Origin Materials, Inc. (ORGN) Earnings Call Transcript & Summary

All right, to get started. So first, I'm going to introduce myself, no knows who I am, and then I'm going to describe how we came to be conducting an interview like this in the first place and sort of we're trying something new here and why we're doing that. So to take off, I'm Ryan Smith. I'm a co-founder with John at Origin Materials. And through most of the company's history, I was CTO, and over the last several years, I've been focusing increasingly on products. So today, I'm Chief Product Officer. And this interview grew out of an interest from many of our retail investors. There's a community that comprised of Origin retail investors, and they reached out and they said, "Can we have some kind of interview or a live AMA session or something like that for the community that's been asking a bunch of things." And so we were intrigued by that, and we've been wanting to up our communications game and develop more communication channels outside of just our earnings calls and press releases. But there are challenges with a lag session with a limited investor audience, which triggers disclosure issues with the SEC and 8-K filings, et cetera. And so -- in addition to that, we thought an interview would also benefit from having you guys interviewed by someone who knows the engineering and the chemistry, the technology, the business and knows you. And so that me, and then the questions that I'm going to be using are questions that the investors submitted themselves. So they listed out 40 to 50 questions, and then I engage with them to really understand what was driving and motivating the questions that they have. I did spend some time with investors talking about that. And so while today, in this particular segment, we're not going to get to everything, I did distillate down to it I think, what are some of the core issues and questions that they raised, and we'll get to that. And then we'll have some follow-up to make sure that we really get to everything because that's important. So, to kick it off, I'm going to start with a question to you, Rich. And before I launch in, I do want to read our safe harbor statement, which we read for every earnings call. So it goes, please note that some of what you will hear during our discussion today will consist of forward-looking statements and 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, and that's as of today's 4/11. And so we've got a set of topics we're going to hit. I think Rich and Matt, I think you've seen some of this. And John, I don't think you've seen any of these questions.

I have seen none of them.

so just a there's a little bit of an element of sport associated with this perhaps all right. But we're going to start off with -- and I am going to put this to you, Rich and Matt and John feel free to weigh in. But it comes down to this question around the $1 minimum share price. And essentially, there were several questions that were pertaining to this. People are wondering how we were treating it or thinking about it. People were wondering if we're going to consider a share buyback, if we're expecting a reverse split or if we're just simply confident that it's going to grow above $1 over the time period that it needs to do that. And so I wanted to ask you specifically -- can you describe how you're thinking about this, the stock price I looked this morning sort of between $0.60 and $0.70. And what are the options that you're anticipating to kick it up over this minimum for the NASDAQ minimum bid price.

Sure. Well, maybe I'll start with how the delisting process works, just to sort of set the stage. So the company has two 180-day grace periods basically, we're in the first one and the second one will start in July, which effectively gives us until the end of this year For the stock to trade above $1 for 10 consecutive days. And if that were to not happen, we would do the very standard reverse stock split, which moves the stock above $1. And that's the standard way company list their share price above $1 and comes back into compliance with the listing requirements. We're optimistic it will get to that because we laid out a game plan on our last earnings call that with our existing cash on hand, and our incredibly promising caption closures business, which is a very near-term, high-margin business that we can get people excited about the stock, that excitement would lift the stock above the dollar and who knows where. And so we wouldn't have to do to sort of the gymnastics of reverse stock splits and things like that. And so we talk a little bit more about that plan. And so we laid out a plan to be in market within 12 months with a very exciting breakthrough, first cap made from PET that's been commercially produced. We have partnerships coming in place with the -- our manufacturing partners and tremendous customer interest and what we hope to do over the coming months and quarters is really fill in that picture more for people. And as investors see that story coming true, the stock price will follow their confidence that we will get to profitability on our cash flow, and we won't be trading below our cash value. And so we think the stock is exceptionally undervalued at these levels. And I saw that there was even questions about considering share buybacks and so I'll touch on that, some of you have probably heard us say that we think we have an absolute world-class board. It's really a competitive advantage for Origin is the incredible talent and experience around our board room table. And allocating capital is a core part of our board's responsibility, and we take that really seriously. And so share buybacks are something that we talk about and at the appropriate time, something that we would absolutely consider. And so that's -- nothing to announce on that now, but that is an active topic of discussion.

