Shares of Origin Materials Inc. are at risk of being delisted from the Nasdaq Stock Market this summer for trading below the $1 minimum required by the national stock exchange.
West Sacramento-based Origin, which makes plastic that sequesters carbon and doesn’t use petroleum products, reported to the Securities and Exchange Commission Jan. 5 that it received a letter from the Nasdaq warning that its shares have traded below the $1 minimum for more than 30 days.
That triggers the potential delisting of Origin (Nasdaq: ORGN) from the national stock market if Origin shares don’t trade above $1 by July 2, according to the company's filing with the SEC.
Even if Origin shares remain below $1 in July, the company could be eligible for an additional 180-day period, according to market rules.
Origin received the letter Jan. 4 and notified the SEC the next day.
“Origin currently meets the continued listing requirement for market value of publicly held shares and all other initial listing standards of The Nasdaq Capital Market, with the exception of the bid price requirement,” wrote Origin Chief Financial Officer Matt Plavan in the SEC filing. Plavan didn't return calls from the Business Journal for comment.
Origin is “presently evaluating potential actions to regain compliance with all applicable requirements for continued listing on the Nasdaq Capital Market,” the company said.
Origin’s shares last traded above $1 on Nov. 17.
Its shares plummeted in August from over $4 to just over $1 after the company said its second factory will take several years longer to build than previously reported. Origin also said it will be adding renewable fuel to its product offerings in addition to the zero-carbon plastic. Analysts said that renewable fuel was a lower-profit-margin and more competitive business.
The 2008 startup makes a drop-in replacement for petroleum in plastics sourced with renewable wood scraps. It opened its first commercial-scale plant in Canada last year at a cost of $130 million. Now Origin is preparing to scale up further with a $1.6 billion plant in Louisiana.
But the company appears to have lost the confidence of Wall Street stock analysts, who criticize Origin for its future foray into renewable fuels. The company in November cut 30% of its staff to get to profitability sooner.
Origin has financial backing from users of plastic materials, including Mitsubishi Group, Nestle SA, Danone SA and PepsiCo Inc. (Nasdaq: PEP), all of which are potential customers for Origin’s zero-carbon PET for industrial goods and packaging.
Origin Materials became a publicly traded company in June 2021.
