Q2 2024 Origin Materials Inc Earnings Call

August 14, 2024

Operator: John Bissell, John Bissell, John John Bissell, John Bissell, John Bissell, John Bissell, John Bissell, A.C.C.C.C.C.C.C.C.C.C [inaudible] John Bissell, John Bissell, John Bissell, John Bissell John Bissell, John Bissell, John Bissell, John, John Bissell, John Bissell, John Bissell, John Bissell [inaudible] John Bissell, John Bissell, John Bissell, John, John Bissell, John Bissell, John Bissell John Bissell, John Bissell, John Bissell, John Bissell, John Bissell, John Bissell, John Bissell John Bissell, John Bissell, John Bissell, John, John Bissell, John Bissell, Frank Mitsch, John Bissell John Bissell, John Bissell, John Bissell, John Bissell [inaudible] John Bissell, John Bissell, Thank you for standing by. This is the conference operator.

Operator: Thank you for standing by. This is the conference operator.

Operator: Welcome to the Origin Materials 2nd quarter 2024 earnings call. As a reminder, all participants are in listen-only mode, and the conference is being recorded.

Operator: Welcome to the Origin Materials second 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.

Conference Operator: Thank you for standing by. This is the conference operator. Welcome to the Origin Materials second quarter 2024 earnings call.

Speaker Change: 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.

Operator: After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing Star and Zero.

Speaker Change: To join the question queue, you may press star then 1 on your telephone keypad.

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

Ryan Smith: 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.

Operator: Should you need assistance during the 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.

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.

Ryan Smith: Thank you. Good afternoon, and thank you for joining us, everyone.

Ryan Smith: Thank you. Good afternoon, and thank you for joining us, everyone. Speaking first today is Origin's co-CEO, Rich Riley. Co-CEO and co-founder John Bissell and CFO Matt Plavan will speak next. Then we'll 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 second quarter press release and presentation.

Rich Riley: Speaking first today is Origin's co-CEO Rich Riley.

Ryan Smith: Thank you. Good afternoon and thank you for joining us everyone. Speaking first today is Origins co-CEO Rich Riley. Co-CEO and co-founder John Bissell and CFO Matt Plavan will speak next. Then we will open the call to questions from analysts.

John Bissell: Co-CEO and co-founder, John Bissell, and CFO Matt Pavin will speak next.

Ryan Smith: Then we'll open the call to questions from analysts and discuss questions submitted as part of our Ask Origin campaign.

Ryan Smith: Ahead of this call, Origin has issued its 2024 2nd quarter press release and presentation. These can be found on the Investor Relations section of our website at originmaterials.com.

Speaker Change: and discuss questions submitted as part of our Ask Origin campaign.

Ryan Smith: These can be found on the investor relations section of our website at originmaterials.com. Please note that during our discussion today, we will be making forward-looking statements based on our current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views as of today, should not be relied upon as representative about views of any subsequent date, 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: Ahead of this call, Origin has issued its 2024 second quarter press release and presentation. These can be found on the investor relations section of our website at originmaterials.com.

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

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 origins, materials, performance. These non-GAAP measures should be considered in addition to and not as substitutes for, or in isolation from GAAP results.

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 to 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 Rick.

Speaker Change: Please note that during our discussion today we were making forward-looking statements based on our current expectations and assumptions

Speaker Change: which are subject to risks and uncertainties.

Speaker Change: These statements reflect our views as of today, should not be relied upon as representative 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. These statements are subject to a variety of risks and uncertainties that could cause actual results.

Speaker Change: to differ materially from expectations.

Speaker Change: 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.

Ryan Smith: During today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Origin's materials performance. These non-GAAP measures should be considered in addition to and not as substitutes for or in isolation from GAAP results. You will find additional disclosures regarding the non-GAAP financial measures discussed on today's call in our press release issued this afternoon and our filings with the SEC, which will be posted to our website.

Speaker Change: During today's call, we will discuss non- GAAP financial measures which we believe are useful as supplemental measures of origins, materials, performance. These non- GAAP measures should be considered in addition to and not as substitute for or an isolation from gap results.

Speaker Change: 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 to 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.

Ryan Smith: The webcast to this call will also be available on the Investor Relations section of our company website.

Rich Riley: With that, I will turn the call over to Rich. Thank you, Ryan, and thank you everyone for joining us. I will begin with a commercialization update as our caps and closures business is making significant strides, and we are closer than ever to producing and selling products in significant volumes. Today, we are announcing our first signed customer for our PET caps and closures. We anticipate delivering multiple billions of caps to this customer, which we expect will generate over $100 million in revenue in the initial two-year term, with revenue ramping from 2025 to 2026. Therefore, to fulfill demand for this MOU, as well as anticipated demand from other customers, we expect to build capacity well beyond our initial system purchases, which we previously announced that have an expected capacity to generate between 45 million and 65 million in annual revenue.

Rich Riley: Thank you, Ryan, and thank you, everyone, for joining us. I will begin with a commercialization update as our caps and closures business is making significant strides and we are closer than ever to producing and selling products in significant volumes. Today, we are announcing our first signed customer for our PET caps enclosure. We anticipate delivering multiple billions of caps to this customer, which we expect will generate over $100 million in revenue in the initial two-year term, with revenue ramping from 2025 to 2026.

Rich: Thank you, Ryan, and thank you, everyone, for joining us.

Rich: I will begin with a commercialization update as our caps and closures business is making significant strides, and we are closer than ever to producing and selling products in significant volumes.

Rich: Today, we are announcing our first signed customer for our PET caps and closures.

Rich: We anticipate delivering multiple billions of caps to this customer, which we expect will generate over $100 million in revenue in the initial two-year term, with revenue ramping from 2025 to 2026.

Rich Riley: Therefore, to fulfill demand for this MOU, as well as anticipated demand from other customers, we expect to build capacity well beyond our initial system purchase, which we previously announced as having expected capacity to generate between $45 million and $65 million in annual revenue. We plan to announce future customers as appropriate, taking into consideration context such as the timing of our prospective customers' product launches, involving our caps, and our customers' related marketing activities. Concurrently, we are negotiating potential licensing agreements with key players.

Rich: Therefore, to fulfill demand for this MOU as well as anticipated demand from other customers, we expect to build capacity well beyond our initial system purchases.

Rich: which we previously announced as having expected capacity to generate between $45 million and $65 million in annual revenue. We plan to announce future customers as appropriate, taking into consideration context such as the timing of our prospective customers product launches involving our caps and our customers related marketing activities.

Rich Riley: We plan to announce future customers as appropriate, taking into consideration context such as the timing of our prospective customers' product launches, involving our caps and our customers' related marketing activities. Concurrently, we are negotiating potential licensing agreements with key players. We anticipate that licensing our technology, in addition to selling the caps we produce with our world-class manufacturing partners, will drive explosive growth for our PET caps because business. This will further catalyze the revolution in recycling, circularity, and product performance that we are bringing to beverage packaging, food packaging, and home goods. We expect to be first to market with PET caps.

Rich Riley: We anticipate that licensing our technology, in addition to selling the caps we produce with our world-class manufacturing partners, will drive explosive growth for our PET caps business. This will further catalyze the revolution in recycling, circularity, and product performance that we are bringing to beverage packaging, food packaging, and home goods. We expect to be first to market with PET caps. We expect to produce them cost competitive. We can make them with any type of PET, making the use of 100% recycled PET possible from cap to container for the first time ever. Our caps perform better than today's HDPE and polypropylene caps in ways that can improve product shelf life, and our caps are designed for circularity, with no additives used to modify the polymer.

Rich: Concurrently, we are negotiating potential licensing agreements with key players.

Rich: We anticipate that licensing our technology, in addition to selling the caps we produce with our world-class manufacturing partners, will drive explosive growth for our PET caps business.

Rich: This will further catalyze the revolution in recycling, circularity, and product performance that we are bringing to beverage packaging, food packaging, and home goods.

Rich Riley: We expect to produce them cost competitively. We can make them with any type of PET, making the use of 100% recycled PET possible from cap to container for the first time ever. Our caps perform better than today's HDPE and polypropylene caps in ways that can improve product shelf life, and our caps are designed for circularity, with no additives used to modify the polymer. For a wide variety of containers, our technology enables the lightest cap, reducing plastic waste and improving sustainability. Demand for these products has been incredibly strong, and some have called PET caps the holy grail for packaging circularity.

Rich: We expect to be first to market with PET caps. We expect to produce them cost-competitively. We can make them with any type of PET, making the use of 100% recycled PET possible from cap to container for the first time ever.

Rich: Our caps perform better than today's HDPE and polypropylene caps in ways that can improve product shelf life and our caps are designed for circularity, with no additives used to modify the polymer.

Rich Riley: For a wide variety of containers, our technology enables the lightest cap, reducing plastic waste and improving sustainability. Demand for these products has been incredibly strong, and some have called PET caps the holy grail for packaging circularity. Today we are reaffirming that CAPS commercial production is on track to begin during the fourth quarter of this year, with revenue generation expected to start ramp up during the first quarter of 2025. This past quarter, in Switzerland and Germany, we tested all manufacturing line subsystems at full speed, and we are pleased with the system's performance.

Rich: For a wide variety of containers, our technology enables the lightest cap, reducing plastic waste and improving sustainability. Demand for these products has been incredibly strong, and some have called PET caps the holy grail for packaging circularity.

Rich Riley: Today, we are reaffirming the cap's commercial production is on track to begin during the fourth quarter this year, with revenue generation expected to start ramp up during the first quarter of 2025. This past quarter, in Switzerland and Germany, we tested all manufacturing line subsystems at full speed, and we are pleased with the system's performance. We also passed the milestone of over 1 million caps produced today, which puts us well in our way to launching the strategically important business. We are also reaffirming our path of profitability, requiring no additional equity capital. Our path of profitability is entirely independent of the scale up of our biomass conversion technology and related manufacturing plant construction.

Rich: Today we are reaffirming that CAPS commercial production is on track to begin during the fourth quarter of this year, with revenue generation expected to start ramp up during the first quarter of 2025. This past quarter, in Switzerland and Germany, we tested all manufacturing line subsystems at full speed, and we are pleased with the system's performance.

Rich Riley: We also passed the milestone of over one million caps produced to date, which puts us well on our way to launching the strategically important business. We are also reaffirming our path to profitability, requiring no additional equity capital. Our path to profitability is entirely independent of the scale-up of our biomass conversion technology and related manufacturing plant construction.

Rich: We also passed the milestone of over 1 million caps produced to date, which puts us well on our way to launching the strategically important business.

Rich: We are also reaffirming our path to profitability, requiring no additional equity capital.

