Q4 2023 Origin Materials Inc Earnings Call
Participants
Matthew Plavan; Chief Financial Officer; Origin Materials Inc
Rich Riley; Co-Chief Executive Officer, Director; Origin Materials Inc
John Bissell; Co-Chief Executive Officer, Co-Founder, Director; Origin Materials Inc
Frank Mitsch; Analyst; Fermium Research, LLC
Eric Stine; Analyst; Craig-Hallum Capital Group LLC
Presentation
Operator
Thank you for standing by. This is the conference operator, welcome to your Origin Materials Fourth Quarter and Full Year 2023 earnings call. The conference is being recorded. (Operator Instructions) I would like to turn the call over to Matt Plavan, CFO. Please go ahead, sir.
Matthew Plavan
Thank you. Good afternoon, everyone, and thanks for joining us speaking. First today is origins Co-CEO, Rich Riley. He will be followed by Co-CEO and Co-Founder, John Bissell and myself. After that, we will open the call to questions from analysts and discuss questions submitted as part of our Ask origin campaign ahead of this call, Origin has issued its 2023 fourth quarter and full year press release and presentation, which we will refer to today. These can be found on the Investor Relations section of our website at origin materials.com.
Please note that some of what you will hear during our discussion today will consist of forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views as of today and should not be relied upon as representative of our views of any subsequent date, and we undertake no obligation to revise or publicly release the results of any revisions 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 more information, please refer to our filings with the SEC, including our annual report on Form 10-K, which will be filed Monday, March 4.
During today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Origin materials performance. These non-GAAP measures should be considered in addition to and not as substitutes for or in isolation from GAAP results.
You'll find additional disclosures regarding the non-GAAP financial measures discussed on today's call in our press release issued this afternoon and our filings with the SEC, which will be posted to our website a 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.
Rich Riley
Thank you, Matt, and good afternoon, everyone, and thank you for joining us for Origin. 2023 was a watershed year, which included the commencement of production at Origin One, a key milestone in improving the scalability of our biomass conversion technology. Furthermore, we made great progress on initiatives that significantly derisk the business on the path to profitability.
Indeed, today, we are pleased to announce that owing to the strong momentum of these initiatives, we now have a path to profitability entirely independent of the scale-up of our biomass conversion technology and related manufacturing plant construction.
These initiatives are led by our all PET caps enclosures business, a highly differentiated solution for the over $65 billion caps enclosures market expected revenue from these initiatives, coupled with our cost reduction program, extend our cash runway and eliminate the need for an equity capital raise to achieve sustained profitability for Origin ended the fourth quarter with just over $158 million in cash and cash equivalents and marketable securities, having prioritized revenue-generating projects with the greatest contributions near term cash and seizing opportunities to defer research expenses or other programs targeting longer term results.
Our expected 2020 for net cash burn is between $55 million and $65 million, with meaningful gross profit generation anticipated to begin in 2025. This is primarily due to the strong commercialization progress of origins caps and closures business, which could begin to generate revenue within the next 12 months with an expected 2024 cash burn of less than $65 million and our expectations for significant gross profit generation beginning in 2025 with a healthy growth trajectory.
Thereafter, we forecast maintaining a solid minimum cash floor on our way to sustained profitability and hence the expectation that we will not require additional equity capital. We anticipate our all the ET caps, enclosures business to be transformative for packaging. We announced this initiative in August 2023 after quietly developing the program for several years as a natural outgrowth of origins, polymer expertise and platform development efforts.
This is squarely on mission for Origin as we are transitioning a hard to recycle material into an easy to recycle one and supported the global transition to sustainable materials, we are positioned to be first to market with a commercially scalable PET cap, something the industry has long sought but never achieved origin BG. caps and closures are expected to be cost competitively produced with any type of PET making made with 100% recycled PET possible from cap to container.
