Q4 2023 Origin Materials Inc Earnings Call
Operator: Thank you for standing by. This is the conference operator. Welcome to the Origin Materials fourth quarter and full year 2023 earnings call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad.
Thank you for standing by this is the conference operator welcome to you are you getting materials fourth quarter and full year 2023 earnings call.
A reminder, all participants are in listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions.
You joined the question queue you May Press Star then one on your telephone keypad should.
Operator: Should you need assistance during the conference call, give me a signal on the operator by pressing star and zero. At this time, for opening remarks and introductions, I would like to turn the call over to Matt Plavan, CFO. Please go ahead.
Should you need assistance during the conference call at Michigan, an operator by pressing star and zero.
At this time for opening remarks, and introductions I would like to turn the call over to Matt Sullivan CFO. Please go ahead Sir.
Matthew T. Plavan: Thank you. Good afternoon, everyone, and thanks for joining us. Speaking first today is Origin's co-CEO, Rich Riley. He will be followed by co-CEO and co-founder, John Bissell, and myself. After that, we will open the call to questions from analysts and discuss questions submitted as part of our Ask Origin campaign. Ahead of this call, Origin has issued its 2023 fourth quarter and full year press release and presentation, which we will refer to today. These can be found in the Investor Relations section of our website at OriginMaterials.com.
Thank you good afternoon, everyone and thanks for joining speaking first today its origins co CEO, which widely he will be followed by co CEO and co founder John or myself. After that we will open the call to questions from analysts.
And discuss questions submitted as part of our ask origin jumping.
Ahead of this call origin has issued its 2023 fourth quarter and full year press release and presentation, which we will refer to today. These can be found on the Investor Relations section of our website at origin materials dotcom.
Matthew T. Plavan: Please note that some of what you will hear during our discussion today will consist of forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainty. These statements reflect our views as of today, should not be relied upon as representative of views of any subsequent date, and 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.
Please note that some of what you will hear during our discussion today will consist of 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 about views of any subsequent date and 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.
The statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations for more information.
Matthew T. Plavan: For more information, please refer to our filings with the SEC, including our annual report on Form 10-K, which will be filed on Monday, March 4th. 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 substitutes for or in isolation from GAAP results.
Please refer to our filings.
Yes, you see including our annual report on Form 10-K, which will be filed Monday March forced during today's call. We will discuss non-GAAP financial measures, which we believe are useful.
For metal measures of origin materials performance. These non-GAAP measures should be considered in addition to and not as substitutes for or in isolation from GAAP results.
Matthew T. Plavan: 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, which will be 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, Matt. Good afternoon, everyone, and thank you for joining us.
You will find additional disclosures regarding non-GAAP financial measures discussed on today's call.
In our press release issued this afternoon, and our filings with U S. D C, which will be posted to our website.
<unk> cast of this call will also be available on the Investor Relations section of our company website.
I'll turn the call over to rich.
Thank you Matt good afternoon, everyone and thank you for joining us.
Richard J. Riley: For Origin, 2023 was a watershed year, which included the commencement of production at Origin One, a key milestone in improving the scalability of our biomass conversion technology. Furthermore, we've made great progress on initiatives that significantly de-risk the business on the path to profitability. Indeed, today we are pleased to announce that, owing to the strong momentum of these initiatives, we now have a path to profitability entirely independent of the scale-up of our biomass conversion technology and related manufacturing plant construction. These initiatives are led by our All PET CAHPS Enclosure, a highly differentiated solution for the over $65 billion caps and closures market. Expected revenue from these initiatives, coupled with our cost reduction program, will extend our cash runway and eliminate the need for an equity capital raise to achieve sustained profitability. Origin ended the fourth quarter with just over $158 million in cash and cash equivalents and marketable security.
Oregon 2023 was a watershed year, which included the commencement of production at origin won a key milestone in improving the scalability of our biomass conversion technology.
Furthermore, we made great progress on initiatives that significantly derisked the business on the path to profitability.
Indeed today, we are pleased to announce that owing to the strong momentum with these initiatives. We now have a path to profitability entirely independent of the scale up of our biomass conversion technology and related manufacturing plant construction season.
These initiatives are led by our all P T caps and closures business a highly differentiated solution for the over 65 billion dollar caps and closures market.
Expected revenue from these initiatives coupled with our cost reduction program extend our cash runway and eliminate the need for an equity capital raise to achieve sustained profitability.
Origin ended the fourth quarter with just over $158 million in cash and cash equivalents in marketable securities.
Richard J. Riley: Having prioritized revenue-generating projects with the greatest contributions in near-term cash and seizing opportunities to defer research expenses or other programs targeting longer-term results, our expected 2024 net cash burn is between $55 million and $65 million, with Meaningful Growth Profit Generation anticipated to begin in 2025. This is primarily due to the strong commercialization progress of Origins, Caps, and Closures, which could begin to generate revenue within the next 12 months, with an expected 2024 cash burn of less than $65 million and our expectations for significant gross profit generation beginning in 2025 with a healthy growth trajectory thereafter. We forecast maintaining a solid minimum cash floor on our way to sustained profitability and hence the expectation that we will not require additional equity capital.
Having prioritized revenue generating projects with the greatest contribution to near term cash and seizing opportunities to defer research expenses or other programs targeting longer term results are expected 2024, net cash burn is between $55 million and $65 million with meaningful gross profit generation anticipated to begin in 2025.
This is primarily due to the strong commercialization progress of origins caps and closures business, which could begin to generate revenue within the next 12 months with.
With an expected 2020 for cash burn of less than $65 million and our expectations for significant gross profit generation beginning in 2025 with a healthy growth trajectory thereafter, we forecast maintaining a solid minimum cash floor on our way to sustained profitability and hence the expectation that we will not require additional equity capital.
Richard J. Riley: We anticipate our All PET Caps and Closures business to be transformative for package. We announced this initiative in August 2023 after quietly developing the program for several years as a natural outgrowth of Origins' polymer expertise and platform development efforts. It's a squarely on mission for Origin as we are transitioning a hard to recycle material into an easy to recycle, in support of the Global Transition to Sustainable Materials. We are positioned to be first to market with a commercially scalable PET cap, something the industry has long sought but never achieved. Origins PEG caps and closures are expected to be cost competitively produced with any type of PET, making Made with 100% Recycled PET possible from cap to container. They perform better than today's HDPE and polypropylene caps in ways that can improve product shelf life, and they are designed for circularity.
We anticipate our all P E T caps and closures business to be transformative for packaging.
We announced this initiative in August 2023, after quietly developing the program for several years is a natural outgrowth of abortions polymer expertise and platform development efforts.
Is squarely on mission for origin, as we are transitioning a hard to recycle material into an easy to recycle one.
Supported the global transition to sustainable materials.