That's great. So -- and we want to get more into the Caps business, I think what you're describing makes sense, and there are these different options, whether it's reversed split or even share buybacks. These are all sort of under consideration and represent sort of backstops and forward-looking activities that we could engage in.

Yes, that's kind of the way I -- Rich really nicely, and you just mentioned it again. But I think thinking of these as different options that can be used in different cases, right, is really valuable. It's first, of course, we think that as we progress on these businesses, that's going to organically raise the price of the stock above the point that we're concerned about, right? And we've already seen a little bit of that with the announcement that we had last week around or by the time it [ published ] maybe a couple of weeks ago and around putting wood into 01, right? That showed quite a bit of [ fitting ] activity, and we think it was the right kind of [fitting ] activity. But -- and we think as we progressively announced progress on these -- on our various businesses that that's going to keep happening, right? That's not a one-off kind of thing. So that's one. Two, the reverse split is really, it's a lever that we can determine at split, pull when we want to. And that's sort of -- you called it a back stop, I think that's a really nice way to think about that.

Perfect. All right. And I don't want to spend too much time on share. I want to get into the content of the business. Let's talk about sort of core origin stuff. And John, I'm going to put this one to you first and Rich, I hope to get your input as well. But John, you just mentioned it about the idea of going to announcing sort of new businesses over time and the impact that has on stock price, but I want to kind of zoom out a little bit on that idea a little bit more because we've already been doing that. We've been announcing things. And I noticed that a lot of the questions that investors have whether it was about one or two or the Cap business or the bioconversion process. As I was sort of tracing to the questions, I noticed, I would have asked that slightly differently. And as I kept trying to sort of uncover what was sort of unique about some of them. It's that there still is some persistent people like confusion or ambiguity about Origin's broader business model. And so while we'll get into some of the details of the technology and OM1 and Caps and Closures business in here, I wanted to give you a chance to kind of talk about how those pieces fit together, like in the jigsaw puzzle Origin put the pieces together, what's the picture that we're left with. What's like the larger vision, whether it's sort of the strategy or to the business model, I think a lot of questions are sort of rooted in trying to understand how all of that fits. So whether it's bioconversion process, Caps and Closures, OM1, but like I think sort of zooming out and kind of what do we need to understand in order to understand what Origin is doing.

Yes. So I think -- at its core, what we're doing is really quite simple to communicate, but there's a lot to unpack from it. So the really simple thing that we're doing is we are commercializing the Furan opportunity. Furan as a monomer. There -- that can be made available to the chemical industry. That's really the drive. It just turns out that a lot of these things are hooked on to that core concept. So if we look at PET or sometimes I'll say more broadly polyester, right, we connected the Furan opportunity to polyester by our technology convert CMS in MS and then [ dinotefuran ] and then into [ pyroxylin ] using that particular chemical technology. So suddenly, those who are associated when they wouldn't intuitively be otherwise. Similarly, as we look at the various kinds of products off of CMS, right, that's an expansion of this Furan concept, right? That's commercially available Furan, being used in all these other applications, paints and coatings, right? Even fuels, it turns out the fuels business that we're talking about is a co-product of the production process, we think makes the most sense for making commodity scale Furan right? And so all of this stuff is linked by either the Furan product or the process to make Furans. That's sort of the key linkage between all these things. But then, of course as you explore that production process and the product on the other side, you run into opportunities. That's just the way that works. And you can't only see exactly what all those opportunities are going to be upfront or you may be -- you certainly can't take them all and you can't see which ones are going to end up being interesting or not. Right? And so what I think, in some ways, people are seeing is us walking down the path of that Furanic commercialization. So when you look at OM1 and OM2, that's the scale up of the production process that we think makes the most sense for making Furans scale. As you look at FECA and fuels and HTC. This is the commercialization of the coproducts that come with the production of Furans at commercial scale. As you look at the specialty chemicals and other kinds of applications, that's us discovering how Furans can be used in different ways to make different types of products that really aren't available in the same way right now, or at least with the same performance in renewables content. And then as you look at like -- the CAPS business is the one that I think some of those people have the most trouble understanding. But really, that's an opportunity that is connected to this core capability we built around PET and polyester and how to use those things. And we have the confidence to go into it because we knew that Furans could enable the production of polyester Caps, if you can use Furans in power. It turns out that you don't have to, right? But that was why we got to do it in the first place. So the whole thing is a thread -- the thread that goes through everything is the exploration of Furans as a core material that's available in a general sense. And everything is around that. What's difficult, I think, is that if you don't have sort of the technical thread that is intuitive to go through this, it looks like a random smattering of sort of stuff, but it's not, not at all. It's very tightly linked to the logical commercialization of Furans as a material. And you see this, by the way, historically also. So if you go back and you look at the development of prior chemical platforms, which typically haven't happened recently. Most of the time, they happened a while back, decades ago. But if you go back and look at that, you can see the same kind of walk that was being taken by the people who are developing those types of chemical platforms. So that's sort of my view on what we're doing and how it's working out this way.