They perform better than today's HDPE. and polypropylene caps in ways that can improve product shelf life and their design for circularity for a wide variety of containers. Our technology enables the lightest cap, reducing plastic waste and improving sustainability. This business continues to make excellent commercialization progress. We successfully completed our third manufacturing development run on production scale equipment, producing thousands of caps per hour.
Our initial product past third-party tests validating that performance meets or exceeds industry standards, and we have conducted preliminary consumer testing. Our partners have conducted extensive diligence and demonstrated strong organizational alignment across procurement, R&D, marketing and sustainability to move forward with Origin solution.
And we are now at the Letter of Intent phase with multiple leading CPG companies that collectively consume tens of billions of caps per year. There are other technologies with near-term revenue generating potential and development at origin like ROVT caps and closures.
These new applications enabled by origin technologies are not dependent on Origin one or origin two for production and sale, but capable of using materials produced from these plants. These applications leverage origins, chemical expertise, depth of application knowledge and intellectual property strength with further details to be provided as development progresses.
Regarding origin two, we are launching an asset-light strategy for core technology scale-up. Beyond origin one, we intend to scale our biomass conversion technology in partnership with other major companies with potential strategic partners to provide a substantial portion of construction capital.
Origins costs are expected to be reduced significantly enhancing our optionality with respect to the ways we can deploy our technology. Customer demand remains strong as reflected by our total offtake agreements and capacity reservations in excess of $10 billion with that, I'll turn it over to John.
John Bissell
Thank you, Rich, and good afternoon, everyone. I'll begin by building on bridges commentary regarding origin two and our asset-light strategy. Notwithstanding the industry-wide capital construction projects setbacks experienced over the past few years due to inflation, higher interest rates and supply chain shocks. The demand for our biomass conversion technology remains strong.
As such, I am particularly proud of our team's innovation, agility in accelerating caps, enclosures to become our primary path to profitability, which allows us greater flexibility to implement our asset-light strategy, accelerating the lower capital intensity caps and closures business is a natural prioritization given the continued escalation of capital project costs as reflected in our revised front-end engineering design for the first phase of working to which we received during Q4 2023, as well as our expectation that industry wide large capital project execution costs will continue to be inflated for some time, thus to best deliver on the demand for our technology.
In the midst of these industry-wide headwinds, we intend to commercialize and scale our biomass conversion technology in partnership with other major companies with potential strategic partners to provide a substantial portion of the capital for construction doing so is expected to optimize scale-up synergies, significantly reduce project execution risk and significantly defray costs that would otherwise be borne exclusively by origin timelines, economic forecasts and plant phasing with respect to separating oils and extracts for biofuel production will depend on the partner and the deal structure, which we can explore a range of scenarios and locations, including Geismar, Louisiana, as well as Asia brownfield scenarios with updates to be provided as we finalize those partnerships.
Regarding the scale-up of our biomass conversion technology. We continue to engage with multiple parties to explore a variety of plant designed to evaluate potential brownfield sites. We continue to perform funded joint development work with our strategic partners, including testing and optimizing various feedstocks to generate information that could influence our scale-up strategy.
Regarding progress at origin one, we are pleased to report it is demonstrating origin biomass conversion technology as plant located in Sarnia, Ontario Canada is first and foremost, an asset that is used to support origin market development, including customer materials, testing and formulation in preparation for it to scale while continuing to be highly focused on safety and training, we are running the plant at appropriate rates to learn as much as we can in support of further tech scale-up.
As we run batches, we continue to prove out at scale the various unit operations such as pumps, reactors, filters, heat exchangers and utility systems. Gathering information from these activities that will inform future technology designs. During this early stage of plant operations, we are using cornstarch for our feedstock to produce CMF and HTCS allows us to focus on chemistry unit ops, which is standard industry practice. We're enabling new technology processes. We expect to introduce wood handling in the months ahead, strategic partners associated with Origin one supply chain remain engaged as we collaborate and market development activities.