We're positioned to be first to market with a commercially scalable P. E T cap something the industry has long sought but never achieved.
P. G caps and closures are expected to be cost competitively produced with any type of P. T.
Making made with 100% recycled P T possible from cap to container.
They performed better than today's HDTV and polypropylene caps in ways that can improve product shelf life and they were designed for circularity.
Richard J. Riley: For a wide variety of containers, our technology enables the lightest cap, reducing plastic waste, and improving sustainability. This business continues to make excellent commercialization progress. We successfully completed our third manufacturing development run on production scale equipment, producing thousands of caps per hour. Our initial product passed third-party tests, validating that performance meets or exceeds industry standards, and we have conducted preliminary consumer testing.
For wide variety of containers, our technology enables the lightest cap, reducing plastic waste and improving sustainability.
This business continues to make excellent commercialization progress we successfully completed our third manufacturing development Ron on production scale equipment, producing thousands of caps per hour.
Our initial product past third party test validating the performance meets or exceeds industry standards and we have conducted preliminary consumer testing.
Richard J. Riley: Our partners have conducted extensive diligence and demonstrated strong organizational alignment across procurement, R&D, marketing, and sustainability to move forward with the Origin Solution, and we are now at the letter of intent phase with multiple leading CPG companies that collectively consume tens of billions of caps per year. There are other technologies with near-term revenue-generating potential and development and origin. Like our all-PET caps and closures, these new applications enabled by ORIGIN technologies are not dependent on ORIGIN1 or ORIGIN2 for production and sale but are capable of using materials produced from these plants. These applications leverage Origin's chemical expertise, depth of application knowledge, and intellectual property strength, with further details to be provided as development progresses.
Partners have conducted extensive diligence and demonstrated strong organizational alignment across procurement R&D marketing and sustainability to move forward with the origin solution and we are now at the letter of intent phase with multiple leading CPG companies. They collectively consume tens of billions of caps per year.
There are other technologies with near term revenue generating potential and development at origin.
Our all P. G caps and closures. These new applications enabled by origin technologies are not dependent on origin won or origin to for production and sale, but capable of using materials produced from these plants.
These applications leverage origins chemical expertise depth of application knowledge and intellectual property strength with further details will be provided as development progresses.
Richard J. Riley: Regarding Origin 2, we are launching an asset-like strategy for core technology scale-up. Beyond Origin One, we intend to scale our biomass conversion technology in partnership with other major companies, with potential strategic partners to provide a substantial portion of construction capital. Construction costs are expected to be reduced significantly, enhancing our optionality with respect to the ways we can deploy our technology. Customer demand remains strong, as reflected by our total offtake agreements and capacity reservations in excess of $10 billion.
Regarding origin too we are launching an asset light strategy for core technology scale up.
Beyond Oregon, one we intend to scale, our biomass conversion technology in partnership with other major companies.
With potential strategic partners to provide a substantial portion of construction capital origins costs are expected to be reduced significantly enhancing our optionality with respect to the ways, we can deploy our technology.
Customer demand remained strong as reflected by our total off take agreements and capacity reservations in excess of $10 billion with that I'll turn it over to John.
John Bissell: With that, I'll turn it over to John. Thank you, Rich, and good afternoon. I'll begin by building on Bridget's commentary regarding Origin 2 and our Asset Light strategy. Notwithstanding the industry-wide capital construction project setbacks experienced over the past few years due to inflation, higher interest rates, and supply chain shocks, the demand for our biomass conversion technology remains strong. As such, I am particularly proud of our team's innovation, agility, and accelerating caps and closures to become our primary path to profitability, which allows us greater flexibility to implement our asset-light strategy. Accelerating the lower capital intensity caps and closures business is a natural prioritization given the continued escalation of capital project costs, as reflected in our revised front-end engineering design for the first phase of Origin 2, which we received during Q4 2020, as well as our expectation that industry-wide large capital project execution costs will continue to be inflated for some time.
Thank you rich and good afternoon, everyone.
I'll begin by building and we're just commentary regarding origin too and our asset light strategy.
Notwithstanding the industry wide capital construction project setbacks experienced over the past few years due to inflation higher interest rates and supply chain shocks the demand for our biomass conversion technology remains strong as such I am, particularly proud of our team's innovation agility and accelerating caps and closures to be kind of our primary path to profitability, which allows us greater flexibility.
Implement our asset light strategy accelerating the lower capital intensity caps and closures business. It's a natural prioritization given the continued escalation of capital project costs.
As reflected in our revised front end engineering design for the first phase of working to which we received during Q4 2023.
Well, it's our expectation that industry wide large capital project execution costs will continue to be in place for some time.
Thus to best deliver on the demand for our technology in the midst of these industry wide headwinds, we intend to commercialize and scale our biomass conversion technology in partnership with other major companies with potential strategic partners to provide a substantial portion of the capital for construction.
John Bissell: Thus, to best deliver on the demand for our technology in the midst of these industry-wide headwinds, we intend to commercialize and scale our biomass conversion technology in partnership with other major companies, with potential strategic partners to provide a substantial portion of the capital for construction. Doing so is expected to optimize scale-up synergies, significantly reduce project execution risk, and significantly defray costs that would otherwise be borne exclusively by, Timelines, economic forecasts, and plant phasing with respect to separating oils and extractives for biofuel production will depend on the partner and the deal structure, which can explore a range of scenarios and locations, including Geismar, Louisiana, as well as Asia, brownfield scenarios, with updates to be provided as we finalize this partnership.
Doing so is expected to optimize scaleup synergies significantly reduced project execution risk and significantly defray costs that would otherwise be borne exclusively by Oregon timelines economic forecasts and plant phasing with respect to separating oils and extracts for biofuel production will depend on the partner and the deal structure, which can explore a range of scenarios and locations.
Geismar, Louisiana as well as Asia brownfield scenarios with updates can be provided as we finalize those partnerships.
Regarding the scale up of our biomass conversion technology, we continue to engage with multiple parties to explore a variety of plant designs and evaluate potential brownfield sites.
We continue to perform funded joint development work with our strategic partners, including testing and optimizing various feedstocks to generate information that can influence our scale up strategy.
Regarding progress in Oregon, and one we are pleased to report it is demonstrating origins biomass conversion technology as expected.
John Bissell: Regarding the scale-up of our biomass conversion technology, we continue to engage with multiple parties to explore a variety of plant designs and evaluate potential brownouts. We continue to perform funded joint development work with our strategic partners, including testing and optimizing various feedback to generate information that could influence our scale of strategy. Regarding progress on Origin One, we are pleased to report it is demonstrating Origin's biomass conversion technology as expected. The plant, located in Sarnia, Ontario, Canada, is first and foremost an asset that is used to support origin market development, including customer materials testing and formulation in preparation for origin two. While continuing to be highly focused on safety and training, we are running the plant at appropriate rates to learn as much as we can and support a further technological scale-up. As we run batches, we continue to prove out, at scale, the various unit operations, such as pumps, reactors, filters, heat exchangers, and utility systems, gathering information from these activities that will inform future technology. During this early stage of plant operations, we're using corn starch for our feedstock to produce CMF.