I want to double click on something here because the way you're describing it, I agree, by the way, but the way you're describing it is Furans are unlocking all this opportunity for you, why weren't the big chemical companies doing this 20 years ago? Or what is it -- how do we identify this as sort of a unique unlock for the industry if you want to speak to that a little bit, I think that will sort of help contextualizing further.

Sure. Well, I think that they were, they were just doing it for different platforms, right? So you saw it with the olefin platform, and you could even more specifically say the ethylene platform, right? So with ethylene, you saw exactly discipline, right? So you started with high-density polyethylene and then low-density polyethylene then linear low-density polyethylene then you had ethylene glycol production, which of course also comes from ethylene. And you have the same sort of platform expansion, what's the relationship between ethylene glycol and linear low-density polyethylene, not much, except that they're linked by the core technology that's used and that enables both of them, right? And yet, if you go back and look at the development of the ethylene glycol, they were both developed by the same companies. And so -- and of course, you -- once you have ethylene glycol you start looking at other things, you can do with ethylene glycol, once you have linear polyethylene, you start looking at other things you can do with linear polyethylene, right? And so I think the other companies were doing these things. And in fact, their exploration of those core chemical platforms took them decades. And in fact, that's what they've been doing is exploring those. That's many of the big chemical companies that we can think of. Our experience of their history is them developing these platforms that they initiated back in the '40, '50, '60 and '70.

So this -- put it another way, is this pattern of unlock isn't new. This is a pattern has been around. It's just that Furans don't come out of a refinery, right? Inside the discoveries that caters this great molecule that also has these properties that you can grab a whole of it sort of has the potential to turn into an bunch of stuff.

Right. And you asked another question, which I think Germy, why hasn't this been done before? And your point that you just made right now, I think it's the key one, which is that for the last 100-plus years, the big wave, the chemical industry has been riding is -- was fossil sources of carbon, right? And so the question has always been, what can I make from oil? And then subsequently, what can I make from natural gas that is useful, easy and inexpensive. And I think it's only relatively recently that everybody has said, well, maybe not everybody, most people have said. Okay. Maybe this whole fossil thing is not a great idea that there are some trade-offs, some meaningful trade-offs and we should have another platform of feedstock that's available. And so we have to ask the same question. What is the right thing to make that is effective and inexpensive and easy to make from other feedstocks. And those feedstocks are, I think, effectively biomass and CO2, right? Those are the two that matter at this point.

And because that's not an incremental innovation from what they've all been doing. It's required in Origin. So just -- so I want to ask Rich sort of the same question here, right? Because this thing like we get -- there's all this sort of technical underpinning, right? But Rich, as you see it, in sort of how these elements sort of connect up to the same vision or the same mission that I'm interested in your view there.

Yes. So I'll zoom out more just partially based on lack of technical attitude, but I see us as really solving some of the sustainability's hardest problems. We have a company full of advanced furanic chemists, as John was describing. We have people with incredible expertise in molecular materials. And so the things we're doing are really hard. This is like hard tech. The hard thing about hard things is a folk that really resonates with us. And if you think about everything we do from our Caps to our CMF, HTC, it's all never been done before, right? And so we would -- we have competitors and things like that because we are blazing new trails and I look at it as the world makes this once in a planet transition, this entire petrochemical complex today powered by oil and gas. That's the feedstock for all of us. And it will transition over time, and it may go at different speeds and in different ways or whatever, but I don't think there's much dispute that it will transition. And like John was saying, it's in the transition, we think to biomasses the feedstock, which is the most plentiful thing on the planet and is readily available and inexpensive and has a bunch of great attributes. And so we have the leading platform to convert that biomass into many of the things that are made today from oil and gas. And when you're commercializing a revolutionary technology like ours, it doesn't always go in the exact straight path they originally thought. And in our 12 year history, we certainly make plenty of twists and turns, but the North Star remains unchanged in terms of tackling the really hard challenges in sustainability and transitioning to biomass feedstock for a huge part of it today's petrochemical complex. So people can get the things in their lives that they need, and we just got to get them from somewhere other oil and gas over time.

