SEC Filing | Origin Materials, Inc.

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orgn-20230930

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, 2023


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 144,279,207, as of November 6, 2023.

ORIGIN MATERIALS, INC.

TABLE OF CONTENTS


		Page No.
PART I. — FINANCIAL INFORMATION
Item 1	Condensed Consolidated Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets (unaudited)	2
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (unaudited)	3
	Condensed Consolidated Statements of Stockholders’ Equity and Accumulated Other Comprehensive Loss (unaudited)	4
	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	28
Item 3	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4	Controls and Procedures	39
PART II. — OTHER INFORMATION		40
Item 1	Legal Proceedings	40
Item 1A	Risk Factors	40
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3	Defaults Upon Senior Securities	66
Item 4	Mine Safety Disclosures	66
Item 5	Other Information	66
Item 6	Exhibits	66
SIGNATURES		68

WHERE YOU CAN FIND MORE INFORMATION

Investors and others should note that we announce material financial information to our investors using our investor relations website, which can be found at https://investors.originmaterials.com/, as well as press releases, SEC filings, and public conference calls and webcasts. We also use the following social media channels as a means of disclosing information about the company, our products, our planned financial and other announcements and attendance at upcoming investor and industry conferences, and other matters and for complying with our disclosure obligations under Regulation FD:

Origin X (f/k/a Twitter) Account (https://twitter.com/OriginMaterials)

Origin LinkedIn Page (https://www.linkedin.com/company/origin-materials)

Origin Facebook Page (https://www.facebook.com/people/Origin-Materials/100057468488825)

These channels may be updated from time to time on Origin’s investor relations website. The information we post through these channels may be deemed material. Accordingly, investors should monitor them in addition to following our investor relations website, press releases, SEC filings, and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this Quarterly Report on Form 10-Q.

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, 2023 (Unaudited)		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	66,106	$	107,858
Restricted cash	—		490
Marketable securities	123,430		215,464
Accounts receivable	10,625		—
Other receivables	1,852		4,346
Inventory	821		—
Derivative asset	277		—
Prepaid expenses and other current assets	6,041		3,341
Total current assets	209,152		331,499

Property, plant, and equipment, net	234,117		154,183
Operating lease right-of-use asset	4,610		2,779

Intangible assets, net	129		160
Other long-term assets	23,033		5,079
Total assets	$	471,041	$	493,700

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	4,991	$	10,384
Accrued expenses	7,071		8,414
Operating lease liability, current	404		619

Deferred income	1,374		—
Other liabilities, current	2,896		51
Derivative liability	—		344

Total current liabilities	16,736		19,812


Earnout liability	3,629		42,533
Canadian Government Research and Development Program liability	7,169		7,185

Assumed common stock warrants liability	3,434		30,872
Notes payable	3,459		5,847
Operating lease liability	4,270		2,249

Other liabilities, long-term	8,257		8,297
Total liabilities	46,954		116,795

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, 2023 and December 31, 2022	—		—
Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 144,198,529 and 143,034,225, issued and outstanding as of September 30, 2023 and December 31, 2022, respectively (including 4,500,000 Sponsor Vesting Shares)	14		14
Additional paid-in capital	380,295		371,072
Retained earnings	56,008		21,772
Accumulated other comprehensive loss	(12,230)		(15,953)
Total stockholders’ equity	424,087		376,905
Total liabilities and stockholders’ equity	$	471,041	$	493,700

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)	2023		2022		2023		2022
Revenues	$	7,140	$	—	$	15,742	$	—
Cost of revenues (exclusive of depreciation and amortization shown separately below)	6,340		—		14,114		—
Operating expenses
Research and development	4,927		3,732		15,398		8,717
General and administrative	7,633		5,834		23,908		16,769
Depreciation and amortization	386		180		1,021		488
Total operating expenses	12,946		9,746		40,327		25,974
Loss from operations	(12,146)		(9,746)		(38,699)		(25,974)
Other income (expenses)
Interest income (expenses)	(1,130)		2,309		4,308		6,077

Gain in fair value of derivatives	126		1,129		620		1,725
Gain (loss) in fair value of warrants liability	22,815		(1,419)		27,438		15,610
Gain in fair value of earnout liability	18,757		15,147		39,137		63,561
Other income, net	2,603		879		1,655		1,577
Total other income, net	43,171		18,045		73,158		88,550
Net income before income tax expenses	31,025		8,299		34,459		62,576
Income tax expenses	(94)		—		(223)		—
Net income	$	30,931	$	8,299	$	34,236	$	62,576
Other comprehensive income (loss)
Unrealized gain (loss) on marketable securities, net of tax	$	1,593	$	(1,403)	$	4,507	$	(10,783)
Foreign currency translation adjustment, net of tax	(4,176)		(7,253)		(784)		(8,061)
Total comprehensive income (loss)	$	28,348	$	(357)	$	37,959	$	43,732
Net income per share, basic	$	0.22	$	0.06	$	0.25	$	0.46
Net income per share, diluted	$	0.22	$	0.06	$	0.24	$	0.44
Weighted-average common shares outstanding, basic	139,806,045		138,061,829		139,374,106		137,348,180
Weighted-average common shares outstanding, diluted	142,703,550		142,197,014		142,872,174		142,134,560

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 LOSS

(Unaudited)

(In Thousands, Except Share Amounts)


								Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)
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 Loss		Total Stockholders’ Equity
	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)
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
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


								Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Common Stock			Additional Paid-in Capital		Retained Earnings
Three Months Ended September 30, 2023	Shares	Amount
Balance at June 30, 2023	143,498,724	$	14	$	377,059	$	25,077	$	(9,647)	$	392,503
Common stock issued upon exercise of stock options	582,240	—		90		—		—		90
Vested common stock awards	117,565	—		—		—		—		—
Stock-based compensation	—	—		3,146		—		—		3,146
Net income	—	—		—		30,931		—		30,931
Other comprehensive loss	—	—		—		—		(2,583)		(2,583)
Balance at September 30, 2023	144,198,529	$	14	$	380,295	$	56,008	$	(12,230)	$	424,087


								Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Common Stock			Additional Paid-in Capital		Retained Earnings
Nine Months Ended September 30, 2023	Shares	Amount
Balance at December 31, 2022	143,034,225	$	14	$	371,072	$	21,772	$	(15,953)	$	376,905
Common stock issued upon exercise of stock options	954,143	—		144		—		—		144
Vested common stock awards	210,161	—		—		—		—		—
Stock-based compensation	—	—		9,079		—		—		9,079
Net income	—	—		—		34,236		—		34,236
Other comprehensive income	—	—		—		—		3,723		3,723
Balance at September 30, 2023	144,198,529	$	14	$	380,295	$	56,008	$	(12,230)	$	424,087

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)	2023		2022
Cash flows from operating activities
Net income	$	34,236	$	62,576
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	1,055		488
Amortization on right-of-use asset	458		423
Stock-based compensation	7,031		3,719
Realized gain of marketable securities	(1,706)		—
Amortization premium and discount of marketable securities, net	3,701		—

Change in fair value of derivatives	(620)		(1,725)
Change in fair value of common stock warrants liability	(27,438)		(15,610)

