Business Wire | Nov 11, 2021 04:01PM EST

Origin Materials, Inc. Reports Financial Results for Third Quarter 2021

Nov. 11, 2021

WEST SACRAMENTO, Calif.--(BUSINESS WIRE)--Nov. 11, 2021--Origin Materials, Inc. ("Origin," "Origin Materials," or the "Company") (Nasdaq: ORGN, ORGNW), the world's leading carbon negative materials company, today announced financial results for its third quarter ended September 30, 2021.

"We continue to make progress on our mission to enable the world's transition to sustainable materials and are pleased to have completed the installation of the key production modules at Origin 1, six months ahead of the plan we announced in April 2021. As the world moves more aggressively to a zero-carbon future, customer demand remains strong, and our efforts to commercialize the business have resulted in increased offtake agreements and capacity reservations from our customers and partners to $4.2 billion. This is more than a 300% increase since our announcement to become a public company in February 2021. We were pleased to announce our recent strategic partnership with Kolon Industries, Inc., a global leader in chemicals and materials, as well as our sustainability partnership with the Drive+ network, which includes 11 of the world's largest automakers working to accelerate the decarbonization of the auto industry. We remain well-capitalized, on budget, and on track for completion of Origin 1 by the end of 2022 and for Origin 2 to be completed by mid-2025," said Rich Riley, Co-Chief Executive Officer of Origin.

Key Company Q3 Highlights

Origin Materials has increased signed offtake agreements and capacity reservations to $4.2 billion from $3.5 billion in August. The Company also implemented new and expanded partnerships and customer relationships, including:

* Partnership with Kolon Industries to industrialize advanced carbon-negative chemicals and materials. * Partnership with Drive+, a platform of automotive suppliers which is in close collaboration with Drive Sustainability, a group of 11 of the world's largest automotive manufacturers, including Volkswagen, Daimler, Ford, Stellantis and Toyota Motor Europe among others, aiming at further developing sustainability along the automotive supply chain. * Partnership with Alliance to End Plastic Waste, which includes industry leaders across the plastics value chain, working towards a common goal of developing, deploying and scaling solutions to help end plastic waste in the environment.

These partnerships complement Origin's existing partnerships and customer relationships including with industry leaders like Danone, Nestl Waters, PepsiCo, Ford Motor Company, Mitsubishi Gas Chemical, PrimaLoft and Solvay.

Origin 1 and Origin 2 Financing and Construction Update

Since selecting Worley Limited as an engineering partner in Q3 2021, Origin has updated its original payment schedule for Origin 1 after incorporating detailed feedback from equipment suppliers and contractors, while reaffirming the Origin 1 capital budget and schedule. Additionally, Origin is reaffirming the previously disclosed Origin 2 capital budget and production timeline. Leading financial institutions that have expertise in financing similarly sized capital projects continue to confirm to the Company that its financing assumptions for Origin 2 are reasonable and executable. Origin reaffirms its expectations that the capital projects for Origin 1 and Origin 2 can be fully funded from its existing cash on hand and previously indicated traditional project financing sources.

Although the timing of capital expenditures will be incurred later than Origin's original projections, Origin 1 remains on track for completion by the end of 2022. The lifting and installation of previously fabricated key production modules was completed in October 2021, six months ahead of the Company's plan announced in April 2021. Origin expects piping fabrication to begin by the end of Q1 2022, three months ahead of its prior target of end of Q2 2022. Additionally, ENCON evaporator module installation is expected to be completed by the end of Q4 2021, three months ahead of schedule, as the Company previously expected to receive the module by the end of Q1 2022.

Similarly, Origin 2 remains on track for completion by mid-2025. As announced previously, the Company has appointed Worley as its FEL1 engineering partner. Origin is also working with Worley, Deloitte Consulting and Fisher International to select the site for Origin 2, which Origin expects to choose by the end of 2021 with an announcement of selected site in Q1 2022, in line with prior guidance. The Company has short-listed three locations for final diligence and negotiations and has acquired an option to purchase one of the sites. Origin remains focused on recruiting additional talent to its engineering and site selection project management teams as planning for Origin 2 is underway.

