Q1 2024 Origin Materials Inc Earnings Call

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Operator: Thank you for standing by. This is the conference operator. Welcome to the Origin Materials first quarter 2024 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. Should you need assistance during a conference call, you may signal an operator by pressing star and zero. At this time, for opening remarks and introductions, I would like to turn the call over to Ryan Smith, Co-Founder and Chief Product Officer. Please go ahead. Thank you.

Thank you for standing by this is the conference operator.

Origin Materials: Welcome to the origin materials first quarter 2024 earnings calls.

Speaker Change: As a reminder, all participants are in listen only mode. Every conference is being recorded.

Speaker Change: After the presentation, there will be an opportunity to ask questions.

Speaker Change: Joining the question to you May Press Star then one on your telephone keypad.

Speaker Change: Should you need assistance during the conference call you may signal, an operator by pressing star zero.

Speaker Change: At this time for opening remarks, and introductions I would like to turn the call over to Ryan Smith co founder and Chief product Officer. Please go ahead. Thank you good afternoon, and thank you for joining US everyone. Speaking first today is Oregon's co CEO rich Riley, who will be followed by co CEO and co founder John Bissell and CFO Max Lapin.

Ryan Smith: Good afternoon, and thank you for joining us, everyone. Speaking first today is Origin's co-CEO, Rich Riley. He'll be followed by co-CEO and co-founder John Bissell and CFO Matt Plavan. 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 2024 first quarter press release and presentation, which we will refer to today. These can be found on the investor relations section of our website at originmaterials.com.

Speaker Change: 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 2024 first quarter press release and presentation, which we'll refer to today.

Speaker Change: These can be found on the Investor Relations section of our website at origin materials Dot com.

Ryan Smith: Please note that during our discussion today, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views as of today, should not be relied upon as representative 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.

Speaker Change: Please note that during our discussion today, we will be making 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.

Speaker Change: These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations for further discussion on 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.

Ryan Smith: For further discussion on 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 today. During today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of origin, materials, and performance. These non-GAAP measures should be considered in addition to and not a substitute for, in isolation from, GAAP

Speaker Change: Filed today during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Oregon's materials performance. These non-GAAP measures should be considered in addition to and not as substitute for an 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.

Ryan Smith: 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.

Speaker Change: It will be posted to our website.

Speaker Change: The webcast of this call will also be available.

Richard J. Riley: On the Investor Relations section of our company website with that I will turn the call over to rich. Thank.

Richard J. Riley: Thank you, Ryan, and thank you, everyone, for joining us. Today we are reaffirming our path to profitability, which is entirely independent of the scale-up of our biomass conversion technology and related manufacturing plant construction. We are reaffirming that as we execute our business plan to achieve sustained profitability, we believe our cash runway is sufficient to eliminate the need for an equity capital rate. Origin ended the first quarter with just over $146 million in cash and cash equivalents and marketable securities.

Richard J. Riley: Thank you Ryan and thank you everyone for joining us.

Richard J. Riley: Today, we are reaffirming our path to profitability, which is entirely independent of the scale up our biomass conversion technology and related manufacturing plant construction.

Richard J. Riley: We are reaffirming that as we execute our business plan to achieve sustained profitability. We believe our cash runway is sufficient to eliminate the need for an equity capital raise.

Richard J. Riley: Origin ended the first quarter with just over $146 million in cash and cash equivalents and marketable securities.

Richard J. Riley: Consistent with our prioritization of revenue-generating projects with the greatest contribution to near-term cash and our continued deferral of research expenses or other programs targeting longer-term paybacks, today we are reaffirming our expected 2024 net cash burn of between $55 million and $65 million. We continue to make strong commercialization progress with Origins Caps and Closures business, which we expect will begin to generate revenue within the next nine months with significant gross profit generation beginning in 2025 and a healthy growth trajectory thereafter.

Richard J. Riley: With our prioritization of revenue generating projects with the greatest contribution to near term cash and our continued deferral of research expenses or other programs targeting longer term paybacks. Today, we are reaffirming our expected 2024, net cash burn of between $55 million and $65 million.

Richard J. Riley: We continue to make strong commercialization progress with origins caps and closures business, which we expect will begin to generate revenue within the next nine months with significant gross profit generation beginning in 2025, and a healthy growth trajectory thereafter.

Richard J. Riley: As such, we continue to forecast a solid minimum cash floor on our way to sustain profitability and hence the expectation that we will not require additional equity capital. During the first quarter, we made strong progress on our journey to profitability.

Richard J. Riley: As such we continue to forecast 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: During the first quarter, we made strong progress on our journey to profitability led by our groundbreaking P. T caps and closures business, we announced a few of our caps and closures manufacturing partners, including packages global and IMT Vista.

Richard J. Riley: Led by our groundbreaking PET caps and closures business, we announced a few of our caps and closures manufacturing partners, including Paxos Global and IMD Vista. And we continue to make good progress with prospective and as yet unannounced customers who are excited about our revolutionary caps offering and the benefits it brings for recycling circularity and performance. Today, we are announcing that we have accelerated the procurement of multiple additional high-throughput CAHPS production lines to complement the initial line which we have already purchased. We aim to bring our first manufacturing system online during the fourth quarter of 2024. At full capacity, following ramp-up, our initial systems are expected to generate between $45 million and $65 million in annual revenue.

Richard J. Riley: We continued to make good progress with respect perspective, and as yet unannounced customers, who are excited about our revolutionary caps offering and the benefits it brings for recycling in circularity and performance.

Richard J. Riley: Today, we are announcing that we have accelerated the procurement of multiple additional high throughput caps production lines to complement the initial line, which we have already purchased.

Richard J. Riley: We aim to bring our first manufacturing system online during the fourth quarter 2024.

Speaker Change: Full capacity, while we ramp up our initial systems are expected to generate between $45 million and $65 million in annual revenue.

Richard J. Riley: The caps and closures opportunity is massive, an over $65 billion market with currently engaged prospective customers alone consuming tens of billions of caps per year. We look forward to rapidly standing up additional lines addressing multiple product types, including tethered beverage caps and caps for non-beverage home goods applications. Today, we are also announcing a CAHPS Enclosures Technical Milestone with the completion of a successful capping trial on a commercial bottle line applying Origin PET caps. In fact, Origin Caps made 100% recycled PET from thousands of filled beverage containers. I'll let John speak to that in greater detail.

Speaker Change: The caps and closures opportunity is massive and over $65 billion market. We currently engage prospective customers alone consuming tens of billions of caps per year.

Speaker Change: We look forward to rapidly standing up additional lines addressing multiple product types, including tethered beverage gaps and caps for non beverage home goods applications.

Speaker Change: Today, we are also announcing the caps and closures technical milestone with the completion of a successful caffeine trial on a commercial bottle line applying origin P G caps and.

Speaker Change: In fact, Oregon caps, maybe 100% recycled P T to thousands of build beverage containers.

Speaker Change: I'll, let John speak to that in greater detail.

Richard J. Riley: We also announced the initial product lineup of our PET Caps Enclosures Manufacturing Platform. We are starting with the world's first CSD, or carbonated soft drink, PET cap, the lightest of its kind ever produced at commercial scale. There are hundreds of different kinds of caps and closures in container packaging, but the PCO 1881 Neck Finish is considered a leading standard for carbonated soft drinks and is often used for other products such as juices or even still or sparkling water.

Speaker Change: We also announced the initial product lineup of our P T caps and closures manufacturing platform.

John Bissell: We are starting with the world's first CSD or carbonated soft drink P. E T cap the lightest of its kind ever produced a commercial scale.

Speaker Change: There are hundreds of different kinds of caps and closures and container packaging, but the P. T. O 18, 81 neck finish is considered a leading standard for carbonated soft drinks and is often used for other products, such as juices or even still or sparkling water.