Change in fair value of earnout liability	(39,137)		(63,561)
Change in fair value of incremental acquisition fee accrual	—		(35)
Changes in operating assets and liabilities:
Receivables	(8,130)		(926)
Inventory	(821)		—
Prepaid expenses and other current assets	(2,703)		(1,464)
Other long-term assets	(17,954)		(5,019)
Accounts payable	2,819		5,195
Accrued expenses	1,707		4,380
Operating lease liability	(529)		(338)
Deferred income	1,374		—
Other liabilities, current	2,846		2,214
Other liabilities, long-term	(2,636)		221
Net cash used in operating activities	(46,447)		(9,462)
Cash flows from investing activities
Purchases of property, plant, and equipment, net of grants	(90,113)		(57,825)

Purchases of marketable securities	(3,092,218)		(2,584,027)
Sales of marketable securities	3,057,700		2,587,649
Maturities of marketable securities	129,081		124,319
Capitalized interest on plant construction	—		(133)
Net cash provided by investing activities	4,450		69,983
Cash flows from financing activities




Proceeds from exercise of stock options	145		371

Net cash provided by financing activities	145		371
Effects of foreign exchange rate changes on the balance of cash and cash equivalents, and restricted cash held in foreign currencies	(390)		(4,549)
Net (decrease) increase in cash and cash equivalents, and restricted cash	(42,242)		56,343
Cash and cash equivalents, and restricted cash, beginning of the period	108,348		47,127
Cash and cash equivalents, and restricted cash, end of the period	$	66,106	$	103,470
Supplemental disclosure for non-cash transactions
Operating lease right-of-use asset obtained in exchange for lease obligations	$	2,302	$	1,710

Stock-based compensation capitalized into property, plant, and equipment	$	2,048	$	697
Purchases of property, plant, and equipment included in accounts payable and accrued expenses and capitalized interest	$	6,182	$	—
Cash paid during the period:
Income taxes payment	$	129	$	—

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, fuels, 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.

On June 27, 2023, the Company began startup of its “Origin 1” facility, the world’s first commercial chloromethylfurfural (“CMF”) plant, located in Sarnia, Ontario. The Company is also currently in the planning phase for the construction of “Origin 2,” its significantly larger manufacturing plant located in Geismar, Louisiana.

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”).

2.Risks and Liquidity

The Company believes that its $189.5 million of cash and cash equivalents, and marketable securities as of September 30, 2023 will enable it to fund its planned operations for at least twelve months from the issuance date of these unaudited condensed consolidated financial statements.

The Company’s future results of operations and liquidity could be materially adversely affected by macroeconomic and geopolitical factors in the United States and globally, including the supply chain environment, inflationary pressure, higher interest rates, instability in the global financial markets, significant disruptions in the global markets as a result of the conflict between Russia and Ukraine and or the recent state of war between Israel and Hamas and the related risk of a larger regional conflict, labor shortages, the introduction of or changes in tariffs, trade barriers, or regulatory requirements, and uncertain or reduced demand, as well as the impact of any initiatives or programs that the Company may undertake to address financial and operational challenges faced by its customers.

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 U.S. Securities and Exchange Commission (“SEC”).

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 revenues, costs and expenses during the reporting periods. Estimates made by the Company include, but are not limited to, 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 expenses, 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 Sheets as of September 30, 2023 and December 31, 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 Loss for the three and nine months ended September 30, 2023 and 2022, and the interim Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022, and the notes to such interim condensed consolidated financial statements are unaudited.

These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and the applicable rules and regulations of the SEC for interim financial information. As permitted under those rules, we condensed or omitted certain footnotes or other financial information that are normally required by GAAP for annual financial statements.

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, 2023 and its results of operations for the three and nine months ended September 30, 2023 and 2022 and cash flows for the nine months ended September 30, 2023 and 2022. The results of operations for the three and nine months ended September 30, 2023 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, 2022 included the Company’s Form 10-K as filed with the SEC on February 23, 2023.

Principles of Consolidation

The unaudited interim condensed 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. 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 financial institutions where, at times, deposits exceed federal insurance limits. Management believes that the Company is not currently exposed to significant credit risk as the Company’s deposits are held at financial institutions that management believes to be of high credit quality. While the Company has not experienced losses of these deposits to date, future disruptions of financial institutions where we bank or have credit arrangements, or disruptions of the financial services industry in general, could adversely affect our ability to access our cash and cash equivalents. If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business could be adversely affected.

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 in the Unaudited Condensed Consolidated Balance Sheets based on the contractual term.

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, 2023 and December 31, 2022, the escrow account had a balance of $0.0 million and $0.3 million, respectively. On June 25, 2023, the Company began startup of the Origin 1 facility. Therefore, those funds are no longer restricted and have been released.

The Company had a standby letter of credit, whereby the funds were used for the completion of work, services, and improvements in connection with Origin 1. The standby letter of credit matured and automatically renewed in October of each year. At September 30, 2023 and December 31, 2022, the standby letter of credit was $0.0 million and $0.2 million, respectively. On June 25, 2023, the Company began startup of the Origin 1 facility. Therefore, those funds are no longer restricted and have been released.

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


	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	66,106	$	107,858
Restricted cash	—		490
Total cash, cash equivalents, and restricted cash	$	66,106	$	108,348

Marketable Securities

The Company’s investment policy requires the Company to purchase investments that are consistent with the classification 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 condensed 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 condensed consolidated statements of operations and comprehensive income (loss) 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, net on the condensed consolidated statements of operations and comprehensive income (loss), and any remaining unrealized gains and losses, net of taxes, are included in accumulated other comprehensive loss in the condensed consolidated statements of stockholders’ equity and accumulated other comprehensive loss. For the purposes of computing realized and unrealized gains and losses, the cost of securities sold is based on the specific-identification method. Amortization of discounts and premiums, net, and interest on securities classified as available for sale are included as a component of interest income (expenses) within other income (expenses).

The nature of these financial instruments includes 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 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 condensed 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 (expenses). 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, 2023 and December 31, 2022 was $13.0 million and $21.2 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. We have determined the fair value of debt approximates the carrying value due to the standard terms of the arrangement including but not limited to the amount borrowed, the term, and the interest rate.

The fair values of cash equivalents and 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, 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 was estimated using Level 3 inputs.

Accounts Receivable

We record accounts receivable at the stated amount of the transactions with our customers, and we do not charge interest. The allowance for credit losses, known as the Current Expected Credit Losses ("CECL") model, is our best estimate of the amount of probable credit losses associated with our accounts receivable. We determine the allowance based on current conditions, and reasonable and supportable forecasts. Past-due balances are reviewed individually for collectability. We charge off account balances against the allowance after we have exhausted all means of collection and we consider the potential for recovery to be remote. Our accounts receivable generally have net 30 to net 90-day payment terms, and we usually receive consideration in accordance with the payment terms of the contract. As of September 30, 2023, we do not have any allowance for credit losses.

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) incurred 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 expenses based on the nature of the cost the grant is reimbursing. The Company received zero and $0.1 million during the three and nine months ended September 30, 2023, respectively, and $0.4 million during the three and nine months ended September 30, 2022 in grants, recorded in other income, net. The Company is not entitled to any further grants under this AgriScience Program.