Rich: Our path of profitability is entirely independent of the scale-up of our biomass conversion technology and related manufacturing plant construction.

Rich Riley: We believe our cash runway, with over 130 million dollars on hand, is sufficient to eliminate the need for an equity capital raise. Given the revenues we expected to generate in the quarters and years ahead, led by our caps and closures' business. Today, we are maintaining our expected 2024 net cash burn of between 55 and 65 million dollars. We anticipate our caps and closures business will begin to generate revenue during the first quarter of next year, with significant gross profit generation beginning in 2025, and a healthy growth trajectory thereafter. As such, we continue to forecast a solid minimum cash floor on our wages, sustained profitability.

Rich Riley: We believe our cash runway, with over $130 million on hand, is sufficient to eliminate the need for an equity capital raise, given the revenues we expect to generate in the quarters and years ahead, led by our caps and closures. Today we are maintaining our expected 2024 net cash burn of between $55 and $65 million. We anticipate our caps and closures business will begin to generate revenue during the first quarter of next year, with significant gross profit generation beginning in 2025 and a healthy growth trajectory thereafter.

Rich: We believe our cash runway, with over $130 million on hand, is sufficient to eliminate the need for an equity capital raise, given the revenues we expect to generate in the quarters and years ahead, led by our caps and closures business.

Rich: Today we are maintaining our expected 2024 net cash burn of between 55 and 65 million dollars. We anticipate our caps and closures business will begin to generate revenue during the first quarter of next year with significant gross profit generation beginning in 2025 and a healthy growth trajectory thereafter.

Rich Riley: As such, we continue to forecast a solid minimum cash flow on our way to sustained profitability. Apart from our caps and closures business, we continue to grow the long-term value of the Origin platform. We anticipate caps and closures will enable us to reach profitability and will be a strong business on its own terms. But the origin technology platform is more than caps and closures, with significant upside due to the extreme flexibility and low cost of the sustainable molecules produced by our technology for converting biomass to sustainable intermediates.

Speaker Change: As such, we continue to forecast a solid minimum cash floor on our way to sustained profitability.

Rich Riley: Apart from our caps and closures business, we continue to grow the long-term value of the origin platform. We anticipate caps and closures will enable us to reach profitability and will be a strong business on its own terms. But the origin technology platform is more than caps and closures, with significant upside due to the extreme flexibility and low cost of the sustainable molecules produced by our technology for converting biomass to sustainable intermediates. Growing the long-term value of the origin platform means continuing to engage potential strategic partners around the scale of our biomass conversion technology, including exploring high value application development initiatives that could generate near term revenue.

Speaker Change: Apart from our caps and closures business, we continue to grow the long-term value of the Origin platform.

Speaker Change: We anticipate caps and closures will enable us to reach profitability and will be a strong business on its own terms.

Speaker Change: But the origin technology platform is more than caps and closures, with significant upside due to the extreme flexibility and low cost of the sustainable molecules produced by our technology for converting biomass to sustainable intermediates.

Rich Riley: Growing the long-term value of the Origin Platform means continuing to engage 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. Some of these applications are capable of using materials that origin one and origin two are designed to produce, but are not dependent on those plants for production and sale.

Speaker Change: Growing the long-term value of the Origin platform means continuing to engage 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.

Rich Riley: Some of these applications are capable of using materials that origin one and origin two are designed to produce, but are not dependent on those plans for production and sale. We're managing these initiatives softly and will announce them as appropriate. Looking ahead, we are positioned to vigorously grow our business, led by caps and closures, and to continue to cultivate our broader technology platform in the quarters and years ahead with a strong financial position, strong IP moat, and a highly innovative and creative team.

Speaker Change: Some of these applications are capable of using materials that Origin 1 and Origin 2 are designed to produce, but are not dependent on those plants for production and sale. We're managing these initiatives thoughtfully, and we'll announce them as appropriate.

John Bissell: We're managing these initiatives thoughtfully and we'll announce them as appropriate. Looking ahead, we are positioned to vigorously grow our business, led by caps and closures, and to continue to cultivate our broader technology platform in the quarters and years ahead with a strong financial position, strong IP moat, and a highly innovative and creative team. With that, I'll turn it over to John. Thank you, Rich, and good afternoon, everyone.

Speaker Change: Looking ahead, we are positioned to vigorously grow our business, led by caps and closures, and to continue to cultivate our broader technology platform in the quarters and years ahead with a strong financial position, strong IP moat, and a highly innovative and creative team.

John Bissell: With that, I'll turn it over to John. Thank you, Rich. And good afternoon, everyone.

John Bissell: This quarter, we announced a European PET cap mass production partnership with Bachmann Group, a respected Swiss packaging production and logistics company. Bachmann Group will assist in the end-to-end operation and automation of our PET cap mass production, helping us produce billions of caps by taking pellet or flake, including recycled material, all the way to finished closures using Origin equipment. Earlier this month, we announced a North American PET cap mass production partnership with Reed Citigroup. Reed Citigroup is a full-scale injection mold builder, injection molder, hydraulic pressmaker, and automation solution company.

John Bissell: This quarter, we announced a European PET cap mass production partnership with Bachman Group, a respected Swiss packaging production logistics company. Bachman Group will assist in the end-to-end operation and automation of our PET cap mass production. Lines, helping us produce billions of caps by taking pellet or flake, including recycled material all the way to finished closures using origin equipment.

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

John Smith: Thank you Rich and good afternoon everyone. This quarter we announced a European PET cap mass production partnership with Bachman Group, a respected Swiss packaging production and logistics company. Bachman Group will assist in the end-to-end operation and automation of our PET cap mass production lines.

Speaker Change: helping us produce billions of caps by taking pellet or flake, including recycled material, all the way to finished closures using Origin equipment.

John Bissell: Earlier this month, we announced a North American PET cap mass production partnership with Reed City Group. Reed City Group is a full-scale injection mold builder, injection molder, hydraulic press maker, and automation solutions company. This partnership enables a geographic expansion complementary to our European manufacturing capability. We look forward to operating cap lines with the Reed City Group team, which includes skilled machinists, mechanical engineers, and operations professionals with impressive capabilities in toolmaking and clean room manufacturing. Bachman Group and Reed City Group are turning us alongside our previously announced world-class partners in PET cap manufacturing, Paxis Global, and IMD Vista.

Speaker Change: Earlier this month, we announced a North American PET cap mass production partnership with Reed Citigroup. Reed Citigroup is a full-scale injection mold builder, injection molder, hydraulic press maker, and automation solutions company.

John Bissell: This partnership enables a geographic expansion complementary to our European manufacturing. We look forward to operating CAHPS lines with the Reed City Group team, which includes skilled machinists, mechanical engineers, and operations professionals with impressive capabilities in tool making and clean room manufacturing. Bachman Group and ReadCity Group are joining us alongside our previously announced world-class partners in PET cap manufacturing, Paxys Global and IMDb. In the past several quarters, you have seen us assemble this incredible team, and we couldn't be happier with how the manufacturing, technology, and people are all, We remain on track to begin commercial production later today.

Speaker Change: This partnership enables a geographic expansion complementary to our European manufacturing capability.

Speaker Change: We look forward to operating cap lines with the Reed City Group team which includes skilled machinists, mechanical engineers, and operations professionals with impressive capabilities in toolmaking and clean room manufacturing.

Speaker Change: Bachman Group and Reed City Group are joining us alongside our previously announced world-class partners in PET cap manufacturing Paxis Global and IMD Vista.

John Bissell: In the past several quarters, you have seen that this assembled this incredible team, and we couldn't be happier with how the manufacturing, technology, and people are all coming together.

Speaker Change: In the past several quarters, you have seen us assemble this incredible team, and we couldn't be happier with how the manufacturing, technology, and people are all coming together. We remain on track to begin commercial production later this year.

John Bissell: We remain on track to begin commercial production later this year.

John Bissell: This quarter, we achieved multiple caps and closures manufacturing milestones. We crossed the milestone of over 1 million caps produced. The testing and scaling of our cap production technology and manufacturing system has been going very well, and our manufacturing partners, prospective customers, and team are energized by the success. As mentioned last month in Switzerland and Germany, we ran each subsystem of our manufacturing line at full speed, including industry standard high speed camera systems, with the system operating as expected. We validated QAQC indicators that operators can use to assess quality, such as stable cap weight and dimensions.

John Bissell: This quarter, we achieved multiple caps and closures manufacturing milestones. We crossed the milestone of over 1 million caps produced. The testing and scaling of our cap production technology and manufacturing system has been going very well. And our manufacturing partners, prospective customers and team are energized by the, As mentioned last month in Switzerland and Germany, we ran each subsystem of our manufacturing line at full speed, including industry standard high speed camera systems with the system operating as expected.

Speaker Change: This quarter, we achieved multiple caps and closures manufacturing milestones. We crossed the milestone of over 1 million caps produced. The testing and scaling of our cap production technology and manufacturing system has been going very well, and our manufacturing partners, prospective customers, and team are energized by the success.

Speaker Change: As mentioned, last month in Switzerland and Germany, we ran each subsystem of our manufacturing line at full speed, including industry standard high-speed camera systems, with the system operating as expected.

Speaker Change: We validated QA-QC indicators that operators can use to assess quality, such as stable cap weight and dimensions.

John Bissell: Earlier this month, we unveiled engineering and design innovations in the manufacturing of our tethered PET caps, the world's first tethered caps made with PET. These tethered caps are a breakthrough in circularity designed to improve cap collection rates for recycling and offer an excellent user experience while enabling leading brands to respond to the EU Single Use Plastics Directive. The EU Single Use Plastics Directive, which came into effect last month, mandates that caps stay connected to bottles throughout the European Union. Our PET cap innovations are perfectly suited for that regulatory environment, and frankly, any environment. If you're going to keep caps connected to bottles, the logical thing to do is to make the cap and the bottle from the same material, PET.

John Bissell: We validated QA QC indicators that operators can use to assess quality, such as stable cap weight. Earlier this month, we unveiled, engineering and design innovations in the manufacturing of our tethered PET caps. The world's first tethered caps made, These tethered caps are a breakthrough in circularity designed to improve cap collection rates for recycling and offer an excellent user experience while enabling leading brands to respond to the EU Single Use Plastics Directive.

Speaker Change: Earlier this month, we unveiled...

Speaker Change: engineering and design innovations in the manufacturing of our tethered PET caps, the world's first tethered caps made with PET.

Speaker Change: These tethered caps are a breakthrough in circularity, designed to improve cap collection rates for recycling and offer an excellent user experience while enabling leading brands to respond to the EU Single-Use Plastics Directive.

