SEC Filing | Origin Materials, Inc.

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orgn-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________________

FORM 10-Q

__________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-39378

__________________________

ORIGIN MATERIALS, INC.

(Exact name of registrant as specified in its charter)

__________________________


Delaware			87-1388928
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

930 Riverside Parkway, Suite 10 West Sacramento, CA			95605
(Address of principal executive offices)			(Zip Code)

(916) 231-9329

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

__________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading Symbol(s)

Name of each exchange on which registered:

Common Stock, $0.0001 par value per share

ORGN

The NASDAQ Capital Market

Warrants

ORGNW

The NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of shares of the registrant’s Common Stock, par value $0.0001 per share outstanding was 142,703,935, as of October 31, 2022.

ORIGIN MATERIALS, INC.

TABLE OF CONTENTS


		Page No.
PART I. — FINANCIAL INFORMATION
Item 1	Financial Statements	1
	Condensed Consolidated Balance Sheets (unaudited)	1
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (unaudited)	2
	Condensed Consolidated Statements of Stockholders’ Equity and Accumulated Other Comprehensive Income (Loss) (unaudited)	3
	Condensed Consolidated Statements of Cash Flows (unaudited)	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4	Controls and Procedures	41
PART II. — OTHER INFORMATION		43
Item 1	Legal Proceedings	43
Item 1A	Risk Factors	43
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	66
Item 3	Defaults Upon Senior Securities	66
Item 4	Mine Safety Disclosures	66
Item 5	Other Information	66
Item 6	Exhibits	67
SIGNATURES		68

Table of contents

PART I. — FINANCIAL INFORMATION

Item 1. Financial Statements

ORIGIN MATERIALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


(In thousands, except share and per share data)	September 30, 2022 (Unaudited)		December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	102,965	$	46,637
Restricted cash	505		490
Marketable securities	258,733		397,458
Other receivables	3,537		2,612

Derivative asset	1,826		202
Prepaid expenses and other current assets	5,237		3,774
Total current assets	372,803		451,173
Property, plant, and equipment, net	111,398		57,185
Operating lease right-of-use asset	3,023		1,782

Intangible assets, net	168		215
Other long-term assets	5,080		62
Total assets	$	492,472	$	510,417

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	7,646	$	2,451
Accrued expenses	5,352		973
Operating lease liability, current	599		280

Other liabilities, current	2,594		380
Derivative liability	—		103

Total current liabilities	16,191		4,187


Earnout liability	64,197		127,757
Canadian Government Research and Development Program liability	6,269		6,762

Assumed common stock warrants liability	37,250		52,860
Stockholder note	5,802		5,189
Related party other liabilities, long-term	5,328		5,720
Operating lease liability	2,494		1,486

Other liabilities, long-term	2,911		2,946
Total liabilities	140,442		206,907

Commitments and contingencies (See Note 19)

STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2022 and December 31, 2021	—		—
Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 142,703,935 and 141,301,569, issued and outstanding as of September 30, 2022 and December 31, 2021, respectively (including 4,500,000 Sponsor Vesting Shares)	14		16
Additional paid-in capital	366,332		361,542
Retained earnings (Accumulated deficit)	5,779		(56,797)
Accumulated other comprehensive loss	(20,095)		(1,251)
Total stockholders’ equity	352,030		303,510
Total liabilities and stockholders’ equity	$	492,472	$	510,417

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ORIGIN MATERIALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except share and per share data)	2022		2021		2022		2021
Operating Expenses
Research and development	$	3,732	$	1,957	$	8,717	$	5,605
General and administrative	5,834		5,043		16,769		13,210
Depreciation and amortization	180		126		488		363
Total operating expenses and loss from operations	9,746		7,126		25,974		19,178

Other (income) expenses
Interest income	(2,309)		—		(6,077)		—
Interest expense, net of capitalized interest	—		—		—		2,839
Change in fair value of derivatives	(1,129)		—		(1,725)		1,426
Change in fair value of warrants liability	1,419		(13,481)		(15,610)		7,363
Change in fair value of earnout liability	(15,147)		(21,511)		(63,561)		(67,008)
Other income, net	(879)		(27)		(1,577)		(651)
Total other income, net	(18,045)		(35,019)		(88,550)		(56,031)
Net income	$	8,299	$	27,893	$	62,576	$	36,853

Other comprehensive income (loss)

Unrealized (loss) on marketable securities	$	(1,403)	$	—	$	(10,783)	$	—
Foreign currency translation adjustment, net of tax	(7,253)		(1,068)		(8,061)		24
Total comprehensive income (loss)	$	(357)	$	26,825	$	43,732	$	36,877
Net income per share, basic	$	0.06	$	0.20	$	0.46	$	0.41
Net income per share, diluted	$	0.06	$	0.20	$	0.44	$	0.39
Weighted-average common shares outstanding, basic	138,061,829		136,749,956		137,348,180		89,244,640
Weighted-average common shares outstanding, diluted	142,197,014		141,239,965		142,134,560		94,029,056

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ORIGIN MATERIALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In Thousands, Except Share Amounts)


				Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (loss)		Total Stockholders’ Equity
	Common Stock
Three Months Ended September 30, 2021	Shares	Amount





