Q2 2025 Origin Materials Inc Earnings Call
Speaker #1: Thank you for standing by. This is the conference operator. Welcome to the Origin Materials second quarter 2025 earnings call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded.
Conference Operator: Thank you for standing by. This is the conference operator. Welcome to the Origin Materials second quarter 2025 earnings call. As a reminder, all participants are in a 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, then zero. At this time, for opening remarks and introductions, I will turn the call over to Ryan Smith, co-founder and chief product officer. Please go ahead.
Speaker #1: 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.
Speaker #1: Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. At this time, for opening remarks and introductions, I will turn the call over to Ryan Smith, co-founder and chief product officer.
Speaker #1: Please go ahead.
Speaker #3: Thank you. Good afternoon and thank you for joining us, everyone. Speaking first today is Origin CEO and co-founder John Bissell, followed by CFO and COO Matt Plavan.
Ryan Smith: Thank you. Good afternoon, and thank you for joining us, everyone. Speaking first today is Origin CEO and co-founder John Bissell, followed by CFO and COO Matt Plavan. Then we will open the call to questions from analysts and discuss questions submitted as part of this quarter's Ask Origin campaign. Ahead of this call, Origin has issued its 2025 second quarter press release and presentation. 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 current expectations and assumptions, which are subject to risks and uncertainties.
Speaker #3: Then we'll open the call to questions from analysts and discuss questions submitted as part of this quarter's Ask Origin campaign. Ahead of this call, Origin has issued its 2025 second quarter press release and presentation.
Speaker #3: 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 current expectations and assumptions, which are subject to risks and uncertainties.
Speaker #3: 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.
Ryan Smith: 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. For further discussion on the material risk and other important factors that could affect our financial results, please refer to our filings with the SEC, including our quarterly report on Form 10-Q filed today. During today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Origin Materials performance. These non-GAAP measures should be considered in addition to and not as substitutes for or in isolation from GAAP results.
Speaker #3: 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 risk and other important factors that could affect our financial results, please refer to our filings of the SEC, including our quarterly report on Form 10-Q filed today.
Speaker #3: During today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Origin Materials' performance. These non-GAAP measures should be considered in addition to and not as substitutes for or in isolation from GAAP results.
Speaker #3: You'll 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.
Ryan Smith: You'll 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 in the Investor Relations section of our company website. With that, I will turn the call over to John.
Speaker #3: 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 John.
Speaker #4: Thank you, Ryan. Good afternoon. In a separate press release, issued today, we announced the first Origin PET bottle caps are now on store shelves.
John Bissell: Thank you, Ryan. Good afternoon. In a separate press release issued today, we announced the first Origin PET bottle caps are now on store shelves, a world's first and a significant inflection point for the company and the packaging industry. We are now officially in market with our 1881 cap for non-carbonated water, a $7 billion segment of the caps market. Coupled with our recent customer announcements, including our first publicly named customer, Berlin Packaging, and recent progress reports on our manufacturing capacity buildout, we are closer than ever to bringing our transformative PET bottle cap technology to the entire $65 billion closures packaging market. Our technology platform produces what we believe to be the world's first and only commercially viable PET caps.
Speaker #4: A world's first and a significant inflection point for the company and the packaging industry. We are now officially in market with our 1881 cap for non-carbonated water--a $7 billion segment of the cap's market.
Speaker #4: Coupled with our recent customer announcements, including our first publicly named customer, Berlin Packaging, and recent progress reports on our manufacturing capacity buildout, we are closer than ever to bringing our transformative PET bottle cap technology to the entire 65 billion dollar closers packaging market.
Speaker #4: Our technology platform produces what we believe to be the world's first and only commercially viable PET caps. The platform excels in seven areas: recyclability, oxygen barrier, which enables longer shelf life, closure diameter, enabling more economic large formats, thickness, which enables lighter weight, rigidity, which gives a premium feel, use of recycled content, and optical clarity.
John Bissell: The platform excels in seven areas: recyclability, oxygen barrier, which enables longer shelf life, closure diameter, enabling more economic large formats, thickness, which enables lighter weight, rigidity, which gives a premium feel, use of recycled content, and optical clarity. Successful commercialization will be a step change for recycling and improved packaging performance while creating significant value for our shareholders in the process. During the quarter, we maintained laser focus on the priority buildout of our first eight cap farmer lines, making solid progress advancing through the various stages of order placement, manufacture, testing, and shipping of lines two through eight. Despite our progress, we experienced a number of OEM manufacturing delays, including slower subcomponent deliveries and procurement delays, often due to tariff considerations. As a result, we expect FAT completion for each of our lines to be 30 to 90 days beyond our prior expectations.