Lastly, our Board of Directors continues to evolve. Karen Richardson has served as Chairman of the Board for three years and short term concludes. We thank her for her exemplary service. Karen supported the company. As we have advanced our technology platform started up Origin one built a world-class Board of industry experts and enhanced senior leadership with the recruitment of Matt Plavan, CFO.
Today, we announced Karen Richardson retirement from the Board effective March 1. Concurrently, Tony Tripeny, our current audit committee, Chair who has served on the Board since May 1, 2023 will succeed Ken as Chairman of the Board, we are incredibly fortunate to have Tony, who brings over three decades of significant operational strategy and M&A experience to the Chair position, extensive knowledge of the manufacturing technology and material science industries and a background in International Corporate Finance.
During his 36 year career with Corning, a global leading innovator in material science with more than $10 billion in annual revenue. Tony held various progressive leadership roles in Corporate Accounting and Finance, including Chief Financial Officer. In addition, John Hickox has been appointed to the Board and will serve as our Audit Committee Chair, succeeding Tony and as a member of the Nominating and Corporate Governance Committee.
John has been on the cutting edge of advising mid-range to Fortune 10 companies on economically responsible sustainability, including having spearheaded the KPMG America's sustainability practice. His distinguished career spans 40 years in auditing accounting, FP&A, corporate governance and executive leadership use the Advisory Partner at both KPMG and Ernst & Young servicing, a range of public clients, including chemical and packaging industry clients in the areas of SOx, regulatory compliance, internal audit and risk management and sustainability, focusing on impactful corporate stewardship, strategy reporting and profit maximization.
Welcome, John. And finally, we would like to again thank Karen for her outstanding leadership during her time these past three years, we look forward to a seamless transition to Tony, who's proven himself, a strong successor for the Chairman role. With that, I'll turn it over to Matt.
Matthew Plavan
Thanks, John. We have provided the quarter and full year results in the tables of the earnings release, so I will focus. My comments on a couple of key financial highlights. 2023 was Origin's first year of revenue generation since becoming a public company with revenue of $13.1 million and $28.8 million for the fourth quarter and full year, respectively. This is primarily comprised of what we refer to as supply chain activation reps generated in conjunction with the initiation, an initial scale-up of Origin one operations.
Looking ahead, we expect the onset of revenue from our caps enclosures initiative just highlighted by Rich and John could be within 12 months. We anticipate this revenue will be significant recurring in nature and with a margin growth profile that will drive us to overall cash positive operations in the needs of our existing cash resources, eliminating the need for an equity capital raise on our way to sustained profitability.
Our confidence in this revenue outlook is predicated on a risk-adjusted aggregation of demand projections provided to us by prospective customers with whom we are in contract negotiations for our PVT. caps. Their individual demand estimates reflect gradual adoption rates within their existing production volumes risk adjusted for potential delays.
Our confidence in a significantly reduced expense forecast for 2024 is due primarily to the impact of our asset-light strategy on how we will finance our forward capital project costs. During 2023, we incurred just over $100 million in property, plant and equipment costs in service of our biomass conversion technology developments with these costs now expected to be contained within our potential strategic partnership arrangements, coupled with the roll forward impact of our previously announced cost reductions made in Q4 of 2023 we are well positioned to execute our 2024 plan of less than $65 million net cash burn.
Turning now to our operating expenses for the fourth quarter, they were $19.8 million compared to $13 million in the prior year period, an increase of $6.8 million. The increase was driven primarily by increases in manufacturing costs of $2 million, increased depreciation costs of $2 million due to Origin, one coming online during the quarter and increases in R&D costs of $1 million for the full year 2023.
Operating expenses were $60.1 million compared to $38.9 million in the prior year period, an increase of $21.2 million, driven by cost increases proportionately consistent with those in the fourth quarter.
Without I'd like to reiterate our financial guidance for 2024, including revenue of $25 million to $35 million and net cash burn between $55 million and $65 million, with significant gross profit generation anticipated to begin 2025.