Richard J. Riley: Because of the ubiquity of bottles using the PCO 1881 finish, it's an area where our PET cap can make a tremendous difference by improving recycling circularity and product performance in a massive addressable market. We followed that initial product announcement by introducing the first ever tethered PET cap. Cap tethering mandates are coming into effect later this year in Europe through the EU Single-Use Plastic Directive. Tethered caps are designed to stay connected to the container and thereby improve cap collection rates for recycling. We look forward to our 1881 compatible caps being available in Q4 later this year, with ramp-up to follow throughout 2025.

Speaker Change: Because of the ubiquity of bottles using the P. C. O 18, 81 finish it is an area where our P. T cap can make a tremendous difference by improving recycling circularity and product performance in a massive addressable market.

Speaker Change: We followed that initial product announcements by introducing the first ever tethered P T cap.

Speaker Change: Chapter either in mandates are coming into effect later this year in Europe through the U S. EU single use plastic directed.

Speaker Change: Other caps are designed to stay connected to the container and thereby improve cash collection rates for recycling.

Speaker Change: We look forward to our 18 81 compatible caps being available in Q4 later this year with ramp up to follow throughout 2025.

Richard J. Riley: Apart from our caps and closures business, we continue to grow the long-term value of the Origin platform by engaging potential strategic partners around the scale-up of our biomass conversion technology, including exploring high-value application development initiatives that could generate near-term revenue. Other technologies with near-term revenue-generating potential are also in development at Origin. Like our PET Caps and Closures, these new applications, enabled by Origin Technologies, are not dependent on Origin 1 or Origin 2 for production and sale but are capable of using materials these plants are designed to produce. We look forward to providing more detail on these initiatives in the future. With that, I'll turn it over to John.

Speaker Change: Apart from our caps and closures business, we continue to grow the long term value of the origin platform by engaging potential strategic partners around the scale up of our biomass conversion technology, including exploring high value application development initiatives that could generate near term revenue.

Speaker Change: Other technologies with near term revenue generating potential are also in development at origin.

Speaker Change: Like our P T caps and closures. These new applications enabled by origin technologies are not dependent on Oregon, one or origin to for production and sale.

Speaker Change: Capable of using materials. These plants are designed to produce we look forward to providing more detail on these initiatives in the future.

Speaker Change: With that I'll turn it over to John.

John Bissell: Thank you, Rich, and good afternoon, everyone. As Rich indicated, we're incredibly excited about the progress we're making at Origin. In particular, our caps and closures business is driving us toward profitability, and we are pleased with its progress, both technical and commercial. As a recap of the value of this business, we anticipate that our PET Caps and Closures business will be transformative for packaging. We announced this initiative in August 2023 after quietly developing the program for several years as a natural outgrowth of Origin's polymer expertise and platform development efforts.

John Bissell: Thank you rich and good afternoon, everyone as rich indicated we're incredibly excited about the progress we're making in Oregon in particular, our caps and closures business is driving us towards profitability and we are pleased with its progress both technical and commercial.

Speaker Change: As a recap of the value of the stake that we anticipate that our P. T. Captain closure will be transformative for packaging, we announced this initiative in August 2023, after a quietly developing the program for several years is a natural outgrowth of origins polymer expertise.

John Bissell: This initiative is squarely on mission for Origin, as we are transitioning a hard-to-recycle material into an easy-to-recycle one, 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. Notably, Origins PET caps and closures are expected to be cost-competitively produced with any type of PET, making made-with-100-percent-recycled PET possible from cap to container.

Speaker Change: But efforts.

Speaker Change: It's squarely on mission for origin as we are transitioning our hard to recycled materials into an easy to recycle one and supported the global transition to sustainable materials.

Speaker Change: Should it be first to market with a commercially scalable can teach out something the industry has long sought but never achieved.

Speaker Change: Notably Oregon's P E T caps and closures are expected to be cost competitively produced with any type of P. E T, making made with 100% recycled P E T possible from cap to container.

John Bissell: They perform better than today's HDPE and polypropylene caps in ways that can improve product shelf life. They can be made from recycled PET or RPET, and they are designed for circularity with no additives used to modify the polymer.

Speaker Change: Performed better than today's H D. P E and polypropylene caps in ways that can improve product shelf life.

Speaker Change: Can be made from recycled P T or our pet and they are designed for circularity with no additives used to modify the polymer.

John Bissell: For a wide variety of containers, our technology enabled the lightest cap, reducing plastic waste, and improving sustainability. We are working with world-class manufacturing partners to bring this technological breakthrough to market. This quarter, we announced a few of them. For example, we announced our partnership with Paxis Global, the leading packaging machine producer for plastic closure splitting machines, to produce the world's first PET cap and closure manufacturing system. Paxis Global is a respected leader in packaging machines for the cosmetics, beverage, pharmaceutical, and packaging industries, with facilities in North America, Europe, and Asia. It has been in operation for over 50 years.

Speaker Change: For a wide variety of containers are technology enabled the lightest cap, reducing plastic waste and improving sustainability.

Speaker Change: We are working with World class manufacturing partners to bring this technology breakthrough to market. This quarter, we announced a few of them.

Speaker Change: We announced our partnership with taxes global the leading packaging machine producer for plastic closure splitting machine to produce the world's first P. T cap and closure manufacturing system Paxis Global is a respected leader in packaging machines for the cosmetics beverage pharmaceutical and packaging industries with facilities in North America, Europe and Asia. It is.

Speaker Change: For over 50 years, we announced our partnership with the IMD Vista.

John Bissell: We announced our partnership with IMDVista, a global leader in high-speed testing systems, headquartered in Switzerland, with locations around the world, including the United States, Germany, and Taiwan, with systems in use on every continent. IMDVista manufactures advanced camera systems that inspect thousands of closures per minute, and which, in the future, are expected to give Origin the ability to inspect billions of caps per year. As Rich alluded to, today we are announcing another technical milestone with the completion of a capping trial on a commercial bottling line, applying origin or pet caps to thousands of filled beverage containers.

Speaker Change: Global leader in high speed testing systems headquartered in Switzerland with locations around the world, including the United States, Germany and Taiwan.

Speaker Change: And use on every continent.

Andy Best: Hi, Andy Best at manufacturers advanced camera system, they inspect thousands of closures per minute and which in the future are expected to give origin the ability to inspect billions of cap springhill.

Speaker Change: As rich alluded to today, we are announcing another technical milestone with the completion of a capping trial on a commercial bottling line applying Oregon, our pet cats 10, thousands that filled beverage containers a trial like this where we use a commercial bottling line to apply our caps to thousands of bottles is a great opportunity to not only collect data but observe.

John Bissell: A trial like this, where we use a commercial bottling line to apply our caps to thousands of bottles, is a great opportunity to not only collect data but observe and learn how our product performs in the context of a high-throughput commercial bottling. The trial went well, and we look forward to parsing the data in the weeks ahead to inform and fine-tune our design for future production. For our trial run, we used caps made with recycled PET, a material which performs just the same as virgin PET for this application. The recycled PET is off the shelf, meaning we don't use any additives to modify the PET polymer for our process.

Speaker Change: <unk> and learn how our product performs in the context of a high throughput commercial bottling line.

Speaker Change: The trial went well and we look forward to parsing the data in the weeks ahead to inform and fine tune our design for future production runs.

Speaker Change: For our trial run we use the origin caps made with recycled P. T a material, which performance just the famous Virgin P. T for this application.

Speaker Change: The recycled P. E T is off the shelf, meaning we don't use any additives to modify the polymer for our process.

John Bissell: Moving on to the scale-up of our biomass conversion technology beyond Origin One. For Origin2, we continue to engage customers as part of our AssetLight strategy for technology scale-up. As we indicated last quarter, timelines and economic forecasts will depend on the partner and the deal structure, which can explore a range of scenarios and locations, including Geismar, Louisiana, and Asia Brownfield scenarios, with updates to be provided as we finalize this partnership. Despite near-term macroeconomic challenges to which we are adapting through less capital-intensive revenue-generating initiatives, customer demand remains strong, as reflected by our total objective agreements and capacity reservations in excess of $10 billion.