Inventory

Inventories are stated at the lower of cost or net realizable value. Cost is determined using a weighted-average cost approach, assuming full absorption of direct and indirect manufacturing costs, or based on cost of purchasing from our vendors. If inventory costs exceed expected net realizable value due to obsolescence or lack of demand, valuation adjustments are recorded for the difference between the cost and the expected net realizable value.

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. Depreciation normally begins when assets are ready for its intended use. 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. We depreciate plants over a maximum life of 40 years and plant improvements over the shorter of the asset life or remaining useful life of the plants structure using the straight-line method. 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 and other equipment			3 years
Pilot plant			5 years
Machinery and equipment			5 years
Leasehold improvements			1-5 years
Plants and improvements			20-40 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. 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. As of September 30, 2023, no impairment was identified.

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” or “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, 2023, 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 to be exercised.

Revenue Recognition

The Company began to recognize revenue in 2023. Our revenues are from product sales and service agreements. The majority of our contracts with customers typically contain multiple products and services. We account for individual products and services separately if they are distinct—that is, if a product or service is separately identifiable from other items in the contract and if a customer can benefit from it on its own or with other resources that are readily available to the customer.

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or service to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under our product revenue and collaborative research and development agreements, we perform the following steps:

1.Identifying the contract with a customer;

2.Identifying the performance obligations in the contract;

3.Determining the transaction price;

4.Allocating the transaction price to the performance obligations; and

5.Recognizing revenue when, or as, the performance obligations are satisfied.

We account for a contract with a customer when there is approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Non-cancellable purchase orders received from customers to deliver a specific quantity of product, when combined with our order confirmation, in exchange for future consideration, create enforceable rights and obligations on both parties and constitute a contract with a customer.

Our service agreements are specified in each respective customer agreement. We identify each performance obligation at contact inception and allocate the consideration to each distinct performance obligation based on the stand-alone selling

prices of each performance obligation. We recognize revenue from the service agreements over time depicting the pattern of service delivery and recognizes the costs associated with these contracts as incurred.

In general, we recognize revenue when, or as, our performance obligations under the terms of a contract with our customer are satisfied. For product sales, this happens when we transfer control of our products and risk of loss to the customer or when title passes upon shipment. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring our products. Taxes collected from customers and remitted to governmental authorities are excluded from revenues. The Company recognizes its revenue from direct product sales which is recognized at a point in time when the performance obligation is satisfied upon delivery of the product.

For service agreements, sometimes the timing of revenue recognition may differ between the timing of satisfying performance obligations and payment by customers. The Company records a receivable prior to payment if there is an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records contract liability (deferred income) until the performance obligations are satisfied.

Revenue is recorded in an amount that reflects that consideration we expect to be entitled to in exchange for those goods or services. We have elected to treat shipping and handling activities as fulfillment costs.

Cost of revenue

Cost of revenue for product sales consists primarily of cost associated with the purchase of finished goods. Cost of revenue for service agreements is based on the actual cost incurred which mainly consists of the direct cost from vendors and overhead costs such as payroll and benefit related to our employees who provide the services to customers.

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. In addition, the Company capitalized stock-based compensation related to employees whose costs are necessary incurred to bring the asset to its intended use. 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 expenses.

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 non-monetary 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 income but are accumulated in a separate component of stockholders’ equity. Foreign currency transaction gains and losses are included in the determination of net income 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 or 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.

Reclassifications

Certain amounts on the balance sheet in prior periods have been condensed to conform with the current presentation for the nine months ended September 30, 2023.

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, 2023 and December 31, 2022, the Company had $189.4 million and $157.2 million, respectively, of assets located outside of the United States.

4.Revenue

The Company began to recognize revenue in 2023. We recognize revenue when, or as, our performance obligations under the terms of a contract with our customer are satisfied. We generally procure, will produce, and sell product to be utilized in the manufacturing of finished products, for which we recognize revenue upon shipment. Our service contracts generally pay us at the commencement of the agreement and then at additional intervals as outlined in each contract. We recognize contract liabilities for such payments and then recognize revenue as we satisfy the related performance obligations. To the extent collectible revenue recognized under this method exceeds the consideration received, we recognize contract assets for such unbilled consideration.

The Company received payment precedes the provision of the related services. Therefore, the Company records deferred income of $1.4 million and zero as of September 30, 2023 and December 31, 2022, respectively, and then recognize revenue when the performance obligations are satisfied.

The Company recognized $7.1 million and $15.7 million revenue during the three and nine months ended September 30, 2023 with no revenues recognized in the prior periods in 2022.

5.Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

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. The Company adopted the new standard as of January 1, 2023. The adoption of the standard had no material impact on the Company’s financial results.

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. The Company adopted the new standard as of January 1, 2023. The adoption of the standard had no material impact on the Company’s financial results.

In September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50). These amendments in this update improves financial reporting by requiring new disclosures about programs thereby allowing financial statement users to better consider the effect of the programs on the Company’s working capital, liquidity and cash flows over time. The amendments in this update are effective for the Company in the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company adopted the new standard as of January 1, 2023. The adoption of the standard had no material impact on the Company’s financial results.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance is effective for the Company for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements.

The Company has determined that all other recently issued accounting pronouncements will not have a material impact on the Company’s consolidated financial statements or do not apply to its operations.

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, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash, cash equivalents and restricted cash	$	66,106	$	—	$	—	$	66,106
Marketable securities	—		123,430		—		123,430
Derivative asset	—		277		—		277
Total fair value	$	66,106	$	123,707	$	—	$	189,813
Liabilities:
Assumed common stock warrants (Public)	$	2,338	$	—	$	—	$	2,338
Assumed common stock warrants (Private Placement)	—		1,096		—		1,096
Earnout liability	—		—		3,629		3,629

Total fair value	$	2,338	$	1,096	$	3,629	$	7,063


	Fair Value as of December 31, 2022
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash, cash equivalents and restricted cash	$	108,348	$	—	$	—	$	108,348
Marketable securities	—		215,464		—		215,464

Total fair value	$	108,348	$	215,464	$	—	$	323,812
Liabilities:
Assumed common stock warrants (Public)	$	21,015	$	—	$	—	$	21,015
Assumed common stock warrants (Private Placement)	—		9,856		—		9,856
Earnout liability	—		—		42,533		42,533
Derivative liability	—		344		—		344
Total fair value	$	21,015	$	10,200	$	42,533	$	73,748

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 Earnout liability (Note 13) is 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. A gain of $18.8 million and $39.1 million during the three and nine months ended September 30, 2023, respectively, and a gain of $15.1 million and $63.6 million during the three and nine months ended September 30, 2022, respectively, was recorded on the unaudited Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) in the change in fair value of earnout liability.