That makes sense. So as we get off of the beaten path that the oil and gas guys have created and we're sort of out hacking away in the jungle. There are some twists and turns, but that north star is clearly there for us and drives us that way.

And it's been the same for whatever, 15 years , right? I mean it really hasn't changed. It's pretty shocking.

We just have a lot more talent and a lot more capital. And so we're finding it's been amazing even at my time at the company that 2 years ago, we were -- our products were sold off for 100% based on sustainability, right? It was competitively priced sustainable replacement, and that resonated hugely. You fast forward and now, yes, we've still got that, but we just keep finding more and more functional advantage. And I think that's a result of having all this talent compounding and working with these molecules and finding higher and higher value things, but it's really incredible to see the value proposition of what we're doing moves so quickly.

No, I can -- I'm sort of holding back from jumping in. I totally agree. But so let's go and connect this. So I think that's actually a very useful sort of vision and context to sort of connect up some of the specific businesses and the activities that we're engaged in. So that's kind of where -- that's why when I take the conversation next. Let's talk about some of these trends. So -- and I think this one can be squarely in John's camp. But there were a number -- not a bunch, but a few questions that were focused on certain technical issues. And it was sort of OM1, biomass conversion technology type questions, things like feedstock and a lot of those were answered with the demonstration of wood feedstock recently. But also questions about does HCL actually affect the -- does it show up in or affect the intermediates that are produced from this technology? And so I basically put it to the group of investors, I said what -- why are these the most popular questions, what's driving this? And the motivation there, they really came back to us. We do want to understand the milestones, right? And so I'm not going to ask you the commit to particular sort of milestones that we're going to sort of share with everyone. I don't think that's the focus here. It's more like helping us helping investors understand what are the milestones that we see for the biomass conversion technology and particularly in the context of OM1 and if you could speak a little bit about that sort of being as general or specific as you think is appropriate for the development of the technology.

Yeah, sure, I think maybe, first of all, actually just respond really specifically to like the HCL comments because I think those are kind of interesting anyway. How much HCL or Chlorine more specifically end up in our products? Well, -- it certainly ends up in CMF, right? I mean so CMF is Chloromethyl pelphrial. And a big part of what we do downstream is catalytically convert the CMF into the next intermediate and there are a couple of different options there. Obviously, when it's going to [indiscernible] and it's going to methylene perphorial to dimethylfuran. But -- and the goal is to recover that Chlorine, so that we can put it back in the front of the process. But characteristically, again, you don't -- you never have perfect recycling on all this kind of stuff, right? There's always going to be some leakage. Now is it inorganic Chlorine, right? Is it organic Chlorine? How are you recovering it? What are you doing with it? That's always the case. Your math is never that were perfect. And these are things that we just manage, right? This is the work of running a chemical process period. Is that you're managing these kinds of things and making decisions and trade-offs around them. And I think that leads to one of the -- the challenges in communicating around technical milestones like that, especially to the public is that -- we can't always predict what the right trade-offs are going to be for a given plant or instantiation of the technology. You know they're going to show up. There are always trade-offs in these type of technology development paths. But what we do know is what the sort of let's call them, more boring sort of financial and commercial milestones. Like more boring to me. I guess. But you don't know -- you do know how those are going to maybe work out or roughly what you think those are going to look like. But there may be lots of different ways that the technology path can sort of tortuously organize itself to ethos. And I think one of the challenges that we've had as a technology development organization that is public is we want to be transparent on these sort of things, but at the same time, I don't want to be setting out tons of milestones and then have to be constantly explaining why we made a slightly different technical decision on something, right? So that's one side. It's just there's a level of play in the way that we make decisions around a particular instantiation that it doesn't make sense to communicate out and constantly be addressing. The second part of that, of course, is that technology is also our differentiator, right? So unlike in the pharmaceutical industry, where I can get a composition of [indiscernible] and at that point, it sort of doesn't matter what I tell you, I own that molecule for that period of time. That's not how it works in our industry, right? There's enormous amounts of know-how and trade secrets and of course, patents that prevent somebody from going and duplicating what we're doing. And a big part of that is understanding the journey through all of these different technical decisions. If we communicate that journey, it makes it that much easier for somebody to come in and say, "Oh, that's what they were doing." If they're trying to replicate what they're doing, they may run into a whole smorgasbord of different issues and knowing which ones are important and which ones aren't important is enormously time saving and efforting saving. And we don't want to be time-saving and effort savings for people who are trying to do what we're doing. And that's not just for right now, right? But in 10 years, if people or 5 years or how long -- if people want to go back and rewalk the journey that we've gone through on technology, we don't want to make it any easier for them. And so -- the more we -- if we were to stand, I should say, time explaining that technology journey publicly, it makes it that much easier for somebody to go back and try to do the same thing, even if it seems like they're immaterial, it's often not immaterial for somebody who's quite technical and engaged in the project. We're even careful about exactly what angles we take all the -- pictures of all on one so that we're not to flagrantly showing sophisticated people exactly what's going on in some of the parts of that plant. And, so that's a big part of why we don't communicate more specific technical milestones on this kind of stuff. It's just -- it's difficult to do while retaining the -- let's call it proprietary knowledge of the like idea maze around a technology like this.