Results for Third Quarter 2021

Cash, cash equivalents and marketable securities were $460 million as of September 30, 2021.

Operating expenses for the third quarter were $7.1 million compared to $2.0 million in the prior year period.

Adjusted EBITDA loss was $(5.7) million for the third quarter compared to a loss of $(1.9) million in the prior-year period.

Net income was $27.9 million for the third quarter compared to a net loss of $(3.1) million in the prior-year period.

Shares outstanding as of September 30, 2021 were 136.8 million excluding 4.5 million shares held by a certain stockholder that are subject to forfeiture based on share price performance targets previously disclosed in our filings.

Full Year 2021 Outlook

Based on current business conditions, business trends and other factors, the Company is maintaining previous guidance for Adjusted EBITDA loss but is updating its capital spending outlook, and now expects:

* Adjusted EBITDA loss of up to $25 million, consistent with prior outlook * Capital spending is expected to be approximately $45 million compared to the prior outlook of up to $111 million, due to refinement of the payment schedule since selecting an engineering partner. This has no impact on the construction timelines of both Origin 1 and 2, or total capital expenditures, which remain on track.

For a reconciliation of a non-GAAP figure to the applicable GAAP figure please see the table captioned 'Reconciliation of GAAP and Non-GAAP Results' set forth at the end of this press release. These expectations do not consider, or give effect to, among other things, unforeseen events, including changes in global economic conditions.

Webcast and Conference Call Information

Company management will host a webcast and conference call on November 11, 2021, at 5:00 p.m. Eastern Time, to discuss the Company's financial results.

Interested investors and other parties can listen to a webcast of the live conference call and access the Company's third quarter update presentation by logging onto the Investor Relations section of the Company's website at https://investors.originmaterials.com/.

The conference call can be accessed live over the phone by dialing 1-855-327-6837 (domestic) or + 1-631-891-4304 (international). A telephonic replay will be available approximately two hours after the call by dialing 1-844-512-2921, or for international callers, +1-412-317-6671. The conference ID for the live call and pin number for the replay is 10016941. The replay will be available until 11:59 p.m. Eastern Time on November 25, 2021.

About Origin Materials, Inc.

Headquartered in West Sacramento, Origin Materials is the world's leading carbon negative materials company. Origin's mission is to enable the world's transition to sustainable materials. Over the past 10 years, Origin has developed a platform for turning the carbon found in inexpensive, plentiful, non-food biomass such as sustainable wood residues into useful materials while capturing carbon in the process. Origin's patented technology platform can help revolutionize the production of a wide range of end products, including clothing, textiles, plastics, packaging, car parts, tires, carpeting, toys, and more with an ~$1 trillion addressable market. In addition, Origin's technology platform is expected to provide stable pricing largely decoupled from the petroleum supply chain, which is exposed to more volatility than supply chains based on sustainable wood residues. Origin's patented drop-in core technology, economics and carbon impact are supported by a growing list of major global customers and investors. For more information, visit www.originmaterials.com.

Non-GAAP Financial Information

To supplement the Company's financial results presented in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), the Company also uses non-GAAP financial measures, including adjusted EBITDA, as supplemental measures to review and assess the Company's operating performance. Adjusted EBITDA is defined as net income or loss adjusted for (i) stock-based compensation expense, (ii) depreciation and amortization, (iii) interest expense, net of capitalized interest, (iv) change in fair value of derivative liability, (v) change in fair value of warrants liability, (vi) change in fair value of earnout liability, (vii) professional fees related to completed mergers, and (viii) other income, net. The Company believes that these non-GAAP financial measures provide useful information about the Company's operating results, enhance the overall understanding of the Company's past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making.

Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools, and when assessing the Company's operating performance, investors should not consider them in isolation. In addition, calculations of this non-GAAP financial information may be different from calculations used by other companies, and therefore comparability may be limited.

The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating our performance.