Balance at June 30, 2021	136,748,470	$	13	$	359,928	$	(89,928)	$	1,476	$	271,489
Common stock issued upon exercise of stock options	6,215	—		2		—		—		2
Stock-based compensation	—	—		636		—		—		636
Net Income	—	—		—		27,893		—		27,893
Other comprehensive loss	—	—		—		—		(1,068)		(1,068)
Balance at September 30, 2021	136,754,685	$	13	$	360,566	$	(62,035)	$	408	$	298,952


				Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (loss)		Total Stockholders’ Equity
	Common Stock
Nine Months Ended September 30, 2021	Shares	Amount
Balance at December 31, 2020	62,545,275	$	6	$	98,620	$	(98,888)	$	384	$	122
Reclassification of stockholders’ convertible notes payable	2,049,191	—		20,491		—		—		20,491
Reclassification of redeemable convertible preferred stock warrant liability	5,554,440	—		54,267		—		—		54,267
Business Combination, net of redemptions and equity issuance costs of $37.0 million	66,481,545	7		385,405		—		—		385,412
Reclassification of equity to liability related to earn out provisions of Business Combination (see note 13)	—	—		(203,082)		—		—		(203,082)
Common stock issued upon exercise of stock options	124,234	—		57		—		—		57
Stock-based compensation	—	—		4,808		—		—		4,808
Net Income	—	—		—		36,853		—		36,853
Other comprehensive income	—	—		—		—		24		24
Balance at September 30, 2021	136,754,685	$	13	$	360,566	$	(62,035)	$	408	$	298,952

ORIGIN MATERIALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In Thousands, Except Share Amounts)


								Accumulated Other Comprehensive Income (loss)		Total Stockholders’ Equity
	Common Stock			Additional Paid-in Capital		Retained Earnings
Three Months Ended September 30, 2022	Shares	Amount





Balance at June 30, 2022	142,378,934	$	14	$	364,853	$	(2,520)	$	(11,439)	$	350,908
Common stock issued upon exercise of stock options	325,001	—		103		—		—		103

Stock-based compensation	—	—		1,376		—		—		1,376
Net income	—	—		—		8,299		—		8,299
Other comprehensive loss	—	—		—		—		(8,656)		(8,656)
Balance at September 30, 2022	142,703,935	$	14	$	366,332	$	5,779	$	(20,095)	$	352,030


								Accumulated Other Comprehensive Income (loss)		Total Stockholders’ Equity
	Common Stock			Additional Paid-in Capital		Retained Earnings
Nine Months Ended September 30, 2022	Shares	Amount
Balance at December 31, 2021	141,301,569	$	16	$	361,542	$	(56,797)	$	(1,251)	$	303,510
Common stock issued upon exercise of stock options	1,269,717	(2)		374		—		—		372
Immediately vested common stock awards	132,649	—		—		—		—		—
Stock-based compensation	—	—		4,416		—		—		4,416
Net income	—	—		—		62,576		—		62,576
Other comprehensive loss	—	—		—		—		(18,844)		(18,844)
Balance at September 30, 2022	142,703,935	$	14	$	366,332	$	5,779	$	(20,095)	$	352,030

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ORIGIN MATERIALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30,
(in thousands)	2022		2021
Cash flows from operating activities
Net income	$	62,576	$	36,853
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	488		362
Amortization on right-of-use asset	423		—
Stock-based compensation	3,719		4,808
Amortization of debt issuance costs	—		14
Accretion of debt discount	—		2,211
Change in fair value of derivatives	(1,725)		1,426
Change in fair value of common stock warrants liability	(15,610)		(27,672)
Change in fair value of preferred stock warrants liability	—		35,035
Change in fair value of earnout liability	(63,561)		(67,008)
Change in fair value of incremental acquisition fee accrual	(35)		—
Changes in operating assets and liabilities:
Other receivables	(926)		(214)
Grants receivable	—		(16)
Prepaid expenses and other current assets	(1,464)		(3,677)
Other long-term assets	(5,019)		—

Accounts payable	5,195		(1,063)
Accrued expenses	4,380		3,173
Payments on operating lease liabilities	(338)		—
Other liabilities, current	2,214		—
Related party payable	221		152
Net cash used in operating activities	(9,462)		(15,616)
Cash flows from investing activities
Purchases of property, plant, and equipment, net of grants	(57,825)		(5,113)

Capitalized interest on plant construction	(133)		—
Purchases of marketable securities	(2,584,027)		—
Sales of marketable securities	2,587,649		—
Maturities of marketable securities	124,319		—
Net cash provided by (used in) investing activities	69,983		(5,113)
Cash flows from financing activities
Proceeds from stockholders' notes payable, net of debt issuance costs	—		11,707