As of September 30, 2023 and December 31, 2022, the carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and deferred income 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. The following table summarized the marketable securities by major security type as follows:


	As of September 30, 2023
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value

Corporate bonds	$	49,865	$	78	$	(1,876)	$	48,067
Asset-backed securities	59,709		37		(2,919)		56,827
U.S. government and agency securities	18,705		—		(492)		18,213
Foreign government and agency securities	373		—		(50)		323



Total marketable securities	$	128,652	$	115	$	(5,337)	$	123,430


	As of December 31, 2022
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Commercial paper	$	17,568	$	38	$	—	$	17,606
Corporate bonds	115,134		—		(4,923)		110,211
Asset-backed securities	70,825		8		(3,885)		66,948
U.S. government and agency securities	19,308		—		(917)		18,391
Foreign government and agency securities	375		—		(37)		338
Municipal/provincial bonds and other	2,000		—		(30)		1,970


Total marketable securities	$	225,210	$	46	$	(9,792)	$	215,464

The realized gains and losses are included in other income, net on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

We sold marketable securities for proceeds of $3,057.7 million and $2,587.6 million during the nine months ended September 30, 2023 and 2022, respectively. As a result of those sales, we realized a gain of $1.7 million and $1.3 million during the nine months ended September 30, 2023 and 2022, respectively, and a gain of $2.4 million and $1.8 million during the three months ended September 30, 2023 and 2022, respectively. We regularly review our available-for-sale

marketable securities in an unrealized loss position and evaluate the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. The aggregate fair value of the marketable securities in unrealized loss position was $111.1 million and $193.5 million as of September 30, 2023 and December 31, 2022, respectively. The unrealized losses were attributable to changes in interest rates that impacted the value of the investments, and not related to increased credit risk. Accordingly, we have not recorded an allowance for credit losses associated with these investments.

The contractual maturities of the investments classified as marketable securities are as follows:


	As of September 30, 2023
(in thousands)	Mature within one year		Mature after one year through two years		Mature over two years		Fair Value

Corporate bonds	$	39,120	$	8,947	$	—	$	48,067
Asset-backed securities	556		1,525		54,746		56,827
U.S. government and agency securities	7,945		7,610		2,658		18,213
Foreign government and agency securities	—		323		—		323



Total marketable securities	$	47,621	$	18,405	$	57,404	$	123,430


	As of December 31, 2022
(in thousands)	Mature within one year		Mature after one year through two years		Mature over two years		Fair Value
Commercial paper	$	17,606	$	—	$	—	$	17,606
Corporate bonds	74,797		35,414		—		110,211
Asset-backed securities	1,907		4,833		60,207		66,947
U.S. government and agency securities	7,719		7,480		3,192		18,391
Foreign government and agency securities	—		338		—		338
Municipal/provincial bonds and other	1,971		—		—		1,971


Total marketable securities	$	104,000	$	48,065	$	63,399	$	215,464

Derivative Asset and Liabilities

The Company entered into foreign currency derivative contracts with financial institutions to reduce foreign exchange risk related to certain marketable securities denominated in foreign currency. Foreign currency derivative contracts are marked-to-market at the end of each reporting period with gains and losses recognized as other income (expenses). The Company recognized a net gain of $0.1 million and $0.6 million during the three and nine months ended September 30, 2023, respectively, and a net gain of $1.1 million and $1.7 million during the three and nine months ended September 30, 2022, respectively, on the fair value adjustment of the foreign currency derivative contracts.

7.Property, Plant and Equipment

Property, plant, and equipment consisted of the following:


(in thousands)	September 30, 2023		December 31, 2022
Land	$	11,335	$	11,358
Pilot plant	4,766		4,599
Lab equipment	3,291		2,526
Machinery and equipment	1,079		948
Computer and other equipment	1,478		598
Construction in process	217,876		138,847
Total	239,825		158,876
Less accumulated depreciation and amortization	(5,708)		(4,693)
Total property, plant, and equipment, net	$	234,117	$	154,183

The depreciation expense totaled $0.4 million and $1.0 million during the three and nine months ended September 30, 2023, respectively, and $0.2 million and $0.5 million during the three and nine months ended September 30, 2022, respectively.

At September 30, 2023 and December 31, 2022, the Company capitalized $1.5 million and $1.1 million, respectively, of interest cost into Origin 1. At September 30, 2023 and December 31, 2022, the Company capitalized $3.9 million and $1.9 million, respectively, of stock-based compensation related to employees whose costs are necessarily incurred to bring the asset to its intended use. At September 30, 2023 and December 31, 2022, a cumulative translation adjustment of $0.3 million and $3.0 million, respectively, is included in total property, plant, and equipment as a result of foreign currency transaction gains and losses.

8.Intangible Assets

Intangible assets consisted of the following:


(in thousands)	September 30, 2023		December 31, 2022
Patents	$	403	$	404

Less accumulated amortization	(274)		(244)
Total intangible assets	$	129	$	160

The weighted average remaining useful life of the patents was 3.7 years. For the three and nine months ended September 30, 2023 and 2022, amortization expense was immaterial.

9.Consortium Agreement

In December 2016, the Company entered into a consortium agreement with two Legacy Origin Series B preferred stock investors to collaborate on development of a process to commercialize bio-based, decarbonizing materials for application on an industrial scale at a competitive price. Under the consortium agreement, the Company received $0.5 million. The agreement expires once performance of the research and development program has been completed.

In August 2018, the agreement was amended, whereby a Legacy Origin Series C preferred stock investor (the “Legacy Origin Series C Investor”, and collectively with the two Legacy Origin Series B investors, the “Legacy Origin Investors”) was added to the agreement and committed to invest $1.5 million of research and development in the consortium. As of September 30, 2023, the Legacy Origin Series C Investor had not invested any funds in the consortium.

In 2020, an additional counterparty was added to the consortium agreement. The funds received under the consortium agreement were recorded in prior periods as other income, net in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During the three and nine months ended September 30, 2023 and 2022, the Company did not receive any funds under the consortium agreement.

10.Inventory

Inventory balances consist of the following:


(in thousands)	September 30, 2023		December 31, 2022
Finished goods	$	152	$	—
Raw materials	669		—

Total	$	821	$	—

11.Notes Payable

The Company maintains eight separate offtake supply agreements (the “Offtake Agreements”). Two of the eight Offtake Agreements are with the same customer and pertain to supply of product from Origin 1 and Origin 2, respectively. Pursuant to the Offtake Agreements, the Company will construct manufacturing plants with specific capacity and product quality requirements within certain timeframes for the manufacture of product for sale to the counterparties to the agreements, and the counterparties will make purchases at a set price, subject to adjustments, all as defined in the agreements.