Speaker #4: Successful commercialization will be a step change for recycling and improved packaging performance while creating significant value for our shareholders in the process. During the quarter, we maintained laser focus on the priority buildout of our first eight cap farmer lines.
Speaker #4: Making solid progress advancing through the various stages of order placement, manufacture, testing, and shipping of lines two through eight. Despite our progress, we experienced a number of OEM manufacturing delays, including slower subcomponent deliveries and procurement delays, often due to tariff considerations.
Speaker #4: As a result, we expect FAT completion for each of our lines to be 30 to 90 days beyond our prior expectations. These delays accentuate the gap between the indicated demand for Origin's PET caps and our production capacity, leaving money on the table.
John Bissell: These delays accentuate the gap between the indicated demand for Origin's PET caps and our production capacity, leaving money on the table. Separately, we have fielded a number of strategic collaboration inquiries reflecting the natural synergy between the robust manufacturing and distribution capabilities of legacy packaging companies and the high-value products and innovative technology development capabilities at Origin. The packaging industry is well-defined, highly commoditized, and very competitive. Its core competencies are operational efficiency, consistently high productivity, and reliable delivery. What we hear regularly from customers, however, is that innovation in the packaging industry is lacking. To pursue these emerging opportunities and help address the gap between the indicated demand and production capacity for Origin's PET caps, we've launched a strategic review with our financial advisor, RBC Capital Markets, to identify creative strategies that can enhance the company's access to manufacturing capacity, marketing and distribution capabilities, and strategic capital.
Speaker #4: Separately, we have fielded a number of strategic collaboration inquiries reflecting the natural synergy between the robust manufacturing and distribution capabilities of legacy packaging companies and the high-value products and innovative technology development capabilities at Origin.
Speaker #4: The packaging industry is well-defined, highly commoditized, and very competitive. Its core competencies are operational efficiency, consistently high productivity, and reliable delivery. What we hear regularly from customers, however, is that innovation in the packaging industry is lacking.
Speaker #4: To pursue these emerging opportunities and help address the gap between the indicated demand and production capacity for Origin's PET caps, we've launched a strategic review with our financial advisor, RBC Capital Markets.
Speaker #4: To identify a creative strategy that can enhance the company's access to manufacturing capacity, marketing and distribution capabilities, and strategic capital. We believe this will enable value capture, beyond what we can achieve organically, potentially enabling Origin to more effectively fulfill pent-up demand and accelerate our efforts to unlock shareholder value in the near term.
John Bissell: We believe this will enable value capture beyond what we can achieve organically, potentially enabling Origin to more effectively fulfill pent-up demand and accelerate our efforts to unlock shareholder value in the near term. One early result of our strategic review is an important refinement of our go-to-market strategy to more effectively prioritize and capture high-value opportunities within the over $65 billion caps and closures market, which is comprised of a number of different differentiated segments. Our current strategic prioritization targets five large functional segments, including water at $7 billion, carbonated soft drinks or CFD at $6 billion, other beverage applications such as hot fill, ready-to-drink, beer, wine, milk, and sports drinks at $18 billion, food and pharmaceutical at $20 billion, and other non-beverage at $17 billion. Each segment utilizes different cap formats to achieve unique performance characteristics required by the product.
Speaker #4: One early result of our strategic review is an important refinement of our go-to-market strategy to more effectively prioritize and capture high-value opportunities within the over 65 billion dollar caps and closers market, which is comprised of a number of different differentiated segments.
Speaker #4: Our current strategic prioritization targets five large functional segments, including water at $7 billion; carbonated soft drinks (CSF) at $6 billion; other beverage applications, such as hot fill, ready-to-drink, beer, wine, milk, and sports drinks, at $18 billion; food and pharmaceutical at $20 billion; and other non-beverage at $17 billion.
Speaker #4: Each segment utilizes different cap formats to achieve unique performance characteristics, required by the product. Previously, our approach had been to design a single 1881 cap to serve all of these markets.
John Bissell: Previously, our approach had been to design a single 1881 cap to serve all of these markets. However, following the recent successful qualification of our 1881 cap for flat water, we can now begin immediately selling into the 1881 flat water market rather than waiting until completion of the final designs for the 1881 cap that will serve the broader CFD market later in 2026. Our PET cap works, passed qualification for a customer's water requirements, succeeded on a commercial bottling system, and went on store shelves. We continue to work side by side with CFD customers and anticipate success with CFD qualification with a focus on impact resistance and multi-day heated horizontal stress testing. Given the design freedom and material properties afforded by our proprietary method for producing PET caps, we believe CFD qualification is a matter of when, not if.