In closing, as you might imagine, with our existing cash on hand and good visibility into a path to sustained profitability without the need to raise additional equity capital. We believe the company is exceptionally undervalued at its current stock price. Moreover, we believe the execution of our plan in 2024 will be well received by investors. And as such, we expect Origin will satisfy the NASDAQ minimum bid price rule within the requisite grace period.
Now I'd like to open the call for questions. Operator? May we have the first question, please?
Question and Answer Session
Operator
We will now begin the question-and-answer session.(Operator Instructions)
Frank Mitsch, Fermium Research.
Frank Mitsch
Good afternoon. Good afternoon, folks. I wanted to come back to the use of wood introducing wood waste wood and wood chips into origin. One on John, you indicated that that's going to happen in over the next few months or several months. I forget exactly what you said, but the way I the way I was thinking about it, the $10 billion plus that you have in capacity reservations and offtake agreements I presume is tied to the use of wood and waste wood as the feedstock and not cornstarch.
So I'm just curious as to why we might not have seen an acceleration to Tri and introduce wouldn't have the origin one facility running running on on what's arguably obviously a much cheaper feedstock. Any color around that would be very helpful.
John Bissell
Yes. Sure, Frank. So it's a really good question. Actually, a lot of our customer arrangements, and I wouldn't say most, but a lot of our customer arrangements actually are pretty agnostic to the feedstock that's being used for them to make the product. And that's because it was a it particularly corresponds to and applications where we're providing a performance advantage product. So when we talk about para-xylene and PET, really the dominant value proposition is sustainability.
And of course, changing where it's hot and sort of how that supply chain is organized and since you don't need to use a petrochemicals or oil to produce it.
But when you look at products that can't really be made outside of our platform. These are things like a pure Android products or FTCAHCT drive products that are unique and we're often using a value proposition that is not just on sustainability, but also just flat-out performance.
The products that we're making are performing better than what they have in that same application.
And while cornstarch really doesn't provide the same sustainability benefits that you get for wood, it is still sustainable. And of course, the buy decision for customers like that is driven by the performance of the end products. You know, CMF is CMF, whether it's coming from wood starch or something else.
And so we actually do have a lot of customers and a lot of applications of which don't really care so much about what the feedstock is on the front end.
Frank Mitsch
Okay. That's very helpful. But the intent is the intent is certainly by the the early July timeframe that the that the NASDAQ has threatened for delisting. The intent is before then you will have introduced and demonstrated the use of wood and waste wood in Origin one?
John Bissell
Yes, the intent is for us to demonstrate that not so far out of it.
Frank Mitsch
Okay, great. And then I and then I guess just lastly, with respect to Origin two and the Asian brownfield sites, which is kind of an interesting sites. Obviously, you've got something cooking there. Wondering if you could elaborate on that, but but your expectation in terms of the partnerships that you want to form, would we also expect to see something announced before midyear in that regard as well?
Rich Riley
Hey, Craig, it's Rich. It's hard to give timing guidance, but I can share that we have multiple potential partners who are deeply engaged, exploring a wide range of of plant build scenarios, including Asian brownfields. As we mentioned, in the remarks. These partners bring a variety of and some of them are long particular forms of feedstock that's very attractive or have some brownfield sites that are attractive capital projects expertise capital generally.
And so we're approaching these partnerships with very open minds and thinking of ourselves as really the technology provider. And we can also bring customers, obviously with our with our massive order book. And so you're looking at these various opportunities, different types of companies wanting potentially different focuses in terms of the end materials that the plant would be geared towards. And so we're working those through hard to give guidance on timing, but I'm continuing to make progress.
Frank Mitsch
Understood. Understood. Thanks so much for the color.
Matthew Plavan
Thank you.
Operator
(Operator Instructions)
Eric Stine, Craig-Hallum.