Payment of short-term debt	—		(906)
Proceeds from Canadian Government Research and Development Program	—		287
Issuance of common stock	371		56
Business combination, net of issuance costs paid	—		467,530
Net cash provided by financing activities	371		478,674
	Nine Months Ended September 30,
(in thousands)	2022		2021
Effects of foreign exchange rate changes on the balance of cash and cash equivalents, and restricted cash held in foreign currencies	(4,549)		(41)
Net increase in cash and cash equivalents, and restricted cash	56,343		457,904
Cash and cash equivalents, and restricted cash, beginning of the period	47,127		1,874
Cash and cash equivalents, and restricted cash, end of the period	$	103,470	$	459,778
Non-cash investing and financing activities
Conversion of stockholder convertible notes payable to common stock	$	—	$	20,493
Reclassification of redeemable convertible preferred stock warrants to common stock	$	—	$	54,267
Reclassification of contingently issued equity to liability	$	—	$	203,082
Net assets assumed from business combination	$	—	$	81,364
Business combination transaction costs, accrued but not paid	$	—	$	609
Operating lease right-of-use asset obtained in exchange for lease obligations	$	1,710	$	—

Stock-based compensation capitalized into property, plant, and equipment	$	697	$	—
Debt discount related to derivative liability	$	—	$	2,196

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ORIGIN MATERIALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.Organization and Business

Unless the context otherwise requires, references in these notes to “Origin”, “the Company”, “we”, “us” and “our” and any related terms are intended to mean the post-Business Combination Origin Materials, Inc. and its consolidated subsidiaries.

The Company’s mission is to help enable the world’s transition to sustainable materials by replacing petroleum-based materials with decarbonized materials in a wide range of end products, such as food and beverage packaging, clothing, textiles, plastics, car parts, carpeting, tires, adhesives, soil amendments and more. The Company’s technology can convert sustainable feedstocks, such as sustainably harvested wood, agricultural waste, wood waste and corrugated cardboard, into materials and products that are currently made from fossil feedstocks, such as petroleum and natural gas. The Company’s products are intended to compete directly with petroleum-derived products on both performance and price, as well as provide a significant unit cost advantage over products made from other low-carbon feedstocks.

The Company is currently developing and constructing its first manufacturing plant in Ontario, Canada (“Origin 1”), with mechanical completion expected in December 2022. The Company is also currently in the planning phase for the construction of a significantly larger manufacturing plant (“Origin 2”), which is expected to become operational in 2025.

On June 25, 2021 (the “Closing Date”), Artius Acquisition Inc. (“Artius”), a special purpose acquisition company, consummated the Merger Agreement and other Related Agreements (the “Merger Agreement”) dated February 16, 2021, by and among Artius, Zero Carbon Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Artius (“Merger Sub”), and Micromidas, Inc. a Delaware corporation (now known as Origin Materials Operating Inc., (“Legacy Origin”)).

Pursuant to the terms of the Merger Agreement, a business combination between Artius and Legacy Origin was effected through the merger of Merger Sub with and into Legacy Origin, with Legacy Origin surviving as the surviving company and as a wholly-owned subsidiary of Artius (the “Merger” and, collectively with the other transactions described in the Merger Agreement, the “Business Combination”). On the Closing Date, Artius changed its name to Origin Materials, Inc. (collectively with its subsidiaries, the “Company”).

For additional information on the Business Combination, please refer to Note 4, Business Combination, to these unaudited condensed consolidated financial statements.

2.Risks and Liquidity

The Company believes that the Business Combination has provided substantial liquidity and that its $362.2 million of cash and cash equivalents, restricted cash, and marketable securities will enable it to fund its planned operations for at least twelve months from the issuance date of these unaudited condensed consolidated financial statements.

Beginning in March 2020, the COVID-19 pandemic and the measures imposed to contain this pandemic have disrupted and are expected to continue to impact the Company’s business. The magnitude of the impact of the COVID-19 pandemic on the Company’s productivity, results of operations and financial position, and its disruption to the Company’s business and timeline, will depend in part, on the length and severity of these restrictions and on the Company’s ability to conduct business in the ordinary course. We continue to monitor the rapidly evolving conditions and circumstances, as well as guidance from international and domestic authorities, including public health authorities, and we may need to take additional actions based on their recommendations. There is considerable uncertainty regarding the impact on our business stemming from current measures and potential future measures that could restrict access to our facilities, limit manufacturing and support operations and place restrictions on our workforce and suppliers. The measures implemented by various authorities related to the COVID-19 outbreak have caused us to change our business practices including those related to where employees work, the distance between employees in our facilities, limitations on in-person meetings between employees and with customers, suppliers, service providers and stakeholders, as well as restrictions on business travel to domestic and international locations or to attend trade shows, investor conferences and other events.

In February 2022, Russia began a military intervention in Ukraine. In response, global sanctions were imposed against Russia. These sanctions and the related global ramifications could impact the costs and timing of construction of the Origin 1 and Origin 2 plants.

3.Summary of Significant Accounting Policies

Basis of Presentation

The Company’s unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and pursuant to the regulations of the SEC.

Pursuant to the Merger Agreement, the merger between Merger Sub and Legacy Origin was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, Artius was treated as the “acquired” company and Legacy Origin was treated as the acquirer for financial reporting purposes.

Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy Origin issuing stock for the net assets of Artius, accompanied by a recapitalization. The net assets of Artius are stated at historical cost, with no goodwill or other intangible assets recorded.

Legacy Origin was determined to be the accounting acquirer based on the following predominant factors:

•the Company’s Board of Directors (the “Board”) and management are primarily composed of individuals associated with Legacy Origin;

•Legacy Origin’s senior management comprise the senior management roles of the Company and are responsible for the day-to-day operations;

•the Company assumed the “doing business as” name of Legacy Origin; and

•The intended strategy and operations of the Company continue Legacy Origin’s current strategy and operations as a carbon negative materials company with a mission to enable the world’s transition to sustainable materials.