Speaker #4: However, following the recent successful qualification of our 1881 cap for flat water, we can now begin immediately selling into the 1881 flat water market rather than waiting until completion of the final designs for the 1881 cap that will serve the broader CFD market later in 2026.
Speaker #4: Our PET cap works, past qualification for a customer's water requirements, succeeded on a commercial bottling system, and went on store shelves. We continue to work side by side with CFD customers and anticipate success with CFD qualification, with a focus on impact resistance and multi-day heated horizontal stress testing.
Speaker #4: Given the design freedom and material properties afforded by our proprietary method for producing PET caps, we believe CFD qualification is a matter of when, not if.
Speaker #4: Next, I will highlight a few of our recently announced strategic partnerships and customer relationships. And then share the status of our manufacturing capacity buildout.
John Bissell: Next, I will highlight a few of our recently announced strategic partnerships and customer relationships and then share the status of our manufacturing capacity buildout. Earlier this month, we announced a new customer, Berlin Packaging. Berlin Packaging is a respected market leader and has agreed to purchase PET 1881 caps from Origin Materials for sale and distribution. Berlin's broad and deep distribution footprint not only immediately extends our market reach for 1881 but also opens the door for all our forthcoming formats across all closure applications globally. As a strategic customer, Berlin was exceptionally attractive because of their expertise in connecting closure products with brands to unlock the highest value opportunities. We look forward to working with Berlin and to revealing more about our other customers as well.
Speaker #4: Earlier this month, we announced a new customer, Berlin Packaging. Berlin Packaging is a respected market leader and has agreed to purchase PET 1881 caps from Origin Materials for sale and distribution.
Speaker #4: Berlin's broad and deep distribution footprint not only immediately extends our market reach for 1881, but also opens the door for all our forthcoming formats across all closure applications globally.
Speaker #4: As a strategic customer, Berlin was exceptionally attractive because of their expertise in connecting closure products with brands to unlock the highest value opportunities. We look forward to working with Berlin and revealing more about our other customers as well.
Speaker #4: On the supply side, we continue to grow our manufacturing capacity and execute our adaptive supply chain strategy, actively responding to macroeconomic uncertainty and changing conditions.
John Bissell: On the supply side, we continue to grow our manufacturing capacity and execute our adaptive supply chain strategy, actively responding to macroeconomic uncertainty and changing conditions. The status of our cap farmer buildout is as follows. Our first cap farmer system is producing PET caps in Reed City, Michigan. Two additional cap farmers, including thermoformers and for one of the cap farmers, all of its subsystems, arrived in the United States from Europe in July and August of 2025. The equipment arrived at Reed City prior to or received an exemption from the EU and Switzerland tariff increases to 15 and 39% respectively, saving over a million dollars. We continue to expect cap farmers three through six to complete factory acceptance testing on a rolling basis through Q4 of 2025.
Speaker #4: The status of our cap farmer buildout is as follows: Our first cap farmer system is producing PET caps in Reed City, Michigan. Two additional cap farmers, including Thermo Farmers and for one of the cap farmers all of its subsystems, arrived in the United States from Europe in July and August of 2025.
Speaker #4: The equipment arrived at Reed City prior to or received an exemption from the EU and Switzerland tariff increases to 15 and 39 percent, respectively.
Speaker #4: Saving over a million dollars. We continue to expect Cap Farmers three through six to complete factory acceptance testing on a rolling basis through Q4 of 2025.
Speaker #4: And primarily due to capital constraints accentuated by tariff exposure, we now plan to complete factory acceptance testing for cap farmers seven and eight in the second half of 2026, updated from Q1 2026.
John Bissell: And primarily due to capital constraints accentuated by tariff exposure, we now plan to complete factory acceptance testing for cap farmers seven and eight in the second half of 2026, updated from Q1 2026. In July, we announced a new European mass production partner, Royal Hordyk, further diversifying Origin's manufacturing footprint in response to continued pressure from US tariffs on European imports. European manufacturing capacity expands Origin's global footprint, enabling the production and sale of PET caps without equipment or caps crossing US borders. Hordyk is a leading Dutch producer of sustainable plastic packaging solutions in operation for over 100 years. Hordyk will use its PET extruders to produce extruded sheet for use in cap farmer production lines owned by Origin and operated by Hordyk in Hordyk facilities in the EU. We expect Hordyk PET extruders and extrusion expertise can drive capital cost efficiency for cap farmer lines.