Speaker Change: Shifting to the scale up of our biomass conversion technology beyond Georgia in one.

Speaker Change: The origin to we continue to engage customers as part of our asset light strategy for technology scale up as we indicated last quarter timelines and economic forecast will depend on the partner in the deal structure, which can them explore a range of scenarios in locations, including Geismar, Louisiana, and the Asia brownfield scenarios with updates can be provided as we finalize that partnerships.

Speaker Change: Despite near term macroeconomic challenges to which we are adapting through less capital intensive revenue generating initiatives customer demand remained strong as reflected by our total off take agreements and capacity reservations in excess of $10 billion. We continue to engage with multiple parties to explore a variety of plans to divert evaluate potential brownfield sites.

John Bissell: We continue to engage with multiple parties to explore a variety of plant designs and evaluate potential brownfield sites. We also continue to perform development work, including testing and optimizing various feedstocks to generate information that could influence our scale-up strategy. As we deliver samples and testing data to partners, we continue to gain market feedback, including that our carbon black derived from our HTC intermediate is currently the most promising alternative to fossil carbon black for rubber reinforcement, such as for tire applications. The reason is simple.

Speaker Change: We continue to perform development work, including testing and optimizing various feedstocks to generate information that could influence our scale up strategy.

Speaker Change: Okay.

Speaker Change: As we deliver samples and testing data to partners, we continue to gain market feedback, including that our carbon black drive from our H T. T. Intermediate is currently the most promising alternative to fossil carbon black for rubber reinforcement such as for tire applications. The reason is simple the performance of the origins carbon black sets it apart from other.

Speaker Change: Sustainable rubber reinforcement alternatives that are being considered for making renewable tires.

John Bissell: The performance of Origins carbon black sets it apart from other sustainable rubber reinforcement alternatives that are being considered for making renewable tires. Origin One, our plant in Sarnia, Ontario, Canada, continues to provide valuable insights into the scale-up of our biomass conversion technology. We achieved a major milestone this quarter by converting sustainable wood residues at our plant into versatile chemical intermediates. The introduction of wood residues marked an evolution from the cornstarch-based production we had employed since the commencement of plant operations in October of last year. We are using locally sourced Forest Stewardship Council, FSC, controlled wood residues produced by a sawmill as a byproduct of lumber and wood flooring production.

Speaker Change: Gen. One our plant in Sarnia, Ontario, Canada continues to provide valuable insights into the scale up of our biomass conversion technology, we achieved a major milestone this quarter by converting sustainable wood residues that are playing into versatile chemical intermediates. The introduction of wood residues marked an evolution from the corn starch based production we hit.

Speaker Change: Employed since commencement of plant operations in October of last year.

Speaker Change: Using locally sourced forest stewardship Council FSC controlled what Red States produced by a sawmill as a byproduct of lumber and wood flooring production.

John Bissell: From bat mills, wood chips, shavings, and sawdust, we produce our sustainable intermediates, which can be used to make a wide variety of products that normally would be made from petroleum. As we operate the plant, we continue to get confirmation of the expected operating parameters for items such as reactors, pumps, and heat exchangers. Our early batch runs have been very helpful in determining wood handling and transfer parameters, biomass slurry transfer behavior, reactor batch loading sequence optimization, and reactor thermal performance, just to name a few.

Speaker Change: Combat Mills Wood chips shavings and saw that we produce to our sustainable intermediates, which can be used to make a wide variety of products that normally would be made for petroleum as.

Speaker Change: As we operate the plant we continue to get confirmation of the expected operating parameters for items, such as reactors pumps and heat exchangers.

Speaker Change: Our early batch runs have been very helpful in determining what handling and transfer parameters biomass for a transfer behavior reactor batch loading sequence optimization.

Speaker Change: And reactor thermal performance just to name a few.

John Bissell: To share an example of the kind of typical process adjustments you make during this part of running the plant, we recently adjusted how we control the airflow in the woody biomass conveyance system and, in doing so, achieved the design performance of the wood mill. This is exactly the kind of learning we expected to gain by operating OriginOne, and we will incorporate this valuable information into future plant design. The plant is first and foremost an asset used to support origin market development, including customer materials testing and formulation in preparation for Origin 2 scale-up.

Speaker Change: To share an example of the kind of typical process adjustments you make during his part of running the plant. We recently adjusted how we control the airflow in the Woody biomass conveying system and in doing so achieved the desired performance of the what is it.

Speaker Change: Exactly the kind of learning we expected to gain by operating Orange, one and we will incorporate this valuable information in the future plant design.

Speaker Change: The plant is first and foremost an asset used to support origin market development, including customer materials testing and formulation preparation for origin to scale up.

John Bissell: Strategic partners remain engaged as we collaborate in market development activities. All of this is exciting progress for our customers and our team as we continue to execute on our mission to drive the once-in-a-planet transition to sustainable materials. With that, I'll turn it over to Matt.

Speaker Change: Strategic partners remain engaged as we collaborate in market development activities.

Speaker Change: All of this is exciting progress for our customers and our team as we continue to execute on our mission to drive the ones that are planned up transition to sustainable materials.

Speaker Change: With that I'll turn it over to Matt.

Matthew T. Plavan: Thanks, John, and good afternoon, everyone. We've provided the quarterly results and the tables in the earnings release, so I will focus my comments on a couple of key financial highlights. We ended the quarter with $146 million in cash and equivalents and marketable securities for a net burn of approximately $12 million. On a quarter run rate basis, this is in line with our net cash burn guidance for the year of between $55 and $65 million.

Matt: Thanks, John and good afternoon, everyone.

Matt: You've provided the quarter results in the tables of the earnings release, So I will focus my comments on a couple of key financial highlights.

Matt: We ended the quarter with $146 million in cash and equivalents and marketable securities for a net burn of approximately $12 million.

Speaker Change: On a quarter run rate basis. This is in line with our net cash burn guidance for the year of between 55 and $65 million.

Matthew T. Plavan: Origin's first quarter revenue was $6.8 million, up substantially from the $1.7 million in the prior year quarter, and also, on a quarterly run rate basis, in line with our revenue guidance for the year, which is between $25 and $35 million. Also, as expected, these revenues are 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 operations. Looking ahead, as just highlighted by John and Rich, we expect the onset of new revenue from our caps and closure initiatives to be within nine months from now.

Speaker Change: In its first quarter revenue was $6 8 million up substantially from the $1 7 million in the prior year quarter and also on a quarterly run rate basis in line with our revenue guidance for the year, which is between 25 and $35 million.

Speaker Change: Also as expected. These revenues are 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 operations.

Speaker Change: Looking ahead as just highlighted by John and rich.

Speaker Change: We'd expect the onset of new revenue from our caps and closure initiatives to be within nine months from now.

Matthew T. Plavan: And to provide investors with additional context as to the quantum of revenue we expect, Rich indicated earlier in the call that our initial cap manufacturing lines are projected to create an aggregate capacity at scale production of between $45 million and $65 million in annual cap and closure revenue, depending upon product mix. Furthermore, in order to fully serve our expected CAHPS demand in 2025, we'll need to expand our production capacity beyond that of our initial lines and therefore intend to acquire additional equipment lines before year end.

Richard J. Riley: To provide investors with additional context as to the quantum of revenue. We expect rich indicated earlier in the call that our initial cap manufacturing lines are projected to create an aggregate capacity at scale production for between $45 million and $65 million in annual cap and closure revenue depends.

Richard J. Riley: Upon product mix.

Richard J. Riley: More in order to fully serve our expected cats demand in 2020 five we'll need to expand our production capacity beyond that of our initial lines and therefore intend to acquire additional equipment lines before year end, we believe the.