The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Legacy Origin. The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the Exchange Ratio (as defined below) established in the Business Combination.

Use of Estimates

The preparation of the condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements as well as reported amounts of expenses during the reporting periods. Estimates made by the Company include, but are not limited to, those related to the valuation of common stock and valuation of convertible preferred stock warrants prior to the Business Combination, valuation of the earnout liability, valuation of assumed common stock warrants liability, carrying amount and useful lives of property and equipment and intangible assets, impairment assessments, marketable securities, stock-based compensation expense, probabilities of achievement of performance conditions on performance stock awards, among others. The Company bases these estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates.

Unaudited Interim Condensed Consolidated Financial Statements

The accompanying interim Condensed Consolidated Balance Sheet as of September 30, 2022, the interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), and the interim Condensed Consolidated Statements of Stockholders’ Equity and Accumulated Other Comprehensive Income (Loss) for the three and nine months ended September 30, 2022 and 2021, and the interim Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021, are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in management’s opinion, include all adjustments consisting of only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of September 30, 2022 and its results of operations for the three and nine months ended September 30, 2022 and 2021 and cash flows for the nine months ended September 30, 2022 and 2021. The financial data and the other financial information disclosed in the notes to these condensed consolidated financial statements related to the three and nine-month periods are also unaudited. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year or any other period.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company's audited annual financial statements and notes thereto for the year ended December 31, 2021 included the Company’s Form 10-K as filed with the U.S. Securities and Exchange Commission (“SEC”) on March 1, 2022.

Principles of Consolidation

The unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP and applicable rules and regulations of the SEC and include the accounts of the Company and its wholly-owned subsidiaries, Origin Materials Canada Holding Limited, Origin Materials Canada Polyesters Limited, Origin Material Canada Pioneer Limited, Origin Materials Canada Research Limited, Origin Materials Operating, Inc, Origin US Megasite Holding, LLC, Origin US Megasite I, LLC, Origin US Megasite Development, LLC, and Origin US Megasite Operating, LLC. All intercompany accounts and transactions have been eliminated in consolidation.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash, cash equivalents, and marketable securities. The Company maintains its cash, cash equivalents, and marketable securities accounts with a financial institution where, at times, deposits exceed federal insurance limits. Management believes that the Company is not exposed to significant credit risk as the Company’s deposits are held at financial institutions that management believes to be of high credit quality. The Company has not experienced any losses on these deposits.

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with an initial maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains such funds in cash deposits and money market accounts.

Restricted cash consists of cash held in a control account as collateral for the Company’s credit card services, escrow services, and standby letter of credit. These restricted cash balances have been excluded from cash and cash equivalents balance and are included within other current assets in the Condensed Consolidated Balance Sheets based on the respective maturity dates.

The Company entered into an escrow agreement on September 27, 2019 for $1.3 million, whereby the funds would be used for construction and transportation services in connection with Origin 1. At September 30, 2022 and December 31, 2021, the escrow account had a balance of $0.3 million.

The Company has a standby letter of credit, whereby the funds may be used for the completion of work, services, and improvements in connection with Origin 1. The standby letter of credit matures and automatically renews in October of each year. At September 30, 2022 and December 31, 2021, the standby letter of credit was $0.2 million.

Cash, cash equivalents, and restricted cash consisted of the following (in thousands):


	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	102,965	$	46,637
Restricted cash	505		490
Total cash, cash equivalents, and restricted cash	$	103,470	$	47,127

Marketable Securities

The Company’s investment policy is consistent with the definition of available-for-sale securities. The Company does not buy and hold securities principally for the purpose of selling them in the near future. The Company’s policy is focused on the preservation of capital, liquidity, and return. The Company considers all of its marketable debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classifies these securities within current assets on the consolidated balance sheets. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the consolidated statements of comprehensive income until realized. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. Securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of the excess, if any, is caused by expected credit losses. Expected credit losses on securities are recognized in other income (expense), net on the consolidated statements of operations and comprehensive loss, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive loss in the consolidated statement of stockholders' equity. For the purposes of computing realized and unrealized gains and losses, the cost of securities sold is based on the specific-identification method. Interest on securities classified as available for sale is included as a component of interest income within other income (expense).

The nature of these financial instruments include instruments for which quoted prices are available but traded less frequently, instruments whose fair value has been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 2 financial instruments include agency mortgage-backed securities, corporate fixed income securities infrequently traded, and other securities, which primarily consist of sovereign debt, U.S. government agency securities, loans, and state and municipal securities.

Derivative Financial Instruments

The Company evaluated the stockholder convertible notes payable in accordance with ASC 815, Derivatives and Hedging and determined that the embedded components of these contracts qualify as a derivative to be separately accounted for as a liability. The Company records the fair value of the embedded components in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivatives was calculated using a model that estimated the value that would be paid to transfer the liability in an orderly transaction between market participants at the measurement date. The fair value of the derivative liabilities is revalued on each balance sheet date with a corresponding gain or loss recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company enters into foreign currency derivative contracts with financial institutions to reduce foreign exchange risk related to marketable securities. The Company uses forward currency derivative contracts to minimize the Company’s exposure to balances primarily denominated in the British Pound Sterling and Australian Dollar. The Company’s foreign currency derivative contracts, which are not designated as hedging instruments, are used to reduce the exchange rate risk associated primarily with marketable securities. The Company’s derivative financial instruments program is not designated for trading or speculative purposes. Outstanding foreign currency derivative contracts are recorded at fair value on the consolidated balance sheets.