Speaker #4: In July, we announced a new European mass production partner, Royal Hordeich, further diversifying Origin's manufacturing footprint in response to continued pressure from U.S. tariffs on European imports.
Speaker #4: European manufacturing capacity expands Origin's global footprint, enabling the production and sale of PET caps without equipment or caps crossing U.S. borders. Hordeich is a leading Dutch producer of sustainable plastic packaging solutions, in operation for over 100 years.
Speaker #4: Hordeich will use its PET extruders to produce extruded sheet for use in cap farmer production lines owned by Origin and operated by Hordeich in Hordeich facilities in the EU.
Speaker #4: We expect Hordeich PET extruders and extrusion expertise can drive capital cost efficiency for cap farmer lines. We anticipate installing the first cap farmer in a Hordeich facility before the end of Q1 2026.
John Bissell: We anticipate installing the first cap farmer in a Hordyk facility before the end of Q1 2026. Finally, our sales pipeline remains strong, and interest remains high for larger cap formats with attractive unit economics. We believe our thermoforming PET technology advantages us disproportionately as format size increases, which we believe will translate to higher margins than HDPE caps, the larger the format. A key objective of our strategic review process is to identify opportunities to accelerate our development and deployment of these new formats. And now I'll hand it over to Matt for a review of our expected near-term financial performance.
Speaker #4: Finally, our sales pipeline remains strong. An interest remains high for larger cap formats with attractive unit economics. We believe our Thermo Farming PET technology advantages us disproportionately as format size increases, which we believe will translate to higher margins than HTPE caps, the larger the format.
Speaker #4: A key objective of our strategic review process is to identify opportunities to accelerate our development and deployment of these new formats. And now, I'll hand it over to Matt for a review of our expected near-term financial performance.
Speaker #5: Thanks, John, and good afternoon, everyone. I'd like to begin with an update on our financing strategy. As we previously indicated, we endeavor to source the majority of funds for our capital equipment buildout on our way to sustained profitability from non-dilutive capital, such as equipment and corporate debt.
Matthew Plavan: Thanks, John, and good afternoon, everyone. I'd like to begin with an update on our financing strategy. As we previously indicated, we endeavor to source the majority of funds for our capital equipment buildout on our way to sustained profitability from non-dilutive capital such as equipment and corporate debt. However, depending upon equipment operation target locations, tariffs may require us to deploy meaningfully more capital for our equipment going forward. The 15% tariff on EU imports, up from 10% as of late July 2025, and the 39% tariff on Switzerland imports, which went into effect on August 7th, 2025, affect Origin because we source cap farmer systems from Switzerland and Germany for deployment in the United States.
Speaker #5: However, depending upon equipment operation target locations, tariffs may require us to deploy meaningfully more capital for our equipment going forward. The 15 percent tariff on EU imports, up from 10 percent as of late July 2025, and the 39 percent tariff on Switzerland imports, which went into effect on August 7, 2025, affect Origin because we source cap farmer systems from Switzerland and Germany for deployment in the United States.
Speaker #5: Such tariff costs can significantly raise the cash outlay required for financing equipment. As we do not expect the tariff costs to be financeable, this could make debt financing in those instances more expensive and potentially suboptimal.
Matthew Plavan: Such tariff costs can significantly raise the cash outlay required for financing equipment, as we do not expect the tariff costs to be financeable, thereby making debt financing in those instances more expensive and potentially suboptimal. As John mentioned, we believe our strategic review process will help us optimize our cost of capital under these circumstances and to maintain timely capacity build for demand capture and to preserve the path to our stated goal of non-dilutive financing for the majority of our forthcoming capital expenses. Next, we're revising our revenue and run rate adjusted EBITDA guidance. We estimate an aggregate reduction in manufacturing output of approximately 50% and 15% for 2026 and 2027, respectively, compared to our prior estimates.
Speaker #5: As John mentioned, we believe our strategic review process will help us optimize our cost of capital under these circumstances and to maintain timely capacity build for demand capture, and to preserve the path to our stated goal of non-dilutive financing for the majority of our forthcoming capital expenses.
Speaker #5: Next, we're revising our revenue and run rate-adjusted EBITDA guidance. We estimate an aggregate reduction in manufacturing output of approximately 50% and 15% for 2026 and 2027, respectively, compared to our prior estimates.
Speaker #5: This is due to the impact of the aforementioned delay in cap farmer FAT timing for lines two through eight on our backloaded 2026 production schedule, as we described in May of 2025.