Located in Sarnia, Ontario, Canada, It's first and foremost an asset that is used to support origin market development, including customer materials testing in formulation and preparation for origin to scale up.
While continuing to be highly focused on safety and training we were running the plant at appropriate rates to learn as much as we can in support of further tech scale up.
We run batches, we continue to prove out at scale, but they're each unit operation such as pumps reactors filters heat exchangers and utility systems gathering information from these activities that will inform future technology designs.
During this early stage of plant operations, where we're using cornstarch for feedstocks, where do you see them. After an H T. T. This allows us to focus on chemistry needed ops, which is standard industry practice, we're enabling new technology processes.
We expect to introduce wood handling in the months ahead.
TD partners associated with the origin, one supply chain remain engaged as we collaborate and market development activities.
Lastly, our board of directors continues to evolve Karen Richardson has served as chairman of the board for three years and as her term includes we thank her for her exemplary service.
Karen supported the company as we have advanced our technology platform started at Fortune, one built a world class board of industry experts and enhanced senior leadership with the recruitment of math lab and our CFO.
Today, we announced Kevin Richardson retirement from the board effective March one concurrently Tony trip any.
Audit Committee Chair, who has served on the board since May 1st 2023 will succeed Karen as chairman of the board. We're incredibly fortunate to have Tony who brings over three decades of significant operational strategy and M&A experience to the chair position extensive knowledge of manufacturing technology and material science industries, and a background and international.
John Bissell: This allows us to focus on chemistry and unit operations, standard industry practice when enabling new technology; we expect to introduce wood handling. Strategic partners associated with the Origin One supply chain remain engaged as we collaborate in market development. Lastly, our Board of Directors continues to... Karen Richardson has served as chairman of the board for three years, and as her term concludes, we thank her for her exemplary leadership. Karen supported the company as we have advanced our technology platform, started up OriginOne, built a world-class board of industry experts, and enhanced senior leadership with the recruitment of Matt Plavan at CFA. Today, we announce Karen Richardson's retirement from the board, effective March.
Corporate finance.
During his 36 year career with Corning, a global leading innovator in materials science with more than $10 billion in annual revenue Tony held various progressive leadership roles in corporate accounting and finance, including Chief Financial Officer.
In addition, John Hickox has been appointed to the board.
And will serve as our audit Committee chair.
Succeeding Tony and as a member of the nominating and corporate governance Committee John has been on the cutting edge of advising midrange to fortune 10 companies on economically responsible sustainability, including having spearheaded the KPMG America sustainability practice. His distinguished career spans 40 years and auditing accounting S. P N a corporate governance and <unk>.
That leadership.
He was an advisory partner at both KPMG, and Ernst and young servicing a range of public clients, including chemical and packaging industry clients in the areas of socks regulatory compliance internal audit and risk management and sustainability focusing on impactful corporate stewardship strategy reporting and profit maximization welcome John.
John Bissell: We are incredibly fortunate to have Tony, who brings over three decades of significant operational strategy and M&A experience to the chair position, extensive knowledge of the manufacturing, technology, and material science industries, and a background in international corporations. During his 36-year career with Corning, a global leader in material science with more than $10 billion in annual revenue, Tony held various progressive leadership roles in corporate accounting and finance, including chief. In addition, John Hickox has been appointed, and he'll serve as our audit, exceeding Tony, and as a member of the nominating and corporate governments. John has been on the cutting edge of advising mid-range to Fortune 10 companies on economically responsible sustainability, including having spearheaded the KPMG America Sustainability. His distinguished career spans 40 years in auditing, accounting, FP&A, corporate governance, and management.
And finally, we would like to again, thank Karen for her outstanding leadership. During her term. These past three years, we look forward to a seamless transition to Tony who has proved himself a strong successor for the chairman role with that I'll turn it over to Mac.
Thanks, John.
Provided the quarter and full year results in the tables of the earnings release, So I'll focus my comments on a couple of key financial highlights.
23 was origins first year revenue generation since becoming a public company with revenue of $13 1 million and $28 8 million for the fourth quarter and full year respectively.
This is primarily comprised of what we refer to as supply chain activation revenue generated in conjunction with the initiation and initial scale up of origin one operation.
Looking ahead, we expect the onset of revenue from our caps and closures initiative, just highlighted by rich and John could be within 12 months.
John Bissell: He was an advisory partner at both KPMG and Ernst & Young, servicing a range of public clients, including chemical and packaging industry clients in the areas of SOX regulatory compliance, internal audit and risk management, and sustainability, focusing on impactful corporate stewardship strategy reporting and profit maximization. Welcome. And finally, we would like to again thank Karen for her outstanding leadership during her term these past three years.
Anticipate this revenue will be significant recurring in nature and with a margin growth profile that will drive us to overall cash positive operations within the means of our existing cash resources and eliminating the need for an equity capital raise on our way to sustained profitability.
In this revenue outlook is predicated on a risk adjusted aggregation of demand projections provided to us by prospective customers.
Matthew T. Plavan: We look forward to a seamless transition to Tony, who has proved himself a strong successor for the chairman role. With that, I'll turn it over to you. Thanks, John. We've provided the quarter and full-year results in the tables of the earnings release, so I will focus my comments on a couple of key financial highlights. 2023 was Origin's first year of revenue generation since becoming a public company, with revenue of $13.1 million and $28.8 million for the fourth quarter and full year, respectively. This is primarily comprised of what we refer to as supply chain activation, generated in conjunction with the initiation and initial scale up of Origin One. Looking ahead, we expect the onset of revenue from our Caps and Closures Initiative, just highlighted by Rich and John, could be within 12 months.
With whom we are in contract negotiations for a P. E T cats their individual demand estimates reflect gradual adoption rates within their existing production volume risk adjusted for potential delays.
Our confidence and a significantly reduced expense forecast for 'twenty 'twenty four is due primarily to the impact of our asset light strategy on how we will finance our forward capital project costs during 'twenty to 'twenty three we incurred just over 100 million.
In property plant and equipment costs and service of our biomass conversion technology development with these costs now expect it to be contained within our potential.
Strategic partnership arrangements, coupled with the roll forward impact of our previously announced cost reductions made in Q4 of 2023, we are well positioned to execute our 'twenty 'twenty four plan.
