sites that can be highly relevant.
Structuring and capital projects expertise some of them have capital and are looking to deploy capital against these kind of goals and so really a wide range of opportunities for us to.
Bring our technology to market at scale.
And if you could get funding towards <unk> to that.
Was for <unk> would you consider going back down that path I know you have made a change in your focus for origin to but just.
I'm wondering if you would consider those those alternatives.
Yeah.
Well, we're absolutely open minded and realize theres a lot of different permutations that could help bring our technology to market and we are very excited about <unk> and I would say continue to find more and more reasons to be excited about <unk> as we develop out that.
Product capability.
But we're also very committed to para xylene and <unk>, which is a massive market and there's enormous interest in demand for it. So we're looking at a variety of options to to bring both products to market.
At scale.
Okay. Thank you.
Thank you.
And our next question comes from John Roberts with Mizuho.
Thank you.
We're having some problems with some of the gauges and measuring equipment I think in Oregon, One have you solved all of that.
Yes, so with a plant like origin one.
Excuse me and by the way Hey, how are you.
So with a plant like origin won one of the interesting component of it is is what's the right way to instrument a plant like that.
And especially with our first of a kind plant, we really want to understand as much as we possibly can of the data that's coming off of it and so in a lot of places we had.
Multiple instrumentation or sensors associated with it given sort of component or processed app or whatever it is that youre looking for.
Measurement system, and what was sort of interesting was to see and this is sort of part of the purpose of a plant like that frankly is to see which of those are the right ones to use in our particular system.
And triangulating on that.
And systems that work the best.
And so yeah, we've definitely learned some things there I think we didn't see anything that was shocking.
And frankly in a lot of cases, we.
We would look at it and say well.
This seems like an unlikely measure right measurement system for this but let's put it in there anyway, because we might be surprised and sometimes we were surprised and things worked when we didn't expect them to from a central perspective, and sometimes we werent surprised and they didn't work really all that well.
But yes, so we've certainly been going through and learning a lot about that.
Additionally, when you bring online a plant like this and you're not quite sure which of the measurement systems, we're going to work out the best you have to do a little bit of that.
Navigating through the data that youre getting and that's that's.
A fun ride frankly.
And if you.
If you spend time with our engineers window, they'll tell you about that.
But yes generally speaking I think things have worked out pretty much the way that we anticipated.
All the way through it's been it's been surprising.
As I said in my earlier comments it was a challenging project.
First because offer some kind of plants or a relatively challenging but also because doing it through COVID-19 and supply chain challenges et cetera made it even more so.
But but once you consider all of that I think the plants performed really quite well.
More well behaved than we expected it to be frankly.
And then how long has the origin won't run run continuously near rated capacity is it run continuously and their rated capacity for weeks at a time before you have to actually take it down and make an adjustment and so forth.
Well welcome that as well.
[laughter].
We're not we're not really running at close to a rated capacity yet.
We're planning to at this point I think when we originally put together to run the ramp schedule for this plant.
It was that we gave ourselves lots and lots of room to bring it all the way up to capacity.
Specifically as.
As I mentioned in my prior comments and I know you and I have talked about before.
It's really you could think of this as a semi works plant on the front end in minutes at a continuous plant on the backend and so part.
Part of what drives this is we're running batches on the front end and then accumulating enough material that we can run the continuous backend and so there is some judgment involved in whats the optimum way to learn on these different systems and we're definitely still in that phase, where we're producing product and we're really happy with the way that we're doing that but we're.
Not at the point that we can really get productivity data around that much of the plant at this point, we can speculate and engineers some engineers like to do that by that.
We're not really prepared to make comments at that higher level, yet, but just not enough data yet.
Okay. Thank you.
And our next question will come from Eric Stine with Craig Hallum.
Hey, this is <unk> on for Eric Stine here can you guys just provide more details about the progress being made for financing for Oregon, Q and is the $1 6 billion still anticipated for the Capex.
Yeah.
Yes, so with respect to Capex capital estimates, we really don't have materially more information that we provided last quarter at this point.
As we mentioned we're going through the revised feed package development.
It takes some time.
Could you give that feedback should element and then it takes time after that to do the re estimation and so we really wont have more information.
In the really near term of course.
We'll report back on that when we get a chance to.
<unk>.
The other point around sort of financing more broadly for origin or two.
Really refer back to the richest waste grind partnerships and partner interest. There. We spent a lot I think a big part of this is gonna be understanding what's the right way to approach.