Legacy Origin received a $5.0 million prepayment from a customer for product from Origin 1 pursuant to one of these Offtake Agreements, which Legacy Origin entered into in November 2016. The prepayment was to be credited against the purchase of products over the term of the Offtake Agreement. The prepayment was secured by a promissory note (the “Promissory Note”) to be repaid in cash in the event that the prepayment could not be credited against the purchase of product, for example, if Origin 1 was never constructed. The Promissory Note was collateralized substantially by Origin 1 and other assets of Origin Materials Canada Pioneer Limited. In May 2019, Legacy Origin and the customer amended the Offtake Agreement and Promissory Note. The amendment added accrued interest of $0.2 million to the principal balance of the prepayment and provided for the prepayment amount to be repaid in three annual installments rather than being applied against the purchase of product from Origin 1. On August 1, 2022, the Company and the customer further amended and restated the Promissory Note with an aggregate principal amount of $5.2 million, which is the sum of the original principal with accrued interest prior to the amendment. As a result of the amendment, the repayment dates were revised and to allow the customer to offset amounts owed for the purchase of product from the Company’s Origin 1 facility against amounts due under the Promissory Note. The repayment in the amount of $2.7 million is due on September 1, 2024, $1.9 million is due on September 1, 2025, and $1.8 million is due on September 1, 2026 (inclusive of accrued but unpaid interest of 3.5% per annum). At September 30, 2023 the total note principal outstanding was $5.2 million of which $3.5 million was included in notes payable and $1.7 million note principal with outstanding accrued interest of $0.8 million was included in other liabilities, current. At December 31, 2022, the note principal balance was $5.2 million with outstanding accrued interest of $0.6 million. In addition, the amendment reflected the customer’s exercise of its option to enter into a new Offtake Agreement to buy a specified annual amount of product from Origin 2 for an initial term of up to 10 years.

12.Other Liabilities, Long-term

In September 2019, Legacy Origin entered into a $5.0 million prepayment agreement with a counterparty for the purchase of products from Origin 1. The prepayment is to be made in two equal installments: the first $2.5 million was in October 2019 and the remaining $2.5 million is due within 30 days of the customer confirming that a sample from Origin 1 meets the customer’s specifications. The Company and customer agreed to work in good faith to execute an Offtake Agreement, the agreed terms of which are set forth in the prepayment agreement, whereby 100% of the prepayment will be applied against future purchases. The prepayment agreement provides the customer a capacity reservation of up to a specified annual volume of product from Origin 1 for a term of ten years, pursuant to the terms of an Offtake Agreement. At September 30, 2023 and December 31, 2022, the total amount outstanding on this agreement was $2.5 million.

Legacy Origin received a $5.0 million prepayment from a customer for product from Origin 1 pursuant to an Offtake Agreement entered into in November 2016. The prepayment is to be credited against the purchase of products from Origin 1 over the term of the Offtake Agreement. Specifically, repayment is effected by applying a credit to product purchases each month over the first five years of operation of Origin 1 up to $7.5 million, which is equal to 150% of the prepayment amount. If product purchases are not sufficient to recover the advances, the application of the credit to purchases as payment of the advances will continue until fully repaid. The prepayment is secured by a note to be repaid in cash in the event the prepayment cannot be credited against the purchase of product, for example, if Origin 1 is never constructed. The note is collateralized substantially by Origin 1 and other assets of Origin Material Canada Pioneer Limited. If repaid in cash, the note bears an annual interest rate of the three-month Secured Overnight Financing Rate (“SOFR”) plus 0.25% (5.52% at September 30, 2023) and matures five years from the commercial operation date of Origin 1, which is defined by the plant's actual production of a certain volume of product as well as its capacity to produce a certain annual volume of product. At September 30, 2023 and December 31, 2022, the total principal outstanding was $5.1 million and accrued interest outstanding was $0.5 million and $0.3 million, respectively.

13.Earnout Liability

As additional consideration for the Merger, within 10 business days after the occurrence of a “Triggering Event,” as defined below, the Company shall issue or cause to be issued to each Legacy Origin stockholder a certain number of shares of the Company Class A Common Stock. The number of such shares is equal to the product of (i) the number of shares of Company Common Stock, Company Series A Preferred Stock, Company Series B Preferred Stock, Company Series C Preferred Stock, and the net number of shares of Company Capital Stock that would be issuable in respect of "Vested Company Options" in the event such options were exercised (on a net exercise basis with respect to only the applicable exercise price, immediately prior to the “Closing” and settled in the applicable number of shares of Company Common Stock, rounded down to the nearest whole share) held by such Legacy Origin stockholder as of immediately prior to the “Effective Time”; and (ii) the “Earnout Exchange Ratio" (such issued shares of Artius Class A Common Stock, collectively, the “Earnout Shares”), where “Vested Company Options,” “Closing,” “Effective Time,” and “Earnout Exchange Ratio” have the meanings set forth in the Merger Agreement. The Company cannot be required to issue more than 25,000,000 Earnout Shares in the aggregate. A Triggering Event is defined as the following:

(a)the volume weighted average price of Common Stock (“VWAP”) equaling on exceeding $15.00 for ten (10) consecutive trading days during the three (3) year period following the Closing Date;

(b)the VWAP equaling or exceeding $20.00 for ten (10) consecutive trading days during the four (4) year period following the Closing Date; or

(c)the VWAP equaling or exceeding $25.00 for ten (10) consecutive trading days during the five (5) year period following the Closing Date.

A Sponsor Letter Agreement was delivered in connection with the Merger such that 4.5 million of the shares held by Sponsor (“Sponsor Vesting Shares”) shall be subject forfeiture based on the same vesting requirements as the Earnout Shares. These shares shall not be transferred prior to the date in which they vest. Dividends and other distributions with respect to Sponsor Vesting Shares shall be set aside by the Company and shall be paid to the Sponsor upon the vesting of such Sponsor Vesting Shares.

The Company evaluated the Earnout Liability 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, there are contingent exercise provisions and settlement provisions that exist. Holders may receive differing amounts of shares depending on the company’s stock price or the price paid in a change of control. All remaining shares would be issuable (or the forfeiture provisions would lapse) upon any change of control involving the Company and all remaining shares would be issuable (or the forfeiture provisions would lapse) upon a bankruptcy or insolvency of the company. This means that settlement is not solely impacted by the share price of the Company (that is, the share price observed in or implied by a qualifying change-in-control event), but also by the occurrence of a qualifying change-in-control event. This causes the arrangement to not be indexed to the Company’s own shares and liability classification is appropriate. 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. The earnout liability was fair valued using a Monte Carlo open-ended model. The inputs used for the model were a dividend yield of 0%, volatility of 97%, and interest rate of 4.75%. The balance of the earnout liability was $3.6 million and $42.5 million at September 30, 2023 and December 31, 2022, respectively. A gain of $18.8 million and $39.1 million during the three and nine months ended September 30, 2023, respectively, and a gain of $15.1 million and $63.6 million during the three and nine months ended September 30, 2022, respectively, was recorded on the unaudited Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) in the change in fair value of earnout liability.

14.Canadian Government Research and Development Program Liability

In April 2019, the Company entered into a contribution agreement related to the research and development and construction associated with the operation of Origin 1 in which the Company will participate in a Canadian government research and development program (the “R&D Agreement”). Pursuant to the R&D Agreement, the Company will receive funding for eligible expenditures through March 31, 2023 up to the lesser of approximately 18.48% of eligible costs and $23.0 million (in Canadian dollars).

The funding will be repaid over 15 years after completion of Origin 1, commencing no sooner than the third fiscal year of consecutive revenues from a commercial plant, but no later than March 2028. The maximum amount to be repaid by the Company under the R&D Agreement is 1.25 times the actual funding received, subject to the following repayment ceiling formula. Repayment of the funding will be reduced by 50% if the Company begins construction before December 31, 2024 of one or more commercial plants that operate in Canada, with costs exceeding $500.0 million (in Canadian dollars), and the plants being constructed and operational within 30 months of the final investment decision, as defined in the R&D Agreement. Once begun, repayments will be paid annually by April of each year through March 31, 2037. Payments will be determined by a formula of the funded amount based on the fiscal year gross business revenue, as defined in the R&D Agreement. The Company recorded a liability for the amount received of $7.2 million at September 30, 2023 and December 31, 2022, on the Condensed Consolidated Balance Sheets in Canadian government research and development program liability.