Eric Stine
Please go ahead, everyone. Hey, Tom. Yes. So maybe we could just start off with the guide. I'm just trying to get a handle on that. And so revenues, $25 million to $35 million, you just came off 29 and certainly on a run rate in Q4 that would exceed that. I mean, is this is this because you are done with as you've termed it, supply chain activation activities and it's more of a I don't know the production is more tempered based on customer needs, what they want to test, et cetera, or maybe I'll just start that or how to think about time getting that revenue level and why and '23 of '24 plus sorry?
Matthew Plavan
Yes, this is Matt. I think certainly, we expect supply chain revenues to recur in 2024. And as we said in our our prepared comments within 12 months, we do expect the caps enclosures revenues to set in. So for '24, I think that's kind of a general guidance. You should rely on them. And as we talked about, '25 is where we really expect to see caps, enclosures revenues ramping. And so yes, I think you picked up on the guidance pretty well.
Rich Riley
Eric, this is Rich. I'm familiar now that our our commercial focus is really what we expect to be substantial 2025 revenues from the caps and closures business. And so it's up. That's the priority for our commercial efforts. It's not as focused as we were on joint development agreements or supply chain activation partnerships.
Eric Stine
Got it. And then I'm just trying to get a handle on it squared up with the reduced cash burn, which is obviously good to see. I mean, you just came off a quarter of total OpEx of almost $20 million. Clearly that number got to come down. If you're going to hit that reduced cash burn one-time, maybe kind of what level should we think about for OpEx, you're in '24 as you build towards '25?
John Bissell
Yes. So I think the only year we talked about 55 to 65. I think it's fair that to assume that to be relatively linear throughout the year. There's not a lot of lumpiness in that. And of course, still as the caps and closures revenues built in '25 bed margins substantially reduces and resulting cash positive thereafter. So I think that's way to think about OpEx in '24.
Eric Stine
Okay. Well, I mean, at this level, should we take this to mean then that because you no longer taking on the spend for plant activity with Origin, one, completing the CapEx is virtually zero in 2020 for at least your portion of it. I'm just trying to square the two because. Yes, that revenue at the TRP level just doesn't it doesn't work.
Matthew Plavan
Yes, I think we will think about bifurcating spend between the cast enclosures initiative and the asset light initiative, which, as Rich mentioned, is really something we're working through with our partners. So we don't see no significant CapEx capital project spend in 2024 coming out of our on our capital on the balance sheet at the moment.
John Bissell
Okay. I guess maybe out there and what might the So yes, what might help square for you a little bit. So when we look at capital that's required for the caps enclosures business, it's much more modest bite sizes, and we see does it matter that I think in his prepared remarks, and we see those as very financeable.
And so even though there is certainly capital outlay that goes towards and that caps enclosures business, if not and the net cash, our burn as a result of that capital outlay is not particularly large relative to the rest of the spend of the company who could find that out and that helps that lease term.
Eric Stine
That makes sense on maybe just turning to caps enclosures. I mean, obviously an attractive path to go down, but you know, and I know you're optimistic, but 12 at least 12 months away. I mean, maybe just talk about what are the steps that we need to see between now and say this time next year and I'd love some details. Like I mean, for instance, are you are you using a tolling arrangement? Where would these be produced? Maybe that's still to be the term?
John Bissell
Yes, that's a great question. So the way to think about the caps enclosures business specifically is so much if you have sort of a chemicals had on or something along those lines this is much smaller operations than you would typically see for a chemicals plant and and so scale that down, but the idea of a plant is still valid, right? They're just they're just small and there are different kinds of technology, right?
This is because mechanical plastic part production technology rather than a big industrial process plant. And so these units are are procured from existing sort of complex mechanical equipment manufacturers. They are require adjustments to the existing equipment, but largely it is still produced by them. So it's really equipment purchase and installation rather than lots of tanks and pipes and things like that.
It's just sort of a different risk profile associated with those it also because of that structure has a different delivery and or time to production profile. So, you know, really the independent components that we're talking about in these systems, I can actually have lead times as short as six to nine months.
We've been giving ourselves a little bit longer than that because we want to make sure we have time to integrate them and bring them online.
