Thank you for standing by, this is the conference operator. Welcome to the Origin Materials Second Quarter 2022 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.

[Operator Instructions] I would now like to turn the conference over to Ashish Gupta, Investor Relations. Please go ahead..

Thank you and welcome everyone to Origin Materials' second quarter 2022 earnings conference call. Joining the call today from Origin Materials are Co-CEO, Rich Riley; Co-CEO and Co-founder, John Bissell; and CFO, Nate Whaley. Ahead of this call, Origin issued its second quarter press release and presentation which we will refer to today.

These can be found on the Investor Relations section of our website at originmaterials.com. Please note on this call, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties.

These statements reflect our views as of today, should not be relied upon as representative 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 of 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 on May 9, 2022.

In addition, 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 a substitute 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, each of which is posted on our website. The webcast of this call will also be available on the Investor Relations section of our company website.

With that, I will turn the call over to Rich..

carbon-negative, recyclable PET, which the world's plastic recycling infrastructure is already designed to collect, sort, and re-use, with the critical added benefit of removing CO2 from the atmosphere.

Beyond that, while there has been some progress made from shifts to renewable energy sources and electric vehicles, it is clear that reducing emissions from energy use alone is insufficient to achieve the goals and commitments established by companies and governments.

As a result, in the near-term, we believe that these companies will need to integrate decarbonized materials into their supply chains. As such, we expect demand to remain well ahead of our projected supplies for the foreseeable future.

Turning to Slide 5, we continue to make steady progress commercializing the business, and have grown customer demand to a total of $8.1 billion today, made up of offtake agreements and capacity reservations. This represents a more than eightfold increase since we announced our intent to go public in February 2021.

As a refresher capacity reservations are signed agreements designed to lead towards take-or-pay contracts and revenue once our plants are complete. They give us and our customers more time to negotiate a take or pay off-take agreement, which typically is a much longer document that meets requirements for project financing.

We continue to expand the breadth of the industry we serve from global CPG brands like Pepsi, Danone and Nestlé Waters to automotive leaders like Ford and specialty chemical innovators like Solvay and Mitsubishi Chemical Holdings Group to ultra-luxury brands like LVMH Beauty and iconic cosmetic brands like Revlon. Our sales pipeline remains strong.

We continue to make inroads into new industries and have numerous active discussions with existing customers to expand their current agreements and with prospective customers to adopt our sustainable products.

Moving to Slide 6, in mid-June, we were pleased to announce a strategic partnership to commercialize advanced carbon-negative materials for diverse polymer applications with Kuraray, a publicly listed, leading manufacturer of specialty chemicals, fibers, and other materials active in many end markets, including the medical, fashion and electronics industries.

As part of the strategic partnership, Kuraray signed a multi-year capacity reservation agreement with Origin to purchase sustainable, carbon-negative intermediate chemicals in the large scale synthesis of mini polymers, including PTA, PET and polyamide.

Moving to Slide 7, we recently announced an initiative with Revlon, a leading global authority and beauty trend setter in the world of color cosmetics and hair care to pursue the rapid development and commercialization of new sustainable materials for cosmetics packaging based on Origin's technology platform.

As part of the initiative, Revlon signed a memorandum of understanding to reserve commercial volumes of Origin PET. We are excited to build in our recent momentum in the beauty industry, by partnering in this initiative with Revlon, an iconic global brand with a deep commitment to sustainability and performance.

It provides another great example of how Origin's wood residue based carbon-negative PET can help companies achieve their sustainability goals, while maintaining their focus on premium quality.

Moving to Slide 8 on July 25, we announced a strategic partnership with Intertex World Resources, a leading value added distributor of synthetic rubber, carbon black, process oils and rubber chemicals to bring sustainable, carbon-negative, carbon black made using Origin’s patented technology platform to the rubber compounding industry.

As part of the partnership, Intertex signed an offtake agreement with Origin to purchase sustainable, carbon-negative, carbon black.

Moving to Slide 9, we recently announced a strategic partnership with ATC Plastics, a leading global manufacturer of black color concentrates to bring sustainable, carbon-negative, carbon black made using Origin's patented technology platform for the plastics industry.