Matthew T. Plavan: We believe the equipment is highly financeable with attractive return on invested capital cycles, and we are in active discussions with both customers and a number of well-established equipment financing companies. The associated debt servicing costs for these lines are baked into our existing forward cash flow and profitability guidance, the specifics of which I will reiterate in a moment.

Richard J. Riley: Shipment is highly financeable with attractive return on invested capital cycles, and we are in active discussions with both customers and the number of well established equipment financing companies associated debt servicing cost for these lines is baked into our existing forward cash flow and profitability guidance.

Richard J. Riley: The specifics of which I will reiterate in a moment.

Operator: Before I do, however, I'd like to highlight what a positive quarter we had engaging with our investors. As outlined in the earnings release today, we announced several fundamental milestones during the quarter, revealing proprietary and compelling aspects of our products, our partners, and strategies for near-term growth and prosperity through the caps and closures market. During the quarter, we seized the opportunity to proactively engage with numerous new institutional investors, research analysts, and our broad base of retail investors to discuss these advances in greater detail and to answer many thoughtful questions along the way.

Richard J. Riley: Before I do however, I'd like to highlight what a positive quarter, we had engaging with our investors as outlined in the earnings release today, we announced several fundamental milestones during the quarter, revealing proprietary and compelling aspects of our products our partners and strategies for near term.

Richard J. Riley: Growth and prosperity through the caps and closures market during the quarter, we seized the opportunity to proactively engage with numerous new institutional investors research analysts and our broad base of retail investors to discuss these advances in greater detail and to answer the many thoughtful questions along.

Richard J. Riley: The way we believe our efforts were a big success, we look forward to more of the same with continued progress and we thank our investors for their sincere engagement and dedicated support, especially the support we've seen across forms like Linkedin.

Operator: We believe our efforts were a big success. We look forward to more of the same with continued progress, and we thank our investors for their sincere engagement and dedicated support, especially the support we've seen across forums like LinkedIn, X, formerly known as Twitter, Discord, and various message boards. With that, I'd like to reiterate and reaffirm our financial guidance, starting with 2024 specifics, including revenue of $25 to $35 million and net cash burned between $55 million and $65 million.

Richard J. Riley: <unk>, formerly known as Twitter discord and various message boards with that I'd like to reiterate and reaffirm our financial guidance, starting with 2024 specifics, including revenue of $25 million to $35 million.

Richard J. Riley: And net cash burn between $55 million and $65 million beyond 2024, we anticipate caps and closures revenue in 2020 five to be significant recurring in nature and with a margin growth profile that will drive us to overall cash positive operations within our.

Operator: Beyond 2024, we anticipate caps and closures revenue in 2025 to be significant, recurring in nature, and with a margin growth profile that will drive us to overall cash positive operations within our existing cash resources, eliminating the need for an equity capital raise on our way to sustain profitability. Operator, may we have the first question, please?

Richard J. Riley: Our existing cash resources.

Richard J. Riley: Eliminating the need for an equity capital raise on our way to sustained profitability.

Now I'd like to open the call for questions. Operator May we have the first question. Please.

Frank Joseph Mitsch: Absolutely. And as a reminder, it's star then one if you have a question, and star then two to remove yourself from the queue. Today's first question comes from Frank Mitsch with Firmium Research. Please go ahead.

Speaker Change: Absolutely and as a reminder, it started in the morning, if you have a question and starting to remove yourself from the queue.

Speaker Change: Today's first question comes from Frank Mitsch Fermium Research. Please go ahead.

Matthew T. Plavan: Yes, good afternoon. And first off, I want to offer my congratulations to Ryan Smith, who I've not met yet, but you're a heck of an interviewer, Ryan. I really appreciated the interviews that you guys posted on the website. I thought that was very helpful. So, Matt, if I understand correctly, the cap and closure lines that you are buying, such that you can get $45 million plus in sales in this first round, it's mainly going to be equipment finance and not eat too much into the cash burn. That's a correction. All right, great, great. And can you talk?

Speaker Change: Yes, good afternoon, and first off I want to offer my congratulations to Ryan Smith, who I've not met yet, but you're a heck of an interview where Ryan I really appreciate it.

Speaker Change: The the interviews that you guys posted on the website I thought that was a that was very helpful.

Speaker Change: I'm Gonna so Matt if I understand correctly, the the cap enclosure lines that you are buying such that you can get 45 million plus and sales in this first round, it's mainly going to be equipment finance, the and and not.

Speaker Change: Too much into the into the cash burn.

Matt: That's that's a correct assumption yes.

Speaker Change: Alright, great great and.

Speaker Change: Can you talk a.

Frank Joseph Mitsch: In a little more detail with respect to government funding, I noticed, you know, on your various financial statements today that you received, it looks like $8 million from the Canadian government, but it also increased your liability. So I assume that you need, there's some expectation that you would pay that back, and part and parcel of speaking to the Canadian government and potential funding for Origin. What if any, what if any progress has been made here in the good old U.S. of A.

Speaker Change: And and a little more detail with respect to government funding I noticed.

Speaker Change: You know on your various financial statements today that are you received it looks like $8 million.

Speaker Change: From the Canadian government, but it also increase your liability so I I assume that you need it there was some expectation that you would pay that back end and.

Speaker Change: Part and parcel.

Speaker Change: Speaking to the what's what's going on with the Canadian government.

Speaker Change: And potential funding for origin, what if anything and what if any progress has been made here in the good old U S. A day.

Speaker Change: So yeah the.

Matthew T. Plavan: So, yeah, the funding you referred to is in connection with OM1, and it is associated with the company building that plant. The debt servicing that goes along with that, that is really tied to your path to profitability and your ability to pay, which is overextended for a period of time.

Speaker Change: The funding that you referred to was in connection with a L. M. One and it is associated with.

Speaker Change: The company.

Speaker Change: Building that plants.

Speaker Change: It's something we're working on for a while so we're very pleased.

Speaker Change: To receive those funds and there is a very generous.

Speaker Change: Debt servicing that goes along with that it is really tied to your your path to profitability and your ability to pay which is over extended period of time. So.

Frank Joseph Mitsch: So we think that is very helpful with regard to managing our cash and managing it effectively. There is an expectation that the $8 million that you receive, you are obligated to pay that back, so this is not... It's not a grant. That's right.

We think that is very helpful with regard to managing our cash and managing it effectively.

Speaker Change: Yeah.

Matthew T. Plavan: Okay. Okay. Great.

Speaker Change: There is an expectation that this that the 8 million that you received you you are obligated to pay that back so this.

Speaker Change: This is not a.

Speaker Change: We're not a grant right. It is okay. Okay, great and then talk to that and whats going on here in the U S. In terms of potential government funding.

Frank Joseph Mitsch: And then to that end, what's going on here in the U.S. in terms of potential government, Well, we continue to pursue such for the potential of OM2, an advertisement that's still available to us, as well as Title 17 funds available to assist in the caps and closures ramp up in time. And we are in line for an application for some of that funding as well. Okay, great. Any thoughts on orders of magnitude?

Speaker Change: Well, we continue to pursue such for potential of O N. Two at Geismar, that's still available to us as well as there are.

Speaker Change: Titled 17 funds available to assist in the caps and closures ramp up in time.

Speaker Change: And we are in line for an application for some of that funding as well.

Speaker Change: Okay, great any any thoughts on orders of magnitude.

Matthew T. Plavan: Well, there are $60 billion in funds available, and there are a number of companies that are applying for it, but we feel really well positioned with the sustainability profile of caps and closures to be a contender for those funds. It would likely take at least a year from now before those would be made available to. Gotcha. All right. Thank you so much. Sure.

Speaker Change: Well there are $60 billion in funds available.

Speaker Change: And.

Speaker Change: There are a number of companies that are applying for it but we feel really well positioned.

Speaker Change: With the sustainability profile of caps and closures to be a contender for those funds it would likely take at least a year from now before those would be made available to us though.

Speaker Change: Okay.

Speaker Change: Got you alright, thank you so much.