Yes. I think that's really helpful. It's definitely not a checklist of binary things were just sort of like a check that one...

I did that point. Now I'm good.

I think trade-offs is a good way to think about it. There are combinations of sort of settings of different parameters that work and sometimes maybe they don't. And sort of tracing out that maze as you call it, I think is useful. I wonder though, can you know, one more comment on that I think would be helpful is. Obviously, we're not the only company that's ever developed a chemical technology while we were a public company, right? What I think is helpful for people to understand is there's actually not a precedent despite the fact that people -- there are other companies that have developed chemical technologies while they were a public company, there's not really a good precedent on how to communicate on a lot of these technology issues. Because when the technology was being developed inside of a public company elsewhere, it was almost always small enough that it was immaterial to the overall story of the company. And that's a really big difference for us, right? So talking about how we proceed with and how successful we are with our various technologies is something that investors care about, right? that's not often the case. And in fact, I can't think of a time when that's been the case for another chemical technology.

Yes, that makes sense. I'm wondering. I was going to actually ask about that, but I'll take my question a little bit. I wonder if maybe there's and this might just be, I don't know, chemical engineering 101 or something, but I'm wondering is there like, can you described categorically the types of things that one would expect to look at this level of scale with a plant, the size of Origin 1? Is it equipment? Is it fundamental chemistry, like I think maybe...

WIth OM1, it's rarely fundamental -- something that scale. You're not looking at fundamental chemistry. You're looking at what are the unexpected -- well, unexpected maybe not fair. But what are the known/unknowns that, how do those manifest in your equipment or process selection, right? How are your parameters being affected, that going to be something that can change as you change scales. So it's those kinds of parameters. It's -- Infact it would be very varied. In fact, I don't think I know of a single story where the fundamental chemistry changed as you scaled? It just doesn't.

Great. Makes sense. I'm going to switch gears on to sort of take us to the next brand, which is for the Caps and Closures business. I'll start with John. Certainly if Matt and Rich do you want to chime in here, too. I think that would be useful. But One thing that I noticed is that a couple of investors used actually sort of very similar language that I heard you used John, with respect to the Caps and Closures business. They asked, "is it the saviour or a side quest?" Which I thought was kind of interesting. I heard you use that. And then it was great, someone had a follow-on question where they said, maybe it's neither, maybe this is a -- they put it. This is -- this is to Origin what explosives were to DuPont. That was kind of a really insightful way to follow up the questions. So I definitely want to ask that sort of how Caps and Closures fit into the larger model that you were describing. You talked about that a little bit, but what role is it playing specifically for us right now?