For more information on this non-GAAP financial measure, please see the table captioned "Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally are accompanied by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "predict," "potential," "seem," "seek," "future," "outlook," and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding Origin's business strategy, estimated total addressable market, access to traditional financing sources, budget and timelines to complete Origin 1 and Origin 2, commercial and operating plans, product development plans, anticipated growth and projected financial information. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of the management of Origin Materials and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Origin Materials. These forward-looking statements are subject to a number of risks and uncertainties, including that Origin Materials may be unable to successfully commercialize its products; the effects of competition on Origin Materials' business; disruptions and other impacts to Origin Materials' business as a result of the COVID-19 pandemic and other global health or economic crises; changes in customer demand; failure to realize the anticipated benefits of the business combination; failure to access needed capital from traditional financing sources and those factors discussed in and our Quarterly Report on Form 10-Q under the heading "Risk Factors," and other documents Origin Materials has filed, or will file, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Origin Materials presently does not know, or that Origin Materials currently believes are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Origin Materials' expectations, plans, or forecasts of future events and views as of the date of this press release. Origin Materials anticipates that subsequent events and developments will cause its assessments to change. However, while Origin Materials may elect to update these forward-looking statements at some point in the future, Origin Materials specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing Origin Materials' assessments of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Origin Materials, Inc.

Condensed Consolidated Balance Sheets

September(In thousands, except share and per share data) 30, December 31, 2021 2020 (Unaudited)

ASSETS

Current assets

Cash and cash equivalents $ 459,288 $ 1,309

Restricted cash $ 490 $ 565

Other receivables $ 262 $ 48

Grants receivable $ 16 $ -

Prepaid expenses and other current assets $ 3,862 $ 144

Total current assets $ 463,918 $ 2,066

Property, plant, and equipment, net $ 49,951 $ 45,104

Intangible assets, net $ 225 $ 258

Total assets $ 514,094 $ 47,428



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable $ 1,783 $ 2,700

Accrued expenses $ 1,135 $ 593

Derivative liability $ - $ 1,239

Stockholder convertible notes payable $ - $ 3,232

Total current liabilities $ 2,918 $ 7,764



PPP Loan $ - $ 906

Earnout liability $ 136,199 $ -

Canadian Government Research and Development $ 6,485 $ 6,197 Program Liability

Redeemable convertible preferred stock warrants $ - $ 19,233

Assumed common stock warrants liability $ 55,698 $ -

Stockholder note $ 5,189 $ 5,189

Related party other liabilities, long-term $ 5,669 $ 5,517

Other liabilities, long-term $ 2,984 $ 2,500

Total liabilities $ 215,142 $ 47,306



Commitments and contingencies (See Note 18)



STOCKHOLDERS' EQUITY

Preferred stock, $0.0001 par value, 10,000,000shares authorized; no shares issued $ - $ - and outstanding as of September 30, 2021 andDecember 31, 2020

Common stock, $0.0001 par value, 1,000,000,000shares authorized; 136,754,685 and $ 13 $ 6 70,266,925, issued and outstanding as of September30, 2021 and December 31, 2020, respectively

Additional paid-in capital $ 360,566 $ 98,620

Accumulated deficit $ (62,035) $ (98,888)

Accumulated other comprehensive income $ 408 $ 384

Total stockholders' equity 298,952 122

Total liabilities, redeemable convertible preferred $ 514,094 $ 47,428 stock and stockholders' deficit

Origin Materials, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

(In thousands, except share and per share data)

2021

2020

2021

2020

Operating Expenses

Research and development

$

1,957

$

1,190

$

5,605

$

3,313

General and administrative

5,043

737

13,210

2,040

Depreciation and amortization

126

102

363

306

Total operating expenses and loss from operations

7,126

2,029

19,178

5,659

Other (income) expenses

Interest expense, net of capitalized interest

-

54

2,839

167

Change in fair value of derivative liability

-

67

1,426

52

Change in fair value of warrants liability

(13,481)

1,024

7,363

1,128

Change in fair value of earnout liability

(21,511)

-

(67,008)

-

Other income, net

(27)

(68)

(651)

(237)