Speaker Change: Sure.

Operator: Thank you. And as a reminder, to ask a question, please press star then 1. Our next question today comes from Steve Byrne with Bank of America. Please go ahead.

Speaker Change: Thank you and as a reminder to ask a question. Please press Star then one.

Speaker Change: Our next question today comes from Steve Byrne with Bank of America. Please go ahead.

Stephen V. Byrne: Yes, thank you. I'd like to better understand that $45 million to $65 million revenue target. How many lines does that require you to purchase? The first line that you would have would be just for the fourth quarter revenue, I assume. Can you provide any more disclosure on how many lines are involved in that $45 million to $65 million? And what kind of revenue do you think you could actually generate in the fourth quarter and in 2025?

Stephen V. Byrne: Yes, Thank you I'd like to better understand that 45 to 65 million revenue target.

Stephen V. Byrne: How many how many lines does that require you to to purchase.

Speaker Change: The first line that you would have would be just for the fourth quarter or revenue I assume can you provide any more disclosure on how many lines are involved in that 45 to 65, what kind of revenue do you think you could actually generate in the fourth quarter and in 2025.

Stephen V. Byrne: Yeah, that's a great question. Thank you. I'm sorry.

Speaker Change: Yeah, that's a great question. Thank you.

Speaker Change: Yeah.

Speaker Change: I'm sorry, John.

Speaker Change: John you want to.

John Bissell: Matt and I crossed, yeah, so thanks Steve, by the way; good to see you. And so for those lines, you know, it's just to give you a sense that we are first; we aren't disclosing exactly the number of lines it is. And there are some very specific commercial reasons for that. But to give you sort of a sense that I think might be useful, we're not talking about, you know, dozens of lines to get to that kind of revenue, but it's also not just one, right? And so we think it's very operationally manageable. And we're pretty excited to do it.

Speaker Change: [laughter] that that night crossed I yeah.

Stephen V. Byrne: Thanks, Steve by the way, it's good to talk to you.

Stephen V. Byrne: So for those lines.

Speaker Change: It's just to give you a sense. We are first we arent disclosing exactly the number of why that is and there is there are some very specific sort of commercial reasons for that but to give you sort of a sense that I think might be useful we're not talking about you know dozens of lines to get to that kind of revenue, but it's also not just one right or too.

Speaker Change: And so we think it's a it's very operationally manageable, where we're pretty excited to do it.

John Bissell: And, you know, there's also a little bit of variability. It's not these lines, depending on exactly which skew you pick. Is it a tethered cap? Is it not a tethered cap? Is it a 38-millimeter cap or a 48-millimeter cap?

Speaker Change: And there's also a little bit of variability, it's not these lines, depending on exactly which.

Speaker Change: SKU you know is it a tethered cap is it not a tethered cap is at.

Speaker Change: 38 millimeter cap or a 40 millimeter cap you know there are different kinds of caps they have different pricing and revenue implications there per line and so I'm going to be a little bit of variability between those as well so just in general.

John Bissell: You know, there are different kinds of caps. They have different pricing and revenue implications per line, and so there can be a little bit of variability. So, just in general, not all lines are created equal in this particular case. Does that help?

Speaker Change: Not all lines are created equal in this particular case that help.

Stephen V. Byrne: Yeah, it does. And I guess I'm still struggling with, is the best path forward for you to purchase these manufacturing lines and get into the business of making caps versus licensing the technology to existing companies that already have this equipment? What's your view on that?

Speaker Change: Yeah, It does and I guess I'm still struggling with.

Is the best path forward for you to purchase these manufacturing lines and get into the business.

Speaker Change: Of making caps versus licensing the technology to do.

Speaker Change: Existing companies that already have this this equipment, what's what's your view on that.

John Bissell: Yeah, so it's a great question. It's something we talk about, you know, what's the right order and sequencing and balance of portfolios here around those kinds of things. We talk about it regularly, and I think our opinion gets informed by the market on that topic pretty regularly as well. So it's not a, it's not fire and forget on that opinion.

Speaker Change: Yeah. So it's a great question, it's something we talk about you know, what's the what's the right order and sequencing and balance the portfolio here around those kinds of things we talked about it regularly and I think our opinion gets informed by the market on that topic of pretty regularly as well.

Speaker Change: It's not a it's not fire and forget on that opinion I think you know what our view is always that we want to control our own destiny as much as we can.

John Bissell: I think, you know, our view is always that we want to control our own destiny as much as we can. And so that means that we need to be prepared to carry this through. And, in fact, our sort of default plan is to carry this through on our own if we need to.

Speaker Change: And so that means that we need to be prepared to carry this through and in fact, our default plan is to carry this through on our own if.

Speaker Change: If we need to but I don't think it's going to be quite as simple as we just go by all these machines and operate them ourselves what we're finding is that our industry and the ecosystem is quite receptive.

John Bissell: But I don't think it's going to be quite as simple as we just go buy all these machines and operate them ourselves. What we're finding is that the industry and ecosystem are quite receptive to using this kind of technology and making this product, and quite excited. And so I think there are a combination of ways that we can interact with the industry. One is actually going to other parties that manufacture plastic parts and using our equipment that we purchased or purchased in conjunction with them in their facilities to operate and produce caps.

Speaker Change: Using this kind of technology, and and making us product and and quite excited and so I think there are a combination of ways that we can interact with the industry. One is actually going to other party manufacturer classic parts and using our equipment that we purchase.

Speaker Change: <unk>.

Speaker Change: Or or purchased in conjunction with them in their facilities to operate and produce caps I think theres another option, which is more closer to what you were just describing which is where we're providing the technology and sort of that the systems associated with purchasing.

John Bissell: I think there's another option, which is more close to what you were just describing, which is where, you know, we're providing the technology and sort of the systems associated with producing our caps, but it's operated by one of the large existing players in the caps and closure space. And I think, you know, all of those are possible. I think they're actually not mutually exclusive either. So we're sort of pursuing all of these at the same time to make sure that we have the ability to deliver on the product in the way that we're most excited.

Speaker Change: Purchasing our caps, but it's operated by one of our large existing players in the caps enclosure space and I think you know all of those are possible I think guy you know.

Speaker Change: Those they're actually not mutually exclusive either so we're sort of pursuing all of these at the same time to make sure that we have the ability to deliver on that on the product and the way that we're most excited about.

Stephen V. Byrne: And maybe just one more for you, John. You mentioned the use of HTC and carbon black and so forth. What about all of the myriad products that have been explored with TMF? Is the interest in going down that pathway of developing these TRN-based products diminished any? I mean, this 10 billion of capacity reservations. I think you'll hit that in 2022. Is there interest out there in helping you finance OM2? Yeah, so there is.

Speaker Change: And maybe just one more for you John you mentioned.

Speaker Change: The the usage.

Speaker Change: H D C and in the carbon black and so forth.

Speaker Change: What about <unk>.

Speaker Change: All of the myriad products that have been explored with <unk>.

Speaker Change: <unk> is there.

Speaker Change: It is the interest in going down that pathway of developing these.

Speaker Change: <unk> based product has that has that diminished any I mean does this 10 billion of cap.

Speaker Change: Possibly reservations I think you hit that in 2022 is the is there is there interest out there in helping you you finance Oh.

One two.

John Bissell: Yeah, so our interest in furan-based products or CMF-derived products has not diminished at all. In fact, I think, you know, one of the threads of conversation that we've had over the years is really the level of opportunity for furan products broadly, right? Across specialty chemicals and sort of performance chemicals all the way through to, of course, Parazilene.

Speaker Change: Yeah. So there.

Speaker Change: Our interest in PRN based products or see them. After a product has not diminished at all in fact, I think one of the threads of conversation that we've had over the years.

Speaker Change: Is I really.

Speaker Change: The level of opportunity in Purion products broadly right across our specialty chemicals and I'm sort of.