Matthew T. Plavan: We anticipate this revenue will be significant, recurring in nature, and with a margin growth profile that will drive us to overall cash positive operations within the means of our existing cash resources, eliminating a need for an equity capital raise on our way to sustained profitability. Our confidence in this revenue outlook is predicated on a risk-adjusted aggregation of demand projections provided to us by prospective customers, with whom we are in contract negotiations for our PET caps. Their individual demand estimates reflect gradual adoption rates within their existing production volumes risk-adjusted for potential delays. Our confidence in a significantly reduced expense forecast for 2024 is due primarily to the impact of our asset light strategy on how we will finance our forward capital project costs.
Less than a $65 million of that cash burn.
Turning now to our operating expenses for the fourth quarter, they were $19 8 million compared to $13 million in the prior year period, an increase of $6 8 million.
The increase was driven primarily by increases in manufacturing costs of $2 million increased depreciation costs of 2 million Judy origin, one coming online during the quarter.
And increases in R&D cost of $1 million for the.
Full year 2023, operating expenses were $61 million compared to $38 9 million in the prior year period, an increase of $21.2 million driven by cost increases proportionately consistent with those in the fourth quarter.
With that I'd like to reiterate our financial guidance for 2024, including revenue of $25 million to $35 million.
And net cash burn between 55 million and $65 million with significant gross profit generation anticipated to begin 2025.
Matthew T. Plavan: During 2023, we incurred just over $100 million in property, plant, and equipment costs in service of our biomass conversion technology development. With these costs now expected to be contained within our potential strategic partnership arrangements, coupled with the roll forward impact of our previously announced cost reductions made in Q4 of 2023, we are well positioned to execute our 2024 plan at less than $65 million net cash flow. Turning now to our operating expenses for the fourth quarter, they were $19.8 million compared to $13 million in the prior year period, an increase of $6.8 million.
In closing as you can.
Might imagine with our existing cash on hand, and good visibility into a path to sustained profitability without the need to raise additional equity capital. We believe the company is exceptionally undervalued at its current stock price. Moreover, we believe the execution of our plan in 2024 will be well received by investors and as such.
We expect origin will satisfy them.
NASDAQ minimum bid price rule within their requisite Grace period.
Now I'd like to open the call for questions. Operator May we have the first question. Please.
We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad.
Matthew T. Plavan: The increase was driven primarily by increases in manufacturing costs of $2 million, increased depreciation costs of $2 million due to Origin One coming online during the quarter, and increases in R&D costs of $1 million. For the full year 2023, operating expenses were $60.1 million compared to $38.9 million in the prior year period, an increase of $21.2 million driven by cost increases proportionally consistent with those in the fourth quarter. With that, I'd like to reiterate our financial guidance for 2024, including revenue of $25 to $35 million and net cash burned between $55 million and $65 million with significant gross profit generation anticipated to begin in 2025. In closing, as you might imagine, with our existing cash on hand and good visibility into a path to sustained profitability without the need to raise additional equity capital, we believe the company is exceptionally undervalued at its current stock price.
You'll hear a tone as knowledge and your request if youre using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.
I'll pause for a moment the scholars trying to queue.
The first question comes from Frank Mitsch Fermium Research. Please go ahead.
Good afternoon, good afternoon folks.
I wanted to I wanted to come back to.
The use of wood, introducing wood waste wood and wood chips are into origin. One John you indicated that that's going to happen in over the next few months or several months I forget exactly what you said, but you know the way I the way I was thinking about it the $10 billion plus that you have in capacity reservations and offtake.
I I presume is tied to the use of water and wastewater as the feedstock and off cornstarch right. So I'm just curious as to why we might not have seen an acceleration to try and introduce wouldn't have the origin. One facility you know running running on on Whats argued.
Matthew T. Plavan: Moreover, we believe the execution of our plan in 2024 will be well received by investors, and as such, we expect Origin will satisfy the NASDAQ minimum bid price rule within the requisite grace period. Now, I'd like to open the call to questions. Operator, may we have the first question? We will now begin the question-and-answer session. To join the question queue, you may press star, then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys.
Obviously, a much cheaper feedstock any any color around that would be very helpful.
Yeah, sure Hey, Frank.
So it's a it's a really good question actually a lot of our customer arrangements.
I wouldn't say, most but a lot of our customer arrangements actually are pretty agnostic to the feedstock that's being used for them to make the product and that's because what I tell you it particularly corresponds to applications, where we're providing them a performance advantaged product. So when we talk about <unk>.
Operator: To withdraw your question, please press star, then... We will pause for a moment as callers join us. The first question comes from Frank Mitsch of Fermium Research. Please go ahead. Good afternoon.
Xylene and P E T.
The dominant value proposition is sustainability and of course, changing where sort of how the supply chain is organized and since you don't need to use petrochemicals or oil to produce it.
Frank Joseph Mitsch: Good afternoon, folks. I wanted to come back to the use of wood, introducing wood, waste wood, and wood chips into Origin One. John, you indicated that that's going to happen in the next few months or several months. I forget exactly what you said, but the way I was thinking about it, the $10 billion plus that you have in capacity reservations and offtake agreements, I presume is tied to the use of wood and waste wood as the feedstock and not cornstarch. So I'm just curious as to why we might not have seen an acceleration to try and introduce wood and have the Origin One facility Any color around that would be very helpful.
But when you look at products that can't really be made outside of our platform.
These are things like a pure Android products are at PCA HTC drive products that are unique where often using a value proposition that is not just sustainability, but also just flat out performance. The products that we're making are performing better than what they have in that same application and while corn.
Really doesn't provide the same sustainability benefits you get the wood is still sustainable and of course, the buy decision for customers like that is driven by the performance at the end product.
John Bissell: Yeah, sure. Hey, Frank. So, it's a really good question. Actually, a lot of our customer arrangements, I wouldn't say most, but a lot of our customer arrangements are actually pretty agnostic to the feedstock that's being used for them to make the product. And that's because, well, I'd say it particularly corresponds to applications where we're providing a performance-advantaged product. So, when we talk about perazolin and PET, really, the dominant value proposition is sustainability and, of course, changing where and how the supply chain is organized since you don't need to use petrochemicals or oil to produce it.
CMS CMS, whether it's coming from wood starch or something else and so we actually do have a lot of customers and a lot of applications, which don't really care. So much about what the feedstock is on the front end.
Okay, that's very helpful, but the intent is.
The intent is certainly by they are the early July.
Timeframe that the that the NASDAQ is has threatened for lifting the intended before then you all have introduced and demonstrated the use of water and wastewater and origin won.
Yes, the intent is for us to demonstrate that I'm not too far out of that.
John Bissell: But when you look at products that can't really be made outside of our platform, these are things like furan-derived products or FDCA, and HTC-derived products that are unique. We're often using a value proposition that is not just sustainability but also just flat-out performance. The products that we're making are performing better than what they have in that same application. And while cornstarch really doesn't provide the same sustainability benefits that you get for wood, it is still sustainable.