Matthew Plavan: This is due to the impact of the aforementioned delay in cap former FAT timing for lines two through eight on our backloaded 2026 production schedule, as we described in May of 2025. Prior revenue guidance for 2026 and 2027 was a range of 50 to 70 million and 150 million to 210 million, respectively. We are updating revenue guidance before consideration of potential strategic review outcomes to 20 to 30 million and 100 to 200 million for 2026 and 2027, respectively. In addition, we expect these same factors to push our adjusted EBITDA run rate breakeven from 2026 into 2027. Lastly, we ended the quarter with a strong balance sheet, including $69 million in cash, cash equivalents, and marketable securities.
Speaker #5: Prior revenue guidance for 2026 and 2027 was a range of 50 to 70 million, and 150 million to 210 million, respectively. We are updating revenue guidance.
Speaker #5: Before consideration of potential strategic review outcomes, to 20 to 30 million, and 100 to 200 million for 2026 and 2027, respectively. In addition, we expect these same factors to push our adjusted EBITDA run rate breakeven from 2026 into 2027.
Speaker #5: Lastly, we ended the quarter with a strong balance sheet. Including 69 million dollars in cash, cash equivalents, and marketable securities. In addition, the net accounts receivable balance of 17.9 million at June 30th, 2025, is comprised of receivables associated with the company's legacy supply chain activation program, that is being wound down in 2025.
Matthew Plavan: In addition, the net accounts receivable balance of $17.9 million at June 30th, 2025, is comprised of receivables associated with the company's legacy supply chain activation program that is being wound down in 2025. Concurrent with the wind-down of the supply chain activation program, we expect to collect all related net receivables in due course, resulting in a significant source of cash. Additionally, as of June 30th, 2025, the company had $9 million in land held for sale in Geismar, Louisiana. We expect the sale of this land to also result in an additional significant source of cash. With that, I'll pass it back to John for concluding remarks.
Speaker #5: Concurrent with the wind down of the supply chain activation program, we expect to collect all related net receivables in due course, resulting in a significant source of cash.
Speaker #5: Additionally, as of June 30th, 2025, the company had 9 million in land, health, or sale in Geismer, Louisiana. We expect the sale of this land to also result in an additional significant source of cash.
Speaker #5: With that, I'll pass it back to John for concluding remarks.
Speaker #4: Thanks, Matt. I will conclude by reiterating what I said at the beginning of this call. Today, Origin is closer than ever to bringing our product to the 65 billion dollar caps and closers market.
John Bissell: Thanks, Matt. I will conclude by reiterating what I said at the beginning of this call. Today, Origin is closer than ever to bringing our product to the $65 billion caps and closures market. The first Origin PET bottle caps are now on store shelves. We are now officially in market with our 1881 cap for non-carbonated water. This quarter, we announced our first publicly named customer, Berlin Packaging. Despite tariffs as high as 39% directly impacting our business, we remain nimble by expanding the geographies into which we can deploy production. We are adapting and executing our plan, and we are evaluating promising paths forward for our strategic review with RBC, which we believe can both accelerate and de-risk our business plan while simultaneously unlocking significant value for our shareholders. With that, I'll open up the call for questions. Operator, may we have the first question, please?
Speaker #4: The first Origin PET bottle caps are now on store shelves. We are now officially in market with our 1881 cap for non-carbonated water. This quarter, we announced our first publicly named customer, Berlin Packaging.
Speaker #4: Despite tariffs as high as 39 percent directly impacting our business, we remain nimble by expanding the geographies into which we can deploy production. We are adapting and executing our plan.
Speaker #4: And we are evaluating promising paths forward for our strategic review with RBC. Which we believe can both accelerate and de-risk our business plan. While simultaneously unlocking significant value for our shareholders.
Speaker #4: With that, I'll open up the call for questions. Operator, may we have the first question, please?
Speaker #1: Showing no questions, I will now 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.
Conference Operator: Shall we note questions? I will now 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.
Speaker #1: Thank you.
Speaker #6: Thank you, operator. Prior to our earnings call, we invited all investors to submit questions as part of our Ask Origin campaign. Thank you so much to everyone who participated.
Ryan Smith: Thank you, Operator. Prior to our earnings call, we invited all investors to submit questions as part of our Ask Origin campaign. Thank you so much to everyone who participated. These questions were, of course, submitted before our call today, and we answered many of them thoroughly with our prepared remarks. We will generally be answering the most relevant questions today during the time that we have. So let's start with the first question for you, John. The investor asks, as soon as a customer becomes public, we'd like to know where to buy the product so we can support it and get the cap into our hands to show and tell the tangibility. How do we do that?
Speaker #6: These questions were, of course, submitted before our call today, and we answered many of them thoroughly with our prepared remarks. We will generally be answering the most relevant questions today during the time that we have.