Foreign currency derivative contracts are marked-to-market at the end of each reporting period with gains and losses recognized in the change in fair value of derivatives within other (income) expense. While the contract or notional amount is often used to express the volume of foreign currency derivative contracts, the amounts potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’ obligations under the agreements exceed the obligations of the Company to the counterparties. The notional amount of foreign currency derivative contracts as of September 30, 2022 and December 31, 2021 was $21.8 million and $63.7 million, respectively.

Fair Value of Financial Instruments

The Company applies the fair value measurement accounting standard whenever other accounting pronouncements require or permit fair value measurements. Fair value is defined in the accounting standard as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy under current accounting guidance prioritizes the inputs to valuation techniques used to measure fair value into three broad levels (Level 1, Level 2, and Level 3).

Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability and reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk) in a principal market.

The carrying amounts of working capital balances approximate their fair values due to the short maturity of these items. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest rate, currency, or credit risks arising from its financial instruments. The fair value of debt approximates its carrying value based on prevailing market rates.

The fair values of the Assumed Common Stock Warrants which are publicly traded are level 1 inputs. The fair value of the Assumed Common Stock Warrants which are not publicly traded, cash equivalents, marketable securities, and foreign currency derivative contracts are level 2 inputs as the Company uses quoted market prices or alternative pricing sources and models utilizing observable market inputs. The earnout liability, derivative liability and redeemable convertible preferred stock warrant liability were estimated using Level 3 inputs.

Other Receivables

Other receivables consist of amounts due from foreign governmental entities related to the Canadian harmonized sales tax (“HST”) and goods and services tax (“GST”) for goods and services transacted in Canada, and amounts due from cash collateral held by others for foreign currency derivative contracts.

AgriScience Grant

In January 2019, the Company entered into an agreement in which it will participate in the AgriScience Program Cluster Component grant through the Canadian Agricultural Partnership, whereby the Company will receive reimbursements for eligible expenditures up to approximately $1.8 million (in Canadian dollars) through March 2023. Grants are received through reimbursements from the Canadian government and recognized, upon completion of scope of services on a quarterly basis. Grants are recognized as a reduction of property, plant, and equipment or expense based on the nature of the cost the grant is reimbursing. During the three months ended September 30, 2022 and 2021 the Company received $0.4 million and zero, respectively, and during the nine months ended September 30, 2022 and 2021 the Company received $0.4 million and $0.1 million, respectively in grants, recorded in other income.

Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost and depreciated or amortized using the straight-line method over the estimated useful lives of the respective assets. Existing useful lives range from 3 to 5 years. Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or the lease term. Major additions and improvements are capitalized, while replacements, repairs, and maintenance that do not extend the life of an asset are charged to operations. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation or amortization are removed from the accounts. Costs incurred to acquire, construct or install property, plant, and equipment during the construction stage of a capital project and costs capitalized in conjunction with major improvements that have not yet been placed in service are recorded as construction in progress, and accordingly are not currently being depreciated. The Company capitalizes interest cost incurred on funds used to construct property, plant and equipment. The estimated useful lives of assets are as follows:


Computer Equipment			3 years
Office Furniture			5 years
Machinery and Equipment			5 years
Leasehold Improvements			1-5 years

Intangible Assets

Intangible assets are recorded at cost and are amortized using the straight-line method over the estimated useful lives of the respective assets, ranging from 7 to 15 years. The cost of servicing the Company’s patents is expensed as incurred. Upon retirement or sale, the cost of intangible assets is disposed of and the related accumulated amortization is removed from the accounts.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets, including property, equipment, software and intangibles, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If indicators of impairment exist, management identifies the asset group which includes the potentially impaired long-lived asset, at the lowest level at which there are separate, identifiable cash flows. If the total of the expected undiscounted future net cash flows for the asset group is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. For the nine month periods ended September 30, 2022 and 2021, no impairment was identified.

Government Loans

Government loans are classified as a noncurrent liability and recorded at amortized cost. Forgiveness of the balances due is recorded through earnings and occurs when there is confirmation from the governmental authority that the Company has complied with the conditions for forgiveness attached to the loan.

Debt Issuance Costs

The costs incurred in connection with the issuance of debt obligations, principally financing and legal costs, are capitalized. These costs are accreted over the term of the debt using the interest method. During the three and nine months ended September 30, 2022, accretion expense for debt issuance cost were zero. During the three and nine months ended September 30, 2021, accretion expense for debt issuance cost were zero and $2.2 million, respectively.