Okay, Great and then.
And then I guess just lastly.
With respect to our origin to and and the Asian Brownfield sites, which is kind of an interesting aside so obviously, you've got something cooking. There wondering if you could.
Ill elaborate on that but but your expectation in terms of the partnerships are that that you want a form.
Would we also expect to see something announced before mid year in that regard as well.
Hey, Greg it's rich.
It's hard to give timing guidance, but I can share that we have multiple potential partners, who are deeply engaged exploring a wide range of plant build scenarios, including Asian brownfield.
John Bissell: And, of course, the buy decision for customers like that is driven by the performance of the end product. You know, CMF is CMF, whether it's coming from wood, starch, or something else. And so, we actually do have a lot of customers and a lot of applications that don't really care so much about what the feedback is on the product. Okay, that's very helpful. But the intent is, The intent is certainly by the early July time frame that the NASDAQ has threatened to delist. The intent is that before then, you will have introduced and demonstrated the use of wood and waste wood in Origin One. Yes, the intent is for us to demonstrate that it is not so far out. Okay, great.
As we mentioned in the in the remarks, you know these partners bring a variety of them.
Some of them are long particular forms of feedstock, that's very attractive or have brownfield sites are attractive capital projects expertise capital generally and so we're approaching these partnerships.
We're very open minds in thinking of ourselves as really the technology provider.
And you know and we can also bring customers, obviously with our with our massive order book.
Richard J. Riley: And then I guess just lastly, with respect to origin two and the Asian brownfield sites, which is kind of an interesting aside. So obviously, you've got something cooking there. I was wondering if you could elaborate on that, but what is your expectation in terms of the partnerships that you want to form? Would we also expect to see something announced before mid year in that regard as well? Hey, Crank It's Rich.
So youre looking at these various opportunities of.
Different types of companies wanting a potentially different focuses in terms of the in materials.
The plant would be geared towards.
So we're working those through hard to give guidance on timing, but you know continuing to make progress.
Understood understood. Thanks, so much for the color.
Thank you.
Once again, if you have a question. Please press Star then one.
Richard J. Riley: It's hard to give timing guidance, but I can share that we have multiple potential partners who are deeply engaged exploring a wide range of plant build scenarios, including Asian brownfields. As we mentioned in the remarks, these partners bring a variety of, some of them are long-term particular forms of feedstock that's very attractive or have brownfield sites that are capital projects expertise, capital generally. And so we're approaching these partnerships with very open minds and thinking of ourselves as really the technology provider. And, you know, and we can also bring customers, obviously, with our massive order book. And so, you know, looking at these various opportunities of different types of companies wanting potentially different focuses in terms of the end materials that the plant would be geared towards. And so we're working those through hard to give guidance on timing, but, you know, continue to make progress. understood, appreciated. Thanks so much for the color.
The next question comes from Eric Stine, Craig Hallum. Please go ahead.
Hey, everyone.
Eric.
So maybe if we could just start off with the glad I'm just trying to get a handle on that so I mean, so revenues 25 to 35 million you just came off 29.
And certainly on a run rate in Q4 that would exceed that I mean is this.
Is this because you were done with those you've termed the supply chain activation activities.
And it's more of a.
No. The production is more tempered based on customer need what they want attempts to sell through or maybe I'll just start there or how to think about.
That revenue level and why in 'twenty three 'twenty four sorry.
Yeah. This is Matt I think.
Certainly we expect supply chain revenues to recur in 2024, and as we said in our.
Our prepared comments.
Operator: Thank you. Once again, if you have a question, please press star then 1. The next question comes from Eric Stine of Craig Hallam. Please go ahead. Hey, everyone.
Within 12 months, we do expect the caps and closures revenues et cetera, and so for 24 I think that's kind of the general guidance you should rely on.
And as we talked about 25 is where we really expect to see capsule collections revenues ramping.
Eric Andrew Stine: Eric, hey. Hey, maybe we could just start off with a guide. I'm just trying to get a handle on that. I mean, revenues between $25 and 35 million; you just came off 29. And certainly on a run rate in Q4 that would exceed that.
So yeah, I think you picked up on the guidance pretty well.
The Eric this is rich so it's somebody who doesn't have that are yeah.
Our commercial focus is really what.
Eric Andrew Stine: I mean, is this because you are done with, as you termed it, supply chain activation activities, and it's more of a, I don't know, the production is more tempered based on, you know, customer needs, what they want to test, etc. Or maybe I'll just start there, how to think about, you know, that revenue level and why on the 23rd or 24th, sorry. Yeah, this is Matt
What we expect to be substantial 2025 revenues from the caps and closures business and so it's oh, yeah, that's the priority for our commercial efforts.
And not as focused as we were on joint development agreements or supply chain activation partnerships.
Got it.
And then you know just trying to get a handle on it squared up with the reduced cash burn which is obviously good to see I mean.
You just came off of a.
A quarter of total opex.
Matthew T. Plavan: I think, um... Certainly, we expect supply chain revenues to recur in 2024, and as we said in our prepared comments, within 12 months, we do expect the caps and closures revenues to set in. So, for 2024, I think that's kind of the general guidance you should rely on. And as we talked about, 2025 is where we really expect to see caps and closures revenues ramping up. So, yeah, I think you picked up on the guidance pretty well. Eric, this is Rich. I'll just call you in the ad that our, yeah.
Almost 20 million clearly that number got.
Got to come down if you're going to hit that reduced cash burn what.
Maybe kind of what level should we think about for opex here in 'twenty poor as you build towards 25.
Yeah. So I think the on the year, we talked about 55 to 65, I think it's fair to assume that to be relatively linear throughout the year, there's not a lot of lumpiness in that.
And of course.
Richard J. Riley: Our commercial focus is really on what we expect to be substantial 2025 revenues from the caps and closures business. And so it's that the priority for our commercial efforts, not as focused as we were on joint development agreements or supply chain activation partnerships. And then, you know, just trying to get a handle on it squared up with the reduced cash burn, which is obviously good to see. I mean, you just came off a quarter of total OPEX of almost 20 million. Clearly, that number has to come down if you're going to hit that reduced cash burn. What, you know, maybe kind of what level should we think about for OPEX here in 24 as you build towards 25? Yeah, so I think the on the year, you know, we talked about 55 to 65. I think it's fair to assume that to be relatively linear throughout the year, not a lot of lumpiness in that.
As the catheter causes revenues built in 25 bed margin substantially reduces.
And our results in cash positive you know.
And thereafter, so I think that's the way to think about Opex in 'twenty four.
Yes.
Okay, well I mean at this level or should we take this to mean than that because.
You know you'll no longer taking on the spend for plant activity with origin. One complete the capex is virtually zero in 2024 or at least your portion of it I'm just trying to square the two.