Speaker Change: <unk> chemicals, all the way through to of course para Xylene you know we have a lot of interest still from our customers in <unk> and para xylene and there's you know we've said before that people are leaning in to try to help us.

John Bissell: You know, we still have a lot of interest from our customers in Parazilene. And there's, you know, we've said before that people are sort of leaning in to try to help us work out what OM2 should look like from a location and development perspective. And that continues.

Speaker Change: Work out what all went to I should look like from a location and development perspective and that continues you know those are bigger conversations and were as you might imagine a little bit reticent to try to forecast exactly how those are going to land.

John Bissell: Those are bigger conversations, and we're, as you might imagine, a little bit reticent to try to forecast exactly how those are going to fare. And we've said that in our prepared comments. But I think the specialty and performance side of CMF molecules or CMF-derived molecules is getting, if anything, more interesting. And I think that trend has been one that we started to see a couple of years ago, and it just keeps going. So, we're pretty excited to talk to the public about some of those molecules in the near future, more specifically. But we don't; we're not doing it yet. I am not ready.

Speaker Change: And we you know we've said that in our prepared comments, but I think the specialty and performance side CMS molecules or seeing that drive molecules is getting if anything more interesting.

Speaker Change: And I think that trend has been one that we started to see a couple of years ago and it just keeps going and so we're pretty excited to talk to the public about some of those molecules in the near future more specifically, but.

Speaker Change: But we don't we're not doing it yet not ready yet.

Speaker Change: Okay. Thank you.

Speaker Change: Yeah.

Operator: Thank you. And this concludes our question and answer session. I'd like to turn the conference back over to the management team for any closing remarks.

Speaker Change: Thank you.

Speaker Change: A question and answer session I'd like to turn the conference back over to management for any closing remarks.

Speaker Change: Thank you operator.

Ryan Smith: Prior to our earnings call, we invited all investors to submit questions as part of our AskOrigin campaign. So, thank you so much to everyone who participated.

Speaker Change: Prior to our earnings call, we invited all investors to submit questions as part of our ask Oregon campaign. So thank you. So much to everyone who participated we received a lot and you have some really great questions.

Ryan Smith: We received a lot, and you asked some really great questions. These questions were, of course, submitted before our call today, and we answered many of them thoroughly with our prepared remarks and our analyst Q&A. In this session, we will generally be answering the first submitted questions first, and for the questions we couldn't get to today, we plan to release an investor Q&A video addressing them. So, please stay tuned for that.

Speaker Change: These questions were of course submitted before our call today, and we answered many of them thoroughly with our prepared remarks, our analyst Q&A.

Speaker Change: In this session, we will generally be answering the first submitted questions first and for the questions. We couldn't get to you today, we plan to release in the Investor Q&A video addressing them. So please stay tuned for that but.

Ryan Smith: But in the remaining time, our first questions are for John, so I'm going to ask you. An investor asked about the CAHPS Enclosures Program, asking, at a high level, could you explain what enabled Origin to figure out PET CAHPS? Was it a mechanical engineering breakthrough that created a new manufacturing process or machine or a chemical engineering development that slightly modified PET to make it a viable material for CAHPS?

Speaker Change: Any time.

Speaker Change: Our first questions are for John I'm going to ask you.

John: An investor asked about the caps and closures program.

John: Asking at a high level could you explain what enabled origin to figure out P. T caps wasn't a mechanical engineering breakthrough that created a new manufacturing process, where machine or chemical engineering development.

Speaker Change: Slightly modified T. He can make it a viable material per caps.

John Bissell: Yeah, that's a great question. And it's incredibly reasonable to ask because we get asked this a lot.

Speaker Change: Yeah, that's a it's a great question and it's.

It's incredibly reasonable to ask because we get asked this a lot.

John Bissell: And I think the answer is actually pretty straightforward and somewhat tied to the question that Steve asked earlier, which is around unique molecules that can be produced from CMF. And so, you know, as we have looked at applications, and, you know, we use this term pretty regularly, applications. In our industry, what that usually means is when you're actually using the chemical or the material in something that a consumer or sort of an end customer might see, that's sort of an application, not quite exclusive to that, but that's a good way to think about it.

Speaker Change: And I think the answer is actually pretty straightforward and somewhat tied to the question.

Steve asked earlier, which is around.

Speaker Change: Unique molecules that can be produced from CNS and so you know as we have looked at applications and we use this term pretty regularly and applications to and there are industry. What that usually means is when you are actually using the chemical or the material in something that a consumer or sort of an end cost.

Speaker Change: Or might see.

Speaker Change: That's sort of an application it is.

Speaker Change: Not quite exclusive to that but that's a that's a good way to think about it and so we started looking at applications for CMS derived in particular unique came after arrived molecules.

John Bissell: And so we started looking at applications for CMF-derived and particularly unique CMF-derived molecules some time ago in sort of an interest in understanding where those would be most valuable and, frankly, how to market them. And part of that was to bring in a really sophisticated team around polyesters in general. So, you know, capable of PET but also very capable of polyesters that might be produced from FDCA or other standards. And one of the things that that team identified was that... Making a PET cap is something that's always been on sort of the industry docket or wishlist, but it was very challenging due to some pretty specific material science.

Speaker Change: Some time ago in it.

Speaker Change: Sort of an interest of of understanding where those would be most valuable and and frankly how to market.

Speaker Change: And and part of that was to bring on a really sophisticated team around polyesters in general so capable and P. E T. But also very capable in polyester that might be produced from FTC, a or other molecules and one of the things that that team identified with.

Speaker Change: Making a P E T. Kat is something that's always been on sort of the industry docket or wish list.

Speaker Change: But it was very challenging for some pretty specific material science reasons.

John Bissell: And so, you know, we thought that our unique furan molecules might allow us to modify PET in a way that would enable it to be used for a cap while retaining its recyclability, which is somewhat unusual. Most of the ways you would modify PET to work in cap synthesis make it less recyclable, or maybe even completely unrecyclable. And so that was sort of the starting point, and you can see sort of the natural line between our core intermediates technology and that application and why we didn't get involved.

Speaker Change: And so you know we thought that.

Speaker Change: Our unique molecules might allow us to.

Speaker Change: Modify the P T in a way that would enable it to be used for a cap while retaining the recyclability of the P. T.

Speaker Change: Which is somewhat unusual most of the way we would modify P T to work in cap synthesis.

Speaker Change: Make it less recyclable or maybe even completely on recycled and so that was sort of the starting point and you can see sort of the natural line between.

Our core our intermediates technology and that application and why we didn't get involved there but.

John Bissell: But it turned out, by the time we were done developing the application, we found out, for better or for worse, that we didn't need our unique molecules to make the cap effectively. And so, consequently, you could do it with just off the shelf. And that was how we got into this business. You know, we obviously said, well, if the application is interesting and novel and economically attractive, we shouldn't force it to be constrained by the scale-up of our own materials, even if it provides us with sort of a strategically attractive landing spot for those materials later.

Speaker Change: But it turned out by the time, we were done developing the application.

Speaker Change: We found out for better for worse that we didnt need our unique molecules to them to make the cat.

Speaker Change: Actively.

Speaker Change: And so consequently, you could do it with just off the shelf T.

Speaker Change: And that was how we got into this space and as you know, we obviously said well if the application is interesting and novel and and economically attractive.

Speaker Change: We shouldn't foresee it to be constrained by the scale up of our own materials, even if it provides us with a sort of a strategically.

Speaker Change: Strategically attractive landing spot for those materials later, so that was how we got into it and if you. If you look at our polyester team.

John Bissell: So that was how we got into it. And if you look at our polyester team, they're frankly pretty incredible. They're not peripheral players in the world of polyester applications. You know, Jay Hannon, who is the technical lead for that team, really, he's been a chief scientist at some of the most impressive and largest bottle companies. So he's the guy when it comes to this sort of thing.

Speaker Change: They are frankly pretty incredible and they are they're not peripheral players in the world of polyester applications, you know Jay Hanna who is the technical lead for that team.