Total other (income) expenses, net

(35,019)

1,077

(56,031)

1,110

Net income (loss)

27,893

(3,106)

36,853

(6,769)

Other comprehensive income (loss)

Foreign currency translation adjustment, net of tax

(1,068)

(3,613)

24

(1,010)

Total comprehensive income (loss)

26,825

(6,719)

36,877

(7,779)

Net income (loss) per share, basic

$

0.20

$

(0.05)

$

0.41

$

(0.11)

Net income (loss) per share, diluted

$

0.20

$

(0.05)

$

0.39

$

(0.11)

Weighted-average common shares outstanding, basic

136,749,956

62,545,275

89,244,640

62,544,818

Weighted-average common shares outstanding, diluted

141,239,965

62,545,275

94,029,056

62,544,818

Origin Materials, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

(In thousands,except share and per 2021 2020 2021 2020share data)

Operating Expenses

Research and $ 1,957 $ 1,190 $ 5,605 $ 3,313 development

General and 5,043 737 13,210 2,040 administrative

Depreciation and 126 102 363 306 amortization

Total operatingexpenses and loss 7,126 2,029 19,178 5,659 from operations

Other (income) expenses

Interest expense,net of capitalized - 54 2,839 167 interest

Change in fair valueof derivative - 67 1,426 52 liability

Change in fair valueof warrants (13,481) 1,024 7,363 1,128 liability

Change in fair value (21,511) - (67,008) - of earnout liability

Other income, net (27) (68) (651) (237)

Total other (income) (35,019) 1,077 (56,031) 1,110 expenses, net

Net income (loss) 27,893 (3,106) 36,853 (6,769)

Other comprehensive income (loss)

Foreign currencytranslation (1,068) (3,613) 24 (1,010) adjustment, net oftax

Total comprehensive 26,825 (6,719) 36,877 (7,779) income (loss)

Net income (loss) $ 0.20 $ (0.05) $ 0.41 $ (0.11) per share, basic

Net income (loss) $ 0.20 $ (0.05) $ 0.39 $ (0.11) per share, diluted

Weighted-averagecommon shares 136,749,956 62,545,275 89,244,640 62,544,818 outstanding, basic

Weighted-averagecommon shares 141,239,965 62,545,275 94,029,056 62,544,818 outstanding, diluted



Origin Materials, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Nine Months EndedSeptember 30,

(in thousands)

2021

2020

Cash flows from operating activities

Net income (loss)

$

36,853

$

(6,769)

Adjustments to reconcile net loss to net cash from operating activities:

Depreciation and amortization

362

306

Stock-based compensation

4,808

78

Amortization of debt issuance costs

14

130

Accretion of debt discount

2,211

40

Change in fair value of derivative liability

1,426

52

Change in fair value of warrants liability

7,363

1,128

Change in fair value of earnout liability

(67,008)

-

Changes in operating assets and liabilities:

Other receivables

(214)

954

Grants receivable

(16)

87

Prepaid expenses and other current assets

(3,677)

3

Accounts payable

(1,063)

(301)

Accrued expenses

3,173

196

Related party payable

152

205

Net cash used in operating activities

(15,616)

(3,891)

Cash flows from investing activities

Purchases of property, plant, and equipment, net of grants

(5,113)

(1,404)

Net cash used in investing activities

(5,113)

(1,404)

Cash flows from financing activities

Proceeds from notes payable, net of debt issuance costs

11,707

906

Proceeds of short-term debt

-

501

Payment of short-term debt

(906)

-

Proceeds from Canadian Government Research and Development Program

287

1,205

Issuance of common stock

56

1

Business combination, net of issuance costs paid

467,530

-

Net cash provided by financing activities

478,674

2,613

Effects of foreign exchange rate changes on the balance of cash and cash equivalents, and restricted cash held in foreign currencies

(41)

58

Net increase (decrease) in cash and cash equivalents, and restricted cash

457,904

(2,624)

Cash and cash equivalents, and restricted cash, beginning of the period

1,874

3,612

Cash and cash equivalents, and restricted cash, end of the period

$

459,778

$

988

Origin Materials, Inc.Reconciliation of GAAP and Non-GAAP Results

We believe that the presentation of Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA) is appropriate to provide additional information to investors about our operating profitability adjusted for certain non-cash items, non-routine items that we do not expect to continue at the same level in the future, as well as other items that are not core to our operations. Further, we believe Adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against that of other peer companies using similar measures.