Yes, I think it's -- I think the -- I think that exclusive analogy is probably tied from a comment that I made at some point or reference from there. But I think that's right. It's sort of -- but it's even a little different than that. It's sort of like the, well, sort of say like the nylon, not making nylons from nylon for DuPont, but that's not probably quite right at. But the Caps and Closures business is a lower risk business that relies on the same differentiated capabilities that we have in the organization, which is strategic to our broader technology, Furan technology platform, but it's not dependent upon it. So it's strategic, but not dependent upon is an important combination and I think the some of the context for people on the side quest piece is a lot of these things are -- a lot of the -- because of the threat that I drew in the beginning of Furan most of these are not really side quest. The question is, what orders do you do them in and what order is optimal. And you're going to end up doing all of them eventually, right, as you develop the Furan chemistry platform. And we have lots of things that have shown up there, let's call them, like potential quest. But this one makes sense in this context right in. Because it can generate that consistent cash flow with much lower risk profiles per capital project and is still strategic to the sort of core business. Core technology business I should say. I don't know, Rich, and Matt you guys probably have...

Just maybe add that as we develop our platform, we uncover some short-cycle opportunities in addition to our sort of longer cycle. When you're building massive chemical plants, it takes years and it costs lot of capital. So as we're doing that, and we're constantly finding new things and seeing new opportunities. We identify some what I would call sort of short cycle ones where. Yes, they're consistent with the long-term strategy, but we have the ability to execute them in the near term and get to market in advance of our biomass plants being built. And so that's really exciting to us from financing the business and continuing to grow the company. And so Caps and Closures that is the first number one, where we can be in market within 12 months into a huge market with a highly differentiated product is really exciting. And there's a few more in development that have the potential to be similar and so you'll expect us to see us take advantage of these sort of shorter cycle opportunities while we continue to advance the overall platform and work on the longer cycle opportunity.

I think that's a great point. And if I could -- so the characteristic timescale component, which is a shorter time cycle. There is actually another one that I don't think -- the Caps and Closures doesn't like fit this, but I think it fits your like opportunity identification piece, which is that there are actually opportunities that -- well, let me back up. The core biomass conversion technology hypothesis is that if you can get Furan cost of production into the same general range as other petrochemical or as petrochemicals, I should say, there is an enormous number of opportunities. However, there are also Furan opportunities that don't require that same level of low-cost production, right? There are Furan opportunities which are so high value, it almost doesn't matter what the price Furan that it produces. And so that is another like the Caps and Closures one. That's another sort of abstract class or archetype of opportunity that shows up, that might be out of cycle with OM2 is where we or OM1 whatever, right? It's where we get to the OM asset-light, I don't know what you call. But that's where you get to really low cost, right, Furan. But there are opportunities that are available that are adjacent to our technology or part of our technology before you get to low cost Furans, right? And so the sequencing, I think, matters a lot, both because of the short-term cycle and because the required characteristics to make the opportunity worthwhile are different.

No, I think that's really helpful. Especially as we sort of think forward like as we announce new opportunities, contextualizing it, I think in terms of the short-cycle opportunities, which I think makes a lot of sense. And then, I'll call it, sort of higher-value opportunities on Furans really, if you're sort of charting a core kind of strategy to get to the place where you got these large OM, OMX plants that have low-cost Furans and then everything sort of opens up and is available. So -- that -- I think that's a very useful way of putting it.

Right, risk of not stating the obvious job one for us right now is getting to profitability and Caps and Closures is of all the opportunities that we have is the one that has the highest probability of driving us there, the soonest. So that -- that is, in fact, what we tried to communicate on the earnings call and why this has come to the forefront. It's totally on mission. It's an enormous market, which is wonderful. But it gets us where we need to be to do all the other things that we want to do.

And to that point, like I always like to tell the history on this stuff, but Dow Chemical did the same thing, like they are making Bromites even though the vision for the core outline process was making Chlorine and Caustic. But that wasn't where they started. They started with Bromites because it was a cash flowing in side quest, you could call it, right, if you want.

So let's talk about the cash flowing piece here, Matt, I'm going to ask you. As I was chatting with the investor set day, there's a lot of. Very strong sentiment, a lot of energy around this idea of trying to characterize what that business is in terms of how much revenue this is going to produce, this kind of thing. And I was sort of pushing like why is everyone so animated around this particular topic. And then someone just kind of came out that said, right, we like the mission, I think John is the genius, but can some just give us something to build a model with the way they stated it and so -- and you and I talked about this a little bit, Matt. But I guess can you help sort of explain will Origin be able to provide something or what have we been providing that can be used to build a kind of economic model, the Caps and Closures business or the enterprise as a whole, what's -- what are the relevant pieces there that we've been putting forward and that we would plan to put forward in the future.