Speaker Change: Really he was that he he's been a chief scientist at some of the most.

Speaker Change: Impressive and and largest bottle companies in the world.

Jay Hanna: He's the guy when it comes to that sort of stuff.

Jay Hanna: Yes.

John Bissell: Great. So, the next question kind of builds on that and is about intellectual poverty and asks, does Origin have patent protection on its tethered BET beverage cap?

Speaker Change: Right so.

Speaker Change: The next question.

Speaker Change #138: Build on that.

Speaker Change: And as is about intellectual poverty.

Speaker Change: Does origin have patent protection on its tether you can leverage that.

John Bissell: So we file intellectual property on a lot of things. We obviously don't get into the details of filings that haven't been made public yet. So, I won't go through that.

Speaker Change: So we file intellectual property.

Speaker Change: On a lot of these sorts of things.

Speaker Change: We obviously don't get into the details of our filings that haven't been made public yet.

Speaker Change: So I won't go through through there and then also you know there's.

John Bissell: And then also, there's... There's. Sometimes the determination of how protective a particular patent is something that gets determined by reality, not necessarily because we think it is or isn't. But that said, you know, we have extensive... Intellectual property is basically what we do. If we develop technology, you know, of course, we want to get some sort of benefit or economic value out of that technology by operating it. But the ability to protect it with intellectual property, you know, whether that's patents or trade secrets or whatever else, is, you know, that's sort of the bread and butter of Origin.

Speaker Change: There is a.

Speaker Change: Or is the determination of how protected into particular patent is it's something that gets determined by reality not necessarily because we think it has risks but that said you know we have an extensive intellectual property is basically what we do if we if we developed technology.

Speaker Change: Of course, we want to.

Speaker Change: Get some sort of benefit or economic value out of that technology by operating it.

Speaker Change: But the ability to protect it with intellectual property is or you know whether that patents are trade secrets or whatever else is that you know that's sort of the that's the bread and butter of of origin and so you know we have a plan around.

John Bissell: And so, you know, we have a plan for pretty much everything that we talk about publicly. Sometimes that plan is something that is easily ascertainable from the outside, and sometimes it's not. But we always have a plan.

Speaker Change: A round of pretty much everything that we are we talk about publicly.

Speaker Change: Times that plan is something that is.

Speaker Change: Easily ascertainable from the outside and sometimes it's not.

Speaker Change: But we always have a plan.

John Bissell: Great, thank you. Okay, so this next investor had sort of a three-part question or a couple-part question on caps and closures as well, and I'm just going to read the first part to you here. The investor says, I understand that the plan is to produce PET caps for the business to break even and be profitable. What percent of origin one capacity will be focused on PET caps, and what will the rest be used for?

Speaker Change: Great. Thank you. Okay. So this next an investor had sort of a three part question or a couple of part question on caps and closures as well and I'm just gonna read the first the first part to you.

Speaker Change: Mr says I understand that the plan is to produce P. T catalyst for the business to breakeven and profitable what percent of origin. One capacity will be focused on P. P caps and will be what will the rest to be used for.

John Bissell: Yeah, so this is a common misapprehension in the market. And again, I can understand why, especially considering our path to getting involved in caps. But in reality,

Speaker Change #101: Yeah. So this is a common misapprehension them in the market and again I can understand why especially considering our path to getting involved in cats.

Speaker Change: But in.

Speaker Change: In actuality.

John Bissell: The material produced by OM-1 is not directed at making CAP. So the CAFs business is interesting in part because it doesn't require any material from origin one or from an original chemical process at all, even though that was how we got involved in it, because we thought that it would. It doesn't.

Speaker Change #100: The material produced by O M. One is not.

Speaker Change #102: Directed at making caps. So the caps business is interesting in part because it doesn't require any material from origin, one or from an origin chemical process at all even though that was how we got involved in it was that we thought that it would.

Speaker Change #102: It doesn't so we can scale that independently.

John Bissell: So we can scale that independently. Origin One, on the other hand, as we've talked about a lot before, is a plant that can produce our intermediate to large scale, which enables us to do application development on our unique materials. And so we think that Origin One will give us the opportunity to develop and identify more things like this. But there is actually not an explicit linkage of materials between Origin 1 and RCAP.

Speaker Change #103: Origin won on the other hand, as we've talked about a lot before is a plant that can produce our intermediate that large scale, which enables us to do application development.

Speaker Change #104: On our unique materials and so we think that.

Speaker Change #105: Origin, one will give us the opportunity to to develop or identify more things like caps.

Speaker Change #105: But there is actually not an explicit linkage.

Speaker Change #106: Of materials between origin won and are a catalyst.

John Bissell: Great. Perfect. So, the next part of the question then asks, you know, what percent of the market share will Origin be expected to capture with Origin One or, if it's not Origin One, try to capture with Decaf's business?

Speaker Change #106: Great perfect.

Speaker Change #107: The next part of the question then.

Speaker Change #108: What percent of the market share will origin do you expect it to capture with origin, one or if it's not working in one mine to capture with with the tops business.

Speaker Change #109: Yeah, So I'll presume that there.

Speaker Change #110: There were frankly, the cap states, particularly you know our view is on.

John Bissell: Yeah, so I'll presume that they're referring to the caps business particularly. You know, our view is the market for caps... $65 billion market. We think there's a lot of opportunity there, both because there's demand for circular solutions in the packaging world and for caps and closures in particular, and also because there's quite a bit of growth in that market. And so we're excited to bring them to the market. We think that we're, you know, given what we're seeing in the market, we expect to be supply limited for quite some time.

Speaker Change #111: The market for cats is large it's a $65 billion market. We think there's a lot of opportunity there both because there's.

Speaker Change #111: There's demand for circular solutions in the packaging world and and caps and closures in particular.

Speaker Change #111: And also because there's quite a bit of growth in that market and so.

Speaker Change #111: We're excited to bring them to market. We think that were you know given what we're seeing in the market, we expect to be a supply and limited them for quite some time and in fact those are the kinds of markets that we like ours are markets, where we're going to end up being supply limited demand limited and.

John Bissell: And in fact, those are the kinds of markets that we like. Ours are markets where we're going to end up being supply limited instead of demand limited. And so I think, you know, I don't have a crystal ball for what the market, you know, the share percentage is going to be by X time, but I think that we're going to be very busy producing as many caps as we possibly can for quite some time, and we're excited about it.

Speaker Change #112: And so I think you know I don't I don't have a crystal ball for what the market.

Speaker Change #113: Our share percentage is gonna be buy X time, but I think that we're gonna be very busy producing as many cats as we possibly can for quite some time.

Speaker Change #113: And we're excited about it.

Speaker Change #114: Great and then just just to round out the question and this was addressed a little bit in the analyst portion earlier, but I just want to call it out specifically.

John Bissell: Great And then just to round out the question, and this was addressed a little bit in the analyst portion earlier, but I just want to call it out specifically. They ask, will the tech be licensed or manufactured to scale up? Will there be partnerships to build other plants to ramp up production of PBQ caps? If you want to speak a little bit more about that,

Speaker Change #115: They ask will the test these licensed or manufactured to scale up.

Speaker Change #116: Will it be partnerships to build other plants to ramp up production of people can catch if you want to speak a little bit more to that.

John Bissell: Excuse me. Sorry

Speaker Change #117: Excuse me sorry.

Speaker Change #117:

John Bissell: The answer is, as I said earlier, it's kind of all of the above. I think our view is the more asset light we can be, the better. That's obviously attractive for a variety of reasons, but we don't need to be limited to that. You know, we see opportunities for partnership in a lot of different ways with a couple different segments of the industry. I think there's going to be room for a couple different types of engagement.

Speaker Change #118: Yeah. The answer is is as I said earlier, it's kind of all of the above I think our view is that the more asset light we can be the better that's obviously attractive for for a variety of reasons, but we don't need to be limited to that we see opportunities for partnership and a lot of different ways with.

