Financial Data and Key Metrics Changes - The company announced a secured convertible debt facility with an initial close of $15 million, with the capacity for additional tranches up to a total of $90 million as needed [5][12] - The revenue and run rate adjusted EBITDA guidance remains unchanged, with expected revenues of $20-$30 million in 2026 and $100-$200 million in 2027, aiming for EBITDA adjusted run rate break-even in 2027 [12][13] Business Line Data and Key Metrics Changes - The company is focused on scaling up PET cap production, with significant progress in manufacturing capacity build-out and product development [8][15] - The Cap farmer deployment schedule is on track, with factory acceptance testing expected to be completed by the end of 2025 [8] Market Data and Key Metrics Changes - The company is executing a water-first go-to-market strategy, with strong customer demand for PET caps in the water and carbonated soft drink (CSD) markets [9][40] - The first order from Berlin Packaging has been placed, marking a significant step in expanding market reach [10][24] Company Strategy and Development Direction - The company aims to dominate the PET cap market by leveraging its technology and expanding production capacity [15] - The strategic review engagement with RVC Capital Markets is progressing well, indicating potential future developments [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for PET caps driven by sustainability efforts and recycling initiatives [39][40] - The company is optimistic about the capacity being brought online and the potential for new product features to access larger customer segments [43][44] Other Important Information - The company settled securities litigation with no finding of liability, allowing it to focus on core business operations [13][14] - The company has made significant progress in addressing challenges related to impact resistance and stress testing for cap designs [10] Q&A Session Summary Question: Can you describe the milestones necessary for future funding from the convertible debt? - Management indicated that details will be provided in the upcoming 8K filing, suggesting a comprehensive understanding of the terms is necessary [17][18] Question: What is the outlook for the burn rate in the next couple of quarters? - The burn rate for Q3 was $15 million, with expectations of a similar rate moving into 2026, split between operating expenses and capital expenditures [19][20] Question: When will lines two and four be generating acceptable product quality? - Management is optimistic about making significant progress by the end of Q1 2026, although specific customer timelines cannot be committed to at this point [21][23] Question: Can you provide details on the first order from Berlin Packaging? - The first order is for a water application, and management is eager to learn from customer feedback once the order is fulfilled [24][25] Question: What developments have come from recent trade shows? - While concrete developments are not ready for external communication, there has been increased inbound interest from potential customers [41][42]

Financial Data and Key Metrics Changes - The company ended 2024 with $103 million in cash, cash equivalents, and securities, down from $158 million at the end of 2023, indicating a cash burn of $55 million, which is at the low end of the guidance range for 2024 of $55 million to $65 million [38][39] - Fourth-quarter revenue was $9.2 million compared to $13.1 million in the prior year quarter, while annual revenue for 2024 was $31.3 million, within the guidance of $25 million to $35 million [38][39] - Operating expenses for the fourth quarter were $16.2 million, down from $19.8 million in the prior year, while full-year operating expenses increased to $85.3 million from $60.1 million, largely due to a non-cash impairment charge and higher depreciation [39][40] Business Line Data and Key Metrics Changes - The company has begun commercial production from its first Catformer line, which is expected to produce tens of millions of caps monthly, with plans to have eight Catformer lines operational by the end of 2025 [10][12][14] - The expected gross margins for the cap business are projected to fall in the mid-double digits range, with a payback period for the average line expected to be less than eighteen months [32][34] Market Data and Key Metrics Changes - Demand for the company's caps is described as incredibly strong, with multiple customers signing MOUs, and indicative demand significantly exceeding fulfillment capabilities for several years [21][22] - The caps market is dynamic, with variable pricing based on customer types and volume commitments, allowing the company to price its products based on their unique value [24][25] Company Strategy and Development Direction - The company aims to build a scalable platform capable of accommodating hundreds of Catformer lines over time, targeting a significant share of the $65 billion caps and closures market [46][47] - The strategy includes forming partnerships and licensing technology to expand overall PET cap supply, with a focus on maintaining a balanced portfolio of customers [27][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the macroeconomic environment as unforeseen but believes the fundamentals of the business remain unchanged, expressing confidence in the technology's value [105][107] - The company expects to achieve EBITDA positive results on a run rate basis by the end of 2026, updated from the previous guidance of the first half of 2026 [36][37] Other Important Information - The company has over seventy issued patents and numerous pending applications, creating a defensible moat around its technology [42][43] - The first beverage products with Origin caps are expected to be on shelves by Q3 2025, with continuous improvements planned for future Catformers [13][29] Q&A Session Summary Question: Timeline for qualification process and customer sourcing - Management confirmed that qualification involves extensive testing on capping and filling systems, requiring large sample sizes for evaluation [51][55] - The qualification process duration varies by customer size, with larger customers typically requiring more time [58][60] Question: Status of a significant MOU and its impact on revenue - Management acknowledged a delay in the initiation of purchases under a $100 million MOU but expects it to be backloaded into the second year of the contract [66][70] Question: Cash burn and minimum cash level - Management indicated a prudent approach to maintaining a minimum cash balance equivalent to one to eighteen months of operating expenses, estimating around $48 million for 2024 [73][75] Question: Revenue and EBITDA guidance for 2025 - Management refrained from providing specific revenue guidance for 2025, citing variability in customer orders and qualification timelines, but expressed confidence in a strong exit rate for 2026 [81][82] Question: Issues with Catformer line one and its impact on EBITDA timeline - Management explained that customer feedback led to the addition of knurling features on line one, causing delays in production and qualification processes, impacting the timeline for achieving EBITDA positivity [89][92] Question: Manufacturing process and margin economics - Management clarified that while they currently rely on external suppliers for extrusion, they plan to vertically integrate over time, maintaining margins without immediate reliance on extruders [96][98]