We define Adjusted EBITDA as net income or loss adjusted for (i) stock-based compensation expense, (ii) depreciation and amortization, (iii) interest expense, net of capitalized interest, (iv) change in fair value of derivative liability, (v) change in fair value of warrants liability, (vi) change in fair value of earnout liability, (vii) professional fees related to completed mergers, and (viii) other income, net.

Origin Materials, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended September 30,

(in thousands) 2021 2020

Cash flows from operating activities

Net income (loss) $ 36,853 $ (6,769)

Adjustments to reconcile net loss to net cash from operating activities:

Depreciation and amortization 362 306

Stock-based compensation 4,808 78

Amortization of debt issuance costs 14 130

Accretion of debt discount 2,211 40

Change in fair value of derivative liability 1,426 52

Change in fair value of warrants liability 7,363 1,128

Change in fair value of earnout liability (67,008) -

Changes in operating assets and liabilities:

Other receivables (214) 954

Grants receivable (16) 87

Prepaid expenses and other current assets (3,677) 3

Accounts payable (1,063) (301)

Accrued expenses 3,173 196

Related party payable 152 205

Net cash used in operating activities (15,616) (3,891)

Cash flows from investing activities

Purchases of property, plant, and equipment, net of (5,113) (1,404) grants

Net cash used in investing activities (5,113) (1,404)

Cash flows from financing activities

Proceeds from notes payable, net of debt issuance 11,707 906 costs

Proceeds of short-term debt - 501

Payment of short-term debt (906) -

Proceeds from Canadian Government Research and 287 1,205 Development Program

Issuance of common stock 56 1

Business combination, net of issuance costs paid 467,530 -

Net cash provided by financing activities 478,674 2,613

Effects of foreign exchange rate changes on thebalance of cash and cash equivalents, and (41) 58 restricted cash held in foreign currencies

Net increase (decrease) in cash and cash equivalents, 457,904 (2,624) and restricted cash

Cash and cash equivalents, and restricted cash, 1,874 3,612 beginning of the period

Cash and cash equivalents, and restricted cash, end $ 459,778 $ 988 of the period



Origin Materials, Inc.Reconciliation of GAAP and Non-GAAP Results

We believe that the presentation of Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA) is appropriate to provide additional information to investors about our operating profitability adjusted for certain non-cash items, non-routine items that we do not expect to continue at the same level in the future, as well as other items that are not core to our operations. Further, we believe Adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against that of other peer companies using similar measures.

We define Adjusted EBITDA as net income or loss adjusted for (i) stock-based compensation expense, (ii) depreciation and amortization, (iii) interest expense, net of capitalized interest, (iv) change in fair value of derivative liability, (v) change in fair value of warrants liability, (vi) change in fair value of earnout liability, (vii) professional fees related to completed mergers, and (viii) other income, net.

Three months ended Nine months ended September 30, September 30,

(in thousands) 2021 2020 2021 2020

Net Income (loss) $ 27,893 $ (3,106) $ 36,853 $ (6,769)

Stock based 636 60 4,808 78 compensation

Depreciation and 126 102 363 306 amortization

Interest expense, net - 54 2,839 167 of capitalized interest

Change in fair value of - 67 1,426 52 derivative liability

Change in fair value of (13,481) 1,024 7,363 1,128 warrants liability

Change in fair value of (21,511) - (67,008) - earnout liability

Professional feesrelated to completed 640 - 640 - mergers

Other income, net (27) (68) (651) (237)

Adjusted EBITDA $ (5,724) $ (1,867) $ (13,367) $ (5,275)

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CONTACT: Origin Materials Investors: ir@originmaterials.com Media: media@originmaterials.com