John Bissell: The EU Single-Use Plastics Directive, which came into effect last month, mandates that caps stay connected to bottles throughout the European Union. Our PET cap innovations are perfectly suited for that regulatory environment and frankly any environment. If you're going to keep caps connected to bottles, the logical thing to do is to make the cap and the bottle from the same material.

Speaker Change: The EU Single-Use Plastics Directive, which came into effect last month, mandates that caps stay connected to bottles throughout the European Union. Our PET cap innovations are perfectly suited for that regulatory environment, and frankly, any environment.

Speaker Change: If you're going to keep caps connected to bottles, the logical thing to do is to make the cap and the bottle from the same material, PET.

John Bissell: Otherwise, recycling centers have to deal with separating the material streams. With our solution, it's all one high-performing recyclable material connected via a tether, offering a real breakthrough for circularity. Our tethered cap design is simple, clever, and user friendly. We use the threads of the PET cap and bottle to lock the cap into place, angled away from the mouth, not toward it. With this product, we are combining the performance and sustainability advantages of our PET caps, recyclability, shelf life extension, lightweight ability to use recyclable PET, and enablement of mono material packaging with an excellent user experience for tethered applications.

Speaker Change: Otherwise, recycling centers have to deal with separating the material streams. With our solution, it's all one, high-performing, recyclable material connected via a tether, offering a real breakthrough for circularity.

Speaker Change: Our tethered cap design is simple, clever, and user-friendly.

Speaker Change: We use the threads of the PET cap and bottle to lock the cap into place.

John Bissell: With this product, we are combining the performance and sustainability advantages of our PET caps, recyclability, shelf-life extension, light-weighting, ability to use recyclable PET, and enablement of monomaterial packaging with an excellent user experience for tethered applications. We have already seen extremely strong interest in this welcome addition to our PET cap. With our leading PET cap technology and manufacturing systems, we're extremely well positioned to address a $65 billion caps and closures market that consumes billions upon billions of caps per year, which today cannot be recycled into new caps, only downcycled.

Speaker Change: angled away from the mouth, not toward it.

Speaker Change: With this product, we are combining the performance and sustainability advantages of our PET caps.

Speaker Change: recyclability, shelf life extension, lightweighting, ability to use recyclable PET, and enablement of monomaterial packaging, with an excellent user experience for tethered applications. We have already seen extremely strong interest in this welcome addition to our PET cap product line.

John Bissell: We have already seen extremely strong interest in this welcome addition to our PET cap product line.

John Bissell: With our leading PET cap technology and manufacturing systems, we're extremely well positioned to address a $65 billion caps and closures market that consumes billions upon billions of caps per year, which today cannot be recycled into new caps, only down. we're very pleased with progress and excited to begin commercial production later this year.

Speaker Change: With our leading PET cap technology and manufacturing systems, we're extremely well positioned to address a 65 billion dollar caps and closures market that consumes billions upon billions of caps per year, which today cannot be recycled into new caps, only downcycled.

John Bissell: We're very pleased with progress and excited to begin commercial production later this year. Regarding our biomass conversion technology, we continue to execute on what has been our thesis from day one, make molecules that are chemically flexible and low cost and build businesses around those sustainable molecules to have as great an impact. To that end, we continue to perform development work with multiple partners. Right now, multiple origin partners are actively engaged in development work using our samples of CMF and HTC. For this kind of work, typically we crystallize our CMF and carbonize our HTC before delivery to our partners.

Speaker Change: We're very pleased with progress and excited to begin commercial production later this year.

John Bissell: Regarding our biomass conversion technology, we continue to execute on what has been our thesis from day one: make molecules that are chemically flexible and low cost, and build businesses around those sustainable molecules to have as great an impact as possible. To that end, we continue to perform development work with multiple partners. Right now, multiple origin partners are actively engaged in development and work using our samples of CMF and HTC. For this kind of work, typically we crystallize our CMF and carbonize our HTC before delivery to our partners. Our partners continue to impress us with their application development capabilities, and we are growing our expertise in CMF and HTC as we are producing them on a scale that wasn't possible before the operation of Origin 1.

Speaker Change: Regarding our biomass conversion technology, we continue to execute on what has been our thesis from day one. Make molecules that are chemically flexible and low-cost and build businesses around those sustainable molecules to have as great an impact as possible.

Speaker Change: To that end, we continue to perform development work with multiple partners.

Speaker Change: Right now, multiple origin partners are actively engaged in development work using our samples of CMF and HTC. For this kind of work, typically we crystallize our CMF and carbonize our HTC before delivery to our partners.

John Bissell: Our partners continue to impress us with their application development capabilities, and we are growing our expertise in CMF and HTC as we are producing them on a scale that wasn't possible before the operation of OriginOne. Origin One, our biomass conversion plant located in Sarnia, Ontario, Canada, continues to support market development. We are producing materials, shipping them, and collaborating with supply chain partners on logistics, joint development activities, and customer materials testing and formulation.

Speaker Change: Our partners continue to impress us with their application development capabilities, and we are growing our expertise in CMS and HDC as we are producing them on a scale that wasn't possible before the operation of OriginOne.

John Bissell: Origin 1, our biomass conversion plant located in Sarna, Ontario, Canada, continues to support market development activities. We are producing materials, shipping them, and collaborating with supply chain partners on logistics, joint development activities, and customer materials testing and formulation.

Speaker Change: Origin One, our biomass conversion plant located in Sarnia, Ontario, Canada, continues to support market development activities.

Speaker Change: We are producing materials, shipping them, and collaborating with supply chain partners on logistics, joint development activities, and customer materials testing and formulation.

John Bissell: For Origin 2, we continue to engage partners as part of our asset-light strategy for further biomass conversion technology scale-up. Timeline and economic forecast will depend on the partner and deal structure, which consider a range of scenarios and locations, including Guise River, Louisiana, as well as Asia brownfield scenarios. We are exploring a variety of plant designs, evaluating potential brownfield sites, and performing development work with partners, including testing and optimizing various feed stocks to generate data that could influence our scale of strategy.

John Bissell: For Origin 2, we continue to engage partners as part of our asset light strategy for further biomass conversion technology scale up. Timelines and economic forecasts will depend on the partner and deal structure, which can consider a range of scenarios and locations including Geyser, Louisiana, as well as Asia brownfield scenario.

Speaker Change: For Origin2, we continue to engage partners as part of our Asset Light Strategy for further biomass conversion technology scale-up.

Speaker Change: Timelines and economic forecasts will depend on the partner and deal structure, which can consider a range of scenarios and locations including Geismar, Louisiana, as well as Asia Brownfield scenarios.

John Bissell: We're exploring a variety of plant designs, evaluating potential brownfield sites, and performing development work with partners, including testing and optimizing various feedstocks to generate data that could influence our scale-up strategy. We will provide updates as. Scaling up a new fundamental materials technology is challenging and takes time, but the reward is worth it. In the history of chemicals and oil and gas, it has never been fast or easy to make a sea change in the basic building blocks of our material.

Speaker Change: We are exploring a variety of plant designs, evaluating potential brownfield sites, and performing development work with partners, including testing and optimizing various feedstocks to generate data that could influence our scale-up strategy.

John Bissell: We will provide updates as appropriate. Scaling up a new fundamental material technology is challenging and takes time, but the reward is worth the effort. In the history of chemicals and oil and gas, it has never been faster easy to make a sea change in the basic building blocks of our material economy. But we are fortunate to have a brilliant team that is leading us to profitability by way of application development, specifically through the innovative engineering design and manufacture of PET cats and closures. It is not unusual for a platform, whether in chemicals or the software industry or otherwise, to be pulled to the market for a specific application, whether it's especially chemical, performance material, or something else that enables a scientific breakthrough to achieve significant revenue and profitability.

Speaker Change: We will provide updates as appropriate.

Speaker Change: Scaling up a new fundamental materials technology is challenging and takes time, but the reward is worth the effort.

Speaker Change: In the history of chemicals and oil and gas, it has never been fast or easy to make a sea change in the basic building blocks of our material economy.

John Bissell: But we are fortunate to have a brilliant team that is leading us to profitability by way of application, specifically through the innovative engineering, design, and manufacture of PET caps and closures. It is not unusual for a platform, whether in chemicals or the software industry or otherwise, to be pulled to the market for a specific application, whether it's a specially chemical, performance material, or something else that enables a scientific breakthrough to achieve significant revenue and profitability.

Speaker Change: But we are fortunate to have a brilliant team that is leading us to profitability by way of application development.

Speaker Change: specifically through the innovative engineering design and manufacture of PET caps and closures. It is not unusual for a platform, whether in chemicals or the software industry or otherwise,

Speaker Change: to be pulled to the market for a specific application, whether it's a specially chemical, performance material, or something else that enables a scientific breakthrough to achieve significant revenue and profitability.

John Bissell: Our cats and closures business is Origin's first application expected to reach truly mass production. We expect it to enable near-term cash flow and profitability and the long-term flourishing of our broader technology platform. And thus, with the widespread application of sustainable performance, enhanced materials, and products, a better planet. We are encouraged that in the short-term, we have a winning business through to our mission of sustainability, and that in the long-term by staying true to our vision, we can transform the world.

John Bissell: Our Caps and Closures business is Origin's first application expected to reach truly mass production. We expect it to enable near-term cash flow and profitability and the long-term flourishing of our broader technology platform, and thus, with the widespread application of sustainable, performance-enhanced materials and products, a better, We are encouraged that in the short term, we have a winning business true to our mission of sustainability, and that in the long term, by staying true to our vision, we can transform the world. And now I'll hand it over. Thanks, John. Good afternoon, everyone.

Speaker Change: Our Caps and Closures business is Origin's first application expected to reach truly mass production.

Speaker Change: we expect it to enable near-term cash flow and profitability and the long-term flourishing of our broader technology platform and Thus with the widespread application of sustainable performance enhanced materials and products a better planet

Speaker Change: We are encouraged that in the short term, we have a winning business true to our mission of sustainability, and that in the long term, by staying true to our vision, we can transform the world. And now, I'll hand it over to Matt.

Matt Plavan: And now, I'll hand it over to Matt. Thanks, John. Good afternoon, everyone. We've provided second quarter results in the tables and the earnings release, so I'll focus my comments on a couple of two financial highlights. We ended the quarter with $132 million in cash, cash equivalents, and marketable securities, $26 million less than at December 31, 2023. As a run rate for cash burn at the halfway point in the year, this amount is slightly below the low end of our cash burn guidance range of $55 to $65 million. However, we remain confident and comfortable in maintaining that range as our guidance for the full year.