Redeemable Convertible Preferred Stock Warrants Liability

Free-standing warrants issued by Legacy Origin for the purchase of shares of its convertible preferred stock were classified as liabilities on the accompanying balance sheets at fair value using an Option-Pricing Model. Prior to the Business Combination, the liability recorded was adjusted for changes in the fair value at each reporting date and recorded as interest expense in the accompanying unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). As a result of the Business Combination, the Legacy Origin warrants each converted into a warrant to purchase shares of the Company’s Common Stock converted at the Exchange Ratio. The fair value of the warrants upon consummation of the Business Combination (see Note 4), is adjusted based on the price of the underlying common stock, was reclassified to additional paid-in capital.

Assumed Common Stock Warrants Liability

The Company assumed 24,149,960 public warrants (the “Public Warrants”) and 11,326,667 private placement warrants (the “Private Placement Warrants”, and the Public Warrants together with the Private Placement Warrants, the “Assumed Common Stock Warrants”) upon the Business Combination, all of which were issued in connection with Artius’ initial public offering and entitle each holder to purchase one share of Class A common stock at an exercise price of at $11.50 per share. As of September 30, 2022, 24,149,960 Public Warrants and 11,326,667 Private Placement Warrants are outstanding. The Public Warrants are publicly traded and are exercisable for cash unless certain conditions occur, such as the failure to have an effective registration statement related to the shares issuable upon exercise or redemption by the Company under certain conditions, at which time the warrants may be cashless exercised. The Private Placement Warrants are transferable, assignable or salable in certain limited exceptions. The Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will cease to be Private Placement Warrants, and become Public Warrants and be redeemable by the Company and exercisable by such holders on the same basis as the other Public Warrants.

The Company evaluated the Assumed Common Stock Warrants under ASC 815-40, Derivatives and Hedging-Contracts in Entity’s Own Equity (“ASC 815-40”), and concluded they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of the Assumed Common Stock Warrants may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of our Class A stockholders. Because not all of the voting stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Assumed Common Stock Warrants do not meet the conditions to be classified in equity. Since the Assumed Common Stock Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the Condensed Consolidated Balance Sheets at fair value, with subsequent changes in their respective fair values recognized in the change in fair value of Assumed Common Stock Warrant liabilities within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) at each reporting date. The Public Warrants were publicly traded and thus had an observable market price to estimate fair value, and the Private Placement Warrants were effectively valued similar to the Public Warrants, as described in Note 6.

Earnout Liability

The Company has recorded an earnout liability related to future contingent equity shares related to the Business Combination (Note 13). The Company recorded these instruments as liabilities on the Condensed Consolidated Balance Sheets at fair value, with subsequent changes in their respective fair values recognized in earnings at each reporting date.

Leases

The Company has leases for office space and equipment, some of which have escalating rentals during the initial lease term and during subsequent optional renewal periods. The Company accounts for its leases under ASC 842, Leases. The Company recognizes a right-of-use asset and lease liability for leases based on the net present value of future minimum lease payments. Lease expense is recognized on a straight-line basis over the non-cancelable lease term and renewal periods that are considered reasonably certain.

Research and Development Cost

Costs related to research and development are expensed as incurred.

Stock-Based Compensation

The Company has issued common stock awards under three equity incentive plans. Origin measures stock options and other stock-based awards granted to employees, directors and other service providers based on their fair value on the date of grant and recognizes compensation expenses of those awards over the requisite service period, which is generally the vesting period of the respective award. For awards with performance conditions, compensation is recorded once there is sufficient objective evidence the performance conditions are considered probable of being met. Origin applies the straight-line method of expense recognition to all awards with only service-based vesting conditions. Origin estimates the fair value of each stock option grant on the date of grant using the Black-Scholes option-pricing model and the grant date closing stock price for RSU awards and performance awards. The Black-Scholes option-pricing model requires the use of highly subjective assumptions including:

•Expected term – The expected term of the options is based on the simplified method, which takes into consideration the grant’s contractual life and vesting period and assumes that all options will be exercised between the vesting date and the contractual term of the option which averages an award’s vesting term and its contractual term.

•Expected volatility – The Company uses the trading history of various companies in its industry sector in determining an estimated volatility factor.

•Expected dividend – The Company has not declared common stock dividends and does not anticipate declaring any common stock dividends in the foreseeable future.

•Forfeiture – The Company estimates forfeitures based on historical activity and considers voluntary and involuntary termination behavior as well as analysis of actual historical option forfeitures, netting the estimated expense by the derived forfeiture rate.

•Risk-free interest rate – The Company bases the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with the same or substantially equivalent remaining term.

Income Taxes

Deferred income taxes are determined using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is recorded when the expected recognition of a deferred income tax asset is considered to be unlikely.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters as a component of income tax expense.

Functional Currency Translation

The functional currency of the Company’s wholly-owned Canadian subsidiaries is the Canadian dollar, whereby their assets and liabilities are translated at period-end exchange rates except for nonmonetary capital transactions and balances, which are translated at historical rates. All income and expense amounts of the Company are translated at average exchange rates for the respective period. Translation gains and losses are not included in determining net loss but are accumulated in a separate component of stockholders’ equity. Foreign currency transaction gains and losses are included in the determination of net loss in the period in which they occur. These amounts are included in other income, net, of the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Comprehensive Income (Loss)

The Company’s comprehensive income or loss consists of net income or loss and other comprehensive income (loss). Foreign currency translation gains or losses and unrealized gains or losses on available-for-sale marketable debt securities are included in the Company’s other comprehensive income (loss).