As part of the partnership, ATC Plastics agreed to purchase sustainable carbon-negative carbon black from Origin. The Intertex and ATC Plastics partnerships further build on our recent momentum in carbon black, a promising new product category for Origin.

Origin’s carbon-negative carbon black, made from Origin’s hydrothermal carbon, is a versatile 100% bio-content filler and pigment. Like traditional petroleum-based carbon black, it can be used in a wide variety of applications including automotive components and tires, belts and hoses, mechanical rubber goods, plastic masterbatch, and toners.

We expect our sustainable carbon black to be deployed across a diverse array of applications to decarbonize the rubber and automotive supply chains, end-markets which have very favorable growth prospects. Finally, we are very excited to tell you about a new strategic relationship with a major U.S.-based supermarket chain.

We continue to see considerable opportunities to expand into new end markets and applications, and we look forward to providing more detail about this partnership, as well as others, when appropriate.

In addition to these partnership announcements, we announced that Origin earned the USDA Certified Biobased Product Label for additional carbon negative products.

The certification affirms that Origin’s FDCA, purified PTA, and para-xylene, when produced at full commercial capacity, are expected to be 100% biobased, allowing Origin to display a unique USDA label highlighting this designation. This certification adds to Origin’s previously announced USDA Certified Biobased Products, which include CMF and HTC.

Turning to Slide 10, we continue to see strong, favorable tailwinds for our technology and business model with some of the world’s largest public companies committing to zero-carbon mandates and governments increasingly enacting regulations to tackle climate change.

The recent passage of California Senate Bill 54, or SB 54, should lead to increased demand for Origin’s renewable products.

In California, to sell, offer for sale, import, or distribute certain plastic covered materials, “producers”, which refers to many of Origin’s customers and potential customers will need to be approved to participate in a Producer Responsibility Organization, or PRO Plan, with limited exceptions.

To join a PRO, producers will be charged a fee based on a variety of factors.

Notably, certain items derived from renewable materials, including Origin’s renewable, bio-based materials, will be subject to a reduced PRO fee relative to those derived from non-renewable resources, an advantage referred to as eco-modulation which could create meaningful savings for our customers.

SB 54 also requires that by 2032, first, all single-use packaging in the state be recyclable or compostable. Second, that producers develop and implement a plan to achieve a 25% reduction in plastic by weight. And third, that 65% of all single-use packaging be recycled.

Given PET’s light weight, recyclability, and high recycling rate compared with other materials, this should drive additional use cases to Origin’s products.

In late June, the Government of Canada published the Single-Use Plastics Prohibition Regulations, which prohibit the manufacturing, importing, and selling of six categories of single-use plastic items, with a temporary exemption for exporting.

The ban covers many widely used items such as checkout bags, cutlery, foodservice ware, and straws made from hard-to-recycle plastics, with a few exceptions such as for medical applications.

Certain items made from PET, however, are considered “non-prohibited” because of their easy recyclability, a precedent that could be a powerful tailwind for Origin’s carbon-negative, 100% bio-based PET if other countries follow Canada’s lead.

With that, I would like to turn it over to John who will discuss our recent EPA award and provide an update on Origin 1 and Origin 2..

the team has done an incredible job creating a great safety culture while executing this project. We will very much take what we have learned and the culture we've developed to Origin 2 and beyond. It's been a busy 18 months for the company and the team has done an incredible job.

We’re not done yet, but from here we have a clear path forward to mechanical completion, commissioning, and start-up. With regard to Origin 2, our previously disclosed capital budget, construction timeline, and financing are unchanged.

As discussed on prior calls, we are closely monitoring costs associated with the current high levels of inflation and the challenging supply chain environment. We continue to proactively manage our cost base and note that we have built appropriate contingencies into our initial projections.

We are not currently placing any equipment or construction orders for Origin 2, and we expect current inflation and supply chain conditions to likely change in our favor in the next 12 to 24 months.

I would also note that materials companies generally benefit from higher product prices and margins in an inflationary environment, which can mitigate the impact of inflation on our capital budget.

Origin 2, our first world-scale manufacturing facility, will produce carbon-negative materials used to make PET plastic resin and fiber, which is used in packaging, textiles, apparel, and other applications, and HTC, which can be used as fuel, as activated carbon, and as a replacement for carbon black.