But you're really talking about yes, you said 12 months, I think that's pretty reasonable and for a given system, but this is not a one big system and then you sort of fill it out kind of business. This is a business where we're going to be bringing online systems. And as we go along and then and they won't be separated by that much time, most likely so we can satisfy demand much more incrementally rather than just sort of one big step change.
So some of the things and I give that color because I think it helps and make sense of some of Matt's comments around us getting to profitability in '25.That's not us all just waiting around saying, okay, well, when that system going to come online.
And then boom, we get to profitability or gross margin isn't a composite gross margin per se. But but the instead we're going to see pieces all the way along our individual systems coming online, satisfying demand for different customers as we go.
And so I think that's going to find lots of opportunity for milestones and the fee sort of real progress and that meaningful, that's fine. I think the other things to think about are one we've done and third party at casting and manufacturing with these systems with the suppliers of the systems. And we've made, as we said in our and both our prepared remarks.
And then I think also in the release, a lot of these parts for validation, we've been working closely with customers to put them into their systems. We're very excited about that. I think we will continue to see progress in terms of efficiency. We're pretty happy with where we are on efficiency right now.
And we think that we have actually a pretty good path forward. So those will be things that we can talk about. But again, I think this is then characteristically a much more quickly moving technology than you see for that sort of large capital project driven businesses in the chemical industry.
Eric Stine
Okay. So just to be clear that you so these are the origin facilities. They would just be it's not a plant, they're much smaller or is this something where it be your tooling? at a leading supplier location and they're making it on your behalf.
John Bissell
Yeah. Great question. I'm glad you reask it because I didn't answer first on VM. So I think it's going to be a combination.
I think you're going to be places where it makes sense for us to have origin operating facilities, and they're going to be places where it makes sense for us to take our equipment and our capital and put it into another facility is operating. But I think that and the balance between those two is going to be driven by the economic opportunity that exists inside of some other parties' facilities. I don't think that we want to make ourselves entirely beholden to any third party manufacturing organization.
And but there are clearly places where we can have one of our systems operating inside of a larger manufacturing context and then take advantage of the efficiencies that they would have. And it's sort of a win-win for both parties on either side. So so we'll do that when we can. And then I think origin operated and owned facilities as well.
Eric Stine
Okay. Thank you.
John Bissell
Thanks.
Operator
That completes today's live Q&A segment. I will now turn it over to Matt Lyman, CFO, to conduct the next segment of our investor Q&A.
Matthew Plavan
Thank you, operator. Prior to our earnings call we invited investors to submit questions that part of our Ask origin campaign. Thank you to everyone who participated for grateful for the significant volume of questions submitted and really encouraged by the thoughtful and engaging nature of your questions. As you might expect, we have tailored our prepared remarks to address many of those questions as practically as we could, which ended up being a majority of your questions.
It's also worth noting there was some good technical and commercial questions we'd really enjoyed getting into. But for either proprietary or competitive reasons, we've got to refrain from answering those. However, there are a few that fall outside of those two categories, and we'd like to quickly cover those. So our first question for John is about one for dioxin is the use of one for dioxin highly likely likely or unlikely to be used anywhere along the chain to produce PET from CMS?
John Bissell
Yes. So this was an interesting question in part because it is an example of where people are diving into that sort of technical detail on things that have been just surprising, but at least for me kind of gratifying and I enjoy it when people looking at this kind of stuff.
So I think the provenance of this question is latent from one of our patents specifically one of our patents around the production of para-xylene from dimethyl purine and our deals, older chemistry to do that.
And I think the the interesting thing to understand about this is you know, first, when you're developing technical systems like this, you typically are going to start with either a model system or or a system that really clearly elucidate the properties that you're looking for.
And then, of course, once you hit on something you like you end up writing a patent around it or whatever you're going to do, and then you include the work that you've done, which includes this model system or model compounds. And so it's quite common, in fact, to have species chemical species in the past, and that are maybe not exactly what's going to be used commercially. So I think you keep that in mind as you as you look at these, that the patents that we write and frankly patents in general.