Basic and Diluted Net Income Per Share

Basic net income per common share is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net income per share is computed by dividing the net income attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For the purposes of the diluted net income per share calculation, the convertible preferred stock, common stock options, RSU awards, performance stock awards, convertible preferred stock warrants, common stock warrants, convertible notes, earnout shares, and Sponsor Vesting Shares (as defined below) are considered to be potentially dilutive securities. Basic and diluted net income per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The two-class method determines net income per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. All series of the Company’s convertible preferred stock are considered to be participating securities because, in addition to cumulative dividends, all holders are entitled to receive a non-cumulative dividend on a pari passu basis in the event that a dividend is paid on the common stock. The two-class method requires income or loss available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to share in undistributed earnings as if all income or loss for the period had been distributed. The holders of the convertible preferred stock do not have a contractual obligation to share in the Company’s losses. Accordingly, the Company’s net income is attributed entirely to common stockholders. For the periods presented that the Company has reported a net loss, diluted net loss per common share is the same as basic net loss per common share for those periods.

Reclassifications

Certain amounts in prior periods have been reclassified to conform with the report classifications of the nine months ended September 30, 2022, noting the Company has reflected the Reverse Recapitalization pursuant to the Business Combination as of and for the nine months ended September 30, 2021, within the unaudited condensed financial statements.

Segment Reporting

The Company operates in a single segment. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The Company has determined that its Co-Chief Executive Officers are the CODM. To date, the Company’s CODM has made such decisions and assessed performance at the Company level.

As of September 30, 2022 and December 31, 2021, the Company had $144.7 million and $60.6 million, respectively, of assets located outside of the United States.

4.Business Combination

On June 25, 2021, Artius and Micromidas, Inc. (now known as Origin Materials Operating Inc., “Legacy Origin”) completed the Business Combination pursuant to the Merger Agreement with Legacy Origin surviving the merger as a wholly owned subsidiary of Artius, which became Origin Materials, Inc. Cash proceeds from the Business Combination totaled approximately $467.5 million, which included funds held in Artius’s trust account and the completion of the concurrent PIPE and Backstop Financing.

In accordance with the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger, (i) all shares of Legacy Origin’s Series A, Series B, and Series C Preferred Stock, and Common Stock (collectively, “Legacy Origin Stock”) issued and outstanding immediately prior to the effective time of the Merger were converted into the right to receive their pro rata portion of shares of Company Common Stock (the “Common Stock”) issued as Merger consideration; (ii) holders of Legacy Origin’s Convertible Notes Payable, plus accrued interest also received shares of Company Common Stock; (iii) each option exercisable for Legacy Origin Stock that was outstanding immediately prior to effective time of the Merger was assumed and continues in full force and effect on the same terms and conditions as were previously applicable to such options, subject to adjustments to exercise price and number of shares Common Stock issuable upon exercise based on the final conversion ratio calculated in accordance with the Merger Agreement. Additionally, as part of the consideration transferred, stockholders of Legacy Origin and Artius were given the right to additional shares in the Company. These shares vest to the holder upon the share price of the Company reaching certain targets over a future period (“Earnout Shares”, see Note 13).

The Company accounted for the Business Combination as a reverse recapitalization, which is the equivalent of Legacy Origin issuing stock for the net assets of Artius, accompanied by a recapitalization, with Artius treated as the acquired company for accounting purposes. The determination of Artius as the “acquired” company for accounting purposes was primarily based on the fact that subsequent to the Business Combination, Legacy Origin will comprise all of the ongoing operations of the combined entity, a majority of the governing body of the combined company and Legacy Origin’s senior management will comprise all of the senior management of the combined company. The net assets of Artius were stated at historical cost with no goodwill or other intangible assets recorded. Reported results from operations included herein prior to the Business Combination are those of Legacy Origin. The shares and corresponding capital amounts and loss per share related to Legacy Origin’s outstanding convertible preferred stock and Common Stock prior to the Business Combination have been retroactively restated to reflect the conversion ratio established in the Merger Agreement (1.00 Legacy Origin share for approximately 2.11 shares of the Company, the “Exchange Ratio”).

5.Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The guidance is effective for fiscal years beginning on or after December 15, 2021, with early adoption permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company adopted the new standard as of January 1, 2022. The adoption of the standard had no material impact.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform ("Topic 848"): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, as amended and supplemented by subsequent ASUs (collectively, “ASU 2020-04”), which provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for borrowing instruments, which use LIBOR as a reference rate, and is effective immediately, but is only available through December 31, 2022. The Company adopted the new standard as of January 1, 2022. The adoption of the standard had no material impact on the Company’s financial results.

In November 2021, the FASB issued ASU 2021-10, Government Assistance ("Topic 832"), Disclosures by Business Entities about Government Assistance. The FASB issued this update to increase the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. The main provisions of this update require the following disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy:

(i) Information about the nature of the transactions and the related accounting policy used to account for the transactions

(ii) The line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item

(iii.) Significant terms and conditions of the transactions, including commitments and contingencies.