Matt Plavan: We've provided second-quarter results in the tables and the earnings release, so I'll focus my comments on a couple of key financial highlights. We ended the quarter with $132 million in cash, cash equivalents, and marketable securities, $26 million less than at December 31st, 2023. As a run rate for cash burn at the halfway point in the year, this amount is slightly below the low end of our cash burn guidance range of $55 to $65 million.

Matt: Thanks, John . Good afternoon, everyone.

Matt: We've provided second quarter results in the tables and the earnings release, so I'll focus my comments on a couple of key financial highlights

Matt: We ended the quarter with $132 million.

Matt: in Cash, Cash Equivalents, and Marketable Securities, $26 million less.

Matt: Then at December 31st

Matt: 2023.

Matt: As a run rate for cash burn at the halfway point in the year, this amount is slightly below the low end of our cash burn guidance range of $55 to $65 million. However, we remain confident and comfortable in maintaining that range as our guidance for the full year.

Matt Plavan: However, we remain confident and comfortable in maintaining that range as our guidance for the full year. Origin's second quarter revenue was $7 million compared to $6.9 million in the prior year quarter and also trending in line with our revenue guidance for the full year, which is between $25 and $35 million.

Matt Plavan: George's second quarter revenue was $7 million compared to $6.9 million in the prior year quarter, and also trending in line with our revenue guidance for the full year, which is between $25 and $35 million. Also, as expected, these revenues are comprised of what we've referred to as supply chain activation revenue generated in conjunction with origin-1 operations.

Matt: Origin's second quarter revenue was $7 million compared to $6.9 million in the prior year quarter and also trending in line with our revenue guidance for the full year, which is between $25 and $35 million.

Operator: Also, as expected, these revenues are comprised of what we've referred to as supply chain activation revenue generated in conjunction with Origin One operations. Looking ahead, as just highlighted by John and Rich, we expect the onset of new revenue from our caps and closures initiative to be as of Q1 2025. 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 sustained profitability.

Matt: Also, as expected, these revenues are comprised of what we've referred to as supply chain activation revenue generated in conjunction with Origin One operations.

Matt Plavan: Looking ahead, it's just highlighted by John and Rich, we expect the onset of new revenue from our Capson Collosures Initiative to be as of Q1 2025. Beyond 2024, we anticipate Capson Collosures 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 sustained profitability.

Speaker Change: Looking ahead...

Speaker Change: As just highlighted by John and Rich, we expect the onset of new revenue from our caps and closures initiative to be

Speaker Change: as of Q-1 2025 25.

Speaker Change: Beyond 2024, we anticipate caps and closures revenue in 2025 to be significant.

Speaker Change: 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 sustained profitability.

Operator: Now, I'd like to open a call for questions. Operator, may we have the first question, please. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two.

Operator: Now I'd like to open the call for questions. Operator, and when we have the first question please. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key.

Speaker Change: Now I'd like to open the call for questions. Operator, may we have the first question, please?

Speaker Change: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad.

Speaker Change: If you are using a speakerphone, please pick up your handset before pressing the keys.

Operator: At this time, we will pause momentarily to assemble our roster.

Operator: To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question is from Stephen Byrne with Bank of America. Please go ahead.

Speaker Change: To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster.

Stephen Byrne: The first question is from Steven Byrne with Bank of America. Please go ahead. Yes, thank you. Where are you seeing the most interest in the products coming out of Origin-1? Is there still interest in a biobased PET, or is this really moving more towards these furan-based derivatives or the variety of products you can produce from HTC? Has there been a change in the level of interest in these products? It seems nice to the question. Yeah, I think we have focused ourselves more on the furan and HTC. We see HTC as a subset of furanics more broadly.

Speaker Change: Thanks for watching, and don't forget to like, share, and subscribe to our channel.

Stephen Byrne: Yes, thank you. Where are you seeing the most interest in the products coming out of Origin-1? Is there still interest in a bio-based PET, or is this really moving more towards, you know, these furan-based derivatives or the variety of products you can produce from HTC? Has there been a change in the level of interest of these products? Hey Steve, thanks for the question. Yeah, I think we have focused ourselves more on the Furan and HTC, you know, we see HTC really as a subset of Furanics more broadly, but on Furanics specific products, that's for a couple reasons.

Speaker Change: The first question is from Stephen Byrne with Bank of America. Please go ahead.

Stephen Byrne: Yes, thank you.

Speaker Change: Where are you seeing the most interest in the products coming out of Origin One?

Stephen Byrne: Is there still interest in a bio-based PET, or is this really moving more towards...

Stephen Byrne: You know, these furan-based derivatives or the variety of products you can produce from HTC. Has there been a change in the level of interest of these products?

Matthew Plavan: Thank you. Nice to have a question.

Matthew Plavan: Yeah, I think...

Matthew Plavan: We have focused ourselves more on the furan and HTC, we see HTC as a subset of furanics more broadly, but on furanics specific products, that's for a couple reasons.

Stephen Byrne: One is because we are seeing real performance improvements and pretty unique functionality in some of those Furan based products. So we think that's interesting, especially in a more capital efficient environment that we need to be operating in, you know, performance is going to drive margin, or differentiated performance, I should say, is going to drive margin, and that margin is a lot easier to manage in a more capital light environment. So that's been really our decision. I think we have seen in the broader market, still a lot of pull on biobase and lower carbon, polyester, and I'd say polymers more broadly.

John Bissell: But on furanic specific products, that's for a couple of reasons. One is because we are seeing real performance improvements and pretty unique functionality in some of those furan-based products. So we think that's interesting, especially in a more capital-efficient environment that we need to be operating in. Performance is going to drive margin or differentiated performance; such a state going to drive margin. And that margins a lot easier to manage in a more capital-wide environment. So that's been really our decision. I think we have seen in the broader market still a lot of pull on biobased and lower carbon polyester, and I'd say polymers for broadly.

Matthew Plavan: One is because

Matthew Plavan: We are seeing real performance improvements and pretty unique functionality in some of those furan based products So we think that's interesting Especially in a more capital efficient environment that we need to be operating in, you know Performance is going to drive margin or differentiated performance I should say it's going to drive margin and that margins a lot easier to manage in a in a more capital light environment

Matthew Plavan: So that's been really our decision. I think we have seen in the broader market still a lot of pull on biobased and lower carbon polyester and I'd say polymers more broadly.

John Bissell: But you know, our view is, we have, we have a lot of demand for that we've demonstrated that demand, we don't think, you know, incrementally demonstrating more of that demand really changes the picture very much. But what we think is new and differentiated is for us to bring here in, I'll say specific, and in some cases even unique, functionality to these applications that people can't get anywhere else. We think that's a place where we can really show the breadth and strength of the platform. Okay, got it.

John Bissell: But our view is we have a lot of demand for that. We demonstrated that demand. We don't think incrementally demonstrating more of that demand really changes the picture very much. But what we think is new and differentiated is for us to bring furan - all say specific and in some cases even unique functionality to these applications that people can't get anywhere else. We think that's a place where we can really show the breadth and strength of the platform.

Matthew Plavan: But, you know, our view is...

Matthew Plavan: We have we have a lot of demand for that. We've demonstrated that demand. We don't think, you know, incrementally demonstrating more of that demand really changes the picture very much. But what we think is new and differentiated is for us to bring Purian

Matthew Plavan: all face specific and in front case even unique functionality to these applications that people can't get anywhere else. We think that's a place where we can really...

John Bissell: And now that you've been running origin wine, you know, using, you know, cellulosic materials and so forth, you run a lot of things through there. Do you think that you would design a new plant, whether it's Origin 2 or something in between? Would you design it differently?

John Bissell: Okay. Got it. And now that you've been running origin wine, you know, using, you know, cellulosic materials and so forth, you run a lot of things through there. Do you think that you would design a new plan? Whether it's origin two or something in between, would you design it differently? Have you, have you learned anything about this process from Origin One that could help you reduce the, you know, the capital costs of building another plant. And, or what about just doubling the size of Origin One? Is that an, is that an opportunity already have the infrastructure at that site?

Matthew Plavan: show the breadth and strength of the platform.

Speaker Change: Okay, got it. And now that you've been running Origin One, you know, using, you know, cellulosic materials and so forth, you run a lot of things through there.

Speaker Change: Do you think that you would design a new plant, whether it's Origin 2 or something in between? Would you design it differently? Have you learned anything about this process from Origin 1?

John Bissell: Have you learned anything about this process from Origin 1 that could help you reduce the capital costs of building another plant? And Or what about just doubling the size of Origin One? Is that an opportunity?

Speaker Change: that could help you reduce the capital costs of building another plant.

Speaker Change: And, or, what about just doubling the size of Origin One? Is that an opportunity? You already have the infrastructure at that site. Could you expand that site as kind of a lower-cost approach to getting more capacity?

John Bissell: You already have the infrastructure at that site. Could you expand that site as kind of a lower cost approach to getting more capacity of the CMF and HTC? Yeah, oh man, asking an engineer if they would do things differently on a plant, that's a deep well, Steve. I think of course there are lots of things that we would like to do differently for the next plant. You know, that's not necessarily because we have regrets or something like that about OM1, but of course, you know, we've got not just some data from OM1, but also just our own ideas about what are things that we can improve as we go to next iterations. And of course, you know, when you're developing a technology like this, you're going to see improvements in the plants, you know, item by item or plant by plant for a long time.

John Bissell: Could, could you, could you expand that site as kind of a lower cost approach to getting more capacity of the CMF and HTC? Yeah, no, man, asking an engineer if they would do things differently on a plant is that, that's a deep well. I think, of course, there are lots of things that we would like to do differently for the next plant. You know, that's not necessarily because we, we have regrets or something like that about OM-1, but of course, you know, we've got not just some, some data from OM-1, but also just our own ideas about what are things that we can improve as we go to next iterations.

Speaker Change: of the CMF and HTC.

Speaker Change: Yeah, oh man. Asking an engineer if they would do things differently on a plant is, that's a deep well, Steve. I think, of course, there are lots of things that we would like to do differently for the next plant.

Speaker Change: you know that's not necessarily because we we have regrets or something like that about OM1 but of course you know we've got not just some some data from OM1 but also just our own ideas about what are things that we can improve as we go to next iterations.

John Bissell: And of course, you know, when you're developing a technology like this, you're going to see improvements in the plants, you know, item by item or plant by plant for a long time. So I think, you know, that's the long version; the short version. And yeah, definitely there are things that we would do that we think, for the next plant that we think could improve it. I think in terms of expanding OM-1 at the starting site. You know, we have some really interesting ideas, I think, around what we can do to expand the functionality of that plant over time or adjust the functionality of that plant over time.

Speaker Change: And of course, you know, when you're developing a technology like this.