Front end design of the plant is underway with the detailed engineering set to begin in 2023. As previously announced, we have selected a site in Geismar, Louisiana for Origin 2, subject to finalization of economic incentives.

We expect the 150-acre facility will convert an estimated 1 million dry metric tons of sustainable wood residues each year into products for a wide range of end markets.

Some of the reasons that we believe the Geismar site is the ideal location for Origin 2 include the extremely skilled labor pool in Louisiana, access to relevant infrastructure, and access to sustainable feedstock. Before I conclude, I’d like to give you some additional detail about what we’re currently working on for Origin 2.

The team is optimizing the scope and layout of the plant. We are evaluating contractors for FEL-2 phase engineering and design work. We are also kicking off environmental permitting and we continue to work closely with landowners and fiber suppliers in Louisiana and Mississippi to put in place our feedstock strategy.

To summarize, the team has continued to make considerable progress and our expectation remains that Origin 1 will be completed by the end of 2022. Regarding Origin 2, the previously disclosed capital budget, construction timeline, and financing are unchanged.

Origin 1 represents an important milestone for our mission to enable the world's transition to sustainable materials. We are excited by the progress our team has made as we approach commissioning and start-up in the second half of the year. And with that, I will turn it over to Nate to discuss some of the financial details..

Thanks, John. I will begin with some commentary on our second quarter results, then our financing expectations for Origin 1 and Origin 2, and finish with an update on our 2022 outlook. Speaking to Slide 21, second quarter operating expenses were $8.7 million compared to $6.7 million during the same period in the prior year.

Adjusted EBITDA loss was $6.9 million for the second quarter compared to a loss of $3.0 million in the same period of the prior year. And finally, net income was $46.9 million for the second quarter compared to a net income of $62.5 million in the same period in the prior year.

Turning to our balance sheet, Origin ended the second quarter with $406.6 million in cash and cash equivalents and marketable securities. We maintain our expectation of fully funding the construction of both Origin 1 and Origin 2 using our existing balance sheet cash and cash equivalents and previously indicated traditional financing sources.

With regard to the financing of Origin 2, as previously mentioned, the State of Louisiana, pending finalization is expected to award a Private Activity Bond. Tax-exempt bonds authorized by the state and local governments for the financing of qualified projects with private capital, volume cap allocation to the company in the amount of $400 million.

We also expect to receive more than $100 million in pending state and local incentives. We maintain our financing assumptions for Origin 2 remain reasonable and achievable. With Origin 2 fully funded from existing cash on hand and previously indicated traditional project financing sources.

The $400 million Private Activity Bond allocation from the State of Louisiana provides a strong foundation for the financing of Origin 2 and in combination with certain 2021 Infrastructure Investment and Jobs Act provisions and other non-volume cap tax-exempt financing could enable the debt financing of Origin 2 using entirely tax-exempt bonds.

Origin also continues to work with leading financial institutions on other forms of traditional private financing and federal loan programs, including through the U.S. Department of Agriculture and Department of Energy. As we have highlighted in our previous earnings calls, inflationary pressures remain an area of focus.

However, as John discussed, at this point we are not adjusting our overall capital budget for Origin 2. We acknowledge that the situation remains fluid, and we continue to closely monitor our cost estimates such that we can communicate any changes to the market at appropriate times as we progress through the project.

I will now wrap up with an update on our 2022 outlook. We are maintaining our prior outlook for an adjusted EBITDA loss of up to $36 million and capital expenditures of up to $175 million. With that, I will turn it back to Rich for closing remarks..

Thank you, Nate. In closing, I am incredibly proud of our team’s continued progress in execution on our mission to enable the world’s transition to sustainable materials. Ahead of the commissioning and start-up of Origin 1, we continue to see robust demand for our industry-leading technology as the world moves aggressively to a zero-carbon future.

I would like to thank all of our customers for their commitments to Origin, our team and construction and engineering partners for their contributions to our company’s success, and our shareholders for their continuous support. And with that, I would like to ask the operator to open the line for questions..

[Operator Instructions] Our first question is from Salvador [indiscernible] with Bank of America. Please go ahead..

Yes. Thank you very much. So congratulations on the Carbon Black partnerships.