Speaker #6: So, let's start with the first question for you, John. The investor asks, "As soon as a customer becomes public, we'd like to know where to buy the product so we can support it and get the cap into our hands to show and tell the tangibility." How do we do that?
Speaker #4: Well, as we announced earlier, we now have our product on shelves with a small brand, Power Hydration, located in California. We're excited to get those bottles and caps out there.
John Bissell: Well, as we announced earlier, we now have our product on shelves with a small brand, Power Hydration, located in California. We're excited to get those bottles out, those caps on bottles out there. We're excited to have them in market. Certainly, if people want to travel to California to go get one of those bottles, they're welcome to do so, but we certainly don't expect that. And we don't expect Power Hydration will be the last brand that we announce with these caps out there in the near term. So we're excited to have our caps qualified for water, and we're excited to have our caps on store shelves already.
Speaker #4: We're excited to have them in market. You know, certainly if people want to travel to California to go get one of those bottles, they're welcome to do so.
Speaker #4: But we certainly don't expect that. And we don't expect Power Hydration will be the last brand that we announce with these caps out there in the near term.
Speaker #4: So we're excited to have our caps qualified for water. And we're excited to have our caps on store shelves already.
Speaker #6: Great. The next question from the investor asks, "Have you been monitoring the competition, and could you provide some insight on who your closest competitors are and how much further ahead you think Origin is in mastering this particular type of PET cap production?"
Ryan Smith: Great. The next question from an investor asks, have you been monitoring the competition, and could you provide some insight on who your closest competitors are and how much further ahead you think Origin is in mastering this particular type of PET cap production?
Speaker #4: Sure. Yeah, so our technology platform is pretty differentiated from the other attempts at making PET caps, both historically and currently. You know, as a reminder, what we do with our technology is ThermoForm PET sheet.
John Bissell: Sure. Yeah, so our technology platform is pretty differentiated from the other attempts at making PET caps, both historically and currently. As a reminder, what we do with our technology is thermoform PET sheet into caps, and then with a little bit of post-processing, can convert those into caps that can be directly put on bottles. As you compare that to both existing caps technology for HDPE and polypropylene cap production, and also the attempts, both historical and current, to make PET caps, those technologies are using either injection molding, which is melting the PET down fully and then extruding it into a fully enclosed mold, or compression molding, which is taking a softened PET and essentially pressing it into a fully enclosed mold to make the shapes. There are some key elements of those technologies which are challenged relative to thermoforming.
Speaker #4: Into caps. And then with a little bit of post-processing, can convert those into caps that can be directly put on bottles. As you compare that to both existing caps technology, for HTPE and polypropylene cap production, and also the attempts both historical and current to make PET caps, those technologies are using either injection molding, which is melting the PET down fully and then extruding it into a fully enclosed mold.
Speaker #4: Compression molding, which involves taking softened PET and essentially pressing it into a fully enclosed mold to create the desired shapes, has some key elements that are challenged relative to thermoforming.
Speaker #4: The first is that you really making that thin film of a PET cap is quite challenging with both of those technologies due to the material properties of PET.
John Bissell: The first is that you really are making that thin film of a PET cap is quite challenging with both of those technologies due to the material properties of PET. And in fact, when you make that cap, it isn't going to have the same kinds of properties that a PET that is formed using thermoforming will, due to some of the orientation that occurs within PET when you stretch it and when you mold it over a part with some draw, like you do with our technology. And we think those are some of the key elements that allow us to both get better unit economics, and not just better unit economics for caps the size of 1881, but caps that are even larger than that. We think that's what allows us to get better material properties out of our PET. It allows us to get lighter weight caps.
Speaker #4: And in fact, when you make that cap, it isn't going to have the same kinds of properties that a PET formed using thermoforming will due to some of the orientation that occurs within PET when you stretch it, and when you mold it over a part with some draw, like you do with our technology.
Speaker #4: And we think those are some of the key elements that allow us to both get better unit economics and not just better unit economics for caps the size of 1881, but caps that are even larger than that.
Speaker #4: We think that's what allows us to get better material properties out of our PET. It allows us to get lighter weight caps. It allows us to get the optical clarity that our customers have found really quite striking and aesthetically pleasing.