Speaker Change: You're going to see improvements in the plants, you know, item by item or plant by plant for a long time. So I think, you know, that's the long version. The short version is, yeah, definitely. There are things that we would do that we think for the next plant that we think could improve it.

John Bissell: So I think, you know, that's the long version, the short version, and yeah, definitely there are things that we would do that we think for the next plant that we think could improve it. I think in terms of expanding OM1 at the Sarnia site, You know, we have some really interesting ideas, I think, around what what we can do to expand the functionality of that plant over time or adjust the functionality of that plant over time.

Speaker Change: I think, in terms of expanding 011 at the Sarnia site,

Speaker Change: You know, we have some really interesting ideas, I think.

Speaker Change: around what we can do to expand the functionality of that plant over time or adjust the functionality of that plant over time. And some of that is going to depend on...

John Bissell: And some of that is going to depend on not just our own thoughts on it, but you know, as we talk to partners for the, you know, the next phase or the next step of this technology, what those partners want and how they want to deploy this technology with us is going to inform the way that we operate and perhaps even make adjustments to the operation of OM-1, which, you know, I could be expansion, it could be other things too. So I think those two things are things that we would expect to, you know, be in pretty close lockstep going forward.

John Bissell: And some of that is going to depend on not just our own thoughts on it, but, you know, as we talk to partners for the, you know, the next phase or the next step of this technology, what those partners want and how they want to deploy this technology with us is going to inform the way that we operate and perhaps even make adjustments to the operation of OM1, which, you know, could be expansion, it could be other things, too. So I think those two things are things that we would expect to, you know, be a pretty close lockstep going forward. Very good. Thank you. Thank you. Now I'll turn it over to Ryan Smith, Co-Founder and Chief Product Officer, for a Q&A section answering Ask Origin questions submitted by investors prior to today's call. Thank you, operator.

Speaker Change: Not just our own thoughts on it, but as we talk to partners for the next phase or the next step of this technology.

Speaker Change: What those partners want, and how they want to deploy this technology with us, is going to inform the way that we operate and perhaps even make adjustments to the operation of

Speaker Change: OM1, which, you know, could be expansion, it could be other things, too. So I think those two things are things that we would expect to, you know, be in pretty close lockstep going forward.

John Bissell: Very good. Thank you.

Speaker Change: Very good. Thank you.

Speaker Change: Take care.

Ryan Smith: Now, I'll turn it over to Ryan Smith, co-founder and Chief Product Officer for a Q&A section answering ask origin questions submitted by investors prior to today's call. Thank you, operator. Prior to our earnings call, we invited all investors to submit questions as part of our Ask Origin campaign. And thank you so much to everyone who participated. We received a lot, and you asked some 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. We will generally be answering the most popular and relevant questions during the time we have.

Speaker Change: [inaudible]

Ryan Smith: Thank you. Now I'll turn it over to Ryan Smith, co-founder and chief product officer, for a Q&A section answering Ask Origin questions submitted by investors prior to today's call.

Ryan Smith: Prior to our earnings call, we invited all investors to submit questions as part of our Ask Origin campaign, and thank you so much to everyone who participated. We received a lot, and you asked some 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. We will generally be answering the most popular and relevant questions during the time we have and for the questions we couldn't get to today, we will look to cover them in our mid-quarter update. Our first questions are going to go to you, John, and it pertains to the biomass conversion technology and scale-up, and this is a multi-part question, so I'm going to give you the whole thing here.

Ryan Smith: Thank you, operator.

Ryan Smith: 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. We will generally be answering the most popular and relevant questions during the time we have, and for the questions we couldn't get to today, we will look to cover them in our mid-quarter update.

Ryan Smith: And for the questions we couldn't get to today, we will look to cover them in our mid-quarter update. On OM-2 related discussions and progress on origins capacity expansion strategy, for example, will it progress beyond OM-1 in the next five years? Specifically, could we get more insight as to what stage we are at with partners in their decision making? Are we already negotiating the manufacturing plant partnership? Are partners working on further applications, developments, and testing? Are they waiting for macro conditions to become more favorable before pulling the trigger? What can you tell us about the state of play on the expansion strategy?

Ryan Smith: Our first questions are going to go to you, John.

John Smith: And it pertains to the biomass conversion technology and scale-up, and this is a multi-part question so I'm going to give you the whole thing here. Can you provide any additional color on OM2-related discussions and progress on ORIGIN's capacity expansion strategy? For example, will it progress beyond OM1 in the next five years?

John Bissell: Can you provide any additional color on OM2-related discussions and progress on ORIGIN's capacity expansion strategy? For example, will it progress beyond OM1 in the next five years? Specifically, could we get more insight as to what stage we are at with partners in their decision-making? Are we already negotiating the manufacturing plant partnership? Are partners working on further application development and testing? Are they waiting for macro conditions to become more favorable before pulling the trigger?

Operator: Thank you for standing by. This is the conference operator.

Operator: Welcome to the Origin Materials 2nd 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 one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero.

Speaker Change: Specifically, could we get more insight as to what stage we are at with partners and their decision-making? Are we already negotiating the manufacturing plant partnership?

Speaker Change: Our partners working on further application development and testing, are they waiting for macro conditions to become more favorable before pulling the trigger? What can you tell us about the state of play on the expansion strategy?

John Bissell: What can you tell us about the state of play on the expansion strategy? Yeah, well, I think, to your point, these questions got submitted before the conversation we just had. So I think Steve sort of front-ran some of that question with his own questions.

Ryan Smith: Yeah, well, I think, to your point, these questions got submitted before the consciousness that you've had. So I think Steve sort of front-ran some of that question, it's unquestioned, but I think the short version is that we see a variety of different directions for the origin Syranics platform to go from here. And I think the commercial drivers for that are really going to drive that direction. It's the same core technology, a lot of the same applications, but geographical location, scale, partner, even potentially feedstock, are things that could, meaningfully, change the way that we expect at next step.

Ryan Smith: 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.

Speaker Change: Yeah, well, I think to your point, these questions got submitted before the conscience of your tab. So I think Steve sort of front ran some of that question. This is on questions.

John Bissell: But I think the short version is that we see a variety of different directions for the Origin Theoranyx platform to go from here, and I think the commercial drivers for that are really going to drive that direction.

Speaker Change: But I think the short version is that we see a variety of different directions for the Origin Theoranyx platform to go from here.

Rich Riley: Speaking first today is Origin's Co-CEO Rich Riley.

Ryan Smith: Co-CEO and co-founder, John Bissell and CFO Matt Pavin will speak next. Then we'll 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 2nd quarter press release and presentation. These can be found on the Investor Relations section of our website at originmaterial.com. Please note, during our discussion today, we will be making forward looking statements based on our current expectations and assumptions, which are subject to risks and uncertainties.

Speaker Change: And I think...

Speaker Change: the commercial drivers for that.

Speaker Change: are really going to drive that direction. It's the same core technology.

John Bissell: But geographic location, scale, partner, even potentially feedstock are things that could meaningfully change the way that we expect that next step. And so I think we're reading off of the commercial environment and the partners that we've been talking to. I think that's the big one.

Speaker Change: It's a lot of the same applications

Ryan Smith: These statements reflect our views as of today, should not be relied upon as representative about views of any subsequent dates. We undertake no obligation to revise or publicly release the results of any revision to these forward looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion 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 10Q file today.

Speaker Change: but geographical location, scale, partner, even potentially feedstock, are things that could meaningfully change the way that we expect that next step. And so I think we're reading off of the commercial environment and the partners that we did talk about.

Ryan Smith: And so I think we're reading off of the commercial environment and the partners that we've been talking to. I think that's the big lesson there.

Ryan Smith: That's great. And I think there's a follow-on question here, and you're partially answering it, I think, but let's explicitly touch it, which is: they ask, is the two-phase OM-2 plan, as presented last August, still the current plant design strategy? Yeah, you know, that's a really interesting question, because we view the origin platform technology, the Syranics platform technology, as sort of like a refining technology in that they're, you know, of course, we've always talked about the feedstock that you can put in and how that can adjust the ratio of products at the other side. But of course, when we talk about the two-phase approach, that's also a way to sort of instantiate the core technology in a way that performs slightly differently than if you were lumping it all together.

John Bissell: That's great, and I think there's a follow-on question here, and you're partially answering it, I think, but let's explicitly touch it, which is, they ask, is the two-phase OM2 plan, as presented last August, is that still the current plant design strategy? Yeah, you know, that's a really interesting question, because we view the Origin platform technology, the Ferenix platform technology, as sort of like a refining technology in that they're, you know, of course, we've always talked about the different feedstocks that you can put in and how that can adjust the ratio of products out the other side.

Speaker Change: talking to. I think that's the big lesson there.

Speaker Change: That's great. And I think there's a follow-on question here, and you're partially answering it, I think, but let's explicitly touch it, which is, they ask, is the two-phased OM2 plan, as presented last August , is that still the current plant design strategy?

Ryan Smith: During today's call, we will discuss non-gap financial measures, which we believe are useful as supplemental measures of origin's materials performance. These non-gap measures should be considered in addition to and not as substitutes for or an isolation from gap results. You will find additional disclosures regarding the non-gap financial measures discussed on today's call in our press release issue this afternoon and our filings with the SEC, which will be posted to our website. The webcast to this call will also be available on the Investor Relations section of our company website.

Speaker Change: Yeah, you know, that's a really interesting question because we view the

Speaker Change: Origin Platform Technology, the Pyrrhetics Platform Technology, as

Speaker Change: sort of like a refining technology in that there, you know, of course, we've always talked about the different feedstocks that you can put in and how that can adjust the ratio of products out the other side. But of course, when we talk about the two phase approach, that's also a way to sort of instantiate.

John Bissell: But of course, when we talk about the two phase approach, that's also a way to sort of instantiate the core technology in a way that is that performs slightly differently than if you were lumping it all together. And so. And that's not the only way that you could adjust some of those parameters.

Speaker Change: The core technology in a way that performs slightly differently than if you were lumping it all together.

Ryan Smith: And so, and that's not the only way that you could adjust some of those parameters. And so, in the same way that we're really waiting for the commercial side to lead what direction we take for next steps beyond OM-1 on the Syranics technology, I think we're also, you know, we have a variety of options for how you could configure the Syranics technology. Yeah, as you said, I was, I sort of mentioned the feedstock and scale, but some applications or commercial partnerships could really drive it toward that two-phase sort of biofuels first. Architecture of the technology, but there are others which look different, some closer to our original vision for the way that that process architecture will work, and some that are not ones we've talked about yet.