So just wondering now that you're starting to have this, I guess agreements to sell HTC for Carbon Black; how do the economics and the pricing compared to the CMF economics, firstly? And also how much of the HTC production at Origin 1 is now contracted with these agreements?.

Yes. This is Rich, thanks for the for the question. So we're very excited about Carbon Black as a product and excited to have announced three partnerships Mitsubishi Chemical Holdings, Intertech, and ATC Plastics as partners that we will work with to access those that – very large Carbon Black market.

At this time we're not sharing more about economics or which plants those materials will be coming from, but Carbon Black is a higher value material that in our original projections that are in the Investor presentation. We hadn't planned on really getting to until the Origin 3 timeframe.

So efforts we're taking to accelerate, getting more of our HTC to Carbon Black is beneficial to our overall economics..

And just as a follow up to what you just mentioned. So the reason we hadn't planned on selling more or getting into it to it Origin till three which is many, many years away. Was it more from a technological standpoint or commercial standpoint? What has changed..

Yes. I would say what's changes we've continued to add it to our team, advance our technology and, and in products.

And so part of it is just getting to know a market partnering with various players in that market and working towards having, you know commercial applications than – that so we are optimistic that we're making better – even better progress than we had in this space..

Okay, perfect. And I just also wanted o ask about the California plastic spill and the recently I guess, proposed climate inflation built, in Congress. Firstly on the California 1, it is a little bit surprising that you would still, I just have to pay a fee for your product, right.

So why is that, and I guess, is there any chance that down the road renewable plastics could be totally excluded and given the proposed climate bill, is there anything there that I know there are a lot of things with regard to credits for carbon capture and biofuels, anything you've seen there that could help you as well?.

Sure. So first on California's SB54 these bills all go on their own journey and you're right that we – customer is using our materials would have a reduced fee versus using fossil based materials, which has the potential to be a meaningful in terms of the price advantage of using our materials.

And as to the reason that it's different than recycled, that's lobbying engagement with legislators that would continue to advance and materials like ours are relatively new. And so I think there's just sort of an educational process that we're certainly very active in.

And on the federal proposed legislation, I guess it's called the Inflation Reduction Act our review of that is that there is a lot in there that that could be relevant to us, so that could certainly be quite meaningful in terms of potentially helping with our plans..

Perfect. Thank you very much..

Thank you..

The next question is Frank Mitsch with Fermium Research. Please go ahead..

Hey, good afternoon folks. I really enjoyed the video, so very helpful to see that and see the progress that you're making. In the press release, as well as in the slides you mentioned that you amended and expanded the agreement with Danone [ph], obviously they're one of the original investor/partners.

Can you give a long insight as to what happened there?.

Yes. Frank all we can really share is that Danone was an investor in origin, one of our earliest customers and really development partners that us prove our technology all the way through to PET. And as part of that relationship, we had a kind of a legacy agreement that just needed to be amended and updated.

And so what we've done is completed that amendment process as well as expanded our relationship and that's pretty much what I can share with Danone..

I see, okay. And then I believe John mentioned that you've been expanding headcount during the quarter particularly at Origin 1. I was wondering if there was any metrics that you could share with us in terms of that, the trends and any comments that you can offer in terms of retention.

Obviously it's a pretty volatile job market and people are moving around, but I'm curious, I suspect that given your mission that you might have a higher retention level, is that correct?.

Yes. So the metrics I can give you, and by the way, hey, Frank, this is Nate. The metrics I can share on [indiscernible] are really that we have – we've got our management team for Origin 1 in place. So we're really excited about that. And we're starting to fill out the other positions as well. So we're sort of well underway on that front.

On retention and recruitment yes, so I think I said last quarter recruitment has been great. We've had a lot of success getting really, really high quality people from across the industries that are related to Origin. And that continues to go really well. And from a retention perspective, similarly, we have just frankly great retention.

It's essentially – you couldn't possibly ask for better retention than we have shown and that's been true historically, but it's continued to be true right now..

Thank you. Thank you so much..

Thanks..

The next question is from Eric Stine with Craig Hallum. Please go ahead..

Yes, good afternoon. It's Aaron Spychalla on for Eric. Thanks for taking the questions. First, you called out….