The amendments in this update are effective for the Company in the annual period beginning after December 15, 2021. Early application of the amendments is permitted. The Company has elected to adopt on January 1, 2022. The adoption of the standard had no impact on the Company’s financial results. See Note 3 and Note 14 for required disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In October 2021, the FASB issued ASU 2021-08, Business Combinations ("Topic 805"), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This update improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to (1) recognition of an acquired contract liability; and (2) payment terms and their effect on subsequent revenue recognized by the acquirer. Specifically, the update requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers. The amendments in this update are effective for the Company in the fiscal year beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted, including adoption in an interim period. The Company does not believe the adoption of this standard will have a material effect on its consolidated financial statements.

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging ("Topic 815") ("ASU 2022-01"). This update clarifies the guidance in Topic 815 on fair value hedge accounting of interest rate risk for portfolios and financial assets. Among other things, the amended guidance established the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible and renamed that method the “portfolio layer” method. ASU 2022-01 is effective January 1, 2023 and is not expected to have a significant impact on the Company's consolidated financial statements.

6.Fair Value Measurement

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows:


	Fair Value as of September 30, 2022
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash, cash equivalents and restricted cash	$	103,470	$	—	$	—	$	103,470
Marketable securities	—		258,733		—		258,733
Derivative asset	—		1,826		—		1,826
Total fair value	$	103,470	$	260,559	$	—	$	364,029
Liabilities:
Assumed common stock warrants (Public)	$	25,357	$	—	$	—	$	25,357
Assumed common stock warrants (Private Placement)	—		11,893		—		11,893
Earnout liability	—		—		64,197		64,197

Total fair value	$	25,357	$	11,893	$	64,197	$	101,447


	Fair Value as of December 31, 2021
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash, cash equivalents and restricted cash	$	47,127	$	—	$	—	$	47,127
Marketable securities	—		397,458		—		397,458
Derivative asset	—		202		—		202
Total fair value	$	47,127	$	397,660	$	—	$	444,787
Liabilities:
Assumed common stock warrants (Public)	$	35,983	$	—	$	—	$	35,983
Assumed common stock warrants (Private Placement)	—		16,877		—		16,877
Earnout liability	—		—		127,757		127,757
Derivative liability	—		103		—		103
Total fair value	$	35,983	$	16,980	$	127,757	$	180,720

The following table sets forth a summary of the activities of the Company’s redeemable convertible preferred stock warrant liability and embedded components of the stockholder convertible notes payable, which represents a recurring measurement that is classified within Level 3 of the fair value hierarchy wherein fair value is estimated using significant unobservable inputs:


Redeemable Convertible Preferred Stock Warrants	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Beginning warrants liability balance	$	—	$	—	$	—	$	19,233
Change in fair value of warrants liability	—		—		—		35,908
Reclassification to APIC upon recapitalization	—		—		—		(55,141)
Ending warrant liability balance	$	—	$	—	$	—	$	—

Embedded Derivative - Stockholder Convertible Notes Payable	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Beginning derivative liability balance	$	—	$	—	$	—	$	1,239
Change in fair value of derivative liability	—		—		—		(1,239)
Additional derivative liability	—		—		—		—
Ending derivative liability balance	$	—	$	—	$	—	$	—

The Company performs routine procedures such as comparing prices obtained from independent sources to ensure that appropriate fair values are recorded. The marketable securities are categorized as Level 2 instruments as the estimated fair value was determined based on the estimated or actual bids and offers of the marketable securities in an over-the-counter market on the last business day of the period. All of the Company’s cash, cash equivalents, restricted cash, marketable securities and foreign currency derivative contracts are classified within Level 1 or Level 2 because the Company’s cash, cash equivalents, restricted cash, marketable securities and foreign currency derivative contracts are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs. Because the transfer of Private Placement Warrants to anyone outside of certain permitted transferees of Artius Acquisition Partners LLC (the “Sponsor”) would result in the Private Placement Warrants having substantially the same terms as the Public Warrants, the Company determined that the fair value of each Private Placement Warrant is consistent with that of a Public Warrant. Accordingly, the Private Placement Warrants are classified as Level 2 financial instruments.

The value of the redeemable convertible preferred stock warrants liability and the derivative liability are classified as Level 3 measurements under the fair value hierarchy, as these liabilities have been valued based on significant inputs not observable in the market.

As of September 30, 2022 and December 31, 2021, the carrying values of cash and cash equivalents, accounts payable and accrued liabilities approximate their respective fair values due to their short-term nature.

Marketable Securities

The Company’s marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. Amortized cost net of unrealized gain (loss) is equal to fair value as of September 30, 2022 and December 31, 2021. The following table summarized the marketable securities by major security type as follows:


	As of September 30, 2022
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Corporate bonds	$	163,671	$	—	$	(6,827)	$	156,844
Asset-backed securities	84,387		—		(4,481)		79,906
U.S. government and agency securities	19,509		—		(1,052)		18,457
Foreign government and agency securities	1,655		—		(85)		1,570
Municipal/provincial bonds and other	2,000		—		(44)		1,956


Total marketable securities	$	271,222	$	—	$	(12,489)	$	258,733


	As of December 31, 2021
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Corporate bonds	$	274,939	$	100	$	(1,725)	$	273,314
Asset-backed securities	96,713		190		(199)		96,704
U.S. government and agency securities	20,235		—		(64)		20,171
Foreign government and agency securities	3,262