That revenue at the Opex level, just doesn't it doesn't work.
Yeah, I think we.
We think about bifurcated spend between the gasoline closures initiative in the asset light initiative, which as Richard mentioned is really.
Matthew T. Plavan: And, of course, as the cap and closure revenue is built in 2025, that margin substantially reduces and results in cash positive, you know, thereafter. So I think that's the way to think about OPEX in 2024. Okay, well, I mean, at this level, should we take this to mean then that because you're no longer taking on the spend for plant activity with origin one complete? I mean, the CapEx is virtually zero in 2024, or at least your portion of it. I'm just trying to square the two because that revenue at this level just doesn't work.
Where.
We're working through with our partners. So we don't see significant Capex capital project spend in 2024 coming out of.
Our our capital on the balance sheet at the moment.
Okay, Okay, Okay, Eric what might have or so.
What what might help them.
Are you a little bit so when we look at capital that's required for the caps and closures, but that's it's much more modest bite sizes.
And we see those as mad at that I think in his prepared remarks.
Eric Andrew Stine: Yeah, I think we should think about bifurcating spend between the Caps and Closures Initiative and the Asset Light Initiative, which, as Richard mentioned, is really something we're working through with our partners. So we don't see significant CapEx capital project spend in 2024 coming out of our capital on the balance sheet at the moment. Okay, I guess maybe I'll take the rest of the... What might help square things for you a little bit is that when we look at the capital that's required for the caps and closures business, it's much more modest by volume.
We see those as very Financeable and so even though.
There is certainly capital outweigh that goes towards.
The caps and closures business, it's it's not there.
The net cash.
Burn as a result of that capital outlay is not particularly large relative to the rest of the spend of the company.
Yeah.
Alright that helps.
So that makes it.
That makes sense maybe.
Maybe just turning to caps and closures I mean, obviously, an attractive path to go down, but you know and I know you're optimistic with 12 at least 12 months away I mean, maybe just talk about what are the steps that we need to see.
John Bissell: And we see those, as Matt has said, I think it has prepared remarks. We see those as very financeable. And so even though there is certainly capital outlay that goes towards the caps and closures business, it's not the net cash burn as a result of that capital outlay is not particularly large relative to the rest. Okay. All right. No, that helps.
Between now and say this time next year.
And I'd love some details like I mean for instance are you.
John Bissell: That helps. That makes it, That makes sense. Maybe just turn it into caps and closures. I mean, obviously, an attractive path to go down. But I know you're optimistic, but at least 12 months away, I mean, maybe just talk about what are the steps that we need to see between now and, say, this time next year. And I'd love some details.
Are you using a tolling arrangement where would these be produced maybe that's still to be determined.
Yeah, that's a great question so.
So the way to think about the caps and closures business specifically is.
If you have sort of a chemicals hat on or something along those lines. This is much smaller operation then you would definitely keep our chemicals plant.
John Bissell: Like, I mean, for instance, are you using a tolling arrangement? And where would these be produced? Maybe that's still to be determined. Yeah, that's a great question. So, the way to think about the caps and closures business specifically is that this is a much smaller operation than you would see for a chemicals plant, but it's still valid, right? They're just small and they're, you know, different kinds of technology, right? This is mechanical plastic part production technology rather than a big industrial process plant, and so these units are procured from existing sorts of complex mechanical equipment manufacturers. They require adjustments to the existing equipment, but largely, it is still produced by them. So it's really equipment purchase and installation rather than lots of tanks and pipes and things like that, right? So it's sort of a different risk profile.
And and so scale that down but the idea of of a plant is still valid right. They're just they're just small and there are different kinds of technology practices cause mechanical plastic part production technology, rather than a big industrial process plant and so at these units.
Are procured from our existing Hum sort of complex mechanical equipment manufacturers they.
Require adjustments to the existing equipment, but largely it is still produced by them. So it's really equipment purchase any installation rather than lots of tanks and pipes and things like that so it's a sort of a different risk profile associate with those it also because of that structure, how is it different delivery and entered.
John Bissell: It also, because of that structure, has a different delivery and sort of time to production profile. So, you know, really the independent components that we're talking about in these systems can actually have lead times as short as six to nine months. You know, we've been giving ourselves a little bit longer than that because we want to make sure that we have time to integrate them and bring them online. But you're really talking about, you know, you said 12 months.
The production profile. So you know really the independent components that we're talking about in these systems I can actually have lead times as short as six to nine months.
We've been giving ourselves a little bit longer than that because we want to make sure. We have time to integrate them and bring them online, but you're you're really talking about you said 12 months I think that's pretty reasonable.
John Bissell: I think that's pretty reasonable for a given system. But this is not, you know, one big system, and then you sort of fill it out kind of business. This is a business where we're going to be bringing online systems as we go along, and they won't be separated by that much time, most likely. So, we can satisfy demand much more incrementally rather than just sort of one big step change. So, some of the things, and I give that color because I think it helps make sense of some of Matt's comments around, you know, us getting to profitability in 25.
For a given system, but this is not a one big system and then you sort of fill it out kind of business. This is a business, where we're gonna be bringing online systems.
As we go along and and they won't be separated by that much time, most likely so we can satisfy demand much more incrementally rather than just sort of one big step change.
So some of the things.
I I get that color because I think it helps them make sense of some of matts comments around us getting to profitability in 'twenty five that's not us all just waiting around and saying, okay, well went that system going to come on line and then boom, we get to profitability.
John Bissell: That's not us all just waiting around saying, okay, well, when's that system going to come online? And then, boom, you know, we get to profitability or gross margin, positive gross. But instead, we're going to see pieces all the way along, individual systems coming online, satisfying demand for different customers as we go. So I think that's going to provide lots of opportunity for milestones and to see sort of real progress and meaningful amounts of time. I think the other things to think about are, one, we've done third-party testing and manufacturing with these systems, with the suppliers of the systems. And we've made, as we've said in both our prepared remarks and then, I think also, in the release, a lot of these parts for validation. We've been working closely with customers to put them into their systems, and we're very excited about that.
Our gross margin actually the composite gross margin I should say, but but the.
Instead, we're gonna see pieces, all the way along our individual systems coming online you know satisfying demand for different customers as we go.
I think that's going to provide lots of opportunity for milestone C sort of real progress and meaningful that's fine I think the other thing to think about our you know one we've done third party testing.
Caffeine manufacturing would be systems with the suppliers at the systems and we've we've made you know as we said in our.
Both our prepared remarks, and then I think also in the release.
A lot of these parks for validation are we've been working closely with customers to put them into their systems, which we're very excited about that.