John Bissell: And so in the same way that we're really waiting for the commercial side to lead what direction we take for next steps beyond OM1 on the PureNX technology, I think we're also, you know, we have a variety of options for how you could configure the PureNX technology. And yeah, as you said, I was, I sort of mentioned the feedstock and scale, um, but some applications or commercial partnerships could really drive it towards that two phase, um, sort of biofuels first, uh, um, John Bissell, John Bissell, the biggest partner in makeshift gaming architecture of the technology, but there are others which, you know, look different.

Speaker Change: And that's not the only way that you can adjust some of those parameters. And so, in the same way that we're really waiting for the commercial side to lead, what direction we take for next steps beyond OM1 on the PureNX technology,

Rich Riley: Today, we are announcing our first signed customer for our PET caps and closures. We anticipate delivering multiple billions of caps to this customer, which we expect will generate over $100 million in revenue in the initial two-year term, with revenue ramping from 2025 to 2026. Therefore, to fulfill demand for this MOU, as well as anticipated demand from other customers, we expect to build capacity well beyond our initial system purchases, which we previously announced that have an expected capacity to generate between 45 million and 65 million in annual revenue.

Speaker Change: I think we're also, you know, we have a variety of options for how you could configure the Firenix technology. And yeah, as you said, I was, I sort of mentioned the feedstock and scale.

Speaker Change: Ah...

Rich Riley: We plan to announce future customers as appropriate, taking into consideration context such as the timing of our prospective customers' product launches, involving our caps and our customers' related marketing activities. Concurrently, we are negotiating potential licensing agreements with key players. We anticipate that licensing our technology, in addition to selling the caps we produce with our world-class manufacturing partners, will drive explosive growth for our PET caps because Business. This will further catalyze the revolution in recycling, circularity, and product performance that we are bringing to beverage packaging, food packaging, and home goods.

Speaker Change: architecture of the technology.

John Bissell: Some which are closer to our original vision for the way that process architecture would work Some that are not ones we have talked about yet. So, I think it's going to be interesting to see how that turns out. But, yeah, I think commercial leads the way. That's great. A kind of menu of plant designs.

Speaker Change: But there are others which, you know, which look different. Some which are closer to sort of our original vision for the way that process architecture would work, and some that are not ones we've talked about yet.

Ryan Smith: So I think it's going to be interesting to see how that turns out. But yeah, I think commercial leads to what? That's great, a kind of menu of plant designs.

Speaker Change: So I think it's going to be interesting to see how that turns out. But yeah, I think commercial leads the way.

Matt Plavan: This next question, I'm going to take over to Matt. It pertains to caps and closures. And Matt, the investor asks... Previously, it was said that caps and closures manufacturing will have higher operational costs at the beginning. Will that have a significant effect on margins? And if yes, will we see that normalizing in weeks, months, quarters, or years?

Matt Plavan: The next question, I'm going to take a bit of Matt; it pertains to Caps and Closers. And Matt, the investor, asks, previously it was said that Caps and Closers manufacturing will have higher operational costs at the beginning. Will that have a significant effect on margins? And if yes, will we see that normalizing in weeks, months, quarters, or years? Yeah, thanks, Ryan. It sounds kind of like a question that involves giving some guidance around 2025. And I think I'd like to speak to that, but maybe dial the lens back a little bit and reiterate and maybe provide a little better clarity on the guides that we've given today to start with this announcement that we made today, which we're pretty excited about.

Speaker Change: That's great, a kind of menu of plant designs. This next question I'm going to take over to Matt. It pertains to caps and closures. And, Matt, the investor asks,

Rich Riley: We expect to be first to market with PET caps. We expect to produce them cost competitively. We can make them with any type of PET, making the use of 100% recycled PET possible from cap to container for the first time ever. Our caps perform better than today's HDPE and polypropylene caps in ways that can improve product shelf life and our caps are designed for circularity, with no additives used to modify the polymer.

Matt: Previously, it was said that caps and closures manufacturing will have higher operational costs at the beginning. Will that have a significant effect on margins? And if yes, will we see that normalizing in weeks, months, quarters, or years?

Matt Plavan: Yeah, thanks, Ryan. It sounds kind of like a question that involves giving some guidance around 2025. And I think I'd like to speak to that, but maybe dial the lens back a little bit and reiterate, and maybe provide a little better clarity on the guidance that we've given to date and start with this announcement that we made today, which we're pretty excited about. There's a initial commitment for two years that in total is over $100 million in revenue. We wanted to share that to provide visibility into a few things. One, kind of the quantum of revenue per customer that we could see in this business, um and really illustrate that.

Matt: Yeah. Thanks, Ryan. It sounds kind of like a question that.

Matt: involved giving some guidance around 2025, and I think

Rich Riley: For a wide variety of containers, our technology enables the lightest cap, reducing plastic waste and improving sustainability. Demand for these products has been incredibly strong, and some have called PET caps the Holy Grail for packaging circularity. Today, we are reaffirming the cap's commercial production is on track to begin during the fourth quarter this year, with revenue generation expected to start ramp up during the first quarter of 2025. This past quarter, in Switzerland and Germany, we tested all manufacturing line subsystems at full speed, and we are pleased with the system's performance.

Speaker Change: I'd like to speak to that, but maybe dial the lens back a little bit and reiterate and maybe provide a little better clarity on the guidance that we've given to date and start with.

Matt Plavan: There's a commitment initial commitment for two years that in total is over 100 million revenue. We wanted to share that to provide visibility into a few things. One kind of the quantum of revenue per customer that we could see in this business. And really illustrate that when we think about rolling into 2025, we expect a number of additional customers, the only one that we announced here, and that together, they give us great confidence that our even loss would decline significantly during 2025. And it would be our expectation if things unfold on plan that we would be crossing over a positive even the territory on a monthly basis, somewhere between 18 and 24 months between now and the future.

Speaker Change: This announcement that we made today, which we're pretty excited about, that is a commitment, initial commitment for two years, that in total is over $100 million in revenue. We wanted to share that, you know, to...

Speaker Change: to provide visibility into a few things. One, kind of the quantum of revenue per customer that we could see in this business.

Rich Riley: We also passed the milestone of over 1 million caps produced today, which puts us well in our way to launching the strategically important business. We are also reaffirming our path of profitability, requiring no additional equity capital. Our path of profitability is entirely independent of the scale up of our biomass conversion technology and related manufacturing plant construction. We believe our cash runway, with over 130 million dollars on hand, is sufficient to eliminate the need for an equity capital raise.

Matt Plavan: When we think about rolling into 2025, we expect a number of additional customers beyond the one that we announced here. And that together, they give us great confidence that our EBITDA loss will decline significantly during 2025. And it would be our expectation if things unfold on plan that we would be crossing over to positive EBITDA territory on a monthly basis, somewhere between 18 and 24 months between now and the future. And so, you know, there's this great confidence in our plan and the guidance that we do have out there with regard to being able to achieve sustained profitability on our own capital. And that the trajectory, if you think about it over the two years, is a significant decline in EBITDA loss of 25, of the Center.

Speaker Change: and really illustrate that

Speaker Change: When we think about rolling into 2025, we expect a number of additional customers beyond the one that we announced here.

Speaker Change: and that together they give us great confidence that our EBITDA loss will decline significantly during 2025.

Speaker Change: And it would be our expectation, if things unfold on plan, that we would be crossing over into positive EVETA territory on a monthly basis.

Rich Riley: Given the revenues we expected to generate in the quarters and years ahead, led by our caps and closure's business. Today, we are maintaining our expected 2024 net cash burn of between 55 and 65 million dollars. We anticipate our caps and closures business will begin to generate revenue during the first quarter of next year, with significant gross profit generation beginning in 2025, and a healthy growth trajectory thereafter. As such, we continue to forecast a solid minimum cash floor on our wages sustained profitability.

Matt Plavan: And so, you know, here's this great confidence in our plan and the guidance that we do have out there, with regard to being able to achieve sustained profitability on our own capital. And that the trajectory, if you think about it over the two years, is a significant decline in even a loss in 2025. The likely profitability in 26, hopefully as early as possible, will all depend on how quickly we can ramp capacity to serve what is an increasing and very attractive demand for the product. So that is our expectation at a high level. And I think as we close out some of these customer agreements and continue to execute operationally, we expect to be able to share more specifics around our 2025 financial expectations in the coming months and the floor to doing that.

Speaker Change: somewhere between 18 and 24 months between now and the future and so You know, there's this great confidence in our plan and the guidance that we do have out there

Speaker Change: with regard to being able to achieve sustained profitability on our own capital and that the trajectory, if you think about it over the two years, is a significant decline in EBITDA loss of $25.

Speaker Change: likely profitability in 26, hopefully as early as possible. It will all depend on how quickly we can ramp capacity to serve what is an increasing and very attractive demand for the product.

Matt Plavan: So, that is our expectation at a high level, and I think as we close out some of these customer agreements and continue to execute operationally, we expect to be able to share more specifics around our 2025 financial expectations in the coming months, and we look forward to doing that. But for the moment, I think I just wanted to kind of restate what we've said with regard to kind of overall guidance and express our confidence that, you know, the strength of that guidance continues to grow. Great. And I'll take these last few questions over to you, Rich. If Matt and John want to chime in, that's fine as well.

Speaker Change: So that is our expectation at a high level and I think

Speaker Change: As we close out some of these customer agreements and continue to execute operationally, we expect to be able to share more specifics around our 2025

Rich Riley: Growing the long-term value of the origin platform means continuing to engage potential strategic partners around the scale of our biomass conversion technology, including exploring high value application development initiatives that could generate near term revenue. Some of these applications are capable of using materials that origin one and origin two are designed to produce, but are not dependent on those plans for production and sale. We're managing these initiatives softly and will announce them as appropriate.

Matt Plavan: But to the moment, I think I just wanted to kind of re-state what we said with regard to kind of overall guidance and express our confidence that, you know, the strength of that guidance continues to grow.

Speaker Change: and Gary K. We look forward to doing that. For the moment, I want to restate what we said with regard to overall guidance and express our confidence that the strength of that guidance continues to grow.

Rich Riley: Great. And I'll take these last few questions over to you, Rich. If Matt and John want to chime in, that's fine as well. But this, this first one, the investor asks. And again, this was before today's earning, of course, and some of the news, but they ask, has a buyer been lined up for the caps? Why haven't any off-take agreements been executed? Rich was saying they had letters of intent since Q4, earning six months. Yes, well, we're very excited to announce our first big Caps customer today, and I can, you know, add that we have a robust pipeline of potential customers, including potential licensing partners lined up, and, you know, this pipeline represents, you know, fairly overwhelming demand. In terms of our challenge, it will be to satisfy it, not to get more, but we of course continue to engage new customers, and, you know, there are various stages of the sort of buying process.