Hi.

How are you?.

I am doing good.

How are you?.

Doing well..

Good, thanks. First, maybe on the major U.S. supermarket chain, I know you said further details to come. Just anything else you can share to better understand where you might fit in there. And then also on ATC Plastics saw language around co-developing for various applications.

Can you just talk a little bit more about that what that might entail and if you're seeing more opportunities like that with partnerships going forward?.

Absolutely. So I'll start with ATC Plastics.

Yes, that's an example of a partnership where we will be working with them to develop our products and figuring out which applications work best, which applications to start with and what's the path to increasingly higher value applications within the carbon black world, so that's definitely a co-development partnership and pretty common in terms of what we do especially in some of these newer markets for us like carbon black.

So that's what we're looking for in partners. There is someone to come on the journey with us and help to make a big impact in that market.

And with respect to the major grocery chain, I can't really share specifics, but what I will say is that, when we talk about grocery chains or retailers or customers like that, they obviously have a lot of products that that they make themselves private label and then obviously a lot of products from other people and so a huge opportunity for us when you look across all of the materials that are moving through those companies.

They do typically start with the private label business, which is – where the companies can have the most direct impact and then look to expand from there. So we're excited to have our first major grocery partnership..

Right. Okay. Thanks for the color. And then maybe just on the USDA bio-based label announcement, can you just maybe give a little bit more details on the significance of that, any markets or opportunities that might open up and I mean, I see you kind of talk about potential funding for Origin 2.

Just trying to better understand what that might mean for you..

Sure. So it's a significant certification and one of the areas where it can be most directly helpful as it does benefit from certain federal purchasing arrangements.

So there's sort of the halo effect of having the USDA certify your materials as being bio-based and then the specific benefits from there being certain advantages with respect to federal purchasing..

Understood. All right. Thanks for taking the questions. I'll hop back in the queue..

Sure Thanks..

[Operator Instructions] Our next question is from Graham Price with Raymond James. Please go ahead..

Hi, good afternoon. Thanks for taking the question.

I guess first one, as you get closer to Origin 1 startup, just wondering if you have visibility on when the first quarter with product sales will be?.

Yes. So, I think, what we're looking at is mechanical completion towards the end of this year still, so we're on track for that. And then commissioning and startup is going to be slated for mostly Q1. And generally speaking, we expect revenue to start out for that.

We haven't provided guidance and for next year yet [indiscernible] to on this call, but generally speaking we're still looking good for next year. And frankly, we're looking good for an on time and successful startup for Origin 1, which will be associated with revenue production as well..

Got it. Understood. And then quickly, if I remember correctly, you hinted at a partnership with the major toy company during the last earnings call, just wanted to check in there and see if there were any additional details..

You're right. We did announce a partnership with a major toy company and we don't have any additional details to share at this time..

Got it. Understood. Thank you very much. I'll jump back in queue..

Thanks..

The next question is from Steve Byrne with Bank of America. Please go ahead..

Yes, thank you. With Origin 1 – sorry for the noise here.

With Origin 1 completing near the end of the year, have you already lined up your feedstock for the – that plant? And is it reasonable to expect that you would be experimenting with different feedstocks of that plant depending on how much lignins in there and hemicellulose, it would affect probably the quantity and maybe the quality of the HTC.

Is that true? And is that – can you comment on the rough cost of that feedstock? Are you getting some pretty, pretty inexpensive material?.

Hi, Steve. Yes, sure. So you're right. Origin 1, we've always talked about that as sort of a strategic plant both on the product side where we can make a variety of different products from it, and we can sort of accelerate some of the commercialization of different – functionally differentiated products from our platform.

But to your point on feedstock, in some ways it's also a strategic plant from the feedstock perspective. So we can demonstrate feedstocks at reasonable scale that maybe we – we would use in future plants of the Origin 2 sort of scale. And so, we do expect to use a variety of different feedstocks Origin 1.

I think we have ready supply of very predictable feedstocks sort of lined up, but I think some of our partners are quite interested in how we can use feedstocks that sort of promote circularity around their specific businesses and we're happy to use those.