Now that all said, so I think it's interesting to ask about the one. I think that's the sort of the relevant information on it. But the question actually was around and the pathway from CMS to PEF now what's interesting about PDF it, Jim, is that it's made out of FTC, et cetera, that come acrylic acid as a replacement for Terra power gas and the turbo gas.
And of course, we would have been made from the para-xylene that we produce from time to prepare and using the deals on our chemistry that I just referenced.
So what's interesting about the question about PEF is that, of course, we don't use our deals over chemistry on the way to make FDCA or PEF. So while I think the provenance of the question is interesting and certainly relevant and it actually turned out not to be relevant for and for the talking about and PEF and despite some of the comments that I made around sort of model systems earlier. So an interesting question at the answer is, I think very unlikely that we're going to use dioxin anywhere in the system specifically going from after topic.
Matthew Plavan
And again, the second question is about the TRL. or technical readiness level of origins, biomass conversion technology has the technology been proven to work in its final form and under expected conditions? Have there been demonstration of actual system prototype in a relevant environment? And how far along is the technology in terms of TRL?
John Bissell
Yeah, that's another great question. And something we think about a lot internally as sort of assessing things via their their technology readiness level.
And by the way, the TRL. system was developed originally, I think by NASA early on to assess sort of how far along were each of the mechanical subsystems that we're going to be required to put people in orbit and get get rockets up into space and then ultimately the people on the moon and get it back and so it's a great system that was very rigorously put together.
What I think is particularly interesting for the chemical process industry, which is where we live is done, is that you have to look at a chemical process oriented technology, rebate readiness definitions that which is out there.
It's, you know, some you can Google it and find a PEF of it. And it's subtly different than the one that you typically see for mechanical systems. But it makes really it makes it a little bit easier to set up the relationships now that all said, as we have done a lot of system and subsystem development through the year. So that's really what's happening when we're doing bench scale work, integrated bench scale reactions, scaling it up the pilot, you could you could set TRRO numbers associated with each of those steps as you as you go forward.
And then of course, with Origin, one origin, one is essentially by the TRL system, a full-scale operating plant. And so once something is operating in Origin one, then it's sort of off the top end of the TRL scale right at or I think it's technical material mine, which is that is fully commercial. So that's sort of the from a technology risk perspective.
That's the way to think about that now, of course, we always have additional technologies that are that we're working on. We like we have improvements to technologies. Even technologies that are have been implemented are one we're working on things that can make those and those process steps better, more efficient in some places. We're really excited about those, and we may be working on them, even though they're a little ways out.
And so as you look through all of those proven properties, you're going to see a smattering of different technology readiness levels. And depending on when we started or how difficult it is, et cetera. But essentially, when something's operating on one, that's that's sort of off the top end of the technology readiness.
Matthew Plavan
Thanks, John. And now a question for Rich, repeat the questions about the share price to provide some insight on organically addressing the share price to maintain origins. NASDAQ listing is top of mind for many retail investors.
Rich Riley
Yes, it's a good question. You're so I think about that first, we have a very strong plan to get to profitability without needing to raise additional equity capital, led by our breakthrough caps, enclosures product, which really highlights the the innovation and capabilities that we have at the Company.
In addition to the intrinsic value of our core biomass conversion technology, which we now plan to scale via partnership. And so that plan is something we feel really good about. And to be clear, we believe that the stock is extremely undervalued at its current levels and we're confident that as we continue to execute this plan, the results will be very well received by investors and that the stock price will reflect that reception and those results and so we really think this is going to be a very exciting year for Origin and are highly confident that we will continue to be listed on the NASDAQ.
Matthew Plavan
All right. Thanks, Rich. Thank you, everyone, who joined looking ahead with confidence and excitement for 2024, and we look forward to our next update. This concludes our call for the day. Thank you.
Operator
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.