Yes, sure. That's great place they are right now in terms of wanting to know that information. And we're eager to share more as we get further along in the business. But it's important, I think, to start with the guidance that we did give because I think it's really, it says a lot, and you can infer from it even more. What we -- the guidance we gave at the earnings call in February was that knowing that we ended 2023 with about $160 million in cash, we said that we would be able to get to profitability off of those funds alone. We all gave further guidance that we would burn -- cash burn would be between $55 million and $65 million in 2024. And two other important points. One was that we wouldn't need to go to the capital markets and raise additional equity and that we would be able to get to profitability, strong sustained profitability based on this plan while maintaining a pretty healthy cash balance at all times. And you can say, okay, what is that? Well, a lot of folks think of having at least a year's worth of runway in the bank is a good thing to serve as a cash deck, so to speak, or bottom deck. And -- and so that guidance, if you kind of think about it and say, okay, well, that means we're probably going to end the year at around $100 million in cash. That's going to get into profitability and they were burning between $55 million and $65 million in '24, you kind of draw a line to see what kind of margin we have to generate to be able to do that. And you know what our operating expenses are coming out of the year, so you can kind of interpolate with some assumption around gross margin, what the quantum of revenue is going to be. So there's more there than maybe people really understand and appreciate. So it's important to kind of provide that recap because at the macro level, that's almost all you need to know. And if you assume that most of that margin and revenue will be driven from Caps and Closures, which is what we also indicated. You start to get a feel for amount of visibility we think we have into that business. Furthermore, if you think about those businesses and what we said about the group of prospects that we have in letter of intent stage and in our pipeline, they represent a lot of Cap production and sales globally. And we said tens of billions. It's a big number. It's also existing business, okay? So when we think about how we're going to be adopted into those volumes, it's really pretty predictable. It's recurring revenue. And it's going to be produced on manufacturing lines that are pretty standard and consistent. So the metrics are going to be pretty simple. We want to be careful not to go into too much detail too quickly because we need to preserve competitive propriety around this because it's very competitive, and this is a very unique opportunity we want to stay as far in the lead out as we can. So as we start to really close out these agreements, spend more time with our analysts aligning them around this being kind of the tip of the spear over the next 3 years. Yes, we expect more of these metrics will start to come out and be available. But I think it's all premature to go any further into it than that. But I think we have given a fair amount of really, I think, meaningful guidance that should hopefully satisfy folks that we've got a good sense for where we're going, how long it's going to take us to get there. And that as we announce some of the news coming forth about how we're doing. I think when you start to put this together and people feel a lot better about being able to envision what this looks like in the next 12 to 24 months.

I think that's great. So you've kind of laid out some of the dots that could be connected today, and there are more dots to connect in the future as the metrics emerge. I think that's -- that's actually very helpful. So all right. I think I've only got one other question I wanted to make sure we hit in this segment, and then we'll have a follow-up to really run through the remaining questions that we weren't able to get to in this segment today. And this can kind of go to anyone, Rich or John. But we heard a couple of times that investors hear about products, I think Carbon Black, biofuels, some of the HCCA stuff. As well as partnerships, but then don't always know what happens to those after those get announced. So for example, last year, there was a technical announcement around performance in a carbon black environment. That was really exciting. We talked about biofuels, and we talked about some other partnerships. How -- and I think that's starting to make -- it should make more sense in the context of what we were discussing before about these sort of short-term cycle opportunities and high value. But as announcements like that continue to pop up, how should investors or anyone tracking origin think about those in the context of the larger business?