Rich Riley: Looking ahead, we are positioned to vigorously grow our business, led by caps and closures, and to continue to cultivate our broader technology platform in the quarters and years ahead with a strong financial position, strong IP moat, and a highly innovative and creative team.

Richard: Great. And I'll take these last few questions over to you, Rich, if Matt and John want to chime in, that's fine as well. But this first one, the investor asks,

Rich Riley: But this first one, the investor asks, and again, this was before today's earning, of course, and some of the news. But they ask, has a buyer been lined up for the caps? Why haven't any offtake agreements been executed? Rich was saying they had letters of intent since Q4 earnings six months. Yeah, well, we're very excited to announce our first big caps customer today. And I can, you know, add that we have a robust pipeline of potential customers, including potential licensing partners lined up.

Speaker Change: And again, this was before Today's Earning, of course, and some of the news, but they ask, has a buyer been lined up for the caps? Why haven't any off-take agreements been executed? Rich was saying they had letters of intent since Q4 earnings six months ago.

John Bissell: With that, I'll turn it over to John. Thank you, Rich. And good afternoon, everyone.

Richard: Yes, well we're very excited to announce our first Big Caps customer today and I can, you know, add that we have a robust pipeline.

Rich Riley: And you know, this this pipeline represents, fairly overwhelming demand in terms of our challenge will be to satisfy it, not to get more, but we of course continue to, um, to engage new customers and, and, you know, there are various stages of the, um, of this sort of buying process. Um, several of them are highly engaged, including traveling to join us on some of the scale up trials and testing and things like that. And so they're very much, um, deep in the process and, um, you know, looking to modify their own, product plans and things like that to incorporate our caps.

Richard: of potential customers, including potential licensing partners lined up. And, you know, this pipeline represents.

Richard: You know, fairly overwhelming demand in terms of our challenge will be to satisfy it, not to get more, but we of course continue to

Richard: to engage new customers and, you know, there are various stages of the sort of buying process.

Rich Riley: Several of them are, you know, highly engaged, including traveling to join us on some of the scale-up trials and testing and things like that, and so they're very much deep in the process and, you know, looking to modify their own product plans and things like that to incorporate our Caps. So we feel great about the demand picture, and like I said, we're very excited to announce our first customer today. Right.

Richard: Several of them are, you know, highly engaged, including traveling to join us on some of the scale-up trials and testing and things like that, and so they're very much deep in the process and, you know, looking to modify their own.

Rich Riley: So we feel great about the demand picture. And like I said, we're very excited to announce our first customer today. Great. All right. Now, this next question sort of gets right at it and asks, What do I have to look forward to in the next six months? So, big question there.

John Bissell: Bachman Group and Reed City Group are turning us alongside our previously announced world-class partners in PET cap manufacturing, Paxis Global, and IMD Vista. In the past several quarters, you have seen that this assembled this incredible team, and we couldn't be happier with how the manufacturing, technology, and people are all coming together.

Richard: We feel great about the demand picture and are very excited to announce our first customer today.

Rich Riley: All right. Now, this next question sort of gets right at it and asks, what do I have to look forward to in the next six months? So big question there. It's going to be a really exciting six months. I would say we have a high degree of confidence, one that will have additional customer announcements over the next six months, and that's certainly going to be exciting. We expect to be commercially producing Caps, which is a very major milestone. In terms of once we're commercially producing Caps, you know, then we're effectively just adding more equipment to do the same thing.

Richard: Great. All right. Now, this next question sort of gets right at it and asks, what do I have to look forward to in the next six months? So, big question there.

John Bissell: We remain on track to begin commercial production later this year.

Rich Riley: It's going to be a really exciting six months. I would say we have a high degree of confidence, one that will have additional customer announcements over the next six months, and that's certainly going to be exciting. We expect to be commercially producing caps, which is a very major milestone in terms of once we're commercially producing caps, you know, then we're effectively just adding adding more equipment to do the same thing. And so we sort of will have started our ramp. And what comes with that ramp is revenue.

John Bissell: This quarter, we achieved multiple caps and closures manufacturing milestones. We crossed the milestone of over 1 million caps produced. The testing and scaling of our cap production technology and manufacturing system has been going very well, and our manufacturing partners, prospective customers, and team are energized by the success. As mentioned last month in Switzerland and Germany, we ran each subsystem of our manufacturing line at full speed, including industry standard high speed camera systems with the system operating as expected. We validated QAQC indicators that operators can use to assess quality, such as stable cap weight and dimensions.

Richard: It's going to be a really exciting six months. I would say we have a high degree of confidence, one that will have additional customer announcements over the next six months, and that's certainly going to be exciting. We expect to be commercially producing caps.

Richard: which is a very major milestone in terms of once we're commercially producing caps, then we're effectively just adding more equipment to do the same thing. And so we sort of will have started our ramp. And what comes with that ramp is revenue.

Rich Riley: And so we sort of will have started our ramp. And what comes with that ramp is revenue. And so if we can start that revenue ramp really going in Q1, you know, which is within six months, then we feel like we can really be, you know, showing a great trajectory and continuing to accelerate it. So next six, we're really excited about the next six months. And I hope you all are as well. That's great. That's exciting.

Rich Riley: So if we can start that revenue ramp really going in Q1, which is within six months, then we feel like we can really be showing a great trajectory and continuing to accelerate it. So we're really excited about the next six months and hope you all are as well. That's great. That's exciting. And then the last question, the investor asked. Why should I continue to hold this stock despite the performance over the last year of the stock? Yeah, well. I think you don't have to do too much valuation math to see that the current stock price is placing very little value on our technology and our talent and our possibilities.

Richard: And so if we can...

Richard: Start that revenue ramp really going in Q1, you know, which is within six months Then we feel like we can really be, you know, showing a great trajectory and continuing to To accelerate it. So next week. We're really excited about the next six months and Hope you all are as well

Rich Riley: And then the last question, the investor asks, why should I continue to hold this stock despite the performance over the last year of the stock? Yeah, well, I think you don't have to do too much evaluation math to see that the current stock price is placing very little value on our technology and our talent and our possibilities. You know, I personally was disclosed in the 10 queue today, placed an order to buy 300,000 more shares in addition to the shares that I already have. So I can't really give stock advice, but I can tell you what I'm doing.

Speaker Change: That's great, that's exciting. And then the last question, the investor asks, why should I continue to hold this stock, despite the performance over the last year of the stock?

John Bissell: Our PET cap innovations are perfectly suited for that regulatory environment and frankly any environment. If you're going to keep caps connected to bottles, the logical thing to do is to make the cap and the bottle from the same material PET. Otherwise, recycling centers have to deal with separating the material streams. With our solution, it's all one high performing recyclable material connected via a tether offering a real breakthrough for circularity. Our tethered cap design is simple, clever and user friendly.

Speaker Change: Yeah, well...

Speaker Change: I think you don't have to do too much valuation math to see that the current stock price is placing very little value on our technology and our talent and our possibilities.

Rich Riley: I personally was disclosed in the 10Q today, placed an order to buy 300,000 more shares in addition to the shares that I already have, so can't really give stock advice, but I can tell you what I'm doing. That's great. All right. Thank you, Rich, John, and Matt, and thank you everyone who joined and to everyone who sent in 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'll be looking to address them in our next mid-quarter update.

Speaker Change: I personally was disclosed in the 10Q today, placed an order to buy 300,000 more shares in addition to the shares that I already have. So, can't really give stock advice, but I can tell you what I'm doing.

Ryan Smith: That's great. All right. Thank you, Rich, John, and Matt, and thank you to everyone who joined and to everyone who sent in questions. We're looking ahead with confidence and excitement for 2024, and we look forward to our next update. So they ask origin questions we couldn't get to today. We'll be looking to address them in our next mid-quarter update. So thanks again.

John Bissell: We use the threads of the PET cap and bottle to lock the cap into place, angled away from the mouth, not toward it. With this product, we are combining the performance and sustainability advantages of our PET caps, recyclability, shelf life extension, lightweight ability to use recyclable PET and enablement of mono material packaging with an excellent user experience for tethered applications. We have already seen extremely strong interest in this welcome addition to our PET cap product line.

Speaker Change: That's great. All right. Thank you, Rich, John, and Matt, and thank you, everyone who joined, and to everyone who sent in questions.

Speaker Change: We're looking ahead with confidence and excitement for 2024, and we look forward to our next update. If they ask origin questions we couldn't get to today, we'll be looking to address them in our next mid-quarter update. So thanks again, and this concludes our call for the day.

Ryan Smith: So thanks again, and this concludes our call for the day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: And this concludes our call for the day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

John Bissell: With our leading PET cap technology and manufacturing systems, we're extremely well positioned to address a $65 billion caps and closures market that consumes billions upon billions of caps per year, which today cannot be recycled into new caps only down, we're very pleased with progress and excited to begin commercial production later this year.

John Bissell: Regarding our biomass conversion technology, we continue to execute on what has been our thesis from day one, make molecules that are chemically flexible and low cost and build businesses around those sustainable molecules to have as great an impact as possible. To that end, we continue to perform development work with multiple partners. Right now, multiple origin partners are actively engaged in development and work using our samples of CMF and HTC. For this kind of work, typically we crystallize our CMF and carbonize our HTC before delivery to our partners.

John Bissell: Origin 1, our biomass conversion plant located in Sarna, Ontario, Canada, continues to support market development activities. We are producing materials, shipping them and collaborating with supply chain partners on logistics, joint development activities, and customer materials testing and formulation.

John Bissell: For Origin 2, we continue to engage partners as part of our asset light strategy for further biomass conversion technology scale up. Timeline and economic forecast will depend on the partner and deal structure, which consider a range of scenarios and locations, including Guise River, Louisiana, as well as Asia brownfield scenarios. We are exploring a variety of plant designs, evaluating potential brownfield sites and performing development work with partners, including testing and optimizing various feed stocks to generate data that could influence our scale of strategy.

John Bissell: But we are fortunate to have a brilliant team that is leading us to profitability by way of application development, specifically through the innovative engineering design and manufacturer of PET cats and closures. It is not unusual for a platform, whether in chemicals or the software industry or otherwise, to be pulled to the market for a specific application, whether it's especially chemical, performance material, or something else that enables a scientific breakthrough to achieve significant revenue and profitability.

John Bissell: We are encouraged that in the short-term, we have a winning business through to our mission of sustainability, and that in the long-term by staying true to our vision, we can transform the world.

Matt Pavin: And now, I'll hand it over to Matt. Thanks, John.

