Origin Materials, Inc. Q1 FY2024 earnings call

• Reaffirming path to profitability independent of biomass conversion scale-up, with cash runway sufficient to avoid equity raise. Expected 2024 net cash burn between $55 million and $65 million.
• Caps and Closures progress: Announced accelerated procurement of additional high-throughput lines, aim to have first system online Q4 2024. Completed capping trial on commercial bottle line with Origin PET caps. Announced initial product lineup for PET caps and closures manufacturing platform.
• Origin 1 operations: Converted sustainable wood residues to chemical intermediates, gaining insights into plant operations like reactor parameters and wood handling. Engaging with partners for biomass conversion technology scale-up, with customer demand strong as reflected by over $10 billion offtake agreements.

The Caps and Closures segment is a key focus. Origin has accelerated procurement of high-throughput caps production lines, aiming to bring the first manufacturing system online in Q4 2024. Initial systems are expected to generate $45 million to $65 million in annual revenue. The Caps and Closures market is over $65 billion. Origin 1 in Sarnia, Ontario, Canada, converted sustainable wood residues to chemical intermediates, marking an evolution from cornstarch-based production, and is providing insights into biomass conversion scale-up.

• 2024 revenue guidance: $25 million to $35 million. Net cash burn guidance: $55 million to $65 million.
• Caps and closures revenue in 2025 expected to be significant, driving to cash positive operations with existing cash resources, eliminating need for equity raise. Initial cap manufacturing systems expected to generate $45 million to $65 million in annual revenue.

• Delisting risk: NASDAQ delisting trigger if stock price below $1 for 30 consecutive days; need to regain compliance by closing above $1 for 10 consecutive days. Risk associated with forward-looking statements, actual results may differ from expectations.

Q: Matt, if I understand correctly, the cap and closure lines that you are buying, such that you can get $45 million plus in sales in this first round, it's mainly going to be equipment finance and not eat too much into the cash burn?

A: That's a correct assumption, yes.

Q: Can you talk in a little more detail with respect to government funding?

A: The funding referred to is in connection with OM1, not a grant, tied to path to profitability and ability to pay over an extended period.

Q: What's your view on manufacturing caps vs licensing the technology to existing companies that already have this equipment?

A: Our view is to control our own destiny as much as possible, but open to partnerships in various ways with the industry.

Q: What is management doing to address the potential NASDAQ delisting?

A: Working to regain compliance by closing above $1 for 10 consecutive days, with a second grace period available if needed, including potential reverse stock split.

Q: Are there other technologies in addition to caps with near-term revenue-generating potential and development at Origin?

A: There are several initiatives in various stages of development, to be announced appropriately as we manage them thoughtfully