15.Assumed Common Stock Warrants

As of September 30, 2023 and December 31, 2022 there are 35,476,627 warrants outstanding.

As part of Artius’s initial public offering, 24,149,960 Public Warrants were sold. The Public Warrants entitle the holder thereof to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustments. The Public Warrants may be exercised only for a whole number of shares of Common Stock. No fractional shares will be issued upon exercise of the warrants. The Public Warrants will expire on June 25, 2026 at 5:00p.m., New York City time, or earlier upon redemption or liquidation. The Public Warrants are listed on the Nasdaq under the symbol “ORGNW.”

The Company may redeem the Public Warrants when exercisable, in whole and not in part, at a price of $0.01 per warrant, so long as the Company provides not less than 30 days’ prior written notice of redemption to each warrant holder, and if, and only if, the reported last sale price of the Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders.

Simultaneously with Artius’s initial public offering, Artius consummated a private placement of 11,326,667 Private Placement Warrants with the Sponsor. The Private Placement Warrant is exercisable for one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment. The Private Placement Warrants are identical to the Public Warrants, except that: (1) the Private Placement Warrants and the shares of Class A Common Stock issuable upon exercise of the Private Placement Warrants are not transferable, assignable or salable until the earliest to occur of: (i) 365 days after the date of the Closing; (ii) the first day after the date on which the closing price of the Public Shares (or any successor securities thereto) equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the date of the Closing; or (iii) the date on which Artius completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of Artius’s Public Shareholders having the right to exchange their Public Shares (or any successor securities thereto) for cash, securities or other property, subject to certain limited exceptions, (2) the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except if the reference value equals or exceeds $10.00 and is less than $18.00 (as described above), so long as they are held by the initial purchasers or their permitted transferees, and (3) the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will be entitled to registration rights. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable under all redemption scenarios by the Company and exercisable by such holders on the same basis as the Public Warrants.

The Company concluded the Public Warrants and Private Placement Warrants, or Assumed Common Stock Warrants, meet the definition of a derivative under ASC 815 and are recorded as liabilities. Upon consummation of the Business Combination, the fair value of the Assumed Common Stock Warrants was recorded on the Condensed Consolidated Balance Sheets. The fair value of the Assumed Common Stock Warrants was remeasured on the September 30, 2023 and December 31, 2022 Condensed Consolidated Balance Sheets at $3.4 million and $30.9 million, respectively. A gain of $22.8 million and $27.4 million during the three and nine months ended September 30, 2023, respectively, and a loss of $1.4 million and a gain of $15.6 million during the three and nine months ended September 30, 2022, respectively, was recorded on the unaudited Condensed Consolidated Statement of Operations and Comprehensive Income (Loss).

16.Stockholders’ Equity

As of September 30, 2023 and December 31, 2022, 1,010,000,000 shares, $0.0001 par value per share are authorized, of which, 1,000,000,000 shares are designated as Common Stock and 10,000,000 shares are designated as Preferred Stock.

Common Stock

Holders of the Common Stock are entitled to dividends when, as, and if, declared by the Board, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. As of September 30, 2023, the Company had not declared any dividends. The holder of each share of Common Stock is entitled to one vote. There were 144,198,529 and 143,034,225 shares of Common Stock (including 4,500,000 Sponsor Vesting Shares not indexed to equity) outstanding as of September 30, 2023 and December 31, 2022, respectively.

Employee Stock Purchase Plan

The Company maintains an Employee Stock Purchase Plan (“ESPP”). The ESPP permits participants to purchase shares of our Common Stock with the purchase price of the shares at a price determined by our board, which shall not be less than 85% of the lower of the fair market value of our Common Stock on the first day of an offering or on the date of purchase.

Initially, following adoption of the ESPP, the maximum number of shares of our Common Stock that may be issued under the ESPP was 1,846,710. The ESPP contains an “evergreen” share reserve feature that automatically increases the number of shares of Common Stock reserved for issuance under the plan on January 1 of each year for a period of ten years commencing on January 1, 2022 and ending on (and including) January 1, 2031 in an amount equal to the lesser of (1) one percent (1%) of the fully-diluted shares of our Common Stock on December 31st of the preceding calendar year, (2) 3,693,420 of Common Stock, or (3) such lesser number of shares as determined by our board. As of December 31, 2022, the number of shares available for issuance under the ESPP was 3,722,490. On January 1, 2023, the number of shares of Common Stock reserved for issuance under the ESPP was automatically increased by 1,917,454. As a result, as of September 30, 2023, the number of shares available for issuance under the ESPP was 5,639,944. Shares subject to purchase rights granted under the ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under the ESPP.

To date no stock has been offered or issued to employees under the ESPP.

Equity Incentive Plans

The Company maintains the following equity incentive plans: the 2010 Stock Incentive Plan, the 2020 Equity Incentive Plan, and the 2021 Equity Incentive Plan, each as amended (together, the “Stock Plans”). Upon closing of the Business Combination, awards under the 2010 Stock Incentive Plan and 2020 Equity Incentive Plan were converted at the Exchange Ratio and the 2021 Equity Incentive Plan was adopted and approved.

Origin may grant a wide variety of equity securities under the Stock Plans, including incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, RSU awards, performance-based stock awards, and other awards. The Company has granted incentive stock options, RSU awards, and performance awards under the Stock Plans. Under the Stock Plans, options must be issued at exercise prices no less than the estimated fair value of the stock on the date of grant and are exercisable for a period not exceeding 10 years from the date of grant. Options granted to employees under the Stock Plan generally vest 25% one year from the vesting commencement date and 1/36th per month thereafter, although certain arrangements call for vesting over other periods. Options granted to non-employees under the Stock Plan vest over periods determined by the Board (generally immediate to four years). RSU awards granted to employees under the 2021 Equity Incentive Plan require a service period of three years and generally vest 33.3% annually over the three-year service period. Under the Stock Plans, the fair value of RSU awards and performance-based stock awards are determined to be the grant date closing stock price. For awards with performance-based conditions, compensation is recorded once there is sufficient objective evidence the performance conditions are considered probable of being met. The performance-based stock awards are subject to vesting based on a performance-based condition and a service-based condition. The performance-based stock awards will vest in a percentage of the target number of shares between 0% and 300%, depending on the extent the performance conditions are achieved.