Matt Pavin: Good afternoon, everyone. We've provided second quarter results in the tables and the earnings release, so I'll focus my comments on a couple of two financial highlights. We ended the quarter with $132 million in cash, cash equivalents, and marketable securities, $26 million less than at December 31, 2023. As a run rate for cashburn at the halfway point in the year, this amount is slightly below the low end of our cashburn guidance range of $55 to $65 million.

Matt Pavin: However, we remain confident and comfortable in maintaining that range as our guidance for the full year. George's second quarter revenue was $7 million compared to $6.9 million in the prior year quarter, and also trending in line with our revenue guidance for the full year, which is between $25 and $35 million. Also, as expected, these revenues are comprised of what we've referred to a supply chain activation revenue generated in conjunction with origin-1 operations. Looking ahead, it's just highlighted by John and Rich, we expect the onset of new revenue from our Capson Collosures Initiative to be as of Q1 2025.

Matt Pavin: Beyond 2024, we anticipate Capson Collosures 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 sustained profitability.

Operator: Now, I'd like to open a call for questions. Operator, may we have the first question please. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster.

Stephen Byrne: The first question is from Steven Byrne with Bank of America. Please go ahead. Yes, thank you. Where are you seeing the most interest in the products coming out of origin-1? Is there still interest in a biobased PET, or is this really moving more towards these furan-based derivatives or the variety of products you can produce from HTC? Has there been a change in the level of interest of these products? It seems nice to the question.

Stephen Byrne: Yeah, I think we have focused ourselves more on the furan and HTC. We see HTC as a subset of furanics more broadly. But on furanic specific products, that's for a couple of reasons. One is because we are seeing real performance improvements and pretty unique functionality in some of those furan-based products. So we think that's interesting, especially in a more capital-efficient environment that we need to be operating in. Performance is going to drive margin or differentiated performance such a state going to drive margin.

Stephen Byrne: And that margins a lot easier to manage in a more capital-wide environment. So that's been really our decision. I think we have seen in the broader market still a lot of pull on biobased and lower carbon polyester, and I'd say polymers for broadly. But our view is we have a lot of demand for that. We demonstrated that demand. We don't think incrementally demonstrating more of that demand really changes the picture very much.

Stephen Byrne: But what we think is new and differentiated is for us to bring furan- All say specific and in some cases even unique functionality to these applications that people can't get anywhere else. We think that's a place where we can really show the breadth and strength of the platform. Okay. Got it. And now that you've been running origin wine, you know, using, you know, cellulosic materials and so forth, you run a lot of things through there. Do you think that you would design a new plan? Whether it's origin two or something in between, would you design it differently?

Unnamed Speaker: Have you, have you learned anything about this process from origin one that could help you reduce the, you know, the capital costs of building another plant. And or what about just doubling the size of origin one? Is that an, is that an opportunity already have the infrastructure at that site? Could, could you, could you expand that site as kind of a lower cost approach to getting more capacity of the CMF and HTC?

Unnamed Speaker: Yeah, no, man, asking an engineer if they would do things differently on a plant is that, that's a, that's a deep well. I think, of course, there are lots of things that we would like to do differently for the next plant. You know, that's not necessarily because we, we have regrets or something like that about OM-1, but of course, you know, we've got not just some, some data from OM-1, but also just our own ideas about what are things that we can improve as we go to next iterations.

Unnamed Speaker: And of course, you know, when you're developing a technology like this, you're going to see improvements in the plants, you know, item by item or plant by plant for a long time. So I think, you know, that's the long version, the short version. And yeah, definitely there are things that we would do that we think, for the next plant that we think could improve it. I think in terms of expanding OM-1 at the starting site, you know, we have some really interesting ideas, I think, around what, what we can do to expand the functionality of that plant over time or adjust the functionality of that plant over time.

Unnamed Speaker: And some of that is going to depend on not just our own thoughts on it, but you know, as we talk to partners for the, you know, the next phase or the next step of this technology, what those partners want and how they want to deploy this technology with us is going to inform the way that we operate and perhaps even make adjustments to the operation of OM-1, which, you know, I, could be expansion, it could be other things too. So I think those two things are things that we would expect to, you know, be in pretty close lockstep going forward. Very good. Thank you.

Ryan Smith: Now, I'll turn it over to Ryan Smith, co-founder and chief product officer for a Q&A section answering ask origin questions submitted by investors prior to today's call. Thank you, operator. Prior to our earnings call, we invited all investors to submit questions as part of our ask origin campaign. And thank you so much to everyone who participated. We received a lot and you asked some 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. We will generally be answering the most popular and relevant questions during the time we have. And for the questions we couldn't get to today, we will look to cover them in our mid-quarter update.

Ryan Smith: On OM-2 related discussions and progress on origins capacity expansion strategy, for example, will it progress beyond OM-1 in the next five years? Specifically, could we get more insight as to what stage we are at with partners in their decision making? Are we already negotiating the manufacturing plant partnership? Are partners working on further applications, developments, and testing? Are they waiting for macro conditions to become more favorable before pulling the trigger? What can you tell us about the state of play on the expansion strategy?

Ryan Smith: Yeah, well, I think, to your point, these questions got submitted before the consciousness that you've had. So I think Steve sort of front ran some of that question, it's unquestion, but I think the short version is that we see a variety of different directions for the origin Syranics platform to go from here. And I think the commercial drivers for that are really going to drive that direction. It's the same core technology, a lot of the same applications, but geographical location, scale, partner, even potentially feedstock, are things that could, meaningfully, change the way that we expect at next step. And so I think we're reading off of the commercial environment and the partners that we've been talking to. I think that's the big lesson there. That's great.

Ryan Smith: And I think there's a follow-on question here, and you're partially answering it, I think, but let's explicitly touch it, which is they ask, is the two-phase OM-2 plan, as presented last August, is that still the current plant design strategy? Yeah, you know, that's a really interesting question, because we view the origin platform technology, the Syranics platform technology, as sort of like a refining technology in that they're, you know, of course, we've always talked about the feedstock that you can put in and how that can adjust the ratio of products at the other side.

Ryan Smith: But of course, when we talk about the two-phase approach, that's also a way to sort of instantiate the core technology in a way that performs slightly differently than if you were lumping it all together. And so, and that's not the only way that you could adjust some of those parameters. And so, in the same way that we're really waiting for the commercial side to lead what direction we take for next steps beyond OM-1 on the Syranics technology, I think we're also, you know, we have a variety of options for how you could configure the Syranics technology.

Ryan Smith: Yeah, as you said, I was, I sort of mentioned the feedstock and scale, but some applications or commercial partnerships could really drive it toward that two-phase sort of biofuels first. Architecture of the technology, but there are others which look different, some closer to our original vision for the way that that process architecture will work and some that are not ones we've talked about yet. So I think it's going to be interesting to see how that turns out. But yeah, I think commercial leads to what? That's great, a kind of menu of plant designs.

Matt Pavin: The next question, I'm going to take a bit of Matt, it pertains to Caps and Closers. And Matt, the investor asks, previously it was said that Caps and Closers manufacturing will have higher operational costs at the beginning. Will that have a significant effect on margins?

Matt Pavin: And if yes, will we see that normalizing in weeks, months, quarters or years? Yeah, thanks, Ryan. It sounds kind of like a question that involves giving some guidance around 2025. And I think I'd like to speak to that, but maybe dial the lens back a little bit and reiterate and maybe provide a little better clarity on the guides that we've given today to start with this announcement that we made today, which we're pretty excited about.

Matt Pavin: There's a commitment initial commitment for two years that in total is over 100 million revenue. We wanted to share that to provide visibility into a few things. One kind of the quantum of revenue per customer that we could see in this business. And really illustrate that when we think about rolling into 2025, we expect a number of additional customers, the only one that we announced here, and that together, they give us great confidence that our even loss would decline significantly during 2025.

Matt Pavin: And it would be our expectation if things unfold on plan that we would be crossing over a positive even the territory on a monthly basis, somewhere between 18 and 24 months between now and the future. And so, you know, here's this great confidence in our plan and the guidance that we do have out there, which regard to being able to achieve sustained profitability on our own capital. And that the trajectory, if you think about it over the two years, is a significant decline in even a loss in 2025.

Matt Pavin: The likely profitability in 26, hopefully as early as possible will all depend on how quickly we can ramp capacity to serve what is an increasing and very attractive demand for the product. So that is our expectation at a high level. And I think as we close out some of these customer agreements and continue to execute operationally, we expect to be able to share more specifics around our 2025 financial expectations in the coming months and the floor to doing that.

Matt Pavin: But to the moment, I think I just wanted to kind of re-state what we said with regard to kind of overall guidance and express our confidence that, you know, the strength of that guidance continues to grow. Great.

Ryan Smith: And I'll take these last few questions over to you, Rich. If Matt and John want to chime in, that's fine as well. But this, this first one, the investor asks.

Rich Riley: And again, this was before today's earning, of course, and some of the news, but they ask, has a buyer been lined up for the caps? Why haven't any off-take agreements been executed? Rich was saying they had letters of intent since Q4 earning six months. Yes, well, we're very excited to announce our first big Caps customer today, and I can, you know, add that we have a robust pipeline of potential customers, including potential licensing partners lined up, and, you know, this pipeline represents, you know, fairly overwhelming demand in terms of our challenge will be to satisfy it, not to get more, but we of course continue to engage new customers, and, you know, there are various stages of the sort of buying process.

Rich Riley: Now, this next question sort of gets right at it, and asks, what do I have to look forward to in the next six months? So big question there. It's going to be a really exciting six months. I would say we have a high degree of confidence, one that will have additional customer announcements over the next six months, and that's certainly going to be exciting. We expect to be commercially producing Caps, which is a very major milestone in terms of once we're commercially producing Caps, you know, then we're effectively just adding more equipment to do the same thing.

Rich Riley: And then the last question, the investor asks, why should I continue to hold this stock despite the performance over the last year of the stock? Yeah, well, I think you don't have to do too much evaluation math to see that there is the current stock price is placing very little value on our technology and our talent and our possibilities. You know, I personally was disclosed in the 10 queue today, placed an order to buy 300,000 more shares in addition to the shares that I already have.

Rich Riley: So I can't really give stock advice, but I can tell you what I'm doing. That's great. All right. Thank you, Rich, John and Matt, and thank you everyone who joined and to everyone who sent in questions. We're looking ahead with confidence and excitement for 2024 and we look forward to our next update.

Ryan Smith: So they ask origin questions we couldn't get to today. We'll be looking to address them in our next mid quarter update. So thanks again.

Operator: And this concludes our call for the day. The conference is now concluded. Thank you for attending today's presentation.

Operator: You may now disconnect.

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