Two financing origin too with respect to partners and then also folding in some of the considerations around them.
Sort of licensing technology licensing and partnership and scale up.
That could be other than yes. Unfortunately.
And that as well.
Yes, so I think thats it by the way it sounds like an open line. So people can check they're right there.
Got it and then so noticing that.
10 billion in demanding surpass though are you guys expecting that kind of number for FPGA and if so do you guys.
One for that.
Okay.
I would say.
$10 billion includes a wide variety of our products, including <unk>.
We do not think we will have any problem with FPGA demand.
Like I referenced earlier, we continue to find more and more interesting applications for FCA were we get not just the sustainability benefit from the material, but also improved functional performance.
Really a wide variety of applications and so.
Similar to our PX and PTT.
Story for origin demand is just not it's just not a problem.
Awesome Alright, thank you guys.
Thank you.
As a reminder, if you would like to ask a question. Please signal by pressing star one on your telephone now.
And our next question will come from Pavel <unk> with Raymond James Financial.
Yeah. Thanks for taking the question so whenever we see revenue guidance coming down by EBITDA.
Improving obviously that speaks to.
And negative margin profile.
That context, I guess youre not formally given guidance for 24, yet but will you be.
Attempting to minimize cash burn by minimizing production or the opposite where youll want to kind of test out the.
The full capacity of origin, one and be willing to burn some extra cash along the way.
Yes, we are.
Very focused on cash and so.
Generating products to support our funded J D E revenues, obviously, continuing to learn and advance the development for origin to other potential plants.
So we're focused on cash.
But we're also advancing our technology platform. So we will continue to do the things mainly due to keep learning and keep innovating and keep and keep moving forward.
Okay.
I've asked this question on.
Couple of previous calls I thought it would maybe get an update.
When you compare everything thats changed between the regional back guidance.
Up through today in terms of.
The price of outputs and but also the cost of inputs right everything is generally inflated.
Which which cited winning in other words is the platform benefiting disproportionately on the <unk>.
Top line or kind of losing ground because of a higher cost structure.
Yes.
It's obviously an interesting question given that the last couple of years I'd say.
We don't try to track on a day by day basis.
What all that looks like.
I don't look at that on a on a sort of medium to long term basis, especially since we're looking at a plant that's going to get built in a few years.
<unk> be running I should say in a few years.
But but I think generally speaking inputs and outputs right now are actually relatively consistent.
Compared to that.
The projections that we provided a few years ago.
If if I don't remember if you asked this question, but I don't think so but if you'd asked it.
In a particular quarter in 2021, my answer might have been different right because energy prices got quite high and up.
Pretty good point too.
Containing his perspective and energy prices went up quite a bit and that was obviously one of our inputs.
I think the thing that we've seen.
That's the biggest change there.
That relates to us is actually generic across the industry, which is the capital costs are significantly up.
I think that's right.
Relatively obvious both for us and in the industry.
But it really doesn't have a meaningful impact.
I'll say, what we haven't seen yet is a product prices.
Commensurate with capital cost increases I think that from that perspective, we're just going to have to see existing capacity fill up.
And and be utilized before the investment economics of new plants with higher capital costs start to impact pricing downstream.
Okay. That's it I appreciate the color on that last question.
Are you receiving any.
Any wins or any other section 45.
<unk> X or the credits.
From from your sales in Oregon.
Origin, one assuming you have some sales in the U S.
Yeah, So we arent, we arent anticipating receiving wins there.
Generally speaking the product that we're producing off of origin one is.
For the vast majority of it is going to be going into chemicals and materials applications.
Rather than fuel applications, although there will be some.
Goes into fuels, but but.
Rent component of that is not a major part of our calculus.
Understood. Thank you guys.
And again, if you'd like to ask a question. Please signal by pressing star one.
For just a moment.
And that concludes today's live Q&A segment.
I'll now turn it over to Ashish Gupta Investor Relations to conduct the next segment of our Investor Q&A. Please go ahead.
Thank you Jan as in prior calls we have invited all investors to make questions as part of our ask Arjen campaign, we want to thank everyone who participated on many questions were answered during prepared remarks, and Q&A, we would now like to highlight a few more.
Starting with John or I guess, all the questions on for John today.
On one of them one what is the intended near term journey for the intermediates youre producing.
Yeah. So one of the questions as you mentioned was around.
Destination for those intermediates and then specifically we had a couple of questions around whether those were going to be going towards para xylene.