Generally speaking the variation in hemicellulose content and lignin content doesn't really have a strong effect on the quality of our different products that we make – can make at our plants. But it can – although to your point on HTC, there are some things that you can do to sort of adjust the HTC behavior.

Although again, probably not as much as you might imagine, but certainly having different quantities of cellulose and hemicellulose and lignin can make a pretty big difference in sort of low double-digit percentages difference – in the proportion of different products coming out.

And similarly, if you had feedstocks, for example, that had only cellulose in them. That would have a pretty strong effect on which the proportions of the products that we're making. And some of the more sort of circular feedstocks are quite heavily weighted in just celluloses content, which tends towards CMF, of course.

So it – certainly, we expect to see a variety of different feedstocks there and we expect to use those with our partners..

Okay. It makes a lot of sense.

And then one more for you, any update on your experimental efforts with PEF or the use of HTC in soil amendments?.

So no update to share yet on HTC with soil amendments, but on PEF, we continue to be excited about PEF. And I would say even more broadly, we continue to be very excited about FDCA as a monomer both in polyesters and other polymers. We think it's a really, really interesting monomer.

And I think for anybody that is unfamiliar with PEF and just to give a little bit more breath to your – the answer that I would give you Steve is PEF and FDCA are interesting for a couple of reasons.

One, of course, because they're well known to provide better gas barrier properties, which lets you use PET and polyesters that have FDCA in them in much broader applications, right? So packaging for foods and drinks that might be oxygen sensitive, for example, which includes pretty much anything the fact in them.

So that's one and that's a really interesting application all by itself to replace multilayer barrier films that usually would have – would both be expensive and not recyclable, right? So that's exciting.

The next piece, of course, is that there is evidence in the public patent literature that that I can refer to, which says that FDCA based polyesters actually improved the quality of the recycled PET that they get included in.

So to be more specific, if you have a big bin of recycled PET bottles, and some of them have FDCA in them, then that whole bale, that whole bin of PET is going to end up processing better in a recycling infrastructure, then just straight PET does. So, that's exciting as well.

Especially when you consider that with the fact that you might be replacing multi-layer barrier films which are not recyclable with something that is not only recyclable, but is in fact making the rest of the recycling infrastructure better. That's really exciting.

And then the last piece that we find really exciting about FTCA based polymers is that at high enough levels of FTCA, you can see that these polymers tend to be degradable.

And so of course degradable polymers are great, especially when you're dealing with really small particles that people call microplastics, getting those microplastics is great, it’s really important. And so from our perspective, PEF and FTCA based polymers really check a lot of important boxes in what done an ideal polymer look like.

And when it's being made from our platform, you can imagine that it's carbon negative, it's from non-food sources, it's not only recycled, but it actually makes the recycling of other polymers work better. And it's degradable. If it leaks out of this sort of end-of-life handling supply chain. So we're really excited and bullish on FTCA and PEF.

So thanks for asking..

No, thank you..

This concludes today's live Q&A segment. I will now turn it over to Ashish Gupta, Investor Relations to conduct the next segment of our investor Q&A..

Great, thank you Galen. As we did on our last call, we invited all investors to submit questions for our second quarter call as part of our Ask Origin campaign. We are pleased to have once again, have such high participation and want to thank everyone who submitted a question. In the interest of time, we'll be taking the most commonly asked questions.

Our first questions are for Rich. Starting on carbon black, Rich, there has been a lot of discussion regarding carbon black's potential to be a game changer for batteries.

Has Origin been in contact with anybody attempting to use its carbon-negative, carbon black as a component in the anodes of batteries, especially the next-gen battery companies or legacy as well as the EV specific automakers?.

Yes, it's a great question. And I've talked a lot about carbon black on the call and the progress that we're making. And the short answer is yes, we are exploring the application of our HTC and our carbon black for those applications..

Great.

Now moving to licensing would you speak to the company's progress on licensing deals? Is it a prerequisite for OM1 or OM2 to be mechanically complete before large licensing deals are realized?.

So we don't have any specifics on licensing to share currently, but I can say that in the ordinary course of business, we have continued to have discussions with various parties about many different forms of potential partnerships that include licensing deals.

And we don't think there's a prerequisite for origin one or origin two to be complete for us to enter into a licensing agreement..

And then another question that's a follow-up on the regulatory environment.