Initially, following adoption of the 2021 Equity Incentive Plan, there were 18,467,109 shares of Common Stock reserved for issuance under the Stock Plans. The 2021 Equity Incentive Plan contains an “evergreen” share reserve feature that automatically increases the number of shares of Common Stock reserved for issuance under the plan on January 1 of each year for a period of ten years commencing on January 1, 2022 and ending on (and including) January 1, 2031 in an amount equal to five percent (5%) of the fully-diluted Common Stock on December 31 of the preceding year unless our board acts prior to January 1 to increase the share reserve by a lesser amount. The number of shares added to the share reserve on January 1 of a given year is reduced automatically to the extent necessary to avoid causing the share reserve to exceed fifteen percent (15%) of the fully-diluted Common Stock on December 31 of the preceding year. As of December 31, 2022, there were 27,846,011 shares of common stock reserved under the Stock Plans. On January 1, 2023, the number of shares of Common Stock reserved for issuance under the 2021 Equity Incentive Plan was automatically increased by 915,805 shares pursuant to the 2021 Plan’s “evergreen” provision. As a result, as of September 30, 2023, there were 28,761,816 shares of Common Stock reserved available under the Stock Plans.

The following tables summarize stock option activity under the Stock Plans:


	Outstanding Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Balance as of December 31, 2022	6,471,062	$	0.17	7.29
Granted	—	—
Exercised	(163,096)	0.14
Forfeited / canceled	—	—
Balance as of March 31, 2023	6,307,966	$	0.17	7.03
Granted	—	—
Exercised	(208,807)	0.15
Forfeited / canceled	(794)	0.14
Balance as of June 30, 2023	6,098,365	$	0.17	6.77
Granted	—	—
Exercised	(582,240)	0.15
Forfeited / canceled	—	—
Balance as of September 30, 2023	5,516,125	$	0.17	6.49
Vested and expected to vest at September 30, 2023	5,516,125

During the three and nine months ended September 30, 2023, the Company did not grant any stock options. As of September 30, 2023 and December 31, 2022, there were 16,062,995 and 15,728,837 awards, respectively, available for grant under the Stock Plans. As of September 30, 2023 and December 31, 2022 there were 3,286,737 and 3,588,523 exercisable options, respectively. The total intrinsic value of the options exercised was $0.7 million and $2.5 million during the three and nine months ended September 30, 2023, respectively, and $2.1 million and $7.8 million during the three and nine months ended September 30, 2022, respectively. The intrinsic value of options exercised during each fiscal year is calculated as the difference between the market value of the stock at the time of exercise and the exercise price of the stock option. The aggregate intrinsic value of options vested and expected to vest at September 30, 2023 and December 31, 2022 were $6.1 million and $28.7 million. As of September 30, 2023 and December 31, 2022, the Company had stock-based compensation of $2.5 million and $4.7 million, respectively, related to unvested stock options not yet recognized that are expected to be recognized over an estimated weighted average period of 1.0 year and 1.7 years, respectively.

The Company issued 2,920,732 of performance and market-based stock options during 2020. During the quarter ended March 31, 2021, the Company modified the vesting schedule of 529,119 of these performance and market-based stock options such that vesting at 1/48th per month would commence upon signing of the Business Combination. The Company entered into the Merger Agreement on February 16, 2021 resulting in the commencement of expense recognition related to these 529,119 options during the quarter ended March 31, 2021. For the remaining 2,391,613 performance and market-based stock options, expense commenced on the close date of the Merger, June 25, 2021, as that is the date when the performance condition was achieved.

The following table summarizes the RSU award and performance-based stock award activity:


	Outstanding	Weighted-average grant date fair value
Unvested balance at December 31, 2022	6,371,950	$	6.24
Granted - RSU awards	163,544	5.15
RSU awards vested and converted to shares	(70,670)	5.39
Forfeited - RSU awards	(50,212)	5.53
Forfeited - performance-based stock awards	(35,625)	5.46
Unvested balance March 31, 2023	6,378,987	$	6.22
Granted - RSU awards	387,841	4.14

RSU awards vested and converted to shares	(50,693)	7.01
Forfeited - RSU awards	(118,008)	6.01
Forfeited - performance-based stock awards	(21,150)	5.56
Unvested balance June 30, 2023	6,576,977	$	6.10
Granted - RSU awards	659,258	2.85

RSU awards vested and converted to shares	(193,466)	5.26
Forfeited - RSU awards	(148,766)	5.52
Forfeited - performance-based stock awards	(73,800)	$	5.53
Unvested balance September 30, 2023	6,820,203	$	6.19
Expected to vest	4,702,771

The RSU awards, which upon vesting entitle the holder to be issued on a future date the number of shares of Common Stock that is equal to the number of restricted stock units subject to the RSU awards. The total fair value of shares vested was $0.7 million and $1.3 million during the three and nine months ended September 30, 2023, respectively, and zero and $0.7 million during the three and nine months ended September 30, 2022, respectively. During the nine months ended September 30, 2023, the performance conditions for the performance-based stock awards were not probable of being met, therefore no performance award stock compensation has been recorded. There were no performance-based stock awards vested during the three and nine months ended September 30, 2023 and 2022. As of September 30, 2023, there were 1,829,125 unvested performance-based awards subject to certain performance criteria for vesting. The vesting period for RSU awards is generally three years. Total remaining compensation expense for RSU awards to be recognized under the 2021 Equity Incentive Plan is $18.0 million as of September 30, 2023, and will be amortized on a straight-line basis over the remaining vesting periods. Total remaining compensation expense for performance-based stock awards to be recognized will be recognized over the requisite service periods once the performance-based conditions are deemed to be probable.

During the three and nine months ended September 30, 2023, stock compensation expense of $1.7 million and $4.7 million, respectively, was recognized in general and administrative expenses, and $0.7 million and $2.2 million, respectively, was recognized in research and development expenses on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During the three and nine months ended September 30, 2022, stock compensation expense of $0.8 million and $2.9 million, respectively, was recognized in general and administrative expenses, and $0.3 million and $1.5 million, respectively, was recognized in research and development expenses on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Total remaining compensation expense to be recognized under the Stock Plans was $20.5 million as of September 30, 2023, and will be amortized on a straight-line basis over the remaining vesting periods of approximately 1.0 year for stock options, 2.1 years for RSU awards and over the remaining requisite service period once considered probable for performance-based stock awards.

17.Income Taxes

The provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year, adjusted for any discrete items during the quarter. The Company has recorded an income tax provision during the three and nine months ended September 30, 2023 of $0.1 million and $0.2 million, respectively, related to foreign withholding taxes on some of its revenue. Other than

withholding taxes, there is no provision for income taxes because the Company has incurred operating losses since inception. The Company’s effective income tax rate was 0.30% and 0.65% for the three and nine months ended September 30, 2023, respectively, and zero for three and nine months ended September 30, 2022. The Company continues to maintain a full valuation allowance on its net deferred tax assets.

18.Leases

The Company leases office space and research and development space in Sacramento, California and Sarnia, Ontario under non-cancelable lease agreements and leases various office equipment, warehouse space, and temporary fencing. Certain operating leases contain options to extend the lease. The Company included the periods covered by these options as we are reasonably certain to exercise the options for all leases. For leases with the option to extend on a month-to-month basis after the defined extension periods, the Company is reasonably certain to extend for the same term as related leases. As such, lease terms for all leased assets located at the same locations have the same end dates. Rent deposits relating to leases are included within other long-term assets on the Condensed Consolidated Balance Sheets. Certain leases were extended during the period ended September 30, 2023. The lease modifications were not accounted for as a separate contract and we remeasured our lease liability and right-of-use asset on the modification date. The operating leases have remaining lease terms of one to ten years.