Speaker Change #117: Yep.

Speaker Change #117: A couple of different segments of the industry and so.

Speaker Change #117: I think theres going to be a couple of the room for a couple of different ways and engagement.

John Bissell: Great. All right. Now, this other question comes back to the present day on the CAHPS program. How many CAHPS surveys have you produced so far? All right, so we...

Speaker Change #117: Right Alright now this other question is.

Speaker Change #119: It comes back to the present day on the capture program.

Speaker Change #120: How many caps have you produced so far.

Speaker Change #121: So we as we sit in the in the press release. We've made you know there were there were.

John Bissell: As we said in the press release, we've made, you know, there were a couple hundred thousand caps that were in the capping trial, maybe a hundred thousand or more. And we've been in sort of the tens and hundreds of thousands of caps produced before that. And as you can imagine, we didn't compile every single cap we've ever made just to do that one capping run, since we've done lots of iterations on process and design, all those kinds of things. So we're, you know, I'd be surprised if we've broken a couple million, but I think we are.

Speaker Change #122: Couple of I think a couple of hundred thousand caps that were in the capping trials, maybe 100000 or more and we've been in sort of that tens and hundreds of thousands of cats produced before that as you imagine we didnt. We didnt compile every single cap we've ever made just to do that one capping one since we've done lots of iterations on Oh.

Speaker Change #123: <unk> and design all those kinds of things. So we're you know I'd be surprised if we've broken a couple of million dollars, but I think we're well into the 100000 plus range.

Speaker Change #123: Great Alright, with that I'm going to turn over and have a question for Matt a question came in asking about.

Matthew T. Plavan: Great. All right. With that, I'm going to turn over and have a question for Matt. The question came in asking about the delisting and asking, what is management doing to address the potential NASDAQ delisting? If you could speak a little bit about that, Matt.

Speaker Change #123: The delisting and asking what is management doing to address the potential a NASDAQ delisting you can speak a little bit about that Matt.

Matthew T. Plavan: Yeah, sure. I think it makes sense to maybe start and reiterate what the delisting process looks like. A company, if the stock price falls below a dollar for 30 consecutive days, it triggers an initial grace period with the NASDAQ, whereby you need to remedy that situation to get the stock above a dollar, and we are actually in the first of the two grace periods that you get. Ours began in January, and so we actually have through July as our first grace period to get the stock above a dollar for 10 consecutive days.

Matt: Yeah sure I think it makes sense, maybe to start and reiterate what the delisting process looks like.

Speaker Change #124: The company a company if it.

Matt: If the stock price falls below a dollar for 30 consecutive days it triggers an initial grace period with the NASDAQ whereby you need to remedy that situation to get the stock above a dollar.

And we are actually in the first of the two grace periods that you get ours to get in January and so we actually have through July as our first grace period.

Matt: To get the stock above a dollar for 10 consecutive days.

Matthew T. Plavan: I'll note that as of the end of the day today, the close today, we're at six days consecutively above a dollar, so we have four more days that we need to close above a dollar to regain compliance. If in the case we weren't able to do that, then you could get a second grace period of 180 days. That would begin in July, which would get us through the end of the year, and at that point, I think the main criteria the NASDAQ has for giving you that second grace period is that you would need to agree that if for some reason, after almost a year, you weren't able to get the stock above a dollar for 10 consecutive days, that you would do a reverse stock split, which would immediately make the conversion on a reverse stock split would definitely get the stock above a dollar and remedy that issue.

Matt: With that as of the end of the day today to close today, we're at six days consecutively above a dollar. So we have four more days that we need to close above a dollar.

Matt: To regain compliance.

Speaker Change #125: If in the case, we weren't able to do that then you could get a second grace period of 180 days that would begin in July which would get us through the end of the year.

Speaker Change #126: And at that point I think the main criteria that NASDAQ has for giving you that second Grace period is that you would need to agree that if for some reason after almost a year you weren't able to get the stock above a dollar for 10 consecutive days that you would do reverse stock split which would immediately you know.

Speaker Change #126: Make the stock the conversion on a reverse stock split would definitely get to talk about a dollar.

Speaker Change #127: And remedy that issue so we.

Matthew T. Plavan: So we do not see that as being a meaningful probability for us. We're going to continue to execute on the caps and closures plan and expect continued positive reception for our successes with caps and closures, and we're looking forward to remedying the delisting and regaining compliance organically, as we like to call it.

Speaker Change #128: We do not see that as being.

Speaker Change #128: A.

Speaker Change #128: A meaningful probability for us we're going to continue to execute on the caps and closures plan.

And expect continue.

Speaker Change #128: Continued.

Speaker Change #129: Positive reception to our R. R.

Speaker Change #129: Successes with caps and closures and we're looking forward to.

Speaker Change #130: Remedying, the delisting and regaining compliance organically as we like to call it.

Matthew T. Plavan: Great. Thank you, Matt. All right. Well, I'm going to put this last question then to Rich.

Speaker Change #133: Right. Thank you, Matt Alright, well I'm going to put this last question then to rich.

Ryan Smith: It's about something that you've mentioned in previous earnings calls. You said that there are other technologies in addition to CAHPS with near-term revenue generating potential and development at Origin. And the question is, are these technologies that have already been released and are part of Origin's product portfolio that you're expecting to generate revenue in the near term?

Speaker Change #131: It's about.

Speaker Change #132: Something that you've mentioned in previous earnings call.

Rich: You said that there are other technologies and they just the caps with near term revenue generating potential and development at origin.

Rich: And the question is are these technologies that have already been released and are part of origins product portfolio that you're expecting to generate revenue in the near term.

Richard J. Riley: Thanks for the question, as we are very much innovators at heart. I think I would answer that by saying that we think as exciting as our campus business.

Speaker Change #135: Thanks for the question is we are very much innovators at heart I think I would I would answer that by saying that we think is exciting as our campus business is as big as it can be there are additional caps like businesses within our platform.

Richard J. Riley: As exciting as our CAHPS business is and as big as it can be, there are additional CAHPS-like businesses within our platform, and the characteristics of these are highly differentiated functionality in addition to sustainability, big markets, high margins, consistent with but not dependent on OM1 or OM2, highly capital efficient, and a short time to market and cash flow generation. And so we have several of these in the various stages of development, and we're managing these initiatives very thoughtfully and look forward to announcing them as appropriate.

Speaker Change #136: And the characteristics of these are highly differentiated functionality in addition to sustainability.

Speaker Change #137: Big markets high margins, consistent with but not dependent on one one for all of them to highly capital efficient in a short time to market and cash flow generation.

And so we have several of these are in various stages of development and where we're managing these initiatives very thoughtfully and.

Speaker Change #137: I look forward to announcing them as appropriate.

Ryan Smith: and I can't agree more with that. So thank you, Rich; I appreciate that. And thank you to everyone who joined us and everyone who sent in the questions. We're looking ahead with confidence and excitement for 2024, and we look forward to our next update. For the Ask Origin questions we couldn't get to today, we look forward to releasing an investor Q&A video addressing those specifically. And this concludes our call for the day. Thank you.

Rich: And I can't agree more with that so Ah. Thank you rich I appreciate that and thank you to everyone, who joined and everyone who sent in questions.

Rich: We're looking ahead with confidence and excitement for 'twenty 'twenty four and we look forward to our next update.

Rich: For the ASP Gordian questions, we couldn't get today, we look forward to releasing an investor Q&A video addressing those specifically.

Speaker Change #139: And this concludes our call for today.

Speaker Change #139: Thank you.

Operator: Thank you, ladies and gentlemen. You may now disconnect your lines and have a wonderful day.

Speaker Change #140: Gentlemen, you may now disconnect your lines and have a wonderful day.

Speaker Change #140: Okay.

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Speaker Change #140: Yeah.

Speaker Change #140: [music].