John Bissell: It allows us to get the optical clarity that our customers have found really quite striking and aesthetically pleasing and differentiating. And actually, it's also what allows us to use recycled content in our caps more easily. And so many of the differentiated properties that we think are key, not just to our technology, but to frankly PET caps in general and making PET caps successful, depend on the technology that we bring, which is this thermoforming anchored technology. And we're really excited about that. We think that that's going to be a step change, as we said earlier, in recyclability and really in cap performance in the product. The PET caps just perform really well across a whole bunch of different dimensions. And so I think relative to our competitors, we're excited that we have, we think, the first commercially viable PET cap in market.
Speaker #4: And differentiating. And actually, it's also what allows us to use recycled content. In our caps more easily. And so many of the differentiated properties that we think are key not just to our technology, but to frankly PET caps in general and making PET caps successful, depends on the technology that we bring, which is this ThermoForming anchored technology.
Speaker #4: And we're really excited about that. We think that that's going to be a step change as we said earlier. In recyclability, and really in cap performance in the product.
Speaker #4: The PET caps just perform really well across a whole bunch of different dimensions. And so, I think relative to our competitors, we're excited that we have, we think, the first commercially viable PET cap in the market. We think that our cap performs better than other attempts at making PET caps out there.
John Bissell: We think that our cap performs better than other attempts at making PET caps out there. And we think that our cap has the ability to really change the way that the packaging industry innovates, frankly. So we're excited to be here.
Speaker #4: And we think that our cap has the ability to really change the way that the packaging industry innovates. Frankly. So we're excited to be here.
Speaker #6: Great. The next question asks, "How should we view the Hordeich partnership in the context of prior partnerships and operating partners?"
Ryan Smith: Great. The next question asks, how should we view the Hordyk partnership in the context of prior partnerships and operating partners?
Speaker #4: Yeah, you know, we expect in general to have multiple operating and manufacturing partners in all of the major geographies. And so we see Hordeich as an excellent addition to that in particular with more protectionist trade environment that we're all companies are operating in these days.
John Bissell: Yeah, you know, we expect in general to have multiple operating and manufacturing partners in all of the major geographies. And so we see Hordyk as an excellent addition to that, in particular with the more protectionist trade environment that all companies are operating in these days. And so having another great partner in the EU, in particular one that has a huge capacity for extrusion of PET sheet, for thermoforming PET, and the capabilities and expertise that comes with that kind of large-scale PET sheet extrusion and PET thermoforming operation is something that we think is hugely additive to our overall capability as a company and, of course, particularly our overall capability in Europe. So we're excited to have them, and we don't think they'll be the last of the manufacturing partners that we bring on board.
Speaker #4: And so having another great partner in the EU, in particular one that has a huge capacity for extrusion of PET sheet, for ThermoForming, PET, and that capabilities and expertise that comes with that kind of large scale sheet PET sheet extrusion and PET ThermoForming operation.
Speaker #4: It is something that we believe is hugely additive to our overall capability as a company, particularly our overall capability in Europe. So, we're excited to have them, and we don't think they'll be the last of the manufacturing partners that we bring on board.
Speaker #4: In the near future, we think that there are going to be plenty more of those. As we look across different geographies and expand into new geographies as well.
John Bissell: In the near future, we think that there are going to be plenty more of those as we look across different geographies and expand into new geographies as well.
Speaker #6: Great. Next question I want to address to Matt. The question asks, "Where do we stand with respect to our NASDAQ listing? We have been trading for under a dollar for some time now."
Ryan Smith: Great. Next question I want to address to Matt. The question asks, where do we stand with respect to our NASDAQ listing? We have been trading for under a dollar for some time now.
Speaker #5: Yeah, thanks, Ryan. So just as a reminder, there are minimum listing requirements the NASDAQ has for companies on the exchange. One of those is that your stock price stays above $1, generally speaking.
Matthew Plavan: Yeah, thanks, Ryan. So just as a reminder, there are minimum listing requirements the NASDAQ has for companies on the exchange. One of those is that your stock price stays above a dollar, generally speaking. The way they monitor that is if your stock falls below a dollar for 30 consecutive days, you get a notification that you're not in compliance with that particular minimum listing requirement. And they give you initially 180 days to remedy that situation. And they measure it as being remedied the moment that your stock crosses over a closing price of a dollar for 10 consecutive days. And so we are 129 days into our first 180-day grace period.
Speaker #5: The way they monitor that is if your stock falls below a dollar for 30 consecutive days, you get a notification that you're non-compliance with that particular minimum listing requirement.
Speaker #5: And they give you initially 180 days to remedy that situation. And they measure it as being remedied the moment that your stock crosses over a closing price of a dollar for 10 consecutive days.
Speaker #5: And so we are 129 days into our first 180-day grace period. We continue to see many opportunities for us to perform, execute, and have our stock in the value of our company increase and, in doing so, be over a dollar for 10 consecutive days in the near future.