Answer is yes, some of them will be going to Paris Eileen.
We have some some proprietary chemistry that we developed.
Both to make that a reduction to our diamond Jo Ann and then also the deals holder for dime uncle, Jerry on type curves anyway. So we are going to be doing that.
At at sort of OLED, one instantaneous rate scales.
Maybe a little smaller but actually the vast majority of the material coming off of one will be going towards.
Towards other applications and there's a whole variety of them is as we mentioned in our prepared remarks.
There are a lot of different things that those materials will be going towards and frankly, that's part of the value of them. One is that we get to see.
The value of our intermediates going into other applications, making completely new chemicals that we really havent gotten a chance to play with that at those large scales before neither of our customers.
Thank you for that added color John.
Moving to unit economics and margins, we've received multiple questions surround economics of margins associated with our products.
Some of which we've touched on here, but can you provide us some additional color.
Yeah.
This is related to <unk> question.
I think so far we really haven't seen enough.
Data out of Oman to save more than yields are looking really good and the performance of the plant in general is good but as we collect additional data.
We get a chance to compare that to the unit economics that we expect to see off of an O M, two or more sort of and I owe them to scale.
Going forward, we know people are interstate we're interested to we'd like to be able to communicate it out on that more precisely just not quite enough data yet.
Okay.
Okay. Thanks for that.
We've received several questions about origin to including whether there's any updates on financing of the plant.
Can you help us more there.
Yes, I think.
We ended up covering that and a lot of the analyst questions.
Good for all the details of it but I'd say, if there's one more generic comment to put on top of it. It's that we still see the same existing sources of financing that we've discussed historically, so things like that.
The private activity bonds et cetera, we still see those as as playing a really meaningful role and then additionally.
We're seeing that sort of partners and customers leaning in.
Participate as well so I think we're seeing more options for financing fewer and we really haven't haven't taken anything off the table yet that was already there.
I appreciate it John wrapping up here on caps and closures can you just give us a better sense of the opportunity you know any color you can provide would be great.
Yeah sure. So we're really excited about this application, we really see it as an application that comes out of.
The materials and application development.
We do for our new materials so.
Part of developing new materials is you've got to go have the expertise to work with customers downstream.
To.
Help them understand the way that youre materials could improve what they're doing and so we have we have a technical staff that's really quite excellent.
In order to interface with those customers on those different applications and one of the things that emerge from that.
Is this caps.
So we're really excited about it you know some of the key points to that caps business are.
Caps, while just one application.
In this area are actually it's a huge market.
60, plus billion dollar market. So it's by no means trivial.
And really the key driver here is the P T caps seem like.
Frankly kind of obvious why wouldnt you make the cap on a bottle out of the same material, we can make the bottle out of it.
Especially since the bottle materialize, so hubei criticism recycled, whereas the cat material. Those theoretically recyclable is is really much less frequently actually recycled.
And so.
Theres sort of motto material package seems like it's so obvious but actually there are some really key technical insights that we're required to make that work and thats why people haven't done it in the past that's been something of a Holy Grail that people have talked about for a long time, but nobody has done it successfully so we're really excited about that.
As I said, it's that it enables really them a single material on mono material.
For the whole beverage package.
And that's that's a big deal really improves the recyclability of the package overall.
You actually get some benefits over using pega as a cat beyond Recyclability is while it's got better barrier.
Then the polyethylene polyolefin caps too.
So we're really excited about it we see customers.
Really excited about it and so it's very much an adjacent.
Sort of innovation to our core business and our core technology.
But it's one that has a tremendous amount of customer pull in demand and we're excited about it also because it's a it's something that moves quicker catheter capital cycles, and you see chemical plants, moving and so we think that that lines up really nicely with the way we're thinking about the world right now.
Very exciting really appreciate all the extra color and want to thank the investors for those thoughtful questions.
That's going to conclude the Q&A portion of the call I'll now turn it back to rich for closing remarks.
Thanks, Jason and thank you to everyone who joined today, we're looking ahead with confidence energized by the team's recent achievements and the incredible opportunities in front of US our success with origin. One was a historic milestone that fundamentally proved our technology scalability and we're more excited than ever deploy our platform and begin to serve our over one trillion dollar addressed.
Market, while helping to solve some of the biggest environmental and performance challenges of our times, we're very focused on managing our cash including near term revenue and.
And we look forward to our next update with you in February Thanks again.
This concludes today's conference call. Thank you for attending.
The host has ended this call goodbye.