John Bissell: I think... You know, we will continue to see progress in terms of efficiency. We're pretty happy with where we are on efficiency right now, and we think that we actually have a pretty good path forward. So those will be things that we can talk about. But again, I think this is characteristically a much more quickly moving technology than you see for the sort of large capital project-driven businesses in the chemical industry. Okay, and so just to be clear, though, these are your origin facilities; they would just be, you know, it's not a plant, they're much smaller. Or is this something where your tooling is at a supplier location, and they're making it on your behalf? Yes, it's a great question. I'm glad you asked it again since I didn't answer it the first time.
I think.
We will continue to see progress in terms of our proficiency, where we're pretty happy with where we are on efficiency right now and we think that we have actually a pretty good path forward.
There'll be things that we can talk about.
But again I think this is characteristically a much more quickly moving technology than you see for that sort of large capital project driven businesses in the chemical industry.
Okay. So just to be clear, though you. These are these would be origin facilities. They would just be you know it's not a plant they're much smaller or is this something where it would be your tooling.
Ali I mean supplier location and they're making it on your behalf.
Yeah, It's a great question.
Glad you re ask it because I didn't answer it first time.
John Bissell: So, I think it's going to be a combination. I think there are going to be places where it makes sense for us to have origin-operated facilities, and there are going to be places where it makes sense for us to take our equipment and our capital and put it into another facility that's already operating. But I think that the balance between those two is going to be driven by the economic opportunity that exists inside of some other party's facilities. I don't think that we want to make ourselves entirely beholden to any third-party manufacturing organization, but there are clearly places where we can have one of our systems operating inside of a larger manufacturing context and take advantage of opportunities that they would have, and it's sort of a win-win for both parties on either side So, we'll do that when we can, in the origin, operated, and owned facilities as well. Okay, thank you. Thanks.
So I think it's gonna be a combination I think they're going to be places, where it makes sense for us to have origin operated facilities and they're gonna be places, where it makes sense for us to take our equipment and our capital and put it into another facility, that's operating but I think that.
The balance between those two is going to be driven by the economic opportunity that exists inside of some other parties fatalities.
I think that we want to make ourselves entirely beholden to any third party manufacturing organization.
But there are clearly places where we can have one of our systems operating inside of a larger manufacturing high tech.
And take advantage of our position to us that they would have and it's sort of a win win for both parties on either side. So what we will do that when we can.
And then I think origin operated and owned facilities as well separately.
Yes.
Okay. Thank you.
Matthew T. Plavan: That concludes today's live Q&A segment. I will now turn it over to Matt Plavan, CFO, to conduct the next segment of our investor Q&A. Thank you, operator. Prior to our earnings call, we invited investors to submit questions as part of our Ask Origin campaign. Thank you to everyone who participated.
Thanks.
That concludes today's live Q&A segment, I will now turn it over to Matt <unk> and CFO to conduct the next segment of our Investor Q&A.
Thank you operator.
Prior to our earnings call, we invite investors to submit questions. That's part of our ask origin campaign. Thank you to everyone who participated we're grateful for the significant go on the questions submitted and really encouraged by the thoughtful and engaging nature of your questions. As you might expect we have tailored our prepared remarks to address many of them.
Matthew T. Plavan: We're grateful for the significant volume of questions submitted and really encouraged by the thoughtful and engaging nature of your questions. As you might expect, we tailored our prepared remarks to address many of those questions as practically as we could, which ended up being a majority of your questions. It's also worth noting there were some good technical and commercial questions we'd really enjoy getting into, but for either proprietary or competitive reasons, we've got to refrain from answering those. However, there are a few that fall outside of those two categories, and we'd like to quickly cover those. So, our first question for John is about 1,4-Dioxane. Is the use of 1,4-Dioxane highly likely, likely, or unlikely to be used anywhere along the chain to produce PEF? Plan Theva.
Two questions.
It's practically as we could which ended up being a majority of their questions.
Also worth noting there was some good technical and commercial questions, we'd really enjoy getting into but for either proprietary or competitive reasons. We got to refrain from answering those however, there are a few that fall outside of those two categories and we'd like to quickly cover those so first question for John is about one.
Four dioxane is the use of one four dioxane highly likely.
Likely.
Or unlikely to be used anywhere along the chain to produce P. F.
From CMS.
John Bissell: Yeah, so this was an interesting question in part because it is an example of people diving into sort of technical detail on things that are, you know, surprising but, at least for me, kind of gratifying. I enjoy it when people look into this kind of stuff. So I think the origin of this question is likely from one of our patents, specifically one of our patents around the production of paraxylene from dimethylpurine and our Diels-Alder chemistry to do that. And I think the interesting thing to understand about this is, you know, first when you're developing technical systems like this, you typically are going to start with either a model system or a system that really clearly elucidates the properties that you're looking for, and then, of course, once you hit on something that you like, you end up writing a patent around it or whatever you're going to do.
Yeah. So this was an interesting question in part because it is an example of where people are diving into sort of technical detail on things that they just you know surprising but at least for me kind of gratifying I enjoy it when people look into this kind of stuff.
So I think the provenance of this question is lightning from one of our patents specifically one of our patents around the production of para xylene from dimethyl PRN and our deals all of our chemistry to do that.
And I think that the interesting thing to understand about this is you know first when you're developing technical.
Technical systems like this you typically are going to start with.
Either a model system or or a system that really clearly elucidates the properties that you're looking for and and then of course once you hit on something that you like you end up writing a patent around it or whatever you're going to do and then you include the work that you've done which includes this model system or model compounds.
John Bissell: Then you include the work that you've done which includes this model system or model company. And so it's quite common, in fact, to have chemical species in the patent that are, you know, maybe not exactly what's going to be used. So, I think, you know, keep that in mind as you look at the patents that we write and, frankly, patents in general. Now that all said, I think it's interesting to ask about the 1,4-Dioxane.
And so it's quite common in fact to have.
Specie chemical species in the patent.
There are you know.
Maybe not exactly what's going to be used commercially.
So I think keep that in mind as you as you look at these that the patents that we write.
Patents of general now.
That all said right.
So I think it's interesting to ask about the one part that I think that's the that's sort of the relevant information on it but you know the question actually was around.
John Bissell: That's the, that's sort of the relevant information on it, but, you know, the question actually was around the pathway from CMF to PEF. Now what's interesting about PEF is that it's made out of FECA, or pure anti-carboxylic acid, as a replacement for terephthalic acid. The terephthalic acid, of course, would have been made from the pyrazaline that we produce from dimethyl purine using the Diels-Alder chemistry that I just referenced.
The pathway from CMS to P. S. Now what's interesting about P. F E M.
It's made out of F. D. C are purely that cutback truck asset as a replacement for care pallet Kathryn the tariff Alec asset of course, we would have been made from the parents or anything that we produce from diamond procure and using the deals all of our chemistry that I just referenced.