Matthew Plavan: We continue to see many opportunities for us to perform, execute, and have our stock and the value of our company increase, and in doing so, be over a dollar for 10 consecutive days in the near future. So at this point, we've got another 51 days in our first grace period. At that point, you can apply, and we would, if we weren't over a dollar and hadn't met that minimum listing requirement, we would apply for a second grace period of 180 days, which the NASDAQ evaluates to make sure that you remain that you meet all the other minimum requirements, and that the only requirement remaining is the minimum dollar stock price.
Speaker #5: The so at this point, we've got another 51 days in our first grace period. At that point, you can apply and we would if we weren't over a dollar and hadn't met that minimum listing requirement.
Speaker #5: We would apply for a second grace period of 180 days. Which the NASDAQ evaluates to make sure that you remain that you meet all the other minimum requirements and that the only requirement remaining is the minimum dollar stock price.
Speaker #5: And you have a plan that is acceptable to the NASDAQ to earn that second grace period, which is generally approved, as long as you're willing to perform a reverse stock split during that second period, if your attempts through organic measures are unsuccessful in raising the stock price above $1.
Matthew Plavan: And you have a plan that is acceptable to the NASDAQ to earn that second grace period, which is generally what it's generally approved, as long as you're willing to perform a reverse stock split during that second period if your attempts through organic measures are unsuccessful in raising the stock price above a dollar. And generally, companies are willing to do that. And so we think we, as I said, have many more opportunities during that remaining period of time between what's left of our first period and should we have to request a second grace period. That gives us another seven months to regain compliance. And so we feel good about our opportunities to do that. And we'll keep all folks, our investors, posted through our public disclosures on our progress towards meeting those minimum requirements.
Speaker #5: And generally, companies are willing to do that. As I said, we believe we have many more opportunities during that remaining period of time between what's left of our first period and should we have to request a second grace period.
Speaker #5: That gives us, you know, another seven months to regain compliance. And so we feel good about our opportunities to do that. And keep, you know, we'll keep all folks, investors posted through our public disclosures on our progress towards meeting those minimum requirements.
Speaker #6: Great, thanks for explaining that. John, to close this out, what do we have to get excited about as we look to the future?
Ryan Smith: Great. Thanks for explaining that. John, to close this out, what do we have to get excited about as we look to the future?
Speaker #4: Yeah, I think there are a lot of things to get excited about. The first is that Origin PET bottle caps are now on shelves.
John Bissell: Yeah, I think there are a lot of things to get excited about. The first is that Origin PET bottle caps are now on shelves, and we think this is just the beginning. There's a lot of growth. That water market is huge, and we're excited to grow sales while we work on our CFD qualifications. We're working on more customer announcements and naming our customers, especially following our Berlin Packaging press release. We have cap farmers three through six, which will be completing their FAT on a rolling basis through the end of the year. So continuing to build capacity there. And we're evaluating promising paths forward through our strategic review with RBC, which we believe can both accelerate and de-risk our business plan while simultaneously unlocking value creation for our shareholders.
Speaker #4: And we think this is just the beginning. There's a lot of growth, and that water market is huge. We're excited to grow sales while we work on our CFD qualifications.
Speaker #4: We're working on more customer announcements and naming our customers, especially following our Berlin Packaging press release. We have cap farmers three through six, which will be completing their FAT on a rolling basis through the end of the year.
Speaker #4: So continuing to build capacity there. And we're evaluating promising paths forward for our strategic review with RBC. Which we believe can both accelerate and de-risk our business plan while simultaneously unlocking value creation for our shareholders.
Speaker #4: And, you know, for some time now, we've been receiving inbound interest from well-established caps companies. That frankly struggle with innovation. It's hard to find innovation in these established industries.
John Bissell: And you know, for some time now, we've been receiving inbound interest from well-established caps companies that frankly struggle with innovation. It's hard to find innovation in these established industries, and we can provide that. So we're excited across all of these areas, from organic to inorganic growth, and we're excited that our high-performance, highly sustainable, and recyclable cap is finally in market in one of the largest caps and closure segments. So there's a lot to be excited about.
Speaker #4: And we can provide that. So we're excited across all of these areas. From organic to inorganic growth. And we're excited that our high performance always sustainable and recyclable cap is finally in market.
Speaker #4: In one of the largest caps and closure segments, so there's a lot to be excited about.
Speaker #6: Great, thank you. I'll pass that back to the operator.
Ryan Smith: Great. Thank you. I'll pass that back to the operator.
Speaker #5: Thank you.
Conference Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.