19. Commitments and Contingencies

Commitments

In May 2018, the Company executed the agreements for certain services, to facilitate the development and thus bring Origin 1 to the condition necessary for its intended use, commencing in different periods between July 2018 and September 2019, and all generally for five-year periods. The agreements are generally automatically extended for one-year periods thereafter. The agreements include annual fixed payments subject to escalation clauses at the beginning of each calendar year, as defined in the agreement. The minimum fixed payments are $0.4 million per year over the fixed term. Certain of the agreements include quantities that are based on volumes, as defined in the applicable agreements. The Company is also responsible for applicable taxes under these agreements. The total amount capitalized into Property, Plant and Equipment, Net under the agreement was $0.3 million and $0.5 million during the three and nine months ended September 30, 2023, respectively, and $0.9 million and $1.4 million during the three and nine months ended September 30, 2022, respectively.

In April 2023, the Company entered into an agreement for conversion of materials produced by Origin 1 into certain derivatives. Pursuant to the agreement, the Company agreed to purchase conversion services for a certain minimum quantity of product on a take-or-pay basis for a term of 5 years beginning in 2025 for an aggregate total cost of $35 million. The Company made advance payments totaling $10.0 million to the counterparty as of September 30, 2023, which is included in the foregoing aggregate total, and the agreement provides for the Company to be fully reimbursed for the advance payment in the form of a discount on conversion services over the term. The agreement gives the Company the right, but not the obligation, to purchase conversion services for an additional quantity of product in 2024 and stipulates a reduction in the take-or-pay commitment under certain circumstances including the counterparty's inability to meet the required product specification. The agreement automatically renews for an additional year unless either party gives advance notice of an intention not to renew. In addition, either party may terminate the agreement in the event of the other party's insolvency or breach of a material term.

In February 2023, the Company entered into a nonexclusive patent license agreement for use in connection with production at a specific licensed facility. The license expires upon cessation of production at that facility. The Company made a nonrefundable €5.0 million deposit in 2022 toward securing the license and, as a result of signing the license agreement, made an additional payment of €7.5 million during first quarter 2023 and may make additional payments depending on the achievement of certain milestones. The total payment is included in other long-term assets. In connection with this license, the Company entered into a conditional offtake agreement under which the licensor will supply the Company with a certain amount of the same type of products to be produced at the licensed facility in order to accelerate market development for these products and related applications.

In July 2017, the Company entered into a nonexclusive patent license agreement for $0.1 million, which expires upon expiration of the last to expire of the licensed patents. Under this agreement, the Company will pay less than $0.1 million minimum royalty payments per year and, if the Company develops and sells certain products based on the licensed patents. Certain products that Origin is currently developing and anticipates selling are expected to utilize these patents.

In December 2016, the Company entered into a patent license agreement for $0.5 million, which expires upon expiration of the last to expire of the licensed patents. Under this agreement, if the Company develops and sells specific products based on the patents, the Company would pay a royalty up to a cumulative $0.5 million from Origin 1, whereby no further payments will be due for any production at Origin 1. If production of those products occurs at subsequent facilities, the Company will pay an upfront license fee royalty and a variable royalty based on production at that subsequent facility, capped at an aggregate $10.0 million per facility. Certain products that the Company is currently developing and anticipates selling are expected to utilize these patents. No payments were made during the three and nine months ended September 30, 2023 or 2022.

In November 2016, the Company entered into a nonexclusive patent license agreement, which expires upon expiration of the patent. Under this agreement, if the Company produces products based on the patent, the Company will pay an annual royalty upon commencement of operations on Origin 1 which will not exceed $1.0 million cumulatively. The pipeline of Company products and sales are not currently expected to be subject to this patent. The annual royalty payments are less than $0.1 million.

In September 2011, the Company entered into a nonexclusive patent license agreement, which expires upon expiration of the patent. Under this agreement, if the Company develops and sells specific products based on the patent, the Company would pay a royalty up to $2.0 million per year and $10.0 million in the aggregate. Certain products that the Company is currently developing and anticipates selling are expected to utilize these patents. No payments were made during the three and nine months ended September 30, 2023 or 2022.

In June 2011, the Company entered into a nonexclusive patent license agreement, which expires upon expiration of the licensed patent. Under this agreement, the Company pays less than $0.1 million royalty fee annually and if the Company develops and sells specific products based on the patent, 0.4% of net sales. The pipeline of Company products and sales are not currently expected to be subject to this patent.

We enter into supply and service arrangements in the normal course of business. Supply arrangements are primarily for fixed-price manufacture and supply. Service agreements are primarily for the development of manufacturing processes and certain studies. Commitments under service agreements are subject to cancellation at our discretion which may require payment of certain cancellation fees. The timing of completion of service arrangements is subject to variability in estimates of the time required to complete the work.

Contingencies

At times there may be claims and legal proceedings generally incidental to the normal course of business that are pending or threatened against the Company. For instance, in August 2023, a shareholder filed a putative securities class action complaint in the Eastern District of California against the Company and certain of its officers, alleging violations of the federal securities laws. An additional complaint, alleging the same claims against the same defendants, was filed in October 2023. Both cases allege a class period of February 23, 2023 to August 9, 2023, and seek as relief, among other things, unspecified damages and fees and costs. The two cases have since been consolidated into In re Origin Materials, Inc. Sec. Litig., No. 2:23-cv-01816-WBS-JDP (E.D. Cal.). No lead plaintiff has been appointed for the consolidated case. At this preliminary stage in the litigation, the Company cannot predict any particular outcome, nor any financial impact thereof, if any.

20. Basic and Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share attributable to common stockholders, which excludes Sponsor Vesting Shares which are legally outstanding, but subject to return to the Company. Basic net income per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income for the period by the weighted-average common shares outstanding during the period, plus the dilutive effect of the stock options and RSU awards, as applicable pursuant to the treasury stock method. The following table sets forth the computation of basic and diluted net income per share:


(In thousands, except for share and per share amounts)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net income attributable to common stockholders—Basic	$	30,931	$	8,299	$	34,236	$	62,576

Net income attributable to common stockholders—Diluted	$	30,931	$	8,299	$	34,236	$	62,576
Denominator:
Weighted-average common shares outstanding—Basic (1)	139,806,045		138,061,829		139,374,106		137,348,180
Stock options	2,893,384		4,126,256		3,451,224		4,748,417

RSU awards	4,121		8,929		46,844		37,963
Weighted-average common shares outstanding—Diluted (1)	142,703,550		142,197,014		142,872,174		142,134,560
Net income per share—Basic	$	0.22	$	0.06	$	0.25	$	0.46
Net income per share—Diluted	$	0.22	$	0.06	$	0.24	$	0.44

(1)Excludes weighted-average Sponsor Vesting Shares subject to return of 4,500,000 shares as of September 30, 2023 and 2022.

Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. The following potentially dilutive securities for common stock were outstanding and excluded from diluted earnings per share as they are subject to performance or market conditions that were not achieved as follows:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Options to purchase common stock	1,481,531	1,481,531	1,481,531	1,481,531
Performance-based stock awards	2,220,750	2,610,500	2,220,750