Can you speak specifically to what lobbying or educational efforts Origin is engaged in to get present regulators to differentiate between recyclable bio-based carbon, negative plastics and legacy plastics and materials?.

Yes, so, we've been very encouraged to see the really wave of legislation. We've talked about several of the recent ones on this call federal, state, local levels in the U.S. and around the world, all that support our business model.

And so we do closely track these legislative developments, and we do engage with the relevant legislators and policy makers to help tell our story and make sure they understand the incredible impact that we can have and how we're aligned with the spirit of these legislations..

Thanks so much for that Rich. With that we'll turn to John for some questions.

John on Origin 1 can you help us understand exactly what is meant by mechanically complete [indiscernible] and startup?.

Yes, so I think a good way to think about this is, is really mechanically complete means is the plant physically put together.

You can sometimes generally define that is at what point does it start to commission, but the reality is and, of course you're doing commissioning in a unit by unit as you finish a complete construction of some of the other units. So it's not quite as strict as that. But the right way to think about it is, is the plant built.

If the answer is yes, then it's mechanically complete, and that's the definition we use.

Of course, after that you go through a commissioning phase where you're making sure that all the things are working the way that they are supposed to, you are pressure testing them, you're water testing, them making sure that the valves are all operating the way that they're supposed to, that the control systems are operating the way that they are supposed to.

generally sort of running the plant for its paces. And then the final start-up phase is really when you put chemicals in the plant. So it's the point at which you start really running reactions and unit operations with live chemicals, so to speak.

Great, very helpful. You touched on employee [indiscernible] and we have one that's a little bit more specific here. Basically along the lines of our ability to recruit talent from large chemical and oil and gas companies has been something we've talked about in the past.

And wondering if you could comment on areas of Origin where that talent is going into..

Yes, so it it's really it's across the company. So obviously, there is a really natural spot for people that are highly technical in our engineering organizations, our technology organizations, R&D manufacturing, project execution. But you actually see it in the commercial side and even in the finance side of our organizations, as well.

There are pretty natural spots for people to slot in there. And so, we really do see it across the organization. It makes a huge difference having access to a really highly skilled talent like that. One of the other interesting things is, we're not just pulling only from one industry.

And so as similar as the chemicals and the oil and gas and the refining industries might seem, you and they obviously have lots of overlapping skill sets. There is a difference to the way that these kinds of companies and these industries approach the business.

And even of course, within those sectors, there are differences from company to company and we're getting a lot of – I won't say they're the only ones getting the best and the brightest, but we're getting a lot of the best and the brightest from these different industries and companies.

And so it's really, frankly, it's a lot of fun, and it's really interesting to see how those different perspectives and approaches to, to business and technical problems, all net together..

Great to hear. And then just turning to technology this is our final question, and I know you gave a lot of detail on PF versus PET in Steve Burn's second question.

But just wanted to make sure since this is a topic near and dear to your heart, is there anything else you wanted to add on the benefits of PF relative to P E T?.

You know, I think, I did cover a lot of it with Steve's question. So I won't go into a lot more detail. But I will say that there are a couple interactions that I think are really interesting to highlight. And one of them that I mentioned is the interaction between degradability and microplastics.

I think that is a particularly salient one in this particular case because often people think of degradability as a solution to a big macro almost aesthetic problem, right. I look into the ocean or the river, and I see these big pieces of plastic floating around, and that's the thing that they are worried about.

But the reality is that microplastics are a much more sort of clear and present issue from a technical standpoint. You can't see them, but they're important from a variety of, for a variety of reasons.

And the other thing that's really important, there is something may not degrade rapidly at a macro perspective, but it may degrade much more quickly at a microscopic level. And so sort of solving for microscopic degradation, I think is the most important technical challenge on the degradable side of plastics.

And so we're really excited about the way that that FTCA can help polyester specifically in that area..

Appreciate it, John and thanks so much Rich, as well. I want to also thank all the investors who submitted their thoughtful questions. We really appreciate your participation. With that we'll conclude today's Q&A portion of the call. I'll turn it back to Rich for closing remarks..

Thanks Ashish. And thank you all for joining us today. We look forward to keeping everyone updated on our progress. Have a great day..

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day..