West Sacramento-based zero-carbon plastic company Origin Materials Inc. reported in a regulatory filing that it paid off its Paycheck Protection Program loan without seeking forgiveness.
Origin (Nasdaq: ORGN) got a PPP loan in 2020 for $906,000 from the Small Business Administration through First Republic Bank of San Francisco.
Such loans can be forgiven if used for the payment of employees, payroll costs, rent and utilities. The PPP was the federal government's main initiative to help small businesses disrupted by Covid-19.
“Origin paid off the loan because it was the right thing to do given that the purpose of the PPP is to support small businesses,” Origin Materials spokesman Evan Winchester said via email.
At the time Origin got the loan, it was a small research and development company with promising technology that can replace petroleum in the manufacture of PET plastic.
Since then, however, Origin became a publicly traded company through a merger with special purpose acquisition company, Artius Acquistion Inc.
"Our merger with Artius gave us sufficient funds to pay (the PPP loan) back without impacting our capital project financing," Winchester said.
Origin now has a stock market value of $782.5 million. It has no revenue yet, but it reported cash and cash equivalents on its balance sheet of $470.3 million as of the end of the second quarter.
The PPP was established as part of the Coronavirus Aid, Relief and Economic Security Act that was passed by Congress at the beginning of Covid-19 shutdowns in the spring of 2020. If PPP loans aren't forgiven they carry a term of two years with an interest rate of 1%.
Early in its implementation, the PPP came under criticism for lending to publicly traded companies, private-equity-backed companies and other businesses that had other means of raising capital, while some mom-and-pop businesses had trouble accessing the program.
Origin reported that it paid off its PPP loan in full in the second quarter this year.
Origin's more than $900 million merger was announced by Artius in February this year, and was completed in June. Artius was a special purpose acquisition company, or SPAC, formed last year to make investments in promising technology companies. SPACs, which are sometimes referred to as blank-check companies, have no specific business plans or purpose other than to pursue mergers or acquisitions.