John Bissell: So what's interesting about the question about PEF is that, of course, we don't use it on the way to make FDCA or PE. So, while I think the provenance of the question is interesting and certainly relevant, it actually turns out not to be relevant for the production of FEC and PEF, despite some of the comments that I made around sort of model systems earlier. So, an interesting question. The answer is, I think, very unlikely that we're going to use dioxane anywhere in the system, specifically going from CMF to.
So what's interesting about the question about P. F is that of course, we don't use our deals all of our chemistry on the way to make F. D. C. A R. P. Yet so while I think the provenance of a the question is interesting and certainly relevant.
It actually turned out not to be relevant for a for the proxy about D. C. N P F.
Despite some of the comments that I made around sort of model systems earlier and.
An interesting question. The answer is I think very unlikely that we're going to use dioxane.
Anywhere in the system, specifically going from FEMA to be yet.
Okay.
John Bissell: Okay. The second question is about the TRL, or Technical Readiness Level, of Origins Biomass Conversion Technology. Has the technology been proven to work in its final form and under expected conditions? Have there been demonstrations of actual system prototypes in a relevant environment?
Okay. The second question is about the TRL or technical readiness levels of origin biomass conversion technology has the technology has been proven to work in its final form and under expected conditions.
And there have been demonstrations of actual system prototype and relevant environments.
John Bissell: and how far along is the technology in terms of TRL? Yep, that's another great question, and something we think about a lot internally, which is sort of assessing things via their technology readiness level. And by the way, the TRL system was developed originally, I think by NASA, early on to assess sort of how far along each of the mechanical subsystems that were going to be required to, you know, put people in orbit and get rockets up into space, and then ultimately land people on the moon and get them back.
And how far along is the technology in terms of T. R. L.
Yes, that's another great question and something we think about a lot internally and sort of assessing things via their their technology readiness level and by the way. The TRL system was developed originally I think by NASA early on to assess sort of how far along where each of the mechanical sub.
Systems.
We're gonna be required.
Put people in orbit and and get get rockets up into space and then ultimately they had people on the moon and get them back and so it's a it's a great system that was very rigorously put together.
John Bissell: And it's a great system that was very rigorously put together. What I think is particularly interesting for the chemical process industry, which is where we live, is that you have to look at a chemical process-oriented technology readiness definition set, which is out there. It makes it a little bit easier to set up. Now, that all said, we have done a lot of system and subsystem development through the years. So that's really what's happening when we're doing bench scale work, integrated bench scale reactions, scaling it up to pilot. You know, you could set CRL, numbers associated with each of those stats as you go forward.
It's particularly interesting for the chemical process industry, which is where we live is is that you have to look at a chemical process oriented technology readiness definition fat.
<unk> is out there.
You can Google it and find a PD out of it.
And it's totally different than the one that you typically see from mechanical systems, but it makes them it makes it a.
A little bit easier to set up the relationships.
Now that all said.
We.
They have done a lot of system and subsystem development through the year. So that's really what's happening when we're doing bench scale work integrated bench scale reactions scaling it up the pilot you could you could set T. R. L numbers associated with each of those steps as you as you go forward.
John Bissell: And then, of course, you know, with Origin One, Origin One is essentially, by the TRL system, a full-scale operating plant. And so once something is operating in Origin One, then it's, you know, it's sort of off the top end of the TRL scale, right? Or it's, I think it's technically TRL minus, which is fully commercial.
And then of course, you know with origin won origin. One is essentially by the TRL system, a full scale operating plant and so.
Once something is operating in Oregon. One then it's you know it's sort of off the top end of the T. R. L scale right at or it's I think it's technically cheer L mind.
Which is that it's fully commercial so that's sort of the from a technology risk perspective, that's the way to think about that now of course, we always have additional technologies that are that we're working on we like we we have improvements to technologies, even technologies that have been implemented at all and one we're working on things that can make those.
John Bissell: So that's sort of from a technology risk perspective. That's the way to think about that. Now, of course, we always have additional technologies that are that we're working on. We like to have improvements to technologies, even technologies that have already been implemented on one. We're working on things that can make those process steps better and more efficient. In some places, you know, we're really excited about them, and we may be working on them, even though they're a little ways out. And so, as you look through all of those improvement processes, you're going to see a smattering of different technology-ready bubbles, depending on when we started or how difficult it is, etc. But essentially, you know, once something's operating in LM1, that's sort of off the top.
Those process steps better more efficient in some places.
We're really excited about those and we may be working on them, even though they are a little ways out and and so as you look through all of those are proven properties youre going to see a smattering of different technology readiness levels.
Depending on when we started or how difficult it is et cetera, but essentially you know when something's operating at one one.
That's that's sort of off the top end of the pathology rating scale.
Richard J. Riley: Okay, thanks, John. Now a question for Rich. This question is about the share price. Can you provide some insight on organically addressing the share price to maintain Origin's NASDAQ listing? It's top of mind for many retail investors. Yeah, it's a good question.
Okay. Thanks.
Thanks, John.
A question for rich.
One is about the share price can you provide some insight on organically addressing the share price to maintain origins NASDAQ listing it's top of mind for many retail investors.
Yeah. It's a good question here's how I think about that first you know we have a very strong plan to get to profitability without needing to raise additional equity capital led by our breakthrough caps and closures product, which really highlights the innovation and capabilities that we have at the company.
Richard J. Riley: Here's how I think about that. First, you know, we have a very strong plan to get to profitability without needing to raise additional equity capital, led by our Breakthrough Caps and Closures product, which really highlights the innovation and capabilities that we have at the company, in addition to the intrinsic value of our core biomass conversion technology, which we now plan to scale via partnership. And so that plan is something we feel really good about. And to be clear, we believe that the stock is extremely undervalued at its current levels, and we're confident that as we continue to execute this plan. The results will be very well received by investors and that the stock price will reflect that reception and those results. And so we really think this is gonna be a very exciting year for Origin and are highly confident that we will continue to be listed on NASDAQ.
In addition to the intrinsic value of our core biomass conversion technology, which we now plan to scale via partnership and so that plan is something we feel really good about and to be clear. We believe that the stock is extremely undervalued.
At its current levels and we're confident that as we continue to execute this plan.
The results will be very well received by investors and that the stock price will reflect.
That reception and those results and so we really think there's going to be a very exciting year for origin and are highly confident that we will continue to be listed on the Nasdaq.
Richard J. Riley: All right. Thanks, Rich. Thank you to everyone who joined us. We're looking ahead with confidence and excitement for 2024, and we look forward to our next update. This concludes our call for the day. Thank you. This concludes today's conference call. You may disconnect your lines.
Alright, thanks rich thanks.
And to everyone, who joined looking ahead with confidence and excitement for 2024, and we look forward to our next update this concludes our call for today. Thank you.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Operator: Thank you for participating and have a pleasant day. The Ultimate Parody Site-Limited Company, LLC.
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