Yes, interesting question. I mean, so it is difficult to see and frankly, we kind of make it intentionally a little bit hard to see this. The connection directly between an individual customer, a white paper like that carbon black, white paper from while back and like an offtake increase, right? And the fundamental challenge there is that we don't want and our customers don't want us to point to exactly the price and volume -- price that they're paying for a particular volume of a particular product. And in some cases and we've mentioned -- and this is more and more true as we get to more performance differentiated products. Our customers really don't want us necessarily even talking about the specific product we are providing them, right, or that they're going to make out of an intermediate. And so it is -- I can understand why it doesn't feel like a nice straight line path to people. And I don't know if it ever will. I think the intent is for people to say, okay, look, I understand that you have these customers, and I can look at them and maybe I can get a feel for what Origin is probably selling. And I can do that because Origin told me sort of the suite of products that are possible to make from Origin intermediates and technology. And I even understand really sort of how they're making some of those products from either the white papers that Origin typically publishes or something along those lines, it could be journal articles or whatever else or just from general industry announce, right? I sort of look at or [indiscernible] told me what sort of what HTC is, and so I can take that plus Kirk-Othmer Chemical Encyclopedia and I can say, when they say they're making this, they'll probably doing it kind of like this,something like that. Right? That's kind of the intent of laying all those things out. The challenge is that requires a lot of industry and technical knowledge. It may not be specific Origin industry technically, but it is chemical industry specific and technical knowledge. And of course, we would like to sort of remediate the need for people to have all that stuff. But if we start pointing to specific things, to help people sort of put those together, well, then we're actually -- we're giving more information just by privilege the fact that we're pointing to that thing. And so it's a little bit challenging on that front. I think -- I think part of this is just having a sufficient body of information out there, people will start to understand what are the sort of class of the things that we're doing, and we're trying to figure out how to teach that more, too. So people can connect those dots on their own a little bit better. But it is -- I'll say it is challenging, right? In the same way that it can be challenging for people to see how all of these businesses are connected because in many ways, they're actually connected technical, right? They're not necessarily connected in any other way. And if you don't have that technical skeleton, it seems incoherent, right? But when you have the technical skeleton infrastructure for it, it's very coherent, right? And so I think we're getting better at that. We're trying to figure out the right ways to talk about those things so that people can connect, customer announcements to white papers to products. But it's fundamentally, it's sort of a hard thing.

Yes, I would just add, if you think about it as we're constantly trying to up value the platform. And so for example, with HTC, 2 years ago, we assumed that our early HTC would go into fuel wells and be sold effectively for its BTU value. We have reason to believe we'd get the carbon black, but we weren't ready to say that and have sufficiently proven it. And so when we did sufficiently proven it to carbon black, we sort of plant that flag and dramatically up value our HTC intermediate and then what happens from that is now we go engage the Carbon Black words, existing manufacturers, customers of Carbon Black, tire companies and all those kind of folks. Because now we've come across the technical milestone and said, we're here carbon black World with a highly differentiated solution to a big problem you're trying to solve. And so then you go to a period of how do you take back to the next level, and that requires more samples and more complex relationships and stuff like that. We did a similar thing with Caps and Closures when we planned the flag and said, we have figured out the PET Cap. And the phone rang off the hook the people from the Caps and Closures, who we didn't know as well as we knew. So if you look at a whole new world. And so then we start figuring out who should we partner with for this part in that part. And then what you'll see likely is the output of those conversations and us taking that to the next level. And so some of it is really sort of planting a flag, out valuing some aspects of the platform. Which is really exciting for our techno-economics and really exciting in terms of addressable market and all the places that our intermediates can go.

And so planting that flag, there's also sort of an iterative quality to this where there's sort of a common response. You put it out there, the phone starts ringing, you are like, okay, now we put more strategic weight on that particular approach.

That's a good point, too. I really like the just said that both against. Because I think probably helpful for people to understand that we may talk about something in an investor communication. And yes, of course, the investors are part of the audience. But the most important audience may actually not be investors for that particular communication. The most important audience may be customers and partners.

And what's great is then we bring in partners to stay with Carbon Black. So we know a lot about our carbon black, but there are there are companies who do nothing but Carbon Black and have been a nothing but carbon black for a really long time and are full really talented people who are world experts in Carbon Black. And so that up levels the conversation. That brings more talent working with our platform and figuring out how to best place for to go, sequence and all that kind of stuff. And so those are more ways that you build a really robust platform is by exposing it to these different companies and partners and having them join the journey.

That's great. So time to flags, other kinds of communications figuring how to tell the story. I think this conversation has done a lot of that. I think there's a lot of contact that was built here. I'm excited to have some follow-up segments for you guys to really sort of pick through the remaining items that came forward and the question set. But I think this is a good start. So really appreciate it. Thanks.

Thank you.